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7 assessments), until all costs of the Project have been fully paid. The City Manager shall maintain the Project Fund until payment of all costs and expenses incurred in connection with the construction of the Project and all costs of issuance of the Bonds have been paid. The City may deposit funds, including prepaid assessments and funds from other available sources, into the Project Fund. From the Project Fund there shall be paid all costs and expenses related to the construction and acquisition of the Project. In addition, costs of issuance are expected to be paid from proceeds of the Bonds in the Project Fund and are included in the respective accounts above. After payment of all such costs and expenses, the Project Fund shall be terminated. All funds on hand in the Project Fund when terminated shall be credited to the Bond Fund described in Section 4 hereof, unless and except as such proceeds may be transferred to some other fund or account as to which the City has received from bond counsel an opinion that such other transfer is permitted by applicable laws and does not impair the exemption of interest on the Bonds from federal income taxes. In no event shall funds remain in the Project Fund later than three years following the date of issuance of the Bonds. SECTION 4. GENERAL OBLIGATION IMPROVEMENT BONDS, SERIES 2024A BOND FUND. The Bonds shall be payable from a separate General Obligation Improvement Bonds, Series 2024A Bond Fund (the “Bond Fund”) of the City, which shall be created and maintained on the books of the City as a separate debt redemption fund until the Bonds, and all interest thereon, are fully paid. Into the Bond Fund shall be paid (a) the amounts specified in Section 3 above upon termination of the Project Fund; (b) any funds received from the Purchaser upon delivery of the Bonds in excess of the amounts specified in Section 3 above; (c) special assessments levied and collected in accordance with this Resolution except prepaid assessments applied to the Project Fund; (d) any taxes collected pursuant to Section 7 hereof; and (e) any other funds appropriated by this Council for the payment of the Bonds. The principal of and interest on the Bonds shall be payable from the Bond Fund, and the money on hand in the Bond Fund from time to time shall be used only to pay the principal of and interest on the Bonds. On or before each principal and interest payment date for the Bonds, the City Finance Director is directed to remit to the Registrar from funds on deposit in the Bond Fund the amount needed to pay principal and interest on the Bonds on the next succeeding principal and interest payment date. There are hereby established two accounts in the Bond Fund, designated as the “Debt Service Account” and the “Surplus Account.” There shall initially be deposited into the Debt Service Account upon the issuance of the Bonds the amount set forth in clause (b) above. Thereafter, during each bond year (each twelve month period commencing on February 1 and ending on the following January 31, a “Bond Year”), as monies are received into the Bond Fund, the City Finance Director shall first deposit such monies into the Debt Service Account until an amount has been appropriated thereto sufficient to pay all principal and interest due on the Bonds through the end of the Bond Year. All subsequent monies received in the Bond Fund during the Bond Year shall be appropriated to the Surplus Account. If at any time the amount on hand in the Debt Service Account is insufficient for the payment of principal and interest then due, the City Finance Director shall transfer to the Debt Service Account amounts on hand in the Surplus Account to the extent necessary to cure such deficiency. Investment earnings (and losses) on amounts from time to time held in the Debt Service Account and Surplus Account shall be credited or charged to said accounts.