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earnings thereon and subject to such other adjustments as are <br />appropriate to provide sufficient funds to pay interest due on <br />the Bonds on or before February 1, 1999 ) • From the <br />Construction Account there shall be paid all costs and expenses <br />of the Improvements, including the cost of any construction <br />contracts heretofore let and all other costs incurred and to be <br />incurred of the kind authorized in Minnesota Statutes, Section <br />475.65; and the moneys in said account shall be used for no other <br />purpose except as otherwise provided by law; provided that the <br />proceeds of the Bonds may also be used to the extent necessary to <br />pay interest on the Bonds due prior to the anticipated date of <br />commencement of the collection of special assessments herein <br />pledged. <br />(b) Debt Service Account. There are hereby irrevocably <br />appropriated and pledged to, and there shall be credited to, the <br />Debt Service Account: (i) all accrued interest received upon <br />delivery of the Bonds; (ii) all funds paid for the Bonds in <br />excess of $978,100; (iii) capitalized interest in the amount of <br />$25,746.18 (together with interest earnings thereon and subject <br />to such other adjustments as are appropriate to provide <br />sufficient funds to pay interest due on the Bonds on or before <br />February 1, 1999) ; (iv) all collections of special <br />assessments relating to the Improvements either initially <br />credited to the Construction Account and required to pay any <br />principal of, and interest on, the Bonds or collected subsequent <br />to the completion of the Improvements and payment of the costs <br />thereof; (v) any collections of all taxes which may hereafter be <br />levied in the event that the special assessments and other sums <br />herein pledged to the payment of the Bonds are insufficient <br />therefor; (vi) the proceeds of any definitive bonds or additional <br />temporary bonds in an amount, together with other moneys then on <br />hand irrevocably appropriated to said account, as is necessary to <br />pay the principal of and interest on, the Bonds; (vii) all funds <br />remaining in the Construction Account after completion of the <br />Improvements and payment of the costs thereof; (viii) all <br />investment earnings on funds held in the Debt Service Account; <br />and (ix) any and all other moneys which are properly available <br />and are appropriated by the governing body of the City to the <br />Debt Service Account. The Debt Service Account shall be used <br />solely to pay the principal and interest and any premiums for <br />redemption of the Bonds and any other general obligation bonds of <br />the City hereafter issued by the City and made payable from said <br />account as provided by law. <br />No portion of the proceeds of the Bonds shall be used <br />directly or indirectly to acquire higher yielding investments or <br />to replace funds which were used directly or indirectly to <br />acquire higher yielding investments, except (1) for a reasonable <br />temporary period until such proceeds are needed for the purpose <br />for which the Bonds were issued and (2) in addition to the above <br />in an amount not greater than the lesser of five percent (5%) of <br />931992.1 19 <br />