CHAPTER 5. RESERVE FUND
IC 5-1.4-5
Chapter 5. Reserve Fund
IC 5-1.4-5-1
Establishment and maintenance of reserve fund; application offunds; required debt service reserve; excess money
Sec. 1. (a) The board may establish and maintain a reserve fundfor each issue of bonds or notes in which there shall be deposited ortransferred:
(1) all proceeds of bonds or notes required to be deposited inthe fund by terms of a contract between the bank and its holdersor a resolution of the bank with respect to the proceeds of bondsor notes;
(2) all other money appropriated to the reserve fund; and
(3) any other money or funds of the bank that it decides todeposit in the fund.
(b) Subject to subsection (c) and section 4(b) of this chapter,money in any reserve fund shall be held and applied solely to thepayment of the interest on and principal of bonds or notes of the bankas the interest and principal become due and payable and for theretirement of bonds or notes. The money may not be withdrawn if awithdrawal would reduce the amount in the reserve fund to anamount less than the required debt service reserve, except forpayment of interest then due and payable on bonds or notes and theprincipal of bonds or notes then maturing and payable, whether byreason of maturity or mandatory redemption, for which paymentsother money of the bank is not then available. As used in thissubsection, "required debt service reserve" means, as of the date ofcomputation, the amount required to be on deposit in the reservefund as provided by resolution or trust agreement of the bank. Asused in this subsection, "interest" includes any payments sodesignated in any contract or agreement between the bank and, or forthe benefit of, any holder.
(c) Money in any reserve fund in excess of the required debtservice reserve as defined in subsection (b), whether by reason ofinvestment or otherwise, may be withdrawn at any time by the bankand transferred to another fund or account of the bank, subject to theprovisions of any agreement with the holders of any bonds or notes.
As added by P.L.42-1985, SEC.1. Amended by P.L.29-1986, SEC.14.
IC 5-1.4-5-2
Investment of funds
Sec. 2. Money in any reserve fund may be invested in the mannerprovided by IC 5-1.4-3-3.
As added by P.L.42-1985, SEC.1. Amended by P.L.29-1986, SEC.15.
IC 5-1.4-5-3
Valuation of investments
Sec. 3. For purposes of valuation, investments in the reserve fundshall be valued at par or, if purchased at less than par, at cost unless
otherwise provided by resolution or trust agreement of the bank.Valuation on a particular date shall include the amount of interestthen earned or accrued to that date on the money or investments inthe reserve fund.
As added by P.L.42-1985, SEC.1.
IC 5-1.4-5-4
Required debt service reserve; appropriation to assuremaintenance; application of funds; excess money
Sec. 4. (a) In order to assure the maintenance of the required debtservice reserve in any reserve fund, the legislative body of the citymay annually appropriate to the bank for deposit in one (1) or moreof the funds the sum, certified by the chairman of the board to thelegislative body, that is necessary to restore one (1) or more of thefunds to an amount equal to the required debt service reserve. Thechairman annually, before December 1, shall make and deliver to thelegislative body a certificate stating the sum required to restore thefunds to that amount. Nothing in this subsection creates a debt orliability of the city to make any appropriation.
(b) All amounts received on account of money appropriated by thelegislative body of the city to any reserve fund shall be held andapplied in accordance with section 1(b) of this chapter. However, atthe end of each fiscal year, if the amount in any reserve fund exceedsthe required debt service reserve, any amount representing earningsor income received on account of any money appropriated to thereserve fund that exceeds the expenses of the bank for that fiscal yearmay be transferred to the general fund of the city.
As added by P.L.42-1985, SEC.1. Amended by P.L.29-1986, SEC.16.
IC 5-1.4-5-5
Combining reserve funds
Sec. 5. Subject to the provisions of any agreement with itsholders, the bank may combine the reserve fund established for eachissue of bonds or notes into one (1) or more reserve funds.
As added by P.L.42-1985, SEC.1. Amended by P.L.29-1986, SEC.17.