Sec. 8-307. Capital reserve fund to secure bonds and notes issued under this chapter.
Sec. 8-307. Capital reserve fund to secure bonds and notes issued under this
chapter. (a) (1) In order to secure bonds and notes issued under this chapter, the legislative body of the municipality may create and establish a capital reserve fund and the
municipality shall pay into such capital reserve fund (A) any moneys appropriated and
made available by the municipality for the purpose of such fund, (B) any proceeds of
sale of notes or bonds, to the extent provided in the resolution or resolutions of the
legislative body authorizing the issuance thereof, and (C) any other moneys which may
be made available to the municipality for the purpose of such fund from any other source.
All moneys held in the capital reserve fund, except as hereinafter provided, shall be
used, as required, solely for the payment of the principal of bonds secured by the capital
reserve fund as the same mature or any annual sinking fund payments, the purchase or
redemption of such bonds, the payment of interest on such bonds or the payment of any
redemption premium required to be paid when such bonds are redeemed prior to maturity; provided moneys in such fund shall not be withdrawn therefrom at any time in such
amount as would reduce the amount of such fund to less than the maximum capital
reserve fund requirement, except for the purposes of paying interest on such bonds,
principal of such bonds and any annual sinking fund payments, as the same become due
and for the payment of which other moneys of the municipality are not available. Any
income or interest earned by, or increment to, the capital reserve fund due to the investment thereof or any amount in excess of the maximum capital reserve fund requirement
may be transferred by the municipality to other funds or accounts of the municipality
established pursuant to this chapter to the extent that such transfer does not reduce the
amount of the capital reserve fund below the maximum capital reserve fund requirement.
(2) A municipality shall not issue bonds secured by the capital reserve fund at any
time if upon issuance the amount in the capital reserve fund will be less than the maximum capital reserve fund requirement, unless the municipality, at the time of issuance
of such bonds, shall deposit in such fund from the proceeds of the bonds so to be issued,
or otherwise, an amount which, together with the amount then in such fund, will not be
less than the maximum capital reserve fund requirement.
(3) In computing the amount of the capital reserve fund for the purposes of this
section, securities held as a part thereof shall be valued in the manner provided in the
resolution or resolutions authorizing the issuance of bonds secured by the capital reserve fund.
(b) The municipality may create and establish such other fund or funds, including
other capital reserve funds with the same force and effect and upon the same terms and
conditions and subject to the same limitations as provided in this section, as may be
necessary or desirable in furtherance of the purposes of this chapter.
(P.A. 79-596, S. 8, 17.)