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 of
funds; required debt service reserve; excess money
Sec. 1. (a) The board may establish and maintain a reserve fund
for each issue of bonds or notes in which there shall be deposited or
transferred:
(1) all proceeds of bonds or notes required to be deposited in
the fund by terms of a contract between the bank and its holders
or a resolution of the bank with respect to the proceeds of bonds
or notes;
(2) all other money appropriated to the reserve fund; and
(3) any other money or funds of the bank that it decides to
deposit 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 the
payment of the interest on and principal of bonds or notes of the bank
as the interest and principal become due and payable and for the
retirement of bonds or notes. The money may not be withdrawn if a
withdrawal would reduce the amount in the reserve fund to an
amount less than the required debt service reserve, except for
payment of interest then due and payable on bonds or notes and the
principal of bonds or notes then maturing and payable, whether by
reason of maturity or mandatory redemption, for which payments
other money of the bank is not then available. As used in this
subsection, "required debt service reserve" means, as of the date of
computation, the amount required to be on deposit in the reserve
fund as provided by resolution or trust agreement of the bank. As
used in this subsection, "interest" includes any payments so
designated in any contract or agreement between the bank and, or for
the benefit of, any holder.
(c) Money in any reserve fund in excess of the required debt
service reserve as defined in subsection (b), whether by reason of
investment or otherwise, may be withdrawn at any time by the bank
and transferred to another fund or account of the bank, subject to the
provisions 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 manner
provided 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 fund
shall 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 interest
then earned or accrued to that date on the money or investments in
the reserve fund.
As added by P.L.42-1985, SEC.1.
IC 5-1.4-5-4
Required debt service reserve; appropriation to assure
maintenance; application of funds; excess money
Sec. 4. (a) In order to assure the maintenance of the required debt
service reserve in any reserve fund, the legislative body of the city
may annually appropriate to the bank for deposit in one (1) or more
of the funds the sum, certified by the chairman of the board to the
legislative body, that is necessary to restore one (1) or more of the
funds to an amount equal to the required debt service reserve. The
chairman annually, before December 1, shall make and deliver to the
legislative body a certificate stating the sum required to restore the
funds to that amount. Nothing in this subsection creates a debt or
liability of the city to make any appropriation.
(b) All amounts received on account of money appropriated by the
legislative body of the city to any reserve fund shall be held and
applied in accordance with section 1(b) of this chapter. However, at
the end of each fiscal year, if the amount in any reserve fund exceeds
the required debt service reserve, any amount representing earnings
or income received on account of any money appropriated to the
reserve fund that exceeds the expenses of the bank for that fiscal year
may 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 its
holders, the bank may combine the reserve fund established for each
issue 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.