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HomeMy WebLinkAboutOrdinance 4050 ORDINANCE NO. 4050 AN ORDINANCE AUTHORIZING THE ISSUANCE OF SALES TAX CAPITAL IMPROVEMENT REFUNDING BONDS FOR THE PURPOSE OF REFUNDING THE CITY'S OUTSTANDING SALES TAX CAPITAL IMPROVEMENT BONDS, SERIES 1986; PLEDGING TWENTY PERCENT OF THE CITY'S SHARE OF WASHINGTON COUNTY'S I % SALES AND USE TAX TO PAY THE PRINCIPAL OF AND INTEREST ON THE BONDS; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has determined that in order to receive debt service savings it is in the best interest of the City to refund the City's outstanding Sales Tax Capital Improvement Bonds, Series 1986, in the outstanding principal amount of $2,940,000 (the "Bonds Refunded") authorized by Ordinance No. 3224 of the City, adopted November 6, 1986 ("Ordinance No. 3224"); and WHEREAS, the Bonds Refunded were approved by the voters at the special election held October 7, 1986 in order to finance capital improvements, specifically a portion of the cost of acquiring, constructing and equipping a new Arts Center in the City, in joint venture with the University of Arkansas; and WHEREAS, the City can obtain the necessary funds for the refunding of the Bonds Refunded (the "refunding") by the issuance of Sales Tax Capital Improvement Refunding Bonds, Series 1997, in the aggregate principal amount of $2,610,000 (the "Series 1997 Bonds") and by appropriating available moneys held in certain of the funds established pursuant to the Trust Indenture dated November 15, 1986, authorized by Ordinance No. 3224 (the "Indenture"); and WHEREAS, the City has made arrangements for the sale of the Series 1997 Bonds to Stephens Inc. (the "Purchaser"), at a price of 99. 15% of par plus accrued interest (the "Purchase Price"), pursuant to a Bond Purchase Agreement between the Purchaser and the City (the "Agreement"), which has been presented to and is before this meeting; and WHEREAS, a final Official Statement, dated August 19, 1997 (the "Official Statement"), has been prepared and will be distributed in connection with the offer and sale of the Series 1997 Bonds; and WHEREAS, the Preliminary Official Statement, dated August 6, 1997, offering the Series 1997 Bonds for sale (the "Preliminary Official Statement"), has been presented to and is before this meeting; and WHEREAS, the Bonds Refunded are secured by a pledge of twenty percent (20%) of the City's share of the county-wide 1 % sales and use tax levied by Ordinance No. 97- 16 of the County adopted June 12, 1997; and Page 2 Ordinance No. 4050 August 19, 1997 WHEREAS, a Continuing Disclosure Agreement, dated September 1 , 1997 (the "Continuing Disclosure Agreement"), requiring the City to comply with the requirements of 17 C.F.R. § 240. 15c2-12 has been presented and is before this meeting; NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF FAYETTEVILLE, ARKANSAS, AS FOLLOWS : Section 1 . Authorization for Refunding. The refunding of the Bonds Refunded shall be accomplished, and the Mayor and City Clerk are hereby authorized to take all action necessary in connection therewith and to execute all required contracts and documents. Section 2. Acccntance of Offer to Purchase Bonds. The offer of the Purchaser for the purchase of the Series 1997 Bonds from the City at the Purchase Price, for Series 1997 Bonds bearing interest at the rates per annum, maturing and otherwise subject to the terms and provisions hereafter in this Ordinance set forth in detail be and is hereby accepted and the Agreement, in substantially the form submitted to this meeting, is approved and confirmed and the Series 1997 Bonds are hereby sold to the Purchaser. The Mayor is hereby authorized and directed to execute and deliver the Agreement on behalf of the City and to take all action required on the part of the City to fulfill its obligations under the Agreement. Section 3. Approval of Preliminary Official Statement. The Preliminary Official Statement is hereby approved and the previous use of the Preliminary Official Statement by the Purchaser in connection with the sale of the Series 1997 Bonds is hereby in all respects authorized, approved and confirmed, and the Mayor be and is hereby authorized and directed, for and on behalf of the City, to execute the Preliminary Official Statement and the final Official Statement in the name of the City to be delivered to the Purchaser for use in connection with the sale of the Series 1997 Bonds as set forth in the Agreement. The Mayor of the City is hereby authorized to execute, deliver and permit the distribution of the Official Statement with such changes as he deems advisable in the name of and on behalf of the City. The Mayor's execution and delivery of the Official Statement shall constitute conclusive evidence of his approval of any such changes. Section 4. The Bonds. Under the authority of the Constitution and laws of the State of Arkansas (the "State"), including particularly Amendment No. 62 to the Constitution of the State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation"), City of Fayetteville, Arkansas Sales Tax Capital Improvement Refunding Bonds, Series 1997 are hereby authorized and ordered issued in the total principal amount of $2,610,000 the proceeds of the sale of which are necessary, along with available moneys held in funds established by the Indenture, to provide sufficient funds for accomplishing the refunding of the Bonds Refunded, Page 3 Ordinance No. 4050 August 19, 1997 paying expenses incidental thereto, and paying expenses of issuing the Series 1997 Bonds. The Series 1997 Bonds shall bear interest at the rates and shall mature on November 15 in the amounts and in the years as follows: Year Amount Interest Rate 1998 $290,000 4. 15% 1999 3055000 4.25% 2000 3155000 4.30% 2001 3305000 4.40% 2002 3457000 4.50% 2003 3605000 4.55% 2004 3755000 4.60% 2005 290,000 4.65% The Series 1997 Bonds shall be issuable only as fully registered bonds without coupons in the denomination of $5,000 or any integral multiple thereof. Unless the City shall otherwise direct, the Series 1997 Bonds shall be numbered from 1 upward in order of issuance. Each Series 1997 Bond shall have a CUSIP number but the failure of a CUSIP number to appear on any Series 1997 Bond shall not affect its validity. Each Series 1997 Bond shall be dated September 1 , 1997. Interest on the Series 1997 Bonds shall be payable on November 15, 1997, and semiannually thereafter on May 15 and November 15 of each year. Payment of each installment of interest shall be made to the person in whose name the Series 1997 Bond is registered on the registration books of the City maintained by First Commercial Trust Company, National Association, Little Rock, Arkansas, as Trustee and Paying Agent (the "Trustee"), at the close of business on the last day of the month (whether or not a business day) next preceding each interest payment date (the 'Record Date"), irrespective of any transfer or exchange of any such Series 1997 Bond subsequent to such Record Date and prior to such interest payment date, by check or draft mailed by the Trustee to such owner at his address on such registration books. Payment of the interest on the Series 1997 Bonds shall also be made by wire transfer to the registered owner of a Series 1997 Bond or Bonds upon the request of such owner if such owner is the registered owner of$ 1 ,000,000 or more in principal amount of Series 1997 Bonds. Principal of the Series 1997 Bonds shall be payable upon surrender at maturity at the corporate trust office of the Trustee. Each Series 1997 Bond shall bear interest from the payment date next preceding the date on which it is authenticated unless it is authenticated on an interest payment date, in which event it shall bear interest from such date, or unless it is authenticated prior to the first interest payment date, in which event it shall bear interest from September 1 , 1997, or unless it is authenticated during the a � Page 4 Ordinance No. 4050 August 19, 1997 period from the Record Date to the next interest payment date, in which case it shall bear interest from such interest payment date, or unless at the time of authentication thereof interest is in default thereon, in which event it shall bear interest from the date to which interest has been paid. Only such Series 1997 Bonds as shall have endorsed thereon a Certificate of Authentication substantially in the form set forth in Section 6 hereof(the "Certificate") duly executed by the Trustee shall be entitled to any right or benefit under this Ordinance. No Series 1997 Bond shall be valid and obligatory for any purpose unless and until the Certificate shall have been duly executed by the Trustee, and the Certificate of the Trustee upon any such Series 1997 Bond shall be conclusive evidence that such Series 1997 Bond has been authenticated and delivered under this Ordinance. The Certificate shall be deemed to have been executed if signed by an authorized officer of the Trustee, but it shall not be necessary that the same officer sign the Certificate on all of the Series 1997 Bonds. In case any Series 1997 Bond shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and the Trustee may authenticate and deliver a new Series 1997 Bond of like date, number, maturity and tenor in exchange and substitution for and upon cancellation of such mutilated Series 1997 Bond, or in lieu of and in substitution for such Series 1997 Bond destroyed or lost, upon the owner paying the reasonable expenses and charges of the City and Trustee in connection therewith, and, in the case of a Series 1997 Bond destroyed or lost, his filing with the Trustee evidence satisfactory to it that such Series 1997 Bond was destroyed or lost, and of his ownership thereof, and fiunishing the City and Trustee with indemnity satisfactory to them. The Trustee is hereby authorized to authenticate any such new Series 1997 Bond. In the event any such Series 1997 Bond shall have matured, instead of issuing a new Series 1997 Bond, the Trustee may pay the same without the surrender thereof. Upon the issuance of a new Series 1997 Bond under this Section 4, the Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. The City shall cause books to be maintained by the Trustee for the registration and for the transfer of the Series 1997 Bonds as provided herein and in the Series 1997 Bonds. The Trustee shall act as the bond registrar. Each Series 1997 Bond is transferable by the registered owner thereof or by his attorney duly authorized in writing at the principal office of the Trustee. Upon such transfer a new fully registered Series 1997 Bond or Bonds of the same maturity, of authorized denomination or denominations, for the same aggregate principal amount will be issued to the transferee in exchange therefor. Series 1997 Bonds may be exchanged at the principal corporate trust office of the Trustee for an equal aggregate principal amount of Series 1997 Bonds of any other authorized denomination or denominations. The City shall execute and the Trustee shall authenticate and deliver Series 1997 1 , Page 5 Ordinance No. 4050 August 19, 1997 Bonds which the registered owner making the exchange is entitled to receive. The execution by the City of any Series 1997 Bond of any denomination shall constitute full and due authorization of such denomination and the Trustee shall be thereby authorized to authenticate and deliver such Series 1997 Bond. No charge shall be made to any owner of any Series 1997 Bond for the privilege of transfer or exchange, but any owner of any Series 1997 Bond requesting any such transfer or exchange shall pay any tax or other governmental charge required to be paid with respect thereto. Except as otherwise provided in the immediately preceding sentence, the cost of preparing each new Series 1997 Bond upon each exchange or transfer and any other expenses of the City or the Trustee incurred in connection therewith shall be paid by the City. Neither the Trustee nor the City shall be required (i) to issue, transfer or exchange any Series 1997 Bond during a period beginning at the opening of business 15 days before any selection of Series 1997 Bonds of that maturity for redemption and ending at the close of business on the day of the first mailing of the relevant notice of redemption, or (ii) to transfer or exchange any Series 1997 Bonds selected for redemption in whole or in part. The person in whose name any Series 1997 Bond shall be registered shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal or premium, if any, or interest on any Series 1997 Bond shall be made only to or upon the order of the registered owner thereof or his legal representative, but such registration may be changed as hereinabove provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon such Series 1997 Bond to the extent of the sum or sums so paid. In any case where the date of maturity of interest on or principal of the Series 1997 Bonds or the date fixed for redemption of any Series 1997 Bonds shall be a Saturday or Sunday or shall be in the State a legal holiday or a day on which banking institutions are authorized by law to close, then payment of interest or principal need not be made on such date but may be made on the next succeeding business day with the same force and effect as if made on the date of maturity or the date fixed for redemption, and no interest shall accrue for the period after the date of maturity or date fixed for redemption. Section 5. Signatures. The Series 1997 Bonds shall be executed on behalf of the City by the manual or facsimile signatures of the Mayor and City Clerk and shall have impressed or imprinted thereon the seal of the City. Section 6. Bond Form. The Series 1997 Bonds and the Certificate shall be in substantially the following form and the Mayor and City Clerk are hereby expressly authorized and directed to make all recitals contained therein: ' I Page 6 Ordinance No. 4050 August 19, 1997 (Form of Bond) REGISTERED REGISTERED UNITED STATES OF AMERICA, STATE OF ARKANSAS COUNTY OF WASHINGTON No. $ CITY OF FAYETTEVILLE SALES TAX CAPITAL IMPROVEMENT REFUNDING BOND SERIES 1997 Interest Dated Maturity Rate: _% Date: September 1 , 1997 Date: November 15, _ CUSIP: Registered Owner: Principal Amount: Dollars The City of Fayetteville, County of Washington, State of Arkansas (the "City"), a city of the first class, duly created under the laws of the State of Arkansas, for value received, hereby promises to pay to the Registered Owner shown above, upon presentation and surrender of this bond at the corporate trust office of First Commercial Trust Company, National Association, Little Rock, Arkansas, or its successor or successors, as Trustee and Paying Agent (the "Trustee"), on the Maturity Date shown above, the Principal Amount shown above, in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts and to pay by check or draft to the Registered Owner shown above interest thereon, in like coin or currency from the interest commencement date specified below at the Interest Rate per annum shown above, payable on November 15, 1997 and on each May 15 and November 15 thereafter, until payment of such Principal Amount or, if this bond or a portion hereof shall be duly called for redemption, until the date fixed for redemption, and to pay interest on overdue principal and interest (to the extent legally enforceable) at the rate borne by this bond. Payment of each installment of interest shall be made to the person in whose name this bond is registered on the registration books of the City maintained by the Trustee at the close of business on the last day of the month (whether or not a business day) next preceding each interest payment date (the "Record Date"), irrespective of any transfer or exchange of this bond subsequent to such Record Date and prior to such interest payment date. Payment of the interest on this bond shall also be made by wire transfer to the registered owner of this bond upon the request of such owner if such owner is the registered owner of $ 1 ,000,000 or more in principal amount of the bonds of the series of which this bond is one. Page 7 Ordinance No. 4050 August 19, 1997 This bond shall bear interest from the payment date next preceding the date on which it is authenticated unless it is authenticated on an interest payment date, in which event it shall bear interest from such date, or unless it is authenticated during the period from the Record Date to the next interest payment date, in which case it shall bear interest from such interest payment date, or unless it is authenticated prior to the first interest payment date, in which event it shall bear interest from the Dated Date shown above, or unless at the time of authentication hereof interest is in default hereon, in which event it shall bear interest from the date to which interest has been paid. This bond is one of an issue of City of Fayetteville, Arkansas Sales Tax Capital Improvement Refunding Bonds, Series 1997, aggregating two million six hundred and ten thousand dollars ($2,610,000) in aggregate principal amount (the "bonds"). The bonds have been issued for the purpose of refunding certain outstanding bonds of the City (the "Bonds Refunded"), paying necessary expenses incidental thereto, and paying expenses of authorizing and issuing the bonds. The bonds are issued pursuant to and in full compliance with the Constitution and laws of the State of Arkansas (the "State"), particularly Amendment No. 62 to the Constitution of the State and Title 14, Chapter 164, Subchapter 3 of the Arkansas Code of 1987 Annotated (the "Authorizing Legislation"), and pursuant to an ordinance of the City duly adopted (the "Authorizing Ordinance"), and an election duly held at which the majority of the legal voters of the City voting on the question approved the issuance of the Bonds Refunded. Reference is hereby made to the Authorizing Ordinance for the details of the nature and extent of the security, of the issuance of additional series and of the rights and obligations of the City, the Trustee and the registered owners of the bonds. The bonds are special obligations of the City, payable from twenty percent (20%) of the City's share of collections derived from the 1 % sales and use tax levied in Washington County, Arkansas (the "County") under the authority of the laws of the State, including particularly Title 26, Chapter 74, Subchapter 3 of the Arkansas Code of 1987 Annotated and a special election held in the County on July 28, 1981 (the "Tax") and the City hereby pledges twenty percent (20%) of its share of collections of the Tax for the payment of this bond. The City has reserved the right in the Authorizing Ordinance to issue additional bonds under the Authorizing Ordinance on a panty of security with the bonds. (REFERENCE IS HEREBY MADE TO FURTHER PROVISIONS OF THIS BOND ON THE REVERSE SIDE HEREOF WHICH HAVE THE SAME EFFECT AS IF SET FORTH IN THIS PLACE.) THE CITY HAS DESIGNATED THIS BOND AS A "QUALIFIED TAX-EXEMPT OBLIGATION" WITHIN THE MEANING OF SECTION 265 OF THE INTERNAL REVENUE CODE OF 19869 AS AMENDED. Page 8 Ordinance No. 4050 August 19, 1997 IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and things required to exist, happen and be performed, under the Constitution and laws of the State, particularly Amendment No. 62 to the Constitution of the State and the Authorizing Legislation, precedent to and in the issuance of this bond have existed, have happened and have been performed in due time, form and manner as required by law; that the indebtedness represented by this bond and the issue of which it forms a part does not exceed any constitutional or statutory limitation; and that provision has been made for the payment of the bonds and interest thereon, as provided for in the Authorizing Legislation. This bond shall not be valid until it shall have been authenticated by the Certificate hereon duly signed by the Trustee. IN WITNESS WHEREOF, the City of Fayetteville, Arkansas has caused this bond to be executed by its Mayor and City Clerk, their facsimile signatures thereunto duly authorized and its corporate seal to be impressed, lithographed or imprinted on this bond, all as of the Dated Date shown above. CITY OF FAYETTEVILLE, ARKANSAS By Fred Hanna, Mayor ATTEST: By: City Clerk (SEAL) TRUSTEE'S CERTIFICATE OF AUTHENTICATION This bond is one of the City of Fayetteville, Arkansas Sales Tax Capital Improvements Refunding Bonds, Series 1997, issued under the provisions of the within mentioned Authorizing Ordinance. First Commercial Trust Company, National Association, Trustee By: Authorized Signature Date of Authentication: Page 9 Ordinance No. 4050 August 19, 1997 (Reverse Side of Bond) CITY OF FAYETTEVILLE, ARKANSAS SALES TAX CAPITAL IMPROVEMENT REFUNDING BOND SERIES 1997 The bonds are special obligations of the City payable from the revenues generated by the twenty percent (20%) of the City's share of the Tax. The bonds are further secured by amounts maintained in the Debt Service Reserve Fund established by the Authorizing Ordinance. Moneys in the Debt Service Reserve Fund may be used only for payment of principal of and interest on the bonds and additional parity bonds in the event moneys in the Bond Fund are insufficient for such purposes or to pay the final maturity of and the respective interest on the bonds and additional parity bonds. This bond is transferable by the Registered Owner shown above in person or by his attomey-in-fact duly authorized in writing at the principal corporate trust office of the Trustee, but only in the manner, subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, and upon surrender and cancellation of this bond. Upon such transfer a new fully registered bond or bonds of the same maturity, of authorized denomination or denominations, for the same aggregate principal amount, will be issued to the transferee in exchange therefor. This bond is issued with the intent that the laws of the State shall govem its construction. The City and the Trustee may deem and treat the Registered Owner shown above as the absolute owner hereof for the purpose of receiving payment of or on account of principal hereof and interest due hereon and for all other purposes, and neither the City nor the Trustee shall be affected by any notice to the contrary. The bonds are issuable only as fully registered bonds in the denomination of $5,000, and any integral multiple thereof. Subject to the limitations and upon payment of the charges provided in the Authorizing Ordinance, fully registered bonds may be exchanged for a like aggregate principal amount of fully registered bonds of the same maturity of other authorized denominations. Page 10 Ordinance No. 4050 August 19, 1997 (Form of Assignment) ASSIGNMENT FOR VALUE RECEIVED, ("Transferor"), hereby sells, assigns and transfers unto the within bond and all rights thereunder, and hereby irrevocably constitutes and appoints as attorney to transfer the within bond on the books kept for registration thereof with full power of substitution in the premises. DATE: Transferor NOTICE: The signature(s) to this assignment must correspond with the names appearing upon the face of the within bond in every particular, without alternation or enlargement of any change whatever. GUARANTEED BY: NOTICE: Signature(s) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or a trust company. Section 7. City Covenants and Pledge of Tax Revenues. The City hereby expressly pledges and appropriates twenty percent (20%) of the City's share of collections of the Tax , to the payment of the principal of and interest on the Bonds when due and to the payment of the fees and charges of the Trustee. Such revenues pledged to the payment of the Bonds are hereinafter referred to as the "Pledged Revenues." The City covenants it shall do nothing that will repeal or reduce the Tax in the City while any of the Bonds are outstanding. The City further covenants to use due diligence in collecting the Pledged Revenues. In the event the County repeals or ceases to collect the Tax, the City covenants to forthwith (a) notify the Arkansas Department of Finance and Administration to take all actions necessary to continue to collect the Tax within the City and disburse those collections as authorized by Arkansas Code of 1987 Annotated § 14- 164-337. Such collections are also hereby pledged to the payment of the principal of and interest on the Bonds and fees and charges of the Trustee and shall be a part of the Pledged Revenues and (b) take such action as is necessary for the Tax to continue to be collected in the City until the Bonds are retired or provision is made for their payment in accordance with this Ordinance. Page 11 Ordinance No. 4050 August 19, 1997 The Bonds shall be specifically secured by a pledge of the Pledged Revenues, which pledge in favor of the Bonds is hereby irrevocably made according to the terms of this Ordinance, and the City, and the officers and employees of the City, shall execute, perform and carry out the terms thereof in strict conformity with the provisions of this Ordinance. It is hereby covenanted and agreed by the City with the owners of the Bonds that the City will faithfully and punctually perform all duties with reference to the Pledged Revenues and the Bonds required by the Constitution and laws of the State and by this Ordinance, including the levy of the Tax within the City and the collection of the Pledged Revenues, as herein specified and covenanted and the applying of the Pledged Revenues as herein provided. Section S. Funds. The following funds are hereby created and shall be held and maintained by the Trustee and the City pursuant to the provisions of this Ordinance: (1 ) Revenue Fund; (2) Bond Fund; (3) Debt Service Reserve Fund; and (4) Cost of Issuance Fund. The Revenue Fund shall be maintained by the City as a segregated fund and the Bond Fund, Debt Service Reserve Fund, and Cost of Issuance Fund shall be maintained by the Trustee as segregated funds. The City may, in connection with the issuance of any Additional Bonds, create additional funds and accounts as may be necessary or convenient. ( 1 ) Revenue Fund. The City shall promptly deposit to the Revenue Fund all Pledged Revenues as received and shall transfer to the Trustee, before the fifteenth day of each month, the amounts required for debt service on the Bonds as described below: 4 (a) The City shall transfer to the Trustee for deposit to the Bond Fund an amount equal to one-sixth (1 /6th) of the interest due on the Bonds on the next interest payment date plus one-twelfth (1/12th) of the principal due on the Bonds on the next principal payment date, after taking into account amounts held in the Bond Fund for the payment of such principal and interest on the Bonds. The City shall also transfer any amount required to pay any Trustee and Paying Agent fees for the Bonds. Notwithstanding the above, the City shall increase the monthly deposits into the Bond Fund in order to make the first interest payment on the Series 1997 Bonds. (b) The City shall transfer to the Trustee, for deposit into the Debt Service Page 12 Ordinance No. 4050 August 19, 1997 Reserve Fund for the Bonds, beginning in the month in which a deficiency in the Debt Service Reserve Fund was created by a withdrawal, valuation change or otherwise, an amount equal to at least one-twelfth ( 1/12th) of the amount of such deficiency until the amount in the Debt Service Reserve Fund is equal to the Required Level (as hereinafter defined). (c) Any moneys remaining in the Revenue Fund, following the transfers required by this Section 8, may be used for any lawful purpose as determined by the City. (2) Bond Fund. The Trustee shall promptly deposit the following receipts to the Bond Fund: (a) Any accrued interest received as proceeds from the Bonds; (b) All amounts required to be transferred from the Revenue Fund, held by the City; (c) All amounts required to be transferred from the Debt Service Reserve Fund; and (d) All amounts required to be transferred from the Cost of Issuance Fund. The Trustee shall pay from moneys on deposit in the Bond Fund, to the Paying Agent for the Bonds (i) on each interest payment date, the amount required for the payment of interest on the Bonds due on said interest payment date, and (ii) on any principal payment date, the amount required for the payment of principal due on the Bonds on said principal payment date and such amounts shall be so applied by the Paying Agent. The Trustee shall pay, from moneys on deposit in the Bond Fund, to the Trustee and Paying Agent any fees due on any interest payment date or principal payment date. Whenever the moneys in the Bond Fund are insufficient to pay the interest and principal due on the Bonds on any interest payment date or principal payment date, the Trustee shall on such payment date, withdraw from the Debt Service Reserve Fund and deposit into the Bond Fund an amount equal to the deficiency. On each interest payment date, any balance remaining in the Bond Fund after all payments required by this Section 8 have been made less amounts on deposit for the next principal payment, shall be transferred to the City to be used for any lawful purpose as determined by the City. (3) Debt Service Reserve Fun . The Debt Service Reserve Fund is created for the purpose of providing a reserve for payment of principal and interest on the Bonds. The Debt Service Reserve Fund shall be maintained in an amount equal to one-half of the maximum annual principal and interest requirements for the Bonds (the "Required Level'). Upon issuance of the Bonds, there