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ARTICLE V ESTABLISHMENT OF FUNDS; DEPOSIT AND APPLICA nON OF MONEY Section 501. Establishment of Funds. There have been or shall be established in the City's treasury and shall be held and administered by the City's Treasurer the following separate funds: (a) Construction Fund. (b) Debt Service Fund. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited with the delivery of the Bonds as follows: (a) All accrued interest received from the sale of the Bonds shall be deposited in the Debt Service Fund and applied in accordance with Section 504 hereof. (b) The remaining balance of the proceeds derived from the sale of the Bonds ($2,000,000) shall be deposited in the Construction Fund and shall be applied in accordance with Section 503 hereof. Section 503. Application of Moneys in the Construction Fund. Moneys in the Construction Fund shall be used by the City solely for the purpose of (a) paying the costs of the Project in accordance with the plans and specifications therefor prepared by the City's architects heretofore approved by the City Council and on file in the office of the City Clerk, including any alterations in or amendments to said plans and specifications deemed advisable by the City's architects and approved by the City Council, and (b) paying the costs and expenses of issuing the Bonds. The City's Treasurer shall make withdrawals from the Construction Fund upon satisfaction that such payment is being made for a purpose within the scope of this Ordinance and that the amount of such payment represents only the contract price of the property, equipment, labor, materials or service being paid for or, if such payment is not being made pursuant to an express contract, that such payment is not in excess of the reasonable value thereof. Upon completion of the purpose for which the Bonds have been issued, any surplus remaining in the Construction Fund shall be transferred to and deposited in the Debt Service Fund. Section 504. Application of Money in Debt Service Fund. (a) All amounts paid and credited to the Debt Service Fund shall be expended and used by the City for the sole purpose of paying the principal or Redemption Price of and interest on the Bonds as and when the same become due and the usual and customary fees and expenses of the Paying Agent. The City's Treasurer is authorized and directed to withdraw from the Debt Service Fund sums sufficient to pay both principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Paying Agent as and when the same become due, and to forward such sums to the Paying Agent in a manner which ensures that the Paying Agent will receive immediately available funds in such amounts on or before the Business Day immediately preceding the dates when such principal or Redemption Price, interest and the fees and expenses of the Paying Agent will become due. All money deposited with the Paying Agent shall be deemed to be deposited in accordance with and subject to all of the provisions -15-