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ARTICLE V ESTABLISHMENT OF FUNDS; DEPOSIT AND APPLICA nON OF MONEYS Section 501. Establishment of Funds. There have been or shall be established in the treasury of the City and shall be held and administered by the Director of Finance of the City the following separate funds and accounts: (a) Project Fund. (b) Debt Service Fund. (c) Debt Service Reserve Fund. Section 502. Deposit of Bond Proceeds. The net proceeds received from the sale of the Bonds shall be deposited simultaneously 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 sum of $70,000 from the proceeds of the Bonds shall be deposited in the Debt Service Reserve Fund and applied in accordance with Section 505 hereof. (c) The remaining balance of the proceeds derived from the sale of the Bonds shall be deposited in the Project Fund and shall be applied in accordance with Section 503 hereof to pay costs of the Project and costs of issuing the Bonds. Section 503. Application of Moneys in the Project Fund. (a) Moneys in the Project Fund shall be used by the City solely for the purpose of (i) paying the costs associated with the Project and (ii) paying the costs and expenses of issuing the Bonds. (b) The Director of Finance shall make withdrawals from the Project Fund only upon duly authorized and executed certificates of the City Manager 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. Nothing hereinbefore contained shall prevent the payment out of the Project Fund of all costs and expenses incident to the issuance of the Bonds without such a certificate. (c) Upon completion of the purpose for which the Bonds have been issued, any surplus remaining in the Project Fund shall be transferred to and deposited in the Debt Service Fund. Section 504. Application of Moneys 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 Director of Finance is authorized and directed to withdraw from the Debt Service Fund sums sufficient to pay principal or Redemption Price of and interest on the Bonds and the fees and expenses of the Paying -15-