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15. Fund and Accounts. For the convenience and proper administration of the moneys to be borrowed and repaid on the Bonds, and to make adequate and specific security to the Purchaser and holders from time to time of the Bonds, there is hereby created a special fund to be designated the "General Obligation Improvement Refunding Bonds, Series 2004A Fund" (the "Fund") to be administered and maintained by the Finance Director as a bookkeeping account separate and apart from all other funds maintained in the official financial records of the City. The Fund shall be maintained in the manner herein specified until all of the Bonds herein authorized and the interest thereon shall have been fully paid. There shall be maintained and created in the fund the "Payment Account" and a"Debt Service Account". (a) Pavment Account. The proceeds of the Bonds, less accrued interest and any unused discount, shall be deposited in the Payment Account. On or prior to June 1,2004, the Finance Director shall transfer $ of the proceeds of the Bonds from the Payment Account to the paying agent for the Refunded Bonds, which sum is sufficient, together with other funds on deposit in Prior Bonds Debt Service Fund created by the Prior Resolution to pay the principal and interest due on the Refunded Bonds on June 1,2004, including the principal of the Refunded Bonds called for redemption on that date. The remainder of the monies in the Payment Account shall be used to pay the costs of issuance of the Bonds. Any monies remaining in the Payment Account after payment of all costs of issuance and payment of the Refunded Bonds shall be transferred to the Debt Service Account. �b� Debt Service Account. To the Debt Service Account there is hereby pledged and irrevocable appropriated and there shall be credited: (1) accrued interest; (2) any balance remaining after June 1,2004, in the Prior Bonds Debt Service Fund createdby the Prior Resolution; (3) any uncollected special assessments which were heretofore pledged for the payment of the Refunded Bonds and are herein pledged to the payment of the Bonds; (4) unused discount; (5) all investment earnings on funds in the Debt Service Account; (6) any taxes herein or hereafter levied for the payment of the Bonds; and (7) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Debt Service Account. The amount of any surplus remaining in the Debt Service Account when the Bonds and interest thereon are paid shall be used consistent with Minnesota Statutes, Section 475.61, Subdivision 4. The moneys in the Debt Service Account shall be used solely to pay the principal of and interest on the Bonds or any other bonds hereafter issued and made payable from the Fund. No portion of the proceeds of the Bonds shall be used directly or indirectly to acquire higher yielding investments or to replace funds which were used directly or indirectly to acquire higher yielding investments, except { 1) for a reasonable temporary period until such proceeds are needed for the purpose for which the Bonds were issued, and (2) in addition to the above, in an amount not greater than the lesser of five percent of the proceeds of the Bonds or $100,000. To this effect, any proceeds of the Bonds and any sums from time to time held in the Fund (or any other City account which will be used to pay principal and interest to become due on the Bonds) in excess of amounts which under the applicable federal arbitrage regulations may be invested without regard as to yield shall not be invested in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, the proceeds of the Bonds and money in the Fund shall not be invested in obligations or deposits �� l3