Repository: UIHistories Project: Board of Trustees Minutes - 1962 [PAGE 252]

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1960]

UNIVEKSITY OF ILLINOIS

249

of the proceeds of the Bonds or from a Construction Fund Account shall not be deemed to be interest or principal to become due on the Bonds. After setting aside funds for the payment of Bonds which have matured and for past due interest or interest coupons and for principal, accrued interest and premium, if any, on Bonds called for redemption but not paid, funds of the Bond and Interest Sinking Fund Account in excess of the principal and interest requirements _ for the next succeeding twelve (12) months may be invested by the depository from time to time by written order of the Comptroller in United States Government securities maturing not more than five (5) years from date of purchase. Funds held for interest and principal payments during the next succeeding twelve (12) months (excluding funds held for the payment of Bonds which have matured and for past due interest or interest coupons and for principal, accrued interest and premium, if any, on Bonds called for redemption but not paid) may be invested by the depository from time to time by written order of the Comptroller in United States Government securities maturing not later than ten (10) days prior to the next interest payment date. (c) After setting aside all funds at the time required for the purposes specified in paragraph (a) above and all funds required to meet the next succeeding deposit required to be made by paragraph (b) above, into said Bond and Interest Sinking Fund Account, the University shall establish on its books an Improvement and Replacement Reserve to which there shall be credited in each fiscal year commencing with the fiscal year beginning July 1, 1962, the sum of not less than $25,000 a year. Said Improvement and Replacement Reserve shall be used by the University for the purpose of paying the cost of unusual or extraordinary maintenance or repairs, renewals, replacements, and improvements, and the renovating, purchase or replacements, of furniture and equipment not paid as part of the ordinary and normal operating expenses of the facilities. Funds standing to the credit of said Improvement and Replacement Reserve may be invested by the Comptroller in United States Government securities until such time as funds are needed. In the event that there is any deficiency in the funds required to be deposited semiannually into the Bond and Interest Sinking Fund Account or there is a deficiency in the debt service reserve, as provided in paragraph (b) above, sufficient funds shall be transferred from the Improvement and Replacement Reserve and deposited in the Bond and Interest Sinking Fund Account to eliminate such deficiency. (d) All funds remaining in said IIHni Union and Health Center Bond Fund in any fiscal year after the full debt service reserve prescribed in subsection (b) of this Section has been provided for and after all provisions in subsections (a), (b) and (c) of this section have been met and all deficiencies have been made up, shall be deemed surplus moneys and shall be used for any of the following purposes: (1) for calling and redeeming the outstanding Bonds, which by their terms are redeemable prior to maturity; (2) for purchasing Bonds in the open market, with all unmatured interest coupons thereto attached at the lowest prices reasonably attainable, but not exceeding the amount at which such Bonds at the time are redeemable; {3) for investment by the Comptroller in United States Government securities until such time as funds are needed for other purposes; (4) for unusual or extraordinary repairs, replacements or improvements to the facilities, for which no funds can be properly provided in subsection (a) above or which are in excess of the amount available therefor in the Improvement and Replacement Reserve; and (5) for any lawful purpose as the Board of Trustees may direct. ARTICLE SIX

APPLICATION OF PROCEEDS OF SALE OF BONDS

SECTION 6.01, Custody and Application of Bond Proceeds. The proceeds from the sale of Bonds to be issued from time to time hereunder shall be applied only toward the cost of acquiring, constructing, equipping, enlarging, or improving facilities, all as hereinbefore provided. When received, the part of the purchase price of Bonds representing the interest accrued on Bonds to the date of payment of such purchase price, together with such portion of the proceeds of the Honds as is determined by the Board of Trustees to be necessary to be so set apart