Repository: UIHistories Project: Board of Trustees Minutes - 1976 [PAGE 683]

EXTRACTED TEXT FROM PAGE:

672

BOARD OF TRUSTEES

[June 16

Article Six — Application of Proceeds of Sale of Bonds SECTION 6.01. Custody and Application of Bond Proceeds. T h e 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 Bonds as is determined by the Board of Trustees to be necessary to be so set apart representing interest and principal, if any, to become due on such Bonds prior to the time the facilities for the account of which such Bonds have been issued become revenue producing and funds become available therefrom, shall be deposited in the Bond and Interest Sinking Fund Account. T h e remaining part of such purchase price shall be retained by the University and accounted for as a separate fund or funds to be known as a "Construction Fund Account" and such money shall be deposited in a bank or banks which are members of the Federal Deposit Insurance Corporation. The money in each Construction Fund Account shall be applied only toward the cost of construction in the manner and subject to the terms provided in any contract or agreement between the Board of Trustees and any purchaser of Bonds or as may be provided by a resolution supplemental hereto and relating to each separate series of Bonds to be issued hereunder, but in such a manner as to assure completion of the project or improvement for the account of which such Bonds were issued free and clear of mechanic's liens and substantially in accordance with the plans and specifications therefor. SECTION 6.02. Investment of Construction Fund. Pending disbursement for the purpose aforesaid the Comptroller may from time to time invest all or any part of the moneys in the Construction Fund Account not to be needed within the next succeeding thirty (30) days for the purposes hereinabove set forth in bonds, or other direct and general obligations of the United States of America having a maturity date or becoming due at the option of the holder not more than three years subsequent to the date of receipt of the proceeds from the issue or sale of Bonds. Interest accruing as a result of any such investments when received shall be credited to the Construction Fund Account. SECTION 6.03. Disposition of Surplus Funds. After completion of each construction or improvement project, the Comptroller of the University shall execute a certificate to the effect that said project has been fully completed according to the plans and specifications and the same filed in the office of the Secretary of the Board of Trustees. Subject to the terms and provisions of any contract or agreement between the Board of Trustees and any original purchaser of Bonds and relating to any separate series of Bonds to be issued hereunder, if there be funds remaining in a Construction Fund Account at the time of the filing of such certificate with the Secretary, said funds shall be withdrawn by the Comptroller and deposited in the Bond and Interest Sinking Fund Account. Any contract or agreement between the Board of Trustees and any original purchaser of Bonds may provide that any funds remaining in a Construction Fund Account established for the account of any series of Bonds being acquired by such purchaser be applied to the redemption of such Bonds or other Bonds then subject to redemption or to the purchase of Bonds on the open market. SECTION 6.04. Arbitrage. T h e principal proceeds of the sale of the Series 1976 Bonds shall be devoted to and used with due diligence for the completion of the Project for which said Bonds are hereby authorized to be issued. T h e Board of Trustees represents and certifies that: (1) the Board of Trustees expects within six months after the delivery of the Series 1976 Bonds, to incur substantial binding obligations equal to at