§ 734 - Reserve fund - Vermont Statutes

§ 734. Reserve fund

(a) The authority shall establish and maintain a special fund called the "Vermont Transportation Authority Reserve Fund" in which there shall be deposited:

(1) All moneys appropriated by the state for the purpose of the fund;

(2) All proceeds of bonds required to be deposited therein by terms of any contract between the authority and its bondholders or any resolution of the authority with respect to the proceeds of bonds; and

(3) Any other moneys or funds of the authority which it determines to deposit therein.

(b) Moneys in the reserve fund shall be held and applied solely to the payment of the interest on and principal of bonds of the authority as they become due and payable and for the retirement of bonds. Money may not be withdrawn if it reduces the amount in the reserve fund to an amount less than the "required debt service reserve" which means, as of any date of computation, the amount or amounts required to be in the reserve fund as provided by resolution of the authority, except for payment of interest then due and payable on bonds and the principal of bonds then maturing and payable and for the retirement of bonds in accordance with the terms of any contract between the authority and its bondholders and for which other moneys of the authority are not then available. Required debt service reserve shall not be required by resolution of the authority to exceed "maximum debt service" which means, as of any date of computation, the largest amount of money required by the terms of all contracts between the authority and its bondholders to be raised in any succeeding calendar year for the payment of interest on and maturing principal of outstanding bonds and payments required by the terms of any contracts to sinking funds established for the payment or redemption of bonds, all calculated on the assumption that the bonds will cease to be outstanding after date of the computation by reason of the payment of the bonds at their respective maturities and the payments of the required moneys to sinking funds and the application thereof in accordance with the terms of all contracts to the retirement of bonds.

(c) Moneys in the reserve fund at any time:

(1) In excess of the required debt service reserve, whether by reason of investment or otherwise, may be withdrawn by the authority and transferred to any other fund or account of the authority; and

(2) May be invested in the same manner as permitted for investment of funds belonging to the state or held in the treasury.

(d) For purposes of valuation, investments in the reserve fund shall be valued at par if purchased at par or at amortized value, defined by resolution of the authority, if purchased at other than par.

(e) Notwithstanding any other provision of this chapter, bonds shall not be issued by the authority unless there is in the reserve fund the required debt service reserve for all bonds then issued and outstanding and the bonds to be issued. However, the authority may satisfy the requirement by depositing so much of the proceeds of the bonds to be issued, upon their issuance, as is needed to achieve the required debt service reserve. The authority may at any time issue its bonds or notes for the purpose of increasing the amount in the reserve fund to the required debt service reserve, or to meet higher or additional reserve fixed by the authority with respect to the fund.

(f) In order to assure the maintenance of the required debt service reserve in the reserve fund there shall be appropriated annually and paid to the authority for deposit in the fund, a sum certified by the chairman of the authority to the governor or to the governor-elect, necessary to restore the fund to an amount equal to the required debt service reserve. Annually, on or before February 1, the chairman shall make and deliver to the governor or the governor-elect his certificate stating the sum required to restore the fund to the required debt service reserve. The sum certified shall be appropriated and paid to the authority during the then current fiscal year. The state shall have a first lien on the authority facilities in the amount of such sum so appropriated. Such lien shall be prior to all other liens theretofore or thereafter attaching to such authority facilities.

(g) The authority may establish additional reserves or other funds or accounts necessary, desirable, or convenient to further the accomplishment of its purposes or to comply with the provisions of any of its agreements or resolutions.

(h) Money or investments in any fund or account of the authority established or held for any bonds, notes, indebtedness or liability to be paid, funded or refunded by issuance of bonds or notes shall, unless the resolution authorizing the bonds or notes provides otherwise, be applied to the payment or retirement of the bonds, notes, indebtedness or liability. If, in any fund or account, there are any moneys in excess of the amount required for payment, funding or refunding, the moneys may be removed from that fund or account but only to the extent that the moneys or investments remaining in the fund or account are not less than the outstanding bonds, notes, indebtedness or liability of the authority to be paid, funded or refunded and for which that fund or account was established or held. (Added 1973, No. 14, § 2, eff. Feb. 23, 1973.)