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A. Taxation. For the purpose of maintaining the local improvement guaranty fund, the City shall, at the time of making its annual budget and tax levy, provide for the levy of a sum sufficient, with the other sources of the fund, to pay the warrants issued against the fund during the preceding fiscal year and to establish a balance therein; provided, that the levy in any one year shall not exceed the greater of (1) twelve percent of the outstanding obligations guaranteed by the fund, or (2) the total amount of delinquent assessments and interest accumulated on the delinquent assessments before the levy as of September 1st. The taxes levied for the maintenance of the local improvement guaranty fund shall be additional to and, if need be, in excess of all statutory and other limitations applicable to tax levies in the City.

B. Interest and Earnings. The local improvement guaranty fund shall be maintained in an interest-bearing account with the interest accrued to be paid into the fund; provided, that the City may invest funds maintained in the local improvement guaranty fund with the earnings to be paid into the fund, so long as the remaining net cash is not reduced below ten percent of the net outstanding obligations guaranteed by such funds.

C. Subrogation Rights to Assessments. Whenever any sum is paid out of the local improvement guaranty fund on account of principal bond or warrant, the City as trustee of the fund shall be subrogated to all the rights of the holder of the bond or interest coupon or warrant so paid, and the proceeds thereof, or of the underlying assessment, shall become part of the guaranty fund.

D. Surplus from Improvement Funds. If in any local improvement fund guaranteed by a local improvement guaranty fund there is a surplus remaining after the payment of all outstanding bonds and warrants payable therefrom, it shall be paid into the local improvement guaranty fund. (Ord. 1426 § 1 (part), 1988).