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manner herein specified until all of the Bonds and the interest thereon have been fully paid. There shall be maintained in the Fund separate accounts, to be designated the "Construction Account" and "Debt Service Account ", respectively: (a) Construction Account. To the Construction Account there shall be credited the proceeds of the sale of the Bonds, less accrued interest received. From the Construction Account there shall be paid all costs and expenses of the Improvements, including the cost of any construction contracts heretofore let and all other costs incurred and to be incurred of the kind authorized in Minnesota Statutes, Section 475.65. Any balance remaining in the Construction Account after completion of the Improvements shall be transferred to the Debt Service Account. Moneys in the Construction Account shall be used for no other purpose except as otherwise provided by law; provided that the proceeds of the Bonds may also be used to the extent necessary to pay interest on the Bonds due prior to the anticipated date of commencement of the collection of taxes or special assessments herein levied or covenanted to be levied or receipt of State -Aid funds, If upon completion of the Public Improvements there shall remain any unexpended balance in the Construction Account for the Improvement Portion of the Bonds, the balance (other than any special assessments) shall be transferred by the City Council to the Improvements Debt Service Subaccount or the fund of any other improvement instituted pursuant to Minnesota Statutes, Chapter 429, and provided further that any special assessments credited to the Construction Account for the Improvement Portion of the Bonds shall only be applied towards payment of the costs of the Public Improvements upon adoption of a resolution by the City Council determining that the application of the special assessments for such purpose will not cause the City to no longer be in compliance with Minnesota Statutes, Section 475.61, Subdivision 1. (b) Debt Service Account. There shall be maintained two separate subaccounts in the Debt Service Account to be designated the "Improvements Debt Service Subaccount" and the "State -Aid Improvements Debt Service Subaccount." There are hereby irrevocably appropriated and pledged to, and there shall be credited to the separate subaccounts of the Debt Service Account: 4057760v3 (i) Improvements Debt Service Subaccount. To the Improvements Debt Service Subaccount there shall be credited: (A) all collections of special assessments herein covenanted to be levied with respect to the Improvements and either initially credited to the Construction Account and not already spent as permitted above and required to pay any principal and interest due on the Improvement Portion of the Bonds or collected subsequent to the completion of the Public Improvements and payment of the costs thereof; (B) a pro rata share of all accrued interest received upon delivery of the Bonds; (C) any collections of all taxes herein or hereinafter levied for the payment of the Improvement Portion of the Bonds; (D) a pro rata share of all funds remaining in the Construction Account after completion of the Public Improvements and payment of the costs thereof; (E) all investment earnings on funds held in the Improvements Debt Service Subaccount; and (F) any and all other moneys which are properly available and are appropriated by the governing body of the City to the Improvements Debt Service Subaccount. The Improvements Debt Service Subaccount shall be used solely to pay the principal and interest and any premium for redemption of the 16