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2. THE CITY'S CONSTRUCTION CONTRIBUTION <br /> <br />(a) <br /> <br />As of the effective date of this Agreement, the City's net present value <br />contribution to the costs of constructing the Facility is $111,035 (the "Present <br />Value Contribution"). <br /> <br />(b) <br /> <br />The City shall pay the Present Value Contribution in full to the Humane Society <br />on January 31, 2001. <br /> <br />(c) <br /> <br />The City shall have no further responsibility to provide any additional funding for <br />construction of the Facility beyond the amounts set forth above. <br /> <br />3. THE CITY'S RESERVE FUND CONTRIBUTION <br /> <br />(a) <br /> <br />"Reserve Fund Contribution" shall mean those annual payments to be made by the <br />City to the Humane Society which shall be received, held and used by the Humane <br />Society as part of "Reserve Fund," as defined below. <br /> <br />(b) <br /> <br />"Reserve Fund" shall mean a segregated account that will be established by the <br />Humane Society in connection with the issuance of the Bonds to hold funds that <br />will be used for future repairs or renovations to the Facility. Such funds will not <br />be used for the Facility's day-to-day operating expenses, but instead will be used <br />to perform necessary or reasonable repairs or renovations that will maintain the <br />integrity of the Facility and extend its useful life. <br /> <br />(c) <br /> <br />Beginning as of January 1, 2003, the Humane Society shall establish the Reserve <br />Fund, to be funded annually during the following 18 years; i.e., through 2020. <br />Each year during such 18-year period, the Humane Society projects depositing <br />approximately $68,000 into the Reserve Fund. <br /> <br />(d) <br /> <br />In addition to the amounts that will be deposited into the Reserve Fund by the <br />Humane Society, and in addition to the'City's construction contribution, the City <br />shall also pay to the Humane Society, as the City's Reserve Fund Contribution, 18 <br />annual payments of $2,221 each, subject to the appropriation of the subject funds <br />by the Council and further subject to the other limitations set forth this <br />Agreement. <br /> <br />(e) <br /> <br />The City's annual Reserve Fund Contribution represents 2% of the City's <br />$111,035 net present value contribution to the costs of constructing the Facility. <br />Each $2,221 annual payment shall be made by the thirty-first day of January, <br />commencing on January 31, 2003 and continuing through January 31, 2020. <br /> <br />(f) <br /> <br />The City's obligation to make its annual Reserve Fund Contribution payments <br />shall be contingent upon the completion of the Facility's construction. <br /> <br />4. NO DEBT <br /> <br /> <br />