Reserve fund for improvement bond payments

(a) The council may provide in the resolution adopted pursuant to section 12-10 for a reserve fund as additional security for the payment of principal and interest on improvement bonds issued in proceedings taken pursuant to this chapter. The reserve fund shall be initially funded from the proceeds from the sale of improvement bonds with respect to which such reserve fund is established in such amount as is designated by the council in the resolution authorizing such bonds. Moneys in a reserve fund shall be used in accordance with the provisions of section 12-49 and to pay the principal or interest, or both, in whole or in part, on the last outstanding maturity or maturities of the bonds, and assessment installments or such portions thereof which would otherwise be collected to make such payments shall be canceled, provided that in making use of moneys in the reserve fund to pay principal or interest, or both, on the last outstanding maturity or maturities of the bonds, the director of finance shall make provisions for expected delinquencies in payment of any portions of assessment installments which will not be canceled by such use of the reserve fund, and provided further that insofar as the moneys are attributable to fully paid assessments rather than to cancellation of installments or portions thereof, the moneys shall be paid pro rata to the persons who at the time of such apportionment own (as shown on the records of the County tax office) the assessment units subjected to the assessments. (b) There shall be transferred to the improvement district revolving fund of the County: (1) Any portion of such moneys which shall not have been paid to or claimed by the persons entitled thereto within two years after the due date of the last bonds; and (2) Any interest earned from the investment of such moneys during the two year period.