The assets and accounts of each of the several sinking funds of the city established prior to July first, nineteen hundred eighty-one shall be kept separate and distinct, and they shall in all respects be administered as independent trusts, with the intent and purpose of preserving inviolate the rights of holders of corporate stock redeemable therefrom.
Between the city and the holders of its corporate stock redeemable from the several sinking funds of the city established prior to July first, nineteen hundred eighty-one there is hereby declared to be a contract that the funds and revenues of the city, raised pursuant to section two hundred seventy-six of the charter and the rapid transit law as amended shall be applied to such sinking funds until all of such debt redeemable therefrom is fully redeemed and paid.
It shall be lawful for the comptroller in his or her discretion from time to time but not before maturity, to cancel any portion of the indebtedness of the city incurred on or after January first, eighteen hundred ninety-eight, which may be held by him or her in any sinking fund of the city established prior to July first, nineteen hundred eighty-one and which may by law be redeemable from such sinking fund.
All obligations which shall be purchased by the comptroller with respect to the several sinking funds of the city established prior to July first, nineteen hundred eighty-one shall be transferred to the comptroller, and all transfers thereof shall be made by the comptroller. Obligations of the city which shall be purchased by the comptroller shall not be cancelled by the comptroller until the final redemption of the same, and all interest accruing therefrom shall regularly be paid to the appropriate sinking funds.
Whenever it shall appear to the mayor that the accumulations in any sinking fund of the city established prior to July first, nineteen hundred eighty-one will be insufficient to meet the payment of any corporate stock falling due in the next following fiscal year redeemable therefrom, it shall be the mayor's duty to include in the annual budget for such year, such an amount to be applied to the payment of such corporate stock as shall be sufficient to meet any such deficiency, and the amount shall be paid into such sinking fund.
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