Pennsylvania Statutes Title 53 P.S. Municipal and Quasi-Municipal Corporations § 16999.9. Sinking fund investments

(a) The ordinance or bond resolution shall provide for the establishment and maintenance of a sinking fund for the payment of interest on and the principal of the bonds at stated maturity or upon mandatory or optional redemption.  Such sinking fund may be an aggregate fund for some or all series of bonds in which case each series shall participate proportionately therein or a separate sinking fund may be established for any particular series.

(b) Each such sinking fund and any other funds or accounts established by the ordinance or bond resolution shall be managed in accordance with the covenants of the city contained in the ordinance or bond resolution and unless stricter requirements are imposed by the ordinance or bond resolution, the moneys therein to the extent not currently required shall be invested from time to time in such securities as may at the time of investment be authorized by law for investment of moneys of the Commonwealth or any of its instrumentalities or shall be deposited in interest-bearing deposits with any bank, bank and trust company or trust company or in shares of building and loan associations or Federal savings and loan associations.  All deposits, including interest-bearing deposits, of moneys in the sinking or other funds, to the extent that the same are not insured by the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation or other Federally authorized corporation or agency, shall be secured either as required by law requiring depositories of the city to give bond or as authorized by law for the securing of public money, or in accordance with such stricter requirements as the ordinance or bond resolution shall provide.  Each bank, bank and trust company, trust company and building and loan association is hereby authorized to so secure such deposits.

(c) Interest and profits received from investments and deposits of moneys in the sinking fund and other funds shall be added to such fund and may be applied in reduction of or to complete required deposits.  Excess moneys in the sinking fund, including moneys for the payment of interest, principal or premiums of bonds unclaimed after the due date of two years and excess moneys in other funds shall be repaid to the municipal utility for its general purposes or applied as may be provided in the ordinance or bond resolution but such repayments of unclaimed moneys shall not discharge such claim which shall continue subject to applicable law.