§ 1711. RESERVE FUND FOR SUBSIDENCE CONTINGENCIES.

There is hereby created and established a special fund, to be designated as the "Reserve Fund for Subsidence Contingencies," which shall be a continuing fund not subject to transfer at the close of the fiscal year.

There shall be deposited in the City Treasury to the credit of said fund all monies payable to the City in accordance with any provision for a "reserve for subsidence contingencies" as contained in the "Contractors' agreement," as defined and referred to in Chapter 138, Statutes of 1964, First Extraordinary Session. All of said amounts, together with interest, shall be invested in bonds issued by the State of California, or, if such bonds are unavailable, then in security of the United States. In the event said Chapter 138 is amended to permit the investment of monies in said fund in bonds issued by the State of California or in security of the United States, then this Section shall be deemed to also permit such investment instead of as restricted above.

There shall be expended from such fund, whether or not included in the official City budget, sufficient monies to indemnify and hold harmless the City, the State of California, and any and all contractors under the aforesaid Contractors' agreement from claims, judgments and costs of defense, arising from subsidence alleged to have occurred as a result of operations under said agreement.

There shall also be expended from such fund monies to pay subsidence costs or the costs of conducting repressuring operations in the event there is no oil revenue, as defined in Chapter 138 aforesaid, or the oil revenue is insufficient to pay such costs.

Monies in said fund shall not be otherwise expended, nor shall any distribution be made therefrom, except in accordance with the provisions of Chapter 138, Statutes of 1964 First Extraordinary Session.