The Division shall pay to members of the Association interest on any retroactive pay which may be paid to such members, on condition that the interest shall be paid for the period of time between the dates the parties apply for arbitration and the date on which any payment is subsequently paid and, in addition, will be paid only on such amounts as would have been outstanding from time to time until such time as payment is finally made. The interest shall be paid on the net pay due each teacher and not the gross pay. Such interest shall be computed at the average rate at which the Division borrows funds during the 12-month period preceding the calculation date or at 8.5%, whichever is less.