9-530. Service charges; taxation and budgeting; computation

A. The governing body of the municipality issuing the bonds shall prescribe service charges, and shall revise them when necessary, so that a utility undertaking for which the bonds were issued shall always remain self-supporting with revenue sufficient:

1. To pay when due all bonds, interest and continuing fees and expenses on the bonds or, if applicable, on the reimbursement agreement, for the payment of which the revenue has been pledged, encumbered or charged.

2. To provide for all expenses of operation, maintenance, expansion and replacement of facilities.

3. To provide reasonable reserves.

B. Until payment of all bonds on any public utility issued under this article, and the expiration of the municipal fiscal year in which the bonds are paid in full, no receipts segregated or collected for the purpose of paying the principal of and interest and redemption charges on bonds and other lawful long-term obligations issued or incurred for a specific capital purpose shall be subject to the provisions of title 42, chapter 17.

C. In computing the annual interest requirements of bonds described in section 9-529, subsection G, the governing body shall determine a rate which is not more than the maximum rate permitted under the terms of their issuance. In making the determination, the governing body shall set a rate that is not less than one hundred twenty-five per cent of the rate in effect on the date of determination, or if the bonds are not then issued, one hundred twenty-five per cent of the initial rate on the bonds, except that if such determination exceeds the maximum rate permitted under the terms of issuance, the rate shall be the maximum rate.