§4318. Disbursement of funds; operating funds established

The funds derived from the operation and management of said systems shall be disbursed as follows:

(1) Between February 1st and January 31st of the following calendar year, there shall be set aside from time to time and as needed amounts sufficient to provide for the payment of the reasonable and necessary expenses of operating and maintaining the light, power and water systems. This fund shall be designated as the operation and maintenance fund. The commission shall adopt a budget of expenses for the operation of said systems and shall file same with the clerk of the municipality. This budget shall estimate as accurately as possible the amounts required to operate said systems per month. The clerk of the municipality shall pay and disburse the funds for operating and maintaining said systems according to said estimates. All checks drawn against said fund, other than payroll checks, as shown by the estimate filed with the clerk, shall be signed by the chairman or vice-chairman of the commission or by another member of the commission designated by the chairman or vice-chairman in their absence, and countersigned by the clerk of the municipality. All other bills payable from said fund shall be approved by the commission herein created, and after such approval shall be paid by check signed by the chairman or vice-chairman of the commission or by another member of the commission designated by the chairman or vice-chairman in their absence and countersigned by the clerk.

(2) After making provisions for the payment of the operating and maintenance expenses, as set forth in subsection (1), there shall be set aside in a fund now designated and carried as a bond and interest redemption fund the following:

Between February 1st and January 31st of the following calendar year, called the sinking fund year, an amount sufficient to pay all interest falling due on August 1st of each sinking fund year and all principal on bonds and interest thereon falling due on February 1st of the next succeeding sinking fund year on bonds payable therefrom. This payment shall be made monthly and, if possible, prior to the tenth day of each month.

(3) In addition to the amount required to be paid into the bond and interest redemption fund in each sinking fund year, under the provisions of the preceding paragraph, there shall be paid a sum equal to twenty percent of the amount required in the preceding paragraph into a fund known as the reserve account. Such payments shall continue to be made into the reserve account until such time as there is in said account an amount sufficient to pay the largest amount of principal and interest payable from the bond and interest redemption fund in any future sinking fund year. Thereafter, the money in the reserve account shall be retained solely for the purpose of paying the principal and interest on bonds payable from the bond and interest redemption fund as to which there will otherwise be a default. Money in the reserve account may be used to purchase bonds of the next maturing installment of principal, for not more than par and accrued interest to the next interest payment date.

(4) From the revenues remaining in each sinking fund year after payments have been made into the operation and maintenance fund and into the bond and redemption fund, there shall be set aside in a fund to be known as the renewal and replacement fund a sum equivalent to five percent of the gross revenues derived from the operation of the systems in the preceding sinking fund year.

Money placed in this fund shall be used for the payment of the principal and interest on the bonds when money available for such purposes in the bond and interest redemption fund is not sufficient and default would occur if such money were not so used. Money in such renewal and replacement fund may also be used for the purposes of making major renewals, replacements, extensions, and improvements to the systems, the cost of which is not properly chargeable as a maintenance and operation expense. The funds required by the resolution of the mayor and board of aldermen of the municipality in connection with the several revenue bond issues heretofore adopted shall be kept, and the provisions in said resolutions shall be faithfully carried out, and this commission shall be without authority to change said provisions or accounts, or to use the funds required to be placed in said accounts, except for the purposes and under the terms and conditions therein set forth. The provisions contained in the several revenue bond resolutions of the mayor and municipality heretofore adopted shall be superior to and shall supersede any and all provisions in this ordinance contrary thereto.

(5) The commission may create a separate fund or funds to be known as improvement and depreciation fund or funds, and to place therein such money in such amounts and at such time as the commission itself may desire and determine, and as the funds received from the operation of said plants will reasonably authorize and permit. These funds can only be used for improvements to the systems or for the payment of the principal and interest on any outstanding bonds, certificates of indebtedness, or other obligations payable from the revenue of said plants.

(6) After providing for the above accounts and payments to be made therefrom, and after complying with all of the provisions of the resolutions of the mayor and the board of aldermen adopted in connection with the issuance and sale of bonds, certificates of indebtedness, and other evidences of debt, and making provision for the payment of all debts and charges properly and legally chargeable against the revenues derived from said system, and after making further provisions for the expansion, improvement, addition to or repairs required by such systems, the remaining funds shall be paid monthly to the clerk of the municipality for general fund purposes. This payment shall be made only after it is authorized by the commission, and upon check signed by the chairman or vice-chairman of the commission, or by another member of the commission designated by the chairman or the vice-chairman in their absence, and countersigned by the clerk. All of these remaining funds and revenues derived from said plants may, by agreement, between the mayor and board of aldermen and this commission be used for the improvement, expansion, and additions to the water and electric power systems, or for any other purpose in connection with the efficient operation and management of said plants, and the acquisition of any additional plants or extensions, to the end that the present and future demands and requirements of the municipality may be adequately provided for and secured.

Acts 1972, No. 598, §7.