1. “Operation and maintenance expenses,” or any phrase of similar import, means all reasonable and necessary current expenses of the municipality, paid or accrued, of operating, maintaining and repairing the facilities or of levying, collecting and otherwise administrating any excise taxes pertaining to the pledged revenues for the payment of the bonds or other securities issued hereunder; and the term may include at the governing body’s option (except as limited by contract or otherwise limited by law), without limiting the generality of the foregoing:

(a) Engineering, auditing, reporting, legal and other overhead expenses of the various municipal departments directly related and reasonably allocable to the administration of the facilities;

(b) Fidelity bond and property and liability insurance premiums appertaining to the facilities, or a reasonably allocable share of a premium of any blanket bond or policy pertaining to the facilities;

(c) Payments to pension, retirement, health and hospitalization funds and other insurance;

(d) Any taxes, assessments, excise taxes, or other charges which may be lawfully imposed on the municipality, any facilities, revenues therefrom, or any privilege in connection with any facilities or their operation;

(e) The reasonable charges of any paying agent, or commercial bank, trust bank or other depositary bank appertaining to any securities issued by the municipality or appertaining to any facilities;

(f) Contractual services, professional services, salaries, other administrative expenses, and costs of materials, supplies, repairs and labor, appertaining to the issuance of any municipal securities and to any facilities, including without limitation the expenses and compensation of any trustee, receiver or other fiduciary under the Local Government Securities Law;

(g) The costs incurred by the governing body in the collection and any refunds of all or any part of the pledged revenues, including without limitation revenues appertaining to any facilities;

(h) Any costs of utility services furnished to the facilities by the municipality or otherwise;

(i) Any lawful refunds of any pledged revenues; and

(j) All other administrative, general and commercial expenses.

2. The term “operation and maintenance expenses” does not include:

(a) Any allowance for depreciation;

(b) Any costs of improvements;

(c) Any accumulation of reserves for major capital replacements (other than normal repairs);

(d) Any reserves for operation, maintenance or repair of any facilities;

(e) Any allowance for the redemption of any bond or other municipal security evidencing a loan or other obligation or for the payment of any interest thereon;

(f) Any liabilities incurred in the acquisition or improvement of any properties comprising any project or of any existing facilities, or any combination thereof; and

(g) Any other ground of legal liability not based on contract.

(Added to NRS by 1967, 424, 425)