When term bonds have been issued the net revenue derived from the operation of such systems shall be set apart by the said board to pay the interest on the bonds so issued or to be issued, and to create a sinking fund to redeem the principal thereof at maturity. The board of supervisors is hereby authorized and empowered to apply any part or all of said sinking fund to the payment, if redeemable by their terms, or to the purchase of any such bonds, at any time, and all bonds so paid off or purchased by the board of supervisors shall be immediately cancelled, and shall not be reissued. The board of supervisors is authorized and empowered to invest all accumulations of money to the credit of the sinking fund in bonds of the United States, of the Commonwealth of Virginia, or of any county, city or town of the Commonwealth of Virginia, or to lend out, upon real estate security, the loan not to exceed fifty per centum of the assessed value of such real estate, or deposit in bank at interest, all accumulations of money to the credit of the sinking fund and to collect and reinvest the same and the interest accruing thereon from time to time, so often as is necessary or expedient, until the bonds become subject to call; provided that no money to the credit of the sinking fund shall be loaned out or deposited or invested by the board of supervisors unless such loan, deposit or investment is first approved by the circuit court of the county, or the judge in vacation, and the form of the security be examined and approved by the attorney for the Commonwealth of the county, which approval shall be entered of record in the order book of the court.

The treasurer shall not be liable for any funds herein provided for that are lost while on deposit made by order of the board of supervisors with any bank or banks, or when invested in any real estate security as provided herein, but the board of supervisors may require of any such bank a bond, with corporate or other surety, to secure such deposit, or may require a pledge of securities to secure such deposits as provided in §§ 58.1-3158 and 2.2-4400.

The board of supervisors shall, if necessary for the payment of interest on the bonds or to increase the sinking fund provided for hereunder, levy an annual tax upon all property in such sanitary district subject to local taxation to pay such interest and to make payments into such sinking fund. For the purposes of this section and § 21-137.2, the words "serial bonds" and "term bonds" shall have the respective meanings customarily given them in the municipal bond market. A finding made by the board of supervisors that an issue of bonds comprises term bonds or serial bonds, or that specified portions thereof comprise term bonds or serial bonds, as the case may be, shall be conclusive for all purposes of this section and § 21-137.2.

1972, c. 236.