§ 14-235-221 - Sinking fund to pay bonds and interest.
14-235-221. Sinking fund to pay bonds and interest.
(a) (1) At or before the issuance of any bonds under this subchapter, the municipal council shall, by ordinance, create a sinking fund for the payment of the bonds and the interest on them and the payment of the charges of banks or trust companies for making payment of the bonds or interest and shall set aside and pledge a sufficient amount of the net revenues of the works, meaning the revenues of the works remaining after the payment of the reasonable expense of operation, repair, and maintenance.
(2) (A) This amount shall be paid by the sewer committee into the sinking fund at intervals to be determined by ordinance prior to issuance of the bonds, for:
(i) The interest upon the bonds as interest shall fall due;
(ii) The necessary fiscal agency charges for paying bonds and interest;
(iii) The payment of the bonds as they fall due, or, if all bonds mature at one time, the proper maintenance of a sinking fund sufficient for the payment of them at such time; and
(iv) A margin for safety and for the payment of premiums upon bonds retired by call or purchase as provided in this subchapter, which margin, together with any unused surplus of such margin carried forward from the preceding year, shall equal ten percent (10%) of all other amounts so required to be paid into the sinking fund.
(B) Required payments shall constitute a first charge upon all the net revenues of the works.
(b) (1) Prior to the issuance of the bonds, the committee, by ordinance, may be given the right to use or direct the trustee to use the sinking fund, or any part of it, in the purchase of any of the outstanding bonds payable from it at the market price of them but not exceeding the price, if any, at which they shall, in the same year, be payable or redeemable, and all bonds redeemed or purchased shall be cancelled and shall not again be issued.
(2) After the payments into the sinking fund as required in this section, the committee, at any time, in its discretion, may transfer all, or any part, of the balance of the net revenues after reserving an amount deemed by the committee sufficient for operation, repair, and maintenance for an ensuing period of not less than twelve (12) months and for depreciation, into the sinking fund or into a fund for extensions, betterments, and additions to the works.