14-234-214. Rates — Disposition of surplus funds.

14-234-214. Rates — Disposition of surplus funds. (a) Rates for resident and nonresident consumers of a municipal waterworks system shall be fixed by the legislative body of the municipality. (b) The rates to be charged by the municipality must be adequate to: (1) Pay the principal of and interest on all revenue bonds and revenue promissory notes as they severally mature; (2) Make such payments into a revenue bond sinking fund as may be required by ordinance or trust indenture; (3) Provide an adequate depreciation fund and to provide the operating authority's estimated cost of operating and maintaining the waterworks system. (c) Rates fixed prior to the issuance of revenue bonds or notes may be reduced if authorized by the trust indenture or ordinance pertaining to the issuance. The rates shall not be reduced below the standards prescribed in this subchapter. (d) If a municipality subject to the provisions of this subchapter proposes to make additions to its system, which additions are to be financed by the issuance of revenue bonds or revenue promissory notes, within eighteen (18) months of the effective date of the rate, then the legislative body of the municipality shall fix a rate to be effective immediately, which will be sufficient, in addition to the above requirements, to amortize the revenue bonds or revenue promissory notes with interest as they severally mature. (e)(1) If any surplus is accumulated in the operation and maintenance fund of the waterworks system which shall be in excess of the operating authority's estimated cost of maintaining and operating the plant during the remainder of the fiscal year then-current and the cost of maintaining and operating the plant during the fiscal year next ensuing, the excess may be by the operating authority transferred to either the depreciation account or to the bond and interest redemption account, as the operating authority may designate. (2) If any surplus is accumulated in the depreciation account over and above that which the operating authority shall find may be necessary for probable replacements needed during the then fiscal year, and the next ensuing fiscal year, the excess may be transferred to the bond and interest redemption account. (3) If a surplus shall exist in the bond and interest redemption account, it may be applied by the operating authority, in its discretion, subject to any limitations in the ordinance authorizing the issuance of the bonds, or in the trust indenture: (A) To the payment of bonds that may later be issued for additional betterments and improvements; (B) To the purchase or retirement, insofar as possible, of outstanding unmatured bonds payable from the bond and interest redemption account, at no more than the fair market value thereof; (C) To the payment of any outstanding unmatured bonds payable from the bond and interest redemption account that may be subject to call for redemption before maturity; or (D) To any other municipal purpose.