The income and revenues of the existing sewage system, together with income and revenue of all extensions, additions, improvements or replacements to the system shall be set aside into separate and special accounts which are to be used and applied as follows.
(A) There is created a fund to be known as the Operation and Maintenance Fund, to which Fund there shall be credited as of the last day of each calendar month a sufficient amount of the revenues of the sewage works so that the balance in said fund shall be sufficient to pay the expenses of operation, repair and maintenance for the then next succeeding two calendar months. The moneys credited to this Fund shall be used for the payment of the reasonable and proper operation, repair and maintenance expenses of the sewage works on a day-to-day basis, but none of the moneys in such Fund shall be used for depreciation, replacements, improvements, extensions or additions. Any balance in said Fund in excess of the expected expenses of operation, repair and maintenance for the next succeeding month may be transferred to the Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal or interest on the outstanding bonds.
(B) There is created a Sinking Fund for the payment of the principal of and interest on revenue bonds which by their terms are payable from the revenues of the sewage works, and the payment of any fiscal agency charges in connection with the payment of bonds and interest coupons, which fund shall be designated the Sewage Works Sinking Fund. There shall be set aside and deposited in said Sinking Fund, as available, and as hereinafter provided, a sufficient amount of the net revenues of said sewage works (defined as gross revenues of the sewage works after deduction only for the payment of the reasonable expenses of operation, repair and maintenance) to meet the requirements of the Bond and Interest Account and of the Debt Service Reserve Account hereby created in said Sewage Works Sinking Fund. Such payments shall continue until the balance in the Bond and Interest Account, plus the balance in the Debt Service Reserve Account hereinafter created, equal the principal of and interest on all of the then outstanding bonds to the final maturity thereof.
(C) As soon as the sewage works becomes revenue producing, there shall be credited on the first day of each calendar month to the Bond and Interest Account an amount equal to the sum of one-fifth of the interest on all then outstanding bonds payable on the then next succeeding interest payment date, and one-tenth of the amount of principal payable on the then-outstanding bonds which will be payable on the then-next succeeding principal payment date, until the amount of interest and principal payable on the then-next succeeding respective principal and interest payment dates shall have been so credited. There shall similarly be credited to the account the amount necessary to pay the bank fiscal agency charges for paying principal and interest on the bonds as the same become payable. The town shall, from the sums deposited in the Sewage Works Sinking Fund and credited to the Bond and Interest Account, remit promptly to the bank fiscal agency sufficient moneys to pay the principal and interest on the due dates thereof together with the amount of bank fiscal agency charges.
(D) On the first day of each calendar month, after making the credits to the Bond and Interest Account, there shall be credited from available net revenues to the Debt Service Account the sum of $410, or such higher amount as may be fixed from time to time by the Town Council. Said credits to the Debt Service Reserve Account shall continue until the balance therein shall equal not less than the maximum annual principal and interest requirements of the then outstanding bonds payable from the Sewage Works Sinking Fund. The Debt Service Reserve Account shall constitute the margin for safety and as a protection against default in the payment of principal of and interest on the bonds, and the moneys in the Debt Service Reserve Account shall be used to pay current principal and interest on the bonds to the extent that moneys in the Bond and Interest Account are insufficient for that purpose. Any deficiencies in credits to the Debt Service Reserve Account shall be promptly made up from the next available net revenues remaining after credits into the Bond and Interest Account. In the event moneys in the Debt Service Reserve Account are transferred to the Bond and Interest Account to pay principal and interest on bonds, then such depletion of the balance in the Debt Service Reserve Account shall be made up from the next available net revenues after the credits into the Bond and Interest Account hereinbefore provided for. Any moneys in the Debt Service Reserve Account in excess of the maximum annual principal and interest requirements of the then outstanding bonds may be used for the redemption of bonds which are then callable, or for the purpose of outstanding bonds at a price not exceeding the then applicable redemption price or the first redemption price if the bonds are not callable, or may be transferred to the Sewage Works Improvement Fund.
(E) After meeting the requirements of the Operation and Maintenance Fund and the Sewage Works Sinking Fund, any excess revenues may be transferred or credited to a fund designated the Sewage Works Improvement Fund, and said Fund shall be used for improvements, replacements, additions and extensions of the sewage works. Moneys in the Sewage Works Improvement Fund shall be transferred to the Sewage Works Sinking Fund if necessary to prevent a default in the payment of principal and interest on the then outstanding bonds or if necessary to eliminate any deficiencies in credits to or minimum balance in the Debt Service Reserve Account of the Sewage Works Sinking Fund.
(Prior Code, § 8:3:03) (Ord. S-1, passed 4-4-1968)