(A) Sinking Fund. There is hereby 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 the Sinking Fund, as available and as hereinafter provided, a sufficient amount of the net revenues of the sewage works (defined as gross revenues exclusive of recovered grant amounts from industrial users as required by the Environmental Protection Agency, 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 the Sewage Works Sinking Fund. The 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 of all of the then-outstanding bonds to the final maturity thereof.
(B) Bond and interest account. 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 1/10 of the interest on all then-outstanding bonds payable on the then-next succeeding interest payment date and 1/10 of the amount of principal payable on the then-outstanding bond 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 any 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 registered owner or 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.
(C) Debt service reserve account. 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 reserve account the sum of $183.30 or a higher amount as may be fixed from time to time by the Town Council. The 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 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 account are transferred to the bond and interest account to pay principal and interest on bonds, then the 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 money 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 coupon bonds or prepayment of installments of principal on fully registered bonds which are then callable or pre-payable or for the purchase of outstanding bonds at a price not exceeding par and accrued interest or may be transferred to the Sewage Works Improvement Fund.
(1982 Code, § 14-20)