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(A) All revenues received from connection fees and their income shall be set aside in a special account designated “City of Saugatuck water service connection fees.”
(B) Such revenues shall be used as follows subject to the discretion and approval of the City Council:
(1) To extend, enlarge, improve or maintain the water system; and
(2) To retire any bond indebtedness incurred by the city to improve or expand the water system.