(A) Expenditures or withdrawals from the depreciation reserve account for total replacement of either/or both the water treatment plant and/or the overhead storage reservoir are hereby authorized as a lawful expenditure when deemed necessary by the Common Council, but only if the following conditions are met upon replacement: the cost basis and the estimated useful life of the new facility must be determined; and thereafter, annual depreciation must be recognized on the new facility in the accounting records and operating statements. In addition, a Depreciation Reserve Sinking Fund must be established for the new facility, with annual cash reserves set aside for sinking fund purposes to preserve the objectives and intent of this subchapter thereafter until the facility is fully depreciated.
(B) Expenditures or withdrawals from the depreciation reserve account for PARTIAL, BUT MAJOR REPLACEMENTS, as defined in § 50.56, for either/or both the water treatment plant and/or the overhead storage reservoir are hereby authorized as a lawful expenditure, when deemed necessary by the Common Council, but only if the following conditions are met upon such replacement: the cost basis and the estimated useful life of said replacements must be determined; and annual depreciation must be recognized on the accounting records and the operating statements thereafter until the cost basis has been fully depreciated. In addition, an equal amount of the annual depreciation must be set aside in the depreciation reserve account annually until the cost basis of said replacements has been fully depreciated. This shall be in addition to the requirements in §§ 50.57 and 50.58. It shall be unlawful to purposely accumulate, amass, or assemble replacements to circumvent the intention of this subchapter, or to do so to exceed the $1,000 limitation, as defined in § 50.56, by wrongful means, motives, or intentions. Such actions shall constitute a misappropriation of funds.
(Prior Code, § 5.0405) Penalty, see § 10.99