(a)

(1) If any municipality shall own or operate a waterworks system, whether or not purchased or constructed under the provisions of this subchapter, and shall desire to construct improvements, extensions, or betterments thereto, it may issue revenue bonds under the provisions of this subchapter to provide funds for those purposes. However, if the municipality deems that it has sufficient funds to construct the proposed improvements without borrowing, then it shall not be necessary to issue revenue bonds to pay for the proposed improvements.

(2) A municipality may also issue revenue bonds under the provisions of this subchapter to provide funds to pay extraordinary expenses or liabilities arising from the ownership and operation of its waterworks system including, without limitation, liabilities to customers of the waterworks system for charges collected for services of the system.

(b)

(1) The procedure for the issuance of bonds and the fixing of rates shall be the same as in this subchapter provided for the issuance of bonds for the acquisition or construction of a waterworks system in a municipality which has not theretofore owned and operated a waterworks system.

(2) In the ordinance declaring the intention to issue bonds and providing details in connection therewith, the legislative body shall either:

(A) Provide, find, and declare, in addition to the other requirements set out in this subchapter, the value of the then-existing system and, in the case of financing betterments and improvements, the value of the property proposed to be constructed and that the revenues derived from the entire system when the contemplated betterments and improvements are completed shall be divided according to such values and that so much of the revenue as is in proportion to the value of the betterments and improvements as against the value of the previously existing plant as so determined shall be set aside and used solely and only for the purpose of paying the revenue bonds issued for the betterments and improvements, together with the cost of operation, maintenance, and depreciation thereof, and the revenues shall be deemed to be income derived exclusively from the betterments and improvements; or

(B) Provide that there shall be set aside and used solely and only for the purpose of paying revenue bonds issued:

(i) For the betterments and improvements, together with the cost of depreciation, maintenance, and operation thereof; or

(ii) For extraordinary expenses or liabilities all or any part of the surplus in the bond and interest redemption account referred to in § 14-234-214.

(3) For the purpose of allocating revenues, the book value of the existing system may be deemed to be the value of the existing system.