7-7-4629. Management of enterprise. (1) In order that the payment of the refunding bonds and interest on the bonds is adequately secured, any municipality issuing refunding bonds pursuant to this part and the proper officers, agents, and employees of the municipality shall at all times:

(a) operate the enterprise in an efficient and economical manner and establish, levy, maintain, and collect fees, tolls, rentals, rates, and other charges in connection with the enterprise as may be necessary or proper, in an amount that is sufficient, after making due and reasonable allowances for contingencies and for a margin of error in the estimates:

(i) to pay all current expenses of operation, maintenance, and repair of the enterprise;

(ii) to pay the interest on and principal of the refunding bonds as the principal becomes due and payable;

(iii) to comply in all respects with the terms of the resolution authorizing the issuance of refunding bonds or any other contract or agreement with the holders of the refunding bonds; and

(iv) to meet any other obligations of the municipality that are charges, liens, or encumbrances upon the revenue of the enterprise;

(b) operate, maintain, preserve, and keep or cause to be operated, maintained, preserved, and kept the enterprise and every part of the enterprise in good repair, working order, and condition;

(c) pay and discharge or cause to be paid or discharged any lawful claims for labor, materials, and supplies that, if unpaid, might by law become a lien or charge upon the revenue prior or superior to the lien of the refunding bonds or that might impair the security of the refunding bonds, to the end that the priority and security of the refunding bonds are fully preserved and protected;

(d) keep proper books of record and accounts of the enterprise, separate from all other records and accounts, in which complete and correct entries must be made of all transactions relating to the enterprise and that, together with all other books and papers of the municipality, must at all times be subject to the inspection of the holders of not less than 10% of the refunding bonds then outstanding or the holders' representatives authorized in writing.

(2) The duties in subsection (1) may not be construed to require the expenditure in any manner or for any purpose by the municipality of any funds other than revenue received or receivable from the enterprise.

History: En. Sec. 12, Ch. 121, L. 1937; R.C.M. 1947, 79-1912(1), (b), (c), (e), (g), (2); amd. Sec. 513, Ch. 61, L. 2007.