7-7-4629. Management of enterprise. (1) In order that the payment of the refunding bonds and interest thereon shall be adequately secured, any municipality issuing refunding bonds pursuant to this part and the proper officers, agents, and employees thereof are hereby directed and it shall be the mandatory duty of such officers, agents, and employees under this part and it shall further be of the essence of the contract of such municipality with the bondholders, at all times:
     (a) to operate the enterprise in an efficient and economical manner and establish, levy, maintain, and collect such fees, tolls, rentals, rates, and other charges in connection therewith as may be necessary or proper, which fees, tolls, rates, rentals, and other charges shall be at least 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 such enterprise;
     (ii) to pay the interest on and principal of the refunding bonds as the same shall become 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 which are charges, liens, or encumbrances upon the revenues of such enterprise;
     (b) to operate, maintain, preserve, and keep or cause to be operated, maintained, preserved, and kept the enterprise and every part and parcel thereof in good repair, working order, and condition;
     (c) to pay and discharge or cause to be paid or discharged any and all lawful claims for labor, materials, and supplies which, if unpaid, might by law become a lien or charge upon the revenues or any part thereof prior or superior to the lien of the refunding bonds or which might impair the security of the refunding bonds, to the end that the priority and security of the refunding bonds shall be fully preserved and protected;
     (d) to keep proper books of record and accounts of the enterprise (separate from all other records and accounts) in which complete and correct entries shall be made of all transactions relating to the enterprise or any part thereof and which, together with all other books and papers of the municipality, shall at all times be subject to the inspection of the holder or holders of not less than 10% of the refunding bonds then outstanding or his or their representatives duly authorized in writing.
     (2) None of the foregoing duties shall be construed to require the expenditure in any manner or for any purpose by the municipality of any funds other than revenues 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).