7-6-4603. Investment of municipal money in city or town warrants. (1) Except as provided in 7-7-4102, whenever the city or town has, under its control and in any fund, any money for which there is no immediate demand and that, in the judgment of the city or town council, it would be advantageous to invest in city or town warrants, the city or town council may direct the city treasurer or town clerk to purchase legally issued city or town general obligation warrants of the same city or town issued against funds in which there are not sufficient funds to pay the city or town warrants at the time of issuance.

(2) (a) If warrants are purchased, the city or town council shall designate the fund or funds to be invested and shall fix the amount of investment and shall also designate the city or town warrants that are to be purchased by the funds. The city or town clerk shall cause to be attached to or stamped, written, or printed upon the warrants ordered to be purchased a notice to the effect that the city or town will exercise its preference right to purchase the warrant.

(b) The city treasurer or town clerk shall, when the city or town warrant is presented, purchase the warrant out of the proper fund as designated by the city or town council. The warrant purchased must be registered as other city or town warrants and bear interest as provided by law.

(3) When the designated amounts have been invested, the city treasurer shall notify the city clerk.