§ 5-1-6-12 — Duties of issuing body and others to secure payment of bonds and interest

(a) In order that the payment of the refunding
bonds, and interest thereon, shall be adequately secured, any issuing
body issuing refunding bonds pursuant to this chapter and the proper
officers, agents and employees thereof, are hereby directed, and it shall
be the mandatory duty of such issuing body and such officers, agents
and employees under this chapter, and it shall further be of the essence
of the contract of such issuing body with the bondholders, at all times:
(1) to pay or cause to be paid punctually the principal of every
refunding bond, and the interest thereon, on the date or dates and
at the place or places and in the manner and out of the funds
mentioned in such refunding bonds and in the coupons thereto
appertaining and in accordance with the resolution authorizing
their issuance;
(2) to operate the enterprise in an efficient and economical
manner and to establish, levy, maintain, and collect such fees,
tolls, rentals, rates and other charges in connection therewith as
may be necessary or proper, which said 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 ordinance or
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 issuing body which are
charges, liens, or encumbrances upon the revenues of such
enterprise;
provided, however, that nothing in this section shall be construed
as curtailing any authority of the utility regulatory commission to
approve rates or charges;
(3) 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;
(4) to preserve and protect the security of the refunding bonds and
the rights of the holders thereof, and to warrant and defend such
rights against all claims and demands of all persons whomsoever;
(5) 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;
(6) to hold in trust the revenues pledged to the payment of the
refunding bonds for the benefit of the holders of the refunding
bonds and to apply such revenues only as provided by the
resolution or resolutions authorizing the issuance of the refunding
bonds or, if such resolution or resolutions shall thereafter be
modified in the manner provided in the resolution or resolutions
or in this chapter, only as provided in such resolution or
resolutions as modified; and
(7) 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 issuing body, shall at all times be subject
to the inspection of the holder or holders of not less than ten
percent (10%) of the refunding bonds then outstanding or his or
their representatives duly authorized in writing.
(b) None of the foregoing duties shall be construed to require the
expenditure in any manner or for any purpose by the issuing body of
any funds other than revenues received or receivable from the
enterprise.
[Pre-Local Government Recodification Citation:
19-8-7-12.]
As added by Acts 1980, P.L.8, SEC.10. Amended by
P.L.23-1988, SEC.5; P.L.136-2018, SEC.22.