§ 15-7-606 — Use of surplus water funds

Any city or town shall use any surplus funds arising from the
sale of water services for the redemption and cancellation of
bonds, if any, issued to pay the purchase price of the water or
the cost of the construction, extension and enlargement of the
system. The city or town shall not redeem any bonds at any sum
greater than par, plus a premium of not to exceed fifty percent
(50%) of the face value on all unearned interest coupons
attached to any bond purchased, nor pay more than the actual
market price of the bonds at the time the bonds are redeemed.
Any surplus funds after the redemption of bonds, may be paid
from the water enterprise account into the general fund of the
city or town. Provided however, sufficient funds, as determined
by the governing body, shall be maintained in the water
enterprise account to cover debt services, operating costs and
reasonable reserves for depreciation of the system and
anticipated acquisition of water resources.