§ 14-92-502 - Water or sewer systems. - Arkansas Statutes

14-92-502. Water or sewer systems.

(a) In those cases where improvement districts have been organized under the suburban improvement district law, or any consolidation of suburban and municipal improvement districts, either for furnishing of water or sewer services, or both, and all, or any part, of it lies outside a municipality within the class affected by this subchapter which desires to operate it as a municipal waterworks or a municipal sewer system, the boards of commissioners of the suburban district, in order to secure more adequate service for the inhabitants within the district, shall have the authority to turn over to the municipality the operation and maintenance of the system.

(b) (1) The municipality may issue revenue bonds, fix the rates for the services, and use the net revenues from the operation to pay the principal and interest and paying charges of its revenue bonds for payment and discharge of the outstanding bonds of the districts.

(2) If the net revenues are not sufficient to prevent a default in the bonds or interest, a tax sufficient to produce enough revenue to cure the default shall be levied on the assessments of benefits in the districts.

(3) Nothing in this section shall impair the rights of the holders of the outstanding bonds to demand and receive sufficient annual collections on the assessments of benefits to meet interest and principal payments as they become due.