(a) Whenever any municipality shall own or operate a waterworks system and shall desire to construct improvements and betterments thereto, it may issue revenue bonds under the provisions of this section to pay for them. The procedure for issuance of bonds shall be as provided in this section.
(b) The legislative body of the municipality shall provide for the issuance of revenue bonds by ordinance. The ordinance shall set forth a brief and general description of the contemplated improvements and betterments, the amount, rate of interest, time and place of payment, and other details in connection with the issuance of the bonds.
(c) The bonds shall bear interest at such rate or rates, payable semiannually, and shall be payable at such times and place not exceeding forty (40) years from their date as shall be prescribed in the ordinance providing for their issuance.
(d) The ordinance shall also declare that a statutory mortgage lien shall exist upon the waterworks system to secure the payment of the bonds and interest.
(e)
(1) The ordinance shall fix the minimum rate or rates for water to be collected prior to the payment of all of the bonds, with exceptions as may be provided in the ordinance, and shall pledge the revenues derived from the waterworks system for the purpose of paying the bonds and interest thereon.
(2) The pledge shall definitely fix and determine the amount of revenue which shall be necessary to be set apart and applied to the payment of principal and interest on the bonds and the proportion of the balance of the revenues or income which are to be set aside as a proper and adequate depreciation account.
(3) The rates to be charged for the services of the waterworks shall be sufficient to provide for the payment of all interest upon all bonds, to create a sinking fund to pay the principal thereof as and when payment becomes due, to provide for the operation and maintenance of the system, and to provide an adequate depreciation account.
(f) The ordinance:
(1) Shall provide, find, and declare, in addition to the other requirements set out in this section, the value of the then-existing system and the value of the property proposed to be constructed, and that the revenues derived from the entire system when the contemplated betterments and improvements are completed shall be derived according to those values and that so much of the revenue as is in proportion to the value of the betterments and improvements as against the value of the previously existing plant as so determined shall be set aside and used solely and only for the purpose of paying the revenue bonds issued for the betterments, together with costs of the operation and the depreciation thereof, and the revenue shall be deemed to be income derived exclusively from the betterments and improvements; or
(2) Shall provide that there shall be set aside and used, solely and only for the payment or retirement of revenue bonds issued for the betterment or improvement, all or any part of the revenues derived from the operation of the waterworks system not presently required to be set aside for other purposes by an ordinance of the municipality authorizing the issuance of revenue bonds then outstanding.
(g)
(1) The proceeds derived from the sale of the bonds shall be used solely for the purpose of making betterments and improvements to the waterworks system owned or operated by the municipality.
(2) The terms “betterments” and “improvements” include mains, pipelines, hydrants, meters, valves, standpipes, storage tanks, storage basins, pumping tanks, intakes, wells, clear water wells, impounding reservoirs, pumps, purification plants and units thereof, filtration plants and units thereof, as well as all other improvements and betterments.
(h)
(1) Bonds issued under the provisions of this section shall be payable solely from revenues derived from such waterworks system.
(2) The bonds shall not in any event constitute an indebtedness of the municipality within the meaning of the constitutional provisions or limitations.
(3) It shall be plainly stated on the face of each bond that it is issued under the provisions of this section and that it does not constitute an indebtedness of the municipality within the constitutional limitation.