(a) In those cases where improvement districts have been organized under this chapter or any consolidation of districts organized under this chapter with one another or with suburban or municipal improvement districts, either for furnishing of water or sewer services, or both, and all or any part thereof lies outside a municipality within the class affected by this chapter which desires to operate them as a municipal waterworks or a municipal sewer system, the boards of these districts, in order to secure more adequate service for the inhabitants within the districts, shall have the authority to turn over to the municipality the operation and maintenance of the systems.(b)(1) The municipality may issue revenue bonds and 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 district.(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 district and nothing in this section shall ent 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 district and 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.Acts 1985, No. 296, § 7; A.S.A. 1947, § 20-2426.
Arkansas Legal Code