In order that the payment of refunding bonds and interest thereon shall be secured adequately, any municipality issuing refunding bonds pursuant to this chapter, and the proper officers, agents, and employees thereof, shall:

1.    Pay or cause to be paid punctually the principal of every refunding bond and the interest thereon on the date or dates, at the place or places, in the manner, and out of the funds, mentioned in such refunding bond and in the coupons thereto appertaining and in accordance with the resolution authorizing its issuance.

2.    Operate the enterprise in an efficient and economical manner and establish, levy, maintain, and collect such fees, tolls, rentals, rates, and other charges in connection therewith as may be necessary or proper. Such fees, tolls, rates, rentals, and other     charges shall be sufficient, after making due and reasonable allowances for contingencies and for a margin of error in the estimates, at least:

a.    To pay all current expenses of operation and maintenance of such enterprise; b.    To pay the interest on and principal of the refunding bonds as the same shall become due and payable; c.    To comply in all respects with the terms of the resolution authorizing the issuance of refunding bonds or any other contract or agreement with the holders of the refunding bonds; and

d.    To meet any other obligations of the municipality which are charges, liens, or encumbrances upon the revenues of such enterprise.

3.    Operate, maintain, preserve, and keep the enterprise and every part or parcel thereof, or cause the same to be operated, maintained, preserved, and kept in good repair, working order, and condition.

4.    Preserve and protect the security of the refunding bonds and the rights of the holders thereof, and warrant and defend such rights against all claims and demands of all persons whomsoever.

5.    Pay and discharge, or cause to be paid or discharged, any and all lawful claims for labor, materials, and supplies, which, if unpaid, might become by law a lien or charge upon the revenues, or any part thereof, superior to the lien of the refunding bonds or which might impair the security of the refunding bonds, all to the end that the priority and security of the refunding bonds shall be fully preserved and protected.

6.    Hold in trust the revenues pledged to the payment of the refunding bonds for the benefit of the holders of such bonds, and apply such revenues only as provided by the resolution authorizing the issuance of the refunding bonds, or, if such resolution thereafter shall be modified in the manner provided therein or in this chapter, as provided in such resolution as modified.

7.    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 municipality, shall be subject at all times to the inspection of the holder or holders of not less than ten percent of the refunding bonds then outstanding or of the holder’s or holders’ representatives duly authorized in writing.

None of the duties contained in this section shall require the expenditure in any manner or for any purpose by the municipality of any funds other than revenue received or receivable from the enterprise. The performance of the duties enumerated in this section shall be of the essence of the contract of the municipality with the bondholders at all times.