§ 8.27. Interest and sinking funds; bond funds.

A sinking fund, in accordance with the laws of the State of Texas, shall be created and from which shall be paid all interest and principal payments as each matures. All cash and securities to the credit of all sinking funds shall be kept in the city depository and shall be kept separate from the cash and securities of any other fund, and shall not be used for any purpose other than the purpose for which the sinking fund was created. Except, when an issue of bonds has been retired in full, then its respective sinking funds shall be abolished and any remaining balance shall be divided pro rata among any remaining sinking funds.

All funds required to be kept in sinking funds shall be deposited in the city depository, a national bank, or a state bank, or invested in bonds of the government of the United States, State of Texas, or political subdivisions of the state.

No funds acquired through the issuance of bonds shall ever be used for the development of privately owned subdivisions situated within or beyond the corporate limits of the city or for the extension of utilities or services into any privately owned subdivision for the purpose of development.

Any elected official or employee of the city who shall divert or use any funds arising from the issuance of bonds or any sinking fund, for any other purpose except that for which the fund is created or is herein otherwise authorized, shall be deemed guilty of a misapplication of public funds and be subject to prosecution as provided under the laws of the State of Texas for the diversion and conversion of funds belonging to any of the municipalities of the state.

(Approved at referendum 8-13-94)