(a) All water development, connection, and service fees paid to the city pursuant to this Code shall be segregated, credited to, and deposited in the water fund of the utility enterprise and shall be used for the construction, installation, operation, maintenance, replacement, extension, and improvement of the water system and all lawful activities associated therewith as may be directed by the city council. Such fund may also be used for the acquisition of land necessary for the construction and installation of water facilities.

(b) The utility enterprise may pledge the proceeds of such fees to the retirement of the principal and interest of revenue bonds or other obligations issued by the enterprise or general obligation bonds issued by the city for the purpose of financing the construction, installation, replacement, extension or improvement of water facilities.

(c) Appropriations for capital projects from the water fund shall not lapse until the purpose for which the appropriation was made shall have been accomplished or abandoned; provided, that any project shall be deemed to have been abandoned if three fiscal years elapse without any expenditure from or encumbrance of the appropriation for such project. (Code 1979, § 39-86; Ord. No. 99-84, § 2, 11-29-1999)