(a) Authority.-- For the purpose of financing the cost and expense or its share of the cost and expense of capital improvements, including the purchase and installation of machinery and equipment, by altering, improving or enlarging any of the following, a borough owning the plant or facility may issue nondebt revenue bonds as provided in section 1202(46) (relating to specific powers): (1) its sewer, sewer system or sewage treatment works, either singly or jointly with other municipalities; (2) its water works, either singly or jointly with other municipalities; (3) its electric power plant or power distribution system; or (4) its gas plant, gas distribution system for its own municipal purposes, municipal gas distribution system or municipal gas works. (b) Rates.-- A borough issuing nondebt revenue bonds under the authority of this section shall adjust and, when necessary, increase the rates of rentals or charges pledged as security for the bonds in order to provide sufficient revenue. The revenue must be set aside as reserve funds to cover depreciation of the properties involved and for future improvements to the plant or facility involved as well as for the payment of the interest on the bonds and the principal at the time of maturity.
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