7-6-4121. Authorization to conduct municipal business on a cash basis. (1) In case the total indebtedness of a city or town has reached 17% of the total taxable value of the property of the city or town subject to taxation, as ascertained by the last assessment for state and county taxes, the city or town may conduct its affairs and business on a cash basis as provided by subsection (2).
     (2) (a) Whenever a city or town is conducting its business affairs on a cash basis, the reasonable and necessary current expenses of the city or town may be paid out of the cash in the city or town treasury and derived from its current revenue, under any restrictions and regulations as the city or town council may by ordinance prescribe.
     (b) In the event that payment is made in advance, the city or town may require a cash deposit as collateral security and indemnity, equal in amount to the payment, and may hold the deposit as a special deposit with the city treasurer or town clerk, in package form, as a pledge for the fulfillment and performance of the contract or obligation for which the advance is made.
     (c) Before the payment of the current expenses mentioned above, the city or town council shall first set apart sufficient money to pay the interest upon its legal, valid, and outstanding bonded indebtedness and any sinking funds provided for and is authorized to pay all valid claims against funds raised by tax especially authorized by law for the purpose of paying the claims.
     (3) This section does not apply to a city or town that has adopted the alternative accounting method provided for in Title 7, chapter 6, part 6.

     History: (1)En. Sec. 4812, Pol. C. 1895; re-en. Sec. 2, Ch. 30, L. 1903; re-en. Sec. 3288, Rev. C. 1907; re-en. Sec. 5078, R.C.M. 1921; re-en. Sec. 5078, R.C.M. 1935; amd. Sec. 1, Ch. 55, L. 1957; amd. Sec. 25, Ch. 566, L. 1977; Sec. 11-1301, R.C.M. 1947; (2)En. Sec. 1, Ch. 30, L. 1903; re-en. Sec. 3287, Rev. C. 1907; re-en. Sec. 5079, R.C.M. 1921; re-en. Sec. 5079, R.C.M. 1935; amd. Sec. 2, Ch. 100, L. 1973; Sec. 11-1302, R.C.M. 1947; R.C.M. 1947, 11-1301(part), 11-1302(part); amd. Sec. 28, Ch. 252, L. 1979; amd. Sec. 41, Ch. 614, L. 1981; amd. Sec. 44, Ch. 430, L. 1995.