FEES AND CHARGES.

(a) The board shall prescribe fees and charges to be collected for the use of water, a water connection, or another service.

(b) The fees and charges must be reasonable and equitable and sufficient to produce revenue adequate to pay the items described by Subsection (c). The fees and charges may not exceed what may be reasonably necessary to fulfill the obligations imposed on the authority by this chapter.

(c) The board shall pay the following items from the fees and charges:

(1) all expenses necessary to the operation and maintenance of the improvements and facilities of the authority, including:

(A) the cost of acquiring materials and other property necessary to maintain the improvements and facilities in good condition and to operate them efficiently;

(B) necessary wages and salaries of the authority; and

(C) other expenses reasonably necessary to the efficient operation of the improvements and facilities;

(2) the interest on any obligation issued under this chapter and payable from the revenue from the improvements and facilities; and

(3) the amount required to be paid for the payment of an obligation issued under this chapter and payable from the revenue from the improvements and facilities.

(d) If the revenue received exceeds the amount required for the purposes listed in Subsection (c), the board may pay from the excess revenue the cost of improvements and replacements not covered by Subsection (c)(1) and may establish a reasonable depreciation and emergency fund.