(a) The official charged with the duty of collecting assessments shall be required to give bond, including the amount of any official bond which may have been required of him by law, equal to not less than five percent of the total amount in said sinking funds provided for in Section 11-81-114, and said bonds shall be increased and may be diminished from time to time in order to comply with this provision. The cost of said increased bond shall be paid by the municipality. Said official shall be liable on his official bond to any holder of the bonds authorized to be issued under this division for any loss or injury to such holder caused by the diversion by said officer of any fund or part thereof to the payment of any bonds or coupons or indebtedness of the municipality other than the bonds and interest coupons entitled and indebtedness authorized in this division to be paid out of said fund or by the use or misappropriation by said officer of any part of the funds out of which said bonds required and contemplated in this division to be paid for any other purpose than provided for in this division or for the benefit of the municipality or others.
(b) All members of the governing body or bodies of the municipality who shall, by their vote or in any other manner, cause, aid or encourage any such diversion, use or misappropriation of the funds out of which the bondholders are entitled to be paid for any other purposes than that authorized and required in this division, whereby loss or injury to the bondholders or any of them is caused, shall be jointly and severally liable to such bondholders injured to the extent of such loss or injury.
(c) Any failure by any of the officials designated in subsections (a) and (b) of this section to keep all funds collected from assessments in separate sinking funds in the bank or banks as provided in this division or to retire bonds when due out of such funds when available shall be construed as a diversion or misappropriation and any bondholder of a bond in the series affected may, at any time, institute a civil action against said official or officials in any court of competent jurisdiction for the satisfaction of such loss and injury.
Last modified: May 3, 2021