In connection with the exercise of the power to borrow money, to issue bonds, and to refund indebtedness, pursuant to this chapter, the board may, from time to time, establish and maintain a reserve fund or funds in the district treasury, or a special trust account or accounts with an agent or agents designated by the board as a sinking fund or otherwise, to insure the payment, when due or payable, whether at maturity or upon redemption, of the principal of, and interest on, bonds issued as aforesaid, including premiums, if any, due upon the redemption of any thereof, or for any of said purposes. Money in any such reserve fund may be used for the purchase of bonds of the

issue in connection with which it was established, for cancellation and retirement pursuant to any mandatory requirement of the redemption of sinking fund bonds. Each such fund or account shall be established and maintained out of the revenues pertaining to the electric system on account of which such power is exercised or out of any moneys which under the terms of this article are applicable to the purpose, through transfers or payments made at such times and in such amounts as the board may direct.