(1) When authorized by the city charter, the officer referred to in ORS § 225.220 as having charge of the electric plant or distributing system may execute its warrants upon the city treasurer, drawn against the funds created by and for the benefit of such plant or system in excess of the current cash on hand but not in an amount exceeding one-half of the estimated annual income for the next ensuing year, from such plant or system. The estimate of annual income shall be made by the officer referred to in ORS § 225.220.

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(2) Warrants so drawn in excess of the cash on hand in any such fund shall be stamped ‘Not Paid for Want of Funds’ by the city treasurer, shall bear the legal interest from the date of such indorsement until the date of payment and shall be paid from the current receipts of the plant or system. The warrant indebtedness shall not be considered or construed to be within the charter limitations respecting any municipal debt.

(3) Warrants issued pursuant to this section shall be retired in the order of their presentation for indorsement ‘Not Paid for Want of Funds’ as funds are available.