§ 31-35-407 — Covenants in bond ordinance

(1) Any ordinance or resolution
authorizing the issuance of bonds under this part 4 or trust indenture or other
instrument appertaining thereto to finance in whole or in part the acquisition,
construction, reconstruction, improvement, betterment, or extension of water
facilities or sewerage facilities or both may contain covenants as to:

(a) The rates, fees, tolls, or charges or combination thereof to be charged for
the services, facilities, and commodities of said water facilities or sewerage
facilities or both, and the use and disposition thereof, including but not limited to
the foreclosure of liens for and collection of delinquencies; the discontinuance of
services, facilities, or commodities or use of any water system, any sewer system, or
any joint system; prohibition against free service; the collection of penalties and
collection costs, including disconnection and reconnection fees; and the use and
disposition of any revenues of the municipality derived or to be derived from any
water facilities or sewerage facilities or both;

(b) The creation and maintenance of reserves or sinking funds and the
regulation, use, and disposition thereof to secure the payment of the principal of
and interest on any bonds or of operation and maintenance expenses of any water
system, sewer system, or joint system or part thereof; the determination or
definition of revenues from any water system, sewer system, or joint system and of
the expenses of operation and maintenance of such system; and the source,
custody, security, use, and disposition of any such reserves or sinking funds,
including but not limited to the powers and duties of any trustee with regard
thereto;

(c) A fair and reasonable payment by the municipality to the account of said
water facilities or sewerage facilities or both for the services, commodities, or
facilities furnished said municipality or any of its departments by said water
facilities or sewerage facilities or both;

(d) The issuance of other or additional bonds or instruments payable from or
constituting a charge against the revenue of such water facilities or sewerage
facilities or both; the payment of the principal of and interest on any bonds and the
sources and methods thereof, the rank or priority of any bonds as to any lien or
security for payment, or the acceleration of any maturity of any bonds, or the
issuance of other or additional bonds payable from or constituting a charge against
or lien upon any revenues pledged for the payment of bonds and the creation of
future liens and encumbrances thereagainst and limitations thereon; and the
purpose to which the proceeds of the sale of bonds may be applied and the
custody, security, use, expenditure, application, and disposition thereof;

(e) Books of account, the inspection and audit thereof, and other records
appertaining to a water system, sewer system, or joint system; the insurance to be
carried by the municipality and use and disposition of insurance moneys; the
acquisition of completion or surety bonds appertaining to any project, funds, or
personnel and the use and disposition of any proceeds of such bonds; the
assumption or payment or discharge of any indebtedness, other obligation, lien, or
other claim relating to any part of a water system, sewer system, or joint system, or
any securities having or which may have a lien on any part of any revenues of such
system; and limitations on the powers of the municipality to acquire or operate or
permit the acquisition or operation of any plants, structures, facilities, or properties
which may compete or tend to compete with the water system, sewer system, or
joint system;

(f) The rights, liabilities, powers, and duties arising upon the breach by the
municipality of any covenants, conditions, or obligations; defining events of default;
the payment of costs or expenses incident to the enforcement of the bonds or of
the provisions of the ordinance or resolution authorizing the bonds or any trust
indenture or other instrument appertaining thereto or of any covenant or contract
with the holders of the bonds; the procedure, if any, by which the terms of any
covenant or contract with or duty to the holders of bonds, the bond ordinance or
resolution, or any trust indenture or other instrument may be amended or
abrogated, the amount of bonds the holders of which, or any trustee, must consent
to, and the manner in which such consent may be given or evidenced; and the terms
and conditions upon which any or all of the bonds shall become or may be declared
due before maturity and as to the terms and conditions upon which such
declaration and its consequences may be waived;

(g) The terms and conditions upon which the holders of the bonds or any
portion or percentage of them may enforce any covenants or provisions made under
this part 4 or duties imposed thereby; and

(h) All such acts and things as may be necessary or convenient or desirable
in order to secure its bonds or, in the discretion of the governing body of the
municipality, tend to make the bonds more marketable, notwithstanding that such
covenant, act, or thing may not be enumerated in this part 4, it being the intention
of this part 4 to give a municipality power to do all things in the issuance of bonds
and for their security consistent with continued public ownership of the sewerage
facilities or water facilities or both.

Legislative History

Source: L. 75: Entire title R&RE, p. 1256, � 1, effective July 1.