§ 38:90.17 — Municipal drainage authority; rates and service charges; users of drainage system; revenue bonds

Louisiana § 38:90.17

• Jurisdiction: Louisiana
• Title 38: Public Contracts, Works and Improvements

Text

A.(1)(a) Any municipal drainage authority may fix the rates and/or service charges to be charged users of the drainage system and collect the same from all persons who use the drainage system within the levied areas of the jurisdiction of the municipal drainage authority, provided the rates and/or service charges to be charged the users of the drainage system shall not become effective unless and until approved by the entities which must approve such municipal drainage authority's bond issues.
(b) Prior to taking any decisive action in connection with the rates and/or service charges and at least thirty days before setting same, the municipal drainage authority shall hold at least three public meetings to discuss the rates and/or service charges. The public shall be notified of the hearings in the official journal no less than three times within the week prior to each such meeting.
(c) Each member of the entities required to approve same shall be furnished a copy of the transcript of each hearing at least twenty days prior to any action being taken by any of said approving entities.
(2) These rates and/or service charges shall be equal and uniform for each grade or class of customers and shall be framed so as to cover:
(a) The cost of maintenance and operation of the public drainage system; the construction cost;
(b) The cost of improvements, extensions, betterments, and repairs to said system;
(c) The establishment of a replacement fund; the revenues herein required to be raised annually to insure the proper development of said drainage system; and
(d) The payment of the interest on and principal of drainage service revenue bonds, including payments required to be made into sinking funds and debt service reserve funds.
(3) No rate and/or service charge shall take effect unless first approved by a majority of the electors of each approving entity at the next regularly scheduled election.
B.(1) The municipal drainage authority, by a vote of two-thirds of all its members and of the members of the approving entities, shall have the power and is authorized to issue from time to time in the name of the municipal drainage authority negotiable bonds payable solely out of the drainage service charges. No bonds shall be issued under the provisions of this Section except for purposes relating to the drainage system of the municipal drainage authority or to refund bonds issued under the authority of this Section.
(2) Bonds issued under the authority of Subsection B(1) of this Section:
(a) Shall bear such rate or rates of interest as provided for in R.S. 39:1424, as the same may be amended, and
(b) Shall, except as herein otherwise specially provided, be issued through the appropriate bond commission, be in such form and denominations, be subject to the provisions for redemption prior to maturity, including redemption premiums, and be payable as to both principal and interest at such times and places within or without the state of Louisiana as the appropriate bond commission shall determine; and,
(c) Except the first bonds issued hereunder, the bonds shall be subject to the condition that the maximum amount required to be paid in the current or any future calendar year for interest on and principal of said bonds, and all other drainage service revenue bonds then outstanding, including sinking fund payments required for the amortization of bonds not maturing in such year, as required by the terms of the resolution or resolutions authorizing the issuance of such bonds, and the debt service reserves, if any, does not exceed seventy-seven percent of one-half of the aggregate amount of revenues derived from drainage service rates and/or service charges which were available for such purposes in the two calendar years next preceding the date of the adoption by the authority of the resolution authorizing the issuance of such bonds.
(3)(a) After a resolution has been adopted by the municipal drainage authority authorizing the issuance of drainage service revenue bonds hereunder and said resolution has been approved by the appropriate approving entities, the appropriate bond commission shall publish a copy of said resolution in the official journal or in any other newspaper of general circulation published in the jurisdiction of the municipal drainage authority.
(b) No suit, action, or proceeding shall be brought in any court contesting the validity of said bonds or of any provision of the resolutions authorizing or approving their issuance after the expiration of thirty days from the date of publication of said resolution. The final decision of the court in any suit brought within such period shall be res judicata as to all questions raised or which could have been raised therein.
(4) Such bonds shall be sold by the appropriate bond commission not later than nine months after the date of adoption of the resolution of the municipal drainage authority authorizing the issuance thereof at public sale pursuant to such notice as the appropriate bond commission shall prescribe, at not less than par and accrued interest to date of delivery.
(5) Except as otherwise provided in the resolution authorizing the issuance of drainage service revenue bonds, all drainage service revenue bonds issued under authority of this Section shall rank on a parity regardless of their date, date of maturity, or time of issuance, but such resolution may prescribe limitations upon the issuance of future parity bonds.
(6)(a) The municipal drainage authority shall, on the first day of each month, pay to the appropriate bond commission not less than one-twelfth of the amount required to be paid to said appropriate bond commission in the current calendar year by the terms of the resolution or resolutions of the municipal drainage authority authorizing the issuance of drainage service revenue bonds hereunder for the payment of interest on and principal of such bonds due in said year and for payments required to be made in said year into the sinking fund or funds and debt service reserve funds.
(b) The debt service funds required to be established by the resolution of the municipal drainage authority, including debt service reserve funds, shall be in the custody and under the control of the appropriate bond commission which shall require the municipal drainage authority to keep a balance in said debt service fund and debt service reserve funds at all times sufficient to meet the interest on and principal of all outstanding drainage service revenue bonds payable solely out of drainage service rates for the next succeeding twelve month period or such greater amount as may be provided by the resolution of the municipal drainage authority.
(7) The appropriate bond commission may, in its discretion, invest any of the proceeds of such drainage service revenue bonds, debt service funds, and debt service reserve funds in such investments as it is authorized by law to make whenever an officer designated by the municipal drainage authority requests the investment of such funds by the appropriate bond commission.
(8)(a) The proceeds of the sale of such drainage service revenue bonds shall be paid to the appropriate bond commission for the municipal drainage authority, shall be deposited in a special drainage revenue bond account, and shall be used solely and exclusively for the construction of improvements, extensions, betterments, and repairs to the public drainage system of the municipal drainage authority or for the acquisition of the land to be used in connection therewith.
(b) All funds in said municipal drainage authority bond account shall be paid out by the appropriate bond commission pursuant to warrants drawn by the municipal drainage authority in the same manner as funds are now withdrawn under the provisions of R.S. 33:4094.
C. The municipal drainage authority in the resolution authorizing the issuance of drainage service revenue bonds shall make such covenants with respect to the fixing and collection of drainage service rates, the use of the revenues derived therefrom, and the operation and maintenance of the drainage system of the municipal drainage authority, including insurance of such properties and insurance against other risks, and it shall provide therein for the payment of enough revenues into the funds created for the payment of the interest on such drainage service revenue bonds and for the payment, amortization, or redemption of such bonds as may be deemed expedient by the appropriate bond commission to insure the sale of said bonds on the best possible terms.
D. So long as any of the drainage service revenue bonds shall be outstanding, the municipal drainage authority shall fix drainage service rates and/or service charges which shall be sufficient to produce revenues over and above the amount required for operation and maintenance of the drainage system of the municipal drainage authority which shall be not less than one hundred thirty percent of the maximum amount due in any calendar year for interest, principal, sinking fund payments, and debt service reserves on all drainage service revenue bonds then outstanding.
E. The appropriate bond commission is empowered by appropriate judicial proceedings to compel the municipal drainage authority to fix drainage service rates which will produce such net revenues and to perform and do such other acts as the municipal drainage authority is required to do as provided herein.
F. All such drainage service revenue bonds shall be issued in the name of the municipal drainage authority if it is a municipality, and if the authority is a special district or board, in the name of the municipality in which such special district or board is located, but such bonds shall be excluded in applying any limitation upon the power of the municipality to issue bonds for any purpose when the bonds are issued by a special district or board located in such municipality, and such bonds shall bear on their face a statement that they do not constitute a debt of said municipality but are payable as to principal and interest solely out of the drainage service revenues pledged for that purpose.
G. Such drainage service revenue bonds shall constitute negotiable instruments, and the issuance thereof shall be subject to no limitation of indebtedness or other limitation prescribed by the constitution and laws of the state of Louisiana, except as set forth in this Section.
H.(a) The provisions hereof, the resolutions of the municipal drainage authority authorizing the issuance of drainage service revenue bonds hereunder, and the resolutions of the approving entities and appropriate bond commission approving the resolutions of the municipal drainage authority, shall constitute a contract between the state of Louisiana, the municipal drainage authority, the approving entities, the appropriate bond commission, and the holders of such drainage service revenue bonds.
(b) The holders of such bonds shall have the right by injunction, mandamus, or other appropriate remedy to enforce the payment of said bonds and the interest thereon and the observance of the covenants made in the resolutions authorizing the issuance of said bonds.
I. The municipal drainage authority may use not more than forty percent per annum of the collections from drainage service rates and/or service charges charged to private consumers for the maintenance and operation of the public drainage system; and the remaining sixty percent, as well as the unused portion of the hereinabove funds set aside for operation and maintenance, shall be used for the cost of capital improvements, extensions, betterments, and repairs to said system; the establishment and maintenance of a replacement fund; and to provide for the payment of interest on and principal of such drainage service revenue bonds, including payments required to be made to any sinking fund for the amortization of such bonds, and for the creation of debt service reserves for said bonds.
J. Bonds issued under authority hereof shall be exempt from all taxation for state, parish, municipal, or other local purposes. Savings banks, tutors of minors, curators of interdicts, trustees, and other fiduciaries may invest the funds in their hands in said bonds. Said bonds may be used for deposit with any officer, board, municipality, or other political subdivision of the state of Louisiana in any case whereby present or future laws deposit or security is required. Said bonds may be registered and released from registry under such rules as the appropriate bond commission may prescribe.

Legislative History

Added by Acts 1983, No. 696, §1.