§ 40-34-02 — Methods of defraying cost of sewage or garbage disposal improvements or lease

lease.
The total cost of a sewage or garbage disposal system, or any portion thereof, may be
defrayed by the following alternative methods:
1. Out of the general current tax revenues on hand and appropriated for that purpose.
2. Out of the proceeds of the sale of general liability bonds issued in accordance with the
procedure and subject to the conditions and limitations prescribed by chapter 21-03,
as far as the same are applicable.
3. Partly out of general current tax revenues on hand and appropriated for that purpose
and the residue out of the proceeds of the sale of general liability bonds as provided in
subsection 2, as the governing body of the municipality shall determine by a majority
vote.
4. Partly from moneys secured by the issuance of mortgage bonds secured by the net
revenues of the improvement or system and by a mortgage or deed of trust upon the
improvement or system issued by the municipality. Bonds issued under this subsection
shall not exceed sixty percent of the cost of the improvement, and the remaining forty
percent of such cost shall be defrayed as provided in subsection 1, 2, or 3.
5. From moneys secured by the issuance and sale of first mortgage bonds secured by
the assets and property of the improvement or system in like manner as provided in
subsection 4, except that such bonds may be issued for the total cost of the
improvement upon compliance with this subsection. Bonds issued under this
subsection shall be secured by a pledge of the net revenues of the improvement or
system to be set apart as an interest and sinking fund to pay the principal and interest
of such first mortgage bonds as they mature. If the method provided in this subsection

is utilized by any municipality to defray the cost of a sewage disposal system, it, by a
resolution of its governing body, shall create the district, provide for and approve the
plans and specifications and estimates of the cost, and adopt and publish the
resolution declaring the work necessary to be done in accordance with the
requirements of chapter 40-22 as far as the same may be applicable. If the owners of
property liable to be imposed with the sewage disposal service charges as provided in
this subsection shall file with the city auditor, within thirty days after the first publication
of the resolution, a written protest against the improvement, the governing body at its
next meeting after the expiration of the time for filing protests against the improvement
shall hear and determine the sufficiency of the protests. After the hearing has been
had, the governing body, if it finds the protests to contain the signatures of the owners
of a majority of the property liable to be charged, shall not proceed further with the
improvement. If the protests are found insufficient or invalid, the governing body of the
municipality may cause the improvement to be made, contract therefor, and defray the
cost thereof in the manner provided in this subsection.
A municipality may pay the cost of leasing any sewage systems and all related real and
personal property for the collection, treatment, purification, and disposal in a sanitary manner of
sewage from the state, or any agency or institution of the state under section 40-34-19, solely
from revenues to be derived by the municipality from the ownership, sale, lease, disposition,
and operation of the sewage systems; the funds or any other amounts invested by the
municipality pursuant to section 21-06-07, or invested on the municipality's behalf by the state,
or any agency of the state, in conformity with policies of the industrial commission, including
investment in a guaranteed investment contract and any earnings thereon, to the extent pledged
therefor; and funds, if any, appropriated annually by the governing body of the municipality or
received from federal or state sources.