Kansas Statutes

Chapter 10: Bonds And Warrants

Article 12: Revenue Bonds

Statutes:

• 10-1201: Definitions.
• 10-1202: Issuance, when; revenues; additional bonds; revenue bonds to construct electric generation facilities in certain first-class cities joining with privately owned utility; contracts or agreements; source of bond payment.
• 10-1203: Duplication of existing utility services; approval and finding by corporation commission.
• 10-1204: Revenue fund; use; application of 12-825d, 13-1269 to 13-1274.
• 10-1205: Liens on revenues of utilities; recitals; negotiability.
• 10-1206:
• 10-1207: Revenue bonds; terms; disposition of excess funds.
• 10-1208: Rates, fees and charges; depreciation or renewal and replacement fund; reserve fund; annual audit, filing; billing and collection of sewer service charges; discontinuance of water service.
• 10-1209:
• 10-1210: Publication of intended improvements; protest; election.
• 10-1211: Refunding of bonds.
• 10-1212: Act supplemental; election.
• 10-1213: Duties of governing bodies of municipalities having board of public utilities; elections; costs.

• 10-1201: Definitions. "Municipality" as used in this act means a municipality as defined in K.S.A. 10-101, and amendments thereto.

        "Utility" as used in this act means any publicly owned utility, instrumentality or facility of a revenue producing character including but not limited to plants, facilities and instrumentalities for the purpose of supplying natural or manufactured gas, water or electric light and off-street parking facilities and sewage disposal plants, facilities and interceptor sewers.

        "Revenue bonds" as used in this act means bonds issued by any municipality in this state to be paid exclusively from the revenue derived from the operation of a utility.

        History:   L. 1947, ch. 107, § 1; L. 1951, ch. 129, § 1; L. 1955, ch. 74, § 1; L. 1983, ch. 227, § 5; L. 1984, ch. 55, § 1; April 5.

• 10-1202: Issuance, when; revenues; additional bonds; revenue bonds to construct electric generation facilities in certain first-class cities joining with privately owned utility; contracts or agreements; source of bond payment. (a) Any municipality authorized by the laws of the state of Kansas to issue general obligation bonds for the acquisition, construction, reconstruction, alteration, repair, improvement, extension or enlargement of any utility is hereby empowered to issue and sell revenue bonds in payment of the cost of such utility or improvements, to fix by ordinance or resolution such rates, fees and charges for the use thereof or services therefrom as may be reasonable and necessary and to provide for the manner of collecting and disbursing such revenues subject to the limitations hereinafter contained. If any city of the first class shall have issued temporary notes for waterworks improvements contemplating the issuance of general obligation bonds, said general obligation bonds having been authorized by the vote of a majority of the qualified electors of such city voting on the proposition at an election called and held for that purpose, such city may fund such temporary notes by the issuance of revenue bonds under the terms of this act without again submitting any proposition to the electors of such city. Any city which has issued revenue bonds under the terms of this act may thereafter issue additional revenue bonds for improvements, enlargements, extensions or additions to any utility system and provide that, on such conditions as may be specified by the governing body of the city, such later bonds shall be on a parity as to the revenues of such utility and in all other respects with revenue bonds previously issued against such utility under the terms of this act.

        (b)   Any city of the first class owning and operating a municipal electric utility, which is located in a county having a population of more than twenty thousand (20,000) and not more than thirty thousand (30,000) and an assessed tangible valuation of more than one hundred thirty-five million dollars ($135,000,000), is hereby authorized to join with any privately owned electric utility in the construction of an additional electric generating facility and to issue revenue bonds under the authority of this section and the act of which this section is amendatory to pay the city's share of the cost thereof. Such city is hereby authorized to enter into any contracts or agreements with such private electric utility which are necessary for the construction of such generating facility and for the purchase by the city of electric energy produced by such facility. The principal of, and the interest upon, all revenue bonds issued under the authority of this subsection shall be paid from available revenues derived from the operation of the city's municipal electric utility and available revenues derived from the operation of such additional electric generating facility.

        History:   L. 1947, ch. 107, § 2; L. 1949, ch. 117, § 1; L. 1955, ch. 75, § 1; L. 1957, ch. 82, § 1; L. 1965, ch. 87, § 1; L. 1978, ch. 53, § 5; April 28.

• 10-1203: Duplication of existing utility services; approval and finding by corporation commission. No municipality, as herein defined, shall issue revenue bonds to acquire, construct, reconstruct, alter, repair, improve, extend or enlarge any plant or facilities for the furnishing of any utility service where same is being furnished by a private utility, except upon approval by the corporation commission of the state of Kansas, after a finding based on substantial evidence that the acquisition, construction, reconstruction, alteration, repair, improvement, extension or enlargement of such plant or facilities is necessary or appropriate for the municipality and its consumers, and for the protection of investors and will not result in the duplication of existing utility services in the area served or to be served by the municipality.

        History:   L. 1947, ch. 107, § 3; April 16.

• 10-1204: Revenue fund; use; application of 12-825d, 13-1269 to 13-1274. Revenue derived from the operation of any utility financed in whole or in part by revenue bonds authorized by this act shall be paid into the treasury of the municipality or into the treasury of its board of public utilities and kept in a separate fund, and shall be used only for the purpose of paying the cost of operation, maintenance, alteration, reconstruction, repair, improvement, extension and enlargement of such utility, providing either a depreciation fund or a renewal and replacement fund, providing a reserve fund and paying the principal of, and the interest upon, the revenue bonds and paying the principal of, and the interest upon, any and all prior existing and subsequently issued revenue and general obligation bonds or other liens or indebtedness against any such utility or facility except that (1) all the provisions of K.S.A. 12-825d shall remain in force when sufficient revenues have been set aside for the current year's principal and interest upon the revenue bonds and (2) all the provisions of K.S.A. 13-1269 to 13-1274, inclusive, and amendments thereto, shall remain in force when the provisions of K.S.A. 13-1270, and amendments thereto, are complied with.

        History:   L. 1947, ch. 107, § 4; L. 1949, ch. 117, § 2; L. 1969, ch. 68, § 1; L. 1979, ch. 47, § 1; L. 1980, ch. 72, § 1; April 14.

• 10-1205: Liens on revenues of utilities; recitals; negotiability. Such revenue bonds are hereby made a lien on the revenues produced from such utility, which revenues may be pledged for the benefit of bondholders to a trustee under a trust agreement, but such bonds shall not be a general obligation of the issuing municipality and shall not contain the recital set forth in K.S.A. 10-112, or any amendments thereto, but shall contain recitals stating the authority under which such bonds are issued, that they are issued in conformity with the provisions, restrictions and limitations of that authority, that such bonds and the interest thereon are to be paid by the issuing municipality from the revenues derived from the rates, fees or charges herein mentioned and not from any other fund or source, that the same have been registered in the office of the clerk of the issuing municipality and the state treasurer of the state of Kansas, respectively, and that said bonds are negotiable. All such bonds, when registered and issued, as herein provided, shall import absolute verity and shall be conclusive in favor of all persons purchasing such bonds that all proceedings and conditions precedent have been had and performed to authorize the issuance thereof and such bonds shall be negotiable and may be issued in addition to the statutory limit of bonded indebtedness of the issuing municipality.

        History:   L. 1947, ch. 107, § 5; L. 1974, ch. 45, § 9; L. 1979, ch. 47, § 2; July 1.

• 10-1206:

        History:   L. 1947, ch. 107, § 6; L. 1957, ch. 83, § 1; Repealed, L. 1979, ch. 47, § 5; July 1.

• 10-1207: Revenue bonds; terms; disposition of excess funds. Revenue bonds issued under the provisions of this act may have serial or term maturities, but the date of maturity on the bonds shall not be fixed for a longer period of time than 40 years after the date of issuance. The bonds shall bear interest at a rate not to exceed the maximum rate of interest prescribed by K.S.A. 10-1009, and amendments thereto. The bonds may be in coupon or registered form and interchangeable, and shall have such other terms and provisions as the municipality provides by ordinance, resolution or trust agreement.

        In no case where revenue bonds are issued under and by virtue of this act shall the total amount received therefrom be in excess of the actual cost of the project plus capitalized interest for up to six months after completion of the plant or facility and reasonable reserves and issuance expenses. No municipality shall have any right or authority to levy taxes to pay any of the principal of or interest on any revenue bonds or any judgment against the issuing municipality on account thereof. The provisions of K.S.A. 10-113, and amendments thereto, shall not apply to any bonds issued hereunder.

        History:   L. 1947, ch. 107, § 7; L. 1949, ch. 117, § 3; L. 1968, ch. 135, § 2; L. 1970, ch. 64, § 8; L. 1978, ch. 99, § 8; L. 1979, ch. 47, § 3; L. 1983, ch. 49, § 40; May 12.

• 10-1208: Rates, fees and charges; depreciation or renewal and replacement fund; reserve fund; annual audit, filing; billing and collection of sewer service charges; discontinuance of water service. (a) The governing body or other proper officers having the control and management of the utilities of such municipality shall provide for the payment of such bonds by fixing rates, fees or charges for the use of or services rendered by such utility, which rates, fees or charges shall be sufficient to pay the cost of operation, improvement and maintenance of the utility, and provide either a depreciation fund or a renewal and replacement fund, provide a reserve fund and pay the principal of and the interest upon such bonds when due. Rates, fees and charges for the use of or services rendered by any interceptor sewer utility, including the cost of construction, alteration, repair or reconstruction of any such interceptor sewer utility, shall not be based on strength or volume of sewage to be carried in any interceptor sewer of such utility. The rates, fees and charges for the use of or services rendered by any sewage disposal plant utility may be based in part upon the strength or volume of sewage contributed.

        (b)   The municipality shall cause an audit to be made annually by a licensed municipal public accountant or certified public accountant of the operation of any utility for which revenue bonds have been issued by the municipality. If the audit discloses that proper provision has not been made for all of the requirements of this section, then the governing body or other officers having the control and management of the utilities of such municipality shall promptly proceed to cause to be charged for the utility service rendered rates which will adequately provide for the requirements of this section. Within one year after the audit period of the audit, a copy of the audit report shall be filed with the clerk of the municipality and shall be open to public inspection.

        (c)   If the municipality does not own the waterworks system serving it and has instituted sewer service charges and rates for the use of its sanitary sewage system utility under this section, it may contract with any corporation owning the waterworks system serving such municipality for the billing and collection of sewer service charges in conjunction with the billing and collection of water charges, and such corporation shall have the power to contract for such billing and collection of sewer service charges. The terms of such contract shall be such as may be reasonable under the circumstances including the payment of reasonable compensation for the services rendered in billing and collecting such sewer service charges and may include a provision that water service to any customer using or required by law to use the sewage facilities of the municipality, except the juvenile correctional facility at Atchison, shall be discontinued, at the direction of the municipality, in the event of such customer's failure to pay sewer service charges, and such water company shall have the power to discontinue such water service under such circumstances.

        (d)   If the municipality owns and operates both the waterworks system and sanitary sewer system serving such municipality and it has instituted sewer rates, fees, and charges under this section, it may combine the billing and collection of the charges for both such utility services and may discontinue the water service to any sewer user who may be delinquent in the payment of sewer service charges.

        History:   L. 1947, ch. 107, § 8; L. 1949, ch. 117, § 4; L. 1955, ch. 74, § 2; L. 1959, ch. 63, § 1; L. 1979, ch. 47, § 4; L. 1980, ch. 64, § 1; L. 1996, ch. 229, § 20; July 1, 1997.

• 10-1209:

        History:   L. 1947, ch. 107, § 9; Repealed, L. 1949, ch. 117, § 7; June 30.

• 10-1210: Publication of intended improvements; protest; election. The governing body, by a two-thirds vote of the members thereof, or where the utilities are under the control and management of a board of public utilities, said board by a three-fifths vote thereof, may contract for or make repairs, alterations, extensions, reconstructions, enlargements or improvements of any of its municipally owned utilities and issue or cause to be issued revenue bonds in payment of the cost thereof without submitting to a vote of the electors of such municipality the proposal to contract for or to make such repairs, alterations, extensions, reconstructions, enlargements or improvements and to issue such bonds in payment of the cost thereof: Provided, That such repairs, alterations, extensions or improvements will not cause duplication of existing utility service furnished by a private utility: Provided, however, That the governing body or other proper officers of any such municipality shall, before contracting for or making any such repairs, extensions, reconstructions, enlargements or improvements, cause to be published in the official paper of said municipality or, if said municipality has no official paper, then some paper of general circulation in such municipality, a notice of its intention so to do which notice shall describe the nature of the proposed repair, alteration, reconstruction, enlargement or improvement, state the total amount of the cost thereof and the amount of the bonds to be issued for the payment thereof: Provided, however, If, within fifteen days after the publication as aforesaid of such notice, there shall be filed with the clerk of such municipality a written protest against such proposed repairs, alterations, extensions, reconstructions, enlargements or improvements and such bond issue, signed by not less than twenty percent of the qualified electors of such municipality, the governing body of such municipality shall thereupon submit such proposed project and the proposed bond issue to the electors of such municipality at a special election to be called for that purpose upon at least ten days' notice, to be held not later than sixty days after the filing of such protest or at a regular city election or general election which will occur not sooner than thirty days nor not later than sixty days after the filing of such protest. In the event that a majority of such voters voting on such proposition at such election shall vote in favor thereof, such repairs, alterations, extensions, reconstructions, enlargements or improvements shall be made and such bonds may be issued in payment of the cost thereof.

        History:   L. 1947, ch. 107, § 10; L. 1949, ch. 117, § 5; June 30.

• 10-1211: Refunding of bonds. Any municipality governed by the provisions of this act having issued revenue bonds under this act or any previous authority may, from time to time, issue revenue bonds pursuant to the provisions of this act to refund any previous issue or part thereof of its outstanding revenue bonds. Such refunding revenue bonds shall be issued in the manner prescribed by and subject to the provisions of K.S.A. 10-116a. In addition, any such municipality may, from time to time, issue general obligation bonds, under the provisions of the general bond law, to refund any previous issue or part thereof of its outstanding revenue bonds, including the principal amount thereof and all accrued outstanding interest thereon, if such revenue bonds are callable in accordance with their terms or the holders thereof are willing to surrender them to the municipality. Such general obligation bonds shall not be issued until a resolution adopted by the governing body of the municipality stating the purpose for which such bonds are to be issued, the total amount of the bonds proposed to be issued, and the total cost to the city of the refunding project, shall be published once each week for two consecutive weeks in the official newspaper of such municipality. After publication, such bonds may be issued unless a petition requesting an election on the proposition, signed by electors equal in number to not less than 5% of the electors of the municipality who voted for the office of secretary of state at the last preceding general election of such office, is filed with the clerk of such municipality within 20 days following the last publication of such resolution. If such a petition is filed, the governing body of the municipality shall submit the proposition to the voters at an election called for such purpose and held within 90 days after the last publication of the resolution, and no bonds shall be issued unless such proposition shall receive the approval of a majority of the votes cast thereon. Such election shall be called and held in the manner provided by the general bond law. No such general obligation bonds shall be issued unless: (a) The total cost to the municipality on the general obligation bonds shall amount to less than the remaining interest cost to the municipality on the outstanding revenue bonds being refunded; (b) the anticipated revenues from the utility system involved are expected to be sufficient to retire such general obligation bonds; and (c) the refunding is necessary to accomplish a comprehensive and orderly financing plan for the utility system.

        History:   L. 1947, ch. 107, § 11; L. 1968, ch. 140, § 1; L. 1977, ch. 58, § 3; L. 1981, ch. 173, § 6; July 1.

• 10-1212: Act supplemental; election. The power herein granted to issue bonds shall be supplemental to and not amendatory of the provisions of K.S.A. 10-102 and shall be in addition to and independent of the authority granted to certain municipalities by K.S.A. 13-1238 to 13-1245, inclusive, and by K.S.A. 13-1252 to 13-1264, inclusive, or any acts amendatory thereof and supplemental thereto: Provided, That, except as provided by K.S.A. 10-1210, no bonds shall be issued by any city under the provisions of this act unless and until the question of the issuance of said bonds shall have been submitted to a vote of the electors of such city at a regular or special election called for such purpose and a majority of those voting on the question shall have voted in favor of the issuance of such bonds; and such election shall have been called, noticed, held and canvassed in the manner provided by the general bond law: And provided further, That any bond election heretofore held pursuant to K.S.A. 10-1212 in which the majority of the voters voted in favor of the issuance of said bonds pursuant to said section and K.S.A. 10-1202 is, and said bonds issued or to be issued are hereby ratified and validated, provided the election statutes of the state of Kansas in such cases made and provided were complied with.

        History:   L. 1947, ch. 107, § 12; L. 1955, ch. 75, § 2; L. 1957, ch. 82, § 2; March 27.

• 10-1213: Duties of governing bodies of municipalities having board of public utilities; elections; costs. In municipalities as defined herein, if the utilities plants thereof are under the control and management of a board of public utilities as provided by law, when three-fifths of said board of public utilities shall deem it necessary and expedient that revenue bonds be issued for any of the purposes provided for herein, it shall be the duty of the governing body of such city within ten days after receiving written request from said board of public utilities to take the necessary steps for the issuance of such revenue bonds and the governing bodies of such city shall issue and sell such bonds as requested by the board of public utilities, the proceeds thereof to be delivered to the treasurer of the board of public utilities. That where it is necessary, as provided herein, to hold an election to submit the question of the issuing of such revenue bonds to the qualified electors of the municipality, such elections shall be held in accordance with the provisions herein and the general bond election laws of the state of Kansas and the cost thereof, if held on dates other than the dates of the regular city election, or general election shall be paid by the board of public utilities of such city.

        History:   L. 1949, ch. 117, § 6; June 30.