MISSISSIPPI LEGISLATURE

1998 Regular Session

To: Municipalities; Ways and Means

By: Representative Robinson (63rd)

AN ACT TO AUTHORIZE MUNICIPALITIES TO CREATE A COMMISSION TO OPERATE A STORM WATER OR DRAINAGE UTILITY SYSTEM; TO AUTHORIZE THE CHARGING OF A FEE FOR SUCH UTILITY SERVICE; TO SPECIFY THE POWERS AND DUTIES OF THE COMMISSION AND THE MUNICIPALITY WITH REGARD TO SUCH A SYSTEM; TO AUTHORIZE THE ISSUANCE OF BONDS; AND FOR RELATED PURPOSES. 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. Whenever used in this act:

(a) The term "municipality" shall include any incorporated city, town or village of the State of Mississippi, whether incorporated under a special charter or under the general laws of the State of Mississippi governing municipalities, and operating under any form of municipal government. Each county or municipality joining together shall be allowed at least one (1) commissioner representing that governing authority;

(b) The term "system" shall mean any storm water or surface drainage system or systems.

(c) The term "improvement" shall include repair, betterment, enlargement, extension and other improvements to a system;

(d) The term "acquire" shall include construct, purchase, gift, exercise of power of eminent domain and other methods by which a municipality may acquire a system;

(e) The term "improve" shall include repair, better, enlarge, extend and other methods of improving a system;

(f) The term "ordinance" shall include ordinance, resolution or other appropriate legislative enactment of the governing authorities of any municipality.

SECTION 2. The governing authorities of any municipality which now owns and operates, or hereafter shall own and operate, any system or systems shall have the power and authority to create a commission to control, manage and operate such systems, or any one or more of them, which said commission shall consist of not less than three (3) nor more than five (5) commissioners, to be elected by the governing authorities of such municipality. In any municipality operating under the council-manager plan of government, such commissioners shall be selected by, and shall be under the control of, the mayor and councilmen of the municipality, and not the city or town manager. Such commissioners shall have the power, authority and duty to manage and control said system or systems and the supply of the facilities and services thereof, both within and without the limits of the municipality. Such commissioners shall be qualified electors of the municipality and shall not hold any other municipal office for honor or profit. Such commissioners shall receive such compensation as may be specified and provided by the governing authorities of said municipality. The governing authorities of the municipality are hereby authorized and empowered to require such commissioners to furnish bonds for the faithful performance of their duties, in the amount as may be deemed proper, and to pay the premiums thereon from the municipal treasury or the available funds of the said system or systems. Where there are three (3) members of such commission, the term of office shall be for a period of three (3) years, and where there are four (4) members the term of office shall be for a period of four (4) years, and where there are five (5) members the term of office shall be for a period of five (5) years. However, in making the first appointment of commissioners, one (1) shall be appointed for a term of one (1) year, one (1) for a term of two (2) years, one (1) for a term of three (3) years and, where necessary, one (1) for a term of four (4) years, and one (1) for a term of five (5) years, so that thereafter the term of office of one (1) commissioner shall expire each year. Where the governing authorities of the municipality do not elect to create a commission as herein provided, then any system or systems owned and operated by the municipality shall be controlled and managed by the governing authorities of the municipality, who shall have all the power and authority conferred upon such commission.

SECTION 3. The governing authorities of such municipality shall have the power to remove any member of said commission for inefficiency or incompetency or any other cause, but the governing authority of any municipality which has created a commission under the terms of this act shall not have authority to abolish the commission, or to diminish its powers, except by a vote of a majority of the qualified electors of such municipality at a special election, duly called and held for that purpose.

SECTION 4. The commission provided for by this act is authorized to make such bylaws for the holding and conduct of its meetings and such other regulations as it may deem necessary for the safe, economic and efficient management and protection of the system or systems, and such bylaws and regulations shall have the same validity as an ordinance duly passed by the governing authorities of any municipality.

It is authorized to elect such officers and appoint such employees as may be necessary to operate the system or systems efficiently, and it shall have the entire control and management of such system or systems, together with all property connected or appertaining in any manner to such system or systems. The commission shall have the authority to employ a superintendent or manager of the systems, who shall have actual charge of the management and operation thereof and of the enforcement and execution of all the rules, regulations, programs, plans and decisions made and adopted by the commission in making purchases for materials and supplies to be used in the operation of the systems. The commission shall advertise for competitive bids in the manner and form as is required in accordance with Section 31-7-13, Mississippi Code of 1972. The superintendent or manager shall make and keep full and proper books and records of all purchases and shall submit them to the commission for its approval and ratification before payment thereof is authorized to be made. It shall have the right to fix the salaries and terms of office of all employees and to direct them in the discharge of their duties. It shall have the right to require good and sufficient bonds from all officers and employees in such amounts as it may deem proper. It shall have the right to discharge employees when found inefficient or for other good cause. It shall have the power to make and collect rates for services and facilities, and appropriate funds for the maintenance and improvements of such systems. It is authorized to insure all property used in the operation of such systems, including buildings, furniture, books and records, against loss by fire and tornado, and to carry sufficient amount of employers liability, steam boiler, plate glass and other miscellaneous casualty insurance, as in the discretion of the commission may be deemed proper, and to pay premiums therefor out of the funds derived from the operation of the systems. It shall report quarterly to the governing authorities of the municipality of all its doings and transactions of every kind whatsoever and shall make a complete statement of the financial condition of the systems at the end of each quarter, and shall annually make a detailed statement covering the entire management and operation of the systems, with any recommendations which it may have for the further development of the systems.

SECTION 5. The commission shall devote all monies, derived from any source other than the issuance of bonds for purposes authorized by the laws of the State of Mississippi, to or for the payment of all operating expenses; to or for the payment of all bonds and interest on outstanding revenue bonds, if any, of such systems; to or for the acquisition and improvement of the system contingencies; to or for the payment of all other obligations incurred in the operation and maintenance of the systems and the furnishing of service; to or for the creation and maintenance of a cash working fund or a surplus fund to be used for replacement, extension of systems, and emergencies. The balance of the revenues of said systems, if any, may be used for any other lawful municipal purpose and may be paid to the governing authorities of the municipality for distribution to the various municipal funds, or may be disbursed for said purpose by the said commission at the direction and request of the governing authorities of such municipality.

SECTION 6. The commission shall keep an accurate account and record of services furnished to all departments of the municipality.

SECTION 7. Any municipality is authorized and empowered:

(a) To borrow money and to issue revenue bonds therefor solely for the purposes specified in this section and by the procedure provided in this act.

Money may be borrowed and bonds issued by any municipality of the State of Mississippi, as hereinbefore defined, to acquire or improve any system within or without the corporate limits thereof, for the purpose of supplying such municipality and the persons and corporations, both public and private, whether within or without its corporate limits, with the services and facilities afforded by such system.

(b) To assume all indebtedness for any system or systems which may be acquired under the provisions of this section as all or part of the consideration for the acquisition of such system or systems and to issue its revenue bonds in exchange for the bonds or notes evidencing such indebtedness.

(c) To acquire or improve any system which it is authorized to borrow money and issue revenue bonds under subsection (a) of this section to acquire or improve; and to make contracts in furtherance thereof or in connection therewith.

(d) To own, operate and maintain any such system or combination of any and all of said systems into one (1) system.

(e) To establish, maintain and collect rates for the facilities and services offered by any such system; provided that if there is a combination of systems into one or more systems, the municipality establishing the same shall be and is empowered to establish, maintain and collect rates for any and all of the services or for any combination thereof, and such municipality shall be and is authorized to discontinue any or all of the services upon any failure to promptly pay the charges fixed for the services. The rates so fixed for services rendered by any system or combination thereof may be charged for all services rendered thereby, regardless of whether or not such services may have been previously rendered without rates or charges therefor by the previously existing system. Any such municipality is authorized to pledge for the payment of any bonds issued to acquire or improve any such combined system, or to refund any bonds previously issued to acquire or improve any such combined system or to acquire or improve any system merged with such combined system, the revenues to be derived from the operation of such combined system, including the charges authorized to be imposed by this section.

If the revenues of any previously existing system being merged into a combined system are subject to a prior lien, the revenues and the expenses of any such previously existing system shall be accounted for separately to the extent necessary to satisfy the covenants relating to such prior lien for so long as the indebtedness secured by such revenues shall remain outstanding. Only surplus revenues remaining after the satisfaction of all covenants relating to said outstanding indebtedness may be pledged to the retirement of any indebtedness to be secured by the revenues of a combined system. The existence of such outstanding indebtedness shall not, in and of itself, prevent the combining of systems as herein provided, so long as the prior lien on the revenues of any previously existing system is fully satisfied from the revenues of said previously existing system.

(f) To acquire property, real or personal, which may be necessary to effectuate the powers herein conferred. If the power of eminent domain is exercised, it shall be exercised in the manner provided by Sections 11-27-1 through 11-27-51, Mississippi Code of 1972.

(g) To enter into contract with the United States of America or any agency thereof, under the provisions of acts of the Congress of the United States, to aid or encourage public works and the regulations made in pursuance thereof, for the sale of bonds issued in accordance with the provisions of this act or for the acceptance of a grant to aid such municipality in acquiring or improving any such system; and such contracts may contain such terms and conditions as may be agreed upon by and between the municipality and the United States of America or any agency thereof, or any purchaser of such bonds.

(h) To adopt such ordinances and resolutions and to do all things and perform all acts necessary, proper or desirable to effectuate the full intent and purpose of this act.

SECTION 8. Any municipality which owns or operates any system, shall have the power and authority through its commission to borrow money and issue its negotiable notes or certificates of indebtedness therefor, in an amount not to exceed ten percent (10%) of the gross revenues of the system in the last preceding fiscal year, in any calendar year, or for the purpose of improving, repairing or extending any such system, without the necessity of calling and holding an election upon such question or otherwise obtaining the consent of the qualified electors of the municipality, or giving any notice thereof. However, the commission shall secure approval of the governing authorities of the municipality. In all cases where money is borrowed under the provisions of this section, the same shall be repaid within three (3) years and at no time shall the amount of money borrowed under this section exceed thirty percent (30%) of the gross revenues of the system for the last preceding fiscal year.

SECTION 9. No free service shall be furnished by any such system, or combined system, to any private person, firm, corporation, or association or other entity. The municipality may, however, furnish such service, free of charge, to the municipality or any agency or department thereof, to any public school, or to any hospital or benevolent institution located within such municipality, including county, city and community fairs.

SECTION 10. Rates charged for services furnished by any system or combined system purchased, constructed, improved, enlarged, extended or repaired under the provisions of this act shall not be subject to supervision or regulation by any state bureau, board, commission or other like instrumentality or agency thereof. It shall not be necessary for any municipality operating under the provisions of said sections to obtain any franchise or other permit from any state bureau, board, commission or other instrumentality thereof, in order to construct, improve, enlarge, extend or repair any system or combined system. However, billing and service disputes between the system and its customers shall be subject to review and arbitration by the Public Service Commission as provided under Section 77-3-6, Mississippi Code of 1972.

SECTION 11. Any municipality issuing revenue bonds pursuant to the authority granted in this act shall install and maintain proper books of record and account (separate entirely from other records and accounts of such municipality), in which correct entries shall be made of all dealings or transactions of or in relation to the properties, business and affairs of the system or combined system. The governing authorities of such municipality, not later than three (3) months after the close of any calendar, operating or fiscal year, shall cause to be prepared a balance sheet and an income and operating and surplus account showing, respectively, in reasonable detail, the financial condition of the system or combined system at the close of such preceding calendar, operating or fiscal year, and the financial operations thereof during such year. Said balance sheet and the income and operating and surplus account shall at all times during the usual business hours be open to examination and inspection by any taxpayer, user of the services furnished by the system, or any holder of bonds issued pursuant to the authority granted in this act, or anyone acting for or on behalf of such taxpayer, user of the services of the system, or bondholder.

SECTION 12. The governing authorities of every municipality shall have power to inspect or cause to be inspected the machinery, appliances and premises of any system within their corporate limits, in order to ascertain whether or not the said machinery, appliances and premises are kept in a sanitary condition and in condition to comply with the terms and requirements under which the said system or systems are operated.

SECTION 13. Whenever the governing authorities of any municipality shall determine to issue bonds pursuant to the authority granted in this act to acquire or improve a system, it shall cause an estimate to be made of the cost of such system or improvement, and the fact that such estimate has been made shall appear in the ordinance authorizing the issuance of such bonds, which ordinance shall set forth a brief description in general terms of the contemplated system or improvement, the estimated life thereof, the said estimated cost thereof, the amount, date, denominations, rate of interest, times and places of payment and other details in connection with the issuance of the bonds, and such covenants and restrictions as may be necessary or desirable to safeguard the interests of the holders of the bonds.

SECTION 14. Except as hereinafter provided, no bonds shall be issued pursuant to the authority granted in this act until and unless a majority of those qualified electors of the municipality, voting on a proposition stating in general terms the maximum amount and purposes of such bonds, have approved such issuance at a special election called thereon according to law.

However, such requirement for an election to be held prior to the issuance of such bonds shall not apply to the issuance of such revenue bonds for the purpose of improving, repairing or extending system owned or operated by any municipality. Such revenue bonds may be issued for such purposes in the following manner: notice of intention to issue such revenue bonds, setting out the amount and other terms or conditions of the proposed issue, shall be given by publication once a week for three (3) consecutive weeks in a local newspaper published in such a municipality, and if no such newspaper be published in said municipality, then in some newspaper having a general circulation in such municipality. After ten (10) days from the last publication of such notice, the bonds may be sold under the regular procedure for selling such bonds unless, within ten (10) days after the last publication of such notice, a petition signed by not less than twenty percent (20%) of the qualified voters of such municipality be filed objecting to and protesting against such revenue bond issue, in which event the same shall not be made unless submitted to a special election ordered for the purpose of determining whether or not a majority of those voting in such election shall vote for or against such revenue bond issue. Such election shall be ordered to be held not later than forty (40) days after the date of the last notice of the proposed revenue bond issue. Notice of such election, stating the purpose of the election, shall be published once each week for three (3) consecutive weeks next preceding the time set for holding said election in such newspaper, as herein provided. The laws governing such municipal elections shall govern the order and conduct of said election. However, nothing herein shall prevent the governing authorities from calling an election, whether required by petition of twenty percent (20%) of the qualified voters, or not. This section shall have no application to and it shall not affect the authority granted public utilities commissions under this act.

SECTION 15. Such bonds as may be issued pursuant to the authority granted in this act may be serial or term; redeemable, with or without premium, or nonredeemable; registered or coupon bonds with registration privileges as to either principal and interest, principal only or both. They shall bear interest at a rate to be determined pursuant to the sale of the bonds, and shall be payable at such time or times as shall be prescribed in the ordinance authorizing them. They shall mature at such time or times, not exceeding the said estimated life of the contemplated system or improvement, and in no event longer than thirty (30) years from their date, and at such place or places as shall be prescribed in the ordinance authorizing their issuance. Any provisions of the general laws to the contrary notwithstanding, any bonds and interest coupons issued pursuant to the authority granted in this act shall possess all the qualities of negotiable instruments. The bonds and the interest coupons shall be executed in such manner and shall be substantially in the form prescribed in the authorizing ordinance. In case any of the officers whose signatures or countersignatures appear on the bonds or interest coupons shall cease to be such officers before delivery of such bonds, such signatures or countersignatures shall nevertheless be valid and sufficient for all purposes the same as if they had remained in office until such delivery. No bond shall bear more than one (1) rate of interest. Each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid. All bonds of the same maturity shall bear the same rate of interest from date to maturity. All interest accruing on such bonds so issued shall be payable semiannually or annually, except that the first interest coupon attached to any such bond may be for any period not exceeding one (1) year.

No interest payment shall be evidenced by more than one (1) coupon and neither cancelled nor supplemental coupons shall be permitted. The lowest interest rate specified for any bonds issued shall not be less than seventy percent (70%) of the highest interest rate specified for the same bond issue. Such bonds shall be sold in such manner and upon such terms as the governing authorities of the municipality shall determine, provided that such bonds shall not bear a greater overall maximum interest rate to maturity than that allowed in Section 75-17-103, Mississippi Code of 1972, and the interest rate on any one (1) interest maturity shall not exceed the maximum interest rate allowed on such bonds. Each interest rate specified in any bid must be in multiples of one-eighth of one percent (1/8 of 1%) or in multiples of one-tenth of one percent (1/10 of 1%). If serial bonds, such bonds shall mature annually, and the first maturity date thereof shall not be more than five (5) years from the date of such bonds. Such bonds shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the State of Mississippi. The bonds and interest coupons shall be exempt from all state, county, municipal and other taxation under the laws of the State of Mississippi. The principal of and interest upon such bonds shall be payable solely for the revenues derived from the operation of the system acquired or improved with proceeds of the sale of such bonds. No bond issued pursuant to the authority granted in this act shall constitute an indebtedness of a municipality within the meaning of any statutory or charter restriction, limitation or provision. It shall be plainly stated on the face of each such bond in substance that the same has been issued pursuant to the authority granted in this act and that the taxing power of the municipality issuing the same is not pledged to the payment of such bond or interest thereon, and that such bond and the interest thereon are payable solely from the revenues of the system to acquire or improve which such bond is issued.

Such bonds shall be sold on sealed bids at public sale in the manner provided by Section 31-19-25, Mississippi Code of 1972. In the event the issuing municipality shall have received a commitment from any agency of the United States of America for the purchase of all or any portion of an issue of such bonds prior to the sale thereof or for financial assistance in providing debt service on such bonds, then, and in such event, said issue or any part thereof may be sold to the United States of America or any agency thereof at private sale. Provided, however, no bonds issued under the authority of this act shall bear an overall maximum interest rate greater than that allowed in Section 75-17-103, Mississippi Code of 1972.

It is specifically provided that any bond issue to be awarded and sold to the United States of America or any agency thereof shall mature at such time or times, not to exceed thirty-five (35) years, as shall be prescribed in the ordinance of the municipality authorizing their issuance.

It is specifically provided that any bond issue to be awarded and sold to the United States of America or any agency thereof may be issued as one or more amortized bonds without coupons, may be dated the date of delivery thereof, and the purchase price for such bond or bonds may be delivered in multiple advances, with interest to accrue on the principal advanced from the date of each such advance. The amount of each such advance and the date thereof shall be registered on the reverse of each such bond and attested by the manual signature of the clerk of the municipality.

On issues of Five Million Dollars ($5,000,000.00) or more, the governing authorities of a municipality may retain the services of a fiscal advisor to assist in the sale of bonds hereunder and pay to such fiscal advisor a fee not to exceed the following amount: Twenty-five Thousand Dollars ($25,000.00) plus one-quarter of one percent (1/4 of 1%) of the amount of the issue in excess of Five Million Dollars ($5,000,000.00). No such fiscal advisor shall be eligible to bid for or participate in the underwriting of the bonds for which he acted as advisor.

Before a person can qualify as a fiscal advisor under the terms of this section, he shall have been actively engaged in the business of fiscal counseling for municipalities, or the underwriting of municipal bonds, for a period of five (5) years prior to qualifying under this section. A partnership or corporation may become a fiscal advisor hereunder with the same qualifications. Such person, corporation, or partnership shall have had prior experience as a fiscal advisor or been involved in the underwriting or investing in bonds of the State of Mississippi, or one or more of the subdivisions thereof, and such person, partnership or corporation shall be recognized in the fiscal community as a reputable and qualified fiscal advisor.

SECTION 16. Any municipality having outstanding bonds issued pursuant to the authority granted in this act shall maintain rates for all the services and facilities afforded by any system, the revenues of which are pledged to the payment of such bonds, which rates shall be sufficient at all times to maintain an interest and bond redemption fund sufficient to pay the interest on and principal of such bonds as and when the same become due and payable and, if so provided in the ordinance authorizing such bonds, to accumulate a reserve in such fund, and to provide for the payment of such cost of operation and maintenance as may be necessary to keep such system at all times in good repair and working order. Such rates shall be fixed by separate ordinance precedent to or at the time of the issuance of such bonds and shall be revised from time to time so as to produce the amounts necessary to provide for the foregoing. Bonds issued pursuant to the authority granted in this act to acquire or improve a system shall be secured by a pledge of an amount of the gross revenues of such system sufficient to maintain such an interest and bond redemption fund. However, if there are then outstanding bonds to the payment of which the revenues of a system have been previously pledged, then, until said outstanding bonds have been retired, bonds issued to improve such system shall be secured by a pledge of the revenues of the system in such an amount only after deductions have been made for servicing the said outstanding bonds and for maintaining and operating the system. Notwithstanding the above provisions, all revenue bonds issued for a specific utility may be issued on an equivalent basis, provided that each and every ordinance authorizing each and every bond issued shall clearly state the basis on which future revenue bond issues shall be provided for in order to place them on an equivalent basis with prior issues.

SECTION 17. Any municipality which shall have issued bonds pursuant to the authority granted in this act, all or any portion of which shall at any time hereafter remain outstanding and unpaid, is hereby authorized, in connection with the issuance of additional bonds hereunder, to issue refunding bonds for the purpose of taking up, paying and redeeming all such outstanding and unpaid bonds. Such refunding bonds and such additional bonds may be authorized and issued separately or may be consolidated into one (1) issue. Such outstanding and unpaid bonds may be refunded without notice and without an election thereon, and such additional bonds may be refunded without notice and without an election except as provided in this act. The proceeds of any such consolidated bonds shall be used to take up, pay and redeem all of such outstanding and unpaid bonds, at their redemption price, and the balance of such proceeds shall be used and expended for the purposes for which the additional bonds were authorized to be issued. In the event any such outstanding bonds, by the terms thereof, shall be redeemable prior to maturity at the option of such municipality, then such option of redemption shall be exercised in the manner provided in such bonds, and the refunding bonds shall not be issued or delivered more than two calendar months in advance of the date upon which such outstanding bonds shall have been called for redemption. In the event that such outstanding bonds, by the terms thereof, be not so redeemable prior to maturity, then the refunding bonds shall not be issued, except concurrently with the surrender and cancellation of a like amount of the bonds to be refunded thereby. All bonds issued under the provisions of this section shall have like incidents and shall be payable from the same source or sources and the payment thereof shall be secured in like manner as are bonds issued pursuant to the authority granted in this act. In lieu of selling such portion of such consolidated bonds, as may be required to provide for the redemption of such outstanding bonds, such consolidated bonds may be issued and delivered in exchange for and upon surrender and cancellation of a like amount of the bonds to be refunded thereby.

SECTION 18. The holder of any bond or any interest coupon issued pursuant to the authority granted in this act may, by suit, action, mandamus or other proceedings at law or in equity, enforce and compel performance by the appropriate official or officials of the municipality of any or all acts and duties to be performed by such municipality under the provisions of this act and the ordinance authorizing the issuance of such bond or interest coupon. If there be any default in the payment of the interest on and principal of any of said bonds, any court having jurisdiction in the proper action may, upon petition of the holder of any of such bonds, appoint a receiver to administer and operate the system with power to fix rates and collect charges sufficient to provide for the payment of all bonds outstanding to the payment of which the revenues of such system are pledged and to pay the expenses of operating and maintaining such system and to apply the revenues of such system, all in conformity with the provisions of this act and of the ordinance authorizing the issuance of such bonds.

SECTION 19. In the authorizing order or ordinance, the governing authorities of the municipality shall set aside monthly and shall pledge the revenues of the system or combined system, in separate and special funds as follows: (1) operation and maintenance fund; (2) depreciation fund; (3) bond and interest fund; and (4) contingent fund. A sufficient amount shall be set aside each year for the retirement of the bonds and interest. Any surplus revenue remaining shall be disposed of by the governing authorities of the municipality as they may determine from time to time for the best interest of the municipality. However, in the segregation into the several funds, the governing authorities may prescribe a reasonable excess amount to be placed in the revenue bond and interest fund from time to time during the earlier years of maturity of such bonds so as to thereby provide and produce a cushion fund to meet any possible deficiencies therein in future years. In the event such excess amounts are provided in the earlier years, the same would be available for such purposes. Bonds pursuant to the authority granted in this act shall be payable solely from revenues of said project and out of the bond and interest fund.

SECTION 20. Nothing in this act shall be construed to prohibit the municipality from appropriating and using any part of its available income or revenues derived from any source other than from the operation of such system or combined system in paying any immediate expenses of operation and/or maintenance of any such system or combined system. Nothing in this act shall be construed, however, to require the municipality to do so.

SECTION 21. The governing authorities of any municipality shall devote all monies of the system derived from any source other than the issuance of bonds for purposes authorized by the laws of the State of Mississippi, to or for the payment of all operating expenses; to or for the payment of all bonds and interest on outstanding revenue bonds, if any, of such system; to or for the acquisition and improvement of the system contingencies; to or for the payment of all other obligations incurred in the operation and maintenance of the system and the furnishing of service; and to or for the creation and maintenance of a cash working fund or a surplus fund to be used for replacement, extension of systems and emergencies. The balance of any monies, including, but not limited to, any which have heretofore been classified as revenues or surplus of such system, if any, may be used for any lawful, municipal purpose and may be paid to the governing authorities of the municipality for distribution to the various municipal funds or may be disbursed for such purpose by the governing authorities at their direction. The purpose of any allocation or expenditure of money made pursuant to this section shall be spread upon the minutes of the municipal governing authorities.

SECTION 22. Nothing in this act shall be construed as authorizing any municipality to impair or commit a breach of the obligation of any valid lien or contract created or entered into by it, the intention hereof being to authorize the pledging, setting aside and segregation of gross revenue only where consistent with outstanding obligations of such municipality.

SECTION 23. If, after the governing authorities of any municipality have issued revenue bonds pursuant to the authority granted in this act, said governing authorities fail or refuse to carry out their duties with reference to setting aside the trust funds, said officers shall be guilty of a misdemeanor and, upon trial and conviction, shall be removed from office.

SECTION 24. This act, being necessary for and to secure the public health, safety, convenience and welfare of the municipalities of the State of Mississippi, shall be liberally construed to effect the purposes hereof.

The powers conferred by this act shall be in addition to the powers conferred by any other law, general, special or local, and such sections shall, without reference to any other statute or to any charter, be deemed full authority to purchase or improve and to own and operate the authorized revenue producing systems, to fix, maintain, and to collect rates for the facilities afforded by such systems, to issue and to sell the authorized bonds, and shall be construed as an additional and alternative method therefor, any provisions of the general laws of the state or of any charter to the contrary notwithstanding.

SECTION 25. Whenever the governing authorities of any municipality of more than one hundred thousand (100,000) population shall determine to issue bonds under the provisions of this act to acquire or improve a system, it shall cause an estimate to be made of the cost of such system or improvement, and the fact that such estimate has been made shall appear in the ordinance authorizing the issuance of such bonds, which ordinance shall set forth a brief description in general terms of the contemplated system or improvement, the estimated life thereof, the said estimated cost thereof, the amount, date, denominations, rate of interest, times and places of payment and other details in connection with the issuance of the bonds, and such covenants and restrictions as may be necessary or desirable to safeguard the interest of the holders of the bonds. Such bonds may be serial or term; redeemable, with or without premium, or nonredeemable; registered or coupon bonds with registration privileges as to either principal and interest, principal only or both. They shall bear interest at a rate to be determined pursuant to the sale of the bonds, and shall be payable at such time or times as shall be prescribed in the ordinance authorizing them. They shall mature at such time or times, not exceeding the said estimated life of the contemplated system or improvement, and in no event exceeding thirty (30) years from their date, and at such place or places as shall be prescribed in the ordinance authorizing their issuance; provided, however, that any bond issue to be awarded and sold to the United States of America or any agency thereof shall mature at such time or times, not to exceed thirty-five (35) years, as shall be prescribed in the ordinance authorizing their issuance. Any provisions of the general laws to the contrary notwithstanding, any bonds and interest coupons issued pursuant to the authority of this section shall possess all the qualities of negotiable instruments. The bonds and the interest coupons shall be executed in such manner and shall be substantially in the form prescribed in the authorizing ordinance. In case any of the officers whose signatures or countersignatures appear on the bonds or interest coupons shall cease to be such officers before delivery of such bonds, such signatures or countersignatures shall nevertheless be valid and sufficient for all purposes the same as if they had remained in office until such delivery. No bond shall bear more than one (1) rate of interest. Each bond shall bear interest from its date to its stated maturity date at the interest rate specified in the bid. All bonds of the same maturity shall bear the same rate of interest from date to maturity. All interest accruing on such bonds so issued shall be payable semiannually or annually, except that the first interest coupon attached to any such bond may be for any period not exceeding one (1) year.

No interest payment shall be evidenced by more than one (1) coupon and neither cancelled nor supplemental coupons shall be permitted. The lowest interest rate specified for any bonds issued shall not be less than seventy percent (70%) of the highest interest rate specified for the same bond issue. Such bonds shall be sold in such manner and upon such terms as the governing authorities of the municipality shall determine, provided that such bonds shall not bear a greater overall maximum interest rate to maturity than that allowed in Section 75-17-103, Mississippi Code of 1972, and the interest rate on any one (1) interest maturity shall not exceed the maximum interest rate allowed on such bonds. If serial bonds, such bonds shall mature annually, and the first maturity date thereof shall not be more than five (5) years from the date of such bonds. Such bonds shall be legal investments for trustees and other fiduciaries, and for savings banks, trust companies and insurance companies organized under the laws of the state of Mississippi. The bonds and interest coupons shall be exempt from all state, county, municipal and other taxation under the laws of the State of Mississippi. The principal of and interest upon such bonds shall be payable solely from the revenues derived from the operation of the system acquired or improved with proceeds of the sale of such bonds. No bond issued pursuant to this section shall constitute an indebtedness of a municipality within the meaning of any statutory or charter restriction, limitation or provision. It shall be plainly stated on the face of each such bond in substance that the same bond has been issued under the provisions of this section and that the taxing power of the municipality issuing the same is not pledged to the payment of such bond or interest thereon, and that such bond and interest thereon are payable solely from the revenues of the system to acquire or improve which such bond is issued.

Such bonds shall be sold on sealed bids at public sale in the manner provided by Section 31-19-25, Mississippi Code of 1972. In the event the issuing municipality shall have received a commitment from any agency of the United States of America for the purchase of all or any portion of an issue of such bonds prior to the sale thereof or for financial assistance in providing debt service on such bonds, then, and in such event, said issue or any part thereof may be sold to the United States of America or any agency thereof at private sale. Bonds in the aggregate amount of Two Hundred Thousand Dollars ($200,000.00) for any project may be sold at private sale either to underwriters or investors.

On issues of Five Million Dollars ($5,000,000.00) or more, the governing authorities of a municipality may retain the services of a fiscal advisor to assist in the sale of the bonds hereunder and pay to such fiscal advisor a fee not to exceed the following amount: Twenty-five Thousand Dollars ($25,000.00) plus one-quarter of one percent (1/4 of 1%) of the amount of the issue in excess of Five Million Dollars ($5,000,000.00). No such fiscal advisor shall be eligible to bid for or participate in the underwriting of the bonds for which he acted as advisor.

Before a person can qualify as a fiscal advisor under the terms of this section, he shall have been actively engaged in the banking business, or the business of fiscal counseling for municipalities, or the underwriting of municipal bonds, for a period of five (5) years prior to qualifying under this section. A partnership or corporation may become a fiscal advisor hereunder with the same qualifications. Such person, corporation or partnership shall have had prior experience as a fiscal advisor or been involved in the underwriting or investing in bonds of the State of Mississippi, or one or more of the subdivisions thereof, and such person, partnership or corporation shall be recognized in the fiscal community as a reputable and qualified fiscal advisor.

SECTION 26. The governing authorities of any municipality authorizing revenue bonds pursuant to the authority granted in this act may make provisions for any of such revenue bonds to be called for payment at any interest payment date before maturity, provided the municipality shall have on hand in its bond and interest fund sufficient monies, not otherwise appropriated or pledged, in excess of the interest and principal requirements within the next two (2) succeeding calendar, operating or fiscal years.

SECTION 27. This act shall take effect and be in force from and after July 1, 1998.