1998 Regular Session
To: Local and Private Legislation; Ways and Means
By: Representatives Green (72nd), Wallace, Clarke, Coleman (65th), Robinson (63rd)
House Bill 1877
AN ACT TO AUTHORIZE THE CITY OF JACKSON TO CREATE A STORM WATER AND DRAINAGE UTILITY DISTRICT; TO AUTHORIZE THE APPOINTMENT OF A COMMISSION TO OPERATE AND MANAGE A STORM WATER AND SURFACE DRAINAGE SYSTEM; TO SPECIFY THE POWERS AND DUTIES OF THE COMMISSION AND THE CITY WITH REGARD TO THE SYSTEM; TO AUTHORIZE THE CHARGING OF A FEE FOR SERVICE; TO AUTHORIZE THE ISSUANCE OF REVENUE BONDS; AND FOR RELATED PURPOSES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:
SECTION 1. For purposes of this act, the following words shall have the meanings ascribed in this section, unless the context clearly indicates otherwise:
(a) "Acquire" means to construct, purchase, receive as a gift or obtain by any other method.
(b) "City" means the City of Jackson, Mississippi.
(c) "Commission" means the governing board of the City of Jackson Storm Water and Drainage Utility District.
(d) "District" means the City of Jackson Storm Water and Drainage Utility District.
(e) "Improve" means to repair, better, enlarge, extend, modify, renovate or otherwise alter a system.
(f) "Ordinance" means any order, resolution or other lawful legislative enactment of the city.
(g) "System" means any storm water or surface drainage system or systems owned, operated or maintained by the commission or the city.
SECTION 2. (1) The governing authorities of the city, by ordinance duly adopted and entered on their minutes, may create a storm water and drainage utility district to be known as the "City of Jackson Storm Water and Drainage Utility District."
(2) If the governing authorities create a district, the mayor, with the advice and consent of the city council, may appoint a commission consisting of three (3) members to control, manage and operate the district. The commissioners shall have the power, authority and duty to manage and control the district and the supply of the facilities and services of the district's system, both inside of and outside of the limits of the city. The commissioners must be qualified electors of the city and may not hold any other municipal office for honor or profit. The commissioners shall receive any compensation as may be specified and provided by the city council. The mayor may require the commissioners to furnish bonds for the faithful performance of their duties, in an amount as the mayor deems proper. The premiums on the bonds may be paid from the municipal treasury or any available funds of the district. Of the persons first appointed to the commission, one (1) shall be appointed for a term of one (1) year, one (1) for a term of two (2) years, and one (1) for a term of three (3) years. All subsequent appointees to the commission shall serve a term of three (3) years.
(3) If the governing authorities of the city do not elect to create a commission as provided in this section, then the system owned and operated by the city shall be controlled and managed by the governing authorities of the city, who shall have all the power and authority conferred upon such commission.
SECTION 3. The mayor of the city may remove any member of the commission for inefficiency or incompetency or any other good cause. If a commission is appointed, the governing authorities of the city may not abolish the commission or diminish its powers, except by a vote of a majority of the qualified electors of the city at a special election, duly called and held for that purpose.
SECTION 4. (1) The commission may make any bylaws for the holding and conduct of its meetings and any other rules, regulations, programs and plans as it deems necessary for the safe, economic and efficient management and protection of the district and the district's system, and any bylaws, regulations, programs and plans shall have the same validity as an ordinance duly passed by the governing authorities of the city.
(2) The commission may elect any officers and appoint any employees as it deems necessary to operate the district efficiently. The commission shall have the entire control and management of the district, together with all property connected or appertaining in any manner to the district and the district's system. The commission may employ a superintendent or manager of the district, who shall have actual charge of the management and operation of the district 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 district and systems of the district. 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 may be made.
(3) The commission may (a) fix the salaries and terms of office of all employees and direct them in the discharge of their duties; (b) require good and sufficient bonds from all officers and employees in such amounts as it deems proper; (c) discharge employees when found inefficient or for other good cause; (d) make and collect rates for services and facilities, and appropriate funds for the maintenance and improvements of the district and its system; and (e) insure all property used in the operation of the system, including buildings, furniture, books and records, against loss by fire and tornado, and carry a 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 pay premiums for the insurance out of the funds derived from the operation of the district.
(4) The commission shall report quarterly to the governing authorities of the city on its activities and transactions and shall make a complete statement of the financial condition of the district and the district's system at the end of each quarter. The commission shall annually make a detailed statement covering the entire management and operation of the district, with any recommendations which it may have for the further development of the district and its system.
SECTION 5. The commission shall keep an accurate account and record of services furnished to all departments of the city.
SECTION 6. The governing authorities, on behalf of the commission, may:
(a) Borrow money and issue revenue bonds solely for the purposes specified in this section and by the procedure provided in this act.
Money may be borrowed and bonds issued by the city to acquire or improve any system inside of or outside of the corporate limits of the city, for the purpose of supplying the city and the persons and corporations, both public and private, whether inside of or outside of its corporate limits, with the services and facilities afforded by the district.
(b) Assume all indebtedness for any system or systems which may be acquired under this section as all or part of the consideration for the acquisition of the system or systems and issue its revenue bonds in exchange for the bonds or notes evidencing that indebtedness.
(c) Acquire or improve any system for which it is authorized to borrow money and issue revenue bonds under paragraph (a) of this section to acquire or improve; and to make contracts in furtherance thereof or in connection therewith.
(d) Own, operate and maintain the system or any system acquired.
(e) Establish, maintain and collect rates for the facilities and services offered by the district and discontinue any service upon any failure to promptly pay the charges fixed for the service. The rates so fixed for services rendered by the district may be charged for all services rendered thereby, regardless of whether or not the services may have been previously rendered without rates or charges by a previously existing system. The city may pledge for the payment of any bonds issued to acquire or improve the system, or to refund any bonds previously issued to acquire or improve the system or to acquire or improve any system merged with the system, the revenues to be derived from the operation of the district, including the charges authorized to be imposed by this section.
If the revenues of any previously existing system being merged into the system are subject to a prior lien, the revenues and the expenses of the previously existing system shall be accounted for separately to the extent necessary to satisfy the covenants relating to a prior lien for so long as the indebtedness secured by the revenues shall remain outstanding. Only surplus revenues remaining after the satisfaction of all covenants relating to any outstanding indebtedness may be pledged to the retirement of any indebtedness to be secured by the revenues of the district. The existence of any outstanding indebtedness shall not, in and of itself, prevent the combining of systems, so long as the prior lien on the revenues of any previously existing system is fully satisfied from the revenues of the previously existing system.
(f) Acquire property, real or personal, which may be necessary to effectuate the powers conferred under this act.
(g) 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 this act or for the acceptance of a grant to aid the city in acquiring or improving the system. A contract may contain any terms and conditions as may be agreed upon by and between the city and the United States of America or any agency thereof, or any purchaser of the bonds.
(h) Adopt any ordinances and do all things and perform all acts necessary, proper or desirable to effectuate the full intent and purpose of this act.
SECTION 7. The city through its commission, may 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 district in the last preceding fiscal year, in any calendar year, or for the purpose of improving the system, without the necessity of calling and holding an election upon the question or otherwise obtaining the consent of the qualified electors of the city, or giving any notice thereof. However, the commission shall secure approval of the governing authorities of the city. In all cases where money is borrowed under this section, the money 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 district for the last preceding fiscal year.
SECTION 8. No free service shall be furnished by the district to any private person, firm, corporation, or association or other entity. However, the district may furnish service, free of charge, to the city or any agency or department of the city, to any public school, or to any hospital or benevolent institution located within the area served by the district, including county, city and community fairs.
SECTION 9. Rates charged for services furnished by any district under this act shall not be subject to supervision or regulation by any state agency. It shall not be necessary for the city to obtain any franchise or permit other than applicable environmental permits from any state agency in order to acquire or improve the 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 10. If issuing revenue bonds under this act, the city shall install and maintain proper books of record and account (separate entirely from other records and accounts of the city), in which correct entries shall be made of all dealings or transactions of or in relation to the properties, business and affairs of the district. The governing authorities of the city, 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 district at the close of the preceding calendar, operating or fiscal year, and the financial operations of the district during that year. The 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 district, or any holder of bonds issued under this act, or anyone acting for or on behalf of a taxpayer, user of the services of the district's system, or bondholder.
SECTION 11. The governing authorities of the city may 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 machinery, appliances and premises are kept in a sanitary condition and in condition to comply with the terms and requirements under which the system is operated.
SECTION 12. Whenever the governing authorities of the city shall determine to issue bonds under this act to acquire or improve a system, the governing authorities shall cause an estimate to be made of the cost of the system or improvement, and the fact that such estimate has been made shall appear in the ordinance authorizing the issuance of any bonds. The ordinance shall set forth a brief description in general terms of the contemplated system or improvement, the estimated life of the system or improvement, the 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 any covenants and restrictions as may be necessary or desirable to safeguard the interests of the holders of the bonds.
SECTION 13. Except as otherwise provided in this act, no bonds shall be issued under this act until and unless a majority of those qualified electors of the city, voting on a proposition stating in general terms the maximum amount and purposes of the bonds, have approved the issuance at a special election called thereon according to law.
However, the requirement for an election to be held before issuance of any bonds shall not apply to the issuance of revenue bonds for the purpose of improving the system owned or operated by the city. Revenue bonds may be issued for those purposes in the following manner: notice of intention to issue the 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 of general circulation published in the city. After ten (10) days from the last publication of the notice, the bonds may be sold under the regular procedure for selling 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 the city is filed objecting to and protesting against the revenue bond issue. If the petition is filed, the revenue bond issue 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 an election shall vote for or against the revenue bond issue. The 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 the 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 the election in the same newspaper, as provided in this section. The laws governing municipal elections shall govern the order and conduct of the election. However, nothing in this section 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 14. Revenue bonds as may be issued under 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 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 under 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 city determines; however, 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 under this act shall constitute an indebtedness of the city within the meaning of any statutory or charter restriction, limitation or provision. It shall be plainly stated on the face of each bond in substance that the same has been issued under this act and that the taxing power of the city 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 district 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. If the issuing municipality receives 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 before the sale thereof or for financial assistance in providing debt service on such bonds, then the issue or any part thereof may be sold to the United States of America or any agency thereof at private sale. 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 city 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 city.
On issues of Five Million Dollars ($5,000,000.00) or more, the governing authorities of the city 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 fiscal advisor shall be eligible to bid for or participate in the underwriting of the bonds for which that person acted as advisor.
Before a person can qualify as a fiscal advisor under the terms of this section, that person 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 before qualifying under this section. A partnership or corporation may become a fiscal advisor under this section 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 15. If the city has outstanding bonds issued under this act, it shall maintain rates for all services and facilities afforded by any system, the revenues of which are pledged to the payment of the 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 the bonds as and when the bonds become due and payable and, if so provided in the ordinance authorizing the bonds, to accumulate a reserve in a fund, and to provide for the payment of the cost of operation and maintenance as may be necessary to keep the system at all times in good repair and working order. The rates shall be fixed by separate ordinance precedent to or at the time of the issuance of the bonds and shall be revised from time to time so as to produce the amounts necessary to provide for the foregoing. Bonds issued under this act to acquire or improve a system shall be secured by a pledge of an amount of the gross revenues of the district sufficient to maintain an interest and bond redemption fund. However, if there are then outstanding bonds to the payment of which the revenues of a district have been previously pledged, then, until the outstanding bonds have been retired, bonds issued to improve the system shall be secured by a pledge of the revenues of the district in an amount only after deductions have been made for servicing the 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 ordinance authorizing each 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 16. If the city has issued bonds under this act and any portion of those bonds remain outstanding and unpaid, the city, in connection with the issuance of additional bonds, may issue refunding bonds for the purpose of taking up, paying and redeeming all outstanding and unpaid bonds issued under this act. The refunding bonds and any additional bonds may be authorized and issued separately or may be consolidated into one (1) issue. Any outstanding and unpaid bonds may be refunded without notice and without an election thereon, and the additional bonds may be refunded without notice and without an election, except as provided in this act. The proceeds of any consolidated bonds shall be used to take up, pay and redeem all outstanding and unpaid bonds issued under this act, at their redemption price, and the balance of any proceeds shall be used and expended for the purposes for which the additional bonds were authorized to be issued. If any outstanding bonds, by the terms thereof, shall be redeemable before maturity at the option of the city, then the option of redemption shall be exercised in the manner provided in the bonds, and the refunding bonds shall not be issued or delivered more than two (2) calendar months in advance of the date upon which any outstanding bonds shall have been called for redemption. If the outstanding bonds, by the terms thereof, are not redeemable before 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 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 under this act. In lieu of selling the portion of any consolidated bonds, as may be required to provide for the redemption of any outstanding bonds, the 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 17. The holder of any bond or any interest coupon issued under 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 city of any or all acts and duties to be performed by the city under this act and the ordinance authorizing the issuance of the bond or interest coupon. If there is any default in the payment of the interest on and principal of any of the bonds, any court having jurisdiction in the proper action may, upon petition of the holder of any of the bonds, appoint a receiver to administer and operate the district 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 the district are pledged and to pay the expenses of operating and maintaining the district and to apply the revenues of the district, all in conformity with this act and of the ordinance authorizing the issuance of the bonds.
SECTION 18. In the authorizing ordinance, the governing authorities of the city shall set aside monthly and shall pledge the revenues of the district, in separate and special funds as follows: (a) operation and maintenance fund; (b) depreciation fund; (c) bond and interest fund; and (d) 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 city as they may determine from time to time for the best interest of the city. 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 any bonds so as to thereby provide and produce a cushion fund to meet any possible deficiencies therein in future years. If excess amounts are provided in the earlier years, then those excess amounts would be available for such purposes. Bonds issued under this act shall be payable solely from revenues of the district and out of the bond and interest fund.
SECTION 19. Nothing in this act shall be construed to prohibit the city from appropriating and using any part of its available income or revenues derived from any source other than from the operation of the district in paying any immediate expenses of operation or maintenance, or both, of the district. Nothing in this act shall be construed, however, to require the municipality to do so.
SECTION 20. The Commission shall devote all monies of the district 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 the district; 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 district 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 improvement of the system and emergencies. The balance of any monies, including, but not limited to, any which have heretofore been classified as revenues or surplus of the district, if any, may be used for any lawful, municipal purpose and may be paid to the governing authorities of the city for distribution to the various municipal funds or may be disbursed for any purpose by the governing authorities at their direction. The purpose of any allocation or expenditure of money made under this section shall be spread upon the minutes of the governing authorities of the city.
SECTION 21. Nothing in this act shall be construed as authorizing the city to impair or commit a breach of the obligation of any valid lien or contract created or entered into by it. It is the intent of this section to authorize the pledging, setting aside and segregation of gross revenue only where consistent with outstanding obligations of the city.
SECTION 22. If, after the governing authorities of the city have issued revenue bonds under this act, those governing authorities fail or refuse to carry out their duties with reference to setting aside the trust funds, the officers shall be guilty of a misdemeanor and, upon trial and conviction, shall be removed from office.
SECTION 23. This act, being necessary for and to secure the public health, safety, convenience and welfare of the City of Jackson, shall be liberally construed to effectuate its purposes.
The powers conferred by this act shall be in addition to the powers conferred by any other law, general, special or local, and these sections shall, without reference to any other statute or to any charter, be deemed full authority to acquire or improve and to own and operate the authorized revenue producing systems, to fix, maintain, and to collect rates for the facilities afforded by the system, 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 24. The governing authorities of the city authorizing the issuance of revenue bonds under this act may make provisions for the revenue bonds to be called for payment at any interest payment date before maturity, provided the city 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 25. This act shall take effect and be in force from and after July 1, 1998.