2006 Utah Code - 17A-2-824 — Revenue indebtedness or general obligation indebtedness -- Procedure for incurring -- Terms.

     17A-2-824.   Revenue indebtedness or general obligation indebtedness -- Procedure for incurring -- Terms.
     (1) (a) Any district which has determined to issue bonds shall issue its bonds under Title 11, Chapter 14, Local Government Bonding Act, for the acquisition through construction, purchase, or otherwise and for the improvement or extension of any properties necessary or desirable in the obtaining, treatment, and distribution of water and any other properties which the district is authorized to own under this part. Bonds may be issued or a contract indebtedness or obligation may be created:
     (i) payable solely from the revenues of the district other than the proceeds of taxes, in which case they shall be known for purposes of this section as "revenue indebtedness";
     (ii) payable solely from the proceeds of taxes, in which case they shall be known for purposes of this section as "general obligation indebtedness"; or
     (iii) payable from both operating revenues and the proceeds of taxes, in which case they shall be known for purposes of this section as "general obligation revenue indebtedness."
     (b) The full faith and credit of the district shall be pledged to the payment of its general obligation and general obligation revenue indebtedness, and taxes shall be levied fully sufficient to pay that part of the principal of and interest on general obligation revenue indebtedness as the revenues of the district pledged for this purpose may not be sufficient to meet.
     (c) General obligation indebtedness and general obligation revenue indebtedness may be issued only after approval at an election as provided in Section 17A-2-821.
     (d) Revenue indebtedness may be similarly submitted at an election as provided in Section 17A-2-821 if considered desirable by the board of trustees, but nothing in this part shall be construed to require such submission.
     (e) Refunding bonds may be issued without approval at an election.
     (2) Revenue indebtedness and general obligation revenue indebtedness may be payable from and secured by the pledge of all or any specified part of the revenues to be derived by the district from its water supply and the operation of its water facilities and other properties. It is the duty of the board of trustees to impose for water and water services rendered thereby, rates fully sufficient to carry out all undertakings contained in the resolution authorizing the bonds or the contract. The board of trustees may in the resolution agree to pay the expenses of maintaining and operating the properties of the district from the proceeds of the ad valorem taxes authorized in Subsection 17A-2-818(6) and may enter into those covenants with the future holders of the bonds or the other contracting party as to the management and operation of the properties, the imposition and collection of fees and charges for water and services furnished thereby, the disposition of the fees and revenues, the issuance of future bonds or the creation of future contract indebtedness or obligations and the creation of future liens and encumbrances against the properties and the revenues from them, the carrying of insurance on the properties, the keeping of books and records, the deposit, securing, and paying out of the proceeds of the bonds, and other pertinent matters, as considered proper by the board of trustees to assure the marketability of the bonds or the making of the contract. The board of trustees may undertake in the resolution to make the revenues of the properties sufficient to pay all or any specified part of the expense of the operation and maintenance of them. Covenants may be contained in the resolution with respect to the manner of the imposition and collection of water charges, and provision also may be made in it for the appointment of a receiver for the properties of the district in the event of a default by the district in carrying out the covenants and agreements

contained in the resolution. Provision may also be made in the resolution for a receiver to perform those services with respect to the holding and paying out of the revenues of the district and the proceeds of the bonds, and otherwise, as may be considered advisable. Maintenance and operation costs and expenses as referred to in this section shall be construed to include any payments made by the district to the United States of America, to any water users' association, or to any other public or private entity for the cost of operating facilities used in providing water for the district.

Amended by Chapter 105, 2005 General Session