IC 8-1.5-2
Chapter 2. Transfer, Acquisition, and Improvement of Utilities by
Municipalities
IC 8-1.5-2-1 Application of chapter; exception
Sec. 1. This chapter applies to all municipalities except
consolidated cities. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-2 Application of chapter; additional exceptions
Sec. 2. (a) This chapter does not apply to utilities governed by
IC 8-1-13 or IC 8-1-2 except for a municipally owned utility.
(b) The law relating to acquisition of electric utility property and
to electricity suppliers' service area assignments shall be governed by
IC 8-1-2.3 and IC 8-1-2-95.1, and nothing in this chapter modifies or
abridges those provisions. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-3 Disposition, construction, and acquisition of utilities; lease and
operation of waterworks facilities
Sec. 3. (a) Subject to restrictions imposed by a bond ordinance,
resolution, indenture, contract under IC 8-1-2.2, or similar instrument
binding upon it, a municipality may sell or otherwise dispose of any
of its municipally owned utilities under this chapter.
(b) A municipality may own, lease, acquire, or construct a utility
within the corporate boundaries of the municipality, and within a
radius of six (6) miles from those boundaries or any place within the
county in which the municipality is located, under this chapter
without the consent of any agency other than the municipal
legislative body. Waterworks facilities may be leased from a public
utility and operated in conjunction with its municipal waterworks,
whether or not the leased facilities are located within the corporate
boundaries of the municipality, if the area served by the leased
facilities outside those boundaries is contiguous to, or within one (1)
mile of, those boundaries. For purposes of IC 36-4-3, a municipality
that leases and operates waterworks serving such an area is
considered to be furnishing water service to the area. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-4 Sale of nonsurplus property; ordinance or resolution providing for
appraisal
Sec. 4. Whenever the municipal legislative body determines to
sell or otherwise dispose of nonsurplus municipally owned utility
property, it shall by ordinance or resolution, by a two-thirds (2/3)
vote, provide for the following:
(1) The appointment, as follows, of three (3) residents of
Indiana to serve as appraisers:
(A) One (1) disinterested person who is an engineer licensed
under IC 25-31-1.
(B) One (1) disinterested appraiser licensed under
IC 25-34.1.
(C) One disinterested person who is either:
(i) an engineer licensed under IC 25-31-1; or
(ii) an appraiser licensed under IC 25-34.1.
(2) The appraisal of the property.
(3) The time that the appraisal is due. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.113-2006,
SEC.2; P.L.103-2008, SEC.2.
IC 8-1.5-2-5 Sale of nonsurplus property; appraiser qualifications; public
hearing; ordinance for sale; petitions opposing sale; submission to
voters
Sec. 5. (a) Each appraiser appointed as provided by section 4 of
this chapter must:
(1) by education and experience, have such expert and technical
knowledge and qualifications as to make a proper appraisal and
valuation of the property of the type and nature involved in the
sale;
(2) be a disinterested person; and
(3) not be a resident or taxpayer of the municipality.
(b) The appraisers shall:
(1) be sworn to make a just and true valuation of the property;
and
(2) return their appraisal, in writing, to the municipal legislative
body within the time fixed by the ordinance or resolution
appointing them.
(c) If all three (3) appraisers cannot agree as to the appraised
value, the appraisal, when signed by two (2) of the appraisers,
constitutes a good and valid appraisal.
(d) If, after the return of the appraisal by the appraisers to the
legislative body, the legislative body decides to proceed with the sale
or disposition of the nonsurplus municipally owned utility property,
the legislative body shall, not later than forty-five (45) days after the
return of the appraisal, hold a public hearing to do the following:
(1) Review and explain the appraisal.
(2) Receive public comment on the proposed sale or disposition
of the nonsurplus municipally owned utility property.
(3) Adopt an ordinance providing for the sale or disposition of
the nonsurplus municipally owned utility property. The
legislative body is not required to adopt an ordinance under this
subdivision if, after the hearing, the legislative body determines
it is not in the interest of the municipality to proceed with the
sale or disposition.
Notice of the hearing shall be published in the manner prescribed by
IC 5-3-1.
(e) The hearing on the ordinance providing for sale or disposition
may not be held for thirty (30) days after notice is given as required
by subsection (d).
(f) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) within the thirty (30) day period described in subsection (e),
at least the number of the registered voters of the municipality
required under IC 3-8-6-3 for a petition to place a candidate on
the ballot sign and present a petition to the legislative body
opposing the sale or disposition;
the legislative body shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election. In submitting the public question to the
voters, the legislative body shall certify the question to the county
election board of the county containing the greatest percentage of
population of the municipality under IC 3-10-9-3. The county
election board shall adopt a resolution setting forth the text of the
public question and shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election on a date specified by the municipal
legislative body. Pending the results of an election under this
subsection, the municipality may not take further action to sell or
dispose of the property as provided in the ordinance.
(g) If a majority of the voters voting on the question vote for the
sale or disposition, the legislative body shall proceed to sell the
property as provided in the ordinance.
(h) If a majority of the voters voting on the question vote against
the sale or disposition, the sale may not be made.
(i) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) after the expiration of thirty (30) days as provided in
subsection (e), a petition is not filed;
the municipal legislative body may proceed to sell the property as
provided in the ordinance. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1995,
SEC.99; P.L.3-1997, SEC.425; P.L.2-1998, SEC.34; P.L.103-2008,
SEC.3.
IC 8-1.5-2-6 Sale of nonsurplus property; terms of ordinance; satisfaction of
existing obligations; bid submitted by trust
Sec. 6. (a) The ordinance adopted by the municipal legislative
body under section 5(d) of this chapter must provide for:
(1) the sale or disposition of the municipally owned utility
property;
(2) the manner of the sale or disposition;
(3) the price, terms, and conditions of the sale or disposition,
which must be consistent with any contractual obligations
previously incurred under IC 8-1-2.2; and
(4) the officer or officers who are to execute the proper
documents conveying title on behalf of the municipality.
(b) The property may not be sold for less than its full appraised
value, as set forth in the appraisal, less the amount of any bonds,
liens, or other indebtedness due upon the property, and only in
accordance with contractual obligations incurred under IC 8-1-2.2.
The indebtedness shall either:
(1) be paid in accordance with the terms and conditions of the
instruments governing the indebtedness before the sale; or
(2) be assumed and paid by the purchaser as part of the
purchase price of the property.
(c) This subsection applies if a municipal legislative body adopts
an ordinance for the sale or disposition of municipally owned utility
real property by acceptance of bids. A bid submitted by a trust (as
defined in IC 30-4-1-1(a)) must identify each:
(1) beneficiary of the trust; and
(2) settlor empowered to revoke or modify the trust.
(d) The proceeds of any sale under this chapter shall be paid into
the treasury of the municipality making the sale and become part of
the general fund. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.104-1983,
SEC.1; P.L.336-1989(ss), SEC.18; P.L.103-2008, SEC.4.
IC 8-1.5-2-7 Public convenience and necessity; declaratory resolution
Sec. 7. (a) A certificate of public convenience and necessity is not
required as a condition precedent to the owning, leasing, acquisition,
construction, or operation of a utility by a municipality, even if there
is a public utility engaged in a similar service. The acquisition of
electric utility property and assignment of a municipal electric
utility's service area are, however, subject to the provisions of
IC 8-1-2.3 and IC 8-1-2-95.1.
(b) A municipality that wants to own and operate a utility where
there is a public utility engaged in a similar service:
(1) under a franchise granted by the municipality; or
(2) under an indeterminate permit as defined in IC 8-1-2-1;
may, after a hearing as provided by section 10 of this chapter, declare
by ordinance that public convenience and necessity require the
establishment of a municipally owned utility. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.172-2009,
SEC.3.
IC 8-1.5-2-8 Preliminary expenses; appropriation
Sec. 8. Before a municipal legislative body:
(1) proposes to construct or acquire a utility; and
(2) makes a determination as to public convenience and
necessity;
it may appropriate out of its general fund an amount not exceeding
five percent (5%) of the total estimated cost of constructing or
acquiring the utility, as necessary to pay the expenses of a
preliminary investigation, surveys, plans, specifications, and
appraisals, including engineering and legal expenses in constructing
or acquiring the utility. Any action by the municipal legislative body
in making an appropriation is final and not subject to review by the
department of local government finance. The municipal legislative
body may renew or adjust the appropriation on an annual basis until
the construction or acquisition of the utility is complete. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.90-2002,
SEC.313; P.L.172-2009, SEC.4.
IC 8-1.5-2-9 Appropriation for preliminary expenses; repayment
Sec. 9. If the municipal legislative body proceeds to construct or
acquire the utility, there must be included in the total amount of
money to be raised by the issuance of bonds in connection with the
construction or acquisition of the utility the amount of the
expenditures that will be repaid to the general fund of the
municipality from the money derived from the issuance and sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-10 Ordinance declaring public convenience and necessity; notice and
hearing
Sec. 10. (a) Before a municipal legislative body adopts an
ordinance declaring that public convenience and necessity require the
construction or acquisition of a utility as provided by section 7 of
this chapter, each public utility furnishing a similar utility service in
the municipality, or in the contiguous territory in which the
municipality proposes to operate, shall be given ten (10) days notice
by the legislative body of the time and place where the hearing will
be held. At the hearing, the public utility is entitled to be heard in
person or by counsel in opposition to the proposed action.
(b) Notice must be served by delivering a copy to an officer or
manager of the public utility in the municipality, if possible, or to an
officer of the public utility elsewhere in Indiana. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-11
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-12 Sale of heat, light, water, or power to municipality
Sec. 12. (a) Upon the approval by resolution of the municipal
legislative body, a municipally owned utility may sell or furnish heat,
light, water, or power to the municipality to be used exclusively for
the furnishing of utility service to the municipality for its own
municipal purposes.
(b) This section is not intended to permit the sale or furnishing of
power to the municipality where the sale would affect the obligation
of any contract or franchise. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-13 Contracts for acquisition, construction, or replacement of public
utility property; authorizing ordinance
Sec. 13. A contract made by the municipal legislative body for the
acquisition, construction, extension, or replacement of the property
of a public utility must be authorized by ordinance. The ordinance
must provide for the principal and interest of bonds issued for the
payment of the cost of the acquisition, construction, extension, or
replacement to be paid exclusively from the income and revenue of
the property acquired with the proceeds of the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-14 Costs of construction or acquisition; security for payment
Sec. 14. A municipality that constructs or acquires a utility may,
through its municipal legislative body, provide for and secure the
payment of the cost of constructing, acquiring, extending, or
improving the utility by assigning or otherwise pledging the property
acquired, together with the net earnings or profits derived or to be
derived from the operation of the utility or utilities. Contracts,
warrants, debentures, or pledges of future revenues entered into by
a municipally owned utility are not an indebtedness of the
municipality within the meaning of any constitutional debt limitation. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-15 Condemnation; authorization
Sec. 15. (a) If the municipality and the owners of a public utility
are unable to agree upon a price to be paid for the property of the
public utility, the municipality may:
(1) by ordinance declare that a public necessity exists for the
condemnation of the utility property; and
(2) bring an action in the circuit or superior court of the county
where the municipality is located against the utility for the
condemnation of the property.
(b) An ordinance adopted under subsection (a) is final.
(c) For the purpose of acquiring the property of a public utility,
the municipality:
(1) may exercise the power of eminent domain in accordance
with IC 32-24; and
(2) is required only to establish the necessity of taking as this
chapter requires.
(d) The provisions of this section do not apply to the acquisition
of electric utility property or the assignment of service areas covered
by IC 8-1-2.3 and IC 8-1-2-95.1. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.38.
IC 8-1.5-2-16
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-17 Acquisition of property rights inside or outside boundaries; utility
lines; protection of services from injury or pollution; attachments
from abuse, destruction, or waste
Sec. 17. (a) A municipality, by exercising the power of eminent
domain in accordance with IC 32-24 or other applicable law, may
acquire property rights inside or outside its corporate boundaries as
necessary for the business of a municipally owned utility.
(b) The municipal legislative body may provide for utility lines to
be laid through the municipality as the municipally owned utility
requires. The municipality may use any property or property rights
necessary for constructing, acquiring, operating, or protecting from
injury or pollution the municipally owned utility services.
(c) For the purpose of preserving and protecting from injury or
pollution the municipal water services, the municipality may exercise
its powers in areas within twenty-five (25) miles outside its corporate
boundaries.
(d) All attachments made to the utility fixtures, whether intended
for public or private use, are subject to the supervision and rules of
the utility for protection against abuse or destruction or the
inordinate use or waste of utility services. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.39.
IC 8-1.5-2-18 Bonds; payable out of special account; issuance
Sec. 18. (a) To provide money to pay for the construction or
acquisition of a utility under this chapter, or its extension,
improvement, or replacement in whole or in part, or its repair, the
municipal legislative body may issue and sell bonds bearing interest
at any rate, executed and payable at times not to exceed forty (40)
years from the date of issuance, and at places as the legislative body
determines. The bonds and interest on them are payable only out of
a special account, and the bonds do not constitute an indebtedness of
the municipality within the meaning of the constitutional limitations.
(b) Each bond must state plainly upon its face:
(1) that it is payable only from a special account;
(2) the account and the ordinance creating it; and
(3) that it does not constitute an indebtedness of the
municipality within the meaning of any constitutional debt
limitation.
(c) The bonds shall be sold in accordance with IC 5-1-11.
(d) This section provides an alternative method of financing for
all municipalities, notwithstanding any other law. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-19 Bonds, notes, or other obligations; issuance; approval by
commission for long term bonds
Sec. 19. (a) A municipality may not issue bonds, notes, or other
obligations under this chapter without the approval of the
commission if the bond, notes, or other obligations are payable more
than twelve (12) months after their execution, except as authorized
by IC 8-1-2.2-11.
(b) If the evidence presented to the commission establishes that
the rates and charges proposed by the municipally owned utility will
provide sufficient funds for the operation, maintenance, and
depreciation of the utility, and to pay the principal and interest of the
proposed bond issue, together with a surplus or margin of at least ten
percent (10%) in excess, the commission shall so certify in its order
approving the issuance of bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.103-2008,
SEC.5.
IC 8-1.5-2-19.5 Purchase of equipment requiring lead time before availability;
approval of contracts if sufficient funds available
Sec. 19.5. If a municipality desires to purchase and install
equipment for its utility which requires more than three (3) months
lead time for the supplier to make such equipment and installation
available, the legislative body may, by ordinance, approve a contract
therefor even though it does not have sufficient funds appropriated
or on hand to pay for such purchase if the utility:
(1) has annual net operating revenues for the immediately
preceding calendar year sufficient to permit the municipality:
(A) to pay the principal of and interest on an issue of its
utility revenue bonds in the principal amount necessary to
fund such purchase (including engineering costs, legal costs,
and costs of bond issuance associated therewith); and
(B) a margin of safety which it deems necessary to market
such bonds on acceptable terms;
(2) if required by section 19 of this chapter, has received
approval from the commission to issue bonds, notes, or other
obligations sufficient to fund such purchase; or
(3) has received approval from the commission to raise its rates
and charges in an amount sufficient to permit the issuance of
said bonds. As added by P.L.105-1983, SEC.1. Amended by P.L.103-2008,
SEC.6.
IC 8-1.5-2-20 Bonds; payment from revenues not derived from particular utility;
restriction
Sec. 20. Except as provided by section 22 of this chapter, the
municipal legislative body may not adopt an ordinance, or enter into
or ratify a contract, for the payment, directly or indirectly, of a bond
or bonds by revenues derived by the municipality from the levy of
taxes, from the issuance of any bonds other than from the issuance
of bonds specifically authorized by this chapter or by a refunding
statute, or from any source except the revenues derived from that
particular utility. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-21 Bonds payable out of special account; purchase by municipality
Sec. 21. A municipality may invest its own money in the bonds
issued under section 18 of this chapter. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-22 General obligation bonds; authorization; limitation
Sec. 22. (a) If the municipal legislative body decides that it is
impracticable to raise the entire amount necessary to construct or
acquire the utility solely by the issuance and sale of revenue bonds,
the legislative body may, by ordinance, provide that a part of the
amount may be raised by the issuance and sale of bonds pledging the
general credit of the municipality.
(b) The bonds shall be issued in accordance with IC 6-1.1-20. The
bonds may not exceed one-third (1/3) of the total cost of the utility.
This limitation does not apply to a utility to be owned and operated
by a municipality exclusively for the purpose of furnishing utility
service to the municipality for its own municipal purposes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-23 General obligation bonds; terms; sale
Sec. 23. If general obligation bonds are issued, they:
(1) may be issued in any denomination;
(2) are payable at a time not to exceed forty (40) years from
issuance;
(3) may bear interest at any rate payable semiannually; and
(4) shall be sold for not less than par value and accrued interest;
as provided by ordinance. The bonds shall be sold in accordance with
IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-24 Revenue bonds; money set aside for payment of interest and
principal
Sec. 24. (a) The board of a municipally owned utility, as defined
by IC 8-1.5-3-2, shall, at least semiannually, set aside from the net
earnings a sufficient amount to pay the interest and principal, as they
become due, on revenue bonds issued in payment for the utility or for
its improvement. This money may not be used for any other purpose.
(b) The commission shall approve the amount set aside for the
payment of the interest and principal when the commission approves
the rates and charges of the municipality. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-25 Special utility account; establishment by municipality; use
Sec. 25. (a) The municipal legislative body, after providing for
the:
(1) payment of operation and maintenance expenses of the
utility;
(2) payment of the interest and principal on revenue bonds and
creation of reserves for them;
(3) payment of the interest and principal on general obligation
bonds and creation of reserves for them; and
(4) payment of assessed taxes;
shall set aside a sufficient remainder of the earnings into a separate
and special account to be identified as the special utility account, to
be used and applied in the extension, replacement in whole or in part,
repair, and operation and maintenance of the utility.
(b) The remaining earnings may be applied to:
(1) the general fund of the municipality in accordance with
IC 8-1.5-3-11, outstanding bond ordinances, and contract
provisions under IC 8-1-2.2;
(2) the payment of the interest on a loan made for utility
construction; or
(3) the creation of a sinking fund for the liquidation of the debt;
as the legislative body determines. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-26 Tax levy for payment of bonds
Sec. 26. (a) To pay the principal and interest on bonds issued for
the construction, acquisition, extension, or improvement of a
municipally owned utility, the municipal legislative body may levy
an annual tax of sufficient amount on all taxable property of the
municipality.
(b) If the legislative body:
(1) has contracted with a person for supplying utility services or
has agreed to lease or purchase utility services; and
(2) has, in the contract, agreed to pay a stated rental, a
stipulated purchase price, or other compensation to the person,
or has issued bonds to pay for stock in the company or to
purchase the plant;
it may levy an annual tax for payment of the rent or other
consideration or purchase price to be paid for utility services, or for
the purchase price of a plant, and to pay the principal and interest on
the bonds.
(c) The tax under this section shall be levied and collected as
other municipal taxes are levied and collected, and the proceeds shall
be used only for the purpose for which the tax was levied. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-27 Lease of waterworks facilities; term; option to purchase or renew;
transfer of property to municipality
Sec. 27. (a) A municipality may lease waterworks facilities from
a not-for-profit corporation, a public utility, a county, or a
municipality. The term of the lease may not exceed fifty (50) years.
The lease must provide that the municipality has an option to:
(1) renew the lease for a further term on like conditions; and
(2) purchase the waterworks facilities covered by the lease
contract with the terms and conditions of the purchase specified
in the lease.
(b) If the option to purchase the waterworks facilities covered by
the lease is exercised, the municipality, for the purpose of procuring
money to pay the purchase price, may issue and sell revenue bonds
under other laws governing the issuance and sale of waterworks
revenue bonds for additions and extensions to municipal waterworks.
(c) If the municipality has not exercised an option to purchase the
property covered by the lease at the expiration of the lease, and upon
the full discharge and performance by the municipality of its
obligations under the lease contract, the property covered by the
lease thereupon becomes the absolute property of the municipality,
and the lessor shall execute proper instruments conveying to the
municipality good and merchantable title thereto.
(d) A waterworks facility leased under this section is subject to
IC 5-16-7. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.26.
IC 8-1.5-2-28 Lease of waterworks facilities; payment of operating expenses;
sufficiency of rates and charges
Sec. 28. (a) A waterworks lease may provide that as a part of the
lease rental for the waterworks facilities the lessee agrees to:
(1) pay all property taxes and assessments levied against or on
account of the leased facilities;
(2) maintain insurance on the leased facilities for the benefit of
the lessor; and
(3) assume all responsibilities for the operation, maintenance,
repair, alterations, and additions of the leased facilities.
(b) All of the expenses incurred under subsection (a) and the lease
rental are payable solely from the revenues derived from water rates
and charges to be collected by the lessee from property and users in
the area served by the leased facilities.
(c) The lessee may establish, fix, bill, and collect rates and
charges with respect to the property and users in the area served by
the leased facilities that are sufficient:
(1) to pay the costs of operation, maintenance, repair,
alterations, depreciation, and additions of the leased facilities;
and
(2) to pay the lease rental as it becomes due.
Rates and charges too low to meet these requirements are unlawful.
These rates and charges are subject to approval in accordance with
IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-29 Lease of waterworks facilities; notice and hearing
Sec. 29. (a) When the municipality and the lessor have agreed
upon the terms and conditions of any waterworks lease proposed to
be entered into under this chapter and before the final execution of
the lease, a notice shall be given by publication in accordance with
IC 5-3-1 to all persons interested, of a hearing to be held before the
municipal legislative body, which hearing must be on a day not
earlier than twenty (20) days after publication of the notice.
(b) The notice must:
(1) name the day, place, and hour of the hearing; and
(2) set forth a brief summary of the principal terms agreed upon,
including:
(A) the name of the lessor;
(B) the character of the property to be leased;
(C) the lease rental to be paid; and
(D) the number of years the lease is to be in effect.
(c) The proposed lease must be available for inspection by the
public during the twenty (20) day period and at the hearing.
(d) All persons interested are entitled to be heard, at the time
fixed, upon the necessity for the execution of the lease and whether
the rental to be paid to the proposed lessor is a fair and reasonable
rental for the waterworks facilities. The hearing may be adjourned to
a later date or dates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.27.
IC 8-1.5-2-30 Lease of waterworks facilities; execution; limitation of actions
Sec. 30. (a) After the hearing under section 29 of this chapter, the
municipal legislative body may:
(1) authorize the execution of the waterworks lease as originally
agreed upon; or
(2) make modifications as may be agreed upon with the
proposed lessor;
but the lease rental as set out in the published notice may not be
increased without a new notice and hearing.
(b) If the execution of the lease as originally agreed upon, or as
modified by agreement, is authorized by the legislative body, a notice
of the signing of the contract of lease shall be given by publication
in accordance with IC 5-3-1.
(c) An action to:
(1) contest the validity of the lease; or
(2) enjoin the performance of any of the terms and conditions
of the lease;
must be brought not later than thirty (30) days after publication of the
notice of execution of the lease. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-31 Leased waterworks facilities; tax exemptions
Sec. 31. All waterworks facilities leased by a lessor contracting
with a municipality under this chapter are exempt from all state,
county, and other taxes. However, the rental paid to a lessor under
the terms of such a lease is subject to all applicable taxes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-32 Leased waterworks facilities; applicable statutes
Sec. 32. As to waterworks facilities leased and acquired under this
chapter, it is not necessary to comply with any other statutes
concerning the leasing and acquisition of waterworks facilities by
municipalities except as specifically required by this chapter. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2
Chapter 2. Transfer, Acquisition, and Improvement of Utilities by
Municipalities
IC 8-1.5-2-1 Application of chapter; exception
Sec. 1. This chapter applies to all municipalities except
consolidated cities. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-2 Application of chapter; additional exceptions
Sec. 2. (a) This chapter does not apply to utilities governed by
IC 8-1-13 or IC 8-1-2 except for a municipally owned utility.
(b) The law relating to acquisition of electric utility property and
to electricity suppliers' service area assignments shall be governed by
IC 8-1-2.3 and IC 8-1-2-95.1, and nothing in this chapter modifies or
abridges those provisions. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-3 Disposition, construction, and acquisition of utilities; lease and
operation of waterworks facilities
Sec. 3. (a) Subject to restrictions imposed by a bond ordinance,
resolution, indenture, contract under IC 8-1-2.2, or similar instrument
binding upon it, a municipality may sell or otherwise dispose of any
of its municipally owned utilities under this chapter.
(b) A municipality may own, lease, acquire, or construct a utility
within the corporate boundaries of the municipality, and within a
radius of six (6) miles from those boundaries or any place within the
county in which the municipality is located, under this chapter
without the consent of any agency other than the municipal
legislative body. Waterworks facilities may be leased from a public
utility and operated in conjunction with its municipal waterworks,
whether or not the leased facilities are located within the corporate
boundaries of the municipality, if the area served by the leased
facilities outside those boundaries is contiguous to, or within one (1)
mile of, those boundaries. For purposes of IC 36-4-3, a municipality
that leases and operates waterworks serving such an area is
considered to be furnishing water service to the area. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-4 Sale of nonsurplus property; ordinance or resolution providing for
appraisal
Sec. 4. Whenever the municipal legislative body determines to
sell or otherwise dispose of nonsurplus municipally owned utility
property, it shall by ordinance or resolution, by a two-thirds (2/3)
vote, provide for the following:
(1) The appointment, as follows, of three (3) residents of
Indiana to serve as appraisers:
(A) One (1) disinterested person who is an engineer licensed
under IC 25-31-1.
(B) One (1) disinterested appraiser licensed under
IC 25-34.1.
(C) One disinterested person who is either:
(i) an engineer licensed under IC 25-31-1; or
(ii) an appraiser licensed under IC 25-34.1.
(2) The appraisal of the property.
(3) The time that the appraisal is due. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.113-2006,
SEC.2; P.L.103-2008, SEC.2.
IC 8-1.5-2-5 Sale of nonsurplus property; appraiser qualifications; public
hearing; ordinance for sale; petitions opposing sale; submission to
voters
Sec. 5. (a) Each appraiser appointed as provided by section 4 of
this chapter must:
(1) by education and experience, have such expert and technical
knowledge and qualifications as to make a proper appraisal and
valuation of the property of the type and nature involved in the
sale;
(2) be a disinterested person; and
(3) not be a resident or taxpayer of the municipality.
(b) The appraisers shall:
(1) be sworn to make a just and true valuation of the property;
and
(2) return their appraisal, in writing, to the municipal legislative
body within the time fixed by the ordinance or resolution
appointing them.
(c) If all three (3) appraisers cannot agree as to the appraised
value, the appraisal, when signed by two (2) of the appraisers,
constitutes a good and valid appraisal.
(d) If, after the return of the appraisal by the appraisers to the
legislative body, the legislative body decides to proceed with the sale
or disposition of the nonsurplus municipally owned utility property,
the legislative body shall, not later than forty-five (45) days after the
return of the appraisal, hold a public hearing to do the following:
(1) Review and explain the appraisal.
(2) Receive public comment on the proposed sale or disposition
of the nonsurplus municipally owned utility property.
(3) Adopt an ordinance providing for the sale or disposition of
the nonsurplus municipally owned utility property. The
legislative body is not required to adopt an ordinance under this
subdivision if, after the hearing, the legislative body determines
it is not in the interest of the municipality to proceed with the
sale or disposition.
Notice of the hearing shall be published in the manner prescribed by
IC 5-3-1.
(e) The hearing on the ordinance providing for sale or disposition
may not be held for thirty (30) days after notice is given as required
by subsection (d).
(f) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) within the thirty (30) day period described in subsection (e),
at least the number of the registered voters of the municipality
required under IC 3-8-6-3 for a petition to place a candidate on
the ballot sign and present a petition to the legislative body
opposing the sale or disposition;
the legislative body shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election. In submitting the public question to the
voters, the legislative body shall certify the question to the county
election board of the county containing the greatest percentage of
population of the municipality under IC 3-10-9-3. The county
election board shall adopt a resolution setting forth the text of the
public question and shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election on a date specified by the municipal
legislative body. Pending the results of an election under this
subsection, the municipality may not take further action to sell or
dispose of the property as provided in the ordinance.
(g) If a majority of the voters voting on the question vote for the
sale or disposition, the legislative body shall proceed to sell the
property as provided in the ordinance.
(h) If a majority of the voters voting on the question vote against
the sale or disposition, the sale may not be made.
(i) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) after the expiration of thirty (30) days as provided in
subsection (e), a petition is not filed;
the municipal legislative body may proceed to sell the property as
provided in the ordinance. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1995,
SEC.99; P.L.3-1997, SEC.425; P.L.2-1998, SEC.34; P.L.103-2008,
SEC.3.
IC 8-1.5-2-6 Sale of nonsurplus property; terms of ordinance; satisfaction of
existing obligations; bid submitted by trust
Sec. 6. (a) The ordinance adopted by the municipal legislative
body under section 5(d) of this chapter must provide for:
(1) the sale or disposition of the municipally owned utility
property;
(2) the manner of the sale or disposition;
(3) the price, terms, and conditions of the sale or disposition,
which must be consistent with any contractual obligations
previously incurred under IC 8-1-2.2; and
(4) the officer or officers who are to execute the proper
documents conveying title on behalf of the municipality.
(b) The property may not be sold for less than its full appraised
value, as set forth in the appraisal, less the amount of any bonds,
liens, or other indebtedness due upon the property, and only in
accordance with contractual obligations incurred under IC 8-1-2.2.
The indebtedness shall either:
(1) be paid in accordance with the terms and conditions of the
instruments governing the indebtedness before the sale; or
(2) be assumed and paid by the purchaser as part of the
purchase price of the property.
(c) This subsection applies if a municipal legislative body adopts
an ordinance for the sale or disposition of municipally owned utility
real property by acceptance of bids. A bid submitted by a trust (as
defined in IC 30-4-1-1(a)) must identify each:
(1) beneficiary of the trust; and
(2) settlor empowered to revoke or modify the trust.
(d) The proceeds of any sale under this chapter shall be paid into
the treasury of the municipality making the sale and become part of
the general fund. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.104-1983,
SEC.1; P.L.336-1989(ss), SEC.18; P.L.103-2008, SEC.4.
IC 8-1.5-2-7 Public convenience and necessity; declaratory resolution
Sec. 7. (a) A certificate of public convenience and necessity is not
required as a condition precedent to the owning, leasing, acquisition,
construction, or operation of a utility by a municipality, even if there
is a public utility engaged in a similar service. The acquisition of
electric utility property and assignment of a municipal electric
utility's service area are, however, subject to the provisions of
IC 8-1-2.3 and IC 8-1-2-95.1.
(b) A municipality that wants to own and operate a utility where
there is a public utility engaged in a similar service:
(1) under a franchise granted by the municipality; or
(2) under an indeterminate permit as defined in IC 8-1-2-1;
may, after a hearing as provided by section 10 of this chapter, declare
by ordinance that public convenience and necessity require the
establishment of a municipally owned utility. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.172-2009,
SEC.3.
IC 8-1.5-2-8 Preliminary expenses; appropriation
Sec. 8. Before a municipal legislative body:
(1) proposes to construct or acquire a utility; and
(2) makes a determination as to public convenience and
necessity;
it may appropriate out of its general fund an amount not exceeding
five percent (5%) of the total estimated cost of constructing or
acquiring the utility, as necessary to pay the expenses of a
preliminary investigation, surveys, plans, specifications, and
appraisals, including engineering and legal expenses in constructing
or acquiring the utility. Any action by the municipal legislative body
in making an appropriation is final and not subject to review by the
department of local government finance. The municipal legislative
body may renew or adjust the appropriation on an annual basis until
the construction or acquisition of the utility is complete. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.90-2002,
SEC.313; P.L.172-2009, SEC.4.
IC 8-1.5-2-9 Appropriation for preliminary expenses; repayment
Sec. 9. If the municipal legislative body proceeds to construct or
acquire the utility, there must be included in the total amount of
money to be raised by the issuance of bonds in connection with the
construction or acquisition of the utility the amount of the
expenditures that will be repaid to the general fund of the
municipality from the money derived from the issuance and sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-10 Ordinance declaring public convenience and necessity; notice and
hearing
Sec. 10. (a) Before a municipal legislative body adopts an
ordinance declaring that public convenience and necessity require the
construction or acquisition of a utility as provided by section 7 of
this chapter, each public utility furnishing a similar utility service in
the municipality, or in the contiguous territory in which the
municipality proposes to operate, shall be given ten (10) days notice
by the legislative body of the time and place where the hearing will
be held. At the hearing, the public utility is entitled to be heard in
person or by counsel in opposition to the proposed action.
(b) Notice must be served by delivering a copy to an officer or
manager of the public utility in the municipality, if possible, or to an
officer of the public utility elsewhere in Indiana. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-11
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-12 Sale of heat, light, water, or power to municipality
Sec. 12. (a) Upon the approval by resolution of the municipal
legislative body, a municipally owned utility may sell or furnish heat,
light, water, or power to the municipality to be used exclusively for
the furnishing of utility service to the municipality for its own
municipal purposes.
(b) This section is not intended to permit the sale or furnishing of
power to the municipality where the sale would affect the obligation
of any contract or franchise. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-13 Contracts for acquisition, construction, or replacement of public
utility property; authorizing ordinance
Sec. 13. A contract made by the municipal legislative body for the
acquisition, construction, extension, or replacement of the property
of a public utility must be authorized by ordinance. The ordinance
must provide for the principal and interest of bonds issued for the
payment of the cost of the acquisition, construction, extension, or
replacement to be paid exclusively from the income and revenue of
the property acquired with the proceeds of the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-14 Costs of construction or acquisition; security for payment
Sec. 14. A municipality that constructs or acquires a utility may,
through its municipal legislative body, provide for and secure the
payment of the cost of constructing, acquiring, extending, or
improving the utility by assigning or otherwise pledging the property
acquired, together with the net earnings or profits derived or to be
derived from the operation of the utility or utilities. Contracts,
warrants, debentures, or pledges of future revenues entered into by
a municipally owned utility are not an indebtedness of the
municipality within the meaning of any constitutional debt limitation. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-15 Condemnation; authorization
Sec. 15. (a) If the municipality and the owners of a public utility
are unable to agree upon a price to be paid for the property of the
public utility, the municipality may:
(1) by ordinance declare that a public necessity exists for the
condemnation of the utility property; and
(2) bring an action in the circuit or superior court of the county
where the municipality is located against the utility for the
condemnation of the property.
(b) An ordinance adopted under subsection (a) is final.
(c) For the purpose of acquiring the property of a public utility,
the municipality:
(1) may exercise the power of eminent domain in accordance
with IC 32-24; and
(2) is required only to establish the necessity of taking as this
chapter requires.
(d) The provisions of this section do not apply to the acquisition
of electric utility property or the assignment of service areas covered
by IC 8-1-2.3 and IC 8-1-2-95.1. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.38.
IC 8-1.5-2-16
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-17 Acquisition of property rights inside or outside boundaries; utility
lines; protection of services from injury or pollution; attachments
from abuse, destruction, or waste
Sec. 17. (a) A municipality, by exercising the power of eminent
domain in accordance with IC 32-24 or other applicable law, may
acquire property rights inside or outside its corporate boundaries as
necessary for the business of a municipally owned utility.
(b) The municipal legislative body may provide for utility lines to
be laid through the municipality as the municipally owned utility
requires. The municipality may use any property or property rights
necessary for constructing, acquiring, operating, or protecting from
injury or pollution the municipally owned utility services.
(c) For the purpose of preserving and protecting from injury or
pollution the municipal water services, the municipality may exercise
its powers in areas within twenty-five (25) miles outside its corporate
boundaries.
(d) All attachments made to the utility fixtures, whether intended
for public or private use, are subject to the supervision and rules of
the utility for protection against abuse or destruction or the
inordinate use or waste of utility services. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.39.
IC 8-1.5-2-18 Bonds; payable out of special account; issuance
Sec. 18. (a) To provide money to pay for the construction or
acquisition of a utility under this chapter, or its extension,
improvement, or replacement in whole or in part, or its repair, the
municipal legislative body may issue and sell bonds bearing interest
at any rate, executed and payable at times not to exceed forty (40)
years from the date of issuance, and at places as the legislative body
determines. The bonds and interest on them are payable only out of
a special account, and the bonds do not constitute an indebtedness of
the municipality within the meaning of the constitutional limitations.
(b) Each bond must state plainly upon its face:
(1) that it is payable only from a special account;
(2) the account and the ordinance creating it; and
(3) that it does not constitute an indebtedness of the
municipality within the meaning of any constitutional debt
limitation.
(c) The bonds shall be sold in accordance with IC 5-1-11.
(d) This section provides an alternative method of financing for
all municipalities, notwithstanding any other law. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-19 Bonds, notes, or other obligations; issuance; approval by
commission for long term bonds
Sec. 19. (a) A municipality may not issue bonds, notes, or other
obligations under this chapter without the approval of the
commission if the bond, notes, or other obligations are payable more
than twelve (12) months after their execution, except as authorized
by IC 8-1-2.2-11.
(b) If the evidence presented to the commission establishes that
the rates and charges proposed by the municipally owned utility will
provide sufficient funds for the operation, maintenance, and
depreciation of the utility, and to pay the principal and interest of the
proposed bond issue, together with a surplus or margin of at least ten
percent (10%) in excess, the commission shall so certify in its order
approving the issuance of bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.103-2008,
SEC.5.
IC 8-1.5-2-19.5 Purchase of equipment requiring lead time before availability;
approval of contracts if sufficient funds available
Sec. 19.5. If a municipality desires to purchase and install
equipment for its utility which requires more than three (3) months
lead time for the supplier to make such equipment and installation
available, the legislative body may, by ordinance, approve a contract
therefor even though it does not have sufficient funds appropriated
or on hand to pay for such purchase if the utility:
(1) has annual net operating revenues for the immediately
preceding calendar year sufficient to permit the municipality:
(A) to pay the principal of and interest on an issue of its
utility revenue bonds in the principal amount necessary to
fund such purchase (including engineering costs, legal costs,
and costs of bond issuance associated therewith); and
(B) a margin of safety which it deems necessary to market
such bonds on acceptable terms;
(2) if required by section 19 of this chapter, has received
approval from the commission to issue bonds, notes, or other
obligations sufficient to fund such purchase; or
(3) has received approval from the commission to raise its rates
and charges in an amount sufficient to permit the issuance of
said bonds. As added by P.L.105-1983, SEC.1. Amended by P.L.103-2008,
SEC.6.
IC 8-1.5-2-20 Bonds; payment from revenues not derived from particular utility;
restriction
Sec. 20. Except as provided by section 22 of this chapter, the
municipal legislative body may not adopt an ordinance, or enter into
or ratify a contract, for the payment, directly or indirectly, of a bond
or bonds by revenues derived by the municipality from the levy of
taxes, from the issuance of any bonds other than from the issuance
of bonds specifically authorized by this chapter or by a refunding
statute, or from any source except the revenues derived from that
particular utility. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-21 Bonds payable out of special account; purchase by municipality
Sec. 21. A municipality may invest its own money in the bonds
issued under section 18 of this chapter. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-22 General obligation bonds; authorization; limitation
Sec. 22. (a) If the municipal legislative body decides that it is
impracticable to raise the entire amount necessary to construct or
acquire the utility solely by the issuance and sale of revenue bonds,
the legislative body may, by ordinance, provide that a part of the
amount may be raised by the issuance and sale of bonds pledging the
general credit of the municipality.
(b) The bonds shall be issued in accordance with IC 6-1.1-20. The
bonds may not exceed one-third (1/3) of the total cost of the utility.
This limitation does not apply to a utility to be owned and operated
by a municipality exclusively for the purpose of furnishing utility
service to the municipality for its own municipal purposes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-23 General obligation bonds; terms; sale
Sec. 23. If general obligation bonds are issued, they:
(1) may be issued in any denomination;
(2) are payable at a time not to exceed forty (40) years from
issuance;
(3) may bear interest at any rate payable semiannually; and
(4) shall be sold for not less than par value and accrued interest;
as provided by ordinance. The bonds shall be sold in accordance with
IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-24 Revenue bonds; money set aside for payment of interest and
principal
Sec. 24. (a) The board of a municipally owned utility, as defined
by IC 8-1.5-3-2, shall, at least semiannually, set aside from the net
earnings a sufficient amount to pay the interest and principal, as they
become due, on revenue bonds issued in payment for the utility or for
its improvement. This money may not be used for any other purpose.
(b) The commission shall approve the amount set aside for the
payment of the interest and principal when the commission approves
the rates and charges of the municipality. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-25 Special utility account; establishment by municipality; use
Sec. 25. (a) The municipal legislative body, after providing for
the:
(1) payment of operation and maintenance expenses of the
utility;
(2) payment of the interest and principal on revenue bonds and
creation of reserves for them;
(3) payment of the interest and principal on general obligation
bonds and creation of reserves for them; and
(4) payment of assessed taxes;
shall set aside a sufficient remainder of the earnings into a separate
and special account to be identified as the special utility account, to
be used and applied in the extension, replacement in whole or in part,
repair, and operation and maintenance of the utility.
(b) The remaining earnings may be applied to:
(1) the general fund of the municipality in accordance with
IC 8-1.5-3-11, outstanding bond ordinances, and contract
provisions under IC 8-1-2.2;
(2) the payment of the interest on a loan made for utility
construction; or
(3) the creation of a sinking fund for the liquidation of the debt;
as the legislative body determines. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-26 Tax levy for payment of bonds
Sec. 26. (a) To pay the principal and interest on bonds issued for
the construction, acquisition, extension, or improvement of a
municipally owned utility, the municipal legislative body may levy
an annual tax of sufficient amount on all taxable property of the
municipality.
(b) If the legislative body:
(1) has contracted with a person for supplying utility services or
has agreed to lease or purchase utility services; and
(2) has, in the contract, agreed to pay a stated rental, a
stipulated purchase price, or other compensation to the person,
or has issued bonds to pay for stock in the company or to
purchase the plant;
it may levy an annual tax for payment of the rent or other
consideration or purchase price to be paid for utility services, or for
the purchase price of a plant, and to pay the principal and interest on
the bonds.
(c) The tax under this section shall be levied and collected as
other municipal taxes are levied and collected, and the proceeds shall
be used only for the purpose for which the tax was levied. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-27 Lease of waterworks facilities; term; option to purchase or renew;
transfer of property to municipality
Sec. 27. (a) A municipality may lease waterworks facilities from
a not-for-profit corporation, a public utility, a county, or a
municipality. The term of the lease may not exceed fifty (50) years.
The lease must provide that the municipality has an option to:
(1) renew the lease for a further term on like conditions; and
(2) purchase the waterworks facilities covered by the lease
contract with the terms and conditions of the purchase specified
in the lease.
(b) If the option to purchase the waterworks facilities covered by
the lease is exercised, the municipality, for the purpose of procuring
money to pay the purchase price, may issue and sell revenue bonds
under other laws governing the issuance and sale of waterworks
revenue bonds for additions and extensions to municipal waterworks.
(c) If the municipality has not exercised an option to purchase the
property covered by the lease at the expiration of the lease, and upon
the full discharge and performance by the municipality of its
obligations under the lease contract, the property covered by the
lease thereupon becomes the absolute property of the municipality,
and the lessor shall execute proper instruments conveying to the
municipality good and merchantable title thereto.
(d) A waterworks facility leased under this section is subject to
IC 5-16-7. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.26.
IC 8-1.5-2-28 Lease of waterworks facilities; payment of operating expenses;
sufficiency of rates and charges
Sec. 28. (a) A waterworks lease may provide that as a part of the
lease rental for the waterworks facilities the lessee agrees to:
(1) pay all property taxes and assessments levied against or on
account of the leased facilities;
(2) maintain insurance on the leased facilities for the benefit of
the lessor; and
(3) assume all responsibilities for the operation, maintenance,
repair, alterations, and additions of the leased facilities.
(b) All of the expenses incurred under subsection (a) and the lease
rental are payable solely from the revenues derived from water rates
and charges to be collected by the lessee from property and users in
the area served by the leased facilities.
(c) The lessee may establish, fix, bill, and collect rates and
charges with respect to the property and users in the area served by
the leased facilities that are sufficient:
(1) to pay the costs of operation, maintenance, repair,
alterations, depreciation, and additions of the leased facilities;
and
(2) to pay the lease rental as it becomes due.
Rates and charges too low to meet these requirements are unlawful.
These rates and charges are subject to approval in accordance with
IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-29 Lease of waterworks facilities; notice and hearing
Sec. 29. (a) When the municipality and the lessor have agreed
upon the terms and conditions of any waterworks lease proposed to
be entered into under this chapter and before the final execution of
the lease, a notice shall be given by publication in accordance with
IC 5-3-1 to all persons interested, of a hearing to be held before the
municipal legislative body, which hearing must be on a day not
earlier than twenty (20) days after publication of the notice.
(b) The notice must:
(1) name the day, place, and hour of the hearing; and
(2) set forth a brief summary of the principal terms agreed upon,
including:
(A) the name of the lessor;
(B) the character of the property to be leased;
(C) the lease rental to be paid; and
(D) the number of years the lease is to be in effect.
(c) The proposed lease must be available for inspection by the
public during the twenty (20) day period and at the hearing.
(d) All persons interested are entitled to be heard, at the time
fixed, upon the necessity for the execution of the lease and whether
the rental to be paid to the proposed lessor is a fair and reasonable
rental for the waterworks facilities. The hearing may be adjourned to
a later date or dates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.27.
IC 8-1.5-2-30 Lease of waterworks facilities; execution; limitation of actions
Sec. 30. (a) After the hearing under section 29 of this chapter, the
municipal legislative body may:
(1) authorize the execution of the waterworks lease as originally
agreed upon; or
(2) make modifications as may be agreed upon with the
proposed lessor;
but the lease rental as set out in the published notice may not be
increased without a new notice and hearing.
(b) If the execution of the lease as originally agreed upon, or as
modified by agreement, is authorized by the legislative body, a notice
of the signing of the contract of lease shall be given by publication
in accordance with IC 5-3-1.
(c) An action to:
(1) contest the validity of the lease; or
(2) enjoin the performance of any of the terms and conditions
of the lease;
must be brought not later than thirty (30) days after publication of the
notice of execution of the lease. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-31 Leased waterworks facilities; tax exemptions
Sec. 31. All waterworks facilities leased by a lessor contracting
with a municipality under this chapter are exempt from all state,
county, and other taxes. However, the rental paid to a lessor under
the terms of such a lease is subject to all applicable taxes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-32 Leased waterworks facilities; applicable statutes
Sec. 32. As to waterworks facilities leased and acquired under this
chapter, it is not necessary to comply with any other statutes
concerning the leasing and acquisition of waterworks facilities by
municipalities except as specifically required by this chapter. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2
Chapter 2. Transfer, Acquisition, and Improvement of Utilities by
Municipalities
IC 8-1.5-2-1 Application of chapter; exception
Sec. 1. This chapter applies to all municipalities except
consolidated cities. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-2 Application of chapter; additional exceptions
Sec. 2. (a) This chapter does not apply to utilities governed by
IC 8-1-13 or IC 8-1-2 except for a municipally owned utility.
(b) The law relating to acquisition of electric utility property and
to electricity suppliers' service area assignments shall be governed by
IC 8-1-2.3 and IC 8-1-2-95.1, and nothing in this chapter modifies or
abridges those provisions. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-3 Disposition, construction, and acquisition of utilities; lease and
operation of waterworks facilities
Sec. 3. (a) Subject to restrictions imposed by a bond ordinance,
resolution, indenture, contract under IC 8-1-2.2, or similar instrument
binding upon it, a municipality may sell or otherwise dispose of any
of its municipally owned utilities under this chapter.
(b) A municipality may own, lease, acquire, or construct a utility
within the corporate boundaries of the municipality, and within a
radius of six (6) miles from those boundaries or any place within the
county in which the municipality is located, under this chapter
without the consent of any agency other than the municipal
legislative body. Waterworks facilities may be leased from a public
utility and operated in conjunction with its municipal waterworks,
whether or not the leased facilities are located within the corporate
boundaries of the municipality, if the area served by the leased
facilities outside those boundaries is contiguous to, or within one (1)
mile of, those boundaries. For purposes of IC 36-4-3, a municipality
that leases and operates waterworks serving such an area is
considered to be furnishing water service to the area. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-4 Sale of nonsurplus property; ordinance or resolution providing for
appraisal
Sec. 4. Whenever the municipal legislative body determines to
sell or otherwise dispose of nonsurplus municipally owned utility
property, it shall by ordinance or resolution, by a two-thirds (2/3)
vote, provide for the following:
(1) The appointment, as follows, of three (3) residents of
Indiana to serve as appraisers:
(A) One (1) disinterested person who is an engineer licensed
under IC 25-31-1.
(B) One (1) disinterested appraiser licensed under
IC 25-34.1.
(C) One disinterested person who is either:
(i) an engineer licensed under IC 25-31-1; or
(ii) an appraiser licensed under IC 25-34.1.
(2) The appraisal of the property.
(3) The time that the appraisal is due. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.113-2006,
SEC.2; P.L.103-2008, SEC.2.
IC 8-1.5-2-5 Sale of nonsurplus property; appraiser qualifications; public
hearing; ordinance for sale; petitions opposing sale; submission to
voters
Sec. 5. (a) Each appraiser appointed as provided by section 4 of
this chapter must:
(1) by education and experience, have such expert and technical
knowledge and qualifications as to make a proper appraisal and
valuation of the property of the type and nature involved in the
sale;
(2) be a disinterested person; and
(3) not be a resident or taxpayer of the municipality.
(b) The appraisers shall:
(1) be sworn to make a just and true valuation of the property;
and
(2) return their appraisal, in writing, to the municipal legislative
body within the time fixed by the ordinance or resolution
appointing them.
(c) If all three (3) appraisers cannot agree as to the appraised
value, the appraisal, when signed by two (2) of the appraisers,
constitutes a good and valid appraisal.
(d) If, after the return of the appraisal by the appraisers to the
legislative body, the legislative body decides to proceed with the sale
or disposition of the nonsurplus municipally owned utility property,
the legislative body shall, not later than forty-five (45) days after the
return of the appraisal, hold a public hearing to do the following:
(1) Review and explain the appraisal.
(2) Receive public comment on the proposed sale or disposition
of the nonsurplus municipally owned utility property.
(3) Adopt an ordinance providing for the sale or disposition of
the nonsurplus municipally owned utility property. The
legislative body is not required to adopt an ordinance under this
subdivision if, after the hearing, the legislative body determines
it is not in the interest of the municipality to proceed with the
sale or disposition.
Notice of the hearing shall be published in the manner prescribed by
IC 5-3-1.
(e) The hearing on the ordinance providing for sale or disposition
may not be held for thirty (30) days after notice is given as required
by subsection (d).
(f) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) within the thirty (30) day period described in subsection (e),
at least the number of the registered voters of the municipality
required under IC 3-8-6-3 for a petition to place a candidate on
the ballot sign and present a petition to the legislative body
opposing the sale or disposition;
the legislative body shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election. In submitting the public question to the
voters, the legislative body shall certify the question to the county
election board of the county containing the greatest percentage of
population of the municipality under IC 3-10-9-3. The county
election board shall adopt a resolution setting forth the text of the
public question and shall submit the question as to whether the sale
or disposition shall be made to the voters of the municipality at a
special or general election on a date specified by the municipal
legislative body. Pending the results of an election under this
subsection, the municipality may not take further action to sell or
dispose of the property as provided in the ordinance.
(g) If a majority of the voters voting on the question vote for the
sale or disposition, the legislative body shall proceed to sell the
property as provided in the ordinance.
(h) If a majority of the voters voting on the question vote against
the sale or disposition, the sale may not be made.
(i) If:
(1) the legislative body adopts an ordinance under subsection
(d)(3); and
(2) after the expiration of thirty (30) days as provided in
subsection (e), a petition is not filed;
the municipal legislative body may proceed to sell the property as
provided in the ordinance. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1995,
SEC.99; P.L.3-1997, SEC.425; P.L.2-1998, SEC.34; P.L.103-2008,
SEC.3.
IC 8-1.5-2-6 Sale of nonsurplus property; terms of ordinance; satisfaction of
existing obligations; bid submitted by trust
Sec. 6. (a) The ordinance adopted by the municipal legislative
body under section 5(d) of this chapter must provide for:
(1) the sale or disposition of the municipally owned utility
property;
(2) the manner of the sale or disposition;
(3) the price, terms, and conditions of the sale or disposition,
which must be consistent with any contractual obligations
previously incurred under IC 8-1-2.2; and
(4) the officer or officers who are to execute the proper
documents conveying title on behalf of the municipality.
(b) The property may not be sold for less than its full appraised
value, as set forth in the appraisal, less the amount of any bonds,
liens, or other indebtedness due upon the property, and only in
accordance with contractual obligations incurred under IC 8-1-2.2.
The indebtedness shall either:
(1) be paid in accordance with the terms and conditions of the
instruments governing the indebtedness before the sale; or
(2) be assumed and paid by the purchaser as part of the
purchase price of the property.
(c) This subsection applies if a municipal legislative body adopts
an ordinance for the sale or disposition of municipally owned utility
real property by acceptance of bids. A bid submitted by a trust (as
defined in IC 30-4-1-1(a)) must identify each:
(1) beneficiary of the trust; and
(2) settlor empowered to revoke or modify the trust.
(d) The proceeds of any sale under this chapter shall be paid into
the treasury of the municipality making the sale and become part of
the general fund. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.104-1983,
SEC.1; P.L.336-1989(ss), SEC.18; P.L.103-2008, SEC.4.
IC 8-1.5-2-7 Public convenience and necessity; declaratory resolution
Sec. 7. (a) A certificate of public convenience and necessity is not
required as a condition precedent to the owning, leasing, acquisition,
construction, or operation of a utility by a municipality, even if there
is a public utility engaged in a similar service. The acquisition of
electric utility property and assignment of a municipal electric
utility's service area are, however, subject to the provisions of
IC 8-1-2.3 and IC 8-1-2-95.1.
(b) A municipality that wants to own and operate a utility where
there is a public utility engaged in a similar service:
(1) under a franchise granted by the municipality; or
(2) under an indeterminate permit as defined in IC 8-1-2-1;
may, after a hearing as provided by section 10 of this chapter, declare
by ordinance that public convenience and necessity require the
establishment of a municipally owned utility. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.172-2009,
SEC.3.
IC 8-1.5-2-8 Preliminary expenses; appropriation
Sec. 8. Before a municipal legislative body:
(1) proposes to construct or acquire a utility; and
(2) makes a determination as to public convenience and
necessity;
it may appropriate out of its general fund an amount not exceeding
five percent (5%) of the total estimated cost of constructing or
acquiring the utility, as necessary to pay the expenses of a
preliminary investigation, surveys, plans, specifications, and
appraisals, including engineering and legal expenses in constructing
or acquiring the utility. Any action by the municipal legislative body
in making an appropriation is final and not subject to review by the
department of local government finance. The municipal legislative
body may renew or adjust the appropriation on an annual basis until
the construction or acquisition of the utility is complete. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.90-2002,
SEC.313; P.L.172-2009, SEC.4.
IC 8-1.5-2-9 Appropriation for preliminary expenses; repayment
Sec. 9. If the municipal legislative body proceeds to construct or
acquire the utility, there must be included in the total amount of
money to be raised by the issuance of bonds in connection with the
construction or acquisition of the utility the amount of the
expenditures that will be repaid to the general fund of the
municipality from the money derived from the issuance and sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-10 Ordinance declaring public convenience and necessity; notice and
hearing
Sec. 10. (a) Before a municipal legislative body adopts an
ordinance declaring that public convenience and necessity require the
construction or acquisition of a utility as provided by section 7 of
this chapter, each public utility furnishing a similar utility service in
the municipality, or in the contiguous territory in which the
municipality proposes to operate, shall be given ten (10) days notice
by the legislative body of the time and place where the hearing will
be held. At the hearing, the public utility is entitled to be heard in
person or by counsel in opposition to the proposed action.
(b) Notice must be served by delivering a copy to an officer or
manager of the public utility in the municipality, if possible, or to an
officer of the public utility elsewhere in Indiana. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-11
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-12 Sale of heat, light, water, or power to municipality
Sec. 12. (a) Upon the approval by resolution of the municipal
legislative body, a municipally owned utility may sell or furnish heat,
light, water, or power to the municipality to be used exclusively for
the furnishing of utility service to the municipality for its own
municipal purposes.
(b) This section is not intended to permit the sale or furnishing of
power to the municipality where the sale would affect the obligation
of any contract or franchise. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-13 Contracts for acquisition, construction, or replacement of public
utility property; authorizing ordinance
Sec. 13. A contract made by the municipal legislative body for the
acquisition, construction, extension, or replacement of the property
of a public utility must be authorized by ordinance. The ordinance
must provide for the principal and interest of bonds issued for the
payment of the cost of the acquisition, construction, extension, or
replacement to be paid exclusively from the income and revenue of
the property acquired with the proceeds of the bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-14 Costs of construction or acquisition; security for payment
Sec. 14. A municipality that constructs or acquires a utility may,
through its municipal legislative body, provide for and secure the
payment of the cost of constructing, acquiring, extending, or
improving the utility by assigning or otherwise pledging the property
acquired, together with the net earnings or profits derived or to be
derived from the operation of the utility or utilities. Contracts,
warrants, debentures, or pledges of future revenues entered into by
a municipally owned utility are not an indebtedness of the
municipality within the meaning of any constitutional debt limitation. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-15 Condemnation; authorization
Sec. 15. (a) If the municipality and the owners of a public utility
are unable to agree upon a price to be paid for the property of the
public utility, the municipality may:
(1) by ordinance declare that a public necessity exists for the
condemnation of the utility property; and
(2) bring an action in the circuit or superior court of the county
where the municipality is located against the utility for the
condemnation of the property.
(b) An ordinance adopted under subsection (a) is final.
(c) For the purpose of acquiring the property of a public utility,
the municipality:
(1) may exercise the power of eminent domain in accordance
with IC 32-24; and
(2) is required only to establish the necessity of taking as this
chapter requires.
(d) The provisions of this section do not apply to the acquisition
of electric utility property or the assignment of service areas covered
by IC 8-1-2.3 and IC 8-1-2-95.1. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.38.
IC 8-1.5-2-16
Repealed
(Repealed by P.L.172-2009, SEC.8.)
IC 8-1.5-2-17 Acquisition of property rights inside or outside boundaries; utility
lines; protection of services from injury or pollution; attachments
from abuse, destruction, or waste
Sec. 17. (a) A municipality, by exercising the power of eminent
domain in accordance with IC 32-24 or other applicable law, may
acquire property rights inside or outside its corporate boundaries as
necessary for the business of a municipally owned utility.
(b) The municipal legislative body may provide for utility lines to
be laid through the municipality as the municipally owned utility
requires. The municipality may use any property or property rights
necessary for constructing, acquiring, operating, or protecting from
injury or pollution the municipally owned utility services.
(c) For the purpose of preserving and protecting from injury or
pollution the municipal water services, the municipality may exercise
its powers in areas within twenty-five (25) miles outside its corporate
boundaries.
(d) All attachments made to the utility fixtures, whether intended
for public or private use, are subject to the supervision and rules of
the utility for protection against abuse or destruction or the
inordinate use or waste of utility services. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.2-2002,
SEC.39.
IC 8-1.5-2-18 Bonds; payable out of special account; issuance
Sec. 18. (a) To provide money to pay for the construction or
acquisition of a utility under this chapter, or its extension,
improvement, or replacement in whole or in part, or its repair, the
municipal legislative body may issue and sell bonds bearing interest
at any rate, executed and payable at times not to exceed forty (40)
years from the date of issuance, and at places as the legislative body
determines. The bonds and interest on them are payable only out of
a special account, and the bonds do not constitute an indebtedness of
the municipality within the meaning of the constitutional limitations.
(b) Each bond must state plainly upon its face:
(1) that it is payable only from a special account;
(2) the account and the ordinance creating it; and
(3) that it does not constitute an indebtedness of the
municipality within the meaning of any constitutional debt
limitation.
(c) The bonds shall be sold in accordance with IC 5-1-11.
(d) This section provides an alternative method of financing for
all municipalities, notwithstanding any other law. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-19 Bonds, notes, or other obligations; issuance; approval by
commission for long term bonds
Sec. 19. (a) A municipality may not issue bonds, notes, or other
obligations under this chapter without the approval of the
commission if the bond, notes, or other obligations are payable more
than twelve (12) months after their execution, except as authorized
by IC 8-1-2.2-11.
(b) If the evidence presented to the commission establishes that
the rates and charges proposed by the municipally owned utility will
provide sufficient funds for the operation, maintenance, and
depreciation of the utility, and to pay the principal and interest of the
proposed bond issue, together with a surplus or margin of at least ten
percent (10%) in excess, the commission shall so certify in its order
approving the issuance of bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.103-2008,
SEC.5.
IC 8-1.5-2-19.5 Purchase of equipment requiring lead time before availability;
approval of contracts if sufficient funds available
Sec. 19.5. If a municipality desires to purchase and install
equipment for its utility which requires more than three (3) months
lead time for the supplier to make such equipment and installation
available, the legislative body may, by ordinance, approve a contract
therefor even though it does not have sufficient funds appropriated
or on hand to pay for such purchase if the utility:
(1) has annual net operating revenues for the immediately
preceding calendar year sufficient to permit the municipality:
(A) to pay the principal of and interest on an issue of its
utility revenue bonds in the principal amount necessary to
fund such purchase (including engineering costs, legal costs,
and costs of bond issuance associated therewith); and
(B) a margin of safety which it deems necessary to market
such bonds on acceptable terms;
(2) if required by section 19 of this chapter, has received
approval from the commission to issue bonds, notes, or other
obligations sufficient to fund such purchase; or
(3) has received approval from the commission to raise its rates
and charges in an amount sufficient to permit the issuance of
said bonds. As added by P.L.105-1983, SEC.1. Amended by P.L.103-2008,
SEC.6.
IC 8-1.5-2-20 Bonds; payment from revenues not derived from particular utility;
restriction
Sec. 20. Except as provided by section 22 of this chapter, the
municipal legislative body may not adopt an ordinance, or enter into
or ratify a contract, for the payment, directly or indirectly, of a bond
or bonds by revenues derived by the municipality from the levy of
taxes, from the issuance of any bonds other than from the issuance
of bonds specifically authorized by this chapter or by a refunding
statute, or from any source except the revenues derived from that
particular utility. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-21 Bonds payable out of special account; purchase by municipality
Sec. 21. A municipality may invest its own money in the bonds
issued under section 18 of this chapter. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-22 General obligation bonds; authorization; limitation
Sec. 22. (a) If the municipal legislative body decides that it is
impracticable to raise the entire amount necessary to construct or
acquire the utility solely by the issuance and sale of revenue bonds,
the legislative body may, by ordinance, provide that a part of the
amount may be raised by the issuance and sale of bonds pledging the
general credit of the municipality.
(b) The bonds shall be issued in accordance with IC 6-1.1-20. The
bonds may not exceed one-third (1/3) of the total cost of the utility.
This limitation does not apply to a utility to be owned and operated
by a municipality exclusively for the purpose of furnishing utility
service to the municipality for its own municipal purposes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-23 General obligation bonds; terms; sale
Sec. 23. If general obligation bonds are issued, they:
(1) may be issued in any denomination;
(2) are payable at a time not to exceed forty (40) years from
issuance;
(3) may bear interest at any rate payable semiannually; and
(4) shall be sold for not less than par value and accrued interest;
as provided by ordinance. The bonds shall be sold in accordance with
IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-24 Revenue bonds; money set aside for payment of interest and
principal
Sec. 24. (a) The board of a municipally owned utility, as defined
by IC 8-1.5-3-2, shall, at least semiannually, set aside from the net
earnings a sufficient amount to pay the interest and principal, as they
become due, on revenue bonds issued in payment for the utility or for
its improvement. This money may not be used for any other purpose.
(b) The commission shall approve the amount set aside for the
payment of the interest and principal when the commission approves
the rates and charges of the municipality. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-25 Special utility account; establishment by municipality; use
Sec. 25. (a) The municipal legislative body, after providing for
the:
(1) payment of operation and maintenance expenses of the
utility;
(2) payment of the interest and principal on revenue bonds and
creation of reserves for them;
(3) payment of the interest and principal on general obligation
bonds and creation of reserves for them; and
(4) payment of assessed taxes;
shall set aside a sufficient remainder of the earnings into a separate
and special account to be identified as the special utility account, to
be used and applied in the extension, replacement in whole or in part,
repair, and operation and maintenance of the utility.
(b) The remaining earnings may be applied to:
(1) the general fund of the municipality in accordance with
IC 8-1.5-3-11, outstanding bond ordinances, and contract
provisions under IC 8-1-2.2;
(2) the payment of the interest on a loan made for utility
construction; or
(3) the creation of a sinking fund for the liquidation of the debt;
as the legislative body determines. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-26 Tax levy for payment of bonds
Sec. 26. (a) To pay the principal and interest on bonds issued for
the construction, acquisition, extension, or improvement of a
municipally owned utility, the municipal legislative body may levy
an annual tax of sufficient amount on all taxable property of the
municipality.
(b) If the legislative body:
(1) has contracted with a person for supplying utility services or
has agreed to lease or purchase utility services; and
(2) has, in the contract, agreed to pay a stated rental, a
stipulated purchase price, or other compensation to the person,
or has issued bonds to pay for stock in the company or to
purchase the plant;
it may levy an annual tax for payment of the rent or other
consideration or purchase price to be paid for utility services, or for
the purchase price of a plant, and to pay the principal and interest on
the bonds.
(c) The tax under this section shall be levied and collected as
other municipal taxes are levied and collected, and the proceeds shall
be used only for the purpose for which the tax was levied. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-27 Lease of waterworks facilities; term; option to purchase or renew;
transfer of property to municipality
Sec. 27. (a) A municipality may lease waterworks facilities from
a not-for-profit corporation, a public utility, a county, or a
municipality. The term of the lease may not exceed fifty (50) years.
The lease must provide that the municipality has an option to:
(1) renew the lease for a further term on like conditions; and
(2) purchase the waterworks facilities covered by the lease
contract with the terms and conditions of the purchase specified
in the lease.
(b) If the option to purchase the waterworks facilities covered by
the lease is exercised, the municipality, for the purpose of procuring
money to pay the purchase price, may issue and sell revenue bonds
under other laws governing the issuance and sale of waterworks
revenue bonds for additions and extensions to municipal waterworks.
(c) If the municipality has not exercised an option to purchase the
property covered by the lease at the expiration of the lease, and upon
the full discharge and performance by the municipality of its
obligations under the lease contract, the property covered by the
lease thereupon becomes the absolute property of the municipality,
and the lessor shall execute proper instruments conveying to the
municipality good and merchantable title thereto.
(d) A waterworks facility leased under this section is subject to
IC 5-16-7. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.26.
IC 8-1.5-2-28 Lease of waterworks facilities; payment of operating expenses;
sufficiency of rates and charges
Sec. 28. (a) A waterworks lease may provide that as a part of the
lease rental for the waterworks facilities the lessee agrees to:
(1) pay all property taxes and assessments levied against or on
account of the leased facilities;
(2) maintain insurance on the leased facilities for the benefit of
the lessor; and
(3) assume all responsibilities for the operation, maintenance,
repair, alterations, and additions of the leased facilities.
(b) All of the expenses incurred under subsection (a) and the lease
rental are payable solely from the revenues derived from water rates
and charges to be collected by the lessee from property and users in
the area served by the leased facilities.
(c) The lessee may establish, fix, bill, and collect rates and
charges with respect to the property and users in the area served by
the leased facilities that are sufficient:
(1) to pay the costs of operation, maintenance, repair,
alterations, depreciation, and additions of the leased facilities;
and
(2) to pay the lease rental as it becomes due.
Rates and charges too low to meet these requirements are unlawful.
These rates and charges are subject to approval in accordance with
IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-29 Lease of waterworks facilities; notice and hearing
Sec. 29. (a) When the municipality and the lessor have agreed
upon the terms and conditions of any waterworks lease proposed to
be entered into under this chapter and before the final execution of
the lease, a notice shall be given by publication in accordance with
IC 5-3-1 to all persons interested, of a hearing to be held before the
municipal legislative body, which hearing must be on a day not
earlier than twenty (20) days after publication of the notice.
(b) The notice must:
(1) name the day, place, and hour of the hearing; and
(2) set forth a brief summary of the principal terms agreed upon,
including:
(A) the name of the lessor;
(B) the character of the property to be leased;
(C) the lease rental to be paid; and
(D) the number of years the lease is to be in effect.
(c) The proposed lease must be available for inspection by the
public during the twenty (20) day period and at the hearing.
(d) All persons interested are entitled to be heard, at the time
fixed, upon the necessity for the execution of the lease and whether
the rental to be paid to the proposed lessor is a fair and reasonable
rental for the waterworks facilities. The hearing may be adjourned to
a later date or dates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.35-1990,
SEC.27.
IC 8-1.5-2-30 Lease of waterworks facilities; execution; limitation of actions
Sec. 30. (a) After the hearing under section 29 of this chapter, the
municipal legislative body may:
(1) authorize the execution of the waterworks lease as originally
agreed upon; or
(2) make modifications as may be agreed upon with the
proposed lessor;
but the lease rental as set out in the published notice may not be
increased without a new notice and hearing.
(b) If the execution of the lease as originally agreed upon, or as
modified by agreement, is authorized by the legislative body, a notice
of the signing of the contract of lease shall be given by publication
in accordance with IC 5-3-1.
(c) An action to:
(1) contest the validity of the lease; or
(2) enjoin the performance of any of the terms and conditions
of the lease;
must be brought not later than thirty (30) days after publication of the
notice of execution of the lease. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-31 Leased waterworks facilities; tax exemptions
Sec. 31. All waterworks facilities leased by a lessor contracting
with a municipality under this chapter are exempt from all state,
county, and other taxes. However, the rental paid to a lessor under
the terms of such a lease is subject to all applicable taxes. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-2-32 Leased waterworks facilities; applicable statutes
Sec. 32. As to waterworks facilities leased and acquired under this
chapter, it is not necessary to comply with any other statutes
concerning the leasing and acquisition of waterworks facilities by
municipalities except as specifically required by this chapter. As added by Acts 1982, P.L.74, SEC.1.
