IC 8-1.5-4
Chapter 4. Department of Waterworks in Certain Municipalities
IC 8-1.5-4-1 Application of chapter
Sec. 1. This chapter applies to all municipalities that:
(1) own or operate waterworks; and
(2) adopt the provisions of this chapter by ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-1.5 Certain municipalities operating a waterworks through a
department before January 1, 1982
Sec. 1.5. (a) A municipality having and operating a waterworks
through a department of waterworks before January 1, 1982, under
IC 19-3-15 (before its repeal on January 1, 1983) or under IC 19-3-27
(before its repeal on January 1, 1983) shall be deemed to have
established a department of waterworks, as authorized by section 2
of this chapter, having the same number of board members as the
board operating before January 1, 1982, and having the same powers,
obligations, and duties as would be the case if the legislative body of
the municipality had adopted an ordinance doing so before January
1, 1983, in accordance with Acts 1982, P.L.74, SECTION 5(b).
(b) Except as provided in subsection (c), the board of directors of
the department of waterworks shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-4 and
IC 8-1.5-3-8.
(c) This subsection applies to water utilities that have been
removed from the jurisdiction of the Indiana utility regulatory
commission under IC 8-1.5-3-9.1 after June 30, 1991. The board of
directors of the department of waterworks shall operate as the board
for the purposes of IC 8-1.5-3-4 and IC 8-1.5-3-8. As added by P.L.105-1983, SEC.3. Amended by P.L.16-1984, SEC.7;
P.L.3-1990, SEC.29; P.L.56-1992, SEC.1.
IC 8-1.5-4-2 Department of waterworks; establishment; board of directors
Sec. 2. (a) If the legislative body of a municipality, by ordinance,
adopts the provisions of this chapter, there is established a
department of waterworks to be controlled by a board of directors
(referred to as "the board" in this chapter). The board consists of
either three (3) or five (5) directors, as determined by ordinance, who
shall be appointed by the municipal executive.
(b) In case there are three (3) directors, not more than two (2) may
be of the same political party. In case there are five (5) directors, not
more than three (3) may be of the same political party.
(c) The terms of directors shall be prescribed by ordinance, but
initial terms must be prescribed so that the directors' terms will be
staggered. Each director shall give a bond, which shall be fixed by
the municipal fiscal officer and is subject to his approval.
(d) The executive may remove a director at any time when, in his
judgment, it is for the best interest of the department. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-3 Special taxing district
Sec. 3. The department of waterworks has jurisdiction over a
special taxing district (referred to as "the waterworks district" in this
chapter) that consists of:
(1) in the case of a second class city located in a county having
a population of more than one hundred seventy thousand
(170,000) but less than one hundred eighty thousand (180,000),
all the territory within that county; or
(2) in the case of any other municipality, all the territory within
the corporate boundaries of the municipality, or the territory
served by the waterworks if larger or smaller than the corporate
boundaries. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1992,
SEC.59; P.L.170-2002, SEC.60.
IC 8-1.5-4-4 Board; powers and duties
Sec. 4. The board has the powers and duties prescribed by
IC 8-1.5-3-4. In addition, the board:
(1) may hold hearings following public notice;
(2) may make findings and determinations;
(3) may design, order, contract for or construct pumping plants
or stations, filtration plants, reservoirs, water mains, hydrants,
and other equipment, structures, and appurtenances and rebuild,
equip, improve, extend, and repair plants, equipment, and
structures;
(4) may build or have built all roads, levees, walls, or other
structures that may be necessary or desirable in connection with
waterworks;
(5) make all necessary or desirable improvements of the
grounds and premises under its control;
(6) may issue and sell bonds for the construction, alteration,
addition, or extension to the waterworks, in the manner
prescribed by law, including the provisions of IC 8-1.5-2; and
(7) shall furnish an adequate supply of water to consumers
within the waterworks district. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-5 Water filtration and service facilities; acquisition, construction,
and operation; financing methods
Sec. 5. The acquisition, construction, installation, operation, and
maintenance of facilities and land for water filtration and water
service may be financed through proceeds from tax levies, proceeds
of special taxing district bonds of the waterworks district, service
rates, revenue bonds, or any other available funds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-6 Authority to set aside revenues for operation and maintenance, a
depreciation account, and payment of bonds
Sec. 6. The board may fix and set aside:
(1) the proportion of the revenues of the waterworks department
necessary for reasonable and proper operation and maintenance;
(2) the proportion of the revenues for a proper and adequate
depreciation account; and
(3) the fixed proportion of the revenues to be applied to the
payment of the principal and interest of the authorized bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-7 Revenues set aside for operation and maintenance
Sec. 7. (a) In fixing the proportion of the revenues of the
waterworks department required for operation and maintenance, the
board shall consider the cost of the operation and maintenance of the
waterworks, and may not set aside into the special fund a greater
amount of the revenues and proceeds than, in its judgment, is
required for the operation and maintenance.
(b) If a surplus is accumulated in the operating and maintenance
fund, and that surplus is equal to the cost of maintaining and
operating the waterworks system during the remainder of the current
calendar, operating, or fiscal year and during the next calendar,
operating, or fiscal year, any excess over that surplus may be
transferred by the board to either the depreciation account, to be used
for any improvements, extensions, or additions to the waterworks, or
to the bond and interest redemption account. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-8 Revenues set aside for payment of bonds
Sec. 8. (a) The fixed proportion set aside for the payment of the
principal and interest of the authorized bonds shall, from month to
month, as accrued and received, be set apart and paid into a special
account identified as "the bond and interest redemption account".
(b) In fixing and determining the amount that is to be set aside for
the payment of the principal and interest of the authorized bonds, the
board may provide that the amount to be set aside and paid into the
bond and interest redemption account for any year or years should
not exceed a fixed sum, which must be at least sufficient to provide
for the payment of the interest and principal of the bonds maturing
and becoming payable in each year, together with a surplus or margin
of ten percent (10%) in excess.
(c) If a surplus created in the bond and interest redemption
account exceeds the interest and principal of any bonds becoming
payable during the current calendar, operating, or fiscal year and
during the next calendar, operating, and fiscal year, the board may
transfer any excess over the surplus to either the operation and
maintenance account, or the depreciation account, as the board may
designate. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-9 Revenues set aside for depreciation account
Sec. 9. (a) The proportion set aside to the depreciation account
shall be expended in making good depreciation in the waterworks or
in new construction, extensions, or additions to the property of the
waterworks.
(b) Any accumulations in the depreciation account may be
invested by the board, and if invested, the income from the
investment shall be carried in the depreciation account. The board
may invest the funds in accordance with IC 5-13-9. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.19-1987,
SEC.21.
IC 8-1.5-4-10 Secured debt or charge
Sec. 10. (a) The board may authorize and set apart bonds equal to
the amount of any secured debt or charge subject to which a
waterworks may be purchased or acquired in any proceeding, and
shall set aside for interest and sinking fund from the income and
revenue of the waterworks a sum sufficient to comply with the
requirements of the instrument creating the lien or securing the
charge.
(b) If the instrument does not make any provision, the board shall
set aside into the secured-debt account from month to month for
interest on the secured debt or charge an amount sufficient to provide
for the payment of the interest on the secured debt or charge, and at
the option of the board either an annual amount sufficient to retire
the secured debt or charge at maturity or bonds issued under this
chapter equal to the secured debt or charge. Any surplus after
satisfying the secured debt or charge may be transferred to the bond
and interest redemption account.
(c) Waterworks bonds set aside for a debt may, from time to time,
be issued in an amount sufficient with the amount then in the sinking
fund to pay and retire the debt or any part thereof. The bonds may
not be issued at less than par value in exchange for, or satisfaction of,
the secured debt or charge, or may be sold in the manner provided by
this chapter, and the proceeds applied in payment of the same at
maturity or before maturity by agreement with the holder. A
municipality acquiring a waterworks does not assume any liability
for the payment of a secured debt or charge, other than the obligation
to apply the revenues in the manner prescribed in the ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-11 Bonds and interest issued against special redemption fund
Sec. 11. (a) The bonds and the interest issued against the special
redemption fund:
(1) are a valid claim of the holders only against that fund and
the fixed proportion or amount of the revenues pledged to that
fund; and
(2) are exempt from taxation in Indiana as provided by IC 6-8-5.
(b) The bonds may be issued either as registered bonds or as
coupon bonds payable to bearer. Coupons and bearer bonds may be
registered as to principal in the holder's name on the books of the
municipality, registration being noted on the bond by the municipal
clerk or other designated officer, after which no transfer is valid
unless made on the books of the municipality by the registered holder
and similarly noted on the bonds. Any bond so registered as to
principal may be discharged from registration by being transferred
to bearer, after which it is transferable by delivery but may be again
registered as to principal as before. The registration of the bonds as
to the principal does not restrain the negotiability of the coupons by
delivery, but the coupons may be surrendered and the interest made
payable only to the registered holder of the bonds. If the coupons are
surrendered, the surrender and cancellation shall be noted on the
bond, and interest on the bond is then payable to the registered
holder on order in cash or at his option by check or draft payable at
the place or one (1) of the places where the coupons were payable.
(c) Bonds shall be sold in accordance with IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-12 Bonds; additional issue or issues for extension, addition, or
improvement
Sec. 12. A board acquiring waterworks and paying for them and
for extensions and betterments authorized at the time of acquisition
may provide for the extension, addition, or improvement of the
waterworks by an additional issue or issues of bonds. A board may
issue new bonds in the manner provided in this chapter and secured
in the same manner, to provide funds for the payment of the principal
and interest of any bonds then outstanding. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-13 Bonds; application of proceeds; default
Sec. 13. (a) All money received from bonds issued under this
chapter shall be applied solely to the acquisition of the waterworks
and the cost of the issuance of the bonds.
(b) Any holder of the bonds or of any of the coupons attached to
them may, by action or other proceeding, compel performance of all
duties required by this chapter of the board issuing the bonds or of
any officer of the board, including the making and collecting of
reasonable and sufficient rates lawfully established for service
rendered by the waterworks, the segregation of the income and
revenues of the utility, and the application of the respective funds
created under this chapter.
(c) If there is any default in the payment of the principal or
interest of any of the bonds, a court having jurisdiction of the action
may:
(1) appoint an administrator or receiver to administer the
waterworks on behalf of the municipality and the bondholders,
with power to:
(A) charge and collect rates lawfully established sufficient
to provide for the payment of the operating expenses and
also to pay any bonds or obligations outstanding against the
waterworks; and
(B) apply the income and revenues in conformity with this
chapter and the ordinance; or
(2) declare the whole amount of the bonds due and payable and
direct the sale of the waterworks.
Under a sale ordered as provided by subdivision (2), the purchaser
is vested with an indeterminate permit as defined in IC 8-1-2-1 to
maintain and operate the waterworks to supply water to the
municipality and its citizens. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-14 Services rendered to municipality; payment
Sec. 14. (a) This subsection applies to a municipality that is not
subject to IC 8-1-2-103(c) or has not adopted an ordinance to become
subject to IC 8-1-2-103(d). The reasonable cost and value of any
service rendered to the municipality by the waterworks by furnishing
water for public purposes or by maintaining hydrants and other
facilities for fire protection shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
(b) This subsection applies to a municipality that is subject to
IC 8-1-2-103(c), that has adopted an ordinance to become subject to
IC 8-1-2-103(d), or that has adopted a plan described in
IC 8-1-2-103(d) as prescribed in IC 8-1-2-103(e). The reasonable
cost and value of any service rendered to the municipality by the
waterworks by furnishing water for public purposes shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
Except as provided in subsection (d), the cost and value of
maintaining hydrants and other facilities for fire protection shall be
excluded from the charges against the municipality and shall be
recovered from the other customers of the waterworks beginning on
January 1, 1994, in a municipality subject to IC 8-1-2-103(c) and
beginning on a date provided in the ordinance for a municipality that
adopts an ordinance under IC 8-1-2-103(d). The change in the
recovery of current revenue authorized by this section shall be
reflected in a schedule of new rates to be filed with the commission
at least thirty (30) days before the time the schedule of new rates is
to take effect.
(c) The compensation for the service provided to the municipality
shall, in the manner prescribed by this chapter, be paid into the
separate and special fund created by setting aside the income and
revenues of the waterworks and is subject to apportionment to the
operating, maintenance, depreciation, and bond and interest
redemption accounts.
(d) This subsection applies to a city having a population of more
than forty-six thousand five hundred (46,500) but less than fifty
thousand (50,000). The cost and value of maintaining hydrants and
other facilities for fire protection may be recovered from customers
of the waterworks residing:
(1) in a county having a population of more than two hundred
thousand (200,000) but less than three hundred thousand
(300,000); and
(2) in a township having a population of more than seven
thousand five hundred (7,500) but less than nine thousand
(9,000) located in a county having a population of more than
one hundred eighty-two thousand seven hundred ninety
(182,790) but less than two hundred thousand (200,000);
beginning on a date determined by the city. The city shall file a new
schedule of rates with the commission as set forth in subsection (b),
but is not subject to commission approval of the rates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.93-1993,
SEC.2; P.L.80-1997, SEC.18; P.L.133-1998, SEC.1; P.L.170-2002,
SEC.61.
IC 8-1.5-4-15 Construction, extension, or improvement; procedure
Sec. 15. (a) If, upon investigation, the board finds:
(1) that the waterworks, plant, system, or equipment is
insufficient to furnish the necessary supply of water to properly
protect the public health and welfare and safeguard the property
within the waterworks district; or
(2) that it is necessary to rebuild, repair, extend, and improve
the waterworks, plant, systems, and equipment and to acquire
lands, construct, erect, or acquire other plants, reservoirs,
systems, and other structures and equipment appurtenant to
them;
the board shall prepare maps, plans, specifications, and drawings
with full details and descriptions for the proposed work, together
with an estimate of the cost. The board shall also prepare a
description of all property rights necessary to be acquired in
connection with the proposed work and the manner in which the
rights are to be acquired, whether by purchase or appropriation,
along with a description of any other lands that may be injuriously
affected, together with the estimated cost.
(b) The board shall then adopt a resolution:
(1) declaring that it is necessary for the protection of the public
health and welfare of the inhabitants of the waterworks district
and the safeguarding of the property within the district;
(2) declaring that it is of public utility and benefit;
(3) appropriating the property described in the resolution;
(4) stating the maximum proposed cost of any land to be
purchased; and
(5) adopting plans, maps, specifications, drawings, details,
descriptions, and estimates.
(c) If the resolution is adopted, the board shall publish a notice in
accordance with IC 5-3-1 of the adoption, the resolution, and the fact
that plans, specifications, and estimates have been prepared and can
be inspected. The notice must also name a date, not less than ten (10)
days after the date of the last publication, when the board will
receive or hear remonstrances from the persons interested in, or
affected by, the resolution, and when it will determine their public
utility and benefit. Notice shall be mailed to the owners of all lands
appropriated by the resolution. If a landowner is a nonresident and
his place of residence is known, a notice shall be mailed to the
nonresident owner. If the nonresident owner's residence is unknown
to the board, then he is considered notified of the pendency of the
proceedings by the publication of notice.
(d) In the resolution and notice, separate descriptions of each
piece or parcel of land are not required, but it is a sufficient
description of the property purchased or to be purchased, or to be
appropriated or damaged, to give a description of the entire tract,
whether it is one (1) or more lots or parcels and whether it is owned
by one (1) or more persons.
(e) All persons affected by the proceedings, including all
taxpayers in the waterworks district, are considered to be notified of
the proceedings and all subsequent acts, hearings, adjournments, and
orders of the board by the original publication of notice.
(f) The board may, before adoption of the resolution, obtain from
the owners of the land an option for its purchase or may enter into a
contract for its purchase after an appraisal by two (2) qualified land
surveyors. Such an option or contract is subject to the final action of
the board confirming, modifying, or rescinding the resolution. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-16 Lands, rights-of-way, or other property; ownership in name of
municipality; remonstrances
Sec. 16. (a) All lands, rights-of-way, or other property, when
acquired, either by purchase or appropriation, shall be taken and held
in the name of the municipality.
(b) At the time fixed for the hearing or before the hearing, the
following persons may file a written remonstrance with the board:
(1) The owner of land, rights-of-way, or other property to be
appropriated under the resolution.
(2) A person injuriously affected by the appropriation.
(3) A person owning real or personal property within the
waterworks district.
(c) The board shall hear all persons interested in the proceedings,
hear all the remonstrances that have been filed, and take final action
on the resolution. The final action shall be recorded. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-17 Appeals
Sec. 17. (a) A person who has remonstrated in writing and is
aggrieved by the decision of the board may, within thirty (30) days,
take an appeal to the circuit or superior court of the county in which
the waterworks district is located.
(b) A remonstrator desiring to appeal from the action of the board
shall, within thirty (30) days after the final action of the board, file
in the office of the clerk of the circuit or superior court a copy of the
order of the board and the remonstrance, together with a bond
conditioned to pay the costs of the appeal, should the appeal be
determined against him.
(c) The court may hear the appeal only if the question is whether
the board acted arbitrarily or capriciously in adopting the resolution.
(d) The cause shall be tried to the court without a jury.
(e) All remonstrances upon which appeals are taken may be
consolidated and heard as one (1) claim for relief by the court. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-18 Special taxing district bonds of the waterworks district; issuance
Sec. 18. (a) To procure money to pay for the required property
and the erection and construction of the proposed work, and in
anticipation of the collection of the special benefit tax, the board may
issue, in the name of the municipality, the special taxing district
bonds of the waterworks district. The bonds may exceed the total
cost of the work and property to be acquired as provided for in the
resolution, including:
(1) all expenses necessarily incurred for supervision and
inspection during the period of construction; and
(2) expenses actually incurred preliminary to the acquiring of
the necessary property and the construction of the work,
including the cost of records, engineering expenses, publication
of notices, salaries, and other expenses incurred, before and in
connection with the acquiring of the property, the letting of the
contract, and the sale of bonds.
(b) After adopting a resolution authorizing the bonds, the board
shall certify a copy of the resolution to the municipal fiscal officer,
who shall then prepare the bonds. The bonds shall be executed by the
municipal executive and attested by the fiscal officer. The bonds are
exempt from taxation as provided by IC 6-8-5. All bonds issued by
the board shall be sold by the fiscal officer under IC 5-1-11.
(c) The board may not issue bonds of the waterworks district,
payable by special taxation, when the total of the outstanding bonds
of the district, including the bonds already issued and to be issued,
exceeds eight percent (8%) of the total adjusted value of taxable
property in the district as determined under IC 36-1-15.
(d) The bonds are not a corporate obligation or indebtedness of
the municipality, but are an indebtedness of the waterworks district.
The bonds and interest are payable out of a special benefit tax levied
upon all of the property of the waterworks district, or by any other
means including revenues, cash on hand, and cash in depreciation or
reserve accounts.
(e) The bonds must recite the terms upon their face, together with
the purpose for which they are issued. An action to question the
validity of the bonds issued for the waterworks district or to prevent
their issuance may not be brought after the date fixed for the sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.6-1997,
SEC.131.
IC 8-1.5-4-19 Tax levy
Sec. 19. (a) To raise the necessary revenues to pay for the bonds
issued, and interest on the bonds, the board:
(1) may levy a special benefit tax upon all the property of the
waterworks district in the amount necessary to meet and pay the
principal of the bonds as they severally mature, together with all
accruing interest; and
(2) shall certify the tax levied each year to the fiscal officers of
the municipality and of the county in which the waterworks
district is located, at the same time the levy of the municipality
is certified.
The tax levied and certified shall be estimated and entered upon the
tax duplicate and shall be collected and enforced in the same manner
as state and county taxes are estimated, entered, collected, and
enforced.
(b) In fixing the amount of the necessary levy, the board:
(1) shall consider the amount of revenues derived by the board
from the operation of the waterworks plant and system under its
jurisdiction above the amount of revenues required to pay the
cost of operation and maintenance of the waterworks plant and
system; and
(2) may, in lieu of making the levy in this section, set aside, by
resolution, a specific amount of the surplus revenues to be
collected before maturity of the principal and interest of the
bonds payable in the following calendar year.
(c) The special tax shall be accumulated and kept in a separate
fund to be known as the "waterworks district bond fund", and applied
to the payment of the district bonds and interest as they severally
mature and are payable. All accumulations in the fund before their
use for the payment of bonds and interest shall be deposited at
interest with the depository of other public funds of the municipality,
and all interest collected belongs to that fund.
(d) If the board adopts the resolution, the board may not use any
part of the amount set aside out of its net revenues for any purpose
other than the monthly payment of the bonds and interest to the
sinking fund. Any amount of net revenues derived from the operation
of the waterworks plant and system under the jurisdiction of the
board, not required for the payment of the principal and interest on
the outstanding waterworks district bonds, shall be paid over to the
municipality and deposited in the sinking fund established for the
purpose of redeeming and retiring outstanding bonds that the
municipality may have issued for the benefit of its waterworks plant.
This section does not relieve the municipality from the obligation to
pay outstanding bonds according to their terms and conditions. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4
Chapter 4. Department of Waterworks in Certain Municipalities
IC 8-1.5-4-1 Application of chapter
Sec. 1. This chapter applies to all municipalities that:
(1) own or operate waterworks; and
(2) adopt the provisions of this chapter by ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-1.5 Certain municipalities operating a waterworks through a
department before January 1, 1982
Sec. 1.5. (a) A municipality having and operating a waterworks
through a department of waterworks before January 1, 1982, under
IC 19-3-15 (before its repeal on January 1, 1983) or under IC 19-3-27
(before its repeal on January 1, 1983) shall be deemed to have
established a department of waterworks, as authorized by section 2
of this chapter, having the same number of board members as the
board operating before January 1, 1982, and having the same powers,
obligations, and duties as would be the case if the legislative body of
the municipality had adopted an ordinance doing so before January
1, 1983, in accordance with Acts 1982, P.L.74, SECTION 5(b).
(b) Except as provided in subsection (c), the board of directors of
the department of waterworks shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-4 and
IC 8-1.5-3-8.
(c) This subsection applies to water utilities that have been
removed from the jurisdiction of the Indiana utility regulatory
commission under IC 8-1.5-3-9.1 after June 30, 1991. The board of
directors of the department of waterworks shall operate as the board
for the purposes of IC 8-1.5-3-4 and IC 8-1.5-3-8. As added by P.L.105-1983, SEC.3. Amended by P.L.16-1984, SEC.7;
P.L.3-1990, SEC.29; P.L.56-1992, SEC.1.
IC 8-1.5-4-2 Department of waterworks; establishment; board of directors
Sec. 2. (a) If the legislative body of a municipality, by ordinance,
adopts the provisions of this chapter, there is established a
department of waterworks to be controlled by a board of directors
(referred to as "the board" in this chapter). The board consists of
either three (3) or five (5) directors, as determined by ordinance, who
shall be appointed by the municipal executive.
(b) In case there are three (3) directors, not more than two (2) may
be of the same political party. In case there are five (5) directors, not
more than three (3) may be of the same political party.
(c) The terms of directors shall be prescribed by ordinance, but
initial terms must be prescribed so that the directors' terms will be
staggered. Each director shall give a bond, which shall be fixed by
the municipal fiscal officer and is subject to his approval.
(d) The executive may remove a director at any time when, in his
judgment, it is for the best interest of the department. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-3 Special taxing district
Sec. 3. The department of waterworks has jurisdiction over a
special taxing district (referred to as "the waterworks district" in this
chapter) that consists of:
(1) in the case of a second class city located in a county having
a population of more than one hundred seventy thousand
(170,000) but less than one hundred eighty thousand (180,000),
all the territory within that county; or
(2) in the case of any other municipality, all the territory within
the corporate boundaries of the municipality, or the territory
served by the waterworks if larger or smaller than the corporate
boundaries. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1992,
SEC.59; P.L.170-2002, SEC.60.
IC 8-1.5-4-4 Board; powers and duties
Sec. 4. The board has the powers and duties prescribed by
IC 8-1.5-3-4. In addition, the board:
(1) may hold hearings following public notice;
(2) may make findings and determinations;
(3) may design, order, contract for or construct pumping plants
or stations, filtration plants, reservoirs, water mains, hydrants,
and other equipment, structures, and appurtenances and rebuild,
equip, improve, extend, and repair plants, equipment, and
structures;
(4) may build or have built all roads, levees, walls, or other
structures that may be necessary or desirable in connection with
waterworks;
(5) make all necessary or desirable improvements of the
grounds and premises under its control;
(6) may issue and sell bonds for the construction, alteration,
addition, or extension to the waterworks, in the manner
prescribed by law, including the provisions of IC 8-1.5-2; and
(7) shall furnish an adequate supply of water to consumers
within the waterworks district. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-5 Water filtration and service facilities; acquisition, construction,
and operation; financing methods
Sec. 5. The acquisition, construction, installation, operation, and
maintenance of facilities and land for water filtration and water
service may be financed through proceeds from tax levies, proceeds
of special taxing district bonds of the waterworks district, service
rates, revenue bonds, or any other available funds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-6 Authority to set aside revenues for operation and maintenance, a
depreciation account, and payment of bonds
Sec. 6. The board may fix and set aside:
(1) the proportion of the revenues of the waterworks department
necessary for reasonable and proper operation and maintenance;
(2) the proportion of the revenues for a proper and adequate
depreciation account; and
(3) the fixed proportion of the revenues to be applied to the
payment of the principal and interest of the authorized bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-7 Revenues set aside for operation and maintenance
Sec. 7. (a) In fixing the proportion of the revenues of the
waterworks department required for operation and maintenance, the
board shall consider the cost of the operation and maintenance of the
waterworks, and may not set aside into the special fund a greater
amount of the revenues and proceeds than, in its judgment, is
required for the operation and maintenance.
(b) If a surplus is accumulated in the operating and maintenance
fund, and that surplus is equal to the cost of maintaining and
operating the waterworks system during the remainder of the current
calendar, operating, or fiscal year and during the next calendar,
operating, or fiscal year, any excess over that surplus may be
transferred by the board to either the depreciation account, to be used
for any improvements, extensions, or additions to the waterworks, or
to the bond and interest redemption account. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-8 Revenues set aside for payment of bonds
Sec. 8. (a) The fixed proportion set aside for the payment of the
principal and interest of the authorized bonds shall, from month to
month, as accrued and received, be set apart and paid into a special
account identified as "the bond and interest redemption account".
(b) In fixing and determining the amount that is to be set aside for
the payment of the principal and interest of the authorized bonds, the
board may provide that the amount to be set aside and paid into the
bond and interest redemption account for any year or years should
not exceed a fixed sum, which must be at least sufficient to provide
for the payment of the interest and principal of the bonds maturing
and becoming payable in each year, together with a surplus or margin
of ten percent (10%) in excess.
(c) If a surplus created in the bond and interest redemption
account exceeds the interest and principal of any bonds becoming
payable during the current calendar, operating, or fiscal year and
during the next calendar, operating, and fiscal year, the board may
transfer any excess over the surplus to either the operation and
maintenance account, or the depreciation account, as the board may
designate. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-9 Revenues set aside for depreciation account
Sec. 9. (a) The proportion set aside to the depreciation account
shall be expended in making good depreciation in the waterworks or
in new construction, extensions, or additions to the property of the
waterworks.
(b) Any accumulations in the depreciation account may be
invested by the board, and if invested, the income from the
investment shall be carried in the depreciation account. The board
may invest the funds in accordance with IC 5-13-9. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.19-1987,
SEC.21.
IC 8-1.5-4-10 Secured debt or charge
Sec. 10. (a) The board may authorize and set apart bonds equal to
the amount of any secured debt or charge subject to which a
waterworks may be purchased or acquired in any proceeding, and
shall set aside for interest and sinking fund from the income and
revenue of the waterworks a sum sufficient to comply with the
requirements of the instrument creating the lien or securing the
charge.
(b) If the instrument does not make any provision, the board shall
set aside into the secured-debt account from month to month for
interest on the secured debt or charge an amount sufficient to provide
for the payment of the interest on the secured debt or charge, and at
the option of the board either an annual amount sufficient to retire
the secured debt or charge at maturity or bonds issued under this
chapter equal to the secured debt or charge. Any surplus after
satisfying the secured debt or charge may be transferred to the bond
and interest redemption account.
(c) Waterworks bonds set aside for a debt may, from time to time,
be issued in an amount sufficient with the amount then in the sinking
fund to pay and retire the debt or any part thereof. The bonds may
not be issued at less than par value in exchange for, or satisfaction of,
the secured debt or charge, or may be sold in the manner provided by
this chapter, and the proceeds applied in payment of the same at
maturity or before maturity by agreement with the holder. A
municipality acquiring a waterworks does not assume any liability
for the payment of a secured debt or charge, other than the obligation
to apply the revenues in the manner prescribed in the ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-11 Bonds and interest issued against special redemption fund
Sec. 11. (a) The bonds and the interest issued against the special
redemption fund:
(1) are a valid claim of the holders only against that fund and
the fixed proportion or amount of the revenues pledged to that
fund; and
(2) are exempt from taxation in Indiana as provided by IC 6-8-5.
(b) The bonds may be issued either as registered bonds or as
coupon bonds payable to bearer. Coupons and bearer bonds may be
registered as to principal in the holder's name on the books of the
municipality, registration being noted on the bond by the municipal
clerk or other designated officer, after which no transfer is valid
unless made on the books of the municipality by the registered holder
and similarly noted on the bonds. Any bond so registered as to
principal may be discharged from registration by being transferred
to bearer, after which it is transferable by delivery but may be again
registered as to principal as before. The registration of the bonds as
to the principal does not restrain the negotiability of the coupons by
delivery, but the coupons may be surrendered and the interest made
payable only to the registered holder of the bonds. If the coupons are
surrendered, the surrender and cancellation shall be noted on the
bond, and interest on the bond is then payable to the registered
holder on order in cash or at his option by check or draft payable at
the place or one (1) of the places where the coupons were payable.
(c) Bonds shall be sold in accordance with IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-12 Bonds; additional issue or issues for extension, addition, or
improvement
Sec. 12. A board acquiring waterworks and paying for them and
for extensions and betterments authorized at the time of acquisition
may provide for the extension, addition, or improvement of the
waterworks by an additional issue or issues of bonds. A board may
issue new bonds in the manner provided in this chapter and secured
in the same manner, to provide funds for the payment of the principal
and interest of any bonds then outstanding. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-13 Bonds; application of proceeds; default
Sec. 13. (a) All money received from bonds issued under this
chapter shall be applied solely to the acquisition of the waterworks
and the cost of the issuance of the bonds.
(b) Any holder of the bonds or of any of the coupons attached to
them may, by action or other proceeding, compel performance of all
duties required by this chapter of the board issuing the bonds or of
any officer of the board, including the making and collecting of
reasonable and sufficient rates lawfully established for service
rendered by the waterworks, the segregation of the income and
revenues of the utility, and the application of the respective funds
created under this chapter.
(c) If there is any default in the payment of the principal or
interest of any of the bonds, a court having jurisdiction of the action
may:
(1) appoint an administrator or receiver to administer the
waterworks on behalf of the municipality and the bondholders,
with power to:
(A) charge and collect rates lawfully established sufficient
to provide for the payment of the operating expenses and
also to pay any bonds or obligations outstanding against the
waterworks; and
(B) apply the income and revenues in conformity with this
chapter and the ordinance; or
(2) declare the whole amount of the bonds due and payable and
direct the sale of the waterworks.
Under a sale ordered as provided by subdivision (2), the purchaser
is vested with an indeterminate permit as defined in IC 8-1-2-1 to
maintain and operate the waterworks to supply water to the
municipality and its citizens. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-14 Services rendered to municipality; payment
Sec. 14. (a) This subsection applies to a municipality that is not
subject to IC 8-1-2-103(c) or has not adopted an ordinance to become
subject to IC 8-1-2-103(d). The reasonable cost and value of any
service rendered to the municipality by the waterworks by furnishing
water for public purposes or by maintaining hydrants and other
facilities for fire protection shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
(b) This subsection applies to a municipality that is subject to
IC 8-1-2-103(c), that has adopted an ordinance to become subject to
IC 8-1-2-103(d), or that has adopted a plan described in
IC 8-1-2-103(d) as prescribed in IC 8-1-2-103(e). The reasonable
cost and value of any service rendered to the municipality by the
waterworks by furnishing water for public purposes shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
Except as provided in subsection (d), the cost and value of
maintaining hydrants and other facilities for fire protection shall be
excluded from the charges against the municipality and shall be
recovered from the other customers of the waterworks beginning on
January 1, 1994, in a municipality subject to IC 8-1-2-103(c) and
beginning on a date provided in the ordinance for a municipality that
adopts an ordinance under IC 8-1-2-103(d). The change in the
recovery of current revenue authorized by this section shall be
reflected in a schedule of new rates to be filed with the commission
at least thirty (30) days before the time the schedule of new rates is
to take effect.
(c) The compensation for the service provided to the municipality
shall, in the manner prescribed by this chapter, be paid into the
separate and special fund created by setting aside the income and
revenues of the waterworks and is subject to apportionment to the
operating, maintenance, depreciation, and bond and interest
redemption accounts.
(d) This subsection applies to a city having a population of more
than forty-six thousand five hundred (46,500) but less than fifty
thousand (50,000). The cost and value of maintaining hydrants and
other facilities for fire protection may be recovered from customers
of the waterworks residing:
(1) in a county having a population of more than two hundred
thousand (200,000) but less than three hundred thousand
(300,000); and
(2) in a township having a population of more than seven
thousand five hundred (7,500) but less than nine thousand
(9,000) located in a county having a population of more than
one hundred eighty-two thousand seven hundred ninety
(182,790) but less than two hundred thousand (200,000);
beginning on a date determined by the city. The city shall file a new
schedule of rates with the commission as set forth in subsection (b),
but is not subject to commission approval of the rates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.93-1993,
SEC.2; P.L.80-1997, SEC.18; P.L.133-1998, SEC.1; P.L.170-2002,
SEC.61.
IC 8-1.5-4-15 Construction, extension, or improvement; procedure
Sec. 15. (a) If, upon investigation, the board finds:
(1) that the waterworks, plant, system, or equipment is
insufficient to furnish the necessary supply of water to properly
protect the public health and welfare and safeguard the property
within the waterworks district; or
(2) that it is necessary to rebuild, repair, extend, and improve
the waterworks, plant, systems, and equipment and to acquire
lands, construct, erect, or acquire other plants, reservoirs,
systems, and other structures and equipment appurtenant to
them;
the board shall prepare maps, plans, specifications, and drawings
with full details and descriptions for the proposed work, together
with an estimate of the cost. The board shall also prepare a
description of all property rights necessary to be acquired in
connection with the proposed work and the manner in which the
rights are to be acquired, whether by purchase or appropriation,
along with a description of any other lands that may be injuriously
affected, together with the estimated cost.
(b) The board shall then adopt a resolution:
(1) declaring that it is necessary for the protection of the public
health and welfare of the inhabitants of the waterworks district
and the safeguarding of the property within the district;
(2) declaring that it is of public utility and benefit;
(3) appropriating the property described in the resolution;
(4) stating the maximum proposed cost of any land to be
purchased; and
(5) adopting plans, maps, specifications, drawings, details,
descriptions, and estimates.
(c) If the resolution is adopted, the board shall publish a notice in
accordance with IC 5-3-1 of the adoption, the resolution, and the fact
that plans, specifications, and estimates have been prepared and can
be inspected. The notice must also name a date, not less than ten (10)
days after the date of the last publication, when the board will
receive or hear remonstrances from the persons interested in, or
affected by, the resolution, and when it will determine their public
utility and benefit. Notice shall be mailed to the owners of all lands
appropriated by the resolution. If a landowner is a nonresident and
his place of residence is known, a notice shall be mailed to the
nonresident owner. If the nonresident owner's residence is unknown
to the board, then he is considered notified of the pendency of the
proceedings by the publication of notice.
(d) In the resolution and notice, separate descriptions of each
piece or parcel of land are not required, but it is a sufficient
description of the property purchased or to be purchased, or to be
appropriated or damaged, to give a description of the entire tract,
whether it is one (1) or more lots or parcels and whether it is owned
by one (1) or more persons.
(e) All persons affected by the proceedings, including all
taxpayers in the waterworks district, are considered to be notified of
the proceedings and all subsequent acts, hearings, adjournments, and
orders of the board by the original publication of notice.
(f) The board may, before adoption of the resolution, obtain from
the owners of the land an option for its purchase or may enter into a
contract for its purchase after an appraisal by two (2) qualified land
surveyors. Such an option or contract is subject to the final action of
the board confirming, modifying, or rescinding the resolution. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-16 Lands, rights-of-way, or other property; ownership in name of
municipality; remonstrances
Sec. 16. (a) All lands, rights-of-way, or other property, when
acquired, either by purchase or appropriation, shall be taken and held
in the name of the municipality.
(b) At the time fixed for the hearing or before the hearing, the
following persons may file a written remonstrance with the board:
(1) The owner of land, rights-of-way, or other property to be
appropriated under the resolution.
(2) A person injuriously affected by the appropriation.
(3) A person owning real or personal property within the
waterworks district.
(c) The board shall hear all persons interested in the proceedings,
hear all the remonstrances that have been filed, and take final action
on the resolution. The final action shall be recorded. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-17 Appeals
Sec. 17. (a) A person who has remonstrated in writing and is
aggrieved by the decision of the board may, within thirty (30) days,
take an appeal to the circuit or superior court of the county in which
the waterworks district is located.
(b) A remonstrator desiring to appeal from the action of the board
shall, within thirty (30) days after the final action of the board, file
in the office of the clerk of the circuit or superior court a copy of the
order of the board and the remonstrance, together with a bond
conditioned to pay the costs of the appeal, should the appeal be
determined against him.
(c) The court may hear the appeal only if the question is whether
the board acted arbitrarily or capriciously in adopting the resolution.
(d) The cause shall be tried to the court without a jury.
(e) All remonstrances upon which appeals are taken may be
consolidated and heard as one (1) claim for relief by the court. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-18 Special taxing district bonds of the waterworks district; issuance
Sec. 18. (a) To procure money to pay for the required property
and the erection and construction of the proposed work, and in
anticipation of the collection of the special benefit tax, the board may
issue, in the name of the municipality, the special taxing district
bonds of the waterworks district. The bonds may exceed the total
cost of the work and property to be acquired as provided for in the
resolution, including:
(1) all expenses necessarily incurred for supervision and
inspection during the period of construction; and
(2) expenses actually incurred preliminary to the acquiring of
the necessary property and the construction of the work,
including the cost of records, engineering expenses, publication
of notices, salaries, and other expenses incurred, before and in
connection with the acquiring of the property, the letting of the
contract, and the sale of bonds.
(b) After adopting a resolution authorizing the bonds, the board
shall certify a copy of the resolution to the municipal fiscal officer,
who shall then prepare the bonds. The bonds shall be executed by the
municipal executive and attested by the fiscal officer. The bonds are
exempt from taxation as provided by IC 6-8-5. All bonds issued by
the board shall be sold by the fiscal officer under IC 5-1-11.
(c) The board may not issue bonds of the waterworks district,
payable by special taxation, when the total of the outstanding bonds
of the district, including the bonds already issued and to be issued,
exceeds eight percent (8%) of the total adjusted value of taxable
property in the district as determined under IC 36-1-15.
(d) The bonds are not a corporate obligation or indebtedness of
the municipality, but are an indebtedness of the waterworks district.
The bonds and interest are payable out of a special benefit tax levied
upon all of the property of the waterworks district, or by any other
means including revenues, cash on hand, and cash in depreciation or
reserve accounts.
(e) The bonds must recite the terms upon their face, together with
the purpose for which they are issued. An action to question the
validity of the bonds issued for the waterworks district or to prevent
their issuance may not be brought after the date fixed for the sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.6-1997,
SEC.131.
IC 8-1.5-4-19 Tax levy
Sec. 19. (a) To raise the necessary revenues to pay for the bonds
issued, and interest on the bonds, the board:
(1) may levy a special benefit tax upon all the property of the
waterworks district in the amount necessary to meet and pay the
principal of the bonds as they severally mature, together with all
accruing interest; and
(2) shall certify the tax levied each year to the fiscal officers of
the municipality and of the county in which the waterworks
district is located, at the same time the levy of the municipality
is certified.
The tax levied and certified shall be estimated and entered upon the
tax duplicate and shall be collected and enforced in the same manner
as state and county taxes are estimated, entered, collected, and
enforced.
(b) In fixing the amount of the necessary levy, the board:
(1) shall consider the amount of revenues derived by the board
from the operation of the waterworks plant and system under its
jurisdiction above the amount of revenues required to pay the
cost of operation and maintenance of the waterworks plant and
system; and
(2) may, in lieu of making the levy in this section, set aside, by
resolution, a specific amount of the surplus revenues to be
collected before maturity of the principal and interest of the
bonds payable in the following calendar year.
(c) The special tax shall be accumulated and kept in a separate
fund to be known as the "waterworks district bond fund", and applied
to the payment of the district bonds and interest as they severally
mature and are payable. All accumulations in the fund before their
use for the payment of bonds and interest shall be deposited at
interest with the depository of other public funds of the municipality,
and all interest collected belongs to that fund.
(d) If the board adopts the resolution, the board may not use any
part of the amount set aside out of its net revenues for any purpose
other than the monthly payment of the bonds and interest to the
sinking fund. Any amount of net revenues derived from the operation
of the waterworks plant and system under the jurisdiction of the
board, not required for the payment of the principal and interest on
the outstanding waterworks district bonds, shall be paid over to the
municipality and deposited in the sinking fund established for the
purpose of redeeming and retiring outstanding bonds that the
municipality may have issued for the benefit of its waterworks plant.
This section does not relieve the municipality from the obligation to
pay outstanding bonds according to their terms and conditions. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4
Chapter 4. Department of Waterworks in Certain Municipalities
IC 8-1.5-4-1 Application of chapter
Sec. 1. This chapter applies to all municipalities that:
(1) own or operate waterworks; and
(2) adopt the provisions of this chapter by ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-1.5 Certain municipalities operating a waterworks through a
department before January 1, 1982
Sec. 1.5. (a) A municipality having and operating a waterworks
through a department of waterworks before January 1, 1982, under
IC 19-3-15 (before its repeal on January 1, 1983) or under IC 19-3-27
(before its repeal on January 1, 1983) shall be deemed to have
established a department of waterworks, as authorized by section 2
of this chapter, having the same number of board members as the
board operating before January 1, 1982, and having the same powers,
obligations, and duties as would be the case if the legislative body of
the municipality had adopted an ordinance doing so before January
1, 1983, in accordance with Acts 1982, P.L.74, SECTION 5(b).
(b) Except as provided in subsection (c), the board of directors of
the department of waterworks shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-4 and
IC 8-1.5-3-8.
(c) This subsection applies to water utilities that have been
removed from the jurisdiction of the Indiana utility regulatory
commission under IC 8-1.5-3-9.1 after June 30, 1991. The board of
directors of the department of waterworks shall operate as the board
for the purposes of IC 8-1.5-3-4 and IC 8-1.5-3-8. As added by P.L.105-1983, SEC.3. Amended by P.L.16-1984, SEC.7;
P.L.3-1990, SEC.29; P.L.56-1992, SEC.1.
IC 8-1.5-4-2 Department of waterworks; establishment; board of directors
Sec. 2. (a) If the legislative body of a municipality, by ordinance,
adopts the provisions of this chapter, there is established a
department of waterworks to be controlled by a board of directors
(referred to as "the board" in this chapter). The board consists of
either three (3) or five (5) directors, as determined by ordinance, who
shall be appointed by the municipal executive.
(b) In case there are three (3) directors, not more than two (2) may
be of the same political party. In case there are five (5) directors, not
more than three (3) may be of the same political party.
(c) The terms of directors shall be prescribed by ordinance, but
initial terms must be prescribed so that the directors' terms will be
staggered. Each director shall give a bond, which shall be fixed by
the municipal fiscal officer and is subject to his approval.
(d) The executive may remove a director at any time when, in his
judgment, it is for the best interest of the department. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-3 Special taxing district
Sec. 3. The department of waterworks has jurisdiction over a
special taxing district (referred to as "the waterworks district" in this
chapter) that consists of:
(1) in the case of a second class city located in a county having
a population of more than one hundred seventy thousand
(170,000) but less than one hundred eighty thousand (180,000),
all the territory within that county; or
(2) in the case of any other municipality, all the territory within
the corporate boundaries of the municipality, or the territory
served by the waterworks if larger or smaller than the corporate
boundaries. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.12-1992,
SEC.59; P.L.170-2002, SEC.60.
IC 8-1.5-4-4 Board; powers and duties
Sec. 4. The board has the powers and duties prescribed by
IC 8-1.5-3-4. In addition, the board:
(1) may hold hearings following public notice;
(2) may make findings and determinations;
(3) may design, order, contract for or construct pumping plants
or stations, filtration plants, reservoirs, water mains, hydrants,
and other equipment, structures, and appurtenances and rebuild,
equip, improve, extend, and repair plants, equipment, and
structures;
(4) may build or have built all roads, levees, walls, or other
structures that may be necessary or desirable in connection with
waterworks;
(5) make all necessary or desirable improvements of the
grounds and premises under its control;
(6) may issue and sell bonds for the construction, alteration,
addition, or extension to the waterworks, in the manner
prescribed by law, including the provisions of IC 8-1.5-2; and
(7) shall furnish an adequate supply of water to consumers
within the waterworks district. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-5 Water filtration and service facilities; acquisition, construction,
and operation; financing methods
Sec. 5. The acquisition, construction, installation, operation, and
maintenance of facilities and land for water filtration and water
service may be financed through proceeds from tax levies, proceeds
of special taxing district bonds of the waterworks district, service
rates, revenue bonds, or any other available funds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-6 Authority to set aside revenues for operation and maintenance, a
depreciation account, and payment of bonds
Sec. 6. The board may fix and set aside:
(1) the proportion of the revenues of the waterworks department
necessary for reasonable and proper operation and maintenance;
(2) the proportion of the revenues for a proper and adequate
depreciation account; and
(3) the fixed proportion of the revenues to be applied to the
payment of the principal and interest of the authorized bonds. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-7 Revenues set aside for operation and maintenance
Sec. 7. (a) In fixing the proportion of the revenues of the
waterworks department required for operation and maintenance, the
board shall consider the cost of the operation and maintenance of the
waterworks, and may not set aside into the special fund a greater
amount of the revenues and proceeds than, in its judgment, is
required for the operation and maintenance.
(b) If a surplus is accumulated in the operating and maintenance
fund, and that surplus is equal to the cost of maintaining and
operating the waterworks system during the remainder of the current
calendar, operating, or fiscal year and during the next calendar,
operating, or fiscal year, any excess over that surplus may be
transferred by the board to either the depreciation account, to be used
for any improvements, extensions, or additions to the waterworks, or
to the bond and interest redemption account. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-8 Revenues set aside for payment of bonds
Sec. 8. (a) The fixed proportion set aside for the payment of the
principal and interest of the authorized bonds shall, from month to
month, as accrued and received, be set apart and paid into a special
account identified as "the bond and interest redemption account".
(b) In fixing and determining the amount that is to be set aside for
the payment of the principal and interest of the authorized bonds, the
board may provide that the amount to be set aside and paid into the
bond and interest redemption account for any year or years should
not exceed a fixed sum, which must be at least sufficient to provide
for the payment of the interest and principal of the bonds maturing
and becoming payable in each year, together with a surplus or margin
of ten percent (10%) in excess.
(c) If a surplus created in the bond and interest redemption
account exceeds the interest and principal of any bonds becoming
payable during the current calendar, operating, or fiscal year and
during the next calendar, operating, and fiscal year, the board may
transfer any excess over the surplus to either the operation and
maintenance account, or the depreciation account, as the board may
designate. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-9 Revenues set aside for depreciation account
Sec. 9. (a) The proportion set aside to the depreciation account
shall be expended in making good depreciation in the waterworks or
in new construction, extensions, or additions to the property of the
waterworks.
(b) Any accumulations in the depreciation account may be
invested by the board, and if invested, the income from the
investment shall be carried in the depreciation account. The board
may invest the funds in accordance with IC 5-13-9. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.19-1987,
SEC.21.
IC 8-1.5-4-10 Secured debt or charge
Sec. 10. (a) The board may authorize and set apart bonds equal to
the amount of any secured debt or charge subject to which a
waterworks may be purchased or acquired in any proceeding, and
shall set aside for interest and sinking fund from the income and
revenue of the waterworks a sum sufficient to comply with the
requirements of the instrument creating the lien or securing the
charge.
(b) If the instrument does not make any provision, the board shall
set aside into the secured-debt account from month to month for
interest on the secured debt or charge an amount sufficient to provide
for the payment of the interest on the secured debt or charge, and at
the option of the board either an annual amount sufficient to retire
the secured debt or charge at maturity or bonds issued under this
chapter equal to the secured debt or charge. Any surplus after
satisfying the secured debt or charge may be transferred to the bond
and interest redemption account.
(c) Waterworks bonds set aside for a debt may, from time to time,
be issued in an amount sufficient with the amount then in the sinking
fund to pay and retire the debt or any part thereof. The bonds may
not be issued at less than par value in exchange for, or satisfaction of,
the secured debt or charge, or may be sold in the manner provided by
this chapter, and the proceeds applied in payment of the same at
maturity or before maturity by agreement with the holder. A
municipality acquiring a waterworks does not assume any liability
for the payment of a secured debt or charge, other than the obligation
to apply the revenues in the manner prescribed in the ordinance. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-11 Bonds and interest issued against special redemption fund
Sec. 11. (a) The bonds and the interest issued against the special
redemption fund:
(1) are a valid claim of the holders only against that fund and
the fixed proportion or amount of the revenues pledged to that
fund; and
(2) are exempt from taxation in Indiana as provided by IC 6-8-5.
(b) The bonds may be issued either as registered bonds or as
coupon bonds payable to bearer. Coupons and bearer bonds may be
registered as to principal in the holder's name on the books of the
municipality, registration being noted on the bond by the municipal
clerk or other designated officer, after which no transfer is valid
unless made on the books of the municipality by the registered holder
and similarly noted on the bonds. Any bond so registered as to
principal may be discharged from registration by being transferred
to bearer, after which it is transferable by delivery but may be again
registered as to principal as before. The registration of the bonds as
to the principal does not restrain the negotiability of the coupons by
delivery, but the coupons may be surrendered and the interest made
payable only to the registered holder of the bonds. If the coupons are
surrendered, the surrender and cancellation shall be noted on the
bond, and interest on the bond is then payable to the registered
holder on order in cash or at his option by check or draft payable at
the place or one (1) of the places where the coupons were payable.
(c) Bonds shall be sold in accordance with IC 5-1-11. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-12 Bonds; additional issue or issues for extension, addition, or
improvement
Sec. 12. A board acquiring waterworks and paying for them and
for extensions and betterments authorized at the time of acquisition
may provide for the extension, addition, or improvement of the
waterworks by an additional issue or issues of bonds. A board may
issue new bonds in the manner provided in this chapter and secured
in the same manner, to provide funds for the payment of the principal
and interest of any bonds then outstanding. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-13 Bonds; application of proceeds; default
Sec. 13. (a) All money received from bonds issued under this
chapter shall be applied solely to the acquisition of the waterworks
and the cost of the issuance of the bonds.
(b) Any holder of the bonds or of any of the coupons attached to
them may, by action or other proceeding, compel performance of all
duties required by this chapter of the board issuing the bonds or of
any officer of the board, including the making and collecting of
reasonable and sufficient rates lawfully established for service
rendered by the waterworks, the segregation of the income and
revenues of the utility, and the application of the respective funds
created under this chapter.
(c) If there is any default in the payment of the principal or
interest of any of the bonds, a court having jurisdiction of the action
may:
(1) appoint an administrator or receiver to administer the
waterworks on behalf of the municipality and the bondholders,
with power to:
(A) charge and collect rates lawfully established sufficient
to provide for the payment of the operating expenses and
also to pay any bonds or obligations outstanding against the
waterworks; and
(B) apply the income and revenues in conformity with this
chapter and the ordinance; or
(2) declare the whole amount of the bonds due and payable and
direct the sale of the waterworks.
Under a sale ordered as provided by subdivision (2), the purchaser
is vested with an indeterminate permit as defined in IC 8-1-2-1 to
maintain and operate the waterworks to supply water to the
municipality and its citizens. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-14 Services rendered to municipality; payment
Sec. 14. (a) This subsection applies to a municipality that is not
subject to IC 8-1-2-103(c) or has not adopted an ordinance to become
subject to IC 8-1-2-103(d). The reasonable cost and value of any
service rendered to the municipality by the waterworks by furnishing
water for public purposes or by maintaining hydrants and other
facilities for fire protection shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
(b) This subsection applies to a municipality that is subject to
IC 8-1-2-103(c), that has adopted an ordinance to become subject to
IC 8-1-2-103(d), or that has adopted a plan described in
IC 8-1-2-103(d) as prescribed in IC 8-1-2-103(e). The reasonable
cost and value of any service rendered to the municipality by the
waterworks by furnishing water for public purposes shall be:
(1) charged against the municipality; and
(2) paid for in monthly installments as the service accrues out
of the current revenues of the municipality, collected or in
process of collection, and the tax levy of the municipality made
by it to raise money to meet its necessary current expenses.
Except as provided in subsection (d), the cost and value of
maintaining hydrants and other facilities for fire protection shall be
excluded from the charges against the municipality and shall be
recovered from the other customers of the waterworks beginning on
January 1, 1994, in a municipality subject to IC 8-1-2-103(c) and
beginning on a date provided in the ordinance for a municipality that
adopts an ordinance under IC 8-1-2-103(d). The change in the
recovery of current revenue authorized by this section shall be
reflected in a schedule of new rates to be filed with the commission
at least thirty (30) days before the time the schedule of new rates is
to take effect.
(c) The compensation for the service provided to the municipality
shall, in the manner prescribed by this chapter, be paid into the
separate and special fund created by setting aside the income and
revenues of the waterworks and is subject to apportionment to the
operating, maintenance, depreciation, and bond and interest
redemption accounts.
(d) This subsection applies to a city having a population of more
than forty-six thousand five hundred (46,500) but less than fifty
thousand (50,000). The cost and value of maintaining hydrants and
other facilities for fire protection may be recovered from customers
of the waterworks residing:
(1) in a county having a population of more than two hundred
thousand (200,000) but less than three hundred thousand
(300,000); and
(2) in a township having a population of more than seven
thousand five hundred (7,500) but less than nine thousand
(9,000) located in a county having a population of more than
one hundred eighty-two thousand seven hundred ninety
(182,790) but less than two hundred thousand (200,000);
beginning on a date determined by the city. The city shall file a new
schedule of rates with the commission as set forth in subsection (b),
but is not subject to commission approval of the rates. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.93-1993,
SEC.2; P.L.80-1997, SEC.18; P.L.133-1998, SEC.1; P.L.170-2002,
SEC.61.
IC 8-1.5-4-15 Construction, extension, or improvement; procedure
Sec. 15. (a) If, upon investigation, the board finds:
(1) that the waterworks, plant, system, or equipment is
insufficient to furnish the necessary supply of water to properly
protect the public health and welfare and safeguard the property
within the waterworks district; or
(2) that it is necessary to rebuild, repair, extend, and improve
the waterworks, plant, systems, and equipment and to acquire
lands, construct, erect, or acquire other plants, reservoirs,
systems, and other structures and equipment appurtenant to
them;
the board shall prepare maps, plans, specifications, and drawings
with full details and descriptions for the proposed work, together
with an estimate of the cost. The board shall also prepare a
description of all property rights necessary to be acquired in
connection with the proposed work and the manner in which the
rights are to be acquired, whether by purchase or appropriation,
along with a description of any other lands that may be injuriously
affected, together with the estimated cost.
(b) The board shall then adopt a resolution:
(1) declaring that it is necessary for the protection of the public
health and welfare of the inhabitants of the waterworks district
and the safeguarding of the property within the district;
(2) declaring that it is of public utility and benefit;
(3) appropriating the property described in the resolution;
(4) stating the maximum proposed cost of any land to be
purchased; and
(5) adopting plans, maps, specifications, drawings, details,
descriptions, and estimates.
(c) If the resolution is adopted, the board shall publish a notice in
accordance with IC 5-3-1 of the adoption, the resolution, and the fact
that plans, specifications, and estimates have been prepared and can
be inspected. The notice must also name a date, not less than ten (10)
days after the date of the last publication, when the board will
receive or hear remonstrances from the persons interested in, or
affected by, the resolution, and when it will determine their public
utility and benefit. Notice shall be mailed to the owners of all lands
appropriated by the resolution. If a landowner is a nonresident and
his place of residence is known, a notice shall be mailed to the
nonresident owner. If the nonresident owner's residence is unknown
to the board, then he is considered notified of the pendency of the
proceedings by the publication of notice.
(d) In the resolution and notice, separate descriptions of each
piece or parcel of land are not required, but it is a sufficient
description of the property purchased or to be purchased, or to be
appropriated or damaged, to give a description of the entire tract,
whether it is one (1) or more lots or parcels and whether it is owned
by one (1) or more persons.
(e) All persons affected by the proceedings, including all
taxpayers in the waterworks district, are considered to be notified of
the proceedings and all subsequent acts, hearings, adjournments, and
orders of the board by the original publication of notice.
(f) The board may, before adoption of the resolution, obtain from
the owners of the land an option for its purchase or may enter into a
contract for its purchase after an appraisal by two (2) qualified land
surveyors. Such an option or contract is subject to the final action of
the board confirming, modifying, or rescinding the resolution. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-16 Lands, rights-of-way, or other property; ownership in name of
municipality; remonstrances
Sec. 16. (a) All lands, rights-of-way, or other property, when
acquired, either by purchase or appropriation, shall be taken and held
in the name of the municipality.
(b) At the time fixed for the hearing or before the hearing, the
following persons may file a written remonstrance with the board:
(1) The owner of land, rights-of-way, or other property to be
appropriated under the resolution.
(2) A person injuriously affected by the appropriation.
(3) A person owning real or personal property within the
waterworks district.
(c) The board shall hear all persons interested in the proceedings,
hear all the remonstrances that have been filed, and take final action
on the resolution. The final action shall be recorded. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-17 Appeals
Sec. 17. (a) A person who has remonstrated in writing and is
aggrieved by the decision of the board may, within thirty (30) days,
take an appeal to the circuit or superior court of the county in which
the waterworks district is located.
(b) A remonstrator desiring to appeal from the action of the board
shall, within thirty (30) days after the final action of the board, file
in the office of the clerk of the circuit or superior court a copy of the
order of the board and the remonstrance, together with a bond
conditioned to pay the costs of the appeal, should the appeal be
determined against him.
(c) The court may hear the appeal only if the question is whether
the board acted arbitrarily or capriciously in adopting the resolution.
(d) The cause shall be tried to the court without a jury.
(e) All remonstrances upon which appeals are taken may be
consolidated and heard as one (1) claim for relief by the court. As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-4-18 Special taxing district bonds of the waterworks district; issuance
Sec. 18. (a) To procure money to pay for the required property
and the erection and construction of the proposed work, and in
anticipation of the collection of the special benefit tax, the board may
issue, in the name of the municipality, the special taxing district
bonds of the waterworks district. The bonds may exceed the total
cost of the work and property to be acquired as provided for in the
resolution, including:
(1) all expenses necessarily incurred for supervision and
inspection during the period of construction; and
(2) expenses actually incurred preliminary to the acquiring of
the necessary property and the construction of the work,
including the cost of records, engineering expenses, publication
of notices, salaries, and other expenses incurred, before and in
connection with the acquiring of the property, the letting of the
contract, and the sale of bonds.
(b) After adopting a resolution authorizing the bonds, the board
shall certify a copy of the resolution to the municipal fiscal officer,
who shall then prepare the bonds. The bonds shall be executed by the
municipal executive and attested by the fiscal officer. The bonds are
exempt from taxation as provided by IC 6-8-5. All bonds issued by
the board shall be sold by the fiscal officer under IC 5-1-11.
(c) The board may not issue bonds of the waterworks district,
payable by special taxation, when the total of the outstanding bonds
of the district, including the bonds already issued and to be issued,
exceeds eight percent (8%) of the total adjusted value of taxable
property in the district as determined under IC 36-1-15.
(d) The bonds are not a corporate obligation or indebtedness of
the municipality, but are an indebtedness of the waterworks district.
The bonds and interest are payable out of a special benefit tax levied
upon all of the property of the waterworks district, or by any other
means including revenues, cash on hand, and cash in depreciation or
reserve accounts.
(e) The bonds must recite the terms upon their face, together with
the purpose for which they are issued. An action to question the
validity of the bonds issued for the waterworks district or to prevent
their issuance may not be brought after the date fixed for the sale of
the bonds. As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.6-1997,
SEC.131.
IC 8-1.5-4-19 Tax levy
Sec. 19. (a) To raise the necessary revenues to pay for the bonds
issued, and interest on the bonds, the board:
(1) may levy a special benefit tax upon all the property of the
waterworks district in the amount necessary to meet and pay the
principal of the bonds as they severally mature, together with all
accruing interest; and
(2) shall certify the tax levied each year to the fiscal officers of
the municipality and of the county in which the waterworks
district is located, at the same time the levy of the municipality
is certified.
The tax levied and certified shall be estimated and entered upon the
tax duplicate and shall be collected and enforced in the same manner
as state and county taxes are estimated, entered, collected, and
enforced.
(b) In fixing the amount of the necessary levy, the board:
(1) shall consider the amount of revenues derived by the board
from the operation of the waterworks plant and system under its
jurisdiction above the amount of revenues required to pay the
cost of operation and maintenance of the waterworks plant and
system; and
(2) may, in lieu of making the levy in this section, set aside, by
resolution, a specific amount of the surplus revenues to be
collected before maturity of the principal and interest of the
bonds payable in the following calendar year.
(c) The special tax shall be accumulated and kept in a separate
fund to be known as the "waterworks district bond fund", and applied
to the payment of the district bonds and interest as they severally
mature and are payable. All accumulations in the fund before their
use for the payment of bonds and interest shall be deposited at
interest with the depository of other public funds of the municipality,
and all interest collected belongs to that fund.
(d) If the board adopts the resolution, the board may not use any
part of the amount set aside out of its net revenues for any purpose
other than the monthly payment of the bonds and interest to the
sinking fund. Any amount of net revenues derived from the operation
of the waterworks plant and system under the jurisdiction of the
board, not required for the payment of the principal and interest on
the outstanding waterworks district bonds, shall be paid over to the
municipality and deposited in the sinking fund established for the
purpose of redeeming and retiring outstanding bonds that the
municipality may have issued for the benefit of its waterworks plant.
This section does not relieve the municipality from the obligation to
pay outstanding bonds according to their terms and conditions. As added by Acts 1982, P.L.74, SEC.1.
