IC 8-1-11.1
Chapter 11.1. Department of Public Utilities of Consolidated City
IC 8-1-11.1-1 Creation; board of trustees; directors; membership; appointment;
qualifications; tenure; proceedings
Sec. 1. (a) In addition to the other executive departments of a
consolidated city, there is hereby created in any such city a
department of public utilities, which shall have as its head and be
under the general supervision and control of a board of seven (7)
members, to be known as the "Board of Directors for Utilities," to be
appointed annually by the board herein provided for and designated
as the "Board of Trustees for Utilities."
(b) Said board of trustees for utilities shall consist of five (5)
members.
(c) All such trustees and all successors thereof shall hold over
after the expiration of their terms until their respective successors
have been duly appointed and have qualified.
(d) At the expiration of the respective terms of each of the
members of the board of trustees, the said board of trustees shall
nominate the successors thereof to membership on such board, each
of which nominees shall be appointed by the mayor of the
consolidated city within ten (10) days after receiving such
nominations, and such succeeding members shall serve for a term of
four (4) years. In the event any person who has been appointed at any
time as a member of such board of trustees shall fail to qualify within
ten (10) days after the mailing to him of notice of his appointment;
or if any member after qualifying shall die, resign, vacate such office
by becoming a nonresident of such city, or be removed as hereinafter
provided; new members of such board of trustees shall be chosen to
fill such vacancy in the same manner as is provided for the member
as to whom such vacancy occurs, and the member so chosen shall
serve for the remainder of the term for which the member whose
place is so filled was appointed.
(e) No person shall be appointed as trustee who is less than
thirty-five (35) years of age, and who has not been a resident of such
city for at least five (5) years immediately preceding his
appointment. If any such trustee shall cease to be a legal resident of
said city his membership on said board shall thereby terminate and
become vacant.
(f) Each member of such board of trustees for utilities, before
entering upon his duties, shall take and subscribe an oath of office in
the usual form, to be indorsed upon the certificate of his
appointment, which shall be promptly filed with the clerk of the
city-county council.
(g) A majority of all the members of said board of trustees for
utilities shall be necessary to constitute a quorum.
(h) Said board of trustees shall elect one (1) member thereof as
president, one (1) as vice-president, and one (1) as secretary, who
shall serve from the date of their election until one (1) year from the
first day of January next following their election and until their
successors are elected and have qualified.
(i) Said board of trustees shall keep a record of their proceedings.
The expense of the meetings and proceedings of said board and of
keeping a record thereof and the salary of the members thereof shall
be paid upon a written request of the presiding officer and secretary
thereof by the board of directors for utilities out of the funds
belonging to said utility district. Each member of said board of
trustees for utilities shall receive as compensation for his services as
such a salary in the sum of fifty dollars ($50) per year.
(j) The board of trustees for utilities shall meet annually on the
first Monday of December of each year, at the principal office of said
department of public utilities, for the purpose of transacting any
business pertaining to their duties, and for the purposes of electing
officers of such board of trustees and of selecting and appointing
members of the board of directors for utilities, who shall serve for
one (1) year from the first day of January following and until their
successors are appointed and qualified.
(k) All persons so selected and appointed as such directors and all
the successors thereof appointed at any time shall be chosen by a
majority vote of all the members of said board of trustees. Said board
of trustees shall have power to remove summarily and at any time
any director and in such event, or if a vacancy occurs in said board
of directors from any cause, said board of trustees shall appoint a
successor in like manner who shall serve for the balance of the term
for which the member whose place is so filled was appointed.
(l) No person shall be appointed a member of said board of
directors for utilities unless he is a bona fide resident of said city and
has been such for five (5) years immediately preceding such
appointment, and is at least thirty-five (35) years of age. If any such
director shall cease to be a legal resident of said city during the term
for which he was appointed, his membership on such board shall
thereby terminate and become vacant.
(m) Each member of said board of directors for utilities before
entering upon his duties shall take and subscribe an oath, to be
indorsed upon the certificate of his appointment, which shall be
promptly filed with the clerk of the city-county council.
(n) Each of said members of said board of directors, before
entering upon his duties, shall execute a bond payable to the state of
Indiana, with surety to be approved by the mayor of said city, in the
penal sum of fifteen thousand dollars ($15,000), conditioned upon
the faithful performance of the duties of his office and the accounting
for all moneys and property that may come into his hands or under
his control. The cost of all such bonds shall be paid by the
department of public utilities of said city.
(o) Any trustee may be removed from office for neglect of duty,
incompetency, disability to perform his duties, or other good cause,
by an order and judgment of the circuit or superior court of the
county in which such city is located, in the following manner, to wit:
An original complaint may be filed by either the mayor, or by a
majority of the city-county council against any such trustee setting
forth the charges preferred, and the cause shall be placed on the
advanced calendar and be tried as other civil causes are tried, by the
court, without the intervention of a jury. If such charges be sustained,
the court shall declare such office vacant. The judgment of said court
shall be final and no appeal shall lie therefrom by any party.
(p) Said board of trustees shall have power to adopt rules,
regulations and by-laws for their own governance, and may meet
regularly or specially as often as necessary to transact any business
or duties imposed upon them under this chapter or any other statute.
(q) In the event such city shall acquire in any manner herein
provided more than one (1) such public utility and the property
thereof, said board of trustees may add to such board of directors
from time to time one (1) or more additional members, increasing
such board to not exceed a total of eleven (11) members; which
members shall be appointed and shall serve under all the provisions
herein governing the appointment, terms and duties of such board of
directors for utilities. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-2 Board of directors; appointment of officers; compensation;
meetings; employee bonds
Sec. 2. (a) The members of such board of directors for utilities
shall hold a meeting on the second Monday of January of each year
for the purpose of organization and to elect officers for the ensuing
year. They shall choose one (1) of their members president, another
vice-president, another secretary, and another treasurer, who shall
perform the duties usually pertaining to those offices. Such officers
so chosen shall serve from the date of their election until their
successors are duly elected and qualified.
(b) The members of such board of directors for utilities shall each
be paid a salary for their services as such directors at the rate of six
hundred dollars ($600) per annum during the period of service. A
majority of the members of said board of directors shall constitute a
quorum, and the concurrence of a majority of such membership shall
be necessary to any action of such board. Such board of directors
shall hold an annual meeting on the second Monday of January of
each year, at the general offices of such board, and such other regular
meetings at such times as it may determine, and upon such notice as
it may fix, by rule or regulation. It shall be authorized to make such
by-laws and regulations as it may deem necessary for the safe,
economical and efficient management and protection of the
properties entrusted to its care. Such board of directors shall require
any officer or employee having custody of funds to give bond in such
reasonable amount as the board may prescribe, the expense of which
bonds shall be paid by the department of public utilities of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-3 Board of directors; powers and duties
Sec. 3. (a) The board of directors for utilities shall have, within
and outside such city as provided in this chapter, the exclusive
government, management, regulation, and control of all public
utilities consisting of any waterworks, gasworks, electric light works,
heating and power plants of any kind or character, telephone and
other systems of communication, and local transportation systems of
any kind operated upon, above, or below any street or territory within
the city, or outside the city within the limits authorized by law, and
all property held by and relating or belonging thereto. Any of which
public utilities any such city may acquire or construct for the service
of the public as consumers, users, or patrons, and including any
public utility and all property which such city may hold as trustee for
the benefit of the inhabitants of such city. Such board of directors
may furnish and sell service and products of and make all necessary
construction, reconstruction, repairs, renewals, enlargements,
extensions, or additions to any such plant or property of any such
public utility so owned or at any time so held in trust, which in the
judgment of the board of directors is desirable or necessary for the
proper conduct of such business and the proper serving of the
inhabitants of the city and adjacent, contiguous, or suburban
communities or territory within the county wherein such city is
situated and served, or reasonably capable of being served, in any
manner by or with respect to any such utility.
(b) The board of directors may lease any such utility property for
a term not exceeding thirty-five (35) years to any person, partnership,
limited liability company, or corporation, and without the approval
of the commission, such lease to be upon such terms and conditions
as the board may deem to be to the best interest of such city and the
city's inhabitants. No such lease shall be valid or effective until it has
been approved by the board of trustees and duly ratified and
approved by an ordinance of the city. The board and the city-county
legislative body must each vote such approval by a two-thirds (2/3)
vote of their total membership. In any such lease an option may be
given to such lessee to extend the same for a period not to exceed ten
(10) additional years.
(c) In connection with the duties devolving upon such board of
directors in the government, management, regulation, control, and
operation of all such utilities, it may act as follows:
(1) To condemn, appropriate, lease, rent, purchase, and hold
any real estate, rights-of-way, materials, or personal property
within such city or within five (5) miles of the corporate limits
of the city needed for the proper giving of service by any such
utility to the inhabitants of the city and the community
contiguous thereto and served from any such utility plant.
(2) To design, order, contract for, and construct any and all
necessary or desirable extensions of or additions to any utility
plant and property owned or so held in trust by the city, and to
enter into all necessary contracts with reference thereto, and
with reference to the purchase of materials and supplies needed
for the operation of any such plant or plants, in accordance with
such rules as may be adopted by such board of directors, and
without the necessity of advertising for bids, or without such
other restrictions as are imposed by any law of Indiana with
reference to the letting of contracts for work, material, or
supplies by municipal bodies or other governmental agencies.
(3) To sell any products or byproducts, and enter into executory
contracts for the sale, to anyone whatsoever and without any
restriction concerning the taking of bids therefor or otherwise.
(4) To operate any such plant or plants, to receive and collect
all money due on account of such operation or otherwise
relating to such plant or plants or business and in connection
therewith to employ such managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys,
auditors, clerks, foremen, and other employees necessary for the
proper carrying on and operation of any such utility plant or
plants and the business and to fix the compensation of all such
employees. No contract of employment shall be made for a
longer fixed period than four (4) years. However, a contract of
employment may be extended or renewed from time to time
thereafter. The directors may elect from their membership an
executive committee consisting of not more than three (3), who
may be assigned to the supervision of any one (1) or more of
such utilities and who shall, in the intervals between the
meetings of the directors, exercise all the powers and duties of
the directors, all of their acts to be subject, however, to the
approval of the directors, and to fix any such additional
compensation to the members of the executive committee, in
addition to their salaries as directors, as shall be reasonable.
The additional compensation shall be fixed by a resolution of
the directors entered of record at the time of the appointment of
the executive committee. Whenever any such city shall acquire,
hold, own, or so hold in trust for the city's inhabitants more than
one (1) such public utility and the property of the city, such
board of directors shall have power to select additional
executive committees from their membership in the same
manner and with the same power as the executive committee
first selected, which committee may be assigned by such board
to any such utilities deemed necessary. In the selection of
employees, other than managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys, and
auditors, the board of directors shall provide for a merit system
of employment to be determined by competitive examination,
except as to unskilled and common laborers, in which political,
religious, or other personal affiliations may not be considered.
In selecting managers the directors shall consider character,
training, and general expert and executive fitness and
experience for the position in the particular utility to which
such manager is to be assigned, as the necessary requirements
for appointment.
(5) To rent such offices and other real estate and property for
the conduct of the business of such utility or utilities as may be
deemed needful and enter into contracts with reference to the
rental and use of the offices, real estate, and property. No such
contract shall be made for a longer period than ten (10) years.
(6) In the event there be an open mortgage upon any utility
property acquired by any such city, either in absolute ownership
or in trust, by the terms of which mortgage additional bonds
may be taken down from the trustee under such mortgage to
meet in whole or in part the cost of extensions and
improvements to the mortgaged property, the board of directors
may perform all things necessary in order to secure the benefit
of such mortgage provisions and to enable the escrow bonds
held by the trustee under any such mortgage to be taken down
and sold in order to defray the cost of any extensions and
betterments to such property and to sell any such bonds so taken
down for the purpose of assisting in defraying the costs of any
such extensions or betterments to such property.
(7) To take over, adopt, and assume the performance of the
provisions of any lease under which any utility property may be
held at the time of the acquisition of any utility by any such
city, either in absolute ownership or in trust and to take any and
all steps necessary to perform and fulfill the terms of any such
lease, and to obtain and preserve the benefits from the lease. In
the event there be any outstanding open mortgage upon the
property covered by such lease so taken over under the
provisions of which bonds may be withdrawn from the trustee
under such mortgage for the purpose of paying all or part of the
cost of additions to the property covered by such mortgage, to
do all things necessary in order to secure the benefit of such
mortgage provisions and to enable the escrow bonds held by the
trustee under any such mortgage to be taken down and sold in
order to defray the cost of any extensions and betterments to
such leased property and to sell any such bonds so taken down
for the purpose of assisting in defraying the costs of any such
extensions or betterments to such leased property.
(8) To preserve the corporate organization of any company
engaged in the mining of coal, or any other commercial or
manufacturing business, the stock of which may be owned by
any utility whose property and assets may be taken over by any
such city, either in absolute ownership or in trust and in
connection with the taking of the property by the city to cause
the stock of any such company to be issued in the name of the
board of directors for utilities except as to qualifying shares for
directors and to cause such qualifying shares to be issued in the
names of such individuals as the board of directors may name
and to vote any such stock for the election of directors, who
may be members of such board of trustees for utilities.
However, no member of such board of directors shall receive
any compensation, directly or indirectly, as a director, officer,
or employee of any such company, other than the compensation
provided in this chapter as a member of the board of directors
for utilities. Through the control thus given of any company, the
board of directors for utilities shall be authorized to do all
things necessary to cause any such coal mining company or
other company efficiently to carry on its operations and to
conduct its business in the same manner as if its stocks were
owned by private individuals.
(9) To adopt rules for service and rates for service in connection
with the furnishing of any public utility service by the city to
consumers, users, or patrons. However, any such rules and rates
for service shall be in effect only after the rules and rates have
been filed with and approved by the commission and such
approval shall be granted by the commission only after notice
of hearing and hearing as provided by IC 8-1-1 and IC 8-1-2,
and only after determining compliance of the rates of service
with IC 8-1.5-3-8 and IC 8-1.5-3-10 and only after determining
compliance of the rules of service with IC 8-1-1 and IC 8-1-2,
along with the rules and standards of service for municipal
utilities of Indiana approved by the commission.
(10) To take over all contracts and rights of any kind or
character, and to fulfill and perform all obligations relating to
the property and business of any utility company whose
property may be taken over by any such city, either in absolute
ownership or in trust.
(11) To make all rules and bylaws customary in private
corporations for their own conduct of business and necessary
for the proper government and supervision of the utilities under
their control. Any such rules and bylaws shall be subject to the
approval of the board of trustees. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.42; P.L.3-1989, SEC.57; P.L.8-1993, SEC.122.
IC 8-1-11.1-3.1 Board of directors; certain powers and duties pertaining to
municipally owned utilities
Sec. 3.1. In addition to the other powers specified by this chapter
and notwithstanding IC 8-1.5-3-1, the board of directors for utilities
has all rights and powers conferred on a municipally owned utility by
IC 8-1.5-3-4(b), IC 8-1.5-3-6, and IC 8-1.5-3-7. Furthermore, the
board of directors for utilities shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.4.
IC 8-1-11.1-3.5 Retirement, survivor, or other benefits; increase
Sec. 3.5. (a) Every person who is receiving retirement benefits,
survivor benefits or other benefits from any fund or funds established
by, or under the authority of, the board of directors for utilities of the
department of public utilities may have such retirement benefits,
survivor benefits or any other benefits increased by an amount not to
exceed two dollars ($2) per month for each year of active service
prior to retirement. Such increase may be made if the board of
directors for utilities of the department of public utilities shall by
resolution so provide which said board of directors is hereby given
power to do.
(b) Any person who is receiving a retirement, survivor or other
benefit which commenced prior to January 1, 1976, shall receive
such increased retirement benefits, survivor benefits or other benefits
as long as he or she shall live. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-4 Directors or trustees; adverse interest in contracts
Sec. 4. No contract shall be made for the purchase or sale of any
materials or supplies on behalf of said board of directors for utilities
with any trustee or director, and no trustee nor director shall have
any pecuniary interest in any such contract. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-5 Actions to protect rights of cities
Sec. 5. The board of directors for utilities in every such city may,
in the name of the city, bring any such action which it deems proper
in order to protect the property rights of said city with reference to
any such utility property so under the control of such board, or to
secure the more effective carrying out of the purposes of this chapter
with reference to the erection, maintenance and operation of any
such utility property or properties. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-6 Utility districts; creation
Sec. 6. All of the territory included within the corporate limits of
any said city shall become and constitute a utility district for the
purpose of providing for the furnishing of utility service in such lines
of utility operation as may be taken over or owned by said city, and
thereafter said utility district shall be deemed duly created and
established under and pursuant to the provisions of this chapter. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-7 Expenses; procedure for payment
Sec. 7. All preliminary expenses actually incurred by such board
of directors in providing necessary records, the employment of
clerks, engineers, attorneys and other employees, the making of
surveys, and all other expenses of whatsoever nature necessary to be
paid prior to the actual taking over and operation of any utility plant
and the collection of revenues therefrom, shall be met and paid in the
following manner: Said board of directors for utilities shall from time
to time certify such items of expense to the controller of such city,
directing him to pay the several amounts thereof, and thereupon said
controller shall at once draw his warrant or warrants upon the county
treasurer, which warrant or warrants shall be paid out of the general
funds of such city not theretofore appropriated, without a special
appropriation being made therefor by the city-county council; or in
case there are no such general funds of said city not otherwise
appropriated, the city controller shall recommend to the city-county
council the temporary transfer of other funds of such city as is
necessary to meet such items of expense, or the making of a
temporary loan for such purpose, and such council shall thereupon
at once make such transfer of funds or authorize such temporary loan
in the same manner that other temporary loans are made by such city:
Provided, however, That the fund or funds of such city from which
such payments are made shall be fully reimbursed and repaid with
six percent (6%) interest by such board of directors for utilities out
of the first receipts from the operation of any such utility by said
board which are not needed to defray current operating expenses and
the expenses of imperative betterments. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-8 Bonds authorized; purposes; terms; sale procedures; disposition of
proceeds; mortgage bonds; temporary loans; execution
Sec. 8. (a) For the purpose of raising money to pay for the
acquisition of any utility property which said city shall have the right
to and shall determine to acquire, or which any such city may take
over as trustee for the inhabitants thereof, including any money
required to be paid for the purpose of redeeming or extinguishing the
capital stock of any utility whose property may be so taken over and
for the purpose of paying any outstanding obligations of any utility
company subject to which the property of any such utility may be
taken over by any such city, or held by it in trust for the inhabitants
thereof; or for the purpose of making necessary betterments,
improvements, extensions or additions to any utility property owned,
or so held in trust, by said city, the board of directors for utilities
shall cause to be issued in the name of the said city the bonds of said
utility district not to exceed in amount the total cost of any such
utility so purchased, or so held in trust, and for the outstanding
obligations of any utility subject to which the property is to be taken
over and which it is desired to pay off and discharge and/or of any
such additions, betterments, improvements, extensions or additions
to any utility owned, or so held in trust, and including all expenses
necessarily incurred in connection with the acquisition of any such
property, the paying off of any such indebtedness or the making of
any such improvements, extensions or additions thereto. Such bonds
shall be issued in any denominations not more than one thousand
dollars ($1,000) each, and shall be payable at such period not longer
than thirty (30) years after date, and in such series or series as such
board of directors may by resolution determine. Said bonds shall be
negotiable as inland bills of exchange, and shall bear interest at any
rate, payable semiannually. On adopting a resolution ordering said
bonds, said board of directors shall certify a copy of the same to the
city controller of said city, who shall thereupon prepare said bonds
and the same shall be executed by the mayor of said city and attested
by the city controller. Such bonds shall be exempt from taxation for
any and all purposes. All of said bonds so issued by the board of
directors shall be sold by the city controller to the highest bidder
therefor, but in no event for less than par, after giving notice of sale
of such bonds by publication in accordance with IC 5-3-1. Any bonds
issued pursuant to the provisions of this chapter, whether bonds of
said utility district, or mortgage bonds, certificates of indebtedness,
or other obligations, as hereinafter provided for in this chapter, shall
be valid and binding without obtaining the approval of the
commission or the department of local government finance of the
state of Indiana. It shall be unlawful for said board of directors for
utilities to cause to be issued under this chapter any bonds of said
utility district payable by special taxation when the total issue for
that purpose, including the bonds already issued and outstanding and
those proposed to be issued, is in excess of two percent (2%) of the
total adjusted value of taxable property in the district as determined
under IC 36-1-15, and all bonds or obligations issued in violation of
this provision shall be void. Said bonds shall not in any respect be a
corporate obligation or indebtedness of said city, but shall be and
constitute an indebtedness of said utility district as a special taxing
district, and said bonds and interest thereon shall be payable out of
a special tax levy upon all of the property of said utility district, or
from surplus earnings as in this chapter provided; and said bonds
shall recite such terms upon their face, together with the purpose for
which they are issued. No suit to question the validity of said bonds
so issued for said utility district or to prevent their issue and sale
shall be instituted after the date set for the sale of said bonds, and all
said bonds from and after said date shall be incontestable for any
cause whatsoever.
(b) In event any such city shall, pursuant to any contract right so
to do, determine to take over the property and business of any utility
company by the payment to it of the amount necessary to pay off the
stock of such company, the proceeds of any such utility district
bonds issued and sold as herein provided may, so far as is necessary,
be paid over to any such utility company at the time of the
conveyance, transfer, or taking over of its property, for the purpose
of enabling such company to discharge its obligations to its
stockholders in accordance with the provisions of any such contract.
(c) In addition to the authority granted to issue utility district
bonds the board of directors of any such utility district for the
purpose of providing necessary funds with which to pay the cost of
acquiring any utility property, or paying off any existing
indebtedness of or upon any utility property, so acquired, or to pay
the expenses of operation of any such utility property, including the
cost of any betterments or extensions, may make temporary loans in
the form of certificates of indebtedness, which shall be a charge
solely against either the particular utility property or against the
earnings thereof, or both, on behalf of which the same is borrowed;
or said board of directors may authorize the issuance of mortgage
bonds secured by a mortgage upon the property or upon the earnings,
or both, of the particular utility for whose benefit such moneys are
borrowed; and any such certificates of indebtedness and mortgages
shall constitute charges as may be indicated aforesaid by the
directors when authorizing the same and shall contain such terms and
provisions and shall be sold at such price and shall bear such rate of
interest as such board of directors may approve.
(d) Such mortgage indebtedness shall not constitute a general
obligation of such city, or of such utility district, but the holders
thereof shall be entitled to look solely to the mortgaged property and
the revenues derived from the operation thereof for the repayment of
such indebtedness.
(e) All such certificates of indebtedness and mortgage bonds shall
be signed by the mayor of such city and attested by the city
controller, and shall on their face show the purpose for which they
are issued and the character of the obligation created thereby. All
such certificates of indebtedness and mortgage bonds, or either
thereof, shall be exempt from all taxation. As added by Acts 1981, P.L.11, SEC.43. Amended by Acts 1981,
P.L.45, SEC.6; P.L.23-1988, SEC.43; P.L.6-1997, SEC.130;
P.L.90-2002, SEC.310.
IC 8-1-11.1-9 Disposition of bond revenues
Sec. 9. All proceeds from the sale of said bonds under and
pursuant to section 8 of this chapter shall be kept as a separate and
specific fund to pay the cost of the acquisition of any utility property
which said city shall have the right to and shall determine to acquire
or the payment of obligations of any such utility subject to which its
property is purchased, or the cost of making necessary betterments,
improvements, extensions or additions to any utility property owned
by said city, as hereinabove provided, and no part of the same shall
be used for any other purpose whatsoever. Such funds shall be
deposited at interest with the depository or depositories of other
public funds of such city, and all interest collected therefrom shall
belong to such fund. Any surplus of funds remaining out of the
proceeds of said bonds after all of said costs and expenses are fully
paid shall be paid into and become a part of the utility district bond
fund as hereinbefore referred to. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-10 Tax levy to pay for bonds; utility district bond fund
Sec. 10. For the purpose of raising money to pay all bonds issued
as provided in section 8 of this chapter, and the interest thereon, to
the extent that moneys are not available therefor in the judgment of
the board of directors for utilities from the operations of said utility
plant or plants so owned by said city, the board of directors for
utilities, as an official board of said utility district, is hereby
empowered to levy, and shall levy each year, a special tax upon all
the property of said utility district in such manner as to meet and pay
the principal of said bonds as they severally mature, together with all
accruing interest thereon. Said board of directors shall cause said tax
so levied each year to be certified to the city controller of said city
and the auditor of the county in which said utility district is located,
on or before the first day of October of each year. Such tax so levied
and certified shall be estimated and entered upon the tax duplicate by
the auditor, and shall be collected and enforced by the county
treasurer in the same manner as state and county taxes are estimated,
entered, collected and enforced; and as such tax is so collected by the
county treasurer, it shall be accumulated and kept in a separate fund
to be known as the "Utility District Bond Fund," and shall be applied
to the payment of the aforesaid utility district bonds and interest as
they severally mature, and for no other purpose whatsoever:
Provided, That all accumulations of said fund prior to their use for
the payment of such bonds and interest shall be deposited, at interest,
with the depository or depositories of other public funds in such city,
and all interest collected thereon shall belong to such fund. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-11 Surplus earnings; disposition
Sec. 11. Within sixty (60) days after the end of each calendar
year, if there be at any time any bonds outstanding issued on account
of said utility district, payable in whole or in part through a tax levy
against the property in said utility district, said board of directors for
utilities shall cause any surplus earnings arising from the operation
of any such utility property, which are not pledged to secure the
payment of any obligation of, or on account of said utility district,
and which are not, in the opinion of such board of directors,
necessary to provide against possible unfavorable results from
operation, or to provide for contemplated betterments, extensions,
improvements, or additions, to be paid over to the county treasurer
and to be added to and become a part of said utility district bond
fund, and to be used for the same purposes and in the same manner
as funds derived from levy of taxes, as in this chapter hereinbefore
provided. In event there are no such utility district bonds at the time
outstanding, any such surplus operating revenues not needed for the
purposes aforesaid shall be paid over to and become a part of the
general funds of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-12 Expenditures of current income; vouchers
Sec. 12. The current receipts and all other moneys derived from
the operation of any such utility property shall be expended by said
board of directors upon vouchers in a form to be determined by them,
and any such funds shall be deposited in such bank or banks as may
be determined by said board to the credit of said board of directors
for utilities, and any interest earned on any such deposits shall be
added to the principal thereof. No appropriation in any form shall be
necessary for the expenditure of any of such current income or for
the expenditure of the proceeds of any sale of bonds, or of any other
obligations, as hereinbefore authorized, but all funds arising under
the provisions hereof shall be deemed appropriated for the respective
purposes herein named and shall be under the control of the board of
directors for utilities as herein provided, and said board of directors
shall have full, complete and exclusive authority to expend such
funds for the purposes herein provided. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-13 Separate books of account for separate utilities
Sec. 13. In event more than one (1) utility property is operated by
said board of directors, separate books of account and records shall
be kept for each utility, and the funds of each shall be kept
segregated. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-14 Quarterly accounting and report to city controller
Sec. 14. The board of directors for utilities shall make quarterly
accounting and reports to the city controller of such city, of all funds
received and expended by it, and not less than sixty (60) days after
the end of each calendar year the city controller shall make
publication in not less than two (2) newspapers of general circulation
printed and published within said city of the material facts as set
forth in the report of said board of directors for the preceding
calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-15 Board of directors free from control of department of local
government finance
Sec. 15. This chapter being necessary for and intended to secure
efficient and economical management and operation of utility
properties in any consolidated city taking advantage of the provisions
hereof, the said board of directors shall have full power to transact
all the business pertaining to said management and operation of each
and all such utilities, including the issuance of bonds, mortgages, and
other forms of indebtedness, free from all control and supervision of
the department of local government finance of Indiana. This chapter
shall be liberally construed to effectuate the purpose hereof, and if
any one (1) or more sections, clauses, phrases, or parts thereof, of
this chapter shall be held invalid, the remaining sections, clauses,
phrases, or parts thereof, shall not be affected thereby, and the
legislature declares that it would have enacted all other parts of said
chapter even if any or all of the aforesaid portions thereof had not
been included therein. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.90-2002,
SEC.311.
IC 8-1-11.1-16 Budgets; nonapplication of chapters; fixing and review of budgets,
tax rates, and levies; limitations on property tax rates or
appropriations
Sec. 16. The provisions of IC 6-1.1-17 and IC 6-1.1-18 shall not
apply to the board of directors created by this chapter, but such board
of directors shall annually, on or before the thirty-first day of
December, furnish to the city controller an estimate of the moneys to
be expended by them for the succeeding calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-17 Examination and audit of books and accounts
Sec. 17. The books, accounts, records and transactions of said
utility district and of the board of directors thereof shall be subject
to examination, audit and supervision by the state board of accounts
to the same extent as the books, accounts, records and transactions
of other municipal governments or officers or departments of
municipal governments are subject thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-18 Application of chapter to currently held or acquired utilities
Sec. 18. Whenever in any sections of this chapter any provisions
are made applying or relating to any public utility or utility property
owned, held, or acquired by said city, all such provisions shall apply
and relate also to any public utility and utility property which said
city may hold, possess, be entitled to, or in any manner acquire in
trust for the use and benefit of the inhabitants thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-19 "Revenue obligations" defined
Sec. 19. As used in this chapter, "revenue obligations" shall mean
any obligations, including bonds, notes, temporary, interim or
permanent certificates of indebtedness, debentures or other
obligations payable out of the income and revenues derived from
utility property. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-20 Revenue obligations; issuance; authorized purposes
Sec. 20. The board of directors for utilities may issue revenue
obligations for any one or more of the following purposes:
(1) For the purpose of obtaining funds with which to pay for the
acquisition of any utility property which any such city shall
have acquired or shall have the right to and shall determine to
acquire, or which any such city may have taken over as trustee
for the inhabitants thereof, including any money required to be
paid for the purpose of redeeming or extinguishing the capital
stock of any utility whose property has been or may be so taken
over and for the purpose of paying any outstanding obligations
of any utility subject to which the property is or may be held in
trust for the inhabitants thereof, or for the purpose of making
necessary betterments, improvements, extensions or additions
to any utility property owned or held in trust by any such city,
including all costs necessarily incurred in connection with the
acquisition of any such property or taking it over in trust or the
paying off of any such indebtedness or the making of any such
betterments, improvements, extensions, or additions thereto.
(2) For the purpose of reimbursing the department of public
utilities, or its board of directors for utilities for funds
borrowed, expended or advanced for interim financing of the
cost of any utility property, or any betterments, improvements,
extensions or additions thereto.
(3) Subject to covenants and agreements with the holders of
outstanding obligations, for the purpose of funding or refunding
revenue obligations. If the board of directors for utilities
determines that it would be advantageous to the department of
public utilities to exchange funding or refunding obligations for
the revenue obligations being funded or refunded, such
exchange may be made, provided the actual interest cost is not
increased. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-21 Security for revenue obligations; issuance of additional obligations
authorized
Sec. 21. Such revenue obligations shall be secured by a pledge of
the unobligated income and revenues of any one (1) or more of the
utility properties of the department of public utilities. In addition, the
board of directors for utilities may in its discretion secure the
payment of such revenue obligations by a mortgage upon the
property of the particular utility for whose benefit the proceeds of the
revenue obligations are to be used. In authorizing the issuance of
such obligations for any particular property or properties, the board
of directors for utilities of the department of public utilities may limit
the amount of such obligations that may be issued as a first lien and
charge against such property or properties and the income and
revenues therefrom, or such board of directors for utilities may
authorize the issuance from time to time thereafter of additional
obligations secured by the same pledge or lien to provide funds for
the completion of the property, properties, betterments,
improvements, extensions or additions thereto, on account of which
the original obligations were issued, or to provide funds to pay the
cost of additional utility properties, betterments, improvements,
extensions or additions thereto, or for both such purposes. Such
additional obligations shall be issued on such terms and conditions
as such board may determine, and may be secured equally and
ratably, without preference, priority or distinction, with the original
issue of obligations or may be made junior thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-22 Resolution authorizing revenue obligations; trust indenture; terms
of obligations
Sec. 22. (a) Such revenue obligations shall be authorized by
resolution adopted by the board of directors for utilities and the
terms, conditions and form thereof shall be set out in such resolution
or in a form of trust indenture between the corporation and a
designated corporate trustee, or both.
(b) Such revenue obligations shall bear interest, not to exceed a
maximum rate to be determined by the board of directors for utilities,
payable annually or at shorter intervals and shall mature at such time
or times as may be determined in such resolution or indenture. The
obligations may be made redeemable before maturity at the option of
the board of directors for utilities under such terms and conditions as
may be fixed by the resolution or indenture.
(c) The principal and interest of the revenue obligations may be
made payable in any lawful medium. The resolution or indenture
shall determine the form of obligations, including the interest
coupons if any to be attached thereto, and shall fix the denomination
or denominations of the obligations and the place or places of
payment of the principal and interest thereof, which may be at any
bank or trust company within or without the state.
(d) Provision may be made for the registration of any of the
obligations in the name of the owner as to principal alone, or as to
both principal and interest, but fully registered obligations shall be
made convertible to coupon obligations at the option of the registered
owner. The obligations including interest shall be exempt from all
taxation: state, county and municipal.
(e) Such resolution or the indenture may also include provisions
for protecting and enforcing the rights and remedies of the holders of
the obligations being issued and covenants setting forth the duties of
the department of public utilities and its officers in relation to the
acquisition, construction, operation and maintenance of and
insurance to be carried on the property or properties on account of
which the obligations are being issued, and, to the fullest extent
permitted by law, the maintenance of rates and charges to be
collected on account hereof; also, provisions for the custody,
safeguarding and application of all moneys and the rights and
remedies of the trustee and the holders of the obligations being
issued, and for the issuance of additional parity obligations or junior
lien obligations secured by a pledge of the revenues or by a pledge
or mortgage of the revenues and property described in said resolution
or indenture; also, such other terms, conditions, limitations and
covenants as the board of directors for utilities shall deem proper.
Such obligations and any interest coupons appertaining thereto shall
be negotiable instruments within the meaning and for all purposes
under the laws of this state, subject only to the provisions for
registration of the obligations. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-23 Temporary loans authorized
Sec. 23. For the purpose of providing necessary funds with which
to pay the cost of acquiring any utility property, or paying off any
indebtedness of or upon any utility property, so acquired, or to pay
for interim costs of construction prior to long term financing,
including the costs of any betterments, improvements, additions or
extensions, or to pay the expenses of operation of any such utility
property the board of directors for utilities may also make temporary
loans, which shall mature within one (1) year from date of issuance,
in the form of certificates of indebtedness, which shall be a charge
solely against the income and revenue of the utility, or upon the
proceeds of revenue obligations to be issued, or any combination
thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-24 Revenue obligations; approval or validation; facsimile signatures;
sale; actions to contest validity; certificates of indebtedness;
execution
Sec. 24. (a) All such revenue obligations shall be valid without the
necessity of any approval of or ratification by either the commission
or the department of local government finance. The board of
directors for utilities, upon adopting a resolution authorizing such
revenue obligations, shall certify a copy thereof to the city controller
of such city who shall thereupon prepare said revenue obligations,
and the same shall be issued in the name of the city and shall be
executed by the mayor of said city and attested by the city controller
and the clerk of the city-county council. Facsimile signatures may be
used in executing such revenue obligations, provided that one or
more of the signatures on the revenue obligations shall be manually
signed, except that all signatures on interest coupons may be
facsimile signatures.
(b) Certificates of indebtedness issued under section 23 of this
chapter shall be executed solely by the president of the board of
directors without the execution of the mayor. The signature of the
president must be attested by the secretary of the board.
(c) Such revenue obligations shall be sold by the city controller of
said city subject to the requirements of IC 5-1-11; provided, that any
revenue obligations maturing within one (1) year of date of issuance
need not be sold at public sale but may be sold in such manner as the
board of directors for utilities may determine; and, provided further,
that any revenue obligations may be offered for sale and sold to the
United States or to any corporation owned or controlled by the
United States without notice by publication. No suit to question the
validity of any revenue obligations so issued or to prevent their
issuance or sale shall be instituted after the date fixed for the sale of
such revenue obligations and all such revenue obligations from and
after such date shall be incontestable, except for fraud, forgery, or
violation of constitutional provisions. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.44; P.L.90-2002, SEC.312.
IC 8-1-11.1-25 Revenue obligations; eligible investments; deposit of securities
Sec. 25. Any revenue obligations issued pursuant to the provisions
of this chapter shall be eligible investments for the funds of any kind
or character of every financial institution, insurance company or
private trust, and such obligations shall be eligible for deposit by any
financial institution, insurance company or trustee under any law of
this state providing for the deposit of securities or funds. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1
Chapter 11.1. Department of Public Utilities of Consolidated City
IC 8-1-11.1-1 Creation; board of trustees; directors; membership; appointment;
qualifications; tenure; proceedings
Sec. 1. (a) In addition to the other executive departments of a
consolidated city, there is hereby created in any such city a
department of public utilities, which shall have as its head and be
under the general supervision and control of a board of seven (7)
members, to be known as the "Board of Directors for Utilities," to be
appointed annually by the board herein provided for and designated
as the "Board of Trustees for Utilities."
(b) Said board of trustees for utilities shall consist of five (5)
members.
(c) All such trustees and all successors thereof shall hold over
after the expiration of their terms until their respective successors
have been duly appointed and have qualified.
(d) At the expiration of the respective terms of each of the
members of the board of trustees, the said board of trustees shall
nominate the successors thereof to membership on such board, each
of which nominees shall be appointed by the mayor of the
consolidated city within ten (10) days after receiving such
nominations, and such succeeding members shall serve for a term of
four (4) years. In the event any person who has been appointed at any
time as a member of such board of trustees shall fail to qualify within
ten (10) days after the mailing to him of notice of his appointment;
or if any member after qualifying shall die, resign, vacate such office
by becoming a nonresident of such city, or be removed as hereinafter
provided; new members of such board of trustees shall be chosen to
fill such vacancy in the same manner as is provided for the member
as to whom such vacancy occurs, and the member so chosen shall
serve for the remainder of the term for which the member whose
place is so filled was appointed.
(e) No person shall be appointed as trustee who is less than
thirty-five (35) years of age, and who has not been a resident of such
city for at least five (5) years immediately preceding his
appointment. If any such trustee shall cease to be a legal resident of
said city his membership on said board shall thereby terminate and
become vacant.
(f) Each member of such board of trustees for utilities, before
entering upon his duties, shall take and subscribe an oath of office in
the usual form, to be indorsed upon the certificate of his
appointment, which shall be promptly filed with the clerk of the
city-county council.
(g) A majority of all the members of said board of trustees for
utilities shall be necessary to constitute a quorum.
(h) Said board of trustees shall elect one (1) member thereof as
president, one (1) as vice-president, and one (1) as secretary, who
shall serve from the date of their election until one (1) year from the
first day of January next following their election and until their
successors are elected and have qualified.
(i) Said board of trustees shall keep a record of their proceedings.
The expense of the meetings and proceedings of said board and of
keeping a record thereof and the salary of the members thereof shall
be paid upon a written request of the presiding officer and secretary
thereof by the board of directors for utilities out of the funds
belonging to said utility district. Each member of said board of
trustees for utilities shall receive as compensation for his services as
such a salary in the sum of fifty dollars ($50) per year.
(j) The board of trustees for utilities shall meet annually on the
first Monday of December of each year, at the principal office of said
department of public utilities, for the purpose of transacting any
business pertaining to their duties, and for the purposes of electing
officers of such board of trustees and of selecting and appointing
members of the board of directors for utilities, who shall serve for
one (1) year from the first day of January following and until their
successors are appointed and qualified.
(k) All persons so selected and appointed as such directors and all
the successors thereof appointed at any time shall be chosen by a
majority vote of all the members of said board of trustees. Said board
of trustees shall have power to remove summarily and at any time
any director and in such event, or if a vacancy occurs in said board
of directors from any cause, said board of trustees shall appoint a
successor in like manner who shall serve for the balance of the term
for which the member whose place is so filled was appointed.
(l) No person shall be appointed a member of said board of
directors for utilities unless he is a bona fide resident of said city and
has been such for five (5) years immediately preceding such
appointment, and is at least thirty-five (35) years of age. If any such
director shall cease to be a legal resident of said city during the term
for which he was appointed, his membership on such board shall
thereby terminate and become vacant.
(m) Each member of said board of directors for utilities before
entering upon his duties shall take and subscribe an oath, to be
indorsed upon the certificate of his appointment, which shall be
promptly filed with the clerk of the city-county council.
(n) Each of said members of said board of directors, before
entering upon his duties, shall execute a bond payable to the state of
Indiana, with surety to be approved by the mayor of said city, in the
penal sum of fifteen thousand dollars ($15,000), conditioned upon
the faithful performance of the duties of his office and the accounting
for all moneys and property that may come into his hands or under
his control. The cost of all such bonds shall be paid by the
department of public utilities of said city.
(o) Any trustee may be removed from office for neglect of duty,
incompetency, disability to perform his duties, or other good cause,
by an order and judgment of the circuit or superior court of the
county in which such city is located, in the following manner, to wit:
An original complaint may be filed by either the mayor, or by a
majority of the city-county council against any such trustee setting
forth the charges preferred, and the cause shall be placed on the
advanced calendar and be tried as other civil causes are tried, by the
court, without the intervention of a jury. If such charges be sustained,
the court shall declare such office vacant. The judgment of said court
shall be final and no appeal shall lie therefrom by any party.
(p) Said board of trustees shall have power to adopt rules,
regulations and by-laws for their own governance, and may meet
regularly or specially as often as necessary to transact any business
or duties imposed upon them under this chapter or any other statute.
(q) In the event such city shall acquire in any manner herein
provided more than one (1) such public utility and the property
thereof, said board of trustees may add to such board of directors
from time to time one (1) or more additional members, increasing
such board to not exceed a total of eleven (11) members; which
members shall be appointed and shall serve under all the provisions
herein governing the appointment, terms and duties of such board of
directors for utilities. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-2 Board of directors; appointment of officers; compensation;
meetings; employee bonds
Sec. 2. (a) The members of such board of directors for utilities
shall hold a meeting on the second Monday of January of each year
for the purpose of organization and to elect officers for the ensuing
year. They shall choose one (1) of their members president, another
vice-president, another secretary, and another treasurer, who shall
perform the duties usually pertaining to those offices. Such officers
so chosen shall serve from the date of their election until their
successors are duly elected and qualified.
(b) The members of such board of directors for utilities shall each
be paid a salary for their services as such directors at the rate of six
hundred dollars ($600) per annum during the period of service. A
majority of the members of said board of directors shall constitute a
quorum, and the concurrence of a majority of such membership shall
be necessary to any action of such board. Such board of directors
shall hold an annual meeting on the second Monday of January of
each year, at the general offices of such board, and such other regular
meetings at such times as it may determine, and upon such notice as
it may fix, by rule or regulation. It shall be authorized to make such
by-laws and regulations as it may deem necessary for the safe,
economical and efficient management and protection of the
properties entrusted to its care. Such board of directors shall require
any officer or employee having custody of funds to give bond in such
reasonable amount as the board may prescribe, the expense of which
bonds shall be paid by the department of public utilities of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-3 Board of directors; powers and duties
Sec. 3. (a) The board of directors for utilities shall have, within
and outside such city as provided in this chapter, the exclusive
government, management, regulation, and control of all public
utilities consisting of any waterworks, gasworks, electric light works,
heating and power plants of any kind or character, telephone and
other systems of communication, and local transportation systems of
any kind operated upon, above, or below any street or territory within
the city, or outside the city within the limits authorized by law, and
all property held by and relating or belonging thereto. Any of which
public utilities any such city may acquire or construct for the service
of the public as consumers, users, or patrons, and including any
public utility and all property which such city may hold as trustee for
the benefit of the inhabitants of such city. Such board of directors
may furnish and sell service and products of and make all necessary
construction, reconstruction, repairs, renewals, enlargements,
extensions, or additions to any such plant or property of any such
public utility so owned or at any time so held in trust, which in the
judgment of the board of directors is desirable or necessary for the
proper conduct of such business and the proper serving of the
inhabitants of the city and adjacent, contiguous, or suburban
communities or territory within the county wherein such city is
situated and served, or reasonably capable of being served, in any
manner by or with respect to any such utility.
(b) The board of directors may lease any such utility property for
a term not exceeding thirty-five (35) years to any person, partnership,
limited liability company, or corporation, and without the approval
of the commission, such lease to be upon such terms and conditions
as the board may deem to be to the best interest of such city and the
city's inhabitants. No such lease shall be valid or effective until it has
been approved by the board of trustees and duly ratified and
approved by an ordinance of the city. The board and the city-county
legislative body must each vote such approval by a two-thirds (2/3)
vote of their total membership. In any such lease an option may be
given to such lessee to extend the same for a period not to exceed ten
(10) additional years.
(c) In connection with the duties devolving upon such board of
directors in the government, management, regulation, control, and
operation of all such utilities, it may act as follows:
(1) To condemn, appropriate, lease, rent, purchase, and hold
any real estate, rights-of-way, materials, or personal property
within such city or within five (5) miles of the corporate limits
of the city needed for the proper giving of service by any such
utility to the inhabitants of the city and the community
contiguous thereto and served from any such utility plant.
(2) To design, order, contract for, and construct any and all
necessary or desirable extensions of or additions to any utility
plant and property owned or so held in trust by the city, and to
enter into all necessary contracts with reference thereto, and
with reference to the purchase of materials and supplies needed
for the operation of any such plant or plants, in accordance with
such rules as may be adopted by such board of directors, and
without the necessity of advertising for bids, or without such
other restrictions as are imposed by any law of Indiana with
reference to the letting of contracts for work, material, or
supplies by municipal bodies or other governmental agencies.
(3) To sell any products or byproducts, and enter into executory
contracts for the sale, to anyone whatsoever and without any
restriction concerning the taking of bids therefor or otherwise.
(4) To operate any such plant or plants, to receive and collect
all money due on account of such operation or otherwise
relating to such plant or plants or business and in connection
therewith to employ such managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys,
auditors, clerks, foremen, and other employees necessary for the
proper carrying on and operation of any such utility plant or
plants and the business and to fix the compensation of all such
employees. No contract of employment shall be made for a
longer fixed period than four (4) years. However, a contract of
employment may be extended or renewed from time to time
thereafter. The directors may elect from their membership an
executive committee consisting of not more than three (3), who
may be assigned to the supervision of any one (1) or more of
such utilities and who shall, in the intervals between the
meetings of the directors, exercise all the powers and duties of
the directors, all of their acts to be subject, however, to the
approval of the directors, and to fix any such additional
compensation to the members of the executive committee, in
addition to their salaries as directors, as shall be reasonable.
The additional compensation shall be fixed by a resolution of
the directors entered of record at the time of the appointment of
the executive committee. Whenever any such city shall acquire,
hold, own, or so hold in trust for the city's inhabitants more than
one (1) such public utility and the property of the city, such
board of directors shall have power to select additional
executive committees from their membership in the same
manner and with the same power as the executive committee
first selected, which committee may be assigned by such board
to any such utilities deemed necessary. In the selection of
employees, other than managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys, and
auditors, the board of directors shall provide for a merit system
of employment to be determined by competitive examination,
except as to unskilled and common laborers, in which political,
religious, or other personal affiliations may not be considered.
In selecting managers the directors shall consider character,
training, and general expert and executive fitness and
experience for the position in the particular utility to which
such manager is to be assigned, as the necessary requirements
for appointment.
(5) To rent such offices and other real estate and property for
the conduct of the business of such utility or utilities as may be
deemed needful and enter into contracts with reference to the
rental and use of the offices, real estate, and property. No such
contract shall be made for a longer period than ten (10) years.
(6) In the event there be an open mortgage upon any utility
property acquired by any such city, either in absolute ownership
or in trust, by the terms of which mortgage additional bonds
may be taken down from the trustee under such mortgage to
meet in whole or in part the cost of extensions and
improvements to the mortgaged property, the board of directors
may perform all things necessary in order to secure the benefit
of such mortgage provisions and to enable the escrow bonds
held by the trustee under any such mortgage to be taken down
and sold in order to defray the cost of any extensions and
betterments to such property and to sell any such bonds so taken
down for the purpose of assisting in defraying the costs of any
such extensions or betterments to such property.
(7) To take over, adopt, and assume the performance of the
provisions of any lease under which any utility property may be
held at the time of the acquisition of any utility by any such
city, either in absolute ownership or in trust and to take any and
all steps necessary to perform and fulfill the terms of any such
lease, and to obtain and preserve the benefits from the lease. In
the event there be any outstanding open mortgage upon the
property covered by such lease so taken over under the
provisions of which bonds may be withdrawn from the trustee
under such mortgage for the purpose of paying all or part of the
cost of additions to the property covered by such mortgage, to
do all things necessary in order to secure the benefit of such
mortgage provisions and to enable the escrow bonds held by the
trustee under any such mortgage to be taken down and sold in
order to defray the cost of any extensions and betterments to
such leased property and to sell any such bonds so taken down
for the purpose of assisting in defraying the costs of any such
extensions or betterments to such leased property.
(8) To preserve the corporate organization of any company
engaged in the mining of coal, or any other commercial or
manufacturing business, the stock of which may be owned by
any utility whose property and assets may be taken over by any
such city, either in absolute ownership or in trust and in
connection with the taking of the property by the city to cause
the stock of any such company to be issued in the name of the
board of directors for utilities except as to qualifying shares for
directors and to cause such qualifying shares to be issued in the
names of such individuals as the board of directors may name
and to vote any such stock for the election of directors, who
may be members of such board of trustees for utilities.
However, no member of such board of directors shall receive
any compensation, directly or indirectly, as a director, officer,
or employee of any such company, other than the compensation
provided in this chapter as a member of the board of directors
for utilities. Through the control thus given of any company, the
board of directors for utilities shall be authorized to do all
things necessary to cause any such coal mining company or
other company efficiently to carry on its operations and to
conduct its business in the same manner as if its stocks were
owned by private individuals.
(9) To adopt rules for service and rates for service in connection
with the furnishing of any public utility service by the city to
consumers, users, or patrons. However, any such rules and rates
for service shall be in effect only after the rules and rates have
been filed with and approved by the commission and such
approval shall be granted by the commission only after notice
of hearing and hearing as provided by IC 8-1-1 and IC 8-1-2,
and only after determining compliance of the rates of service
with IC 8-1.5-3-8 and IC 8-1.5-3-10 and only after determining
compliance of the rules of service with IC 8-1-1 and IC 8-1-2,
along with the rules and standards of service for municipal
utilities of Indiana approved by the commission.
(10) To take over all contracts and rights of any kind or
character, and to fulfill and perform all obligations relating to
the property and business of any utility company whose
property may be taken over by any such city, either in absolute
ownership or in trust.
(11) To make all rules and bylaws customary in private
corporations for their own conduct of business and necessary
for the proper government and supervision of the utilities under
their control. Any such rules and bylaws shall be subject to the
approval of the board of trustees. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.42; P.L.3-1989, SEC.57; P.L.8-1993, SEC.122.
IC 8-1-11.1-3.1 Board of directors; certain powers and duties pertaining to
municipally owned utilities
Sec. 3.1. In addition to the other powers specified by this chapter
and notwithstanding IC 8-1.5-3-1, the board of directors for utilities
has all rights and powers conferred on a municipally owned utility by
IC 8-1.5-3-4(b), IC 8-1.5-3-6, and IC 8-1.5-3-7. Furthermore, the
board of directors for utilities shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.4.
IC 8-1-11.1-3.5 Retirement, survivor, or other benefits; increase
Sec. 3.5. (a) Every person who is receiving retirement benefits,
survivor benefits or other benefits from any fund or funds established
by, or under the authority of, the board of directors for utilities of the
department of public utilities may have such retirement benefits,
survivor benefits or any other benefits increased by an amount not to
exceed two dollars ($2) per month for each year of active service
prior to retirement. Such increase may be made if the board of
directors for utilities of the department of public utilities shall by
resolution so provide which said board of directors is hereby given
power to do.
(b) Any person who is receiving a retirement, survivor or other
benefit which commenced prior to January 1, 1976, shall receive
such increased retirement benefits, survivor benefits or other benefits
as long as he or she shall live. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-4 Directors or trustees; adverse interest in contracts
Sec. 4. No contract shall be made for the purchase or sale of any
materials or supplies on behalf of said board of directors for utilities
with any trustee or director, and no trustee nor director shall have
any pecuniary interest in any such contract. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-5 Actions to protect rights of cities
Sec. 5. The board of directors for utilities in every such city may,
in the name of the city, bring any such action which it deems proper
in order to protect the property rights of said city with reference to
any such utility property so under the control of such board, or to
secure the more effective carrying out of the purposes of this chapter
with reference to the erection, maintenance and operation of any
such utility property or properties. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-6 Utility districts; creation
Sec. 6. All of the territory included within the corporate limits of
any said city shall become and constitute a utility district for the
purpose of providing for the furnishing of utility service in such lines
of utility operation as may be taken over or owned by said city, and
thereafter said utility district shall be deemed duly created and
established under and pursuant to the provisions of this chapter. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-7 Expenses; procedure for payment
Sec. 7. All preliminary expenses actually incurred by such board
of directors in providing necessary records, the employment of
clerks, engineers, attorneys and other employees, the making of
surveys, and all other expenses of whatsoever nature necessary to be
paid prior to the actual taking over and operation of any utility plant
and the collection of revenues therefrom, shall be met and paid in the
following manner: Said board of directors for utilities shall from time
to time certify such items of expense to the controller of such city,
directing him to pay the several amounts thereof, and thereupon said
controller shall at once draw his warrant or warrants upon the county
treasurer, which warrant or warrants shall be paid out of the general
funds of such city not theretofore appropriated, without a special
appropriation being made therefor by the city-county council; or in
case there are no such general funds of said city not otherwise
appropriated, the city controller shall recommend to the city-county
council the temporary transfer of other funds of such city as is
necessary to meet such items of expense, or the making of a
temporary loan for such purpose, and such council shall thereupon
at once make such transfer of funds or authorize such temporary loan
in the same manner that other temporary loans are made by such city:
Provided, however, That the fund or funds of such city from which
such payments are made shall be fully reimbursed and repaid with
six percent (6%) interest by such board of directors for utilities out
of the first receipts from the operation of any such utility by said
board which are not needed to defray current operating expenses and
the expenses of imperative betterments. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-8 Bonds authorized; purposes; terms; sale procedures; disposition of
proceeds; mortgage bonds; temporary loans; execution
Sec. 8. (a) For the purpose of raising money to pay for the
acquisition of any utility property which said city shall have the right
to and shall determine to acquire, or which any such city may take
over as trustee for the inhabitants thereof, including any money
required to be paid for the purpose of redeeming or extinguishing the
capital stock of any utility whose property may be so taken over and
for the purpose of paying any outstanding obligations of any utility
company subject to which the property of any such utility may be
taken over by any such city, or held by it in trust for the inhabitants
thereof; or for the purpose of making necessary betterments,
improvements, extensions or additions to any utility property owned,
or so held in trust, by said city, the board of directors for utilities
shall cause to be issued in the name of the said city the bonds of said
utility district not to exceed in amount the total cost of any such
utility so purchased, or so held in trust, and for the outstanding
obligations of any utility subject to which the property is to be taken
over and which it is desired to pay off and discharge and/or of any
such additions, betterments, improvements, extensions or additions
to any utility owned, or so held in trust, and including all expenses
necessarily incurred in connection with the acquisition of any such
property, the paying off of any such indebtedness or the making of
any such improvements, extensions or additions thereto. Such bonds
shall be issued in any denominations not more than one thousand
dollars ($1,000) each, and shall be payable at such period not longer
than thirty (30) years after date, and in such series or series as such
board of directors may by resolution determine. Said bonds shall be
negotiable as inland bills of exchange, and shall bear interest at any
rate, payable semiannually. On adopting a resolution ordering said
bonds, said board of directors shall certify a copy of the same to the
city controller of said city, who shall thereupon prepare said bonds
and the same shall be executed by the mayor of said city and attested
by the city controller. Such bonds shall be exempt from taxation for
any and all purposes. All of said bonds so issued by the board of
directors shall be sold by the city controller to the highest bidder
therefor, but in no event for less than par, after giving notice of sale
of such bonds by publication in accordance with IC 5-3-1. Any bonds
issued pursuant to the provisions of this chapter, whether bonds of
said utility district, or mortgage bonds, certificates of indebtedness,
or other obligations, as hereinafter provided for in this chapter, shall
be valid and binding without obtaining the approval of the
commission or the department of local government finance of the
state of Indiana. It shall be unlawful for said board of directors for
utilities to cause to be issued under this chapter any bonds of said
utility district payable by special taxation when the total issue for
that purpose, including the bonds already issued and outstanding and
those proposed to be issued, is in excess of two percent (2%) of the
total adjusted value of taxable property in the district as determined
under IC 36-1-15, and all bonds or obligations issued in violation of
this provision shall be void. Said bonds shall not in any respect be a
corporate obligation or indebtedness of said city, but shall be and
constitute an indebtedness of said utility district as a special taxing
district, and said bonds and interest thereon shall be payable out of
a special tax levy upon all of the property of said utility district, or
from surplus earnings as in this chapter provided; and said bonds
shall recite such terms upon their face, together with the purpose for
which they are issued. No suit to question the validity of said bonds
so issued for said utility district or to prevent their issue and sale
shall be instituted after the date set for the sale of said bonds, and all
said bonds from and after said date shall be incontestable for any
cause whatsoever.
(b) In event any such city shall, pursuant to any contract right so
to do, determine to take over the property and business of any utility
company by the payment to it of the amount necessary to pay off the
stock of such company, the proceeds of any such utility district
bonds issued and sold as herein provided may, so far as is necessary,
be paid over to any such utility company at the time of the
conveyance, transfer, or taking over of its property, for the purpose
of enabling such company to discharge its obligations to its
stockholders in accordance with the provisions of any such contract.
(c) In addition to the authority granted to issue utility district
bonds the board of directors of any such utility district for the
purpose of providing necessary funds with which to pay the cost of
acquiring any utility property, or paying off any existing
indebtedness of or upon any utility property, so acquired, or to pay
the expenses of operation of any such utility property, including the
cost of any betterments or extensions, may make temporary loans in
the form of certificates of indebtedness, which shall be a charge
solely against either the particular utility property or against the
earnings thereof, or both, on behalf of which the same is borrowed;
or said board of directors may authorize the issuance of mortgage
bonds secured by a mortgage upon the property or upon the earnings,
or both, of the particular utility for whose benefit such moneys are
borrowed; and any such certificates of indebtedness and mortgages
shall constitute charges as may be indicated aforesaid by the
directors when authorizing the same and shall contain such terms and
provisions and shall be sold at such price and shall bear such rate of
interest as such board of directors may approve.
(d) Such mortgage indebtedness shall not constitute a general
obligation of such city, or of such utility district, but the holders
thereof shall be entitled to look solely to the mortgaged property and
the revenues derived from the operation thereof for the repayment of
such indebtedness.
(e) All such certificates of indebtedness and mortgage bonds shall
be signed by the mayor of such city and attested by the city
controller, and shall on their face show the purpose for which they
are issued and the character of the obligation created thereby. All
such certificates of indebtedness and mortgage bonds, or either
thereof, shall be exempt from all taxation. As added by Acts 1981, P.L.11, SEC.43. Amended by Acts 1981,
P.L.45, SEC.6; P.L.23-1988, SEC.43; P.L.6-1997, SEC.130;
P.L.90-2002, SEC.310.
IC 8-1-11.1-9 Disposition of bond revenues
Sec. 9. All proceeds from the sale of said bonds under and
pursuant to section 8 of this chapter shall be kept as a separate and
specific fund to pay the cost of the acquisition of any utility property
which said city shall have the right to and shall determine to acquire
or the payment of obligations of any such utility subject to which its
property is purchased, or the cost of making necessary betterments,
improvements, extensions or additions to any utility property owned
by said city, as hereinabove provided, and no part of the same shall
be used for any other purpose whatsoever. Such funds shall be
deposited at interest with the depository or depositories of other
public funds of such city, and all interest collected therefrom shall
belong to such fund. Any surplus of funds remaining out of the
proceeds of said bonds after all of said costs and expenses are fully
paid shall be paid into and become a part of the utility district bond
fund as hereinbefore referred to. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-10 Tax levy to pay for bonds; utility district bond fund
Sec. 10. For the purpose of raising money to pay all bonds issued
as provided in section 8 of this chapter, and the interest thereon, to
the extent that moneys are not available therefor in the judgment of
the board of directors for utilities from the operations of said utility
plant or plants so owned by said city, the board of directors for
utilities, as an official board of said utility district, is hereby
empowered to levy, and shall levy each year, a special tax upon all
the property of said utility district in such manner as to meet and pay
the principal of said bonds as they severally mature, together with all
accruing interest thereon. Said board of directors shall cause said tax
so levied each year to be certified to the city controller of said city
and the auditor of the county in which said utility district is located,
on or before the first day of October of each year. Such tax so levied
and certified shall be estimated and entered upon the tax duplicate by
the auditor, and shall be collected and enforced by the county
treasurer in the same manner as state and county taxes are estimated,
entered, collected and enforced; and as such tax is so collected by the
county treasurer, it shall be accumulated and kept in a separate fund
to be known as the "Utility District Bond Fund," and shall be applied
to the payment of the aforesaid utility district bonds and interest as
they severally mature, and for no other purpose whatsoever:
Provided, That all accumulations of said fund prior to their use for
the payment of such bonds and interest shall be deposited, at interest,
with the depository or depositories of other public funds in such city,
and all interest collected thereon shall belong to such fund. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-11 Surplus earnings; disposition
Sec. 11. Within sixty (60) days after the end of each calendar
year, if there be at any time any bonds outstanding issued on account
of said utility district, payable in whole or in part through a tax levy
against the property in said utility district, said board of directors for
utilities shall cause any surplus earnings arising from the operation
of any such utility property, which are not pledged to secure the
payment of any obligation of, or on account of said utility district,
and which are not, in the opinion of such board of directors,
necessary to provide against possible unfavorable results from
operation, or to provide for contemplated betterments, extensions,
improvements, or additions, to be paid over to the county treasurer
and to be added to and become a part of said utility district bond
fund, and to be used for the same purposes and in the same manner
as funds derived from levy of taxes, as in this chapter hereinbefore
provided. In event there are no such utility district bonds at the time
outstanding, any such surplus operating revenues not needed for the
purposes aforesaid shall be paid over to and become a part of the
general funds of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-12 Expenditures of current income; vouchers
Sec. 12. The current receipts and all other moneys derived from
the operation of any such utility property shall be expended by said
board of directors upon vouchers in a form to be determined by them,
and any such funds shall be deposited in such bank or banks as may
be determined by said board to the credit of said board of directors
for utilities, and any interest earned on any such deposits shall be
added to the principal thereof. No appropriation in any form shall be
necessary for the expenditure of any of such current income or for
the expenditure of the proceeds of any sale of bonds, or of any other
obligations, as hereinbefore authorized, but all funds arising under
the provisions hereof shall be deemed appropriated for the respective
purposes herein named and shall be under the control of the board of
directors for utilities as herein provided, and said board of directors
shall have full, complete and exclusive authority to expend such
funds for the purposes herein provided. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-13 Separate books of account for separate utilities
Sec. 13. In event more than one (1) utility property is operated by
said board of directors, separate books of account and records shall
be kept for each utility, and the funds of each shall be kept
segregated. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-14 Quarterly accounting and report to city controller
Sec. 14. The board of directors for utilities shall make quarterly
accounting and reports to the city controller of such city, of all funds
received and expended by it, and not less than sixty (60) days after
the end of each calendar year the city controller shall make
publication in not less than two (2) newspapers of general circulation
printed and published within said city of the material facts as set
forth in the report of said board of directors for the preceding
calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-15 Board of directors free from control of department of local
government finance
Sec. 15. This chapter being necessary for and intended to secure
efficient and economical management and operation of utility
properties in any consolidated city taking advantage of the provisions
hereof, the said board of directors shall have full power to transact
all the business pertaining to said management and operation of each
and all such utilities, including the issuance of bonds, mortgages, and
other forms of indebtedness, free from all control and supervision of
the department of local government finance of Indiana. This chapter
shall be liberally construed to effectuate the purpose hereof, and if
any one (1) or more sections, clauses, phrases, or parts thereof, of
this chapter shall be held invalid, the remaining sections, clauses,
phrases, or parts thereof, shall not be affected thereby, and the
legislature declares that it would have enacted all other parts of said
chapter even if any or all of the aforesaid portions thereof had not
been included therein. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.90-2002,
SEC.311.
IC 8-1-11.1-16 Budgets; nonapplication of chapters; fixing and review of budgets,
tax rates, and levies; limitations on property tax rates or
appropriations
Sec. 16. The provisions of IC 6-1.1-17 and IC 6-1.1-18 shall not
apply to the board of directors created by this chapter, but such board
of directors shall annually, on or before the thirty-first day of
December, furnish to the city controller an estimate of the moneys to
be expended by them for the succeeding calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-17 Examination and audit of books and accounts
Sec. 17. The books, accounts, records and transactions of said
utility district and of the board of directors thereof shall be subject
to examination, audit and supervision by the state board of accounts
to the same extent as the books, accounts, records and transactions
of other municipal governments or officers or departments of
municipal governments are subject thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-18 Application of chapter to currently held or acquired utilities
Sec. 18. Whenever in any sections of this chapter any provisions
are made applying or relating to any public utility or utility property
owned, held, or acquired by said city, all such provisions shall apply
and relate also to any public utility and utility property which said
city may hold, possess, be entitled to, or in any manner acquire in
trust for the use and benefit of the inhabitants thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-19 "Revenue obligations" defined
Sec. 19. As used in this chapter, "revenue obligations" shall mean
any obligations, including bonds, notes, temporary, interim or
permanent certificates of indebtedness, debentures or other
obligations payable out of the income and revenues derived from
utility property. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-20 Revenue obligations; issuance; authorized purposes
Sec. 20. The board of directors for utilities may issue revenue
obligations for any one or more of the following purposes:
(1) For the purpose of obtaining funds with which to pay for the
acquisition of any utility property which any such city shall
have acquired or shall have the right to and shall determine to
acquire, or which any such city may have taken over as trustee
for the inhabitants thereof, including any money required to be
paid for the purpose of redeeming or extinguishing the capital
stock of any utility whose property has been or may be so taken
over and for the purpose of paying any outstanding obligations
of any utility subject to which the property is or may be held in
trust for the inhabitants thereof, or for the purpose of making
necessary betterments, improvements, extensions or additions
to any utility property owned or held in trust by any such city,
including all costs necessarily incurred in connection with the
acquisition of any such property or taking it over in trust or the
paying off of any such indebtedness or the making of any such
betterments, improvements, extensions, or additions thereto.
(2) For the purpose of reimbursing the department of public
utilities, or its board of directors for utilities for funds
borrowed, expended or advanced for interim financing of the
cost of any utility property, or any betterments, improvements,
extensions or additions thereto.
(3) Subject to covenants and agreements with the holders of
outstanding obligations, for the purpose of funding or refunding
revenue obligations. If the board of directors for utilities
determines that it would be advantageous to the department of
public utilities to exchange funding or refunding obligations for
the revenue obligations being funded or refunded, such
exchange may be made, provided the actual interest cost is not
increased. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-21 Security for revenue obligations; issuance of additional obligations
authorized
Sec. 21. Such revenue obligations shall be secured by a pledge of
the unobligated income and revenues of any one (1) or more of the
utility properties of the department of public utilities. In addition, the
board of directors for utilities may in its discretion secure the
payment of such revenue obligations by a mortgage upon the
property of the particular utility for whose benefit the proceeds of the
revenue obligations are to be used. In authorizing the issuance of
such obligations for any particular property or properties, the board
of directors for utilities of the department of public utilities may limit
the amount of such obligations that may be issued as a first lien and
charge against such property or properties and the income and
revenues therefrom, or such board of directors for utilities may
authorize the issuance from time to time thereafter of additional
obligations secured by the same pledge or lien to provide funds for
the completion of the property, properties, betterments,
improvements, extensions or additions thereto, on account of which
the original obligations were issued, or to provide funds to pay the
cost of additional utility properties, betterments, improvements,
extensions or additions thereto, or for both such purposes. Such
additional obligations shall be issued on such terms and conditions
as such board may determine, and may be secured equally and
ratably, without preference, priority or distinction, with the original
issue of obligations or may be made junior thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-22 Resolution authorizing revenue obligations; trust indenture; terms
of obligations
Sec. 22. (a) Such revenue obligations shall be authorized by
resolution adopted by the board of directors for utilities and the
terms, conditions and form thereof shall be set out in such resolution
or in a form of trust indenture between the corporation and a
designated corporate trustee, or both.
(b) Such revenue obligations shall bear interest, not to exceed a
maximum rate to be determined by the board of directors for utilities,
payable annually or at shorter intervals and shall mature at such time
or times as may be determined in such resolution or indenture. The
obligations may be made redeemable before maturity at the option of
the board of directors for utilities under such terms and conditions as
may be fixed by the resolution or indenture.
(c) The principal and interest of the revenue obligations may be
made payable in any lawful medium. The resolution or indenture
shall determine the form of obligations, including the interest
coupons if any to be attached thereto, and shall fix the denomination
or denominations of the obligations and the place or places of
payment of the principal and interest thereof, which may be at any
bank or trust company within or without the state.
(d) Provision may be made for the registration of any of the
obligations in the name of the owner as to principal alone, or as to
both principal and interest, but fully registered obligations shall be
made convertible to coupon obligations at the option of the registered
owner. The obligations including interest shall be exempt from all
taxation: state, county and municipal.
(e) Such resolution or the indenture may also include provisions
for protecting and enforcing the rights and remedies of the holders of
the obligations being issued and covenants setting forth the duties of
the department of public utilities and its officers in relation to the
acquisition, construction, operation and maintenance of and
insurance to be carried on the property or properties on account of
which the obligations are being issued, and, to the fullest extent
permitted by law, the maintenance of rates and charges to be
collected on account hereof; also, provisions for the custody,
safeguarding and application of all moneys and the rights and
remedies of the trustee and the holders of the obligations being
issued, and for the issuance of additional parity obligations or junior
lien obligations secured by a pledge of the revenues or by a pledge
or mortgage of the revenues and property described in said resolution
or indenture; also, such other terms, conditions, limitations and
covenants as the board of directors for utilities shall deem proper.
Such obligations and any interest coupons appertaining thereto shall
be negotiable instruments within the meaning and for all purposes
under the laws of this state, subject only to the provisions for
registration of the obligations. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-23 Temporary loans authorized
Sec. 23. For the purpose of providing necessary funds with which
to pay the cost of acquiring any utility property, or paying off any
indebtedness of or upon any utility property, so acquired, or to pay
for interim costs of construction prior to long term financing,
including the costs of any betterments, improvements, additions or
extensions, or to pay the expenses of operation of any such utility
property the board of directors for utilities may also make temporary
loans, which shall mature within one (1) year from date of issuance,
in the form of certificates of indebtedness, which shall be a charge
solely against the income and revenue of the utility, or upon the
proceeds of revenue obligations to be issued, or any combination
thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-24 Revenue obligations; approval or validation; facsimile signatures;
sale; actions to contest validity; certificates of indebtedness;
execution
Sec. 24. (a) All such revenue obligations shall be valid without the
necessity of any approval of or ratification by either the commission
or the department of local government finance. The board of
directors for utilities, upon adopting a resolution authorizing such
revenue obligations, shall certify a copy thereof to the city controller
of such city who shall thereupon prepare said revenue obligations,
and the same shall be issued in the name of the city and shall be
executed by the mayor of said city and attested by the city controller
and the clerk of the city-county council. Facsimile signatures may be
used in executing such revenue obligations, provided that one or
more of the signatures on the revenue obligations shall be manually
signed, except that all signatures on interest coupons may be
facsimile signatures.
(b) Certificates of indebtedness issued under section 23 of this
chapter shall be executed solely by the president of the board of
directors without the execution of the mayor. The signature of the
president must be attested by the secretary of the board.
(c) Such revenue obligations shall be sold by the city controller of
said city subject to the requirements of IC 5-1-11; provided, that any
revenue obligations maturing within one (1) year of date of issuance
need not be sold at public sale but may be sold in such manner as the
board of directors for utilities may determine; and, provided further,
that any revenue obligations may be offered for sale and sold to the
United States or to any corporation owned or controlled by the
United States without notice by publication. No suit to question the
validity of any revenue obligations so issued or to prevent their
issuance or sale shall be instituted after the date fixed for the sale of
such revenue obligations and all such revenue obligations from and
after such date shall be incontestable, except for fraud, forgery, or
violation of constitutional provisions. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.44; P.L.90-2002, SEC.312.
IC 8-1-11.1-25 Revenue obligations; eligible investments; deposit of securities
Sec. 25. Any revenue obligations issued pursuant to the provisions
of this chapter shall be eligible investments for the funds of any kind
or character of every financial institution, insurance company or
private trust, and such obligations shall be eligible for deposit by any
financial institution, insurance company or trustee under any law of
this state providing for the deposit of securities or funds. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1
Chapter 11.1. Department of Public Utilities of Consolidated City
IC 8-1-11.1-1 Creation; board of trustees; directors; membership; appointment;
qualifications; tenure; proceedings
Sec. 1. (a) In addition to the other executive departments of a
consolidated city, there is hereby created in any such city a
department of public utilities, which shall have as its head and be
under the general supervision and control of a board of seven (7)
members, to be known as the "Board of Directors for Utilities," to be
appointed annually by the board herein provided for and designated
as the "Board of Trustees for Utilities."
(b) Said board of trustees for utilities shall consist of five (5)
members.
(c) All such trustees and all successors thereof shall hold over
after the expiration of their terms until their respective successors
have been duly appointed and have qualified.
(d) At the expiration of the respective terms of each of the
members of the board of trustees, the said board of trustees shall
nominate the successors thereof to membership on such board, each
of which nominees shall be appointed by the mayor of the
consolidated city within ten (10) days after receiving such
nominations, and such succeeding members shall serve for a term of
four (4) years. In the event any person who has been appointed at any
time as a member of such board of trustees shall fail to qualify within
ten (10) days after the mailing to him of notice of his appointment;
or if any member after qualifying shall die, resign, vacate such office
by becoming a nonresident of such city, or be removed as hereinafter
provided; new members of such board of trustees shall be chosen to
fill such vacancy in the same manner as is provided for the member
as to whom such vacancy occurs, and the member so chosen shall
serve for the remainder of the term for which the member whose
place is so filled was appointed.
(e) No person shall be appointed as trustee who is less than
thirty-five (35) years of age, and who has not been a resident of such
city for at least five (5) years immediately preceding his
appointment. If any such trustee shall cease to be a legal resident of
said city his membership on said board shall thereby terminate and
become vacant.
(f) Each member of such board of trustees for utilities, before
entering upon his duties, shall take and subscribe an oath of office in
the usual form, to be indorsed upon the certificate of his
appointment, which shall be promptly filed with the clerk of the
city-county council.
(g) A majority of all the members of said board of trustees for
utilities shall be necessary to constitute a quorum.
(h) Said board of trustees shall elect one (1) member thereof as
president, one (1) as vice-president, and one (1) as secretary, who
shall serve from the date of their election until one (1) year from the
first day of January next following their election and until their
successors are elected and have qualified.
(i) Said board of trustees shall keep a record of their proceedings.
The expense of the meetings and proceedings of said board and of
keeping a record thereof and the salary of the members thereof shall
be paid upon a written request of the presiding officer and secretary
thereof by the board of directors for utilities out of the funds
belonging to said utility district. Each member of said board of
trustees for utilities shall receive as compensation for his services as
such a salary in the sum of fifty dollars ($50) per year.
(j) The board of trustees for utilities shall meet annually on the
first Monday of December of each year, at the principal office of said
department of public utilities, for the purpose of transacting any
business pertaining to their duties, and for the purposes of electing
officers of such board of trustees and of selecting and appointing
members of the board of directors for utilities, who shall serve for
one (1) year from the first day of January following and until their
successors are appointed and qualified.
(k) All persons so selected and appointed as such directors and all
the successors thereof appointed at any time shall be chosen by a
majority vote of all the members of said board of trustees. Said board
of trustees shall have power to remove summarily and at any time
any director and in such event, or if a vacancy occurs in said board
of directors from any cause, said board of trustees shall appoint a
successor in like manner who shall serve for the balance of the term
for which the member whose place is so filled was appointed.
(l) No person shall be appointed a member of said board of
directors for utilities unless he is a bona fide resident of said city and
has been such for five (5) years immediately preceding such
appointment, and is at least thirty-five (35) years of age. If any such
director shall cease to be a legal resident of said city during the term
for which he was appointed, his membership on such board shall
thereby terminate and become vacant.
(m) Each member of said board of directors for utilities before
entering upon his duties shall take and subscribe an oath, to be
indorsed upon the certificate of his appointment, which shall be
promptly filed with the clerk of the city-county council.
(n) Each of said members of said board of directors, before
entering upon his duties, shall execute a bond payable to the state of
Indiana, with surety to be approved by the mayor of said city, in the
penal sum of fifteen thousand dollars ($15,000), conditioned upon
the faithful performance of the duties of his office and the accounting
for all moneys and property that may come into his hands or under
his control. The cost of all such bonds shall be paid by the
department of public utilities of said city.
(o) Any trustee may be removed from office for neglect of duty,
incompetency, disability to perform his duties, or other good cause,
by an order and judgment of the circuit or superior court of the
county in which such city is located, in the following manner, to wit:
An original complaint may be filed by either the mayor, or by a
majority of the city-county council against any such trustee setting
forth the charges preferred, and the cause shall be placed on the
advanced calendar and be tried as other civil causes are tried, by the
court, without the intervention of a jury. If such charges be sustained,
the court shall declare such office vacant. The judgment of said court
shall be final and no appeal shall lie therefrom by any party.
(p) Said board of trustees shall have power to adopt rules,
regulations and by-laws for their own governance, and may meet
regularly or specially as often as necessary to transact any business
or duties imposed upon them under this chapter or any other statute.
(q) In the event such city shall acquire in any manner herein
provided more than one (1) such public utility and the property
thereof, said board of trustees may add to such board of directors
from time to time one (1) or more additional members, increasing
such board to not exceed a total of eleven (11) members; which
members shall be appointed and shall serve under all the provisions
herein governing the appointment, terms and duties of such board of
directors for utilities. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-2 Board of directors; appointment of officers; compensation;
meetings; employee bonds
Sec. 2. (a) The members of such board of directors for utilities
shall hold a meeting on the second Monday of January of each year
for the purpose of organization and to elect officers for the ensuing
year. They shall choose one (1) of their members president, another
vice-president, another secretary, and another treasurer, who shall
perform the duties usually pertaining to those offices. Such officers
so chosen shall serve from the date of their election until their
successors are duly elected and qualified.
(b) The members of such board of directors for utilities shall each
be paid a salary for their services as such directors at the rate of six
hundred dollars ($600) per annum during the period of service. A
majority of the members of said board of directors shall constitute a
quorum, and the concurrence of a majority of such membership shall
be necessary to any action of such board. Such board of directors
shall hold an annual meeting on the second Monday of January of
each year, at the general offices of such board, and such other regular
meetings at such times as it may determine, and upon such notice as
it may fix, by rule or regulation. It shall be authorized to make such
by-laws and regulations as it may deem necessary for the safe,
economical and efficient management and protection of the
properties entrusted to its care. Such board of directors shall require
any officer or employee having custody of funds to give bond in such
reasonable amount as the board may prescribe, the expense of which
bonds shall be paid by the department of public utilities of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-3 Board of directors; powers and duties
Sec. 3. (a) The board of directors for utilities shall have, within
and outside such city as provided in this chapter, the exclusive
government, management, regulation, and control of all public
utilities consisting of any waterworks, gasworks, electric light works,
heating and power plants of any kind or character, telephone and
other systems of communication, and local transportation systems of
any kind operated upon, above, or below any street or territory within
the city, or outside the city within the limits authorized by law, and
all property held by and relating or belonging thereto. Any of which
public utilities any such city may acquire or construct for the service
of the public as consumers, users, or patrons, and including any
public utility and all property which such city may hold as trustee for
the benefit of the inhabitants of such city. Such board of directors
may furnish and sell service and products of and make all necessary
construction, reconstruction, repairs, renewals, enlargements,
extensions, or additions to any such plant or property of any such
public utility so owned or at any time so held in trust, which in the
judgment of the board of directors is desirable or necessary for the
proper conduct of such business and the proper serving of the
inhabitants of the city and adjacent, contiguous, or suburban
communities or territory within the county wherein such city is
situated and served, or reasonably capable of being served, in any
manner by or with respect to any such utility.
(b) The board of directors may lease any such utility property for
a term not exceeding thirty-five (35) years to any person, partnership,
limited liability company, or corporation, and without the approval
of the commission, such lease to be upon such terms and conditions
as the board may deem to be to the best interest of such city and the
city's inhabitants. No such lease shall be valid or effective until it has
been approved by the board of trustees and duly ratified and
approved by an ordinance of the city. The board and the city-county
legislative body must each vote such approval by a two-thirds (2/3)
vote of their total membership. In any such lease an option may be
given to such lessee to extend the same for a period not to exceed ten
(10) additional years.
(c) In connection with the duties devolving upon such board of
directors in the government, management, regulation, control, and
operation of all such utilities, it may act as follows:
(1) To condemn, appropriate, lease, rent, purchase, and hold
any real estate, rights-of-way, materials, or personal property
within such city or within five (5) miles of the corporate limits
of the city needed for the proper giving of service by any such
utility to the inhabitants of the city and the community
contiguous thereto and served from any such utility plant.
(2) To design, order, contract for, and construct any and all
necessary or desirable extensions of or additions to any utility
plant and property owned or so held in trust by the city, and to
enter into all necessary contracts with reference thereto, and
with reference to the purchase of materials and supplies needed
for the operation of any such plant or plants, in accordance with
such rules as may be adopted by such board of directors, and
without the necessity of advertising for bids, or without such
other restrictions as are imposed by any law of Indiana with
reference to the letting of contracts for work, material, or
supplies by municipal bodies or other governmental agencies.
(3) To sell any products or byproducts, and enter into executory
contracts for the sale, to anyone whatsoever and without any
restriction concerning the taking of bids therefor or otherwise.
(4) To operate any such plant or plants, to receive and collect
all money due on account of such operation or otherwise
relating to such plant or plants or business and in connection
therewith to employ such managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys,
auditors, clerks, foremen, and other employees necessary for the
proper carrying on and operation of any such utility plant or
plants and the business and to fix the compensation of all such
employees. No contract of employment shall be made for a
longer fixed period than four (4) years. However, a contract of
employment may be extended or renewed from time to time
thereafter. The directors may elect from their membership an
executive committee consisting of not more than three (3), who
may be assigned to the supervision of any one (1) or more of
such utilities and who shall, in the intervals between the
meetings of the directors, exercise all the powers and duties of
the directors, all of their acts to be subject, however, to the
approval of the directors, and to fix any such additional
compensation to the members of the executive committee, in
addition to their salaries as directors, as shall be reasonable.
The additional compensation shall be fixed by a resolution of
the directors entered of record at the time of the appointment of
the executive committee. Whenever any such city shall acquire,
hold, own, or so hold in trust for the city's inhabitants more than
one (1) such public utility and the property of the city, such
board of directors shall have power to select additional
executive committees from their membership in the same
manner and with the same power as the executive committee
first selected, which committee may be assigned by such board
to any such utilities deemed necessary. In the selection of
employees, other than managers, superintendents, assistant
managers, assistant superintendents, engineers, attorneys, and
auditors, the board of directors shall provide for a merit system
of employment to be determined by competitive examination,
except as to unskilled and common laborers, in which political,
religious, or other personal affiliations may not be considered.
In selecting managers the directors shall consider character,
training, and general expert and executive fitness and
experience for the position in the particular utility to which
such manager is to be assigned, as the necessary requirements
for appointment.
(5) To rent such offices and other real estate and property for
the conduct of the business of such utility or utilities as may be
deemed needful and enter into contracts with reference to the
rental and use of the offices, real estate, and property. No such
contract shall be made for a longer period than ten (10) years.
(6) In the event there be an open mortgage upon any utility
property acquired by any such city, either in absolute ownership
or in trust, by the terms of which mortgage additional bonds
may be taken down from the trustee under such mortgage to
meet in whole or in part the cost of extensions and
improvements to the mortgaged property, the board of directors
may perform all things necessary in order to secure the benefit
of such mortgage provisions and to enable the escrow bonds
held by the trustee under any such mortgage to be taken down
and sold in order to defray the cost of any extensions and
betterments to such property and to sell any such bonds so taken
down for the purpose of assisting in defraying the costs of any
such extensions or betterments to such property.
(7) To take over, adopt, and assume the performance of the
provisions of any lease under which any utility property may be
held at the time of the acquisition of any utility by any such
city, either in absolute ownership or in trust and to take any and
all steps necessary to perform and fulfill the terms of any such
lease, and to obtain and preserve the benefits from the lease. In
the event there be any outstanding open mortgage upon the
property covered by such lease so taken over under the
provisions of which bonds may be withdrawn from the trustee
under such mortgage for the purpose of paying all or part of the
cost of additions to the property covered by such mortgage, to
do all things necessary in order to secure the benefit of such
mortgage provisions and to enable the escrow bonds held by the
trustee under any such mortgage to be taken down and sold in
order to defray the cost of any extensions and betterments to
such leased property and to sell any such bonds so taken down
for the purpose of assisting in defraying the costs of any such
extensions or betterments to such leased property.
(8) To preserve the corporate organization of any company
engaged in the mining of coal, or any other commercial or
manufacturing business, the stock of which may be owned by
any utility whose property and assets may be taken over by any
such city, either in absolute ownership or in trust and in
connection with the taking of the property by the city to cause
the stock of any such company to be issued in the name of the
board of directors for utilities except as to qualifying shares for
directors and to cause such qualifying shares to be issued in the
names of such individuals as the board of directors may name
and to vote any such stock for the election of directors, who
may be members of such board of trustees for utilities.
However, no member of such board of directors shall receive
any compensation, directly or indirectly, as a director, officer,
or employee of any such company, other than the compensation
provided in this chapter as a member of the board of directors
for utilities. Through the control thus given of any company, the
board of directors for utilities shall be authorized to do all
things necessary to cause any such coal mining company or
other company efficiently to carry on its operations and to
conduct its business in the same manner as if its stocks were
owned by private individuals.
(9) To adopt rules for service and rates for service in connection
with the furnishing of any public utility service by the city to
consumers, users, or patrons. However, any such rules and rates
for service shall be in effect only after the rules and rates have
been filed with and approved by the commission and such
approval shall be granted by the commission only after notice
of hearing and hearing as provided by IC 8-1-1 and IC 8-1-2,
and only after determining compliance of the rates of service
with IC 8-1.5-3-8 and IC 8-1.5-3-10 and only after determining
compliance of the rules of service with IC 8-1-1 and IC 8-1-2,
along with the rules and standards of service for municipal
utilities of Indiana approved by the commission.
(10) To take over all contracts and rights of any kind or
character, and to fulfill and perform all obligations relating to
the property and business of any utility company whose
property may be taken over by any such city, either in absolute
ownership or in trust.
(11) To make all rules and bylaws customary in private
corporations for their own conduct of business and necessary
for the proper government and supervision of the utilities under
their control. Any such rules and bylaws shall be subject to the
approval of the board of trustees. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.42; P.L.3-1989, SEC.57; P.L.8-1993, SEC.122.
IC 8-1-11.1-3.1 Board of directors; certain powers and duties pertaining to
municipally owned utilities
Sec. 3.1. In addition to the other powers specified by this chapter
and notwithstanding IC 8-1.5-3-1, the board of directors for utilities
has all rights and powers conferred on a municipally owned utility by
IC 8-1.5-3-4(b), IC 8-1.5-3-6, and IC 8-1.5-3-7. Furthermore, the
board of directors for utilities shall operate as both the board and the
municipal legislative body for the purposes of IC 8-1.5-3-8. As added by Acts 1982, P.L.74, SEC.4.
IC 8-1-11.1-3.5 Retirement, survivor, or other benefits; increase
Sec. 3.5. (a) Every person who is receiving retirement benefits,
survivor benefits or other benefits from any fund or funds established
by, or under the authority of, the board of directors for utilities of the
department of public utilities may have such retirement benefits,
survivor benefits or any other benefits increased by an amount not to
exceed two dollars ($2) per month for each year of active service
prior to retirement. Such increase may be made if the board of
directors for utilities of the department of public utilities shall by
resolution so provide which said board of directors is hereby given
power to do.
(b) Any person who is receiving a retirement, survivor or other
benefit which commenced prior to January 1, 1976, shall receive
such increased retirement benefits, survivor benefits or other benefits
as long as he or she shall live. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-4 Directors or trustees; adverse interest in contracts
Sec. 4. No contract shall be made for the purchase or sale of any
materials or supplies on behalf of said board of directors for utilities
with any trustee or director, and no trustee nor director shall have
any pecuniary interest in any such contract. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-5 Actions to protect rights of cities
Sec. 5. The board of directors for utilities in every such city may,
in the name of the city, bring any such action which it deems proper
in order to protect the property rights of said city with reference to
any such utility property so under the control of such board, or to
secure the more effective carrying out of the purposes of this chapter
with reference to the erection, maintenance and operation of any
such utility property or properties. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-6 Utility districts; creation
Sec. 6. All of the territory included within the corporate limits of
any said city shall become and constitute a utility district for the
purpose of providing for the furnishing of utility service in such lines
of utility operation as may be taken over or owned by said city, and
thereafter said utility district shall be deemed duly created and
established under and pursuant to the provisions of this chapter. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-7 Expenses; procedure for payment
Sec. 7. All preliminary expenses actually incurred by such board
of directors in providing necessary records, the employment of
clerks, engineers, attorneys and other employees, the making of
surveys, and all other expenses of whatsoever nature necessary to be
paid prior to the actual taking over and operation of any utility plant
and the collection of revenues therefrom, shall be met and paid in the
following manner: Said board of directors for utilities shall from time
to time certify such items of expense to the controller of such city,
directing him to pay the several amounts thereof, and thereupon said
controller shall at once draw his warrant or warrants upon the county
treasurer, which warrant or warrants shall be paid out of the general
funds of such city not theretofore appropriated, without a special
appropriation being made therefor by the city-county council; or in
case there are no such general funds of said city not otherwise
appropriated, the city controller shall recommend to the city-county
council the temporary transfer of other funds of such city as is
necessary to meet such items of expense, or the making of a
temporary loan for such purpose, and such council shall thereupon
at once make such transfer of funds or authorize such temporary loan
in the same manner that other temporary loans are made by such city:
Provided, however, That the fund or funds of such city from which
such payments are made shall be fully reimbursed and repaid with
six percent (6%) interest by such board of directors for utilities out
of the first receipts from the operation of any such utility by said
board which are not needed to defray current operating expenses and
the expenses of imperative betterments. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-8 Bonds authorized; purposes; terms; sale procedures; disposition of
proceeds; mortgage bonds; temporary loans; execution
Sec. 8. (a) For the purpose of raising money to pay for the
acquisition of any utility property which said city shall have the right
to and shall determine to acquire, or which any such city may take
over as trustee for the inhabitants thereof, including any money
required to be paid for the purpose of redeeming or extinguishing the
capital stock of any utility whose property may be so taken over and
for the purpose of paying any outstanding obligations of any utility
company subject to which the property of any such utility may be
taken over by any such city, or held by it in trust for the inhabitants
thereof; or for the purpose of making necessary betterments,
improvements, extensions or additions to any utility property owned,
or so held in trust, by said city, the board of directors for utilities
shall cause to be issued in the name of the said city the bonds of said
utility district not to exceed in amount the total cost of any such
utility so purchased, or so held in trust, and for the outstanding
obligations of any utility subject to which the property is to be taken
over and which it is desired to pay off and discharge and/or of any
such additions, betterments, improvements, extensions or additions
to any utility owned, or so held in trust, and including all expenses
necessarily incurred in connection with the acquisition of any such
property, the paying off of any such indebtedness or the making of
any such improvements, extensions or additions thereto. Such bonds
shall be issued in any denominations not more than one thousand
dollars ($1,000) each, and shall be payable at such period not longer
than thirty (30) years after date, and in such series or series as such
board of directors may by resolution determine. Said bonds shall be
negotiable as inland bills of exchange, and shall bear interest at any
rate, payable semiannually. On adopting a resolution ordering said
bonds, said board of directors shall certify a copy of the same to the
city controller of said city, who shall thereupon prepare said bonds
and the same shall be executed by the mayor of said city and attested
by the city controller. Such bonds shall be exempt from taxation for
any and all purposes. All of said bonds so issued by the board of
directors shall be sold by the city controller to the highest bidder
therefor, but in no event for less than par, after giving notice of sale
of such bonds by publication in accordance with IC 5-3-1. Any bonds
issued pursuant to the provisions of this chapter, whether bonds of
said utility district, or mortgage bonds, certificates of indebtedness,
or other obligations, as hereinafter provided for in this chapter, shall
be valid and binding without obtaining the approval of the
commission or the department of local government finance of the
state of Indiana. It shall be unlawful for said board of directors for
utilities to cause to be issued under this chapter any bonds of said
utility district payable by special taxation when the total issue for
that purpose, including the bonds already issued and outstanding and
those proposed to be issued, is in excess of two percent (2%) of the
total adjusted value of taxable property in the district as determined
under IC 36-1-15, and all bonds or obligations issued in violation of
this provision shall be void. Said bonds shall not in any respect be a
corporate obligation or indebtedness of said city, but shall be and
constitute an indebtedness of said utility district as a special taxing
district, and said bonds and interest thereon shall be payable out of
a special tax levy upon all of the property of said utility district, or
from surplus earnings as in this chapter provided; and said bonds
shall recite such terms upon their face, together with the purpose for
which they are issued. No suit to question the validity of said bonds
so issued for said utility district or to prevent their issue and sale
shall be instituted after the date set for the sale of said bonds, and all
said bonds from and after said date shall be incontestable for any
cause whatsoever.
(b) In event any such city shall, pursuant to any contract right so
to do, determine to take over the property and business of any utility
company by the payment to it of the amount necessary to pay off the
stock of such company, the proceeds of any such utility district
bonds issued and sold as herein provided may, so far as is necessary,
be paid over to any such utility company at the time of the
conveyance, transfer, or taking over of its property, for the purpose
of enabling such company to discharge its obligations to its
stockholders in accordance with the provisions of any such contract.
(c) In addition to the authority granted to issue utility district
bonds the board of directors of any such utility district for the
purpose of providing necessary funds with which to pay the cost of
acquiring any utility property, or paying off any existing
indebtedness of or upon any utility property, so acquired, or to pay
the expenses of operation of any such utility property, including the
cost of any betterments or extensions, may make temporary loans in
the form of certificates of indebtedness, which shall be a charge
solely against either the particular utility property or against the
earnings thereof, or both, on behalf of which the same is borrowed;
or said board of directors may authorize the issuance of mortgage
bonds secured by a mortgage upon the property or upon the earnings,
or both, of the particular utility for whose benefit such moneys are
borrowed; and any such certificates of indebtedness and mortgages
shall constitute charges as may be indicated aforesaid by the
directors when authorizing the same and shall contain such terms and
provisions and shall be sold at such price and shall bear such rate of
interest as such board of directors may approve.
(d) Such mortgage indebtedness shall not constitute a general
obligation of such city, or of such utility district, but the holders
thereof shall be entitled to look solely to the mortgaged property and
the revenues derived from the operation thereof for the repayment of
such indebtedness.
(e) All such certificates of indebtedness and mortgage bonds shall
be signed by the mayor of such city and attested by the city
controller, and shall on their face show the purpose for which they
are issued and the character of the obligation created thereby. All
such certificates of indebtedness and mortgage bonds, or either
thereof, shall be exempt from all taxation. As added by Acts 1981, P.L.11, SEC.43. Amended by Acts 1981,
P.L.45, SEC.6; P.L.23-1988, SEC.43; P.L.6-1997, SEC.130;
P.L.90-2002, SEC.310.
IC 8-1-11.1-9 Disposition of bond revenues
Sec. 9. All proceeds from the sale of said bonds under and
pursuant to section 8 of this chapter shall be kept as a separate and
specific fund to pay the cost of the acquisition of any utility property
which said city shall have the right to and shall determine to acquire
or the payment of obligations of any such utility subject to which its
property is purchased, or the cost of making necessary betterments,
improvements, extensions or additions to any utility property owned
by said city, as hereinabove provided, and no part of the same shall
be used for any other purpose whatsoever. Such funds shall be
deposited at interest with the depository or depositories of other
public funds of such city, and all interest collected therefrom shall
belong to such fund. Any surplus of funds remaining out of the
proceeds of said bonds after all of said costs and expenses are fully
paid shall be paid into and become a part of the utility district bond
fund as hereinbefore referred to. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-10 Tax levy to pay for bonds; utility district bond fund
Sec. 10. For the purpose of raising money to pay all bonds issued
as provided in section 8 of this chapter, and the interest thereon, to
the extent that moneys are not available therefor in the judgment of
the board of directors for utilities from the operations of said utility
plant or plants so owned by said city, the board of directors for
utilities, as an official board of said utility district, is hereby
empowered to levy, and shall levy each year, a special tax upon all
the property of said utility district in such manner as to meet and pay
the principal of said bonds as they severally mature, together with all
accruing interest thereon. Said board of directors shall cause said tax
so levied each year to be certified to the city controller of said city
and the auditor of the county in which said utility district is located,
on or before the first day of October of each year. Such tax so levied
and certified shall be estimated and entered upon the tax duplicate by
the auditor, and shall be collected and enforced by the county
treasurer in the same manner as state and county taxes are estimated,
entered, collected and enforced; and as such tax is so collected by the
county treasurer, it shall be accumulated and kept in a separate fund
to be known as the "Utility District Bond Fund," and shall be applied
to the payment of the aforesaid utility district bonds and interest as
they severally mature, and for no other purpose whatsoever:
Provided, That all accumulations of said fund prior to their use for
the payment of such bonds and interest shall be deposited, at interest,
with the depository or depositories of other public funds in such city,
and all interest collected thereon shall belong to such fund. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-11 Surplus earnings; disposition
Sec. 11. Within sixty (60) days after the end of each calendar
year, if there be at any time any bonds outstanding issued on account
of said utility district, payable in whole or in part through a tax levy
against the property in said utility district, said board of directors for
utilities shall cause any surplus earnings arising from the operation
of any such utility property, which are not pledged to secure the
payment of any obligation of, or on account of said utility district,
and which are not, in the opinion of such board of directors,
necessary to provide against possible unfavorable results from
operation, or to provide for contemplated betterments, extensions,
improvements, or additions, to be paid over to the county treasurer
and to be added to and become a part of said utility district bond
fund, and to be used for the same purposes and in the same manner
as funds derived from levy of taxes, as in this chapter hereinbefore
provided. In event there are no such utility district bonds at the time
outstanding, any such surplus operating revenues not needed for the
purposes aforesaid shall be paid over to and become a part of the
general funds of such city. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-12 Expenditures of current income; vouchers
Sec. 12. The current receipts and all other moneys derived from
the operation of any such utility property shall be expended by said
board of directors upon vouchers in a form to be determined by them,
and any such funds shall be deposited in such bank or banks as may
be determined by said board to the credit of said board of directors
for utilities, and any interest earned on any such deposits shall be
added to the principal thereof. No appropriation in any form shall be
necessary for the expenditure of any of such current income or for
the expenditure of the proceeds of any sale of bonds, or of any other
obligations, as hereinbefore authorized, but all funds arising under
the provisions hereof shall be deemed appropriated for the respective
purposes herein named and shall be under the control of the board of
directors for utilities as herein provided, and said board of directors
shall have full, complete and exclusive authority to expend such
funds for the purposes herein provided. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-13 Separate books of account for separate utilities
Sec. 13. In event more than one (1) utility property is operated by
said board of directors, separate books of account and records shall
be kept for each utility, and the funds of each shall be kept
segregated. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-14 Quarterly accounting and report to city controller
Sec. 14. The board of directors for utilities shall make quarterly
accounting and reports to the city controller of such city, of all funds
received and expended by it, and not less than sixty (60) days after
the end of each calendar year the city controller shall make
publication in not less than two (2) newspapers of general circulation
printed and published within said city of the material facts as set
forth in the report of said board of directors for the preceding
calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-15 Board of directors free from control of department of local
government finance
Sec. 15. This chapter being necessary for and intended to secure
efficient and economical management and operation of utility
properties in any consolidated city taking advantage of the provisions
hereof, the said board of directors shall have full power to transact
all the business pertaining to said management and operation of each
and all such utilities, including the issuance of bonds, mortgages, and
other forms of indebtedness, free from all control and supervision of
the department of local government finance of Indiana. This chapter
shall be liberally construed to effectuate the purpose hereof, and if
any one (1) or more sections, clauses, phrases, or parts thereof, of
this chapter shall be held invalid, the remaining sections, clauses,
phrases, or parts thereof, shall not be affected thereby, and the
legislature declares that it would have enacted all other parts of said
chapter even if any or all of the aforesaid portions thereof had not
been included therein. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.90-2002,
SEC.311.
IC 8-1-11.1-16 Budgets; nonapplication of chapters; fixing and review of budgets,
tax rates, and levies; limitations on property tax rates or
appropriations
Sec. 16. The provisions of IC 6-1.1-17 and IC 6-1.1-18 shall not
apply to the board of directors created by this chapter, but such board
of directors shall annually, on or before the thirty-first day of
December, furnish to the city controller an estimate of the moneys to
be expended by them for the succeeding calendar year. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-17 Examination and audit of books and accounts
Sec. 17. The books, accounts, records and transactions of said
utility district and of the board of directors thereof shall be subject
to examination, audit and supervision by the state board of accounts
to the same extent as the books, accounts, records and transactions
of other municipal governments or officers or departments of
municipal governments are subject thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-18 Application of chapter to currently held or acquired utilities
Sec. 18. Whenever in any sections of this chapter any provisions
are made applying or relating to any public utility or utility property
owned, held, or acquired by said city, all such provisions shall apply
and relate also to any public utility and utility property which said
city may hold, possess, be entitled to, or in any manner acquire in
trust for the use and benefit of the inhabitants thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-19 "Revenue obligations" defined
Sec. 19. As used in this chapter, "revenue obligations" shall mean
any obligations, including bonds, notes, temporary, interim or
permanent certificates of indebtedness, debentures or other
obligations payable out of the income and revenues derived from
utility property. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-20 Revenue obligations; issuance; authorized purposes
Sec. 20. The board of directors for utilities may issue revenue
obligations for any one or more of the following purposes:
(1) For the purpose of obtaining funds with which to pay for the
acquisition of any utility property which any such city shall
have acquired or shall have the right to and shall determine to
acquire, or which any such city may have taken over as trustee
for the inhabitants thereof, including any money required to be
paid for the purpose of redeeming or extinguishing the capital
stock of any utility whose property has been or may be so taken
over and for the purpose of paying any outstanding obligations
of any utility subject to which the property is or may be held in
trust for the inhabitants thereof, or for the purpose of making
necessary betterments, improvements, extensions or additions
to any utility property owned or held in trust by any such city,
including all costs necessarily incurred in connection with the
acquisition of any such property or taking it over in trust or the
paying off of any such indebtedness or the making of any such
betterments, improvements, extensions, or additions thereto.
(2) For the purpose of reimbursing the department of public
utilities, or its board of directors for utilities for funds
borrowed, expended or advanced for interim financing of the
cost of any utility property, or any betterments, improvements,
extensions or additions thereto.
(3) Subject to covenants and agreements with the holders of
outstanding obligations, for the purpose of funding or refunding
revenue obligations. If the board of directors for utilities
determines that it would be advantageous to the department of
public utilities to exchange funding or refunding obligations for
the revenue obligations being funded or refunded, such
exchange may be made, provided the actual interest cost is not
increased. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-21 Security for revenue obligations; issuance of additional obligations
authorized
Sec. 21. Such revenue obligations shall be secured by a pledge of
the unobligated income and revenues of any one (1) or more of the
utility properties of the department of public utilities. In addition, the
board of directors for utilities may in its discretion secure the
payment of such revenue obligations by a mortgage upon the
property of the particular utility for whose benefit the proceeds of the
revenue obligations are to be used. In authorizing the issuance of
such obligations for any particular property or properties, the board
of directors for utilities of the department of public utilities may limit
the amount of such obligations that may be issued as a first lien and
charge against such property or properties and the income and
revenues therefrom, or such board of directors for utilities may
authorize the issuance from time to time thereafter of additional
obligations secured by the same pledge or lien to provide funds for
the completion of the property, properties, betterments,
improvements, extensions or additions thereto, on account of which
the original obligations were issued, or to provide funds to pay the
cost of additional utility properties, betterments, improvements,
extensions or additions thereto, or for both such purposes. Such
additional obligations shall be issued on such terms and conditions
as such board may determine, and may be secured equally and
ratably, without preference, priority or distinction, with the original
issue of obligations or may be made junior thereto. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-22 Resolution authorizing revenue obligations; trust indenture; terms
of obligations
Sec. 22. (a) Such revenue obligations shall be authorized by
resolution adopted by the board of directors for utilities and the
terms, conditions and form thereof shall be set out in such resolution
or in a form of trust indenture between the corporation and a
designated corporate trustee, or both.
(b) Such revenue obligations shall bear interest, not to exceed a
maximum rate to be determined by the board of directors for utilities,
payable annually or at shorter intervals and shall mature at such time
or times as may be determined in such resolution or indenture. The
obligations may be made redeemable before maturity at the option of
the board of directors for utilities under such terms and conditions as
may be fixed by the resolution or indenture.
(c) The principal and interest of the revenue obligations may be
made payable in any lawful medium. The resolution or indenture
shall determine the form of obligations, including the interest
coupons if any to be attached thereto, and shall fix the denomination
or denominations of the obligations and the place or places of
payment of the principal and interest thereof, which may be at any
bank or trust company within or without the state.
(d) Provision may be made for the registration of any of the
obligations in the name of the owner as to principal alone, or as to
both principal and interest, but fully registered obligations shall be
made convertible to coupon obligations at the option of the registered
owner. The obligations including interest shall be exempt from all
taxation: state, county and municipal.
(e) Such resolution or the indenture may also include provisions
for protecting and enforcing the rights and remedies of the holders of
the obligations being issued and covenants setting forth the duties of
the department of public utilities and its officers in relation to the
acquisition, construction, operation and maintenance of and
insurance to be carried on the property or properties on account of
which the obligations are being issued, and, to the fullest extent
permitted by law, the maintenance of rates and charges to be
collected on account hereof; also, provisions for the custody,
safeguarding and application of all moneys and the rights and
remedies of the trustee and the holders of the obligations being
issued, and for the issuance of additional parity obligations or junior
lien obligations secured by a pledge of the revenues or by a pledge
or mortgage of the revenues and property described in said resolution
or indenture; also, such other terms, conditions, limitations and
covenants as the board of directors for utilities shall deem proper.
Such obligations and any interest coupons appertaining thereto shall
be negotiable instruments within the meaning and for all purposes
under the laws of this state, subject only to the provisions for
registration of the obligations. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-23 Temporary loans authorized
Sec. 23. For the purpose of providing necessary funds with which
to pay the cost of acquiring any utility property, or paying off any
indebtedness of or upon any utility property, so acquired, or to pay
for interim costs of construction prior to long term financing,
including the costs of any betterments, improvements, additions or
extensions, or to pay the expenses of operation of any such utility
property the board of directors for utilities may also make temporary
loans, which shall mature within one (1) year from date of issuance,
in the form of certificates of indebtedness, which shall be a charge
solely against the income and revenue of the utility, or upon the
proceeds of revenue obligations to be issued, or any combination
thereof. As added by Acts 1981, P.L.11, SEC.43.
IC 8-1-11.1-24 Revenue obligations; approval or validation; facsimile signatures;
sale; actions to contest validity; certificates of indebtedness;
execution
Sec. 24. (a) All such revenue obligations shall be valid without the
necessity of any approval of or ratification by either the commission
or the department of local government finance. The board of
directors for utilities, upon adopting a resolution authorizing such
revenue obligations, shall certify a copy thereof to the city controller
of such city who shall thereupon prepare said revenue obligations,
and the same shall be issued in the name of the city and shall be
executed by the mayor of said city and attested by the city controller
and the clerk of the city-county council. Facsimile signatures may be
used in executing such revenue obligations, provided that one or
more of the signatures on the revenue obligations shall be manually
signed, except that all signatures on interest coupons may be
facsimile signatures.
(b) Certificates of indebtedness issued under section 23 of this
chapter shall be executed solely by the president of the board of
directors without the execution of the mayor. The signature of the
president must be attested by the secretary of the board.
(c) Such revenue obligations shall be sold by the city controller of
said city subject to the requirements of IC 5-1-11; provided, that any
revenue obligations maturing within one (1) year of date of issuance
need not be sold at public sale but may be sold in such manner as the
board of directors for utilities may determine; and, provided further,
that any revenue obligations may be offered for sale and sold to the
United States or to any corporation owned or controlled by the
United States without notice by publication. No suit to question the
validity of any revenue obligations so issued or to prevent their
issuance or sale shall be instituted after the date fixed for the sale of
such revenue obligations and all such revenue obligations from and
after such date shall be incontestable, except for fraud, forgery, or
violation of constitutional provisions. As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988,
SEC.44; P.L.90-2002, SEC.312.
IC 8-1-11.1-25 Revenue obligations; eligible investments; deposit of securities
Sec. 25. Any revenue obligations issued pursuant to the provisions
of this chapter shall be eligible investments for the funds of any kind
or character of every financial institution, insurance company or
private trust, and such obligations shall be eligible for deposit by any
financial institution, insurance company or trustee under any law of
this state providing for the deposit of securities or funds. As added by Acts 1981, P.L.11, SEC.43.
