12-811. Purchase by city of corporate utility plants upon expiration of franchise; petition to court; notice; appraisers; election; bonds.
12-811
12-811. Purchase by city of corporate utility plants upon expiration
of franchise; petition to court; notice; appraisers; election; bonds.
In any city wherein the franchise of a corporation supplying water,
natural or artificial gas, electric light or power, heat, or operating a
street railway, has expired or will expire before the completion of the
proceedings contemplated by this section, unless an earlier date is fixed
by the franchise, the governing body may by resolution declare it necessary
and for the interest of such city to acquire control and operate any such
plant. Upon the passage of such resolution an application may be presented
in writing to the district court of the county in which such city is
located, which shall set forth the action of the said city relative
thereto, and a copy of the resolution so passed by the city, and praying
for the appointment of commissioners to ascertain and determine the value
of such plant.
Thereupon a time shall be fixed for the hearing thereof, of which either
at least ten days' notice shall be given in writing, or at least thirty
days' notice shall be given by publication once in the official city paper,
to the person, company or corporation owning said plant and to all persons
having or claiming liens on such property: Provided, That publication
in the city paper shall not be made until an affidavit has been filed
showing that actual service of notice cannot be made and that a diligent
effort has been made to obtain such service, and said court shall make an
order granting such application, and provide for the appointment and
selection of three commissioners, one of whom shall be selected by the
city, and one by the person, company, or corporation owning such plant, and
the third shall be designated by the judge of the court, who shall be an
expert engineer; and the said commissioners shall take an oath to
faithfully, honestly and to the best of their skill and ability, appraise
and ascertain the fair cash value of said plant and the appurtenances
thereunto belonging or in any way appertaining to same; but in the
determination of such value said commissioners shall not take into account
the value of the franchise or contract given or granted by said city to
such person, company or corporation.
The said commissioners shall carefully examine said plant and may
examine experts and persons familiar with the cost, construction and
reproduction cost of such plant, and resort to any other means by which
they may arrive at the value thereof, and the city or the person, company
or corporation owning such plant may produce such testimony before said
commissioners as in their judgment seems necessary and desirable. Said
commissioners shall make their report in writing under oath and file the
same with the clerk of the district court. Each party shall have ten days
from the filing of said report to file exceptions thereto. Thereupon at a
time to be fixed by the court, of which each party shall have ten days'
notice in writing, a hearing shall be had upon the said report and the
exceptions thereto, and the court thereupon shall confirm, reject or modify
said report, and its decision therein shall be a final order from which an
appeal may be taken to the supreme court. If any city by a majority vote of
the electors voting upon the proposition at an election called and held
according to law shall elect to take the property at the amount so
ascertained, the governing body is hereby authorized to enact a proper
ordinance providing for the issue of bonds according to law to be sold and
the proceeds thereof used for the purchase of such plant.
If the city elects to pay the award of said commissioners as approved by
the district court it may do so at any time within six months from the date
of final order of the district court on the report of the commissioners if
no appeal to the supreme court be taken, or from the final judgment in case
thereafter an appeal is determined, by paying the amount of the award to
the clerk of the district court, and thereupon the title, right and
possession of such plant and appurtenances shall vest absolutely in the
city and the city shall have the right to enter into and take possession
thereof. The court shall make all orders necessary to protect such city in
the possession of the property and plant. When the purchase money is paid
into court for such plant, it shall be paid out only upon the order of the
court. If there are any liens or encumbrances upon such plant, the nature
and extent thereof shall be ascertained by the court after fixing a time
for the hearing, of which all parties in interest shall have sufficient
notice. The ascertained liens and encumbrances shall first be paid out of
the said fund and the balance to the person, company or corporation owning
such plant.
History: R.S. 1923, § 12-811; L. 1941, ch. 105, § 1; June 30.