13-1275.   Transfer of ownership and control over certain township watersystems to certain cities; conditions; powers and obligations of city orboard of public utilities.Whenever 65% or more of the customers of anypublicly owned township water system of any township located, in whole orin part, within three miles of the limits of any city of the firstclass located in the same county as such township have been annexed andtaken into such city and, at the time of such annexation, township watersystem revenue bonds have been issued and are outstanding and unpaid in atotal principal amount of$700,000 ormore, such bonds being a first and prior lien on the earnings and incomederived from the operation of the water system, the control and ownershipof such system shall be transferred to and shall thereupon vest in suchcity of the first class and if such city has a board of public utilities,such system shall be for the use and benefit of such board and for thosepersons now or hereafter being served by such system. The board ofpublic utilities shall be responsible for the maintenance, operation,improvement and extension of such system. Such city or if the city has aboard of public utilities, thensuch board of public utilities shall by resolution obligate itself to payand shall assume the entire revenue bonded indebtedness, together withinterest charges and other debt service costs, and all other outstandingobligations, of any such township water system. Such city or board ofpublic utilities, as the case may be, shall by resolution further obligateand commit itself to pay off all such revenue water system bonds as thesame mature and become payable and any interestdue on such revenue bonds and to maintain at all times a sufficient revenuebond reserve fund, for the payment of both principal and interest on suchbonds, all in strict conformity with the tenor of such revenue bonds andthe resolution of any such township board heretofore adoptedand authorizing the issuance of a series or several series of water systemrevenue bonds by any such township board.

      Such city or its board of public utilities shall be authorized toestablish such rates for customers residing in any such township outside ofthe corporate limits of the city which are fair and equitable andsufficient to pay the percentage or pro rata amount of the annual revenuebond and debt service costs, including interest and principal, applicableto that portion of the utility system lying outside of the corporate limitsof the city. Prior to the date theinterest becomes due on such revenue bonds and prior to the date ofthe annual maturity of those revenue bonds which becomes due eachyear, such city or its board of public utilities, asthe case may be, shall pay over to the state treasurer a sum equal to andsufficient to pay the total revenue bond and debt service cost, includinginterest and principal.

      History:   L. 1967, ch. 109, § 1; L. 1983, ch. 49, § 60; May 12.