19-3516.   Issuance, sale, registration and terms ofrevenue bonds;fixing of service rates and charges; deposit and use of revenues;sinking fund; liens; annual audits; bids, when; exceptions; lease purchaseagreements; finance leases.(a) Any water district board may issue and sell revenue bonds to finance thecost of acquisition, construction, reconstruction, alteration, repair,improvement, extension or enlargement of any such water supply anddistribution system. The board shall fix by resolution such rates, fees andcharges for the services furnished by such water supply and distributionsystem as may be reasonable and necessary and provide for the manner ofcollecting and disbursing such revenues subject to the limitationshereinafter contained.

      Revenues derived from the operation of any such water supply anddistribution system shall be deposited in a responsible bank within thecounty in which the greatest portion of such water district is locatedand the deposits shall be governed by article 14 of chapter 9 of theKansas Statutes Annotated and shall not be used except for the purposeof: (1) Paying wages and salaries of all officers and employees, (2)paying the cost of operation, (3) paying the cost of maintenance,extension and improvement of such water supply and distribution system,(4) providing an adequate depreciation fund, and (5) creating reasonablereserves for such purposes. All revenues over and above those necessaryfor the above enumerated purposes shall be placed in a reserve fundwhich, together with any moneys not currently needed which have been setaside for the purposes described in (4) and (5) above, may beinvested in accordance with the provisions of K.S.A. 10-122,and amendments thereto, or K.S.A. 10-131, and amendmentsthereto. Such reserve fund shall be used solely for improving,extending or enlarging the district's water system or for the retirementof revenue bonds issued hereunder and the payment of interest thereon.Such revenue bonds are hereby made a lien on the water supply anddistribution system and on the revenues produced from such water supplyand distribution system but shall not be general obligations of theissuing water district. Such revenue bonds shall not be taken intoaccount or in any way be a limitation upon the power of the waterdistrict to issue bonds for any other purpose. All revenue bonds issuedunder this act shall be signed by the chairperson of the issuing waterdistrict board and attested by the secretary and shall contain recitalsstating the authority under which such bonds are issued; that they areissued in conformity with the provisions, restrictions and limitationsof that authority; that such bonds are to be paid by the issuing waterdistrict from the revenues derived from the rates, fees or chargesherein mentioned and not from any other fund or source; that the samehave been registered in the office of the county clerk of the variouscounties in which the issuing water district is located and in theoffice of the treasurer of the state of Kansas, respectively; and thatsuch bonds are negotiable. All such bonds, when registered and issued,as herein provided, shall import absolute verity, and shall beconclusive in favor of all persons purchasing such bonds, that allproceedings and conditions precedent have been had and performed toauthorize the issuance thereof. The provisions of K.S.A. 10-112, andamendments thereto, shall not apply to any bonds issued under this act.

      (b)   Revenue bonds issued under this act shall mature not later than 40years after the date of the bonds; may besubject to redemption prior to maturity, with or without premium, atsuch times and upon such conditions as may be provided by the waterdistrict board; and shall bear interest at a rate not to exceed themaximum rate of interest prescribed by K.S.A. 10-1009, and amendmentsthereto. The board may sell such bonds in suchmanner and for such priceas it determines will best effect the purposes of this act. In nocase where revenue bonds are issued under this act shall the totalamount received therefrom be in excess of the actual costof the plan or programwhich includes, in addition to all expenses incurred in theacquiring of a water supply and distribution system, all expensesincurred prior to and including the bond election, the no-fund warrantsoutstanding under the provisions of K.S.A. 19-3505a, and amendments thereto,and unpaid at thetime such revenue bonds are issued and all costs of operation andmaintenance of such water supply and distribution system estimated to benecessary for a period of two years immediately following theacquisition of such system and the amount necessary to pay the salariesof the water district board due from the date the first member of thefirst board is elected. Whenever any such water district board hassufficient revenues to pay the operational and maintenance cost and theboard members' salaries, then such expenses shall be paid out of suchrevenues and any surplus funds remaining from the sale of revenue bondsshall be transferred to the revenue bond sinking fund of the waterdistrict. No water district or county in which a portion of such waterdistrict lies shall have any right or authority to levy taxes to pay anyof the principal of or interest on any such bonds or any judgmentagainst the issuing water district on account thereof, and the provisionsof K.S.A. 10-113, and amendments thereto, shall not apply to any bondsissued hereunder. Allwater district boards created by this act by appropriateresolution shall make provisions for the payment of such bonds by fixingrates, fees and charges, for the use of all services rendered by suchwater district, which rates, fees and charges shall be sufficient to paythe wages and salaries of all officers and employees and the costs ofoperation, improvement and maintenance of the water supply anddistribution system; to provide an adequate depreciation fund and anadequate sinking fund to retire such bonds and pay the interest thereonwhen due; and to create reasonable reserves for such purposes. Suchfees, rates or charges shall be sufficient to allow for miscellaneousand emergency or unforeseen expenses. The resolution of the waterdistrict board authorizing the issuance of revenue bonds may establishlimitations upon the issuance of additional revenue bonds payable fromthe revenues of the district's water supply and distribution system orupon the rights of the holders of such additional bonds and may providethat additional revenue bonds shall stand on a parity as to the revenuesof the water district and in all other respects with revenue bondspreviously issued on such conditions as specified by the board insuch resolution. Such resolution may include other agreements,covenants or restrictions deemed necessary or advisable by the districtboard to effect the efficient operation of the district's system and tosafeguard the interests of the holders of the revenue bonds and tosecure the payment of the bonds and the interest thereon.

      (c)   The water district board shall cause an audit to be made annually bya licensed municipal public accountant or by a certified publicaccountant of the operations of any watersupply and distribution system created hereunder for which revenue bondshave been issued by any water district, and, if the auditdiscloses that proper provision has not been made for all of the requirements ofthis section, the water district board shall proceed promptly to causerates to be charged for the water supply and distribution servicesrendered which will adequately provide for the requirements set outherein. Within 30 days after the completion of such audit, acopy of the audit shall be filed with the county clerks of the variouscounties in which such water district is located, and such audit shallbe open to public inspection.

      (d)   The water district board, by a majority vote of the members thereof,may contract for repairs, alterations, extensions or improvements of thewater supply and distribution system and issue revenue bonds to pay thecost thereof without submitting to a vote of the electors of such waterdistrict the proposal to contract for the making of such repairs,alterations, extension and improvements and to issue revenue bonds topay the costs thereof. All contracts for any construction of all orpart of the water system, or for repairs, extensions, enlargements orimprovements to any such water supply and distribution system createdunder this act, the cost of which exceeds $25,000 shall be awarded ona public letting by the water districtboard to the lowest responsible bidder, and in the manner provided byK.S.A. 19-214, 19-215 and 19-216, and amendments thereto, except thatthe required notice ofletting contracts shall be seven days if the cost does not exceed $100,000and 30 days if the cost exceeds $100,000. Whenever the board finds thatan unforeseen occurrence or condition has created a public exigencyrequiring immediate delivery of materials or performance of services, itmay declare an emergency and shorten or entirely dispense with the biddingprocedure.

      (e)   Where goods for use by the water district can be more advantageouslyacquired by lease-purchase or financing leases than by full initial payment ofthe purchase price or conventional leasing that is neither a sale nor creates asecurity interest, the water district board, by a majority vote of the membersthereof, may approve the use of lease-purchases or financing leases orauthorize the general manager to make such determinations and approvals withinany limitations designed by the board.

      History:   L. 1951, ch. 240, § 16;L. 1957, ch. 192, § 10;L. 1970, ch. 64, § 66;L. 1975, ch. 170, § 5;L. 1977, ch. 54, § 31;L. 1983, ch. 49, § 71;L. 1984, ch. 106, § 1;L. 1985, ch. 101, § 1;L. 1987, ch. 103, § 2;L. 1998, ch. 47, § 1; July 1.