Section 14-140-209 - Procedure for issuance of revenue bondsThe city council or other legislative body of any city or town desiring to provide marketing facilities as provided in this subchapter is authorized to issue revenue bonds to finance the planning, designing, acquisition of property for, construction, alteration, enlargement, maintenance, or operation of market facilities by the following procedure:
(1)Authorizing Ordinance.(A) The city council or other legislative body of any city or town shall by ordinance provide for the issuance of revenue bonds. The ordinance shall set forth: (i) A brief description of the contemplated improvement;(ii) The estimated cost thereof;(iii) The amount, rate of interest, time, and place of payment; and(iv) Other details in connection with the issuance of the bonds.(B) The bonds shall bear interest at not more than six percent (6%) per annum, payable semiannually, and shall be payable at such times and places, not exceeding forty (40) years from their date, as shall be prescribed in the ordinance providing for their issuance.(2)Statutory Mortgage Lien.(A) The ordinance shall also declare that a statutory mortgage lien shall exist upon the property so to be acquired, and all construction thereon, and shall pledge the revenues derived from the operation of the market facilities for the purpose of paying the bonds and interest thereon.(B) The pledge shall definitely fix and determine the amount of revenue which shall be necessary to be set apart and applied to the payment of the principal of, and interest on, the bonds and the proportion of the balance of the revenues and incomes which are to be set aside as a proper and adequate depreciation account, and the remainder shall be set aside for the reasonable and proper operation thereof.(3)Notice and Hearing.(A) After the ordinance shall have been adopted, it shall be published one (1) time in a newspaper published in the city or town with a notice to all persons concerned, stating that:(i) The ordinance has been adopted;(ii) The city or town contemplates the issuance of the bonds described in the ordinance; and(iii) Any person interested may appear before the governing body upon a certain date, which shall not be less than ten (10) days subsequent to the publication of the ordinance and notice, and present protest.(B) At the hearing, all objections and suggestions shall be heard, and the legislative body shall take such action as it shall deem proper in the premises.(4)Issuance of Bonds.(A) Bonds provided for in this section shall be issued in such amount as may be necessary to provide sufficient funds to pay all costs of planning, designing, acquisition of property for, construction, alteration, enlargement, and other expenses, together with interest to a date six (6) months subsequent to the estimated date of completion.(B)(i) Bonds issued under the provisions of this subchapter are declared to be negotiable instruments.(ii) They shall be executed by the presiding officer and clerk or recorder of the corporate town and bear the corporate seal.(iii) In case any of the officers whose signatures appear on the bonds or coupons shall cease to be such officers before delivery of the bonds, their signatures shall nevertheless be valid and sufficient for all purposes, the same as if they had remained in office until the delivery.(C) The bonds may be sold at not less than ninety cents (90¢) on the dollar, and the proceeds derived therefrom shall be used exclusively for the purposes for which the bonds were issued.(5)Payment of Bonds.(A) Bonds issued under the provisions of this section shall be payable solely from the revenues derived from leasing the market facilities.(B) The bonds shall not, in any event, constitute an indebtedness of the city or town within the meaning of the constitutional provisions or limitations, and it shall be plainly stated on the face of each bond that it has been issued under the provisions of this subchapter and that it does not constitute an indebtedness of the city or town.(6)Enforcement of Mortgage Lien.(A) There shall be created a statutory mortgage lien upon the market facilities so acquired or constructed from the proceeds of bonds authorized by this section to be issued, which shall exist in favor of the holder of the bonds, and each of them, and in favor of the holder of the coupons attached to the bonds.(B) The market facilities shall remain subject to the statutory mortgage lien until payment in full of the principal and interest of the bonds. Subject to such restrictions as may be contained in the indenture authorized in this section, any holder of bonds issued under the provisions of this subchapter or of the coupons representing interest accrued thereon may, either at law or in equity, enforce the statutory mortgage lien conferred by this section and may, by proper suit, compel the performance of the duties of the officials of the issuing city or town.(C) If there is default in the payment of the principal of, and interest on, any of the bonds, any court having jurisdiction in any proper action may appoint a receiver to administer the market facilities on behalf of the city or town, with power to charge and collect rates sufficient to provide for the payment of the bonds and interest thereon, and for payment of the operating expenses, and to apply the income and revenues in conformity with this subchapter and the ordinance providing for the issuance of the bonds.(7)Rental Rates - Surplus.(A) The rental rates for market facilities fixed precedent to the issuance of bonds shall not be reduced until all of the bonds shall have been fully paid and shall, wherever necessary, be increased, in amounts sufficient to provide for the payment of the bonds, both principal and interest, and to provide proper funds for the depreciation account and operation and maintenance charges. However, the rates may be reduced subject to any conditions which may be set out in the ordinance authorizing the issuance of the bonds of the trust indenture referred to in this section.(B)(i) If any surplus shall be accumulated in the operating and maintenance fund which shall be in excess of the cost of maintaining and operating the market facilities during the remainder of the fiscal year then current, and the cost of maintaining and operating the facilities during the fiscal year then next ensuing, then any excess may be transferred by the legislative body to either the depreciation account or other bond and interest redemption account.(ii) If a surplus shall exist in the bond or interest redemption account, it may be applied to the payment of any outstanding unmatured bonds payable from the bond and interest redemption account that may be subject to call for redemption before maturity.(8)Funds Custodian and Accounts.(A) Any municipality issuing revenue bonds under the provisions of this subchapter shall install and maintain a proper system of accounts. The accounts shall be properly audited by a competent auditor, and the report of the audit shall be open to the public for inspection.(B) The treasurer of the municipality shall be custodian of the funds derived from income received from the market facilities. All of the funds received as such income shall be kept separate and apart from the other funds of the city.(9)Other Terms of Authorizing Ordinance.(A) The ordinance authorizing the issuance of revenue bonds may contain provisions for the acceleration of the maturities of all unmatured bonds in the event of default in the payment of any principal or interest maturing under the bond issue, or upon failure to meet any sinking fund requirements, or in any other event stipulated in the ordinance, and such provisions will be binding.(B) The ordinance may also, if deemed desirable, provide for:(i) The execution, contemporaneously with the execution of bond, by the municipality of an indenture defining the rights of the bondholders inter sese;(ii) Appointing a trustee for the bondholders;(iii) A priority of lien as between successive bond issues;(iv) The acceleration of bond maturities;(v) Any covenants on the part of the municipality relating to the construction or acquisition of the market facilities or the application of safeguarding of the proceeds of the bonds, or other covenants intended for the protection of the bondholders; and(vi) Any other provisions which are consistent with the terms of this subchapter and which may be deemed desirable.Acts 1949, No. 300, § 7; A.S.A. 1947, § 19-3310.