HOUSE BILL No. 2769 An Act concerning certain water districts; relating to the powers and duties of the governing
bodies thereof; amending K.S.A. 19-3516 and repealing the existing section. Be it enacted by the Legislature of the State of Kansas:

    Section 1. K.S.A. 19-3516 is hereby amended to read as follows:
19-3516. (a) Any water district board may issue and sell revenue bonds
to finance the cost of acquisition, construction, reconstruction, alteration,
repair, improvement, extension or enlargement of any such water supply
and distribution system. The board shall fix by resolution such rates, fees
and charges for the services furnished by such water supply and distri-
bution system as may be reasonable and necessary and provide for the
manner of collecting and disbursing such revenues subject to the limi-
tations hereinafter contained.

    Revenues derived from the operation of any such water supply and
distribution system shall be deposited in a responsible bank within the
county in which the greatest portion of such water district is located and
the deposits shall be governed by article 14 of chapter 9 of the Kansas
Statutes Annotated and shall not be used except for the purpose of: (1)
Paying wages and salaries of all officers and employees, (2) paying the
cost of operation, (3) paying the cost of maintenance, extension and im-
provement of such water supply and distribution system, (4) providing an
adequate depreciation fund, and (5) creating reasonable reserves for such
purposes. All revenues over and above those necessary for the above
enumerated purposes shall be placed in a reserve fund which, together
with any moneys not currently needed which have been set aside for the
purposes described in (4) and (5) above, may be invested in accordance
with the provisions of K.S.A. 10-122, and amendments thereto, or K.S.A.
10-131, and amendments thereto. Such reserve fund shall be used solely
for improving, extending or enlarging the district's water system or for
the retirement of revenue bonds issued hereunder and the payment of
interest thereon. Such revenue bonds are hereby made a lien on the water
supply and distribution system and on the revenues produced from such
water supply and distribution system but shall not be general obligations
of the issuing water district. Such revenue bonds shall not be taken into
account or in any way be a limitation upon the power of the water district
to issue bonds for any other purpose. All revenue bonds issued under this
act shall be signed by the chairperson of the issuing water district board
and attested by the secretary and shall contain recitals stating the au-
thority under which such bonds are issued; that they are issued in con-
formity with the provisions, restrictions and limitations of that authority;
that such bonds are to be paid by the issuing water district from the
revenues derived from the rates, fees or charges herein mentioned and
not from any other fund or source; that the same have been registered
in the office of the county clerk of the various counties in which the
issuing water district is located and in the office of the treasurer of the
state of Kansas, respectively; and that such bonds are negotiable. All such
bonds, when registered and issued, as herein provided, shall import ab-
solute verity, and shall be conclusive in favor of all persons purchasing
such bonds, that all proceedings and conditions precedent have been had
and performed to authorize the issuance thereof. The provisions of K.S.A.
10-112, and amendments thereto, shall not apply to any bonds issued
under this act.

    (b) Revenue bonds issued under this act shall mature not later than
40 years after the date of the bonds; may be subject to redemption prior
to maturity, with or without premium, at such times and upon such con-
ditions as may be provided by the water district board; and shall bear
interest at a rate not to exceed the maximum rate of interest prescribed
by K.S.A. 10-1009, and amendments thereto. The board may sell such
bonds in such manner and for such price as it determines will best effect
the purposes of this act. In no case where revenue bonds are issued under
this act shall the total amount received therefrom be in excess of the
actual cost of the plan or program which includes, in addition to all ex-
penses incurred in the acquiring of a water supply and distribution system,
all expenses incurred prior to and including the bond election, the no-
fund warrants outstanding under the provisions of K.S.A. 19-3505a, and
amendments thereto, and unpaid at the time such revenue bonds are
issued and all costs of operation and maintenance of such water supply
and distribution system estimated to be necessary for a period of two
years immediately following the acquisition of such system and the
amount necessary to pay the salaries of the water district board due from
the date the first member of the first board is elected. Whenever any
such water district board has sufficient revenues to pay the operational
and maintenance cost and the board members' salaries, then such ex-
penses shall be paid out of such revenues and any surplus funds remaining
from the sale of revenue bonds shall be transferred to the revenue bond
sinking fund of the water district. No water district or county in which a
portion of such water district lies shall have any right or authority to levy
taxes to pay any of the principal of or interest on any such bonds or any
judgment against the issuing water district on account thereof, and the
provisions of K.S.A. 10-113, and amendments thereto, shall not apply to
any bonds issued hereunder. All water district boards created by this act
by appropriate resolution shall make provisions for the payment of such
bonds by fixing rates, fees and charges, for the use of all services rendered
by such water district, which rates, fees and charges shall be sufficient to
pay the wages and salaries of all officers and employees and the costs of
operation, improvement and maintenance of the water supply and distri-
bution system; to provide an adequate depreciation fund and an adequate
sinking fund to retire such bonds and pay the interest thereon when due;
and to create reasonable reserves for such purposes. Such fees, rates or
charges shall be sufficient to allow for miscellaneous and emergency or
unforeseen expenses. The resolution of the water district board author-
izing the issuance of revenue bonds may establish limitations upon the
issuance of additional revenue bonds payable from the revenues of the
district's water supply and distribution system or upon the rights of the
holders of such additional bonds and may provide that additional revenue
bonds shall stand on a parity as to the revenues of the water district and
in all other respects with revenue bonds previously issued on such con-
ditions as specified by the board in such resolution. Such resolution may
include other agreements, covenants or restrictions deemed necessary or
advisable by the district board to effect the efficient operation of the
district's system and to safeguard the interests of the holders of the rev-
enue bonds and to secure the payment of the bonds and the interest
thereon.

    (c) The water district board shall cause an audit to be made annually
by a licensed municipal public accountant or by a certified public ac-
countant of the operations of any water supply and distribution system
created hereunder for which revenue bonds have been issued by any
water district, and, if the audit discloses that proper provision has not
been made for all of the requirements of this section, the water district
board shall proceed promptly to cause rates to be charged for the water
supply and distribution services rendered which will adequately provide
for the requirements set out herein. Within 30 days after the completion
of such audit, a copy of the audit shall be filed with the county clerks of
the various counties in which such water district is located, and such audit
shall be 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 the water supply and distribution system and issue revenue bonds to
pay the cost thereof without submitting to a vote of the electors of such
water district the proposal to contract for the making of such repairs,
alterations, extension and improvements and to issue revenue bonds to
pay the costs thereof. All contracts for any construction of all or part of
the water system, or for repairs, extensions, enlargements or improve-
ments to any such water supply and distribution system created under
this act, the cost of which exceeds $25,000 shall be awarded on a public
letting by the water district board to the lowest responsible bidder, and
in the manner provided by K.S.A. 19-214, 19-215 and 19-216, and amend-
ments thereto, except that the required notice of letting contracts shall
be seven days if the cost does not exceed $100,000 and 30 days if the cost
exceeds $100,000. Whenever the board finds that an unforeseen occur-
rence or condition has created a public exigency requiring immediate
delivery of materials or performance of services, it may declare an emer-
gency and shorten or entirely dispense with the bidding procedure.

    (e) Where goods for use by the water district can be more advanta-
geously acquired by lease-purchase or financing leases than by full initial
payment of the purchase price or conventional leasing that is neither a
sale nor creates a security interest, the water district board, by a majority
vote of the members thereof, may approve the use of lease-purchases or
financing leases or authorize the general manager to make such deter-
minations and approvals within any limitations designed by the board.

    Sec. 2. K.S.A. 19-3516 is hereby repealed.

    Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.

I hereby certify that the above Bill originated in the House,
and passed that body

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Speaker of the House.

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Chief Clerk of the House.

Passed the Senate __________________________

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President of the Senate

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Secretary of the Senate.

Aproved __________________________________

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Governor.