(1) To accomplish any of its corporate purposes, a joint operating agency shall have the power to issue revenue obligations payable from the revenues derived by it from its ownership of, or its participation in or contribution to the ownership or development of, any one or more utility properties. The issuance of such revenue obligations shall be governed by the provisions of subsections (2) to (13) of this section.
(2) The board of directors shall issue revenue obligations only by bond resolution. The bond resolution shall specify the corporate purposes for which the proceeds of the revenue obligations shall be expended, declare the cost of carrying out such purposes as nearly as possible, contain such covenants, and provide for the issuance and sale of revenue obligations in such form and amount as the directors determine. In declaring such cost, the directors may include the funds necessary for working capital, reserves, fuel and fuel assemblies, interest during construction and for a reasonable period thereafter, the payment of organizational and planning expenses, the repayment of advances and such other expenses as may be reasonably necessary to carry out the purposes of such resolution. The bond resolution may provide that utility properties subsequently acquired or constructed by the joint operating agency shall be considered betterments or additions to, or extensions of the specified utility property, whether or not physically connected.
(3) The bond resolution may provide for the establishment of one or more special funds, and such funds may be under the control of the board or one or more trustees. The bond resolution may obligate the joint operating agency to deposit and expend the proceeds of the revenue obligations only into and from such fund or funds, and to set aside and pay into such fund or funds any fixed proportion or fixed amount of the revenues derived by it from any or all of its utility properties or other corporate activities, as the board in its discretion considers in the best interest of the agency. The board may issue and sell revenue obligations payable as to interest and principal only out of such fund or funds. In creating any special fund for the payment of revenue obligations, the board shall have due regard to the cost of operation and maintenance of the joint operating agency’s utility properties, and to any proportion or amount of the revenues previously pledged as a fund for the payment of revenue obligations, and shall not obligate the agency to set aside into such special fund or funds a greater amount or proportion of the revenues and proceeds than in its judgment will be available over and above such cost of maintenance and operation and the amount or proportion of the revenues previously pledged.
(4) Any revenue obligations and the interest thereon issued against any fund provided for in subsection (3) of this section shall be a valid claim of the holder thereof only as against such special fund and the proportion or amount of the revenues pledged to such fund, but shall constitute a prior charge over all other charges or claims whatsoever, against such fund and the proportion or amount of the revenues pledged to the fund. Each revenue obligation shall state on its face that it is payable from a special fund, naming the fund and the resolution creating it, or shall describe the alternate method for the payment thereof as provided by the resolution authorizing the fund.
(5) Any pledge of revenues or other moneys or obligations made by a joint operating agency shall be valid and binding from the time that the pledge is made and recorded in the minute book of the joint operating agency. Revenues or other moneys or obligations so pledged and later received by a joint operating agency shall immediately be subject to the lien of the pledge without any physical delivery or further act. The lien of the pledge shall be valid and binding against any parties having claims of any kind in tort, contract or otherwise against a joint operating agency, irrespective of whether such parties have notice thereof. Neither the resolution nor other instrument by which a pledge is created need be recorded except in the minute book of the joint operating agency, nor shall the filing of any financing statement under the Uniform Commercial Code be required to perfect such pledge.
(6) The revenue obligations issued under the provisions of subsections (1) to (5) of this section shall bear such date or dates, mature in such amounts at such time or times, be in such denominations, be in such form, either coupon or registered or both, carry such registration privileges, be made transferable, exchangeable and interchangeable, be payable in such medium, at such place or places, and be subject to such terms of redemption as the board of directors shall declare in the bond resolution.
(7) Any resolution authorizing any revenue obligation, and any revenue obligation, may provide for and contain such covenants in favor of the purchaser or holder of such obligation as the board of directors shall determine to be necessary, desirable, or convenient in order to secure and protect the obligation and its purchaser or holder and to enhance the marketability of the obligation. Among other things, such covenants may define events of default, provide for the appointment of a trustee or receiver in the event of default, and provide that any such trustee or receiver may take possession and control of any portion or all of the business and property of the joint operating agency upon the occasion of any event of default.
(8) Notwithstanding any other provision of law, the revenue obligations issued by a joint operating agency may be sold by the board of directors upon such terms and conditions and at such rate or rates of interest and for such price or prices as it may consider most advantageous to the joint operating agency, with or without public bidding. The board of directors may make contracts for the future sale from time to time of revenue obligations by which the contract purchasers shall be committed to the prices, terms and conditions stated in such contract, and the board of directors may pay such consideration as it deems proper for such commitments.
(9) The board of directors may provide by resolution for the issuance of funding and refunding revenue obligations in order to take up and refund any one or more series, or portion of a series, of outstanding revenue obligations at such time or times at or prior to the maturity thereof as it may determine. Such refunding revenue obligations may be sold or exchanged at par or otherwise as the board of directors determines is in the best interest of the joint operating agency.
(10) The board of directors may provide in any contract for the construction, acquisition or improvement of utility properties that payment shall be made only in outstanding revenue obligations at their par value.
(11) All revenue obligations issued pursuant to this section shall be legal securities which may be used by any bank or trust company for deposit with the State Treasurer or a county treasurer or city treasurer, as security for deposits in lieu of a surety bond under any law relating to deposits of public moneys and shall constitute legal investments for trustees and other fiduciaries other than corporations doing a trust business in this state and for savings and loan associations, banks and insurance companies doing a trust business in the state. All such revenue obligations and all coupons appertaining thereto shall be negotiable instruments within the meaning of and for all purposes of the law of this state.
(12) All revenue obligations issued pursuant to this section, the interest thereon, and investment income therefrom shall be exempt from all taxes levied by the state, its agencies, instrumentalities, and political subdivisions.
(13) Neither the board of directors of the joint operating agency nor any person executing any revenue obligation or other evidence of indebtedness shall be liable personally thereon or shall be subject to personal liability or accountability by reason of the issuance thereof. [1973 c.722 §9]
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