CHAPTER 269

WILMINGTON

SEWER REVENUE BOND ACT OF 1949

AN ACT TO AUTHORIZE THE MAYOR AND COUNCIL OF WILMINGTON TO PROVIDE FOR THE PLANNING, ACQUISITION, PURCHASE, CONSTRUCTION, RECONSTRUCTION, IMPROVEMENT, BETTERMENT, EXTENSION, OPERATION, AND MAINTENANCE OF REVENUE-PRODUCING UNDERTAKINGS FOR THE COLLECTION, TREATMENT, AND DISPOSAL OF SEWAGE, WASTE, GARBAGE, AND STORM WATER; AUTHORIZING THE EXERCISE OF THE POWER OF EMINENT DOMAIN AND THE FIXING OF RATES IN CONNECTION WITH SUCH UNDERTAKINGS; AUTHORIZING AND REGULATING THE ISSUANCE OF REVENUE BONDS FOR FINANCING SUCH UNDERTAKINGS; PROVIDING FOR THE PAYMENT OF SUCH BONDS AND THE RIGHTS OF THE HOLDERS THEREOF; AND MAKING AN APPROPRIATION TO THE MAYOR AND COUNCIL OF WILMINGTON FOR SEWAGE TREATMENT PLANTS.

WHEREAS, the State of Delaware by a legislative act approved May 8, 1941, and entitled "An Act To Promote Interstate Cooperation for the Conservation and Safeguard of Water Resources in the Delaware River Basin" (43 Laws of Delaware 280), and by agreements executed in pursuance thereof, has become obligated to participate in a program to preserve in a safe and sanitary condition the waters and watershed of the Delaware River Basin; and

WHEREAS, the purification of the waters and watershed of the Delaware River Basin will promote the general welfare of the citizens of this State by eliminating the menace to health occasioned by polluted waters, and by improving the economic and recreational opportunities in all sections of the State, NOW THEREFORE,

Be it enacted by the Senate and House of Representatives of the State of Delaware in General Assembly met (two-thirds of all the Members of each branch thereof concurring therein):

Section 1. Short Title of Act. This act may be cited as "Wilmington Sewer Revenue Bond Act of 1949."

Section 2. Definitions. Whenever used in this act, unless a different meaning clearly appears from the context:

(a) The term "undertaking" shall mean plants, properties, works, systems, or facilities, or any part thereof, used or useful in connection with the collection, treatment and disposal of sewage, waste, garbage and storm water.

(b) The term "municipality" shall mean "The Mayor and Council of Wilmington," a municipal corporation of the State of Delaware.

(c) The term "governing body" shall mean "The Council" of "The Mayor and Council of Wilmington."

Section 3. Declaration of Policy. It is hereby declared to be the policy of this State that to provide benefits to the public health and welfare by the abatement, prevention or reduction of pollution of the rivers, waters and streams of this State, any municipality planning, acquiring, purchasing, constructing, reconstructing, improving, bettering or extending an undertaking pursuant to this Act, shall manage such undertaking in the most efficient manner consistent with sound economy and public advantage to the end that such pollution shall be reduced, prevented or abated and that the services of the undertaking shall be furnished to consumers at the lowest possible cost.

Section 4. Additional Powers of Municipality. In addition to the powers which it may now have, the municipality shall have power under this Act: (a) to plan, construct, acquire by gift, purchase, or the exercise of the right of eminent domain, reconstruct, improve, better or extend any undertaking, within or without the municipality, or partially within or partially without the municipality, and to acquire by gift, purchase, or the exercise of the right of eminent domain, lands or rights in land

or water rights in connection therewith; (b) to operate and maintain any undertaking and furnish the services, facilities and commodities thereof for its own use and for the use of public and private consumers within or without the territorial boundaries of such municipality; (c) to enter into and perform contracts, whether long term or short term, with any industrial establishment for the provision and operation, by a municipality of the undertaking to abate or reduce the pollution of waters caused by discharges of industrial wastes by the industrial establishment and the payment periodically by the industrial establishment to the municipality of amounts at least sufficient, in the determination of the governing body, to compensate the municipality for the cost of providing (including payment of principal and interest charges, if any), and of operating and maintaining the undertaking or part thereof serving such industrial establishment; (d) to issue its bonds to finance, either in whole or in part, the cost of the planning, acquisition, purchase, construction, reconstruction, improvement, betterment or extension of any undertaking; (e) to prescribe and collect rates, fees, charges for the services, facilities and commodities furnished by such undertaking; (f) to pledge to the punctual payment of said bonds and interest thereon an amount of the revenues of such undertaking (including the revenues of the existing facilities, if any, comprising an undertaking which is being improved, bettered, or extended, and the revenues to be derived from any improvements, betterments, extensions thereafter constructed or acquired), or of any part of such undertaking, sufficient to pay, on either equal or priority basis, said bonds and interest as the same shall become due and to create and maintain reasonable reserves therefor, which amount may consist of all or any part or portion of such revenues; and (g) to accept from any authorized agency of the State or the Federal Government, or from persons, firms, or corporations, grants or contributions for the planning, construction, acquisition, lease, reconstruction, improvement, betterment or extension of the undertaking and to enter into agreements with such agency respecting such loans and grants. The governing body of the municipality in determining the cost of acquiring or constructing any undertaking may include all costs and estimated costs of the issuance of said bonds, all planning, engineering, inspection, fiscal and legal expenses, and interest which it is estimated

will accrue during the construction period and for six months thereafter or money borrowed or which it is estimated will be borrowed pursuant to this Act.

Section 5. Authorization of Undertaking; Form and Content of Bonds. The planning, acquisition, purchase, construction, reconstruction, improvement, betterment or extension of any undertaking may be authorized under this Act and bonds may be authorized to be issued under this Act to provide funds for such purpose or purposes by resolution or resolutions of the governing body which may be adopted at the same meeting at which they are introduced by a majority of all the members thereof then in office and shall take effect immediately upon adoption. Said bonds shall bear interest at such rate or rates, may be in one or more series, may bear such date or dates, may mature at such time or times not exceeding forty years from their respective dates, may be payable in such medium of payment, at such place or places, may carry such registration privileges, may be subject to such terms of redemption, may be executed in such manner, may contain such terms, covenants and conditions, and may be in such form, either coupon or registered, as such resolution or subsequent resolutions may provide. Said bonds shall be sold at public sale, after advertisement: Provided, however, that any of said bonds may be sold at private sale to the United States of America, or any agency, instrumentality or corporation thereof, at not less than par. Pending the preparation of the definitive bonds, interim receipts or certificates in such form and with such provisions as the governing body may determine may be issued to the purchaser or purchasers of bonds sold pursuant to this Act. The rate of interest may be determined in advance of sale, or the bonds may be offered for sale at a rate of interest to be fixed by the successful bidder for such bonds.

Section 6. Covenants in Resolution Authorizing Issuance of Bonds. Any resolution or resolutions authorizing the issuance of bonds under this Act may contain covenants as to (a) the purpose or purposes to which the proceeds of sale of said bonds may be applied and the use and disposition thereof, (b) the use and disposition of the revenue of the undertaking for which said bonds are to be issued, including the creation and maintenance of reserves, (c) the transfer from the general funds of the municipality to the account or accounts of the undertaking an amount equal to the cost of furnishing such municipality or any of its departments, boards or agencies with the services, facilities and commodities of said undertaking, (d) the issuance of other or additional bonds payable from the revenue of said undertaking, (e) the operation and maintenance of such undertaking, (f) the insurance to be carried thereon and the use and disposition of insurance moneys, (g) books of account and the inspection and audit thereof, and (h) the terms and conditions upon which the holders of said bonds or any proportion of them or any trustee therefor shall be entitled to the appointment of a receiver by the appropriate court, which court shall have jurisdiction in such proceedings, and which receiver may enter and take possession of said undertaking, operate and maintain the same, prescribe rates, fees, or charges, and collect, receive and apply all revenue thereafter arising therefrom in the same manner as the municipality itself might do. The provisions of this Act and any such resolution or resolutions shall be a contract with the holder or holder of said bonds, and the duties of the municipality and of its governing body and officers under this Act and any such resolution or resolutions shall be enforceable by any bondholder, by mandamus or other appropriate suit, action or proceeding M any court of competent jurisdiction.

Section 7. Validity of Bonds. Said Bonds bearing the signatures of officers in office on the date of the signing thereof shall be valid and binding obligations, notwithstanding that before the delivery thereof and payment therefor any or all the persons whose signatures appear thereon shall have ceased to be officers of the municipality issuing the same. The validity of said bonds shall not be dependent on nor affected by the validity or regularity of any proceedings relating to the planning, acquisition, purchase, construction, reconstruction, improvement, betterment, or extension of the undertaking for which said bonds are issued. The resolution authorizing said bonds may provide that the bonds shall contain a recital that they are issued pursuant to this Act, which recital shall be conclusive evidence of their validity and of the regularity of their issuance.

Section 8. Lien of Bonds. All bonds of the same issue may, subject to the prior and superior rights of outstanding bonds, claims or obligations, have a prior and paramount lien on the revenue of the undertaking, for which said bonds have been issued, over and ahead of all bonds of any issue payable from said revenue which may be subsequently issued and over and ahead of any claims or obligations of any nature against said revenue subsequently arising or subsequently incurred. All bonds of the same issue may be equally and ratably secured without priority by reason of number, date of bonds, of sale, of execution, or of delivery, by a lien on said revenue in accordance with the provisions of this Act and the resolution or resolutions authorizing said bonds, or all bonds of the same issue, or such ones thereof as may be specified, may, to the extent and in the manner prescribed, be subordinated and be junior in standing, with respect to the payment of principal and interest and the security thereof, to such other bonds as are designated in the resolution or resolutions authorizing said bonds.

Section 9. Bonds to Be Issued to Finance Undertaking.

The municipality may issue either revenue bonds or general obligation bonds, or a series or combination of either type of such bonds, either in whole or in part of the total amount necessary to finance any undertaking under this Act. If revenue bonds are issued under this Act, each such bond shall recite in substance that said bond, including interest thereon, is payable from the revenue pledged to the payment thereof, and that said bond does not constitute a debt of the municipality within the meaning of any statutory or constitutional limitation; provided, however, that in the event of some emergency, the municipality may temporarily appropriate, advance or loan such amount as is necessary to meet current interest on outstanding bonds, such advance or loan to be repaid to the municipality out of revenue subsequently received from the undertaking. If general obligation bonds are issued under this Act, the aggregate amount of any such bonds so issued shall be in addition to and not within the limitations of any existing statutory or constitutional debt limitations of the municipality.

Section 10. Undertakings to be Self-Supporting. The governing body of the municipality issuing bonds pursuant to this

Act shall prescribe and collect reasonable rates, fees or charges for the services, facilities and commodities of such undertaking, and shall revise such rates, fees or charges from time to time whenever necessary so that such undertaking shall be and always remain self-supporting. The rates, fees or charges prescribed shall be such as will procure revenue at least sufficient (a) to pay when due all bonds and interest thereon, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reserves therefor, and (b) to provide for all expenses of operation and maintenance of such undertaking, including reserves therefor. The base for rates, charges or fees against any property shall be the measured quantity of wastes actually carried away by the sewer from such property.

Section 11. Use of Revenue From Undertaking. The municipality issuing bonds pursuant to this Act for the planning, acquisition, purchase, construction, reconstruction, improvement, betterment or extension of any undertaking shall have the right to appropriate, apply or expend the revenue of such undertaking for the following purposes: (a) to pay when due all bonds and interest thereon, for the payment of which such revenue is or shall have been pledged, charged or otherwise encumbered, including reserves therefor, (b) to provide for all expenses of operation and maintenance of such undertaking, including reserves therefor, (c) to pay and discharge notes, bonds or other obligations and interest thereon, not issued under this Act for the payment of which the revenue of such undertaking is or shall have been pledged, charged or encumbered, (d) to pay and discharge notes, bonds or other obligations and interest thereon, which do not constitute a lien, charge or encumbrance on the revenue of such undertaking, which shall have been issued for the purpose of financing the planning, acquisition, purchase, construction, reconstructions, improvement, betterment or extension of such undertaking, and (e) to repay any advance or loan made by the municipality to meet current interest on outstanding bonds, and (f) to provide a reserve for betterments to such undertaking. Unless and until adequate provision has been made for the foregoing purposes, the municipality shall have no right to transfer the revenues of such undertaking to its general funds.

Section 12. Joint Action by Municipality. The municipality through its governing body is hereby authorized and empowered to enter into and perform such contracts and agreements with others, including towns, cities, and counties, as it may deem proper for or concerning the planning, construction, lease or other acquisition and the financing of an undertaking and the maintenance and operation thereof.

Section 13. Rates, Fees, or Charges. Any rate, fee or charge prescribed pursuant to the provisions of this Act may include a discount for payment within a certain period of time and a penalty for failure to pay within a certain period of time. All rates, fees or charges prescribed pursuant to the provisions of this Section remaining unpaid from the date they become due and payable shall be and constitute a lien upon the lands and premises of the owner to which the service was furnished, and such liens shall have preference and priority to all liens of recognizance, mortgage or judgment on such lands and premises created or suffered by said owner, although such other lien or liens shall be of a date prior to the time of the attaching of such lien for services furnished hereunder. In case of sale under execution process of any lands and premises upon which the liens hereby established shall exist, such liens shall be transferred to the fund arising from such sale in the hands of the officer making the same and the said real estate so sold shall be discharged therefrom. The lien herein provided shall remain a lien for the period of five years and no longer. The municipality may also collect the rates, fees or charges out of real estate upon which there is a lien under the provisions of this section in the manner now or hereafter prescribed by law for the collection of taxes out of real estate by the municipality. The municipality may also shut off the water supply, or order any person supplying water to the premises to shut off the water supply, in the event any rate, fee or charge prescribed pursuant to the provisions of this Section remains unpaid for a period of ninety days. The rates, fees or charges fixed pursuant to this Act may be made to be payable in advance, and such rates, fees or charges may be placed in effect immediately after the issuance of any bonds pursuant to this Act.

Section 14. Delegation of Authority. The construction, erection, maintenance, and operation of any undertaking may be placed under the jurisdiction, supervision, and control of an appropriate department or agency of the municipality, such as the Street and Sewer Department, which shall be designated by the governing body of the municipality, and such department or agency shall have the full power and authority to fix the rates, fees, or charges which are to be imposed under this Act. The governing body of the municipality may also place the duty of collecting the rates, fees, or charges so imposed, under the jurisdiction, supervision and control of an appropriate department or agency of the municipality, such as the Water Department, and such rates, fees or charges may be measured in whole or in part by the quantity of water consumed. The governing body of the municipality may also delegate any other duties in connection with any undertaking or the administration thereof to an appropriate department or agency of the municipality.

Section 15. Construction of Act. The powers conferred by this Act shall be in addition and supplemental to the powers conferred by any other general, special or local law. The undertaking may be planned, acquired, purchased, constructed, reconstructed, improved, bettered, and extended, and bonds may be issued under this Act for said purposes, notwithstanding that any general, special or local law may provide for the planning, acquisition, purchase, construction, reconstruction, improvement, betterment, and extension of a like undertaking, or the issuance of bonds for like purposes, and without regard to the requirements, restrictions, limitations or other provisions contained in any other general, special or local law, including, but not limited to, any requirement for the approval by the voters of the municipality or any existing debt limitations. Insofar as the provisions of this Act are inconsistent with the provisions of any other general, special, or local law, the provisions of this Act shall be controlling.

Section 16. Excision of Unconstitutional or Ineffective Parts of Act. It is hereby declared that the sections, clauses, sentences and parts of this Act are severable, are not matters of mutual essential inducement, and any of them may be exscinded by any court of competent jurisdiction, and if any pro-

vision shall be adjudged unconstitutional or invalid, such judgment shall not affect, impair or invalidate the remaining provisions thereof, but shall be confined in its operation to the specific provision or provisions so held unconstitutional or invalid, and the inapplicability or invalidity of any section, clause, sentence or part of this Act in any one or more instances shall not be taken to affect or prejudice in any way the applicability or invalidity in any other instances.

Section 17. Time of Taking Effect. This Act shall be in force and effect from the date of its approval.

Approved June 15, 1949.