AN ACT TO AUTHORIZE THE CITY OF DOVER TO ISSUE REVENUE BONDS FOR THE PURPOSE OF FINANCING THE EXTENSION, RECONSTRUCTION OR IMPROVEMENT OF THE CITY'S WATER SYSTEM, ELECTRIC SYSTEM AND SEWER SYSTEM, AND TO PROVIDE FOR THE PAYMENT OF SUCH BONDS.
Be it enacted by the General Assembly of the State of Delaware (two-thirds of all Members elected to each House concurring therein):
Section 1. Wherever used in this act, unless a different meaning clearly appears from the context, the word "undertaking" shall mean (1) the system of water supply established and operated by The City of Dover, or (2) the system for the generation and distribution of electric energy for lighting, heating and power established and operated by said City, or (3) the sewer system established and operated by said City for the purpose of collecting, treating and disposing of sewage, or (4) a combination of the systems mentioned in items (1) and (3) of this section, together with all property, rights, easements and interests pertaining thereto or acquired in connection therewith.
Section 2. In addition to the powers which it may now have The City of Dover shall have power (1) to extend or enlarge or to reconstruct and otherwise improve any undertaking, wholly within, wholly without, or partially within and partially without the City, and to acquire such lands and rights and interests therein as it may deem necessary in connection therewith, and (2) to operate and maintain the undertaking for its own use or for the use of the public, and (3) to prescribe, revise and collect rates, fees or charges for the service, facilities, or commodities furnished by any such undertaking, and (4) to issue revenue bonds, in anticipation of the collection of the revenues of such undertaking, to finance in whole or part the cost of such extension, or enlargement, or reconstruction or other improvement of such undertaking, and (5) to pledge to the punctual payment of said bonds and the interest thereon all or any part of the revenues of such undertaking, including the revenues derived from the improvements, betterments or extensions thereto thereafter constructed or acquired, as well as the revenues of the then existing undertaking, and (6) to issue revenue refunding bonds for the purpose of refunding any revenue bonds then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the date of redemption of such bonds, and, if deemed advisable, for the additional purpose of constructing improvements, extensions or enlargements of the undertaking in connection with which the bonds to be refunded shall have been issued, and (7) to do all acts and things necessary or convenient to carry out the powers expressly granted in this act.
Section 3. Bonds issued pursuant to this act may be authorized by a resolution or 'resolutions adopted by the Council of the City. In determining the cost of any project to be financed, the City may include all costs and estimated costs of acquisition or construction or reconstruction, the cost of all labor, materials, machinery and equipment, the cost of all lands, property, rights, easements and interests acquired by the City for such construction or reconstruction or the operation thereof, financing charges, interest prior to and during construction and for one year after completion of construction, and all engineering, inspection, fiscal and legal expenses.
Section 4. Revenue bonds may be issued under this act in one or more series; may bear such date or dates, may mature at such time or times, not exceeding thirty-five years from their respective dates; may bear interest at such rate or rates, not exceeding six per centum (6%) per annum, payable at such time or times; may be payable in such medium of payment; at such place or places; may be in such denomination or denominations; may be in such form either coupon or registered; may carry such registration, conversion, and exchangeability privileges; may be subject to such terms of redemption with or without premium; may be declared or become due before the maturity date thereof; may be executed in such manner, and may contain such terms, covenants, assignments, and conditions as the resolution or resolutions authorizing the issuance of such bonds may provide; and may provide for the sale of the bonds by public sale or by private sale and at such price as deemed in the best interest of the City by the Council of the City. All bonds issued under this act bearing the signature of officers in office on the date of the signing thereof shall be valid and binding notwithstanding that before the delivery thereof and payment therefor, such officers whose signatures appear thereon shall have ceased to be officers of the City. Said bonds and coupons shall be negotiable for all purposes, except as restricted by registration.
Revenue bonds may be issued under the provisions of this act without obtaining the consent of any department, division, commission, board, bureau or agency of the State and without any other proceedings or the happening of any other conditions or things than those proceedings, conditions or things which are specifically required by this act. It shall not be necessary to publish any resolution adopted under the provisions of this act either before or after its final passage. Any action taken by the Council of the City under the provisions of this act may be authorized by resolution at any regular or special meeting, and each such resolution shall take effect immediately. Revenue bonds may be issued under the provisions of this act beyond the general limits of indebtedness prescribed by law and shall not be included in the amount of bonds which the City may be authorized to issue under any other law.
Section 5. Any resolution or resolutions authorizing the issuance of bonds under this act to finance in whole or in part the acquisition, construction, reconstruction, improvement, betterment, or extension of an undertaking may contain covenants (notwithstanding that such covenants may limit the exercise of powers conferred by this act) as to:
(d) The rates, fees, or charges to be charged for the services, facilities, and commodities of such undertaking;
(e) The use and disposition of the revenue of such undertaking;
(f) The creation and maintenance of reserves or sinking funds; the regulation, use and disposition thereof;
(g) The purpose or purposes to which the proceeds of the sale of said bonds may be applied, and the use and disposition of such proceeds;
(h) Events of default and the rights and liabilities arising thereupon, the terms and conditions upon which bonds issued under this act shall become or may be declared due before maturity, and the terms and conditions upon which such declaration and its consequences may be waived;
(f) A fair and reasonable payment by the City to the account of said undertaking for the services, facilities or commodities furnished said City or any of its departments by said undertaking;
(g) The issuance of other or additional bonds or instruments payable from or a charge against the revenue of such undertaking;
(h) The insurance to be carried thereon, and the use and disposition of insurance moneys;
(i) Books of account and the inspection and audit thereof:
(j) Limitations or restrictions as to the leasing or otherwise disposing of the undertaking while any of the bonds or interest thereon remain outstanding and unpaid;
(k) The continuous operation and maintenance of the undertaking;
(l) The creation of a lien on the revenues.
The provisions of this act and of any such resolution or resolutions shall be a contract with every holder of said bonds; and the duties of the City and the governing body and the officers of the City under this act and under any such resolution or resolutions shall be unforceable by any bondholder by mandamus or other appropriate suit, action, or proceeding at law or in equity.
Section 6. Revenue bonds issued under this act shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof, nor shall the municipality issuing the same be subject to any pecuniary liability thereon. No holder or holders of any such bonds shall ever have the right to compel any exercise of the taxing power of the City to pay any such bonds or the interest thereon; nor to enforce payment thereof against any property of the City, nor shall any such bonds constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City. Every bond issued under this act shall contain a statement on its face that the bond is not a debt of the City but is payable solely from the revenues of the undertaking for which it is issued, as provided by law and the proceedings in accordance therewith, and the holder thereof has no right to compel the levy of any tax for the payment of any bond or the interest to accrue thereon.
Section 7. (a) In the event that the City shall default in the payment of the principal of any of the bonds after the same shall become due, or in the event that the City shall default in the payment of the interest of any of the bonds after the same shall become due and such default in the payment of the interest shall continue for a period of thirty days whether the default in the payment of the principal, or the default in the payment of the interest shall be at maturity, or upon call for redemption or in the event that the City or governing body, or officers, agents, or employees thereof shall fail or refuse to comply with the provisions of the act or shall default in any agreement made with the holders of the bonds, any holders of bonds or trustee therefor shall have the right to apply in an appropriate judicial proceeding to any court of competent jurisdiction for the appointment of a receiver of the undertaking, whether or not all bonds have been declared due and payable and whether or not such holder, or trustee therefor, is seeking or has sought to enforce any other right, or exercise any remedy in connection with such bonds. Upon such application the court may appoint, and if the application is made by the holders of twenty per centum in principal amount of such bonds then outstanding, or any trustee for holders of such bonds in such principal amount, shall appoint a receiver of the undertaking.
(b) The receiver so appointed shall forthwith, directly or by his agents and attorneys, enter into and upon and take possession of the undertaking and each and every part thereof and may exclude the City, its governing body, officers, agents, and employees and all persons claiming under them wholly therefrom and shall have, hold, use, operate, manage and control the same and each and every part thereof, and, in the name of the City or otherwise, as the receiver may deem best, and shall exercise all the rights and powers of the City with respect to the undertaking as the City itself might do. Such receiver shall maintain, restore, insure and keep insured, the undertaking, and from time to time shall make all such necessary or proper repairs as to such receiver may seem expedient and shall establish, fix, maintain and collect such rates, fees, rentals, and other charges in connection with the undertaking as such receiver may deem necessary or proper and reasonable, and shall collect and receive all revenues and shall deposit the same in a separate account and apply such revenues so collected and received in such manner as the court shall direct.
(c) Whenever all that is due upon the bonds and interest thereon, and upon any other notes, or other obligations, and interest thereon, having a charge, lien, or other encumbrance on the revenues of the undertaking and under any of the terms of any covenants or agreements with holders of bonds shall have been paid or deposited as provided therein, and all defaults shall have been cured and made good, the court may in its discretion, and after such notice and hearing as it deems reasonable and proper, direct the receiver to surrender possession of the undertaking to the City, the same right of the holders of the bonds to secure the appointment of a receiver to exist upon any subsequent default as hereinabove provided.
(d) Such receiver shall in the performance of the powers hereinabove conferred upon him, act under the direction and supervision of the court making such appointment and shall at all times be subject to the orders and decrees of such court and may be removed thereby. Nothing herein contained shall limit or restrict the jurisdiction of such court to enter such other and further orders and decrees as such court may deem necessary or appropriate for the exercise by the receiver of any functions specifically set forth herein.
Section 8. The City shall not be required to pay any taxes or assessments upon any undertaking or any part thereof, or upon the income therefrom, and any bonds issued under' ,the provisions of this act, their transfer and the income therefrom (including any profit made on the sale thereof) shall at all times be free from taxation within the State.
Section 9. The Council of the City shall cause to be published once in a newspaper published in the City a notice reciting that a resolution has been adopted by it authorizing the issuance of revenue bonds under the provisions of this act and setting forth the amount of such bonds, 'a brief statement of the purpose for which they are to be issued, and further reciting that any action or proceeding to contest the validity of such resolution or any of its provisions must be commenced within thirty (30) days after the publication of such notice. Any action or proceeding in any court to set aside such resolution or any of its provisions or to obtain any other relief upon the ground that it is invalid must be commenced within thirty (30) days after the publication of such notice. After the expiration of such period of limitation, no right of action or defense founded upon the invalidity of such resolution or any of its provisions shall be asserted, nor shall the validity of such resolution or any of its provisions be open to question in any court upon any ground whatever, except in an action or proceeding commenced within such period.
Section 10. This act shall be deemed to provide an additional and alternative method for the doing of the things authorized hereby and shall be regarded as supplemental and additional to powers conferred by other laws and shall not be regarded as in derogation of or as repealing any powers now existing under any other law.
Section 11. In addition to the powers which it may now have The City of Dover shall have power to invest and re-invest in obligations of the United States Government in such sums and for such periods as the Mayor and Council of The City of Dover deem advisable, all or any portion of the funds derived from the operation of the undertaking, or of the funds derived from the sale of revenue bonds of the undertaking, as authorized by this act. Any and all income derived from such investment or re-investment of these funds shall be applied to the costs of operation, maintenance, and/or payment of any obligations of the undertaking from which the funds so invested or re-invested were originally obtained:
Approved June 30, 1959.