Transfer From Associated Municipality to Authority
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The associated municipality is authorized to transfer to an authority created pursuant to this chapter all of the associated municipality's right, title, and interest in and all the assets of the municipal electric, water, wastewater, and telecommunications systems, or any one (1) or more of such systems, including all real and personal property, tangible or intangible, and any right or interest in any such property, whether or not subject to mortgages, liens, charges, or other encumbrances, and all appurtenances, contracts, leases, franchises, and other intangibles must be transferred to the authority. The transfer must be authorized by resolution of the governing body of the associated municipality adopted on one (1) reading and must be accomplished through documents and instruments authorized by the resolution and executed by the officers of the associated municipality as designated by the resolution. A transfer of an associated municipality's electric or telecommunications system to an authority in accordance with this subsection (a) is not a disposition of assets for purposes of § 7-52-132.
Upon formation of an authority pursuant to this chapter, a franchise is granted to the authority to provide within the corporate limits of the associated municipality any and all of the services that it is authorized to provide under applicable law and as set forth in its certificate of incorporation, subject to payment in lieu of taxes pursuant to § 7-36-122. Consistent with § 7-36-107(a)(6), the associated municipality may require such franchise or franchises for the provision of telecommunications services as are permitted under state or federal law.
Upon transfer of an electric, water, or wastewater system from an associated municipality to an authority and the assumption or satisfaction of all obligations of the supervisory board, the jurisdiction and control of the associated municipality and the supervisory board over such system must be transferred to the authority, and the supervisory board having oversight over such system shall cease to exist.
It is a condition of the transfer of a system from the associated municipality to the authority that upon the transfer the authority must either retire the associated municipality's bonds associated with such system by the payment of the bonds in full upon transfer, defease such associated municipality's bonds by depositing funds in irrevocable escrow for the payment of these bonds, or assume and agree to pay in full principal of and interest on such bonds of the associated municipality. Upon the assumption by the authority of the associated municipality bonds and its agreement to pay those bonds when due, the authority shall be fully obligated to pay when due, principal, premium, and interest with respect to those bonds with the same force and effect as if those bonds were issued by the authority. Bonds issued pursuant to this section must be secured by, and payable from, the revenues of the respective system in the same way as other bonds of the authority issued pursuant to this chapter. The transfer of each of the systems must be accomplished in such a manner as not to impair the obligations of contract with reference to the associated municipality's bonds and other legal obligations of the associated municipality and to preserve and protect the contract rights vested in the owners of such bonds and other obligations.