In addition to the bonds pledging the faith and credit of the city, as provided for in section 452.08, any city of the first class may issue and dispose of interest-bearing certificates, which shall be a lien or charge against the public utility property for the acquisition or construction of which they were issued and shall be payable out of the specified portion of the revenues or income to be derived therefrom, but which shall under no circumstances be or become an obligation or liability of the city or payable out of the general funds thereof, nor shall the certificates be deemed a part of the indebtedness of the city for any purpose. The certificates, together with the bonds provided for in section 452.08, shall not be issued on the public utility property in an amount in excess of the cost to the city of the property as provided in section 452.08, and ten percent of the cost in addition thereto. In order to secure the payment of the public utility certificates and the interest thereon, the city may convey, by way of mortgage or deed of trust, any or all of the property thus acquired or to be acquired through the issue thereof; which mortgage or deed of trust shall be executed in such a manner as directed by the council and acknowledged and recorded in the manner provided by law for the acknowledgment and recording of mortgages of real estate, and may contain such conditions and provisions, not in conflict with the provisions of sections 452.08 to 452.13, as may be deemed necessary to fully secure the payment of the certificates described therein. The mortgage or deed of trust may carry the grant of a privilege or right to maintain and operate the property covered thereby, for a period not exceeding 20 years from and after the date the property may come in the possession of any person or corporation as a result of foreclosure proceedings; which privilege or right may fix the rates which the person or corporation securing the same as a result of the foreclosure proceedings shall be entitled to charge in the operation of the property, for a period not exceeding 20 years. When, and as often as default shall be made in the payment of the certificate issued or secured by mortgage or deed of trust, or in the payment of the interest thereon when due, and the default shall have continued for the space of 12 months after notice thereof has been given to the mayor and financial officer of the city issuing the certificates, it shall be lawful for the mortgagee or trustee, upon the request of the holder or holders of a majority in amount of the certificates issued and outstanding under the mortgage or deed of trust, to declare the whole of the principal of all the certificates outstanding to be at once due and payable, and to proceed to foreclose the mortgage or deed of trust in any court of competent jurisdiction. At a foreclosure sale, the mortgagee or the holders of the certificates may become the purchaser or purchasers and the rights and privileges sold, if the mortgagee or the holders be the highest bidders. Any public utility acquired under the foreclosure shall be subject to regulation by the corporate authorities of the city to the same extent as if the right to construct, maintain, and operate the property had been acquired through a direct grant without the intervention of foreclosure proceedings; provided, that no such public utility certificates or mortgage shall ever be issued by any city under the provisions of sections 452.08 to 452.13, unless and until the question of the adoption of the ordinance of the council making provision of the issue thereof shall have first been submitted to a popular vote and approved by a majority of the qualified voters of the city voting upon the question.

History: (1486) 1913 c 310 s 3; 1986 c 444; 1987 c 384 art 2 s 1