66.0823 Joint local water authorities.

(1) Finding and declaration of necessity. It is declared that the operation of water utility systems by local governmental units of this state and the improvement of the systems through joint action in the production, treatment, storage, transmission, distribution, purchase, sale and exchange of water is in the public interest and a matter of statewide concern; that there is a need in order to ensure the stability and continued viability of the local systems to provide for a means by which local governmental units which operate the systems may act jointly, including development of coordinated water production, treatment, storage, transmission and distribution; and that, the necessity in the public interest for the provisions of this section is declared as a matter of legislative determination.

(2) Definitions. As used in this section, unless the context clearly indicates otherwise:

(a) “Authority" means a joint local water authority.

(b) “Bonds" means any bonds, interim certificates, notes, debentures or other obligations of an authority issued under this section.

(c) “Commission" means the public service commission.

(d) “Contracting party" means a local governmental unit in this state, or a federally recognized Indian tribe or band located in this state, that contracts to establish or to join an authority under this section.

(e) “Local governmental unit" means any city, village, town, county, town sanitary district, water utility district, or a public inland lake protection and rehabilitation district that has town sanitary district powers under s. 33.22 (3).

(f) “Local water authority" means a public corporation created by contract between 2 or more contracting parties.

(g) “Project" means any plant, works, system, facilities and real and personal property of any nature, together with all parts and appurtenances, that are used or useful in the production, treatment, storage, transmission, distribution, purchase, sale, or exchange of water. “Project" includes any interest in, or right to the capacity of, the plant, works, system, facilities or property. “Project" also includes the acquisition of water and the acquisition, construction or operation of facilities for producing, treating, storing, transmitting, or distributing water.

(3) Creation of an authority.

(a) Creation by contract. Any local governmental unit in this state may contract with one or more local governmental units in this state or federally recognized Indian tribes or bands located in the state to establish a separate governmental entity, to be known as a joint local water authority, to jointly produce, treat, store, transmit, distribute, purchase, sell or exchange water, in whole or in part for the benefit of the contracting parties. The parties to the contract may amend the contract as provided in the contract.

(am) Hearing requirements. At least 30 days before becoming a contracting party by entering into a contract under this subsection, a local governmental unit shall hold a public hearing on the proposed contract. Notice of the hearing shall be published as a class 3 notice under ch. 985.

(b) Filing requirements. The parties entering into a contract under this subsection shall file a copy of the contract with the secretary of state. Upon receipt, the secretary of state shall record the contract and issue a certificate of incorporation stating the name of the authority and the date and fact of incorporation. The corporate existence of the authority begins upon issuance of the certificate.

(4) Contract. A contract establishing an authority under sub. (3) shall specify all of the following:

(a) The name and purpose of the authority and the functions or services to be provided by the authority. The name shall refer to the authority as an agency, authority or district.

(b) The establishment and organization of a board of directors, in which all powers of the authority shall be vested. The contract may permit the board of directors to create an executive committee of the board of directors to which the board of directors may delegate any of its powers and duties, as specified by the board.

(c) The number of directors, the manner of their appointment, the terms of their office, their compensation, if any, and the procedure for filling vacancies on the board of directors. The contracting parties shall appoint the members of the board of directors. Each contracting party shall be entitled to appoint an equal number of directors to the board of directors and may remove those directors at will.

(d) The weight given to each director's vote. Unless specifically provided otherwise, each director's vote shall be given equal weight. If the contract provides for differing weights to be given to each director's vote, the contract shall specify the manner of calculating the weight to be given to each director's vote.

(e) The manner of selection of the officers of the authority and their duties.

(f) The voting requirements for action by the board of directors. Unless specifically provided otherwise, a majority of the authorized directors constitutes a quorum of the board of directors. Unless specifically provided otherwise, a majority of the voting power present is necessary for any action to be taken by the board of directors.

(g) The duties of the board of directors, including the obligation to comply with this section and the laws of this state and with the terms of the contract under this subsection.

(h) The manner in which additional local governmental units and Indian tribes or bands located in the state may become parties to the contract by amendment.

(i) Provisions for the disposition, division or distribution of any property or assets of the authority on dissolution.

(j) The term of the contract and the method, if any, of terminating or rescinding the contract. The term of the contract may be a definite period or it may be until rescinded or terminated. The contract may not be rescinded or terminated so long as the authority has bonds outstanding, unless provision for full payment of such bonds, by escrow or otherwise, has been made pursuant to the terms of the bonds or the resolution, trust indenture or security instrument securing the bonds.

(k) The manner in which the contracting parties shall resolve any disputes.

(5) Powers. The authority may do all of the following:

(a) Plan, develop, acquire, construct, reconstruct, operate, manage, dispose of, participate in, maintain, repair, extend or improve one or more projects within the state, either solely or in conjunction with any other person.

(b) Act as agent in conducting an activity under par. (a).

(c) Buy or sell interest in, or rights to the capacity of, projects.

(d) Produce, treat, store, transmit, distribute, purchase, sell or exchange water in such amounts as the board of directors determines to be necessary and appropriate, subject to the limitations in this paragraph. An authority may not sell water at retail. An authority may not sell any water to a person other than a contracting party, except pursuant to an emergency services contract. An authority may enter into an emergency services contract to sell water at wholesale to a person other than a contracting party in emergency situations, to be specified in the contract.

(e) Acquire, own, hold, use, lease as lessor or lessee, sell or otherwise dispose of, mortgage, pledge, or grant a security interest in any real or personal property, commodity or service.

(f) Acquire property by condemnation using the procedure under s. 32.05 or 32.06 for the purposes set forth in this section.

(g) Enter upon any state, county or municipal street, road or alley, or any public highway for the purpose of installing, maintaining and operating the authority's facilities. Whenever the work is to be done in a state, county or municipal highway, street, road or alley, the public authority having control thereof shall be duly notified, and the highway, street, road or alley shall be restored to as good a condition as existed before the commencement of the work with all costs incident to the work to be borne by the authority.

(h) Install and maintain, without compensation to the state, any part of the authority's facilities over, upon or under any part of the bed of any river or of any land covered by any of the navigable waters of the state, the title to which is held by the state, and over, upon or under canals or through waterways. This paragraph does not relieve the authority of its obligation to obtain any permits or approvals otherwise required by law.

(i) Require contracting parties to purchase water from the authority and to connect any contracting party's distribution system with the authority's distribution system.

(j) Fix, maintain and revise fees, rates, rents and charges for functions, services, facilities or commodities provided by the authority.

(k) Make, and from time to time amend and repeal, bylaws, rules and regulations to carry into effect the powers and purposes of the authority.

(L) Join an organization, if the board of directors determines that membership is beneficial to accomplishment of the authority's purposes.

(m) Sue and be sued in its own name.

(n) Have and use a corporate seal.

(o) Employ agents and employees.

(p) Incur debts, liabilities or obligations including the borrowing of money and the issuance of bonds, secured or unsecured, under sub. (9) (b).

(q) Invest any funds held in reserve or sinking funds, or any funds not required for immediate disbursement, including the proceeds from the sale of any bonds, in such obligations, securities and other investments as the authority deems proper in accordance with s. 66.0603 (1m).

(r) Do and perform any acts and things authorized by this section under, through or by means of an agent or by contracts with any person.

(s) Exercise any other powers that the board of directors considers necessary and convenient to effectuate the purposes of the authority.

(6) Public character. An authority is a political subdivision and body public and corporate of the state, exercising public powers, separate from the contracting parties. It has the duties, privileges, immunities, rights, liabilities and disabilities of a public body but does not have taxing power.

(7) Payments.

(a) Definition. In this subsection, “purchase of water" includes any right to capacity or interest in any project.

(b) Payments for commodities and services. The contracting parties may agree to pay the authority funds for commodities to be procured or services to be rendered by the authority. The agreement may also provide for payments in the form of contributions to defray the cost of any purpose set forth in the contract under sub. (4) or the agreement and, subject to repayment by the authority, for advances for any purpose set forth in the contract under sub. (4) or the agreement.

(c) Purchase agreements. The contracting parties may enter into purchase agreements with the authority for the purchase of water. Purchase agreements may include the following provisions:

1. A provision requiring the purchaser to make payments in amounts that are sufficient to enable the authority to meet its expenses, interest and principal payments, whether at maturity or upon debt service fund redemption, for its bonds, reasonable reserves for debt service, operation and maintenance and renewals and replacements and the requirements of any rate covenant with respect to debt service coverage contained in any resolution, trust indenture or other security instrument.

2. A provision requiring the purchaser to pay for water regardless of whether water is delivered to the purchaser or whether any project contemplated by any such agreement is completed, operable or operating, and notwithstanding suspension, interruption, interference, reduction or curtailment of the output of the project.

3. A provision requiring that, if one or more of the purchasers defaults in the payment of its obligations under a purchase agreement, the remaining purchasers shall accept and pay for, and shall be entitled proportionately to use or otherwise dispose of, the water that was to have been purchased by the defaulting purchaser.

4. A provision providing for a term for the purchase agreement. The term may be for the life of a project, for an indefinite period or for any other term.

5. Other terms and conditions that the authority and the purchasers determine.

(d) Status of obligations under a purchase agreement. To the extent that a purchase agreement with an authority provides that the obligations of a contracting party under the purchase agreement are special obligations of the contracting party, payable solely from the revenues and other moneys derived by the contracting party from its water utility, these obligations are not debt of the contracting party and shall be treated as operation and maintenance expenses of a water utility.

(8) Regulation.

(a) An authority may not issue bonds for the construction of a project until the commission has certified that public convenience and necessity require the project. A project need not be certified as being required by public convenience and necessity if no bonds are issued for the project. The commission may promulgate rules regarding the making of certifications of public convenience and necessity under this subsection.

(b) The commission may refuse to certify a project under par. (a) if it appears that the completion of the project will do any of the following:

1. Substantially impair the efficiency of the service of a contracting party's public utility.

2. Provide facilities unreasonably in excess of the probable future requirements.

3. When placed in operation, add to the cost of service without proportionately increasing the value or available quantity of service.

(c) The commission may issue a certificate for the construction of a project or for any part of the project if the project complies with the requirements of par. (b). The commission may attach to the issuance of its certificate terms and conditions that will ensure that the construction of the project meets the requirements of par. (b).

(9) Bonds; generally.

(a) Types of bonds. An authority may issue the types of bonds it determines, subject only to any agreement with the holders of particular bonds. An authority may issue bonds, the principal and interest on which are payable exclusively from all or a portion of the revenues from one or more projects, or from one or more revenue producing contracts made by the authority or from its revenues generally. The authority may secure its bonds by a pledge of any grant, subsidy, or contribution from any contracting party, or by a pledge of any income or revenues, funds, or moneys of the authority from any source whatsoever.

(b) Purposes of bonds. An authority may issue bonds in such principal amounts as the authority deems necessary to provide sufficient funds to carry out any of its corporate purposes and powers, including the establishment or increase of reserves, interest accrued during construction of a project and for a period not exceeding one year after the completion of construction of a project, and the payment of all other costs or expenses of the authority incident to and necessary or convenient to carry out its corporate purposes and powers.

(c) Liability on the bonds.

1. Neither the members of the board of directors of an authority nor any person executing the bonds is personally liable on the bonds by reason of the issuance of the bonds.

2. The bonds of an authority is not a debt of the contracting parties. Neither the contracting parties nor the state are liable for the payment of the bonds. The bonds of any authority shall be payable only out of funds or properties of the authority. The bonds of the authority shall state the restrictions contained in this paragraph on the face of the bonds.

(10) Issuance of bonds.

(a) Bonds of an authority shall be authorized by resolution of the board of directors. The bonds may be issued under such a resolution or under a trust indenture or other security instrument. The bonds may be issued in one or more series and may be in the form of coupon bonds or registered bonds under s. 67.09. The bonds shall bear the dates, mature at the times, bear interest at the rates, be in the denominations, have the rank or priority, be executed in the manner, be payable in the medium of payment, at the places, and be subject to the terms of redemption, with or without premium, as the resolution, trust indenture or other security instrument provides.

(b) The authority may sell the bonds at public or private sales at the price or prices determined by the authority.

(c) If an officer whose signatures appear on any bonds or coupons ceases to be an officer of the authority before the delivery of such obligations, the officer's signature shall, nevertheless, be valid for all purposes as if the officer had remained in office until delivery of the bonds.

(11) Covenants. An authority may do all of the following in connection with the issuance of bonds:

(a) Covenant as to the use of any or all of its property, real or personal.

(b) Redeem the bonds, or covenant for the redemption of the bonds, and provide the terms and conditions of the redemption.

(c) Covenant as to charge fees, rates, rents and charges sufficient to meet operating and maintenance expenses, renewals and replacements to a project, principal and debt service on bonds, creation and maintenance of any reserves required by a bond resolution, trust indenture or other security instrument and to provide for any margins or coverages over and above debt service on the bonds that the board of directors considers desirable for the marketability of the bonds.

(d) Covenant as to the events of default on the bonds and the terms and conditions upon which the bonds shall become or may be declared due before maturity, as to the terms and conditions upon which this declaration and its consequences may be waived, and as to the consequences of default and the remedies of bondholders.

(e) Covenant as to the mortgage or pledge of, or the grant of a security interest in, any real or personal property and all or any part of the revenues from any project or any revenue producing contract made by the authority to secure the payment of bonds, subject to any agreements with the bondholders.

(f) Covenant as to the custody, collection, securing, investment and payment of any revenues, assets, moneys, funds or property with respect to which the authority may have any rights or interest.

(g) Covenant as to the purposes to which the proceeds from the sale of any bonds may be applied, and as to the pledge of such proceeds to secure the payment of the bonds.

(h) Covenant as to limitations on the issuance of any additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds.

(i) Covenant as to the rank or priority of any bonds with respect to any lien or security.

(j) Covenant as to the procedure by which the terms of any contract with or for the benefit of the holders of bonds may be amended or abrogated, the amount of bonds, the holders of which must consent thereto, and the manner in which such consent may be given.

(k) Covenant as to the custody and safekeeping of any of its properties or investments, the insurance to be carried on the property or investments and the use and disposition of insurance proceeds.

(L) Covenant as to the vesting in one or more trustees, within or outside the state, of those properties, rights, powers and duties in trust as the authority determines.

(m) Covenant as to the appointing of, and providing for the duties and obligations of, one or more paying agent or other fiduciaries within or outside the state.

(n) Make all other covenants and do any act that may be necessary or convenient or desirable in order to secure its bonds, or in the absolute discretion of the authority, tend to make the bonds more marketable.

(o) Execute all instruments necessary or convenient in the exercise of the powers granted under this section or in the performance of covenants or duties, which may contain such covenants and provisions, as a purchaser of the bonds of the authority may reasonably require.

(12) Refunding bonds. An authority may issue refunding bonds for the purpose of paying any of its bonds at or prior to maturity or upon acceleration or redemption. An authority may issue refunding bonds at such time prior to the maturity or redemption of the refunded bonds as the authority deems to be in the public interest. The refunding bonds may be issued in sufficient amounts to pay or provide the principal of the bonds being refunded, together with any redemption premium on the bonds, any interest accrued or to accrue to the date of payment of the bonds, the expenses of issue of the refunding bonds, the expenses of redeeming the bonds being refunded, and such reserves for debt service or other capital or current expenses from the proceeds of such refunding bonds as may be required by the resolution, trust indenture or other security instruments. To the extent applicable, refunding bonds are subject to subs. (10) and (11).

(13) Bonds eligible for investment.

(a) Any of the following may invest funds, including capital in their control or belonging to them, in bonds of the authority:

1. Public officers and agencies of the state.

2. Political subdivisions.

3. Insurance companies.

4. Trust companies.

5. Banks.

6. Savings banks.

7. Savings and loan associations.

8. Investment companies.

9. Personal representatives.

10. Trustees.

11. Other fiduciaries not listed in this paragraph.

(b) The authority's bonds are securities that may be deposited with and received by any officer or agency of the state or any political subdivision for any purpose for which the deposit of bonds or obligations of the state or any political subdivision is authorized by law.

(14) Budgets; rates and charges; audit. An authority shall adopt a calendar year as its fiscal year for accounting purposes. The board of directors of the authority shall annually prepare a budget for the authority. Rates and other charges received by the authority shall be used for the general expenses and capital expenditures of the authority and to pay interest, amortization, and retirement charges on bonds. The authority shall maintain an accounting system in accordance with generally accepted accounting principles and shall have its financial statements and debt covenants audited annually by an independent certified public accountant.

(15) Compliance with local ordinances and permit conditions; deviations. The authority shall comply with all local ordinances and permit conditions, unless the authority's board of directors determines that the ordinance or permit condition imposes unreasonable requirements, costs or delays on the authority's ability to carry out its responsibilities. If the board of directors determines that an ordinance or permit condition imposes unreasonable requirements, costs or delays, the board of directors shall pass a resolution specifying the ordinance or permit condition, indicating why it is unreasonable and how the authority intends to deviate from the ordinance or permit condition. If the board of directors passes a resolution under this subsection, the authority shall serve a copy of the resolution by certified mail upon the clerk of the county or municipality whose ordinance or permit condition is specified in the resolution. The copy shall be accompanied by a statement that the authority's determination is subject to review only for a period of 90 days from the date of the postmark. Any aggrieved person may commence an action in the circuit court of the county, or in the circuit court in which the municipality is located, to challenge the authority's determination. The action must be commenced within 90 days of the postmark of the copy served on the county or municipality. An action under this subsection is the only manner by which the authority's determination to deviate from an ordinance or permit condition may be challenged. The circuit court shall give the matter precedence over other matters not accorded similar precedence by law. Failure to commence an action within 90 days from the date of the postmark bars the person from objecting to the authority's determination to deviate from the local ordinance or permit condition. If the determination of the authority either is not challenged or is upheld, the authority may deviate from the ordinance or permit condition in the manner specified in the resolution, except that this subsection does not authorize the authority to deviate from floodplain or shoreland zoning ordinances or permit conditions.

(16) Other statutes. This section does not limit the powers of local governmental units to enter into intergovernmental cooperation or contracts or to establish separate legal entities under s. 66.0301 or any other applicable law, or otherwise to carry out their powers under applicable statutory provisions.

(17) Construction. This section shall be interpreted liberally to effect the purposes set forth in this section.

History: 1997 a. 184; 1999 a. 150 s. 212; Stats. 1999 s. 66.0823; 1999 a. 186 s. 49; 2001 a. 30, 102.