Administrative Rules of Montana › Department 36 - NATURAL RESOURCES AND CONSERVATION › Chapter 36.23 - DRINKING WATER STATE REVOLVING FUND ACT › Subchapter 36.23.1 - Financial Assistance › Rule 36.23.111 - REVENUE BONDS

Current through Register Vol. 13, July 5, 2024
(1) The department
				may accept revenue bonds issued by a municipality in accordance with the
				provisions of Title 7, chapter 7, part 44, or Title 7, chapter 13, part 2, MCA,
				or other applicable statutory provisions, subject to the following terms and
				conditions:
(a) the bonds must be payable from
				the revenues of the system on a parity with any outstanding revenue bonds
				payable from the system. The bond must be secured by a pledge of the net
				revenues of the system. If bonds are currently outstanding payable from the
				gross revenues of the system, a gross revenue pledge will be acceptable
				provided the requirements of (1) (b) through (d) are met;
(b) the payment of principal and interest on
				the revenue bonds must be secured by a reserve account equal to reserve
				requirement, such requirement to be met upon the issuance of the
				bonds;
(c) the municipality shall
				covenant to collect and maintain rates, charges, and rentals such that the
				revenue for each fiscal year the bonds are outstanding will be at least
				sufficient to pay the current expenses of operation and maintenance of the
				system, to maintain the operating reserve, and to produce net revenues during
				each fiscal year not less than 125% of the maximum amount of principal and
				interest due on all outstanding bonds payable from the revenues of the system
				in any future fiscal year, or, if the municipality calculates debt service on
				such outstanding bonds on a calendar year basis, then in any future calendar
				year;
(d) the municipality shall
				agree not to incur any additional debt payable from the revenues of the system,
				unless the net revenues of the system for the last complete fiscal year
				preceding the issuance of such additional bonds have equaled at least 125% of
				the maximum amount of principal and interest payable from the revenue bond
				account in any subsequent fiscal year during the term of the then outstanding
				bonds and the additional bonds proposed to be issued, or, if the municipality
				calculates debt service on such outstanding bonds on a calendar year basis,
				then in any future calendar year.
(i) For the
				purpose of the foregoing computation, the net revenues must be those shown by
				the financial reports caused to be prepared by the municipality, except that if
				the rates and charges for service provided by the system have been changed
				since the beginning of the preceding fiscal year, then the rates and charges in
				effect at the time of issuance of the additional bonds must be applied to the
				quantities of service actually rendered and made available during such
				preceding fiscal year to ascertain the gross revenues, from which there shall
				be deducted, to determine the net revenues, the actual operation and
				maintenance cost plus any additional annual costs of operation and maintenance
				which the engineer for the municipality estimates will be incurred because of
				the improvement or extension of the system to be constructed from the proceeds
				of the additional bonds proposed to be issued.
(ii) In no event may any such additional
				bonds be issued and made payable from the revenue bond account if there then
				exists any deficiency in the balances required to be maintained in any of the
				accounts of the fund or if the municipality is in default in any of the other
				provisions;
(e)
				applications indicating the loan will be evidenced by the issuance of a revenue
				bond must be accompanied by:
(i) if requested
				by the department, audited financial statements of the system for the last two
				completed fiscal years;
(ii) if
				requested by the department, a certificate as to the municipality's current
				population and number of system users, a schedule of the 10 largest users of
				the system showing the percentage of total revenues provided by such users and
				the amount of outstanding system debt;
(iii) a description of the existing and
				proposed facilities constituting the system, including a discussion of the
				additional capital needs for the system over the next three-year
				period;
(iv) a copy of the
				ordinance or resolution establishing and describing the system of rates and
				charges for the use or availability of the system;
(v) a pro forma showing revenues of the
				system in an amount sufficient to meet the requirements of these rules and any
				outstanding obligations payable from the system;
(vi) if the pro forma indicates an increase
				in rates and charges to meet the requirements of these rules, a copy of the
				proposed rates and charge resolution and a proposed schedule for the adoption
				of the charges and if subject to review or approval by another entity, the
				schedule for the rate approval; and
(vii) any other information deemed necessary
				by the department to assess the feasibility of the project and the financial
				security of the bonds;
(f) notwithstanding the fact that the
				municipal revenue bond act does not require that the issuance of revenue bonds
				be approved by the voters, the department may require the municipality to
				conduct an election to evidence community support and acceptance of the project
				or require the bonds be authorized by the electors and issued as general
				obligation bonds in accordance with
				7-7-4202, MCA. A municipality shall
				conduct an election to evidence community support and acceptance of the project
				when in the opinion of the department there are projected large rate increases
				due to the improved facility or the facility is a projected high-cost
				facility.