Article II. AUTHORITY OF COUNTY TO MAINTAIN WATER SUPPLY SYSTEM  

Section 1. The board of supervisors of any county adjoining any city within or without this state having a population of more than 125,000, according to the last preceding United States census, shall be and it hereby is authorized and empowered to construct, reconstruct, maintain, alter, improve, add to and operate water supply systems in said county.

Section 2. Said boards shall have the following additional powers and duties subject to the conditions and limitations hereinafter prescribed.

(a)

To acquire by gift, condemnation, purchase, lease or otherwise water supply and water supply system or systems, provided that the right of condemnation granted herein shall be subject to the same provisions as are provided in section 3832 [Code of Virginia, § 25-233] of the Code of Virginia concerning the condemnation of any property belonging to a corporation possessing the power of eminent domain by another public service corporation.

(b)

To furnish water from any such system or systems to any sanitary district, village, town, community, individual, firm, corporation or partnership, and to make such charge for such supply of water as the board may from time to time determine upon.

(c)

To lay a levy for the purpose of raising funds for the construction, maintenance, operation, improvement, acquisition and reconstruction of any such water systems or in lieu thereof to appropriate from the general county fund for such purposes.

(d)

To contract for a loan or loans and to issue bonds of said county on the credit of the county and/or bonds of the said county, the payment of which the net revenue from the sale of water from any such water supply system or systems shall be obligated and appropriated and for which the credit of any such county shall not be obligated, to an amount in the aggregate of not exceeding 18 percent of the assessed value of all real estate in the said county subject to local taxation, for the purpose of construction, acquisition, reconstruction, improvement, maintenance, operation and extension of any such water supply system or systems, provided that such borrowing power shall not exist and the loan shall not be contracted for nor bonds issued unless and until the action of the board of supervisors determining to construct, maintain and operate, acquire, reconstruct, extend and/or improve such water supply system or systems and specifying the character of bonds shall be certified to the judge of the circuit court of said county petitioning the said judge to call an election for the purpose of taking the sense of the qualified voters of the county on such loan and bond issue. After receipt of the petition of the board of supervisors above referred to, the judge of the circuit court of said county, in term time or in vacation, shall make an order requiring the judges of election to open a poll not less than 30 days from the date of such order, which date shall be designated therein, and take the sense of the qualified voters of the said county on the question whether the board of supervisors shall issue bonds for said purpose and/or purposes. The clerk of the said court shall cause a notice of such election to be published in some newspaper, published or having a general circulation in the county, once a week for three consecutive weeks, shall post a copy of such notice at the door of the court house of said county and shall certify a copy of the order requiring the judges of election to open a poll to the county electoral board. The county electoral board shall cause the polls at the various voting places in the county to be open on the day designated in the said order and the judges of election shall conduct the election in the manner provided in section 197A [Code of Virginia, §§ 24.2-682, 24.2-684] of the Code of Virginia. The ballots shall be furnished by the county electoral board and shall be prepared, printed and voted in accordance with the provisions of section 197A of the Code of Virginia [§§ 24.2-682, 24.2-684], and the board of supervisors, if they deem it expedient, shall proceed to carry out the wishes of the voters as soon as practicable.

Section 3. Whenever the sense of the qualified voters of the county shall be taken on the question whether the board of supervisors of the said county shall issue bonds for the purposes aforesaid, the said election and returns shall be subject to the inquiry, determination and judgment of the circuit court of the county in which said election was held, upon the written complaint of 25 or more of the qualified voters of such county, of an undue election or false returns, two of whom shall take an oath that facts set forth in such complaint are true to the best of their knowledge and belief, and the court shall in judging of such election and returns, proceed upon the merits thereof and determine concerning the same according to the constitution and laws of this state, but such complaint shall not be valid unless it shall have been filed within 30 days after said election in the clerk's office of the said circuit court. The board of supervisors of such county shall be made a defendant by summons or notice to its chairman of the filing of the complaint, and after such service on the chairman of the board of supervisors, either party, upon reasonable notice to the other, shall be at liberty to take depositions to sustain or invalidate such election. Service of notice on any three of the complaints shall be sufficient. The court shall proceed at its next term after such service of summons or notice to determine the contest without a jury on the evidence, oral or written, unless good cause be shown for a continuance, and shall make a proper record of its judgment. If the judgment be that election was a valid one in favor of the issuing of bonds in said county, the court shall make an order in conformity with the preceding section [section 2].

Section 4. After the approval of any such loan and bond issue by the qualified voters of the county, the board of supervisors shall determine what amount of bonds shall be issued for the construction, maintenance, operation, acquisition, reconstruction, extension and/or improvements of said system or systems in said county and in event they do not direct the present issuing of all of the said bonds, they may thereafter, from time to time, direct the residue thereof to be issued to carry out the wishes of the voters, so far as necessary, as expressed in such election, and in event the board, for any reason, fails or refuses to issue the bonds so authorized to be issued, the circuit court of the county may, upon the complaint of 200 qualified voters of such county and after ten days' notice to the chairman of the board, for cause shown, issue an order directing the board to issue the said bonds or any unissued residue thereof, or such portion thereof as the court may, from time to time, deem proper to be issued in order to carry out the wishes of the voters as expressed in said election. The board shall have the power to appoint an agent or agents to sell said bonds (and to pay said agent or agents a commission for negotiating said sale not to exceed three percent of the amount of bonds sold by them, or to pay such sum to the purchaser of such bonds, provided that said bonds sold shall be paid for in lawful money only, and shall not be sold at less than par value). When such a sale of bonds has been negotiated, the board of supervisors shall issue the same. Such bonds may be either registered or with coupons attached, as said board of supervisors may prescribe, and if the bonds authorized to be issued be bonds the payment of which the full faith and credit of the county is pledged, there shall be written or printed in ink thereon the following sentences: "These bonds are issued for the construction and operation of a public water supply system in the county of ___________, Virginia, and the full faith and credit of the said county is hereby pledged for their payment." And if the bonds authorized to be issued be bonds for the payment of which the net revenue from the sale of water from any such water supply system or systems shall be obligated and appropriated and for which the credit of any such county shall not be obligated, there shall be written or printed in ink on the face of the bonds the following sentences: "These bonds are issued for the construction and operation of a public water supply system in the County of ___________, Virginia, and the net revenue from the sale of water from said public water supply system is hereby pledged for their payment, and the credit of the county is not pledged."

Section 4-a. The moneys raised by the contracting of a loan and the issuance of bonds for any of the purposes specified in section 2 or section 4 of this act may, to the extent necessary, be applied to the refunding of the principal of or interest on all or any part of any outstanding bonds of the county issued for one or more purposes provided the notice of the election called pursuant to section 2 of this act to take the sense of the qualified voters of the county on the question whether the board of supervisors shall make such loan and issue such bonds specifies such refunding as one of the purposes to be financed by the issuance of such bonds.

Section 5. The net revenue derived from the operation of such systems shall be set apart by the said board to pay the interest on the bonds so issued or to be issued, and to create a sinking fund to redeem the principal thereof at maturity. The board of supervisors is hereby authorized and empowered to apply any part or all of said sinking fund to the payment, if redeemable by their terms, or to the purchase of any of said bonds, at any time, and all bonds so paid off or purchased by said board of supervisors shall be immediately canceled, and shall not be reissued and the board of supervisors is authorized and empowered to lend out, upon real estate security, the loan not to exceed 50 percent of the assessed value of such real estate, or deposit in bank at interest all accumulations of money to the credit of said sinking fund to collect and reinvest the same and the interest accruing thereon from time to time, so often as may be necessary or expedient, until such bonds become subject to call; provided, that no money to credit of said sinking fund shall be loaned out or deposited or invested by the said board of supervisors, unless said loan, deposit or investment shall be first approved by the circuit court of said county, or the judge thereof in vacation, and the form of the security be examined and approved by the commonwealth's attorney of said county, which approval shall be entered of record in the order book of this court. The treasurer shall not be liable for any funds herein provided for that shall be lost while on deposit made by order of the board of supervisors with any bank or banks, or when invested in any real estate security as provided herein, but the board of supervisors may require of any such bank a bond, with corporate or other surety, to secure such deposit.

The said board of supervisors shall, if necessary for the payment of interest on the said bonds or to increase the sinking fund provided for hereunder, levy an annual tax upon all the real property in such county subject to local taxation to pay such interest and to make payments into the said sinking fund, if the bonds be those the payment of which the credit of the county is pledged.

Section 6. When the board of supervisors of the county wishes to redeem any of the outstanding bonds subject to call, issued under the provisions of this act, it may, through the chairman of the board of supervisors, give notice of its readiness to do so to the holder in person or by publication thereof once a week for two successive weeks in a newspaper published in said county or nearest thereto. It shall be sufficient in the notice to give the number and amount of such bond, and fix a day for its presentation for payment, which shall not be less than ten days from the date of personal service of the notice, or the completion of the publication thereof, as the case may be. If the bond be not presented on the day fixed for its redemption, interest thereon shall cease from that day.

Section 7. The board of supervisors of any such county is hereby vested with the power of eminent domain insofar as may be necessary for the acquisition, construction, reconstruction, alteration, additions to, maintenance, and repair of any part of such water supply system or systems, and in the exercise of such power is hereby vested with all of the authority to exercise such power as is given to the state highway commissioner of Virginia by chapter 411 of the Acts of the General Assembly of Virginia of 1942, approved April 4, 1942.

Section 7-a. Any incorporated town operating its own water supply system shall be exempt from the operation of this act and from any obligation for the payment of bonds or loans made under authority of this act, and no election had under authority of this act shall be held in any such town.

Section 7-b. In cases where a county, at the time of issuing bonds under authority of this act, contains an incorporated town operating its own water supply system and exempted from the operation of this act by section 7-a, that part of the territory of such county which is outside of the corporate limits of such exempt town shall, for the purposes of issuing and paying the bonds, constitute a district, and the following special provisions shall be applicable to such bonds:

(a)

The bonds shall be issued in the name of such county on behalf of such district, and not on the credit of the entire county.

(b)

There shall not be written or printed on the bonds the words "and the full faith and credit of said county is hereby pledged for their payment", required by section 4 of this act.

(c)

The aggregate principal amount of the bonds shall not exceed 18 percent of the assessed value of all real estate of such district subject to local taxation.

(d)

Any tax which may be levied for the payment of interest on such bonds or to increase the sinking fund provided therefor shall be levied only on the real property in such district.

Section 7-c. Any provision of any law to the contrary notwithstanding, any bond issued pursuant to the authority of this act shall be deemed to be fully negotiable within the meaning and for all the purposes of chapter 233 of the Code of Virginia.

Editor's note— Former ch. 233 was omitted from the current Code of Virginia.

Section 7-d. Any resolution of the board of supervisors of a county providing for or authorizing the issuance of any bonds under the authority of this act may, in the discretion of the board of supervisors, contain provisions, which shall be a part of the contract with the several holders of such bonds, as to:

(1)

The custody, security, use, expenditure or application of the proceeds of the bonds;

(2)

The construction and completion, or replacement, of all or any part of the water supply system or systems for which the bonds are issued;

(3)

The use, regulation, operation, maintenance, insurance or disposition of all or any part of such water supply system or systems, or restrictions on the exercise of the powers of the board of supervisors to dispose of, or to limit or regulate the use, of all or any part of such water supply system or systems;

(4)

Payment of the principal of or interest on the bonds, and the sources and methods thereof, the rank or priority of any such bonds as to any lien or security, or the acceleration of the maturity of any such bonds;

(5)

The use and disposition of the revenues derived or to be derived from the operation of all or any part of such water supply system or systems, including any parts thereof theretofore constructed or acquired and any parts, extensions, replacements or improvements thereof thereafter constructed or acquired;

(6)

The pledging, setting aside, depositing or trusteeing of all or any part of the revenues of such water supply system or systems to secure the payment of the principal or interest on the bonds, or the payment of expenses of operation or maintenance of such water supply system or systems;

(7)

The setting aside out of said revenues, reserves and sinking funds, and the source, custody, security, regulation and disposition thereof;

(8)

Determination of the definition of said revenues or of the expenses of operation and maintenance of such water supply system or systems;

(9)

The rents, rates, fees, or other charges for connection with or the use of the services of such water supply system or systems, including any parts thereof theretofore constructed or acquired, and any parts, extensions, replacements or improvements thereof thereafter constructed or acquired, and the fixing, establishment, collection and enforcement of the same, the amount or amounts of revenues to be produced thereby, and the disposition and application of the amounts charged or collected;

(10)

The assumption or payment or discharge of any indebtedness, liens or other claims relating to any part of such water supply system or systems or any obligations having or which may have a lien on any part of such revenues;

(11)

Limitations on the issuance of additional bonds or any other obligations or on the incurrence of indebtedness, payable from said revenues;

(12)

Limitations on the powers of the board of supervisors to construct, acquire or operate, or permit the construction, acquisition or operation of, any plants, structures, facilities or properties which may compete or tend to compete with such water supply system or systems;

(13)

Payment of costs or expenses incident to the enforcement of the bonds or of the provisions of any resolution authorizing or providing for the bonds, or of any covenant or contract with the holders of the bonds;

(14)

The procedure, if any, by which the terms of any covenant or contract with, or duty to, the holders of the 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 or evidenced; or

(15)

Any other matter or course of conduct which, by recital in the resolution authorizing or providing for the bonds, is declared to further secure the payment of the principal of or interest on the bonds.

All such provisions of a resolution authorizing or providing for the bonds and of such covenants and agreements shall constitute valid and legally binding contracts between the county and the several holders of the bonds, regardless of the time of issuance of such bonds, and shall be enforceable by any such holder or holders by mandamus or other appropriate action, suit or proceeding at law or in equity in any court of competent jurisdiction.

Section 8. If any section, or part of section, of this act is hereafter held by any court of competent jurisdiction to be unconstitutional, such decision shall in no wise affect or render void the remainder of such section or this act.