PART V. SALE OR LEASE OF MUNICIPAL PUBLIC UTILITY.
§8-12-17. Sale or lease of municipal public utility.
In any case where a municipality shall own a gas system, an
electric system, a waterworks or other public utility, and the
governing body thereof shall deem it for the best interest of such
municipality that such utility be sold or leased, the governing
body shall, by ordinance legally adopted, submit to the qualified
voters of such municipality, at any regular municipal election or
at any special municipal election called for that purpose, the
question of making or effecting such sale or lease. In such case
the governing body shall, in the ordinance submitting such question
to a vote, set forth in full the terms of such proposed sale or
lease, the name of the proposed purchaser or lessee and the date of
such election, and a notice containing this information shall be
published as a Class II-0 legal advertisement in compliance with
the provisions of article three, chapter fifty-nine of this code,
and the publication area for such publication shall be such
municipality. Such election shall be held in all respects in
compliance with the provisions of chapter three of this code, so
far as the same are applicable and not inconsistent herewith, and
the provisions of article five of this chapter. If a majority of
the legal votes cast at such election upon such question be in
favor of the proposed sale or lease of such utility, the governing
body, upon the ascertainment of the result of such election, shall
have full power and authority to proceed to execute or effect such sale or lease in accordance with the terms and conditions
prescribed in the ordinance as aforesaid, and shall have power to
do any and all things necessary or incident thereto: Provided,
That if at any time after such election and before the execution of
the authority under the ordinance, any person should present to the
governing body an offer to buy such public utility at a price which
exceeds by at least five percent the sale price which shall have
been so voted upon and authorized or to lease the same upon terms
which the governing body, in its discretion, shall consider more
advantageous to the municipality than the terms of the lease which
shall have been authorized by vote as aforesaid, the governing body
shall have the power to accept such subsequent offer, and to make
such sale or such lease to the person making the offer, without
resubmitting the question to a vote; but, if a sale shall have been
authorized by vote as aforesaid, and such subsequent proposition be
for a lease, or, if a lease shall have been so authorized, and the
subsequent proposition shall be for a sale, the governing body
shall have no power to accept the same without submitting the
question thereof to a vote of the people as first above provided.
Before any such second or subsequent proposition shall be submitted
to a vote, after a sale or lease shall have been authorized at an
election held hereunder, the person making such proposition shall
furnish bond, with security to be approved by the governing body,
in a penalty of not less than twenty-five percent of such proposed
bid, conditioned to carry such proposition into execution, if the same shall be approved at the election to be called thereon. In
any case where any such public utility shall be sold or leased by
the governing body as hereinabove provided, no part of the moneys
derived from such sale or lease shall be applied to the payment of
current expenses of the municipality, but the proceeds of such sale
or lease shall be applied in payment and discharge of any bonded
indebtedness created in respect to such public utility, and in case
there be no bonded indebtedness, the governing body, in its
discretion, shall have the power and authority to expend all such
moneys when received for the purchase or construction of
fire-fighting equipment and buildings for housing such equipment,
a municipal building or city hall, and the necessary land upon
which to locate the same, or for the construction of paved streets,
avenues, roads, alleys, ways, sidewalks, sewers and other like
permanent improvements, and for no other purposes. In case there
be a surplus after the payment of such bonded indebtedness, the
surplus shall be used as aforesaid.
The requirements of this section shall not apply to the sale
or lease of any part of the properties of any such public utility
determined by the governing body to be unnecessary for the
efficient rendering of the service of such utility.