Water and Sewer Authorities

Del. Code tit. 16, ch. 14
in effect

Del. Code tit. 16, § 1401 Definitions.

As used in this chapter: (1) “Authority” means a body politic and corporate created pursuant to this chapter or, if such body politic and corporate shall be abolished, the board, body or commission succeeding to the principal functions thereof or to which the powers given by this chapter to such body politic and corporate shall be given by law. (2) “Board” means the governing body of an authority. (3) “Bonds” means and includes notes, bonds and other evidences of indebtedness or obligations which each authority is authorized to issue pursuant to § 1408 of this title. (4) “Cost” as applied to a water system or a sewerage system includes the purchase price of any such system or the cost of acquiring all of the capital stock of the corporation owning such system and the amount to be paid to discharge all of its obligations in order to vest title to the system or any part thereof in the authority, the cost of improvements, the cost of all lands, properties, rights, easements, franchises and permits acquired, the cost of all machinery and equipment, financing charges, interest prior to and during construction and for 1 year after completion of construction, cost of engineering and legal services, plans, specifications, surveys, estimates of cost and of revenues, other expenses necessary or incident to the determining of the feasibility or practicability of any such acquisition, improvement or construction, administrative expenses and such other expenses as may be necessary or incident to the financing herein authorized, to the acquisition, improvement, construction of a water system or a sewerage system and the placing of the same in operation by the authority prior to the issuance of revenue bonds under this chapter for engineering studies and for estimates of cost and of revenues and for other technical or professional services which may be utilized in the acquisition, improvement or construction of such system, may be regarded as a part of the cost of such system. (5) “Federal agency” means and includes the United States of America, any department or bureau thereof, and any agency or instrumentality of the United States of America heretofore established or which may be established or created hereafter. (6) “Governing body” as applied to any municipality means the body or board authorized by law to enact ordinances or adopt resolutions for the particular municipality. (7) “Improvements” means such construction, erection, repairs, replacements, additions, extensions and betterments of and to a water system or a sewerage system as are deemed necessary by the authority to place or to maintain such system in proper condition for the safe, efficient and economic operation thereof or to meet requirements for service in areas which may be served by the authority and in which no existing service is being rendered. (8) “Municipality” means any county, city, town, village, sanitary district or other political subdivision of this State. (9) “Project” means any water system, sewer system and any combination or part or parts thereof owned, constructed or operated by an authority under this chapter. (10) “Sewage” means the water carried wastes created in and carried or to be carried away from residences, hotels, schools, hospitals, industrial establishments, commercial establishments or any other private or public building together with such household and industrial wastes as may be present. (11) “Sewerage system” means and includes all plants, systems, facilities or properties used or useful or having the present capacity for future use in connection with the collection, carrying away, treating, neutralizing, stabilizing or disposal of sewage, industrial wastes or other wastes, and any integral part thereof, including sewage treatment plants, disposal fields, lagoons, pumping stations, drainage ditches, surface water intercepting ditches, outfall sewers, trunk sewers, intercepting sewers, lateral sewers, force mains, pipes, pipelines, conduits, equipment, appurtenances and all properties, rights, easements and franchises relating thereto and deemed necessary or convenient by the authority for the operation thereof. (12) “Water system” means and includes all plants, systems, facilities or properties used or useful or having the present capacity for future use in connection with the supply or distribution of water, and any integral part thereof, including water supply systems, water distribution systems, reservoirs, dams, wells, intakes, mains, laterals, pumping stations, standpipes, filtration plants, purification plants, hydrants, meters, valves and equipment, appurtenances and all properties, rights, easements and franchises relating thereto and deemed necessary or convenient by the authority for the operation thereof.

Del. Code tit. 16, § 1402 General referendum; creation of authority; certificate and recording; certification of information to Secretary of State.

(a) (1) After a favorable majority referendum vote at a special election in the municipality or in each of the municipalities creating an authority, which referendum election shall be held on the same date in each of such municipalities, the governing body of a municipality or the governing bodies of 2 or more municipalities may by ordinances or resolutions signify their intention to create an authority to acquire, construct, reconstruct, extend, repair, improve, maintain and operate a project under an appropriate name and title, containing the word “authority,” which shall be a public body politic and corporate. (2) Notice of the holding of such referendum election shall be authorized by resolution of the governing body of each municipality and published once a week for at least 3 consecutive weeks in at least 1 newspaper circulating in the municipality. Such notice shall set out in summary form the purpose, the date and place of holding the referendum election and the hours the polls will be open. (3) At said referendum election every resident and nonresident taxable of the municipality of the age of 21 years or upwards who has, by the time of voting, paid all municipal taxes theretofore assessed to the taxable resident or nonresident and/or assessed against the property the taxable resident or nonresident owns at the time of the referendum election shall be entitled to vote and shall have 1 vote for each dollar, or fractional part of a dollar, of taxes paid by the taxable resident or nonresident according to the last municipal assessment and tax payment records preceding the referendum election. The judge of the election shall note on the outside of each ballot, before the judge deposits the ballot in the ballot box, the number of votes to which each voter is entitled, in accordance with municipal assessment and tax payment records. (4) In cases of jointly owned property the votes of the owners of shares therein shall be in accordance with their respective shares or, if all owners appear at the polls and so consent, all of the votes may be cast by the owner of any share, except that the spouse first present at the polls may cast all the votes in reference to property held by a married couple as tenants by the entirety. Life tenants shall have the entire vote as to the property so held and holders of remainder interest only shall have no vote by reason thereof. (5) The clerk of each municipality shall provide sufficient ballots which shall have printed thereon “For” and “Against.” The election shall be conducted in conformity with the provisions governing general elections as provided in Chapter 49 of Title 15. (b) Each such ordinance or resolution shall include articles of incorporation which shall set forth: (1) The name of the “authority;” (2) A statement that such authority is formed under this chapter; (3) The name of the incorporating municipality or municipalities; (4) The names, addresses and terms of office of the first members of the board of said authority and, if the governing body of the municipality determines that its members shall constitute the board of said authority, a statement to that effect; (5) The purpose or purposes for which the authority is to be created or is created. (c) The articles of incorporation shall be executed by each incorporating municipality by its proper officers and shall be filed with the Secretary of State, who shall receive the same and endorse thereon the date and time of such receipt. If the Secretary of State finds that the articles of incorporation conform to law, the Secretary of State shall forthwith endorse the Secretary of State’s own approval thereon and issue a certificate of approval to which shall be attached a copy of the approved articles. Upon the issuance of such certificate of approval by the Secretary of State, the corporate existence of said authority shall begin and thereupon such authority shall be conclusively deemed to have been lawfully and properly created and established and authorized to exercise its powers under this chapter. Promptly thereafter the Secretary of State shall record said articles of incorporation, together with the endorsements thereon, in a book to be kept for that purpose. (d) When the authority has been organized and its officers elected, the secretary shall certify to the Secretary of State the names and addresses of its officers as well as the principal office of the authority. Any change in the location of the principal office shall likewise be certified to the Secretary of State within 10 days after such change.

Del. Code tit. 16, § 1403 Amendment of articles of incorporation.

Every authority of this State may, from time to time and in the manner hereinafter provided, amend its articles of incorporation and thereby accomplish any 1 or more of the following: The adoption of a new name, changes in, additions to and diminutions of its powers and purposes, provided that such amendment shall contain only such provisions as it would be lawful or proper to insert in articles of incorporation made at the time of such amendment.

Del. Code tit. 16, § 1404 Withdrawal or joinder of municipalities; procedure.

(a) Whenever an authority has been incorporated by 2 or more municipalities, any 1 or more of such municipalities may withdraw therefrom and any municipality not having joined in the original incorporation may join in the authority, but no municipality shall be permitted to withdraw from any authority after an obligation has been incurred by the authority. (b) Any municipality wishing to withdraw from or to become a member of an existing authority shall signify its desire by resolution or ordinance after an enabling referendum. If the authority shall by resolution express its consent to such withdrawal or joining, articles of withdrawal or articles of joinder, as the case may be, shall be executed by the proper officers of the withdrawing or incoming municipality and shall be joined by the proper officers of the governing body of the authority and, in the case of a municipality seeking to become a member of the authority, also by the proper officers of each of the municipalities that are then members of the authority, pursuant to resolutions or ordinances by the governing bodies of such municipalities. In the case of a certificate of joinder, the certificate shall set forth all of the information required in the case of original incorporation insofar as it applies to the incoming municipality including the name and address and term of office of the first member of the board of the authority from the incoming municipality. Articles of withdrawal and articles of joinder shall be filed with the Secretary of State, who shall receive the same and endorse thereon the date and time of such receipt. If the Secretary of State finds that the articles of withdrawal or articles of joinder, as the case may be, conform to law, the Secretary of State shall forthwith endorse the Secretary of State’s own approval thereon and issue a certificate of approval to which shall be attached a copy of the approved articles. Upon the issuance of such certificate of approval by the Secretary of State, said articles of withdrawal or articles of joinder, as the case may be, shall become effective and be in full force and effect, and such articles shall be conclusively deemed to have been lawfully and properly adopted. Promptly after the issuance of a certificate of approval the Secretary of State shall record the articles of withdrawal or articles of joinder, as the case may be, together with the endorsements thereon, in the book kept by it for the purpose of recording articles of incorporation.

Del. Code tit. 16, § 1405 Exercise of powers by governing body; composition; quorum; personnel; salaries; records.

(a) The powers of each authority shall be exercised by a governing body (herein called the “board”) composed as follows: (1) If the authority is incorporated by 1 municipality, the board shall be composed of the members of the governing body of the municipality creating the authority or shall be composed of 5 citizens of such municipality, as the governing body of such municipality shall determine. If the governing body of the municipality creating the authority determines that the said board shall be composed of the members of said governing body, the terms of office of the members of said board shall coincide with their terms of office as members of the governing body and any member of said governing body shall automatically be a member of said board and shall cease to be a member of said board upon ceasing to be a member of said governing body. If the governing body of the municipality creating an authority shall determine that the board shall consist of 5 citizens, the governing body of such municipality shall appoint the members of the board, whose terms of office shall commence on the date of appointment and 1 of whom shall serve for 1 year, 1 for 2 years, 1 for 3 years, 1 for 4 years and 1 for 5 years from the January 1 next succeeding the date of incorporation, and thereafter the said governing body shall, at a meeting held not later than 1 month prior to January 1 in each year in which a vacancy occurs, appoint as a member of the board a citizen of the municipality for which the authority is created for a term of 5 years to succeed the member whose term expires on the January 1st next succeeding. (2) If the authority is incorporated by 2 or more municipalities, the board shall consist of a number of members at least equal to the number of municipalities incorporating the authority, but in no event less than 5. When 1 or more additional municipalities join an existing authority, each of such joining municipalities shall have 1 member on the board. The first of such members shall be appointed immediately upon the admission of the municipality into the authority for a full term of years equal to that fixed for the other members of the board. The members of the board shall be appointed, their terms staggered and vacancies filled, and where the number of municipalities joining is less than 5, shall be apportioned in such manner as the articles of incorporation shall provide. No member shall be appointed for a term longer than 5 years. (b) Members of the board who are not members of the governing body of the municipality or municipalities composing the authority shall hold office until their successors have been appointed, and may succeed themselves, and shall receive such salaries as may be determined by the governing body or bodies of the municipality or municipalities, but none of such salaries shall be increased or diminished by such governing body or bodies during the term for which the member receiving the same shall have been appointed. Members of the board who are members of the governing body of a municipality shall serve as board members without pay. If a vacancy shall occur by reason of the death, disqualification, resignation or removal of an appointed member, the governing body of the municipality shall appoint a successor to fill the member’s unexpired term. In joint authorities such vacancies shall be filled by the governing body of the municipality in the representation of which the vacancy occurs. Whenever any municipality shall withdraw from a joint authority the term of any member or members appointed from such municipality shall immediately terminate. (c) A majority of the members shall constitute a quorum of the board for the purpose of organizing the authority and conducting the business thereof and for all other purposes, and all action may be taken by vote of a majority of the members present, unless in any case the bylaws shall require a larger number. The board shall have full authority to manage the properties and business of the authority and to prescribe, amend and repeal bylaws, rules and regulations governing the manner in which the business of the authority may be conducted, and the powers granted to it may be exercised and embodied. The board shall fix and determine the number of officers, agents and employees of the authority and their respective powers, duties and compensation and may appoint to such office or offices any members of the board with such powers, duties and compensation as the board may deem proper. (d) Every such officer appointed shall be adequately bonded. (e) Each authority shall keep a complete and true record of its receipts, expenses and expenditures and shall employ a certified or licensed public accountant to audit its books and accounts. Each authority shall always keep available and open to public inspection during business hours, at its principal office, a detailed audit and financial statement of its accounts. Each authority shall file annually with the governing body or governing bodies of the municipality or municipalities composing the authority a certified copy of such detailed audit and financial statement. The governing body of the municipality composing an authority, or in the case of an authority composed of 2 or more municipalities the governing body of each such municipality, may at any time in person or by its duly authorized agent or agents audit and examine the books and records of such authority; provided, however, that such audit or examination shall be without cost to said authority. (f) Notwithstanding anything in Title 8 or anything in the certificate of incorporation of an authority to the contrary notwithstanding, a member of the Board may be removed at any time and without cause by act of the governing body of the municipality responsible for appointing that Board member.

Del. Code tit. 16, § 1406 Character of authorities with reference to public health and welfare; projects; general powers.

(a) Each authority created hereunder shall be deemed to be an instrumentality exercising public and essential governmental functions to provide for the public health and welfare and shall be for the purpose of acquiring, holding, constructing, reconstructing, repairing, improving, maintaining and operating, owning or leasing, either in the capacity of lessor or lessee, a project or projects within or partly within and partly without 1 or more of the municipality or municipalities by action of whose governing body or governing bodies the authority was created. (b) Every authority is granted and shall have and may exercise all powers necessary or convenient for the carrying out the aforesaid purposes including, but without limiting the generality of the foregoing, the following rights and powers: (1) To have perpetual existence; (2) To adopt bylaws for the regulation of its affairs and the conduct of its business; (3) To adopt an official seal and alter the same at pleasure; (4) To maintain an office at such place or places as it may designate; (5) To appoint officers, agents, employees and servants, to prescribe their duties and to fix their compensation; (6) To sue and be sued; (7) To acquire, purchase, hold, lease as lessee and use any franchise, property, real, personal or mixed, tangible or intangible, or any interest therein necessary or desirable for carrying out the purposes of the authority and to sell, lease as lessor, transfer or dispose of any property or interest therein at any time acquired by it; (8) To acquire by gift, purchase or the exercise of the right of eminent domain lands or rights in land or water rights in connection therewith; provided, however, that no property or any interest therein owned by any county, city, town or other political subdivision of the State shall be acquired by the exercise of the power of eminent domain without the consent of the governing body of such county, city, town or political subdivision; (9) To issue revenue bonds of the authority, payable solely from revenues, for the purpose of paying all or a part of the cost of any 1 or more projects, and to secure the payment of such bonds or any part thereof by pledge or deed of trust of all or any part of its revenues, and to make such agreements with the purchasers or holders of such bonds or with others in connection with any such bonds, whether issued or to be issued, as the authority may deem advisable, and in general, to provide for the security for said bonds and the rights of the holders thereof; (10) To combine any water system and any sewerage system as a single system for the purpose of operation and financing; (11) To fix, alter, charge and collect rates, fees and charges for the use of or for the services furnished by its systems and each of them for the purpose of providing for the payment of the expenses of the authority, the construction, reconstruction, extension, repair, improvement, maintenance and operation of its facilities and properties, the payment of the principal of and interest on its bonds, and to fulfill the terms and provisions of any agreements made with the purchasers or holders of any of its bonds or with the municipality or municipalities incorporating or the municipalities which are members of said authority or with any municipality served or to be served by said authority; said rates, fees and charges to be at reasonable and uniform rates to be determined exclusively by the authority. Any person questioning the reasonableness or uniformity of any rate, fee or charge fixed by an authority may bring suit against the authority; (12) To enter into contracts with the federal government, the State, or any agency or instrumentality thereof, or with any municipality, private corporation, copartnership, association or individual providing for or relating to the furnishing of services and facilities of any project of the authority or in connection with the services and facilities rendered by any water system or sewerage system owned or controlled by the federal government or the State, any agency or instrumentality thereof, and any municipality, private corporation, copartnership, association or individual; (13) To contract with any municipality, county, corporation, individual or any public authority of this or any adjoining state, on such terms as the said authority shall deem proper, for the construction and operation of any project which is partly in this State and partly in such adjoining state; (14) To make and enter into all contracts or agreements, as the authority may determine, which are necessary or incidental to the performance of its duties and to the execution of the powers granted by this chapter, including contracts with any federal agency or with any municipality, on such terms and conditions as the authority may approve, relating to (i) the use by such agency or by such municipality or the inhabitants thereof of any project acquired or constructed by the authority under this subsection or the services therefrom or the facilities thereof, or (ii) the use by the authority of the services or facilities of any water system or sewerage system owned or operated other than by the authority. Any such contract shall be subject to such provisions, limitations or conditions as may be contained in the resolution of the authority authorizing revenue bonds of the authority or the provisions of any trust agreement securing such bonds. Any such contract may provide for the collecting of fees, rates or charges for the services and facilities rendered to a municipality or to the inhabitants thereof by such municipality or by its agents or by the agents of the authority, and for the enforcement of delinquent charges for such services and facilities. The provisions of any such contract and of any ordinance or resolution of the governing body of a municipality enacted pursuant thereto shall be irrepealable so long as any of the revenue bonds issued under the authority of this chapter shall be outstanding and unpaid, and the provisions of any such contract and of any ordinance or resolution enacted pursuant thereto shall be and be deemed to be for the benefit of such bondholders. The aggregate of any fees, rates or charges which shall be required to be collected pursuant to any such contract or any ordinance or resolution enacted thereunder shall be sufficient to pay all obligations which may be assumed by the other contracting party; (15) To enter upon, use, occupy and dig up any street, road, highway or private or public lands necessary to be entered upon, used or occupied in connection with the acquisition, construction or improvement, maintenance or operation of a project, subject, however, to such reasonable local police regulation as may be established by the governing body of any municipality having jurisdiction in the particular respect; (16) To receive and accept from any federal agency grants for or in aid of the construction, acquisition or operation of any project, and to receive and accept aid or contributions from any source of either money, property, labor or other things of value to be held, used and applied only for the purposes for which such grants and contributions may be made; (17) To charge a reasonable tapping fee whenever the owner of any property connects such property with a water or sewer system operated by the authority, which fee shall be in addition to any rental or use charges assessed by the authority; (18) In the event of any annexation by a municipality not a member of the authority of lands, areas or territory served by the authority, to continue to do business, exercise its jurisdiction over its properties and facilities in and upon or over such lands, areas or territory as long as any bonds or indebtedness remain outstanding or unpaid, or any contracts or other obligations remain in force.

Del. Code tit. 16, § 1407 Limits of powers.

None of the powers granted by this chapter shall be exercised in the construction, improvement, maintenance, extension or operation of any project or projects which in whole or in part shall duplicate or compete with existing utilities, public or private, serving substantially the same purposes. The municipality or municipalities organizing such an authority may, in the resolution or ordinance signifying their intention so to do, or from time to time by subsequent resolution or ordinance, specify the project or projects to be undertaken by the said authority, and no other projects shall be undertaken by the said authority than those so specified. If the municipality or municipalities organizing an authority fail to specify the project or projects to be undertaken, then the authority shall be deemed to have all the powers granted by this chapter. No municipality which shall have created an authority under this chapter shall thereafter create any other authority serving the whole or any part of the same area. No municipality which shall have joined with any other municipality or municipalities in the creation of any authority under this chapter shall thereafter create or join in the creation of any other authority unless such other municipality or municipalities shall consent thereto by ordinance or resolution after a general referendum.

Del. Code tit. 16, § 1408 Issuance of revenue bonds — Interest; maturity; use of proceeds; interim receipts or temporary bonds.

(a) (1) Each authority created under this chapter may provide by resolution of its board, at 1 time or from time to time, for the issuance of revenue bonds of the authority for the purpose of paying the whole or any part of the cost of any project. (2) The principal of and the interest on such bonds shall be payable solely from the funds herein provided for such payment. The bonds of each issue shall be dated, shall bear interest at such rate or rates, shall mature at such time or times not exceeding 40 years from their date or dates, as may be determined by the authority, and may be made redeemable before maturity, at the option of the authority, at such price or prices and under such terms and conditions as may be fixed by the authority prior to the issuance of the bonds. (3) The authority shall determine the form of the bonds, including any interest coupons to be attached thereto, and the manner of execution of the bonds, and shall fix the denomination or denominations of the bonds and the place or places of payment of principal and interest, which may be at any bank or trust company. (4) In case any officer, whose signature or a facsimile of whose signature shall appear on any bonds or coupons, shall cease to be such officer before the delivery of such bonds, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if the officer had remained in office until such delivery. (5) All revenue bonds issued under this chapter shall have and are declared to have, as between successive holders, all the qualities and incidents of negotiable instruments under the negotiable instruments laws of the State. The bonds may be issued in coupon or in registered form, or both, as the authority may determine, and provision may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest and for the reconversion into coupon bonds of any bonds registered as to both principal and interest. (6) The issuance of such bonds shall not be subject to any limitations or conditions contained in any other law and the authority may sell such bonds in such manner, either at public or at private sale, and for such price as it may determine to be in the best interests of the authority and the municipality to be served thereby. (b) (1) The proceeds of such bonds shall be used solely for the payment of the cost of the project or projects on account of which such bonds are issued and shall be disbursed in such manner and under such restrictions, if any, as the authority may provide in the authorizing resolution or in the trust agreement hereafter mentioned securing the same. (2) If the proceeds of such bonds, by error of estimates or otherwise, shall be less than such cost, additional bonds may in like manner be issued to provide the amount of such deficit, and, unless otherwise provided in the authorizing resolution or in the trust agreement securing the same, shall be deemed to be of the same issue and shall be entitled to payment from the same fund without preference or priority of the bonds first issued for the same purpose. (3) If the proceeds of the bonds of any issue shall exceed the amount required for the purpose for which such bonds shall have been issued, the surplus shall be deposited to the credit of the reserve account or sinking fund for such bonds. (c) (1) Prior to the preparation of definitive bonds, the authority may, under like restrictions, issue interim receipts or temporary bonds, with or without coupons, exchangeable for definitive bonds when such bonds have been executed and are available for delivery. (2) The authority may also provide for the replacement of any bonds which shall become mutilated, destroyed or lost. (d) Bonds may be issued under this chapter without obtaining the approval or consent of any department, division, commission, board, bureau or agency of the State and without any other proceeding or the happening of any other condition or thing than those proceedings, conditions or things which are specifically required by this chapter. (e) The resolution providing for the issuance of revenue bonds of the authority and any trust agreement securing such bonds may contain such limitations upon the issuance of additional revenue bonds as the authority may deem proper, and such additional revenue bonds shall be issued under such restrictions and limitations as may be prescribed by such resolution or trust agreement.

Del. Code tit. 16, § 1409 Issuance of revenue bonds — Faith and credit of State or political subdivisions as unaffected.

Revenue bonds issued under this chapter shall not be deemed to constitute a pledge of the faith and credit of the State or of any political subdivision thereof. All such bonds shall contain a statement on their face substantially to the effect that neither the faith and credit of the State nor the faith and credit of any county, city, town or other subdivision of the State are pledged to the payment of the principal of or the interest on such bonds. The issuance of revenue bonds under this chapter shall not directly or indirectly or contingently obligate the State or any county, city, town or other subdivision of the State to levy any taxes whatever therefor or to make any appropriation for their payment except from the funds pledged under this chapter.

Del. Code tit. 16, § 1410 Exemption of projects from taxes.

No authority shall be required to pay any taxes or assessments upon any project acquired, constructed or operated by it under this chapter or upon the income therefrom, and the bonds issued under this chapter, their transfer and the income therefrom (including any profit made on the sale thereof) shall at all times be free from taxation by the State or any of its political subdivisions or by any town or incorporated municipality or any other public agency within the State.

Del. Code tit. 16, § 1411 Fixed charges in connection with projects; regulation of sewage; water meter readings.

(a) The rates, fees and charges of each authority in connection with each project shall be so fixed and revised as to provide funds, with other funds available for such purposes, sufficient at all times: (1) To pay the cost of maintaining, repairing and operating the project on account of which the authority shall have issued revenue bonds as authorized by this chapter including reserves for such purposes and for replacement and depreciation and necessary extensions; (2) To pay the principal of and interest on the revenue bonds as the same shall become due and payable and to create reserves and provide a margin of safety for such purposes; and (3) To fulfill the terms and provisions of any agreements made with the purchasers or holders of any of its bonds or with the municipality or municipalities incorporating or the municipalities which are members of said authority or with any municipality served or to be served by said authority. (b) Any authority may fix rates, fees and charges for the services and facilities of its water system sufficient to pay all or any part of the cost of maintaining, repairing and operating its sewerage system and all or any part of the principal of and interest on revenue bonds issued on account of such sewerage system, and to pledge any surplus revenues of its water system, subject to prior pledges thereof, for such purpose or purposes. (1) Rates, fees and charges for the services of a sewerage system may be based or computed either upon the quantity of water used or upon the amount of the water bill or upon the number and size of sewer connections or upon the number and kind of plumbing fixtures in use in the premises connected with the sewerage system or upon the number or average number of persons residing or working in or otherwise connected with such premises or upon the type or character of such premises or upon any other factor affecting the use of the facilities furnished or upon any combination of the foregoing factors. (2) Charges for sewerage services to premises obtaining all or a part of their water supply from sources other than public water system may be determined by gauging or metering or in any other manner approved by the authority. (3) All other rates, fees and charges of the authority shall be based or computed upon such factor or factors as the authority shall deem reasonable and proper. (c) In cases where the character of the sewage or waste from any manufacturing, commercial or industrial plant, building or premises is such that it imposes an unreasonable burden upon any sewerage system, an additional charge may be made therefor, or the authority may, if it deems advisable, compel such manufacturing, commercial or industrial plant, building or premises to treat such sewage or waste in such manner as shall be specified by the authority before discharging such sewage or waste into any sewage system owned, operated or maintained by such authority. (d) Every municipality composing an authority operating a sewerage system shall, at the request of such authority, supply such authority, on or before the fifteenth day of the month following the month during which water bills are issued by such municipality, with a list of all water meter readings forming the basis of such bills and/or a statement of the amount of such bills so that such data may be used by such authority in calculating or computing its rates, fees and charges for sewer services to such water consumer.

Del. Code tit. 16, § 1412 Trust agreements to secure bonds; pledges and assignments; contents of authorizing resolutions; depositaries for bond sales proceeds.

(a) In the discretion of the authority, any revenue bonds issued under this chapter may be secured by a trust agreement by and between the authority and a corporate trustee, which may be any trust company or bank having the powers of a trust company. (b) (1) The resolution authorizing the issuance of the bonds or the trust agreement may pledge or assign the revenues to be received from the operation of the project or projects on account of which the bonds are issued and, in the case of bonds issued to finance a sewerage system, may pledge or assign as security for such bonds the revenues to be received from its water system to the extent authorized by § 1411 of this title, but shall not convey or mortgage any project or any part thereof, and may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the authority in relation to the acquisitions, construction, improvement, maintenance, operation, repair and insurance of the project or projects on account of which such bonds are issued, and provisions for the custody, safeguarding and application of all moneys and for the employment of consulting engineers in connection with such construction, reconstruction or operation. (2) Such resolution or trust agreement may set forth the rights and remedies of the bondholders and of the trustees in the case of a trust agreement and may restrict the individual right of action by bondholders as is customary in trust agreements or trust indentures securing bonds or debentures of corporations. (3) In addition to the foregoing, such resolution or trust agreement may contain such other provisions as the authority may deem reasonable and proper for the security of the bondholders. (c) Except as is in this chapter otherwise provided, the authority may provide for the payment of the proceeds of the sale of the bonds and its revenues to such officer, board or depositary as it may designate for the custody thereof and for the method of disbursement thereof, with such safeguards and restrictions as it may determine. (d) All expenses incurred in carrying out such resolution or trust agreement may be treated as a part of the cost of operation of the project or projects.

Del. Code tit. 16, § 1413 Connection with sewerage system by abutting property owners; conditions.

Upon the acquisition or construction of any sewerage system under this chapter, the owner of each lot or parcel of land which abuts upon a street or other public way containing a sanitary sewer which is a part of or which is served or may be served by such sewerage system and upon which lot or parcel of land a building shall have been constructed for residential, commercial or industrial use, shall, if so required by the rules and regulations or a resolution of the authority, connect such building with such sanitary sewer and shall cease to use any other method for the disposal of sewage, sewage waste or other polluting matter; provided, however, that the owner of such lot or parcel of land having a method for the disposal of sewage, sewage waste or other polluting matter constructed and operated in accordance with standards prescribed or approved by the Secretary of the Department of Natural Resources and Environmental Control shall not be required to make such connection. All such connections shall be made in accordance with rules and regulations which shall be adopted from time to time by the authority, which rules and regulations may provide for a charge for making any such connection in such reasonable amount as the authority may fix and establish.

Del. Code tit. 16, § 1414 Provisions permitted for inclusion in resolutions or trust agreements providing for bonds.

(a) Any resolution or trust agreement providing for the issuance of revenue bonds under this chapter may include any or all of the following provisions and may require the authority to adopt such resolutions or to take such other lawful action as shall be necessary to effectuate such provisions, and the authority may adopt such resolutions and take such other action: (1) That the authority may require the owner, tenant or occupant of each lot or parcel of land who is obligated to pay rates, fees or charges for the use of or for the services furnished by any project acquired, constructed or operated by the authority under this chapter to make a reasonable deposit with the authority in advance to insure the payment of such rates, fees or charges and to be subject to application to the payment thereof if and when delinquent; (2) That if any rates, fees or charges for the use of or for the services furnished by any project acquired, constructed or operated by the authority under this chapter shall not be paid within 30 days after the same shall become due and payable, the authority may at the expiration of such 30-day period disconnect the premises from the water and/or sewer system or otherwise suspend services and the authority may proceed to recover the amount of any such delinquent rates, fees or charges with interest, in a civil action or by foreclosure of the lien therefor; (3) That, if any rates, fees or charges for the use and services of any sewerage system acquired, constructed or operated by the authority under this chapter shall not be paid within 30 days after the same shall become due and payable, the owner, tenant or occupant of such premises shall cease to dispose of sewage or industrial wastes originating from or on such premises by discharge thereof directly or indirectly into the sewerage system until such rates, fees or charges with interest shall be paid; that, if such owner, tenant or occupant shall not cease such disposal at the expiration of such 30-day period, any political subdivision, district, private corporation, board, body or person supplying water to or selling water for use on such premises shall cease supplying water to or selling water for use on such premises within 5 days after the receipt of notice of such delinquency from the authority; and that, if such political subdivision, district, private corporation, board, body or person shall not, at the expiration of such 5-day period, cease supplying water to or selling water for use on such premises, the authority may shut off the supply of water to such premises. (b) There shall be lien upon real estate for the amount of any fees, rents or other charges, including tapping fees, by an authority to the owner or lessee or occupant of such real estate for the use and services for any project of the authority by or in connection with such real estate from and after the time when such fees, rents or charges are due and payable, and for the interest which may accrue thereon. Such lien shall be superior to the interest of any owner, lessee or occupant of such real estate. (c) Such lien shall not bind or affect a subsequent bona fide purchaser of such real estate for valuable consideration without actual notice of such lien, until and except from the time that the amount of such fees, rents and charges are entered in a register or registers furnished for such purpose by and at the expense of the authority and kept in the office where deeds may be recorded in the municipality wherein the real estate or a part thereof is located. The clerk in whose office deeds may be recorded shall keep and preserve and hold available for public inspection any such register which may be delivered to the clerk by the authority and cause entries to be made and indexed therein from time to time upon certification by the authority for which the clerk shall be entitled to a fee of 5 cents per entry to be paid by the authority and added to the amount of the lien. (d) Such lien on any real estate may be discharged by the payment to the authority of the total amount of such lien and the interest which may accrue to the date of such payment and the authority shall deliver a certificate thereof to the person paying the same, and upon presentation thereof, the clerk having the record of such lien shall mark the entry of such lien satisfied without further fee.

Del. Code tit. 16, § 1415 Moneys received as trust funds; fiscal agents to act as trustees.

All moneys received pursuant to the authority of this chapter, whether as proceeds from the sale of bonds or as revenues, shall be deemed to be trust funds to be held and applied solely as provided in this chapter. The resolution or trust agreement providing for the issuance of revenue bonds of the authority shall provide that any officer to whom or any bank, trust company or other fiscal agent to which such moneys shall be paid shall act as trustees of such moneys and shall hold and apply the same for the purposes hereof, subject to such regulations as such resolution or trust agreement may provide.

Del. Code tit. 16, § 1416 Rights of bondholders and trustees.

Any holder of revenue bonds issued by an authority under this chapter or any of the coupons appertaining thereto and the trustee under any trust agreement, except to the extent the rights herein given may be restricted by the resolution or trust agreement providing for the issuance of such bonds, may either at law or in equity, by suit, mandamus or other proceeding protect and enforce any and all rights under the laws of this State or granted hereunder or under such resolution or trust agreement, and may enforce and compel the performance of all duties required by this chapter or by such resolution or trust agreement to be performed by the authority or by an officer thereof, including the fixing, charging and collecting of rates, fees and charges for the use of or for the services furnished by any project.

Del. Code tit. 16, § 1417 Revenue refunding bonds; single issues of revenue bonds; applicability thereto of other provisions of this chapter.

Each authority created hereunder may provide by resolution for the issuance of revenue refunding bonds of the authority for the purpose of refunding any revenue bonds outstanding and issued under this chapter. Each such authority may further provide by resolution for the issuance of a single issue of revenue bonds of the authority for the combined purposes of: (1) Paying the cost of any project, or the improvement, extension, addition or reconstruction thereof; and (2) Refunding revenue bonds of the authority which shall theretofore have been issued under this chapter and shall then be outstanding and which shall then have matured or be subject to redemption or can be acquired for retirement. The issuance of such bonds, the maturities and other details thereof, the rights and remedies of the holders thereof, and the rights, powers, privileges, duties and obligations of the authority with respect to the same, shall be governed by the foregoing provisions of this chapter insofar as the same may be applicable.

Del. Code tit. 16, § 1418 Accreditation of bonds for investment purposes.

Bonds issued under this chapter are made securities in which all public officers and public agencies of the State and its political subdivisions, and all bonds, trust companies, savings and loan associations, investment companies and others carrying on a banking business, all insurance companies and insurance associations and others carrying on an insurance business, all administrators, executors, guardians, trustees and other fiduciaries and other persons may legally and properly invest funds, including capital in their control or belonging to them. Such bonds are made securities which may properly and legally be deposited with and received by any state or municipal officer or any agency or political subdivision of the State for any purpose for which the deposit of bonds or other obligations of the State is now or may hereafter be authorized by law.

Del. Code tit. 16, § 1419 Transfer of interest by municipalities; use of certain lands; powers of municipalities.

(a) Notwithstanding any contrary provision of law, any municipality may transfer jurisdiction over, lease, lend, grant, sell or convey to any authority upon the request of such authority, with or without consideration, any facilities or any right or interest therein or any property appertaining thereto or any real property or estate, right or interest therein for use by such authority in connection with the construction, reconstruction, extension, repair, improvement, maintenance or operation of 1 or more projects upon such terms and conditions as the governing body of such municipality shall determine to be for the best interest of such municipality. The State consents to the use of all lands below high watermark owned or controlled by it and to the use of any land between the right-of-way limits of any state highway which are necessary or desirable in connection with the construction, reconstruction, extension, repair, improvement, maintenance or operation of any project; provided, however, that the use of any portion between the right-of-way limits of a state highway shall be subject to the approval of the State Highway Department. (b) Each municipality may: (1) Contract with any authority created hereunder for the collection, treatment or disposal of sewage; (2) Contract with any authority created hereunder for shutting off the supply of water furnished by any water system owned or operated by such municipality or under its jurisdiction or control to any premises connected with any sewerage system of the authority in the event that the owner, tenant or occupant of such premises shall fail to pay any rates, fees or charges for the use of or for the services furnished by such sewerage system within the time or times specified in such contract; (3) Contract with any authority with respect to any and all matters and things concerning which such authority is authorized to contract with such municipality under this chapter; (4) Loan to any newly created authority money for the purpose of providing funds to pay the organization and preliminary expenses of such authority on condition that such moneys shall be repaid out of the proceeds of the first issue of such authority.

Del. Code tit. 16, § 1420 Transfer of projects to municipalities; conditions; termination of authorities.

When any authority shall have paid or provided for the payment of the principal of and the interest on all bonds secured by a pledge of any of the revenues of a project, it may (subject to any agreements concerning the operation or disposition of such project) grant and convey such project to the municipality or municipalities composing the authority. When any authority shall have paid or made provisions for the payment of the principal of and the interest on all bonds issued by it and settled all other claims against it, it may terminate its existence. A certificate, requesting the termination of the existence of the authority, signed by the proper officers of the authority and stating that the principal of and the interest on all bonds issued by it have been paid or that provisions for such payment have been made and that all claims against the authority have been settled shall be filed with the Secretary of State. If the certificate is approved by the municipality or municipalities composing the authority by ordinance or resolution, the Secretary of State shall note the termination of existence on the records of the Secretary of State and issue its certificate of approval to the board and thereupon the authority shall cease to exist.

Del. Code tit. 16, § 1420A Incorporation of project within other governmental system; assumption of debt.

No project acquired or constructed by an authority pursuant to this chapter may be incorporated within any other governmental system except upon the assumption without surcharge to the authority or its customers by the governing body of that government of full responsibility for payments of any outstanding revenue bonds issued by the authority to finance the acquisition or construction of the project.

Del. Code tit. 16, § 1421 Scope and construction of chapter.

This chapter shall constitute full and complete authority, without regard to any other law for the doing of the acts and things herein authorized, and shall be liberally construed to effect the purposes hereof; provided, however, that nothing herein contained shall be taken as restricting any control which the Department of Health and Social Services, State Highway Department and the Water Pollution Commission are empowered to exercise over or within any authority. The foregoing sections of this chapter shall be deemed to provide an additional and alternative method for the doing of the things authorized thereby and shall be regarded as supplemental and additional to powers conferred by other laws and shall not be regarded as in derogation of any powers not existing.
Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title16/c014/index.htmlFetched: 6/28/2026