NMSA 3-28-16. Establishment of rates or contracts for service; lien against
AI-assisted research summary: Water or gas supply association boards must set rates or agreements to cover operating costs and bond payments while revenue bonds are outstanding; certain users’ charges can become a lien on the served property.
3-28-16. Establishment of rates or contracts for service; lien against property served. A. Boards of directors of intercommunity water or natural gas supply associations, while any revenue bonds are outstanding, shall establish rates and charges for services rendered by the water or natural gas supply system to a user of those services other than a city, town, village or other political subdivision or shall enter into such leases or other agreements or any combination of such rates and charges, leases and other agreements as shall be sufficient to provide revenues that are sufficient to meet at least the following requirements: (1) pay all reasonable expenses of operation and maintenance of such system; (2) pay all interest on the revenue bonds as it comes due; and (3) pay the principal of the revenue bonds as it comes due. Such rates, charges, leases and agreements shall remain in effect until the revenue bonds have been paid or sufficient provision has been fully made for their payment. B. In the event the board of directors of the intercommunity water or natural gas supply association fails or refuses to establish rates and charges for the system or alternatively to enter into a lease or other agreement where applicable to such system, or both, as required in this section, any bondholder may apply to the district court for a mandatory order requiring the board to establish rates or, if applicable, to enter into such applicable leases or agreements, or both, that will provide revenues adequate to meet the requirements of this section. Any city, town, village or other political subdivision entering into any such lease or agreement with the association is authorized to use and pledge revenues of its water, gas or utility system to such payments pursuant to any such lease or agreement as a part of the operation and maintenance costs of its water, gas or utility system, and its obligations under the lease or agreement shall not constitute an indebtedness of such city, town, village or other political subdivision for purposes of Article 9, Sections 9 through 13 of the constitution of New Mexico. C. Any rates or charges imposed upon a user other than a city, town, village or other political subdivision for service rendered by a water or natural gas supply system, except as otherwise indicated in this subsection, shall be: (1) payable by the owner of the tract or parcel of land being served at the time the rate or charge accrues and becomes due; and (2) a lien upon the tract or parcel of land being served from such time which lien shall be a first and prior lien on the property coequal with municipal liens pursuant to Section 3-36-2 NMSA 1978, but subject only to the lien of general state and county taxes. D. The lien provided for in Subsection C of this section shall be enforced in the manner prescribed in Sections 3-36-1 through 3-36-5 NMSA 1978; provided, however, that any action to be taken by the municipal clerk or any successor under Sections 3- 36-1 through 3-36-5 NMSA 1978 shall, for purposes of this section, be taken by the secretary of the board of directors of the association. In any proceedings where pleadings are required, it shall be sufficient to declare generally for the service supplied by the system. Notice of the lien shall be filed in the manner provided in Section 3-36-1 NMSA 1978, and the effect of such filing shall be governed by Section 3-36-2 NMSA 1978. Paragraphs (1) and (2) of Subsection C of this section shall not apply if an owner notifies the intercommunity water or natural gas supply system that charges that may be incurred by a renter shall not be the responsibility of the owner. Such notification shall be given in writing prior to the initiation of the debt and shall include the location of the rental property. E. Any law that authorizes the pledge of any or all of the net revenues of a system pledged to the payment of any revenue bonds issued pursuant to Chapter 3, Article 28 NMSA 1978 or any law supplemental thereto or otherwise appertaining thereto shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any such outstanding revenue bonds, unless such outstanding revenue bonds have been discharged in full or provision has been fully made therefor. History: 1978 Comp., § 3-28-16, enacted by Laws 1990, ch. 60, § 16.