AGO 1989-048.

• Case Date: April 17, 1989
• Court: Kansas

Kansas Attorney General Opinions 1989. AGO 1989-048. April 17, 1989ATTORNEY GENERAL OPINION NO. 89-48Thomas A. GlinstraMunicipal Counsel City of Olathe 100 West Santa Fe P.O. Box 768 Olathe, Kansas 66061 Re: Bonds and Warrants--General Provisions--Local Legislative Powers--Financing; Issuance of Bonds Synopsis: A city which has adopted an ordinance prescribing how revenues from a combined water and sewer system may be expended may not pledge those revenues for an unauthorized purpose. The City of Olathe may not use revenues from the City's combined water and sewer system to pay debt service on general obligation bonds issued by the City to finance improvements and extensions to such system. The City has pursuant to ordinance limited the availability of the system surplus revenues to the purposes stated therein: Cited herein: K.S.A. 12-860. * * * Dear Mr. Glinstra: On behalf of the City of Olathe, you have requested our opinion concerning the authority of the City to use revenues from its combined water and sewer system to pay debt service on general obligation bonds the City proposes to issue to finance improvements and extensions to such system. You inform us that the City has created a water and sewer system in accordance with K.S.A. 12-856 to 12-869, inclusive, as amended, and has two series of bonds outstanding which are payable from water and sewer revenues--the water and sewer system refunding bonds, Series 1984, of the City dated June 15, 1984 (the "1984 Bonds"), which were authorized by Ordinance No. 84-80 of the City, as amended by Ordinance No. 87-74 (collectively, the "1984 Bond Ordinance"), and the Water and Sewer System Refunding Revenue Bonds, Series 1987, of the City (the "1987 Bond Ordinance"). You also inform us that the City is considering financing certain improvements to its water and sewer system which would be payable either from revenue bonds or from general obligation bonds, but that regardless of the type of financing used the city would like for the debt service to be paid from the revenues collected from the water and sewer system. K.S.A. 12-860 authorizes the governing body of a city to use revenues collected from the water and sewer system to pay the debt service on revenue bonds or general obligation bonds. The statute provides in relevant part:

"The governing body of the city shall establish such rates and charges for water and for the use of the sewage disposal system as shall be reasonable and sufficient to pay the cost of operation, repairs, maintenance, extension and enlargement of the water and sewage system . . . and the payment of any bonds and the interest

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