Arkansas Code
Subchapter 2 - Purchase and Construction
§ 14-234-213. Exchange of unpaid water revenue certificates for refunding bonds

(a) Whenever all of the holders of unpaid water revenue certificates of a particular issue, which were issued to pay the cost of constructing a waterworks system and which are payable from the revenues thereof, shall offer in writing to exchange the certificates for refunding revenue bonds to be issued under the provisions of this subchapter, the legislative body shall receive the certificates, and if they are found to be properly executed, may adopt an ordinance incorporating therein the offer, setting forth the determined value of the entire waterworks system as it then exists, the value of so much of the system as was paid for by the issue of certificates, the unpaid portion of which is proposed to be refunded, and the details in connection with the issuance of the bonds in the same manner as is provided for in the issuance of revenue bonds. The municipality may fix the minimum rate or rates to be charged for water and pledge the revenues, if and when the refunding revenue bonds are issued, to pay the bonds.
(b) The revenues shall be applied as provided in this subchapter for revenue bonds and particularly §§ 14-234-212 and 14-234-214.
(c) The amount of refunding revenue bonds shall not exceed and may be less than the par amount of certificates to be surrendered and shall not exceed and may be less than the determined value of so much of the systems as was paid for by the issue of certificates, less the amount of certificates paid.
(d)
(1) The ordinance shall be published together with notice of hearing thereon in the same manner as is provided in this subchapter in case of the issuance of revenue bonds, and hearing shall be had thereon as is provided in this subchapter in case of the issuance of revenue bonds.
(2) After the hearing, the refunding revenue bonds may be issued, or a less amount thereof may be issued with the consent of the certificate holders, or the ordinance may be repealed, all as the legislative body shall determine.

(e) If the refunding revenue bonds are issued, the certificates shall be surrendered and cancelled simultaneously therewith.
(f) Refunding revenue bonds issued under the provisions of this subchapter shall be payable only out of the revenues derived from the system as provided in the ordinance and according to the terms of this subchapter.
(g) Holders of refunding revenue bonds issued under the provisions of this subchapter shall have similar rights as holders of revenue bonds issued under this subchapter, including the power to apply for a receiver to operate the system, and the municipality shall be under the same obligations to the bondholders as is provided to holders of revenue bonds issued under the provisions of this subchapter.

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