McGrath Clarifies Payment of Sewer District Bonds
HELENA – In a formal opinion released Monday, Montana Attorney General Mike McGrath held that general obligation bonds issued by a county water and sewer district are payable by a levy on real and personal property within the district.
The Lockwood Sewer and Water District outside of Billings wants to issue about $30 million in general obligation bonds to finance a number of projects related to wastewater treatment. Before the bonds may be issued, voters in the district must approve a proposition that includes the purpose of the debt, the amount, the term of the bonds and the land in the district to benefit from the bonds.
Yellowstone County Attorney Dennis Paxinos requested the opinion prior to such a vote, to clarify whether the bonds would be paid by a levy on both real and personal property or solely on real property.
The 1995 Montana Legislature gave water and sewer districts the authority to issue general obligation bonds. At the same time, the legislature directed that such bonds be authorized, sold and issued under the same conditions that exist for school bonds. The opinion states that school district bonds “are clearly payable by levy on taxable value of all real and personal property within a school district.”
The legal research conducted by the Attorney General’s Office found nothing in the laws governing water and sewer districts that expressly contradicts following the same procedure for payment of school district bonds.
An attorney general’s opinion carries the weight of law unless a court overturns it or the legislature modifies the laws involved.