Article 3. Issuance Of Bonds of California Health And Safety Code >> Division 5. >> Part 3. >> Chapter 1. >> Article 3.
At any meeting after the passage and recording of the
resolution establishing the district, the governing body may, by a
resolution passed by a vote of two-thirds of all its members, call an
election to be held in the district for the purpose of voting on the
question of incurring indebtedness for the purpose of making the
improvement as finally determined.
The resolution calling the special election shall do all of
(a) Describe the boundaries of the district as finally determined
and refer to the district by its name and number.
(b) Describe in general terms the improvement as finally
determined and state the dollar amount of the estimated cost and
expenses of the proposed improvement, which amount shall not exceed
by more than 10 percent the amount determined under Section 4607.
(c) State the amount of the principal of the indebtedness to be
incurred for the purpose of paying the costs and expenses, which
amount shall not exceed the estimate under subdivision (b) of this
(d) State the rate of interest or a maximum rate of interest to be
paid on the indebtedness, which rate shall not be more than the rate
specified in this chapter.
(e) Fix the date on which the special election shall be held.
(f) Determine the manner of holding the election, and the manner
of voting for or against the incurring of the indebtedness.
In all particulars not recited in this chapter or in the
resolution, the election shall be held as is provided by law for
holding general elections in the city. At the election, the measure
of incurrring indebtedness for the purposes set forth in the
resolution shall be submitted to the voters of the district.
The maximum rate of interest to be paid on the bonded
indebtedness shall be 8 percent per annum, and shall be payable
semiannually. The first interest payable on the bonds or any series
of the bonds may, however, be for any period not exceeding one year,
as determined by the governing body.
The resolution calling the election shall be published once a
week for two successive weeks prior to the date set for the election
in a newspaper of general circulation, which is printed and
published in the city. The first publication shall be not less than
30 days prior to the date of the election.
In any city where no newspaper is printed and published, the
resolution shall be posted in three public places in the district not
later than 30 days prior to the date set for the election. No other
notice of the election need be given.
If two-thirds of the votes cast upon the measure are in favor
of the issuance of the bonds, the bonds may be issued and the
If less than two-thirds of the votes cast are in favor of the
issuance of the bonds, the governing body of the city shall not
within six months after the election pass any resolution which calls
another election for incurring any indebtedness for sewer work or
improvement within that district or in any district which has within
its boundaries any of the territory of that district.
All bonds issued under this chapter shall be issued in the
name of the city in which the district has been formed, or in the
name of the initiating city, as the case may be, shall be in such
form as the governing body may determine, and shall be payable at the
time and in the manner determined by the governing body, at a place
within the United States, to be fixed by the governing body and
designated in the bonds. The maturity date of a bond need not be an
anniversary of its date. The governing body may divide the principal
amount of any issue of bonds into two or more series and fix
different dates for the bonds of each series. The bonds of one series
may be made payable at different times from those of any other
series. The final maturity date of any issue of bonds, or of any
series, shall not exceed 40 years from the date of such bonds, or the
date of such series of the bonds. Bonds issued pursuant to this
chapter shall not constitute indebtedness within the meaning of
Section 29909 or Section 43605 of the Government Code.
The governing body may provide for the call and redemption of any
bond prior to maturity at such time or times and at such price or
prices and upon such other terms as it may specify, but no bond shall
be subject to call or redemption prior to maturity unless a
statement to that effect is printed on the bond.
The bonds shall be issued in any denominations which the
governing body may determine.
The bonds shall be signed by the mayor, or by such other officer
of the city as shall be designated for that purpose by the governing
body by resolution, and shall also be signed by the city treasurer
and countersigned by the city clerk or a deputy clerk.
The coupons of the bonds shall be numbered consecutively and
signed by the treasurer.
All signatures and countersignatures on the bonds and coupons,
except that of the clerk or his deputy, may be printed, lithographed,
If any officer whose signature or countersignature appears on the
bonds or coupons ceases to be an officer before the delivery of the
bonds to the purchaser, his signature or countersignature is as valid
and sufficient for all purposes, as if he had remained in office.
The governing body may issue and sell the bonds at not less
than their par value. The proceeds of the sale shall be placed in the
city treasury to the credit of the proper improvement district fund
and shall be applied exclusively to the purposes and objects
specified in the resolution calling the election.
(a) When the purposes and objects specified in any measure
incurring bonded indebtedness submitted at any special election
called for that purpose have been accomplished and any proceeds of
sale of bonds authorized at the special election remain unexpended,
or any bonds authorized at the special election remain unissued and
unsold (the unexpended proceeds and the proceeds of sale of the then
unissued bonds being hereinafter in this section together referred to
as "unexpended bond proceeds"), the unexpended bond proceeds may be
applied to payment of the costs (including any or all of the items
specified in Section 4625) of any improvements, additions,
betterments or extensions (hereinafter in this section collectively
referred to as "improvements") to the sewer work or improvement
described in the resolution or ordinance calling the special election
if the governing body shall first find and determine that:
(1) The improvements are reasonably related to the purposes and
objects included within the terms of the bond measure approved at the
special election or are necessary to carry out the purposes and
(2) The improvements will be acquired or constructed entirely
within the area of and will benefit the district as it existed on the
date on which the special election was called to authorize the bonds
sold, or to be sold, to provide the unexpended bond proceeds.
(3) The resolution providing for the issuance of the bonds
authorized at the special election and already outstanding does not
prohibit, or can be and is amended to permit, the application of the
unexpended bond proceeds to payment of the costs of the improvements;
and if a hearing is duly called, noticed and held and resolutions
are adopted by the governing body as provided in paragraph (b) of
(b) Before so applying the unexpended bond proceeds the governing
body shall adopt a resolution stating the following:
(1) The name and number of the district and a reference by date of
adoption to the resolution or resolutions in which the boundaries of
the district are set forth.
(2) The date of the special election at which the bonds (which
provided, or which when sold will provide, the unexpended bond
proceeds) were authorized, the aggregate principal amount of bonds
outstanding, the amount (if any) of unexpended bond proceeds provided
by bonds theretofore sold and the principal amount of authorized,
but unissued bonds (if any), proposed to be sold to provide
unexpended bond proceeds.
(3) A general description of the improvements proposed to be
acquired or constructed, the estimated costs thereof and the amount
of unexpended bond proceeds to be applied to payment of the costs.
(4) A time and place for the hearing of objections to the proposed
improvements or to the proposed expenditure of the unexpended bond
proceeds by any person who is on the date of the hearing an owner of
land or a registered voter within the boundaries of the district as
it existed on the date of the special election at which the bonds
The resolution shall be published, posted and mailed as provided
in Sections 4610 and 4610.5 for a resolution relating to formation of
a district. On the day fixed for the hearing, or on any date to
which the hearing is continued, the governing body shall hear and
consider all written and oral objections presented to the proposed
improvements or to the proposed expenditure of the unexpended bond
proceeds. At the hearing, the governing body may make any changes in
the proposed improvements or proposed expenditures as appear
necessary in the public interest; and the governing body may not
exclude any land from the district and shall abandon the proceedings
if it finds that any land within the boundaries of the district as it
existed on the date the special election was called will not be
benefited by the proposed improvements.
At the conclusion of the hearing, if the proceedings are not
abandoned and if the governing body overrules all protests and
objections and finds that the provisions of this section are complied
with, the governing body may by a resolution which is passed by a
vote of two-thirds of all its members approve the proposed
improvements and proposed expenditure of the unexpended bond proceeds
and, if bonds are to be issued and sold, may also, by the resolution
provide for the issue and sale of the bonds.
Before selling the bonds, or any part of the bonds, the
governing body shall give notice inviting sealed bids in such manner
and for such time as the governing body may prescribe. If
satisfactory bids are received, the bonds offered for sale shall be
awarded to the highest responsible bidder. If no bids are received,
or if the governing body determines that the bids received are not
satisfactory as to price or responsibility of the bidders, the
governing body may reject all bids received, if any, and either
readvertise or sell the bonds at private sale.
An action to determine the validity of bonds issued pursuant
to this chapter may be brought pursuant to Chapter 9 (commencing with
Section 860), Title 10, Part 2 of the Code of Civil Procedure.
In determining the amount of bonds to be issued, the
legislative body may include all of the following:
(a) All costs and expenses and estimated costs and expenses
incidental to or connected with the acquisition, construction,
improving, or financing of the improvement.
(b) All engineering, inspection, legal, and fiscal agent's fees,
expenses in connection with the formation of the district, costs of
the bond election and of the issuance of the bonds, bond reserve
funds and working capital, and bond interest estimated to accrue
during the construction period and for a period of not to exceed 12
months after completion of construction.