Article 4. Bonds of California Health And Safety Code >> Division 5. >> Part 3. >> Chapter 5. >> Article 4.
The cost of the acquisition or construction of the works for
which bonds may be issued includes all of the following:
(a) The cost of all property, rights, easements, and franchises
deemed necessary or convenient therefor.
(b) Engineering, clerical, legal, financial, paying and fiscal
agent's fees and expenses, cost of bond proceedings, bond reserve
funds and working capital and bond interest estimated to accrue
during the construction period and for a period of not to exceed
twelve (12) months after completion of construction.
(c) All other expenses connected with or incident to the works in
the operation and performance of the acts required by this chapter to
Bonds issued and sold under this chapter shall be revenue
bonds of the character and form known as "serials." Each bond shall
be entitled "sewer revenue bond," and shall be paid and discharged
within forty years from its date.
Each bond, except those of the last installment, or one of
each annual installment, shall be in multiples of one hundred
dollars, in such amount as the governing body determines, but no bond
shall be of greater denomination than one thousand dollars.
The bonds shall bear interest, as the governing body shall
determine, at a rate not to exceed 8 percent per annum, and shall,
after the first principal maturity, be payable semiannually by
The governing body shall prescribe the form of the bonds, and
provide that of the indebtedness represented thereby a part shall be
payable each year after their date, at a time and place to be
designated in the bonds, together with interest, until the whole of
the indebtedness has been paid.
The maturity date of the first bond or series of bonds may be
deferred for a period not exceeding five years from the date of the
The number of bonds to be paid each year need not be the
same, and the governing body may fix maturities so that the number of
bonds retired each year will, in the discretion of the governing
body, be most equitable and just; however, all bonds shall be
completely paid within forty years from date of issue.
If the district is a city, the bonds shall be signed by the
mayor if there is one; otherwise by the president or chairman of the
governing body, and countersigned by the clerk. The seal of the
district shall be affixed to the bond. The coupons shall be signed by
the treasurer by his engraved or lithographed signature.
If any officer whose signature or countersignature appears on the
bonds or coupons ceases to be such officer before the delivery of the
bonds to the purchaser, his signature or countersignature is
nevertheless as valid and sufficient for all purposes as if he had
remained in office.
In the ordinance authorizing the issuance of the bonds,
provision may be made, but are not limited to provisions:
(a) That all or part of the bonds are callable, the manner of the
call and the premiums to be paid thereon;
(b) That all or part of the bonds are payable at the office of a
paying or fiscal agent, within or without the State, and for the
payment of fees therefor;
(c) For the pledge of revenues, its nature, and its parity with
other sewer revenue bonds issued or to be issued;
(d) For the percentage that annual net revenues shall bear to bond
and interest payments;
(e) For reserve, surplus and other funds usual in the issuance of
(f) For the duties and obligations of the district;
(g) For the remedies of bondholders, which may be in addition to
those provided herein;
(h) For the manner of amending or abrogating the bond ordinance or
refunding any or all bonds thereunder;
(i) For occurrences in the event of default and the rights and
remedies arising therefrom; and
(j) For usual and customary covenants for the security and
protection of the payment of the bonds.
If the proceeds of the bonds for any reason are less than the
cost of the works, additional bonds may in like manner be issued and
sold to provide for the amount of the deficit, but not to exceed the
amount necessary to complete the works according to the original
plans and specifications. Such deficiency bonds shall be deemed to be
the same in all respects as the original issue, and shall be
entitled to payment, without preference or priority over the bonds
first issued, and shall be disposed of in like manner.
No error, defect, irregularity, informality, and no neglect
or omission of any officer of any district in any proceedings under
this chapter, that does not affect the jurisdiction of the governing
body to order the doing of the acts proposed to be done, avoids or
invalidates the proceedings or any bond. The exclusive remedy of any
person affected or aggrieved thereby shall be to the governing body
as provided in this chapter.
Bonds may be made payable on a date subsequent to the time
fixed for the collection of the second installment of general
district taxes with which the first levy of taxes for the payment of
the principal and interest of said bonds is to be collected. In such
event, the first interest coupons shall be for interest from the date
of said bonds of such issue or series or division to the maturity
date of said coupons.
An action to determine the validity of bonds may be brought
pursuant to Chapter 9 (commencing with Section 860) of Title 10 of
Part 2 of the Code of Civil Procedure.
In determining the amount of bonds to be issued, the
legislative body may include:
(a) All costs and estimated costs incidental to or connected with
the acquisition, construction, improving or financing of the project.
(b) All engineering, inspection, legal and fiscal agent's fees,
costs of the bond election and of the issuance of said 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.