Article 5. Temporary Borrowing of California Public Utilities Code >> Division 10. >> Part 14. >> Chapter 7. >> Article 5.

At any time prior to the first receipt by the district of revenues from taxation or other sources, any city or county may lend any available money to the district for the purposes of organization and operation. Such expenditures shall constitute a proper expenditure of city and county funds.

The district may borrow money in accordance with the provisions of Article 7 (commencing with Section 53820), Article 7.4 (commencing with Section 53835), Article 7.5 (commencing with Section 53840), Article 7.6 (commencing with Section 53850), or Article 7.7 (commencing with Section 53859) of Chapter 4 of Part 1 of Division 2 of Title 5 of the Government Code.

The district may borrow money in anticipation of the sale of bonds which have been authorized to be issued pursuant to Article 1 (commencing with Section 102500) of this chapter, but which have not been sold and delivered, and may issue negotiable bond anticipation notes therefor and may renew the same from time to time, but the maximum maturity of any such notes, including the renewals thereof, shall not exceed five years from the date of delivery of such original notes. Such notes may be paid from any moneys of the district available therefor and not otherwise pledged. If not previously otherwise paid, the notes shall be paid from the proceeds of the next sale of the bonds of the district in anticipation of which they were issued and if not so paid, taxes may be levied for their payment in the same manner as taxes are levied for the payment of general obligation bonds pursuant to Section 102336 until such bonds are issued. Such notes shall not be issued in any amount in excess of the aggregate amount of bonds which the district has been authorized to issue, less the amount of any bonds of such authorized issue previously sold, and also less the amount of other bond anticipation notes therefor issued and then outstanding. The notes shall be issued and sold in the same manner as the bonds. Such notes and the resolution or resolutions authorizing the same may contain any provisions, conditions, or limitations which a resolution of the district authorizing the issuance of bonds may contain.

In addition to, and as an alternative to, the borrowing authority in Section 102582, the district may seek and obtain a short-term revolving line of credit for operating purposes in anticipation of receipt of federal operating grants, with the extension of credit to the district evidenced by a note, pursuant to a resolution adopted by the board of directors of the district. The district may pledge the anticipated grants and any other funds available to the district, including, but not limited to, fare revenues collected by the district in connection with the operation of its transit system and any other revenues, income, or receipts, as security for repayment of the note, the interest on the note, and the related obligations evidenced by the note. The note shall have a maturity date of not more than 60 months from the date of issuance. The district may pledge anticipated federal operating grants and other available funds over a multiyear period. Notwithstanding the 60-month maturity period for the line of credit, the maximum indebtedness under the note shall not exceed the maximum amount in federal operating grant revenues that the district anticipates receiving in the next fiscal year. Immediately upon receipt thereof, the district shall set aside and apply all amounts received from the pledged federal operating grant revenues to the repayment of any outstanding indebtedness incurred pursuant to this section, and these federal operating grant revenues may not be used for any other purpose until such time as the indebtedness is fully repaid.