Chapter 18. Funding Bonds of California Streets And Highways Code >> Division 16. >> Part 1. >> Chapter 18.

As a separate and cumulative method of financing, the board of directors of the district may issue funding bonds to cover the costs and expenses of the whole or any part of any acquisitions of property and improvements undertaken by the district.

The provisions of this chapter relating to the issuance of funding bonds shall be cumulative and shall not affect any of the other provisions or sections of this part relative to other bonds or levies. Any number of series of funding bonds may be issued for any portion or portions of a single or different projects of the district.

If the board of directors propose to issue funding bonds, they shall first adopt a resolution setting forth their intention so to do, and the resolution shall also contain the following:
  (a) A general description of the boundaries of the funding district to be charged with the payment of any funding bonds which are proposed to be issued. The funding district may embrace the whole or any portion of the joint highway district, and the funding district shall be divided into zones composed of the counties, or portions thereof, composing the joint highway district. It shall be a sufficient description of the boundaries of the funding district and the zones therein, if the same are clearly shown upon a map or plat attached to the resolution.
  (b) A description in general terms of the location, character and cost of the acquisition of property or improvement for which it is proposed to issue the funding bonds.
  (c) A statement of the proposed amount for which funding bonds are to be issued, together with a statement of the maximum time for which such bonds are proposed to be issued (which shall not exceed five years from the date of the order providing for their issuance), and the rate of interest which such bonds shall bear, not to exceed 6 per cent per annum.
  (d) A statement of the percentage of the total amount of the annual sums to be levied upon the lands, exclusive of improvements, within each zone in the funding district for the purpose of retiring the principal and interest of the funding bonds. The amount to be thus levied shall not exceed the proportionate amounts chargeable against the several counties within the district as set forth in the report of the board of directors adopted pursuant to Section 25154.
  (e) A statement of the time and place fixed for the hearing upon the matter of the proposed issuance of funding bonds, in the manner provided for in this resolution.

Upon the adoption of the resolution of intention to issue funding bonds, the secretary shall cause a notice of the time and place of hearing to be published twice in a newspaper of general circulation published at the county seat of each county embraced within the boundaries of the proposed funding district. The newspapers in which such publication shall be made may be designated by the board of directors or, if the board does not make the designation, the secretary may do so.

The time fixed for the hearing shall not be less than 15 days after the completion of the required publication. Not less than 30 days prior to the time fixed for the hearing, a copy of the notice of the hearing shall be transmitted by the secretary of the board of directors to the several boards of supervisors of the counties comprising the district. No county or portion of a county shall be assessed within any funding district for the payment of any amount which has previously been paid by such county into the district treasury upon any amount previously levied within and upon such county.

All persons interested may appear at the hearing and they may set forth in writing any objections they may have to the issuance of the funding bonds or to the boundaries of the proposed funding district or the zones therein, or to the amount of benefits to be derived by any parcel of land within the proposed funding district.

The board of directors shall hear and determine all objections presented at the hearing. The board may alter the boundaries of the proposed funding district or change the amount for which funding bonds are proposed to be issued, but it may not enlarge the boundaries of the funding district or increase the amount of bonds proposed to be issued. At the conclusion of the hearing, the board of directors shall finally determine the boundaries of the funding district and the zones therein and shall determine the amount of funding bonds to be issued, and the proportions of the bonds to be charged against each zone, which amounts shall not exceed the benefits to be derived by the lands within the funding district from the project for which the funding bonds are to be issued.

All decisions, findings and determinations of the board of directors made upon notice and hearing shall, in the absence of actual fraud, be final and conclusive upon all persons entitled to present objections at such hearing.

If at the hearing, the owners of more than 25 per cent in area of the property within any proposed funding district object in writing to the issuance of funding bonds, the board of directors shall have no power to cause such funding bonds to issue.

Following the hearing the board of directors shall, if it determines to issue funding bonds, cause its findings in relation thereto to be transmitted to the boards of supervisors of the several counties within the district. If any board of supervisors makes objection to the issuance of the funding bonds within 35 days after receiving notice thereof, the board of directors shall have no power to cause the same to be issued, but may take new proceedings in the same manner as provided in the first instance covering an amended proposition for the issuance of funding bonds for the same or any different project or any portions thereof. If no objections are made by any board of supervisors as in this section provided, the board of directors may proceed to issue the funding bonds.

Funding bonds issued pursuant to the provisions of this chapter shall be in substantially the following form (filling in blanks as appropriate):

FUNDING BOND

Joint Highway District No. ___ of the State of California

$____ Bond No. ___ Serial ___. Under and by virtue of Part 1 (commencing with Section 25000) of Division 16 of the Streets and Highways Code, the treasurer of Joint Highway District No. ____ of the State of California will pay to the bearer, out of the fund hereinafter designated, at the office of the treasurer of said district, on the ____ day of ____, 20__, the sum of ____ dollars, in lawful money of the United States of America, with interest thereon in like lawful money at the rate of ____ per cent per annum, payable semiannually on the second day of January and the second day of July in each year from the date hereof (except the last installment thereof, which shall be payable at the maturity of this bond), upon presentation and surrender, as they respectively become due, of the proper interest coupons hereto attached, the first of which is for interest from date hereof to the next date of interest payment, and the last for interest to maturity hereof from the last preceding date of interest payment. This bond is issued under and in conformity with the provisions of Part 1 (commencing with Section 25000) of Division 16 of the Streets and Highways Code, and is one of a series of bonds of like date and effect numbered from one to ____ consecutively. It is hereby certified, recited, and declared that all proceedings, acts, and things required by law precedent to or in the issuance of this bond have been regularly had, done, and performed, and this bond is by law made conclusive evidence thereof. This bond is payable out of the "Joint Highway District No. ____ of the State of California Funding Bond Redemption Fund," exclusively, as the same appears upon the books of the treasurer of that district, and in accordance with the provisions of Part 1 (commencing with Section 25000) of Division 16 of the Streets and Highways Code special assessment taxes will be levied and collected upon the lands within Funding District No. ____ in that joint highway district in an amount clearly sufficient to pay the principal and interest of the bonds as the bonds become due and payable. In witness whereof the board of directors of the district has caused this bond to be signed by the treasurer of the district attested by the secretary of the board and the official seal of the district to be affixed hereto this ____ day of ____, 20__.

____________________________ (SEAL) Treasurer of Joint Highway District No. ___ of the State of California. Attest: _________________________________________________ Secretary of the Board of Directors.

Funding bonds shall be dated as of the date of the resolution or order of the board of directors authorizing their issuance.

The board of directors may use any available moneys of the district, not already allocated to some other purpose, for the payment of any interest or principal due or past due upon any funding bonds of the district, and may advance moneys of the district for that purpose. If an advancement is made the district shall be entitled to reimbursement out of any levies thereafter made or any moneys thereafter collected and applicable to the payment of the funding bonds.

All funding bonds shall be signed by the treasurer of the district, attested by the secretary, and shall have the official seal of the district affixed thereto. The form of the interest coupons attached to the funding bonds shall be determined by the treasurer subject to the approval of the board of directors. The signature on the interest coupons shall be that of the treasurer and may be either written, or an engraved or printed facsimile. The principal and interest of the funding bonds shall be payable in lawful money of the United States of America at the office of the treasurer of the district issuing the same.

All funding bonds shall be serial in character and approximately an even proportion of the total amount of each issue shall be payable annually. The amount of the principal due in each annual payment need not be exactly the same but with respect to each installment excepting the last may be made to differ not more than five hundred dollars ($500) from the amount obtained by dividing the total of the principal amount due under the bonds, by the number of installments. The last installment shall be for the balance of the total principal amount not provided to be paid in the previous installments.

The funding bonds shall be issued by the board of directors at such time and manner and in such amounts as may be required to meet the demands of the district, as may be determined by the board of directors. The form, denomination, rate of interest, time, place and manner of payment and all matters relating to such issuance shall be determined by the board of directors, but the rate of interest shall not exceed 6 per cent per annum. The funding bonds so issued may be sold in such amounts and at such times and in such manner as the board of directors may determine, or they may be delivered to any contractor performing any work for the district, at par, in satisfaction of any sum due upon his contract.

In each district in which funding bonds have been issued there is hereby created a special fund to be designated "Joint Highway District No. ____ of the State of California Funding Bond Redemption Fund No. ____" (each such fund to be consecutively numbered within each district as created) for the discharge and payment of principal and interest on such bonds.

The treasurer of the district shall annually before the fifteenth day of August transmit to the several boards of supervisors within the funding district, a statement showing the amount to be raised in such year by the levy and collection of special assessment taxes upon the lands only, exclusive of improvements, within each county which is within the funding district and subject to be taxed for the payment of principal, interest and delinquencies upon any funding bonds of the district. The statement shall show the percentages of the total amount to be levied upon the lands in each county in accordance with the zones established for each such funding district. The engineer of the district shall cause to be prepared and filed in the office of the clerk of the board of supervisors of each county within the district, a map or plat showing the boundaries of the lands in each county which are within any funding district showing the boundaries of the zones therein and the percentage of the total assessment to be paid by each zone.

The special assessment taxes levied for the payment of funding bonds shall be independent of and distinct from any other levies authorized by this part and shall be levied, collected and enforced by the proper officers of the several counties within the district, in behalf of the joint highway district and in the same manner and by the same persons and at the same time and with the same penalties and interest as are taxes for county purposes, and all laws applicable to the levy, collection and enforcement of taxes for county purposes are hereby made applicable to these special assessment taxes where such laws are not in conflict with the provisions of this part except that such special assessment taxes shall be levied and collected upon land only, exclusive of the improvements thereon.

It shall be the duty of the board of supervisors of each county within the district to annually cause to be levied upon the lands only, exclusive of improvements, within the county liable therefor the amounts reported to it by the treasurer of such district, which amounts shall be clearly sufficient to pay the principal and interest coming due or past due in such year upon any funding bonds of the district together with a sufficient amount to cover delinquencies.