Chapter 13. Issuance Of District Bonds And Disposition Of Surplus Proceeds of California Streets And Highways Code >> Division 16. >> Part 3. >> Chapter 13.

At or before the time of issuing any bonds the board shall estimate:
  (a) The total cost of constructing or acquiring or both the works for which the bonds are to be issued.
  (b) The period of construction of such works.
  (c) The amount of bonds which will be required to pay the total estimated cost and to pay interest on the bonds during the estimated period of construction and for six months thereafter. No bonds shall be issued if the estimated amount of bonds required to pay the estimated cost and interest exceeds the total amount of bonds authorized to be issued by the district.

If the estimated amount of bonds required to pay the estimated cost and interest exceeds the total amount of bonds theretofore authorized, the board may submit to the electors of the district the proposition of authorizing additional bonds for the purpose of meeting the estimate. No error or informality in any estimate shall invalidate any bonds of the distirct.

Bonds may be issued in accordance with the estimate in such amounts not exceeding the total amount of bonds authorized as will produce a sum sufficient to pay the cost of constructing or acquiring or both the works for which they were authorized and interest on the bonds so issued during the period of construction and six months thereafter. The failure to issue the full amount of bonds authorized shall not invalidate any bonds of the district.

Prior to the preparation of definitive bonds the board may issue temporary bonds of any denomination and with or without coupons and subject to the same restrictions imposed upon the issuance of definitive bonds. Temporary bonds shall be exchangeable for definitive bonds upon the issuance of the latter.

If, after any bond has been duly signed by any properly authorized officer, that officer ceases to hold office, the bond may nevertheless be delivered with the same effect as if it had been signed by the person holding the office at the time of delivery.

The district bonds may be made registerable as to principal alone or as to both principal and interest under such terms and conditions as may be fixed by the board prior to the issuance thereof.

If after paying the cost of constructing or acquiring or both the works and interest on the bonds during the actual period of construction and for a period of six months thereafter, there is a surplus of the proceeds of the bonds issued by the district, including all premiums paid there shall be set aside out of such surplus in a reserve interest fund an amount equal to one year's interest on the bonds, or, if the surplus shall be less than one year' s interest on the bonds, all of the surplus shall be set aside.

The money in the reserve interest fund shall be deposited in the same manner as other funds of the district or invested in securities which are legal investments for public funds, and the fund shall be used solely for the payment of interest on such bonds whenever there shall be a deficit in the revenues of the works and only to the extent of such deficit.

If the surplus from the proceeds of the bonds exceeds one year's interest on the bonds, the balance shall be placed in the fund for the payment of the principal of such bonds.

A district formed under this part may issue either general obligation bonds or revenue bonds secured solely by tolls.