Chapter 4.5. Provisions Relating To Short Term Borrowings of California Water Code >> Division 13. >> Part 6. >> Chapter 4.5.

A district may borrow money and incur indebtedness as provided in this chapter by action of the board and without the necessity of calling and holding an election in the district, except as otherwise provided in Section 36402.1.

Indebtedness may be incurred pursuant to this chapter for any purpose for which the district is authorized to expend funds, including provisions for the payment of current expenses of the district and for the funding or refunding of any outstanding warrants.

Indebtedness incurred under this chapter shall be evidenced by warrants or negotiable notes of the district payable at stated times fixed by the board and bearing interest at a rate not exceeding 8 percent per annum, payable annually or semiannually.

Except as provided in Section 36407.1, no warrants or negotiable notes issued pursuant to this chapter shall be valid unless their issuance is authorized by a majority of the voters voting at an election called by the board for the purpose of determining whether or not the warrants or negotiable notes shall be authorized.

Notice of the election shall be given and the election shall be held and the result determined as nearly as practicable in the manner provided for bond elections.

The proceeds of such warrants or negotiable notes may be used and applied to the purchase or redemption of any outstanding warrants or negotiable notes of the district.

Such warrants shall be issued in the name of the district after the adoption, by a four-fifths vote of all the members of the board, of a resolution setting forth the form of the warrant, the maturity date or dates thereof, and the manner of execution thereof.

The board may, in its resolution authorizing the issuance of such warrants, provide that the warrants shall be subject to call and redemption prior to maturity, at the option of the district, at such price or prices as may be fixed in the resolution, not exceeding a premium of 6 percent of the par value of the warrants so subject to redemption. The resolution shall fix the method of giving notice of redemption to the holders of warrants to be redeemed and the price or prices at which the warrants shall be subject to redemption. Warrants so subject to call and redemption prior to maturity shall contain a recital to that effect on their face, and no warrant issued under this chapter shall be subject to call or redemption prior to its fixed maturity date unless it contains such recital.

Coupons payable to bearer shall be in a form and signed as prescribed by the board and may be attached to warrants issued under this chapter to evidence their interest.

Warrants or negotiable notes issued under this chapter shall be offered for public sale upon notice inviting sealed bids therefor. Such notice shall be given by publication pursuant to Section 6061 of the Government Code in a newspaper of general circulation printed and published in the district or if such a newspaper is not printed and published in the district by posting in three public places in the district, and the sale shall not be held before 10 days after such publication or posting. The board may reject all bids received on public sale and either readvertise or sell the warrants or negotiable notes at private sale, but no sale at private sale shall be made for less than the par value of the warrants or negotiable notes and accrued interest thereon.

Warrants or negotiable notes issued under this chapter and authorized by the voters pursuant to Section 36402.1 shall constitute general obligations of the district for the payment of both principal and interest of which all land in the district subject to assessment by the district shall be assessed without limitation of rate or amount. It shall be the duty of the board to include in its annual estimate filed with the board of supervisors all sums necessary to pay the principal of, and interest on, all warrants or negotiable notes issued under this chapter coming due during the next year, and any sums that the board shall direct to be set aside in a special fund for the future payment of principal of and interest on any outstanding warrants or negotiable notes issued under this chapter which will come due in any year following the next year. It shall be the duty of the board of supervisors, at the time and in the manner provided in this division for making the annual assessment, to fix an ad valorem rate of assessment sufficient to pay the principal of and interest on all warrants or negotiable notes issued under this chapter as the same become due, and the sums required for the special fund established by the board. Such ad valorem assessment shall be in addition to all other assessments in this division provided for and when collected shall be used for no purpose other than the payment of said warrants or negotiable notes and the interest thereon.

Warrants or negotiable notes payable in five years or less from the date of issuance may be issued under this section without the approval of the voters pursuant to Section 36402.1 and shall constitute obligations of the district payable from annual assessments and other revenues of the district and subject to the maximum property tax rate contained in Chapter 3 (commencing with Section 2201) of Part 4 of Division 1 of the Revenue and Taxation Code.

Warrants or negotiable notes payable at a future date or times may also be issued to obtain funds or property for any lawful purpose of the district; provided, the total amount of the warrants or negotiable notes payable in any one year shall not exceed one-fourth of one (1) percent of the total valuation of the land in the district according to the last equalized assessment roll.

Any warrant or negotiable notes authorized in the preceding section shall draw interest at a rate to be fixed by the board not to exceed eight (8) percent per year payable annually or semiannually as the board may prescribe. Negotiable notes shall be issued payable to bearer with a right of the district to provide for the registration and deregistration thereof in the same manner as bonds of the district. Interest coupons to bearer in a form and signed as prescribed by the board may be attached to such warrants or negotiable notes.

Warrants or negotiable notes of any district may be issued to evidence the indebtedness allowed to be incurred prior to the levy of the first district assessment, bearing interest fixed by the board at not more than eight (8) percent per year. These warrants or negotiable notes shall be made payable on a date not later than the first day of July next after the first annual assessment in the district is levied.

A district may borrow money in anticipation of the sale of, but not in excess of the principal amount of, authorized bonds of the district which have not yet been sold and delivered, and for that purpose may issue and sell negotiable bond anticipation notes, and may refund such notes from time to time, but the maximum maturity of any such notes, as originally issued or as refunded, shall not exceed five years from the date of the original notes. The notes shall be sold in such manner as the board may determine, and such notes and the resolution providing for the issuance of such notes may contain any provision, condition or limitation which a bond, or any resolution or ordinance providing for the issuance of bonds, may contain. The interest on bond anticipation notes shall be payable at the time or times provided in such notes and may be represented by interest coupons attached to the notes and shall be payable from the same funds from which the interest on bonds of the district are payable. The principal of such notes may be paid from any moneys of the district available for such purpose. If such notes, or any portion thereof, have not been previously paid, they shall be paid from the proceeds of the next sale of bonds in anticipation of which the notes were issued. The resolution providing for the issuance of bond anticipation notes may contain a provision that, if for any reason bonds of the district are not sold in time to provide funds to pay any unpaid note, and, if other funds of the district are not available for such payment, ad valorem assessments shall be levied upon the assessable land in the district for such payment in the same manner provided for the payment of bonds in such amount each year for such period of years as may be set forth in such resolution. To the extent bond anticipation notes are paid from such assessment, authorized bonds in a corresponding amount shall be canceled and not issued thereafter. When bonds of the district are issued and any portion of the proceeds of the sale are to be used to pay bond anticipation notes, such bonds shall mature not later than the maximum permissible years for such bonds as provided in Section 36195, with the maximum permissible maturity determined from the date of such notes as originally issued.

A district may borrow money in anticipation of the sale of, but not in excess of the principal amount of, authorized bonds of an improvement district formed pursuant to this division which have not yet been sold and delivered, and for that purpose may issue and sell negotiable bond anticipation notes, and may refund such notes from time to time, but the maximum maturity of any such notes, as originally issued or as refunded, shall not exceed five years from the date of the original notes. The notes shall be sold in such manner as the board may determine, and such notes and the resolution providing for the issuance of such notes may contain any provision, condition or limitation which a bond, or any resolution or ordinance providing for the issuance of bonds, may contain. The interest on bond anticipation notes shall be payable at the time or times provided in such notes and may be represented by interest coupons attached to the notes and shall be payable from the same funds from which the interest on bonds of the improvement district are payable. The principal of such notes may be paid from any moneys of the improvement district available for such purpose. If such notes, or any portion thereof, have not been previously paid, they shall be paid from the proceeds of the next sale of bonds in anticipation of which the notes were issued. The resolution providing for the issuance of bond anticipation notes may contain a provision that, if for any reason bonds of the improvement district are not sold in time to provide funds to pay any unpaid note, and, if other funds of the improvement district are not available for such payment, ad valorem assessments shall be levied upon the assessable land in the improvement district for such payment in the same manner provided for the payment of bonds in such amount each year for such period of years as may be set forth in such resolution. To the extent bond anticipation notes are paid from such assessments, authorized bonds in a corresponding amount shall be canceled and not issued thereafter. When bonds of the improvement district are issued and any portion of the proceeds of the sale are to be used to pay bond anticipation notes, such bonds shall mature not later than the maximum permissible years for such bonds as provided in Section 36195, with the maximum permissible maturity determined from the date of such notes as originally issued.

The provisions of this chapter shall constitute an addition to all other power of the district to borrow money, incur indebtedness, and issue warrants or negotiable notes in connection therewith, and shall not be deemed a restriction or limitation on such other power. A district may issue negotiable notes as provided in this chapter in lieu of the issuance of warrants of the district or for an improvement district as provided in this division.