Article 1. Issuance And Sale of California Water Code >> Division 16. >> Part 4. >> Chapter 2. >> Article 1.

The board may issue and sell the bonds of the district, when authorized, at not less than par value, and the proceeds of the sale shall be placed in the county treasury or other depository for the district's fund to the credit of the proper district fund and shall be applied exclusively to the purposes and objects mentioned in the ordinance or resolution ordering the holding of the bond election; provided, however, that when said purposes and objects have been accomplished any moneys remaining in said fund shall be transferred to the general fund of the district and may be used by the board for any lawful purpose of the district.

The board by an order entered upon its minutes, shall, subject to the provisions of this division, prescribe the form of bonds issued and of the interest coupons attached thereto.

The board shall designate an amount, not less than one-fortieth of the principal amount of the indebtedness, or series thereof, which shall be paid annually at a fixed time and place, together with the interest on all sums unpaid. The rate of interest shall be designated in the bonds and shall be paid semiannually at a rate not in excess of 8 percent per year; except that interest for the first year after the date of the bonds may be made payable at the end of said year.

The board may determine and fix a date for the earliest maturity of the principal of the bonds, or series thereof, not more than 10 years from the date of issue of bonds. The principal amount of the indebtedness, or series thereof, must be made payable in not to exceed 40 years from the time of contracting the same; and beginning with the date of earliest maturity of the bonds, or series thereof, not less than one-fortieth of the principal amount of the indebtedness, or series thereof, shall be paid annually.

The bonds shall be issued in such denomination or denominations as the board may determine.

The bonds shall be signed by the chairman of the board and countersigned by the auditor of the district, or if one has not been appointed, the auditor of the county and the seal of the district shall be affixed thereto. All such signatures and countersignatures, except one, may be printed, lithographed, engraved, or otherwise mechanically reproduced. Any such signature may be affixed in accordance with the provisions of the Uniform Facsimile Signatures of Public Officials Act, Chapter 6 (commencing with Section 5500) of Title 1 of the Government Code.

The interest coupons of the bonds shall be numbered consecutively and signed by the auditor of the county by his engraved or lithographed signature.

In case any officer whose signature or countersignature appears on the bonds or coupons shall cease to be an officer before the delivery of the bonds to the purchaser, the signature or countersignature shall be valid and sufficient for all purposes the same as if the officer remained in office until the delivery of the bonds.

The principal and interest on the bonds shall be paid by the district treasurer, or if one has not been appointed, the county treasurer, in the manner provided by law for the payment of principal and interest on bonds of the county.

The board may divide the principal amount of any issue into two or more series and fix different dates for the bonds of each series. The bonds of one series may be made payable at different times from those of any other series. The maturity of each series shall comply with this article.

Notwithstanding any other provision of the law, the board may determine that the public economy so requires, and order that less than one-fortieth of the whole amount of the indebtedness, or a series thereof, shall be payable annually.

District or zone bonds may be made payable on July 1st 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 or interest of the bonds is to be collected. In such event, the first interest coupons shall be for interest from the date of the bonds of such issue or series to January 1st next prior thereto.

The proceeds of such bonds may be used for the following purposes:
  (a) All costs or estimated costs incidental to or connected with the acquisition, construction, improving and financing of the improvements for which they are issued.
  (b) All engineering, inspection, legal and fiscal agent's fees, costs of the bond election and of the issuance of the bonds.

Any bonds issued by the district may be subject to call and redemption prior to maturity at such times and prices and upon such other terms as the board may specify.

When bonds are made callable, a statement to that effect shall be set forth on the face of the bond.