11-264.01. Additional bonding authority; security for payment; definition
A. In addition to other bonding authority of the board of supervisors the board of any county authorized to operate a sewerage system pursuant to provisions of section 11-264 may issue bonds for the construction, acquisition or improvement of such system. All principal and interest of bonds issued by a county are payable solely out of the revenues, proceeds and receipts derived from the operation of the county sewerage system or out of the proceeds of bonds issued under this section or of any revenues, proceeds and receipts of such bonds as are specified in the proceedings of the board of supervisors in which the bonds are authorized to be issued.
B. No bonds shall be issued without the assent of a majority of the qualified electors voting at an election held within the county in the manner prescribed for the authorization of municipal bonds for financing utilities pursuant to sections 9-523 through 9-528 inclusive.
C. The bonds prescribed by subsection A of this section may:
1. Be executed and delivered by the county at any time.
2. Be in such form and denominations and of such tenor and maturities.
3. Be in registered or bearer form either as to principal or interest or both.
4. Be payable in such installments and at such time or times not exceeding forty years from the date of issuance.
5. Be payable at such place or places within or without this state.
6. Bear interest at such rate or rates, but not exceeding the maximum rate set forth in the ballot, payable at such time or times and at such place or places and evidenced in such manner.
7. Be executed by the chairman of the board of supervisors and in such manner, and contain provisions not inconsistent with this section, as provided in the proceedings of the board of supervisors in which the bonds are authorized to be issued.
D. If deemed advisable by the board of supervisors, there may be retained in the proceedings in which any bonds of the county are authorized to be issued an option to redeem all or any part of the bonds as may be specified in the proceedings, at such price or prices and after such notice or notices and on such terms and conditions as are provided in the proceedings and as may be briefly recited on the face of the bonds, but nothing in this article shall be construed to confer on the county any right or option to redeem any bonds except as may be provided in the proceedings under which they are issued.
E. Any bonds of the county may be sold by calling for bids at public sale, through an on-line bidding process or through an accelerated bidding process as follows:
1. If sold under an accelerated bidding process, the bonds shall be sold at the lowest cost the board of supervisors considers to be available after receiving at least three pricing quotations from recognized purchasers of bonds of the type being sold.
2. If sold at public sale or through an on-line bidding process, the bonds shall be sold to the person offering the best bid.
3. If bonds are sold at public sale, the board of supervisors shall call for bids by giving notice at least once a week for two successive weeks by publication in a newspaper of general circulation within the county. The notice shall be in such form as the board of supervisors prescribes.
4. If bonds are sold through an on-line bidding process, bids for the bonds that are entered into the system may be concealed until a specified time or disclosed in the on-line bidding process, may be subject to improvement in favor of the county before a specified time and may be for an entire issue or specified maturities according to the manner, terms and notice provisions ordered by the board of supervisors.
5. The bonds may be sold below, at or above par. If the bonds are sold below par, the aggregate amount of the discount plus interest to be paid on the bonds may not exceed the amount of interest that would be payable on the bonds over the maturity schedule prescribed by the board of supervisors at the maximum rate stated in the resolution calling the election at which the bonds were approved.
6. The bids shall be for the entire bond issue unless the board of supervisors allows bidding in parcels for less than the entire issue.
7. The county may pay all expenses, premiums and commissions which its board of supervisors deems necessary or advantageous in connection with such issuance.
8. Issuance by the county of one or more series of bonds does not preclude it from issuing other bonds in connection with the same project or any other project, but proceedings in which any subsequent bonds may be issued shall recognize and protect any prior pledge made for any prior issue of bonds.
F. Bonds may be sold to natural persons residing in this state by negotiated sale on terms the board of supervisors considers to be the best available. The bonds may bear interest payable at times determined by the board of supervisors. The bonds may be sold below, at or above par. If the bonds are sold below par, the aggregate amount of discount plus interest to be paid on the bonds may not exceed the amount of interest that would be payable on the bonds over the maturity schedule prescribed by the board of supervisors at the maximum rate set out in the resolution calling the election at which the bonds were approved.
G. Pending preparation of the actual bonds, the board of supervisors may issue interim receipts or certificates to the purchasers of the bonds in the form and with the provisions the board determines.
H. Any outstanding bonds of the county may at any time be refunded by the county by the issuance of its refunding bonds in such amount as the board of supervisors may deem necessary but not exceeding an amount sufficient to refund the principal of the bonds to be refunded, together with any unpaid interest on the bonds and any necessary premiums and commissions. Any such refunding may be effected whether the bonds to be refunded have matured or shall thereafter mature, either by sale of the refunding bonds and the application of the proceeds for the payment of the bonds to be refunded or by the exchange of the refunding bonds for the bonds to be refunded with the consent of the holders of the bonds to be refunded, and regardless of whether the bonds to be refunded were issued in connection with the same projects or separate projects and regardless of whether the bonds proposed to be refunded are payable at the same date or different dates or are due serially or otherwise.
I. All such bonds and interest coupons applicable to the bonds are negotiable instruments.
J. Bonds issued under this section may bear interest at any rate or rates not in excess of the maximum rate of interest stated in the resolution calling the election. Interest is payable at the times determined by the board of supervisors, except that each such bond may be evidenced by one instrument or, if commercial paper, by a succession of instruments each bearing interest payable only at maturity. Bonds or commercial paper issued under this section are subject to the following:
1. The bonds may bear interest at a fixed, variable or combination rate, none of which exceeds the maximum rate of interest stated in the resolution calling the election.
2. A variable rate shall be based on any objective measure of the current value of money borrowed such as the announced prime rate of a bank, the rates borne by obligations of the United States or an index or other formula provided for by the board of supervisors. The board of supervisors shall employ a recognized agent in municipal bonds to market and remarket the bonds or commercial paper issued and to establish an interest rate pursuant to the approved index or formula.
3. The board of supervisors may grant to the owner of any bond a right to tender or may require the tender of the bond for payment or purchase at one or more times before maturity and may enter into appropriate agreements with any financial institution, insurance company or indemnity company for the purchase of bonds so tendered. The agreement may provide that while the bonds are held by the financial institution, insurance company or indemnity company the bonds may bear interest at a rate higher than when the bonds are held by other owners, but not exceeding the maximum rate of interest stated in the resolution calling the election.
4. If bonds are tendered before maturity under an agreement to pay for or purchase bonds when tendered, the county may provide for the purchase and resale of the bonds pursuant to the tenders without extinguishing the obligation they represent or incurring a new obligation on the resale, whether or not those bonds are represented by the same instruments when purchased as when resold.
5. Compensation for the resale of the bonds shall not be based on or measured by the difference between the price at which the bonds are purchased and the price at which they are resold.
6. The board of supervisors may:
(a) Contract with a financial institution, insurance company or indemnity company to provide additional security for the bonds in the form of a line of credit, letter of credit, insurance policy or other security.
(b) Pay the costs of the additional security from amounts provided in the bond issue or from other available sources and may enter into reimbursement obligations in connection with the cost of the additional security.
7. Any reimbursement obligation entered into with the financial institution, insurance company or indemnity company shall not provide for the payment of interest in excess of the maximum rate of interest stated in the resolution calling the election. The reimbursement obligation does not constitute a general obligation of the county and is payable from the same source as the bonds, or from other available revenues, as determined by the board of supervisors. The use of such other available revenues does not create indebtedness of the county under article IX, section 8, Constitution of Arizona.
8. Variable rate bonds and commercial paper may be sold at competitive public sale, through an on-line bidding process or at negotiated sale. A competitive public sale may be accomplished pursuant to a notice of sale published at the times and in the manner provided in this section. The notice shall include the terms and conditions determined by the board of supervisors.
9. If bonds are to be issued in the form of commercial paper, the board of supervisors shall first establish the schedule for the maturities of the bonds within the maximum period permitted by the voted proposition. The individual instruments representing the bonds may mature over shorter periods and may be retired before maturity with proceeds of subsequent instruments or with the proceeds of definitive bonds, but they shall be finally paid according to the schedule of bond maturities or earlier.
10. Bonds issued in the form of commercial paper may be sold through an agent in the form of instruments that mature at intervals the agent determines to be most advantageous to the issuer after giving public notice to potential investors as determined by the board of supervisors.
11. Bonds may be issued as compound interest bonds bearing interest payable only at maturity but compounded periodically until that date at a fixed rate no higher than the rate set forth in the resolution calling the election.
K. A county may submit to the attorney general all proceedings for the issuance of bonds to be issued under this article after all proceedings for their issuance have been taken, and thereupon it shall be the duty of the attorney general to pass upon the validity of the bonds and the regularity of the proceedings authorizing their issuance. If such proceedings conform to the provisions of this article, and the bonds when delivered and paid for will constitute binding and legal obligations of the county according to the terms thereof, the attorney general shall certify in substance that the bonds are issued in accordance with the constitution and laws of this state.
L. For purposes of this section, " on-line bidding process" means a procurement process in which the governing body receives bids electronically over the internet in a real-time, competitive bidding event.
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