If funds are needed to meet current expenses of maintenance and operation, a district may incur indebtedness by the issuance of negotiable promissory notes pursuant to this section, without an election. The notes shall be general obligations of the district payable in the same manner as bonds of the district, shall mature not later than two years from the date thereof, and shall bear interest at a rate not to exceed 7 percent per annum, payable as provided therein. The aggregate amount of the notes outstanding at any one time shall not exceed an amount equal to seven cents ($0.07) on each one hundred dollars ($100) of the assessed valuation of the taxable real property within the district as shown on the last equalized assessment roll of the county. If such assessed valuation is not obtainable, the county auditor’s estimate of the assessed valuation of the taxable real property within the district for the fiscal year in which the indebtedness is to be incurred shall be used.

All such notes shall be issued after the adoption of a resolution by a four-fifths vote of the district board setting forth the following:

(a)  The necessity for such borrowing.

(b)  The assessed valuation of the taxable real property within the district, or the auditor’s estimate thereof.

(c)  The amount of funds to be borrowed.

(d)  The date, maturity, denomination, and form of such notes.

The notes shall be signed by the chairman of the district board and countersigned by the county treasurer and the seal of the district board shall be affixed.

The district board shall cause the board of supervisors to levy and collect taxes to pay the interest on and the principal of the notes as the same comes due and, if the maturity of the notes begins more than one year after the date thereof, to constitute a sinking fund for the payment of the principal thereof at maturity.

Before selling such notes, the district board shall give notice inviting sealed bids in such manner as the board may prescribe. If satisfactory bids are received, the notes offered for sale shall be awarded to the highest responsible bidder. If no bids are received, or if the district board determines that the bids received are not satisfactory as to price or responsibility of the bidders, the district board may reject all bids received, if any, and either readvertise or sell the notes at private sale.

(Amended by Stats. 1972, Ch. 1384.)