§ 3-62. Council; School Board; not to pledge credit of City; exceptions

(a) Except as otherwise provided, the credit of the City, except by temporary loans not exceeding during any quarter of any fiscal year 25 percent of the taxes assessed upon the entire grand list for such fiscal year, and except by emergency loans as hereinafter provided, shall not be pledged by the City Council, or by any officer of said City, unless by vote of the legal voters of said City, at a meeting thereof duly called for that purpose; provided, however, that the Chief Administrative Officer, when authorized and directed by resolution of the City Council, may pledge the credit of the City by a temporary loan in anticipation of the receipt of revenue from the Airport Department, or the Traffic Division or the Wastewater or Water Divisions of the Public Works Department for their ordinary running expenses during times in any fiscal year when there are not sufficient funds on hand to the credit of the Airport Department or the above-mentioned divisions for the payment of such bills and accounts, or sufficient unappropriated funds in the City Treasury from which such accounts may be paid pending the receipt of revenues of the division sufficient to pay such bills and accounts; and provided further, that the Chief Administrative Officer, when authorized by the City Council, may pledge the credit of the City by temporary borrowing in anticipation of the receipt of revenue from the Electric Department not to exceed $5 million outstanding at any time to provide working capital for the Electric Department. Temporary notes issued hereunder in anticipation of the receipt of the revenue from the Electric Department shall mature within two years from the date of issue, and may be renewed or refunded by the issue of other notes maturing within a similar period whenever such action is deemed expedient. Except as above provided, all temporary loans, except loans for the payment of bills and accounts of the Water Division of the Public Works Department and the Electric Department and except emergency loans, shall be paid by the Chief Administrative Officer from and out of the receipts from the collection of the installment of property taxes or other taxes next falling due after the making of the loan, and all moneys received from such temporary loans, other than for the Water Division of the Public Works Department and the Electric Department and other than from emergency loans, shall be used to pay the current and ordinary expenses of the City, pending the collection of taxes. All such temporary loans made to pay the accounts and bills of the Water Division of the Public Works Department pending the receipt of revenue shall be paid during said fiscal year from the revenues received by that division. Temporary loans under this paragraph for the Water Division and electric departments shall be general obligations of the City notwithstanding that they are primarily payable from the revenues or receipts of the respective Division and departments.

(b) In case of an emergency demand found and declared to exist by the City Council, the City Council may pledge the credit of the City by an emergency loan to meet such demand, but such emergency loans shall not exceed in the aggregate during any fiscal year 40 cents upon the dollar of the entire grand list of said City. All emergency loans shall be used for the emergency declared to exist by the City Council, and shall be paid by taxation the following fiscal year, the budget for which shall include an appropriation sufficient to pay all such emergency loans.

(c) The City Council may, during the first five days of the July following the making of such emergency loans, assess upon the property grand list a tax or taxes, which will be sufficient to pay such loan, which tax shall be in addition to those provided for in section 99 hereof, and shall not be included within the tax limitation thereby imposed upon taxation for City purposes.

(d) The Chief Administrative Officer, when authorized and directed by resolution of the City Council, may pledge the credit of the City by means of temporary loans in anticipation of the sale of bonds authorized by the legal voters of said City for the payment of installments due on the project for which said bonds are to be issued, pending the receipt of revenues from the sale of such bonds; provided, however, that the said temporary loans shall not exceed 90 per cent of the amount so anticipated. Any of such loans shall be immediately repaid upon receipt of the proceeds from the sale of the said bonds.

(e) The Chief Administrative Officer, when authorized and directed by resolution of the City Council, may pledge the credit of the City by means of temporary loans for the payment of final bills due on any project approved for school State aid construction, pending receipt by the City of the final State aid payment, but limited to 90 per cent of the amount so anticipated. Any of such loans shall be immediately repaid upon receipt of the State aid construction payment.

(f)(1) The Chief Administrative Officer, when authorized and directed by resolution of the City Council, may pledge the credit of the City by issuing negotiable orders, warrants, notes, or bonds in an amount not to exceed in the aggregate $2 million in any fiscal year for the purpose of providing working capital and capital improvements, additions, and replacements required for the efficient and economical operation of the City and its departments, other than the Electric Light Department and the Water and Wastewater Divisions of the Public Works Department. If any of such annual borrowing authority is used to provide working capital, notes shall be issued in anticipation of the receipt of City revenue and shall mature within two years from the date of issue, and may be renewed or refunded by the issue of other notes maturing within a similar period whenever such action is deemed expedient. If any of such annual borrowing authority is used to provide capital improvements, additions, and replacements, the negotiable orders, warrants, notes, or bonds issued for such purposes shall be of such denominations, payable at such time or times, at such rate of interest, and to be sold and registered in such manner and under such terms and conditions as shall be established by resolution of the City Council.

(2) Notwithstanding the above, however, five per cent of the qualified voters of the City may petition for referendum review of the action by the City Council. Any such request for referendum review shall be in accordance with and governed by the procedures specified in section 63 of this charter for borrowing on behalf of Burlington Electric Department.

(3) The Chief Administrative Officer, when authorized and directed by the Board of School Commissioners and the City Council, may pledge the credit of the City by issuing negotiable orders, warrants, notes, or bonds in an amount not to exceed in the aggregate $2 million in any fiscal year for the purpose of providing working capital and capital improvements, additions, and replacements required for the efficient and economical operation of the School Department. If any of such annual borrowing authority is used to provide working capital, notes shall be issued in anticipation of the receipt of school revenue and shall mature within two years from the date of issue, and may be renewed or refunded by the issue of other notes maturing within a similar period whenever such action is deemed expedient. If any of such annual borrowing authority is used to provide capital improvements, additions, and replacements, the negotiable orders, warrants, notes, or bonds issued for such purposes shall be of such denominations, payable at such time or times, at such rate of interest, and to be sold and registered in such manner and under such terms and conditions as shall be established by resolution of the City Council. The funds raised in any such year from such borrowing shall be used for the capital needs of the School District that qualify for the 30 percent State of Vermont matching grant. The authorization provided for this addition to the City charter shall be considered the voting of funds by the Burlington School District as required by 16 V.S.A. § 3448, as the same may be amended from time to time. The amortization of such borrowed funds shall be by means of an annual tax on the education grand list in an amount sufficient for this purpose, such tax to be in addition to the tax necessary to support the education spending portion of the annual budget of the School Department. (Amended 1999, No. M-14 (Adj. Sess.), § 4; 2005, No. M-1, § 2; 2005, No. M-3, § 4, eff. May 12, 2005; 2009, No. M-11, § 3; eff. May 18, 2009; 2011, No. M-12 (Adj. Sess.), § 2, eff. May 3, 2012.)