§ 901-33. Indebtedness

(a) Short-term borrowing.

(1) The Board may borrow money through the issuance of notes of the Authority for the purpose of paying current expenses of the Authority. Such notes must mature within one year.

(2) The Board may also borrow money in anticipation of assessment to each member in an amount not to exceed 90 percent of the amount assessed for each year, and may issue notes of the Authority which must mature within one year.

(3) The Board may also borrow money in anticipation of grants-in-aid from any source and any revenues other than assessments through the issuance of notes of the Authority. Such notes must mature within one year but may be renewed as provided by general law.

(4) The Board may also borrow money in anticipation of bond proceeds which have been authorized as provided in this chapter. These notes shall be issued as provided in 24 V.S.A. chapter 53.

(b) Long-term indebtedness.

(1) Submission to voters.

(A)(i) On a petition signed by at least ten percent of the voters of the Authority, the proposition of incurring a bonded debt or other indebtedness to pay for public improvements or of authorizing a long-term contract shall be submitted by the Board to the voters thereof at a special meeting to be held for that purpose.

(ii) In the alternative, when the Board shall determine by resolution passed by the majority of members present and voting at a duly warned and called meeting that the public interest or necessity demands improvements or a long-term contract, and that the cost of the same will be too great to be paid out of the ordinary annual income and revenue, it shall order the proposition of incurring indebtedness or of authorizing a long-term contract to be submitted to the voters of the Authority at a meeting to be held for that purpose.

(iii) As used in this subdivision (1)(A):

(I)(aa) "Long-term contract" means a contract in which the Authority incurs obligations for which the costs are too great to be paid out of the ordinary annual income and revenues of the Authority in the judgment of the Board.

(bb) "Long-term contract" shall not include any contract that is subject to annual renewal or extension at the election of the Authority, or any contract pursuant to which payment by the Authority shall be subject to annual appropriations in accordance with the annual budget, or any contract for services or the purchase or lease of equipment, materials, or supplies needed in the ordinary course of business of the Authority.

(II) "Public improvements" shall include improvements which may be used for the benefit of the public, whether or not publicly owned or operated.

(iv) Bonded debt or other indebtedness may be authorized for any purpose permitted by 24 V.S.A. chapter 53 or 119 and 10 V.S.A. chapter 12, or any other applicable statutes for any purpose for which the Authority is organized.

(v) The Board may not submit to the voters more than twice in the same calendar year the proposition of incurring bonded or other indebtedness to pay for the same or similar public improvement or of entering the same or similar long-term contract.

(B) Any bonds, notes, or other evidence of indebtedness of the Authority may be sold at par, premium, or discount, at public or private sale or to the Vermont Municipal Bond Bank, as the Authority acting through the Board of Directors shall determine.

(2) Warnings of meeting.

(A) The warning of a special meeting of the Authority to incur bonded debt or other indebtedness or to authorize a long-term contract shall state:

(i) the object and purpose for which the indebtedness or long-term contract is proposed to be incurred or authorized;

(ii) the estimated cost of the improvements or service;

(iii) the amount of bonds or other evidence of indebtedness proposed to be authorized;

(iv) a summary of the terms of any contract proposed to be authorized;

(v) means of raising or apportioning costs entailed thereby for debt service or payments under a long-term contract; and

(vi) the places where and the date and time when the meeting shall be held and the hours of opening and closing the polls.

(B) The Board, in cooperation with the board of civil authority of each member, shall determine the number and location of polling places. There shall be at least one polling place in each member.

(3) Notice of meeting.

(A) The Secretary of the Authority shall cause notice of such special meeting to be published in one or more newspapers of known circulation in the Authority once a week for three consecutive weeks on the same day of the week, the last publication to be not less than five nor more than ten days before such meeting.

(B) Notice of such meeting shall also be posted in at least three public places within each member at least 30 and not more than 40 days before the meeting and be filed with the clerk of each member and the Secretary of the Authority prior to posting.

(4) Authorization.

(A)(i) The voters of the members shall vote for or against the issuance of bonds or other indebtedness or to authorize a long-term contract based upon the majority of votes cast by the voters.

(ii) When the majority of votes so cast favor the issuance of bonds or other indebtedness or to authorize a long-term contract, the Authority shall be so authorized as provided in 24 V.S.A. chapter 53 (indebtedness) or other applicable statutes, or to enter into the long-term contract.

(iii) The ballots cast in each member shall be counted by the election officials of each member, preserved and secured with the checklist, and thereafter the results shall be certified to the Authority Secretary within 48 hours.

(B)(i) The Authority may issue such authorized bonds, notes, or other evidence of indebtedness from time to time in one or more series or separate series, as determined by the Board of Directors, provided that the aggregate principal amount does not exceed the principal amount for which voter approval was obtained.

(ii) Such bonds, notes, or other evidence of indebtedness may bear such date or dates; mature at such time or times not exceeding 40 years from their respective dates; bear interest at such rate or rates (including variable rates) payable semiannually, monthly, or at such other time as determined by the Board of Directors; be in such denominations; be in such form, either coupon or registered; carry such conversion or registration privileges; have such rank or priority; be executed in such manner; be payable in such medium of payment; at such place or places; be subject to such terms of redemption, with or without premium; and be declared or become due before the maturity date thereof, as such resolutions authorizing their issuance may provide.

(5) Assessment.

(A) The cost of debt service or of payments under a long-term contract shall be included in the annual budget of the Authority, and shall be allocated among the members as provided in section 28 of this chapter for the calculation of the annual budget assessment.

(B) The applicable provisions of 24 V.S.A. chapter 53 (indebtedness) or other enabling law under which debt is incurred or long-term contracts authorized shall apply to the issuance of bonds or other evidence of indebtedness by the Authority and for that purpose the Authority shall be deemed a "municipal corporation," the Board shall be deemed a "legislative branch," and the Authority Treasurer shall be deemed a "municipal treasurer" within the purview of that chapter.

(C) Bonds or other evidence of indebtedness and long-term contracts shall be signed by the Treasurer and Chair of the Board.

(6) Bonds eligible for investment.

(A) Bonds and notes issued by the Authority shall be legal investments for all persons without limit as to the amount held, regardless of whether they are acting for their own account or in a fiduciary capacity.

(B) Such bonds and notes shall likewise be legal investments for all public officials authorized to invest public funds.

(7) Tax exemption.

(A) All bonds, notes, or other evidence of indebtedness issued by the Authority are issued by a body corporate and public of the State and for an essential public and governmental purpose.

(B) Such bonds, notes, and other evidence of indebtedness and the interest thereon and the income therefrom, and all fees, charges, funds, revenues, income, and other monies pledged or available to pay or secure the payment of those bonds, notes, and other evidence of indebtedness or interest thereon, are exempt from taxation except for transfer, inheritance, and estate taxes.

(8) Purchases and disposition of own obligations.

(A) The Authority may purchase bonds, notes, and other evidence of indebtedness of the Authority out of any of its funds or money available therefor.

(B) The Authority may hold, cancel, or resell the bonds, notes, and other evidence of indebtedness subject to and in accordance with agreements with holders of its bonds, notes, and other evidence of indebtedness.

(9) Presumption of validity. After issuance, all bonds, notes, and other evidence of indebtedness of the Authority shall be conclusively presumed to be fully authorized and issued by all the laws of this State, and any person or governmental unit shall be stopped from questioning their authorization, sale, issuance, execution, or delivery by the Authority.

(10) Specific provisions. In connection with the issuance of any bonds, notes, or other evidence of indebtedness, in addition to the powers it may now have or hereafter have, the Authority may make such covenants and agreements and exercise such powers as contained in 24 V.S.A. chapter 53. (Added 2013, No. M-17 (Adj. Sess.), § 2, eff. May 20, 2014.)