Virginia Law

Article 2. Bonds of Sanitary Districts.

The governing body of any county in which a sanitary district has been or may hereafter be created by general or special law shall have power, subject to the conditions and limitations of this article, to issue bonds of such sanitary district to an amount in the aggregate of not exceeding eighteen per centum of the assessed value of all real estate in the district subject to local taxation, for the purpose of raising the necessary funds to carry into effect any or all of the purposes specified in Article 1 (§ 21-112.22 et seq.) of Chapter 2 of Title 21, provided, however, that such limitation of eighteen per centum shall not apply if the petition required by § 21-123 states the maximum amount of bonds to be issued, and if such bonds are to be issued for a specific undertaking from which the sanitary district may derive revenue, but from and after a period to be determined by the governing body of the county, not exceeding five years from the date of the election authorized in § 21-123, whenever and for so long as such undertaking fails to produce sufficient revenue to pay the cost of operation and administration (including interest on bonds issued therefor), and the cost of insurance against loss by injury to persons or property, and an annual amount to be covered into a sinking fund sufficient to pay, at or before maturity, all bonds issued on account of such undertaking, all such bonds outstanding shall be included in determining such limitation.

1946, p. 180; Michie Suppl. 1946, § 1560z1; 1964, c. 165.

The governing body of any county in which a sanitary district has been or may be created by general or special law shall have the power to issue bonds to satisfy improvements to water or sewerage systems mandated by the State Water Control Board, pursuant to the Federal Water Pollution Control Act, as amended (P.L. 92-500).

The principal and interest on bonds issued under this section shall be paid by the governing body exclusively from revenues and receipts from the water or sewerage system which is to be improved.

For the purposes of this section, the term "mandated" shall also mean any agreement between a governing body and the State Water Control Board to come into compliance with the requirements of the State Water Control Law.

Issuance of such bonds shall be subject to the conditions or limitations of this article; however, no bond referendum shall be required for bonds to be issued pursuant to this section. The sections of this article pertaining to election requirements and procedures shall not be applicable where bonds are to be issued for the purposes set forth herein. In addition, the provisions of §§ 21-137.2 and 21-138, authorizing an annual tax to be levied upon all the property in the district in order to pay the principal and interest due on the bonds, shall not be applicable to bonds issued under this section.

All bonds issued under the provisions of this section shall contain a statement on their face substantially to the effect that neither the faith and credit of the Commonwealth nor the faith and credit of any county, city, town or other subdivision of the Commonwealth are pledged to the payment of the principal of or the interest on such bonds. The issuance of revenue bonds under the provisions of this section shall not directly or indirectly or contingently obligate the Commonwealth or any county, city, town or other subdivision of the Commonwealth to levy any taxes whatever therefor or to make any appropriation for their payment except from the funds pledged under the provisions of this section.

1986, c. 340.

The circuit court of such county, upon the petition of a majority of the members of the governing body of the county, or upon the petition of fifty qualified voters residing in such sanitary district, shall make an order in accordance with § 24.2-684 requiring the officers of election to open a poll and take the sense of the qualified voters of the district on the question whether the governing body shall issue bonds for one or more of the purposes for which the sanitary district was created.

1946, p. 181; Michie Suppl. 1946, § 1560z2; 1976, c. 11.

The election shall be conducted in the manner prescribed by law for the conduct of regular elections, and the ballots shall be printed and voted, and the returns made and canvassed and the results certified, in accordance with the provisions of § 24.2-684.

1946, p. 181; Michie Suppl. 1946, § 1560z3.

If it shall appear from the report of the commissioners of election that a majority of the qualified voters of the sanitary district voting on the question are in favor of issuing the bonds, the circuit court, or the judge thereof in vacation, shall enter of record an order requiring the governing body to proceed at its next meeting to carry out the wishes of the voters as expressed at the election.

1946, p. 181; Michie Suppl. 1946, § 1560z4.

Whenever the sense of the qualified voters of the district shall be taken on the question whether the governing body shall issue bonds for one or more of the purposes for which the sanitary district was created, election and returns shall be subject to the inquiry, determination and judgment of the circuit court of the county upon the written complaint of twenty-five or more of the qualified voters of the district, of an undue election or false returns, two of whom shall take an oath that the facts set forth in such complaint are true to the best of their knowledge and belief, and the court shall, in judging of such election and returns, proceed upon the merits thereof and determine concerning the same according to the Constitution and laws of this Commonwealth, but such complaint shall not be valid unless it shall have been filed within thirty days after the election in the office of the clerk of the court. The governing body of the county shall be made a defendant by summons or notice to its chairman of the filing of the complaint, and after such service of notice on the chairman of such governing body, either party, upon reasonable notice to the other, shall be at liberty to take depositions to sustain or invalidate such election. Service of notice on any three of the complainants shall be sufficient. The court shall proceed at its next term after such service of summons or notice to determine the contest without a jury on the evidence, oral or written, unless good cause be shown for a continuance, and shall make a proper record of its judgment. If the judgment be that the election was a valid one in favor of the issuance of bonds in the district, the court shall make an order in conformity with § 21-125.

1946, p. 181; Michie Suppl. 1946, § 1560z5.

The governing body at its next meeting or as soon thereafter as practicable, shall determine what amount of bonds shall be issued for the purposes defined in the order calling the election.

The maximum amount of bonds issued shall in no case exceed the limitations prescribed in § 21-122, and in the event such governing body does not at such meeting direct the present issuing of all bonds, it may thereafter, from time to time, direct the residue thereof to be issued to carry out the wishes of the voters, so far as necessary, as expressed in such election.

1946, p. 181; Michie Suppl. 1946, § 1560z6.

(a) In anticipation of the issuance of bonds under the provisions of this chapter and of the receipt of the proceeds of sale of such bonds, the governing body may on behalf of the sanitary district borrow money for the purpose for which such bonds have been authorized and within the maximum authorized amount of the bond issue. Each such loan shall mature and be paid within two years from the date of its original issue; provided, that on or after such maturity, any loan now outstanding or hereafter made may be extended from time to time, provided, further, that no such extension shall mature and be paid later than five years from the date of the original issue of said loan. The governing body may, in its discretion, retire any such loans by means of current revenues, special assessments, or other funds, in lieu of retiring them by means of bonds; provided that the maximum amount of bonds that has been authorized shall be reduced by the amount of such loans retired in such manner.

(b) Negotiable notes or other obligations shall be issued for all moneys borrowed under subsection (a). Such notes or other obligations may be renewed from time to time and money may be borrowed upon notes or other obligations from time to time for the payment of any indebtedness evidenced thereby, but all such notes or other obligations shall mature within the time limited by said subsection (a). The issuance of such notes or other obligations and other details thereof shall be governed by the provisions of this chapter with respect to bonds insofar as the same may be applicable.

(c) All such notes or other obligations heretofore issued on behalf of a sanitary district and proceedings had in connection therewith which conform to this section are hereby ratified, validated and confirmed and declared to be legal and as fully binding obligations as if issued under this section.

1966, c. 189; 1970, c. 124.

In event the governing body, for any reason, fails or refuses to issue the bonds so authorized to be issued, the circuit court of the county may, upon the complaint of ten qualified voters of the district, and after ten days' notice to the chairman of the governing body, for cause shown, issue an order directing it to issue such bonds or any unissued residue thereof, or such portion thereof as the court may, from time to time, deem proper to be issued in order to carry out the wishes of the voters as expressed in the election.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

The governing body shall have power to appoint an agent or agents to sell the bonds and to pay such agent or agents a commission for negotiating the sale not exceeding three per centum of the amount of bonds sold by them, provided the bonds shall be sold to be paid for in lawful money only, and shall not be sold at less than their par value. When such a sale has been negotiated, the governing body shall issue the bonds.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

Such bonds may be either registered or with coupons attached, as the governing body may prescribe, and coupon bonds may be registerable as to principal, or as to principal and interest, at the option of the holder, under such rules and regulations as may be prescribed by the governing body. The bonds shall be signed by the chairman and countersigned by the clerk of the governing body under its seal; shall be in denominations of $100 or some multiple thereof; shall bear interest at a rate not exceeding six percent per annum, payable semi-annually, both principal and interest to be payable at such place or places as may be determined by the governing body, and shall be payable not exceeding thirty-four years from the date thereof, but may, in the discretion of the governing body, be made redeemable at such time or times within such period or periods and upon such notice as the governing body may prescribe and stipulate upon the face of the bond when issued.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

Should any bond issued under this chapter become mutilated or be lost or destroyed, the governing body of the county may cause a new bond of like date, number and tenor to be executed and delivered in exchange and substitution for, and upon cancellation of, such mutilated bond and its interest coupons, or in lieu of and in substitution for such lost or destroyed bond and its unmatured interest coupons. Such new bond shall not be executed or delivered until the holder of the mutilated, lost or destroyed bond (1) has paid the reasonable expense and charges in connection therewith and (2) in the case of a lost or destroyed bond has filed with the governing body and the county treasurer evidence satisfactory to such governing body and treasurer that such bond was lost or destroyed and that the holder was the owner thereof and (3) has furnished indemnity satisfactory to the county treasurer.

1962, c. 208.

The governing body shall deliver the bonds to the treasurer of the county, who shall deliver them to the purchasers thereof, or to their order, upon the payment of the purchase price thereof.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

The treasurer and his sureties shall be liable for the amount received for such bonds as though it were a county levy, and such funds shall be expended for the purposes for which the bonds were voted and none other.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

The treasurer shall receive the reasonable cost of giving surety on such additional bond or bonds as may be required of him, if any, on account of his receipts heretofore or hereafter of such funds.

1946, p. 182; Michie Suppl. 1946, § 1560z6; 1952, c. 283.

The governing body may direct the treasurer to deposit the proceeds of the bond issue in such bank or banks as it may approve, to the credit of such treasurer, to be paid out on his checks therefor, and at the rate of interest to be specified, and all interest accrued therefrom shall be accounted for by the treasurer, and shall be expended for the purposes for which the bonds were issued, and insofar as not necessary therefor, shall be paid into the sinking fund to redeem the principal thereof at maturity.

1946, p. 182; Michie Suppl. 1946, § 1560z6.

The governing body of any county may advance funds, not otherwise specifically allocated or obligated, from the general fund to a sanitary district to assist the sanitary district to initiate the project for which it was created.

1964, c. 242, § 15.1-26.1; 1997, c. 587.

Notwithstanding the provisions of § 21-132, the governing body shall direct the treasurer to reimburse the general fund of the county from the proceeds of the bond issue or from any funds to the credit of the sanitary district, not otherwise specifically allocated or obligated to the extent that the county has made advances to the sanitary district from such general fund to assist the district to initiate or effectuate the project for which it was created.

1954, c. 321; 1962, c. 335.

The advancement of any funds heretofore advanced from the general fund by the board of supervisors of any county in this Commonwealth for the benefit of a sanitary district in effectuating a project lawful for such sanitary district is hereby validated and confirmed.

1954, c. 321.

The treasurer shall not be liable for any deposits which shall be lost by reason of the insolvency or failure of any bank in which he shall have been directed by the governing body to deposit them.

1946, p. 183; Michie Suppl. 1946, § 1560z6.

A bond with surety may be required by such governing body from any bank in which such deposits are made.

1946, p. 183; Michie Suppl. 1946, § 1560z6.

Repealed by Acts 1972, c. 236.

When term bonds have been issued the net revenue derived from the operation of such systems shall be set apart by the said board to pay the interest on the bonds so issued or to be issued, and to create a sinking fund to redeem the principal thereof at maturity. The board of supervisors is hereby authorized and empowered to apply any part or all of said sinking fund to the payment, if redeemable by their terms, or to the purchase of any such bonds, at any time, and all bonds so paid off or purchased by the board of supervisors shall be immediately cancelled, and shall not be reissued. The board of supervisors is authorized and empowered to invest all accumulations of money to the credit of the sinking fund in bonds of the United States, of the Commonwealth of Virginia, or of any county, city or town of the Commonwealth of Virginia, or to lend out, upon real estate security, the loan not to exceed fifty per centum of the assessed value of such real estate, or deposit in bank at interest, all accumulations of money to the credit of the sinking fund and to collect and reinvest the same and the interest accruing thereon from time to time, so often as is necessary or expedient, until the bonds become subject to call; provided that no money to the credit of the sinking fund shall be loaned out or deposited or invested by the board of supervisors unless such loan, deposit or investment is first approved by the circuit court of the county, or the judge in vacation, and the form of the security be examined and approved by the attorney for the Commonwealth of the county, which approval shall be entered of record in the order book of the court.

The treasurer shall not be liable for any funds herein provided for that are lost while on deposit made by order of the board of supervisors with any bank or banks, or when invested in any real estate security as provided herein, but the board of supervisors may require of any such bank a bond, with corporate or other surety, to secure such deposit, or may require a pledge of securities to secure such deposits as provided in §§ 58.1-3158 and 2.2-4400.

The board of supervisors shall, if necessary for the payment of interest on the bonds or to increase the sinking fund provided for hereunder, levy an annual tax upon all property in such sanitary district subject to local taxation to pay such interest and to make payments into such sinking fund. For the purposes of this section and § 21-137.2, the words "serial bonds" and "term bonds" shall have the respective meanings customarily given them in the municipal bond market. A finding made by the board of supervisors that an issue of bonds comprises term bonds or serial bonds, or that specified portions thereof comprise term bonds or serial bonds, as the case may be, shall be conclusive for all purposes of this section and § 21-137.2.

1972, c. 236.

When serial bonds have been issued, the net revenue derived from the operation of such systems shall be applied to pay the interest on and the principal of such serial bonds as the same become due, but no sinking fund shall be required in respect of serial bonds.

The board shall, if necessary, levy an annual tax upon all property in such sanitary district, subject to local taxation, to pay such principal and interest as shall annually become due for payment. In the event net revenue exceeds the annual principal and interest due thereon, the board may use such net revenue for extensions and additions to the system, purchase and retirement of outstanding bonds of the district, or for any other lawful purpose consistent therewith.

1972, c. 236.

The governing body shall, if necessary for the payment of the interest on the bonds or to increase the sinking fund provided for hereunder, levy an annual tax upon all the property in the district subject to local taxation to pay such interest and to make payments into the sinking fund.

1946, p. 183; Michie Suppl. 1946, § 1560z7.

Sections 4 through 7 of Chapter 460 of the Acts of 1930, as amended by Chapter 15 of the Acts of 1933; Chapter 274 of the Acts of 1936; Chapter 28 of the Acts of 1936-7, codified as §§ 1560p-1560s of Michie Code 1942, relating to bonds of sanitary districts, is continued in effect.

Chapter 186 of the Acts of 1932, as amended by Chapter 164 of the Acts of 1938, codified as §§ 1560aa through 1560gg of Michie Code 1942, relating to bonds of sanitary districts created by special act, is continued in effect.

Chapter 25 of the Acts of 1947, as amended by Chapter 72 of the Acts of 1948, relating to the issuance of bonds by sanitary districts in counties adjoining a county having a population of not less than 1,000 a square mile, is continued in effect.

All proceedings had and all elections held in any sanitary district of the Commonwealth prior to January 1, 1946, to provide for and with respect to the contracting of bonded indebtedness and the authorization, issuance, sale, execution and delivery of bonds by or on behalf of such district are validated and confirmed, notwithstanding any lack of power of the governing body of the county in which such district is located to authorize and issue such bonds, or to execute, sell or deliver the same, and notwithstanding any defects or irregularities in such proceedings or elections, or in such execution, sale or delivery; and such bonds so issued or to be issued are and shall be valid and enforceable obligations of such sanitary district.

1946, p. 64.

All proceedings had and all elections held in any sanitary district of the Commonwealth prior to June 30, 1954, whether under general law or by special act, to provide for and in respect to the contracting of bonded indebtedness and the authorization, issuance, sale, execution, and delivery of bonds by or on behalf of such district prior to June 30, 1954, whether under general law or by special act, are ratified and confirmed, notwithstanding the lack of power of the governing body of the county in which such district is located to authorize and issue such bonds or to execute, sell or deliver the same, and notwithstanding any defects or irregularities in such proceedings or elections concerning such execution, sale, or delivery, and notwithstanding any curable unconstitutionality of a procedural character, such as failure of the act to conform to the title and such other constitutional questions; and such bonds so issued or to be issued are and shall be binding, legal, valid, and enforceable obligations of such sanitary district.

1950, p. 4; 1954, c. 68.

All proceedings heretofore taken and all elections heretofore held in sanitary districts of whatsoever kind in the Commonwealth of Virginia, whether under general law or special act, to provide for, and with respect to, the contracting of bonded indebtedness and the authorization, issuance, sale, execution and delivery of bonds by or on behalf of all such sanitary districts, are hereby validated, ratified, approved and confirmed, notwithstanding any lack of power of the governing body of the county in which any such district is located to authorize and issue such bonds, or to authorize the execution, sale or delivery thereof, and notwithstanding any defects or irregularities in any such proceedings or elections, or in such execution, sale or delivery; and such bonds so issued or to be issued are and shall be binding, legal, valid and enforceable obligations of any such sanitary districts, notwithstanding any statutory limitation on the amount thereof.

1960, c. 562; 1962, c. 26; 1964, c. 243; 1968, c. 62; 1970, c. 441.

All bonds heretofore issued by any sanitary district for any or all of the purposes specified in Article 1 (§ 21-112.22 et seq.) of Chapter 2 of Title 21 are hereby declared to be valid and legally binding obligations of such sanitary district, notwithstanding any limitations contained in any general law or special act pursuant to which such sanitary district was created and notwithstanding any limitations contained in the proceedings taken for the creation thereof.

1964, c. 165.