Virginia Law

Article 5. Bonds.

Bonds of a commission shall at no time be outstanding in a principal amount in excess of $10 million.

1946, p. 356; Michie Suppl. 1946, § 1560iii8.

No bonds shall be issued by a commission, except to fund or refund bonds theretofore issued and thus to redeem a previous liability, unless the qualified voters of the district shall approve by a majority vote of the qualified voters voting in an election the issuance of the bonds. Whenever the commission shall determine by resolution that it is advisable to issue bonds for the purposes of the commission, such resolution shall be certified to the circuit court of a county or corporation court of a city in whole or in part embraced within the district and the court shall thereupon make an order requiring the opening of a poll and the taking of the sense of the qualified voters of the district in accordance with § 21-226 on the question of issuing the bonds in not exceeding the amount stated in such resolution. The question so submitted shall be "Do you favor the issuance of not exceeding $_____ bonds of the _______________ sanitation district commission (inserting the amount of bonds stated in such resolution and the name of the commission)?" If upon the certification of the result of the election made by the Secretary of the Commonwealth to the court, it shall appear that a majority of the qualified voters of the district voting at the election shall have voted "yes" and in favor of the issuance of the bonds, the court shall make and enter of record an order stating such result and thereupon the commission shall have power in accordance with this article to issue bonds in not exceeding the amount stated in such resolution and, in anticipation of the issuance of such bonds, to borrow money on temporary loan and issue temporary bonds therefor.

1946, p. 356; Michie Suppl. 1946, § 1560iii8.

All other matters relating to the issuing of such bonds, and all matters relating to the contracting of debt, borrowing of money and issuing of other bonds and obligations shall be determined by resolution of the commission.

1946, p. 356; Michie Suppl. 1946, § 1560iii8.

Bonds shall be authorized by resolution of the commission, and shall be issued from time to time in one or more series, be in such form, bear such date or dates, mature at such time or times not more than forty years from the date of issuance thereof, bear interest at such rate or rates not exceeding six per centum per annum, be in such denominations, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places, be subject to acceleration of maturity on such contingencies and terms, and be subject to such terms of redemption with or without premium, as such resolution shall provide.

1946, p. 356; Michie Suppl. 1946, § 1560iii8.

Such bonds may be sold at public or private sale for such price or prices as the commission shall determine, provided the interest cost to maturity of the money received from any such bonds simultaneously sold shall not exceed an average of six per centum per annum.

1946, p. 356; Michie Suppl. 1946, § 1560iii8.

Any resolutions of the commission authorizing any bonds may contain provisions, which shall be a part of the contract with the several holders of such bonds and accordingly subject to amendment by mutual agreement of the commission and the holders of all of such bonds, as to:

(1) Pledging, setting aside, depositing or trusteeing any or all revenues or funds of the commission to secure the payment of the principal of or interest on such bonds or other bonds of the commission or the payment of expenses of construction, operation or maintenance of the sewage disposal system, including provisions giving priority, notwithstanding any provision or rule of law otherwise to the contrary, to the obligation to perform such contractual provisions to secure payment of such principal or interest over any or all other obligations and liabilities of the commission;

(2) Payment of the principal of or interest on such bonds or other bonds of the commission, and the sources and methods thereof;

(3) The fees, rents and other charges to be established and collected by the commission, the collection and enforcement of the same, and the use, disposition and application of the amounts collected;

(4) The setting aside of reserves and sinking funds and the source, regulation, application and disposition thereof;

(5) The determination or definition of the revenues and income of the commission and of the expenses of operation and maintenance of the sewage disposal system;

(6) The use, regulation, operation, maintenance, insurance and disposition of the sewage disposal facilities and other property of the commission;

(7) Restrictions on the power of the commission to limit and regulate the use of the sewage disposal system, facilities and other property of the commission;

(8) Limitations on the purposes to which the proceeds of such bonds or other bonds of the commission may be applied;

(9) The construction and completion of all or any part of the sewage disposal system or any facilities of the commission;

(10) Limitations on the issuance of additional bonds or on the indebtedness of the commission;

(11) The procedure, if any, by which the terms of any contract with the holders of such bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given or evidenced;

(12) Payment of costs or expenses incident to the enforcement of such bonds or of the provisions of such resolution or of any contract with the holders of such bonds, in accordance with this article; or

(13) Any other matter which the commission shall determine to be necessary in order to carry out and effectuate the purposes of the commission.

1946, p. 357; Michie Suppl. 1946, § 1560iii8.

Any provisions of law to the contrary notwithstanding, any bonds or temporary bonds issued pursuant to the authority of this chapter shall be deemed to be fully negotiable within the meaning and for all the purposes of Title 8.3A.

1946, p. 357; Michie Suppl. 1946, § 1560iii8.

The bonds, notes and other obligations, and any indebtedness, of a commission shall not be in any way a debt or liability of the Commonwealth, or of any county, city or town in whole or in part embraced within the district and shall not create or constitute any indebtedness, liability or obligation of the Commonwealth or of any such county, city or town, either legal, moral or otherwise and nothing in this chapter contained shall be construed to authorize a commission or district to incur any indebtedness on behalf of or in any way to obligate the Commonwealth or any county, city or town, in whole or in part embraced within the district.

1946, p. 364; Michie Suppl. 1946, § 1560iii23.

Neither the members of the commission, nor any person executing any bonds or temporary bonds shall be liable personally on the bonds or temporary bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

1946, p. 358; Michie Suppl. 1946, § 1560iii8.

The commission is authorized, out of any funds available therefor, to purchase any bonds of the commission.

1946, p. 358; Michie Suppl. 1946, § 1560iii8.

Any bonds issued pursuant to the authority of this chapter are hereby made securities in which all public officers and bodies of this Commonwealth and all political subdivisions thereof, all insurance companies and associations, all savings banks and savings institutions, including savings and loan associations, in the Commonwealth, may properly and legally invest funds in their control.

1946, p. 364; Michie Suppl. 1946, § 1560iii24.

(a) The provisions of this section shall be applicable to a series of bonds of a commission only if the resolution or resolutions authorizing such series of bonds shall provide in substance that the holders of the bonds of such series shall be entitled to all the benefits, and be subject to the provisions of this section.

(b) In the event that the commission shall default in the payment of the principal of or interest on any bonds of such series after the same shall become due, whether at maturity or upon call for redemption, and such default shall continue for a period of thirty days, or in the event that the commission shall fail or refuse to comply with the provisions of this chapter relating to or affecting the payment or security of such bonds or the collection of fees, rents or charges, or other revenues therefor, or shall fail or refuse to carry out and perform the terms of any contract with the holders of any of such bonds, and such failure or refusal shall continue for a period of thirty days after written notice of its existence and nature to the commission the holders of twenty-five per centum in aggregate principal amount of such bonds then outstanding, by instrument or instruments filed with the Governor of the Commonwealth of Virginia and proved or acknowledged in the same manner as a deed to be recorded, may appoint a trustee to represent the holders of all bonds of such series for the purposes herein provided.

(c) Such trustee may, and upon written request of the holders of twenty-five per centum in principal amount of the bonds of such series then outstanding shall, in his or its name:

(1) By mandamus or other suit, action or proceeding at law or in equity, enforce all rights of the holders of such bonds, including the right to require the commission to collect fees, rents and other charges adequate to carry out any agreement as to, or pledge of, such fees, rents or other charges, or the revenues therefrom, and to require the commission to carry out and perform the terms of any contract with the holders of such bonds or its duties under this chapter;

(2) Bring suit upon all or any part of such bonds;

(3) By action or suit in equity, require the commission to account as if it were the trustee of an express trust for the holders of such bonds;

(4) By action or suit in equity, enjoin any act or thing which may be unlawful or in violation of the rights of the holders of such bonds;

(5) Declare all such bonds due and payable, whether or not in advance of maturity, and, if all defaults shall be made good, then with the consent of the holders of twenty-five per centum of the principal amount of such bonds then outstanding, annul such declaration and its consequences, provided that before declaring such bonds due and payable, the trustee shall first give thirty days' notice in writing to the commission.

(d) If the resolution or resolutions authorizing such series of bonds shall contain the provision authorized by subsection (a) of this section and shall further provide in substance that any trustee appointed pursuant to this section shall have the powers provided by subsection (c) of this section, then such trustee, whether or not all of the bonds of such series shall have been declared due and payable, shall be entitled as of right to the appointment of a receiver, who may enter upon and take possession of any facilities or property operated by the commission any of the revenues from the operation of which are pledged for the security of such bonds, and operate and maintain the same and fix, charge, collect and receive all fees, rents and other charges and other revenues thereafter arising from such operation in the same manner as the commission itself might do, and shall deposit all moneys collected in a separate account and apply the same in accordance with the duties and contracts of the commission in such manner as the court appointing such receiver shall direct.

(e) In any suit, action or proceeding by such trustee, the fees, counsel fees and expenses of such trustee and of the receiver, if any, shall constitute taxable costs and disbursements, and all costs and disbursements, allowed by the court shall be a first charge upon any fees, rents and other charges, and revenues of the commission pledged for the payment or security of such bonds.

(f) Such trustee shall, in addition to the foregoing, have and possess all of the powers necessary or appropriate for the exercise of any functions specifically set forth herein or incident to the general representation of the holders of the bonds of such series in the enforcement and protection of their rights.

1946, p. 358; Michie Suppl. 1946, § 1560iii9.

Should any bond issued by the commission become mutilated or be lost or destroyed the commission may cause a new bond of like date, number and tenor to be executed and delivered in exchange and substitution for, and upon the 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 or coupon shall not be executed or delivered until the holder of the mutilated, lost or destroyed bond (1) has paid the reasonable expenses and charges in connection therewith and (2) in the case of a lost or destroyed bond, has filed with the chairman of the commission satisfactory evidence that such bond was lost or destroyed and that the holder was the owner thereof and (3) has furnished indemnity satisfactory to the commission.

1962, c. 204.

The Commonwealth does pledge to and agree with the holders of any bonds or other obligations issued by any commission pursuant to this chapter that the Commonwealth will not limit or alter the rights hereby vested in such commission to charge and collect such fees, rents and charges and other revenues as may be convenient or necessary in order to comply with the terms and provisions of any contract or contracts made by such commission with such holders, or in any way impair the rights and remedies of such holders, until the bonds and other obligations, together with interest thereon, with interest on any unpaid installments of interest, and all costs and expenses in connection with any action or proceeding by or on behalf of such holders are fully met and discharged.

1946, p. 365; Michie Suppl. 1946, § 1560iii27.

Pending the preparation, execution and delivery of definitive bonds of the commission to the purchaser of such bonds, interim certificates or other obligations may be issued by the commission to the purchaser. Such interim certificates or obligations shall be in such form and contain such terms, conditions and provisions as the commission issuing the same may determine.

1946, p. 359; Michie Suppl. 1946, § 1560iii10.