§ 86. Bond issues, etc., generally.

(1)

The council may in the name and for the use of the city contract debts and make and issue or cause to made and issued as evidence thereof, bonds, notes or other obligations, upon the credit of the city or solely upon the credit of specific property owned by the city, or personal property including investments and other securities deposited in a separate account and held for, and pledged to, the payment of principal of and interest on such bonds, notes or other obligations, or solely upon the credit of income derived from property used in connection with any public utility owned and operated by the city, such bonds and notes or other obligations to be either coupon or registered bonds, or coupon bonds with the privilege to the holder of having same registered as to principal or as to both principal and interest. Such bonds may be made subject to redemption prior to maturity, with or without premium, and subject to such notice as may be provided in the ordinance authorizing such bonds or in a resolution adopted in connection with the sale of such bonds. But except as provided in clause (4) of this section no debt shall hereafter be contracted for a longer period than that of the probable life of the work or object for which the debt is to be contracted, to be determined by the director of public works and by him certified as hereinafter provided. In determining the probable life or probable average life of works or objects as hereinafter provided, the director of public works shall not deem the life of the following classes of work or objects to exceed the following periods, namely: Roadways of streets having, at the time the debt is contracted, railroad or street railway tracks thereon, fifteen years; roadways of all other streets, twenty years; school houses, thirty years; other public buildings, forty years; iron bridges, thirty years; concrete bridges, forty years; parks or other real estate, fifty years; and all other works or objects not hereinabove specified, thirty years. In the event that a debt shall be authorized for purposes falling within two or more of the above-named classes, it shall be the duty of the director of public works to determine and certify as hereinafter provided the probable average life of the works or objects for which said debt is contracted, taking into consideration the nature of said works or objects and the portion of said debt applicable to said works or objects, respectively. The words "probable life," as herein used, shall be construed to mean the length of time that will probably elapse before any particular improvement (assuming it to be kept in reasonable current repair) will reasonably require replacement.

(2)

No bond, note or other obligation of the city shall hereafter be issued except as hereinafter provided in the case of temporary loans, unless and until there is filed with the city clerk a certificate from the director of public works in substantially the following form:

"I hereby certify that the probable life (or `the probable average life') of the work or object (or `the works or objects') for which the debt authorized by the ordinance entitled (naming it) is contracted is as great as the longest period fixed for the maturity of any obligation issued or to be issued under the same ordinance";

and the said certificate shall be conclusive.

(3)

The maximum periods hereinabove fixed for the contracting of debts for the several purposes hereinabove set forth may be changed at any time by the General Assembly, or under its authority, as to any bonds to be issued after said change is made, and such change shall not be deemed to constitute an impairment of the obligation of the contract of the city as to any bonds theretofore issued.

(4)

Notwithstanding any other provisions of this section the city may issue, without the certification of the director of public works above-mentioned, bonds, notes or other obligations for the purpose of refunding any obligations of the city at any time, whether or not prior to the maturity or earliest redemption date of the obligations to be refunded and including interest on the obligations 10 be refunded; but no such refunding bonds, notes or obligations shall be issued for a period which exceeds twenty-five years.

(5)

Bonds issued by the city may be either serial bonds or term bonds. Serial bonds shall be payable in annual installments, the first of which shall be payable at any time within two years of the date of the bonds, and the last of which shall be payable within the period of probable life of the work or object for which the debt evidenced by said bonds was created, ascertained and certified as hereinabove provided. Such installments may be in amounts determined by the council either in the ordinance authorizing such bonds or in a resolution adopted in connection with the sale of such bonds. Unless otherwise provided by ordinance for bonds issued for the purposes of refunding of outstanding bonds of the city, no installment shall be greater than double the amount of the smallest. If term bonds are issued which mature prior to the first principal repayment date of an issue of serial bonds, the first annual installment of such serial bonds may be more than two years after the date of such bonds. Term bonds must be payable within the period of the probable life of the work or object for which the debt evidenced by said bonds was created, ascertained and certified as hereinabove provided; and the council, either in the ordinance authorizing such bonds or in a resolution adopted in connection with the sale of the bonds, shall establish a sinking fund into which deposits shall be made for the payment of the principal of such bonds, in such amounts and in such times as may be determined by the council so that such bonds will be fully retired either by redemption or by payment at maturity by the maturity date thereof.

(6)

[Repealed.]

(7)

All bonds issued after April l, 1916, shall be paid at their respective maturities, and, except in the case of obligations of said city issued after April 1, 1916, and prior to the enactment of this Charter, which mature not more than three years from the date thereof, no refunding bonds shall be issued for the payment thereof; provided, however, that if for any reason there shall not at the time of the maturity of any such bonds be sufficient funds of said city available for the payment thereof, it shall be lawful for the city to borrow money and issue negotiable notes to the amount required to pay such maturing bonds, which bonds shall be paid out of taxes to be levied and collected within the three years next succeeding the year in which such notes were issued. The payment out of the proceeds of the sale of any bonds of temporary loans made in anticipation of the sale of such bonds shall not be deemed a refunding of such temporary loans within the meaning of this clause. If the council shall fail to make provision for the payment of any sinking fund installment required as to any bonds lawfully issued under this section, or of any installment of serial bonds lawfully issued under this section and such default shall continue for sixty days, then, and in either of said events, the city treasurer shall, without further direction from the council, and notwithstanding any contrary direction from the council, pay such sinking fund or serial bond installments from moneys then in his hands, if sufficient; and, if not, then from the first moneys that shall come into his hands thereafter.

(8)

Pending the issuance or sale of any bonds, notes or other obligations by this section authorized, or in anticipation of the receipt of taxes and revenues of the current fiscal year, or of either of the two fiscal years immediately preceding the current fiscal year, it shall be lawful for the city to borrow money temporarily and issue notes or other evidences of indebtedness therefor, and from time to time to renew such temporary loans to be ultimately repaid from the proceeds of said bonds, notes or other obligations, or from the city taxes and revenues, as the case may be; provided that such temporary loans, including all renewals thereof, if made pending the issuance or sale of bonds, notes or other obligations, issued under clause (5) hereof, shall not be made for a period greater than five (5) years, nor shall they exceed in the aggregate at any one time the amount of such bonds, notes or other obligations remaining unissued and unsold; and temporary loans made in anticipation of the receipt of taxes and revenues of any fiscal year including all renewals thereof, shall not be made for a period greater than the period ending two years after the expiration of such fiscal year and shall not exceed in the aggregate at any one time the uncollected portion of the taxes and revenues in anticipation of which such notes or other evidences of indebtedness are issued. All such temporary loans shall be evidenced by instruments upon the face of which there shall be plainly written "temporary loans." No such loan made pending the issuance or sale of bonds, notes or other obligations under the provisions of clause (5) hereof shall be valid unless the said bonds, notes or other obligations shall have been first legally authorized. The provisions of clauses (l) to (5) inclusive, of this section, shall not apply to said temporary loans.

(9)

The credit of the city shall not, directly or indirectly, under any device or pretense whatsoever, be granted to or in aid of any person, association or corporation. The council shall not issue any bonds, notes or other obligations of the city, or increase the indebtedness thereof, to an amount greater than ten percent of the assessed valuation of the real estate in the city subject to taxation as shown by the last preceding assessment for taxation; provided, however, that in determining the limitation of the power of the city to incur indebtedness there shall not be included the classes of indebtedness mentioned in numbered subdivisions (1), (2), (3) and (4) of subsection (a) of section 10, article VII of the Constitution of Virginia.

(10)

Bonds of the city, the principal and interest on which are payable exclusively from the revenues and receipts of a water system or other specific undertaking or undertakings from which the city may derive a revenue, or secured solely or together with such revenues, by contributions of other units of government, may be issued pursuant to the provisions of this Charter and any general law of the State of Virginia as the council may deem applicable with regard to the funds and revenues pledged, covenants by the city with regard to fees and charges and other matters required for the protection of bondholders, remedies of bondholders and appointment of a trustee as well as the right of such trustee to the appointment of a receiver. The provisions of clause (5) of this section shall not apply to such bonds and the ordinance authorizing such bonds shall not be subject to a vote of the qualified voters. Such bonds shall not be a debt of the city and the city shall not be liable thereon except to the extent set forth in the ordinance pursuant to which the bonds are authorized and in no event shall such bonds be payable out of any funds other than those referred to in such ordinance. The bonds shall not constitute an indebtedness within the meaning of any debt limitation or restriction.

(10a)

Bonds pledging the full faith and credit of the city authorized by an ordinance enacted in accordance with article VII of the Constitution of Virginia and approved by the affirmative vote of the qualified voters of the city voting upon the question of their issuance, for a supply of water or other specific undertaking from which the city may derive a revenue, may be issued without being included in determining the limitation on indebtedness set forth in clause (9) of this section and in article VII, section 10 of the Constitution of Virginia, but from and after a period to be determined by the council not exceeding five years from the date of such election, whenever and for so long as such undertaking fails to produce sufficient revenue to pay for the cost of operation and administration (including interest on bonds issued therefor), the cost of insurance against loss by injury to persons or property, and an annual amount to be placed into a sinking fund sufficient to pay the bonds at or before maturity, all outstanding bonds issued on account of such undertaking shall be included in determining the limitation on indebtedness set forth in clause (9) of this section and in article VII, section 10 of the Constitution of Virginia.

(11)

Every ordinance authorizing the issuance of bonds shall specify the purpose or purposes for which they are to be issued, the aggregate amount of the bonds, the term for which they shall be issued, and the rate or maximum rate of interest to be paid thereon. Any such ordinance may be amended by ordinance at any time before the bonds to be affected by such amendment have been sold. All other matters relating to such bonds may e determined by resolution, within the limitations prescribed by such ordinance or by this act.

(12)

All bonds shall be under the seal of the city and shall be signed by the city treasurer or one of his deputies and by such other officer or officers of the city as may be designated in the ordinance authorizing the bonds. If such ordinance shall so determine, the officer or officers signing the bonds, other than the city treasurer or his deputy, may sign the bonds by their facsimile signatures, in lieu of manual signatures; but the signature of the city treasurer or his deputy on such bonds shall be in his own proper handwriting, provided that the treasurer may cause the bonds to be executed by a facsimile of his signature if a fiscal agent, transfer agent or registered agent is appointed with authority to manually authenticate each bond. Coupons attached to a bond shall be authenticated by the facsimile signature of the city treasurer. (Acts 1932, Ch. 93; Acts 1950, Ch 436; Acts 1964, Ch. 23; Acts 1972, Ch. 706, § 1; Acts 1983, Ch. 587, § 1; Acts 1988, Ch. 519, § 1)

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Editor's note— Code of Virginia section 15.1-171.1 required a public hearing before a bond ordinance may be adopted.