SECTIONS 53840-53844 - California Statutes

GOVERNMENT CODE

SECTION 53840-53844

53840. It is hereby declared the intention of the Legislature by
the enactment of this article to provide an alternative procedure
under which short term loans may be procured by those counties in
which the board of supervisors has declared it to be county policy to
make advances of current operating requirements to subsidiary
political subdivisions required by law to deposit their funds in the
county treasury as such advances are authorized by the provisions of
Section 25 of Article XIII of the State Constitution. In any such
county the board of supervisors, upon recommendation of the county
treasurer with the approval of the county auditor, may borrow on July
1st or thereafter such amounts as may be required to meet current
obligations payable by the county treasury, pending collection of the
revenue provided for the year in progress. Amounts so borrowed shall
be evidenced by notes signed by the chairman of the board of
supervisors, the county auditor and the county treasurer, and the
liability created thereby shall be secured by a lien on all revenue
to accrue to the county treasury from any source during the year then
in progress.

53841. Any amounts borrowed by a county as provided in the
preceding section shall not exceed 85 percent of the total of taxes
levied for all purposes on said county's tax roll for the next
preceding fiscal year, and at no time during the year for which
borrowed shall the unpaid total of the amounts so borrowed as shown
by the auditor's accounts at the close of any month be allowed to
remain at more than 85 percent of the uncollected balance of taxes
for the current year as shown by said accounts.

53841.5. Proceeds of sales or funds set aside for the repayment of
any notes issued pursuant to this article shall not be invested for a
term that exceeds the term of the notes.

53842. Amounts borrowed as above provided shall be entered to the
credit of the county's general reserve fund and may be used to make
advances to operating funds in the county treasury as authorized by
Section 25 of Article XIII of the State Constitution. Payment of the
notes upon their due dates shall be made by warrants drawn by the
county auditor on the general reserve fund.

53843. In any county which finds it necessary to borrow current
operating requirements, as provided in the foregoing sections, the
board of supervisors shall either:
(1) Advertise for bids by publication for two weeks in a newspaper
of general circulation in the county, setting forth the date upon
which the amount will be required, which shall be not less than three
weeks following the date of the first publication, the amount
required and the repayment date. Bids shall be opened at the time set
forth in the notice which shall be during a regular meeting of the
board; and the board, unless it rejects all bids, shall accept the
bid which offers the loan to the county at the lowest net interest
cost not in excess of 10 percent, or
(2) After finding that time is of the essence, direct the county
treasurer to negotiate for a loan to the county and to solicit and
receive bids without advertising for them. The board of supervisors,
unless it rejects all bids, shall accept the bid which offers the
loan to the county at the lowest net interest cost not in excess of
10 percent, or
(3) After finding that any political subdivision subject to this
article periodically requires advances of current operating
requirements prior to receipt of tax revenues, direct the county
treasurer, upon request of such political subdivision, to solicit and
receive bids for loans from time to time without advertising for
them. The board of supervisors, unless it rejects all bids, shall
accept the bid which offers the loan to the county at the lowest net
interest cost not in excess of 10 percent.

53844. In any county which qualifies as set forth in Section 53840
to use the foregoing procedure for short-term financing, all interest
payments on the loans may, in the discretion of the board of
supervisors, be charged to the general fund of any district or fund
for which loans have been made. All interest earned on funds in the
county treasury shall be credited to said general fund of the county,
excepting therefrom the interest on deposits of school districts
which shall accrue to the general funds of the respective school
districts, the interest earned on specific investments of a local
agency as authorized by Section 53601 of this code or by Section 5007
of the Education Code, and moneys on deposit in court in eminent
domain actions pursuant to Article 1 (commencing with Section
1255.010) of Chapter 6 of, or Article 2 (commencing with Section
1268.110) of Chapter 11 of, Title 7 of Part 3 of the Code of Civil
Procedure.