SECTIONS 36060-36064 - California Statutes

WATER CODE

SECTION 36060-36064

36060. This article applies only to the Irvine Ranch,
Moulton-Niguel, Rancho California, and Santa Margarita Water
Districts. "District" as used in this article means the Irvine Ranch
Water District, the Moulton-Niguel Water District, the Rancho
California Water District, or the Santa Margarita Water District.

36061. A district may, when necessary or proper, issue additional
bonds in the same manner as provided for the original issue for any
one or more of the following purposes:
(a) To accomplish one or more of the purposes specified in Section
35954.
(b) To refund any issue of bonds previously made. Refunding bonds
may be issued pursuant to Article 9 (commencing with Section 53550)
of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government
Code, without submitting the question of issuance of the refunding
bonds to a vote of the qualified electors.

36062. A district may bring an action pursuant to Chapter 9
(commencing with Section 860) of Title 10 of Part 2 of the Code of
Civil Procedure or pursuant to Chapter 2 (commencing with Section
1084) of Title 1 of Part 3 of the Code of Civil Procedure to validate
the issuance of any or all of the remaining bonds which were
authorized by the voters at any given election, if the district's
board of directors has adopted a resolution authorizing the issuance
of the remaining bonds of the authorization, inclusive of any
refunding bonds that might be issued therefor under Section 36063, in
such series and at such times as the board may, in its discretion,
determine, and at the interest rates as may be authorized by law at
the time of issuance, including, but not limited to, Article 8
(commencing with Section 53540) of Chapter 3 of Part 1 of Division 2
of Title 5 of the Government Code. The terms of a judgment obtained
in a proceeding hereunder may include a ruling that the validation
shall automatically incorporate any change made in the interest rate
set forth in Article 8 (commencing with Section 53540) of Part 1 of
Division 2 of Title 5 of the Government Code by a later-enacted
statute. Any action commenced under this section may be filed either
in a superior court or in a district court of appeals.

36063. (a) Whenever the board of directors determines that prudent
management of the fiscal affairs of the district so requires, it may
refund by defeasing or calling for redemption any outstanding bonds,
subject to all of the following:
(1) The last-maturing refunding bonds shall mature not later than
the date on which the last-maturing bonds being refunded would have
matured.
(2) Refunding bonds shall not be issued unless the total interest
cost to maturity of the refunding bonds added to the principal amount
of those refunding bonds will be less than the total interest cost
to maturity of the bonds being refunded added to the principal amount
of the bonds being refunded. If any of the refunding bonds or the
bonds being refunded, or both, bear or may bear interest at a
variable rate, thereby making the actual total interest cost to
maturity indeterminable in advance of maturity, the determination
required by this paragraph may consist of a finding made by the board
based on substantial evidence, which means evidence that is
reasonable, credible, and of solid value and ponderable legal
significance, based upon the record as a whole. The test in Section
53552 of the Government Code need not be met if the determination in
this paragraph is made.
(3) The savings achieved through the refunding of bonds shall be
used by the board of directors solely to reduce the assessments or
charges, or both, which are fixed and collected for the payment of
principal of, and interest on, the refunding bonds. The reductions to
reflect the savings in any fiscal year shall be made not later than
the next succeeding fiscal year.
(b) The refunding bonds shall be issued according to Article 9
(commencing with Section 53550) of Chapter 3 of Part 1 of Division 2
of Title 5 of the Government Code.
(c) When the originally issued bonds have been refunded, the
refunding bonds shall thereafter take the place of, and be deemed for
all purposes to be, the bonds corresponding to the portion of the
authorization by the voters from which the refunded bonds were
originally issued and shall be payable from the same funds as those
refunded bonds. Following the refunding, the same portion of the
corresponding voter authorization as was previously canceled by
issuance of the refunded bonds shall remain canceled and shall be
deemed to be the amount of indebtedness issued from the voter
authorization representing the refunding bonds. However, refunding
bonds issued under this section shall be used only for the purpose of
reducing debt service costs on bonds issued from indebtedness
approved by the voters prior to July 1, 1978, or refunding bonds
issued in place thereof under this section.
(d) Notwithstanding Section 53569 of the Government Code and
Section 35996 of this code, if the board of directors determines that
to do so would be consistent with prudent management of the district'
s fiscal affairs, the board may sell refunding bonds issued under
this section at private sale without advertising for bids.
(e) The disbursement of the proceeds of the refunding bonds,
pursuant to this section, shall be at the direction of the board of
directors or the district's authorized officers.

36063.5. (a) The following terms shall have the following meanings
for purposes of this section:
(1) "Bond counsel" means any attorney or firm of attorneys that
represents the issuer of a new issue of bonds with respect to the
issuance of the bonds and that renders a written legal opinion to, or
as counsel for, the issuer with respect to the validity of the
bonds.
(2) "Bond" means any bonds, notes, or other evidences of
indebtedness issued by a district, or certificates of participation
in any lease, sale, or other obligations of a district. "New issue of
bonds" means the original issuance of bonds by a district to one or
more purchasers until, in the case of underwriters, the end of the
underwriting period. In the case of bonds with a tender or put option
feature, or commercial paper, "new issue of bonds" means only the
original issuance and not any remarketing, rollover, or reissuance.
(3) A "financial advisory relationship" exists when an investment
firm, or other person or firm in the business of providing financial
advisory or financial consulting services to issuers with respect to
municipal securities, renders, or enters into an agreement to
render, financial advisory or financial consultant services to, or on
behalf of, an issuer with respect to a new issue or issues of bonds,
including advice with respect to the structure, timing, terms, and
other similar matters concerning the issue or issues, for a fee or
other compensation or in expectation of such compensation for the
rendering of those services. However, a financial advisory
relationship does not exist when, in the course of acting as an
underwriter, an investment firm renders advice to an issuer,
including advice with respect to the structure, timing, terms, and
other similar matters concerning a new issue of bonds or when, for
any new issue of bonds, an investment firm advises and assists an
issuer with respect to obtaining consent from holders of previously
issued bonds in connection with, among other things, amendments of
covenants or defaults.
(4) "Investment firm" means any bank, investment bank,
partnership, corporation, association, or other firm engaged in the
business of buying and selling bonds for its own account or for the
account of others as part of its regular business.
(b) No investment firm that has, or has had, a financial advisory
relationship with respect to a new issue of bonds shall acquire as
principal either alone or as a participant in a syndicate or other
similar account formed for the purpose of purchasing, directly or
indirectly, from the issuer all or any portion of the issue, or
arrange for the acquisition or participation by a person controlling,
controlled by, or under common control with the investment firm,
unless the issue is to be sold by the issuer at competitive bid and
the issuer has, prior to the bid, expressly consented in writing to
the acquisition or participation. The limitations and requirements
set forth in this section also apply to any investment firm
controlling, controlled by, or under common control with the
investment firm having a financial advisory relationship. The use of
the term "indirectly" in this section does not preclude any
investment firm which has a financial advisory relationship with
respect to a new issue of bonds from purchasing any of those bonds
from an underwriter, either for its own trading account or for the
account of its customers, except to the extent that the purchase is
made to contravene the purpose and intent of this section.
(c) Each financial advisory relationship shall be evidenced by a
written document executed prior to, upon, or promptly after the
inception of the financial advisory relationship, or promptly after
the creation or selection of the issuer if the issuer does not exist
or has not been determined at the time the relationship commences.
That written document shall set forth the basis of compensation for
the financial advisory services to be rendered, which shall be on a
basis other than as a percentage of the amount of the bonds to be
sold.
(d) No bond counsel with respect to a new issue of bonds shall
also be counsel, with respect to that new issue of bonds, to the
underwriter or other initial purchaser of the bonds. This section
does not preclude the bond counsel from rendering one or more
opinions to the underwriter or purchaser with respect to the bonds,
the documents or laws pursuant to which the bonds are issued, the
official statement, offering circular, or other disclosure document
describing the bonds, or any related matter, if the opinion is
rendered as bond counsel and not as counsel to the underwriter or
purchaser.
(e) Injunctive relief shall be available, subject to judicial
discretion, to prohibit or enjoin any violation of this section, but
no violation shall affect the authority, validity, or enforceability
of bonds.

36064. Bonds may be refunded by defeasance or call for redemption,
subject to all of the following requirements:
(a) Notwithstanding Sections 53557 and 53585 of the Government
Code, the proceeds of the sale of refunding bonds deposited in escrow
or trust may be invested or reinvested in any combination of federal
securities and securities permitted by subdivisions (c) and (d) of
Section 53635 of the Government Code, except that investment and
reinvestment of the proceeds shall not be permitted in securities
issued by the district or on behalf of any of its improvement
districts. The ratings of any securities permitted by subdivision (d)
of Section 53635 of the Government Code in which the escrow or trust
is invested or reinvested, or debt service insurance or other credit
enhancement with respect to those securities, or any combination
thereof, shall produce a rating on those securities when acquired
equivalent to the highest long-term debt rating category of either
Moody's Investors Service, Inc., or Standard and Poor's Corporation.
Notwithstanding Section 53584 of the Government Code, the securities
may be acquired from the issuer thereof or any other source approved
by the board.
(b) The escrow or trust shall be established in an amount
sufficient to pay when due the principal of, redemption premium, if
any, and interest on, the bonds being refunded. Securities in the
escrow or trust may be exchanged or sold and the proceeds used to
purchase other securities only when the escrow agent or trustee
holding the fund deems the exchange or sale necessary to maintain the
ability to pay when due the principal of, redemption premium, if
any, and interest on, the bonds being refunded. If the escrow or
trust becomes insufficient to pay the principal, redemption premium,
if any, and interest when due, the board may, to the extent of the
insufficiency, augment the escrow or trust from assessments or
charges, or both, fixed and collected for that purpose,
notwithstanding Section 53561 of the Government Code and Section
36063 of this code.
(c) Notwithstanding Section 53583 of the Government Code, the
bonds being refunded need not be called and paid at the first or any
subsequent date on which the bonds may legally be called, if the
board determines that to do so would be consistent with prudent
management of the district's fiscal affairs.