Sec. 7-244a. Temporary notes. Methods of payment. - Connecticut Statutes

      Sec. 7-244a. Temporary notes. Methods of payment. (a) In addition to its other powers described under this chapter, any municipality operating a waterworks system may issue temporary notes for purposes of financing any capital project related to such system, and such municipality may renew such notes for not more than fifteen years, provided in the first year immediately following completion of such project, or if more than one project is financed by any issue of such notes, in the first year immediately following completion of the last of such projects, or in the sixth year following the date of issue of such notes, whichever is sooner, and in each year thereafter, not less than one-fifteenth of the total of the notes so issued shall be retired using funds derived from the sources of payment set forth below. Payment of principal and interest on such notes may be secured by a pledge of (1) the full faith and credit of the municipality, (2) revenues to be derived from waterworks system use charges, (3) revenues to be derived from waterworks system connection charges, (4) revenues to be derived from waterworks system benefit assessments, (5) any other revenues which are collected by the municipal waterworks department or the municipal authority which is authorized to set rates and other charges or (6) any combination of the aforementioned sources of payment. Any temporary notes which are secured by a pledge of the full faith and credit of the municipality shall be obligatory upon the municipality and the inhabitants and property thereof according to the tenor and purport of such pledge, whether or not such notes are also secured by one or more additional sources of payment as herein provided. In each year during which such notes secured by a pledge of the full faith and credit of the municipality are outstanding, the municipality shall appropriate and there shall be available on or before the date when any principal, interest or mandatory annual retirement payment on such notes is required to be paid, an amount of money which, together with all revenues from other sources available for such purpose, shall be sufficient to pay such principal, interest or mandatory annual retirement payment on such payment date. There shall be included in the tax levy for each such year an amount which, together with other revenues available for such purpose, shall be sufficient to provide for such appropriations.

      (b) The legislative body of any municipality issuing temporary notes as provided in this section shall determine the maximum authorized amount of such notes to be issued and may determine or may authorize an officer or officers of such municipality to determine the form of such notes, their date, the dates of principal and interest payments on such notes, provisions for protecting and enforcing the rights and remedies of the holders of such notes and all other terms, conditions and particular matters regarding the issuing and securing of and the payment of debt service on such notes. Such legislative body may determine the rate or rates of interest for each issue of such notes or may provide that such rate or rates of interest shall be determined subsequently by an officer or officers of such municipality, which determination may be based upon the receipt of bids to purchase such notes. Each note issued in accordance with this section shall be exempt, both as to principal and interest, from taxation.

      (c) Any powers granted under this section shall be in addition to, and not in derogation of, any powers granted to any municipality under the provisions of its municipal charter or of any general statute or special act.

      (d) Notwithstanding the provisions of subsection (c) of this section, to the extent payment of principal and interest on such notes is not secured in whole or in part by a pledge of the full faith and credit of the municipality, any limitations on the powers granted to any municipality under the provisions of its municipal charter or of any general statute or special act regarding renewal of such notes or the total amount of such notes outstanding shall not be applicable to any notes issued pursuant to this section.

      (P.A. 83-513, S. 7; P.A. 84-483, S. 1, 2; P.A. 86-309, S. 1.)

      History: P.A. 84-483 amended section to permit municipality to use tax resources to pay debt service on notes and to permit all revenue from water systems use charges or taxes and the full faith and credit of the municipality to be used to secure the notes; P.A. 86-309 provided that renewal of notes need not be annual and added Subsec. (d) re inapplicability of limitations on municipal powers to renew certain notes.