Added by Stats. 2005, Ch. 249, Sec. 3. Effective January 1, 2006.
(a)A district may issue promissory notes to borrow money and incur indebtedness for any lawful purpose, including, but not limited to, the payment of current expenses, pursuant to this section.
(b)The total amount of indebtedness incurred pursuant to this section outstanding at any one time shall not exceed 5 percent of the district’s total enterprise and nonenterprise revenues in the preceding fiscal year. Any indebtedness incurred pursuant to this section shall be repaid within five years from the date on which it is incurred. Any indebtedness incurred pursuant to this section shall bear interest at a rate which shall not exceed the rate permitted under Article 7 (commencing with Section 53530) of Chapter 3 of Part 1 of Division 2 of Title 5.
(c)Each indebtedness incurred pursuant to this section shall be authorized by resolution adopted by a four-fifths vote of the total membership of the board of directors and shall be evidenced by a promissory note signed by the president of the board of directors and the general manager.
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