§ 7211 Bond Authorization Resolution Requirements

This law tells a government how to write a ballot measure that lets voters approve new bond debt, including what details must be listed such as the purpose, amount, maximum term of 40 years, and a cap of 6% annual interest.

Key Takeaways

•The ballot measure must list the purpose, amount, maximum 40‑year term, and interest cap of 6% per year.
•Interest can be paid twice a year or once at the end of the first year, but never exceed 6% annually.
•The resolution also must specify election date, precincts, polling places, and election officials.

Example

A city council wants to borrow money to build a new fire station and must put the proposal on the ballot.

The council drafts a resolution that says the debt will pay for the fire station, the total amount borrowed, that the bonds will mature no later than 40 years from issue, and that interest will be no more than 6% per year, paid twice a year (or once at the end of the first year if they choose). It also includes when the vote will happen and where people can cast ballots.

How to Calculate

Maximum annual interest = Principal × 6% (0.06) × (1 if paid once per year or 2 if paid semiannually)

Identify the principal amount of the bond (e.g., $5,000,000).
Multiply the principal by the maximum rate: 5,000,000 × 0.06 = $300,000.
If interest is paid semiannually, split the $300,000 into two payments of $150,000 each year.
If the first year allows a single payment at year‑end, the full $300,000 is paid then.

The city issues $5,000,000 of bonds with the maximum allowed interest.

Result: Annual interest = $5,000,000 × 0.06 = $300,000. If paid semiannually, each payment is $150,000; if paid at year‑end, the full $300,000 is paid after one year.

The resolution shall state: (a) The purpose for which the proposed debt is to be incurred, which may include expenses of all proceedings for the authorization, issuance and sale of the bonds. (b) The amount of debt to be incurred. (c) The maximum term the bonds proposed to be issued shall run before maturity, which shall not exceed 40 years. (d) The maximum rate of interest to be paid, which shall not exceed 6 percent per annum, payable semiannualy, except that interest for the first year may be payable at the end of the year. (e) The measure to be submitted to the voters. (f) The date upon which an election shall be held for the purpose of authorizing the bonded indebtedness to be incurred; and (g) The designation of the precincts, the location of the polling places and the names of the officers selected to conduct the election, who shall consist of one inspector, one judge, and two clerks in each precinct. (Added by Stats. 1959, Ch. 1598.)

Key Takeaways

•The ballot measure must list the purpose, amount, maximum 40‑year term, and interest cap of 6% per year.
•Interest can be paid twice a year or once at the end of the first year, but never exceed 6% annually.
•The resolution also must specify election date, precincts, polling places, and election officials.

Example

A city council wants to borrow money to build a new fire station and must put the proposal on the ballot.

How to Calculate

Maximum annual interest = Principal × 6% (0.06) × (1 if paid once per year or 2 if paid semiannually)

Identify the principal amount of the bond (e.g., $5,000,000).
Multiply the principal by the maximum rate: 5,000,000 × 0.06 = $300,000.
If interest is paid semiannually, split the $300,000 into two payments of $150,000 each year.
If the first year allows a single payment at year‑end, the full $300,000 is paid then.

The city issues $5,000,000 of bonds with the maximum allowed interest.

Result: Annual interest = $5,000,000 × 0.06 = $300,000. If paid semiannually, each payment is $150,000; if paid at year‑end, the full $300,000 is paid after one year.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 7211 Bond Authorization Resolution Requirements

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References