35-457. Sale of bonds; bids; forfeiture of
deposit; definitions
A. Any or all of the bonds may be sold at public sale or through an online bidding
process in a manner prescribed by the governing body or board that includes the
following:
1. If sold by public sale before the sale of any bonds the governing body or board
shall meet and enter upon its record an order directing the sale of the bonds and the
date and hour of the sale, and cause a copy of the order to be published at least once a
week for two successive weeks in cities having a population of fifteen thousand or more
persons according to the most recent federal census, and once a week for four successive
weeks in all other political subdivisions before the sale in one or more designated daily
or weekly newspapers, together with a notice that sealed proposals will be received for
purchase of the bonds on the date and hour named in the order.
2. If sold through an online bidding process, bids for the bonds that are entered
into the system may be concealed until a specified time or disclosed in the online
bidding process, may be subject to improvement in favor of the political subdivision
before a specified time and may be for an entire issue of bonds or specified maturities
according to the manner, terms and notice provisions ordered by the governing body.
B. If the bonds are sold by public sale or through an online bidding process, all
proposals shall be received on the date and hour or in the manner stated in the order and
the governing body or board shall award the bonds to the highest and most responsible
bidder. The successful bidder shall provide a bid guarantee for not less than two per
cent of the total par value of the bonds within twenty-four hours after the date and time
the bid is awarded. The bid guarantee may be in the form of a certified check or a bond
issued by a surety company licensed by the department of insurance to do business in this
state. The governing body or board may reject any and all bids. If the successful bidder
does not carry out the terms of the proposal to purchase the bonds, the bid guarantee
shall be forfeited as stipulated and liquidated damages.
C. Notwithstanding any other provision of this section, bonds may be sold by
negotiated sale on terms the governing body deems to be the best then available and may
bear interest payable at such times as shall be determined by the governing body.
D. The bonds may be sold below, at or above par. If an issue of bonds is sold below
par, the aggregate amount of discount plus interest to be paid on the bonds must not
exceed the amount of interest that would be payable on the bonds over the maturity
schedule prescribed by the governing body at the maximum rate set out in the resolution
calling the election at which the bonds were voted. The amount of net premium associated
with a bond issue may not exceed the greater of:
1. Five per cent of the par value of the bond issue.
2. One hundred thousand dollars.
E. Costs incurred in issuing the bonds may be paid from the net premium associated
with a bond issue. Any net premium not used to pay the costs incurred in issuing the
bonds shall be deposited in a debt service fund and used only to pay interest on the
bonds.
F. For the purposes of this section:
1. "Net premium" means the difference between the par amount of the bond issue and
the bond issue price determined pursuant to United States treasury regulations.
2. "Online bidding process" means a procurement process in which the governing body
receives bids electronically over the internet in a real-time, competitive bidding event.
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