48-2859

48-2859. Bond anticipation notes; form;
procedures applicable

A. If the board determines and states in the resolution of intention that
improvement bonds shall be issued, bond anticipation notes may be sold at any time after
the award of a construction contract.

B. Bond anticipation notes shall be paid solely from the proceeds of the sale of
improvement bonds and monies collected from property owners who want to pay all or part
of their assessments in cash before the filing of the certified list of unpaid
assessments as provided in section 48-2853. The notes may be in such form and
denomination as the board provides. The notes shall be executed by the chairman of the
board and attested by the secretary. The notes may bear interest from their date at a
rate not in excess of the maximum rate shown in the resolution of intention. The term of
the notes shall not be more than six months beyond the date set for completion of the
construction. The board may repay such notes before maturity and without penalty or
extend the life of the notes if the term of the construction contract is extended or if
any default is made by the contractor. The notes shall be authorized by resolution of the
board.

C. The total amount of notes issued for any improvement shall not be greater than
the aggregate of ninety per cent of the contract price and the total estimated amount of
incidental expenses. The notes shall be sold at not less than par at either public or
private sale. If authorized by the board, the chairman may enter into loan agreements
with the purchaser of the notes relative to:

1. The time and place of delivery.

2. The sale of improvement bonds to the purchaser of the notes if the district is
unable to procure a purchaser willing to purchase the bonds when issued.

3. Making the demand on the owners of property for payment in cash.

4. Collection of cash payments from persons who want to pay their assessments in
cash and application of such cash payments to the repayment of the notes.

5. Payment of an additional fee to the purchaser of the note to cover the
administrative expenses of the cash collections if the purchaser is the person to whom
cash collections are made.

D. To secure the payment of the notes, the loan agreements may provide for a
collateral assignment to the purchaser of the notes of all cash collections, the warrant
and the district's interest in the performance bond.

E. The proceeds from the sale of the notes shall be placed in a special fund to be
held by the treasurer and used for payment of incidental expenses and payments to the
construction contractor.

F. Proceeds from the sale of the notes shall be used to make semimonthly or monthly
payments to the contractor on a basis of ninety per cent of the value of the work
actually performed, as estimated by the engineer employed for such purpose, up to and
including the fifteenth or last day of each calendar month. The balance shall be paid to
the contractor after the sale of the bonds solely from the proceeds from the bond sale,
or if bonds equal to the balance remaining cannot be sold, the balance shall be paid by
delivery of a similar principal amount of bonds to the contractor.

G. The issuance of bond anticipation notes constitutes an assignment to the
district of the monies due the contractor under the construction contract.

H. If bonds are issued to represent any assessments remaining unpaid on the date
the list is certified, the district shall sell the bonds and use the proceeds to redeem
the notes and pay the balance due to the contractor.

I. In addition to any incidental expenses included in the assessment, if bond
anticipation notes are issued, the notes may also include in the incidental expenses all
interest accruing on the bond anticipation notes, the added costs of cash collections, if
any, and all legal or financial fees incurred in the issuance and sale of the bond
anticipation notes.

J. If bond anticipation notes have been issued and the contractor has been paid in
accordance with subsection F of this section, the district shall apply the proceeds
collected from demands on the property owners to the reduction of the outstanding portion
of the bond anticipation notes and, if the notes have been paid, to the contractor to
reduce any balance due him.