Subtitle 6. Loans; Bonds.

14-601. Loans for work on facilities.

1967, ch. 754, sec. 439-O; 1976 Code, sec. 15-15; 1978, ch. 739; 1980, ch. 225; 2000, ch. 601.

   (a)   For the purpose of assisting in the engineering and the construction of needed water, sewerage and drainage systems, the Board may make general fund appropriations or borrow funds for this purpose, upon any terms and conditions as they deem right and proper.

   (b)   Any enterprise fund as that term is used in accounting, created for the purpose of complying with this title, shall reimburse the County’s general fund for any expense attributable to work performed by the County out of its general fund. Each year, the Board may determine a reasonable amount, by estimate, to satisfy the requirements of this section, which may be paid to the County from the enterprise fund by appropriation or any other lawful method.

   (c)   If no payment is made under the provisions of this section, then the amount established under subsection (b) of this section shall act as an appropriation under subsection (a) of this section.

14-602. Sale of bonds; use of proceeds; payment.

1967, ch. 754, sec. 439P; 1969, ch. 494, sec. 439P(a); 1970, ch. 283, sec. 439P(a); 1970, ch. 363, sec. 439P(a); 1976 Code, sec. 15-16; 1978, ch. 739; 2000, ch. 601.

   (a)   For the purpose of providing funds for the design, construction, establishment, purchase, or condemnation of water, sewerage and drainage systems in Carroll County pursuant to this title, the County is authorized and empowered to borrow money, from time to time, and to evidence the borrowing by the issuance of bonds, which shall constitute a pledge of the full faith and credit and unlimited taxing power of the County. The authority conferred under this section is subject to the limitation that the County shall issue no amount of bonds pursuant to this section if, by the issuance, the total unpaid bonded indebtedness under this section, less the amount of any sinking funds or reserves for payment of bonds previously issued, shall exceed fifteen percent of the total assessed valuation of all property in Carroll County subject to unlimited County taxation during the fiscal year of the County most recently concluded. The bonds of each issue shall be dated, shall bear interest at the rate or rates, shall mature at the time or times not exceeding forty years from their date or dates, as may be determined by the County, and may be made redeemable before maturity, at the option of the Board, at the price or prices and under the terms and conditions as may be fixed by the Board before the issuance of the bonds. The Board shall determine the form of the bonds, including any interest coupons to be attached, and the manner of execution of the bonds, and shall fix the denomination or denominations of the bonds and the place or places of payment of principal and interest, which may be at any bank or trust company. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds or coupons shall cease to be an officer before the delivery of the bonds or shall become an officer after the date of issue, the signature or facsimile shall nevertheless be valid and sufficient for all purposes the same as if the officer had remained in office until the delivery or had held office on date of issue. All bonds issued under the provisions of this title shall have and are declared to have, as between successive holders, all the qualities and incidents of negotiable instruments under the negotiable instruments law of the State of Maryland. The bonds may be issued in coupon or in registered form, or both, as the Board may determine, and provision may be made for the registration of any coupon bonds as to principal alone; also as to both principal and interest, and for the reconversion into coupon bonds of any bonds registered as to both principal and interest. The issuance of the bonds shall not be subject to any limitations or conditions contained in any other law and the County may sell the bonds in a manner, either at public or private sale, and for a price, as it may determine to be for the best interests of the County. The bonds shall be issued under the signature and seal of the County. The bonds shall be signed by the chief executive officer of the County, with the seal of the County affixed and attested by the signature of either the Administrative Assistant or the Clerk to the County. At any time before the issuance of any bonds the Board may, in addition to any sums appropriated under any other provision of law, advance the sums as may be necessary to cover the expense of issuance of the bonds, which shall be treated and repaid as part of the costs of the project or projects financed with the proceeds of the bonds.

   (b)   The proceeds of the bonds shall be used solely for the payment of the cost of the project or projects on account of which the bonds are issued and shall be disbursed in a manner and under the restrictions, if any, as the Board may provide in the authorizing resolution. If the proceeds of the bonds, by error of estimates or otherwise, shall be less than the cost, additional bonds may in like manner be issued to provide the amount of the deficit, and, unless otherwise provided in the authorizing resolution, shall be deemed to be of the same issue and shall be entitled to payment from the same fund without preference or priority of the bonds first issued for the same purpose. If the proceeds of the bonds of any issue shall exceed the amount required for the purpose for which the bonds shall have been issued, the Board may, by appropriate resolution, apply the surplus to payment of the cost of an additional project or projects or the surplus shall be used for the retirement of bonds of the issue, as in the authorizing resolution provided. In every case where the proceeds of any issue of bonds shall be expended for the cost of one or more projects, the Board shall cause separate capital accounts to be created for each project, among which the bond proceeds shall be divided and from which the separate costs of each project shall be paid. As soon as each project is completed, the special assessments or other charges imposed or made by the Board with respect to the project shall be calculated in the manner as to provide a proportion of the annual debt service on the issue of bonds equal to the proportion of the proceeds of the issue expended on the project. The resolution authorizing any bonds issued pursuant to this title to finance a drainage system also shall identify the drainage area established pursuant to § 14-108 of this title in which any drainage system is to be built and state the amount being borrowed for the drainage area.

   (c)   The County’s full faith and credit and unlimited taxing power shall be unconditionally pledged to the payment of the principal of and interest on any bonds issued pursuant to this section. In the event that the funds available to the County from all sources are insufficient to pay any bonds issued under this title, together with the interest due, the Board, on behalf of the County, in each and every fiscal year in which bonds are outstanding shall levy and collect ad valorem taxes upon all the legally assessable property within the corporate limits of Carroll County in rate and amount sufficient to provide for the payments when due, together with accrued interest to the date of payment. In the event the proceeds from the taxes so levied in any fiscal year are inadequate for the above purposes, the Board, on behalf of the County, shall levy additional taxes in the succeeding fiscal year to make up any deficiency.

   (d)   In addition to any other authorizations contained in this title, the Board is empowered and directed to make payments to any municipality operating its own water, sewerage or drainage systems in an amount equal to the amount of ad valorem taxes levied and collected within such municipality under other provisions of this title, provided that the payments shall be used solely for the construction or maintenance of water, sewerage or drainage systems within the municipality. The Board is authorized to impose additional ad valorem taxes to provide for the payments but the imposition of the taxes shall be discretionary with the Board and shall be in addition to any other taxes or charges levied or imposed under this title. Nothing contained herein shall be construed as impairing the unconditional pledge of the County’s full faith and credit and unlimited taxing power to the payment of the principal of and interest on bonds issued under this title; all taxes levied and collected for the purpose of paying the principal and interest shall be kept separate and apart from any other revenues and receipts of the County and shall be used solely and only for the purpose for which they were levied.

14-603. Revenue bonds.

1967, ch. 754, sec. 439Q; 1976 Code, sec. 15-17; 1978, ch. 739; 2000, ch. 601.

For the purpose of providing funds for the design, construction, establishment, purchase, or condemnation of water, sewerage and drainage systems in Carroll County pursuant to this title, the County is authorized and empowered, in addition to the authority and power conferred by § 14-602 of this subtitle, to borrow money in the amounts as may be needed for the purpose and to evidence the borrowing by the issuance and sale of its negotiable revenue bonds, payable as to principal and interest solely from the proceeds of special benefit assessments and other charges imposed and made by the County on the project or projects so financed with the proceeds of bonds, which revenues the County is authorized to pledge to the payment. The Board is authorized and empowered to fix and determine the form and tenor of revenue bonds, the denominations, the rate or rates of interest payable, the place or places of payment, and the method of sale, all as provided in § 14-602 of this subtitle, except that the amount of the revenue bonds which may be issued by the County shall be limited only by the cost of the project or projects to be financed with the bonds and the revenue bonds shall not constitute an obligation of the faith and credit of the County, but, on the contrary, shall recite that the principal and interest of the bonds are payable solely from the revenues prescribed from the bonds or in the resolution or trust indenture authorizing the same. The Board is authorized and empowered, in its discretion, to secure any revenue bonds issued under this title by an appropriate trust indenture by and between the County and a corporate trustee, which may be any trust company, or bank having trust powers, within or outside the State. Every trust indenture, and revenue bonds secured thereby, shall clearly recite that the bonds are obligations of the County, payable solely from the revenues therein prescribed, and do not constitute general obligations of the County or of the State of Maryland and that the faith and credit of the County and the County’s taxing power are not pledged to the payment of the bonds. Any trust indenture may contain covenants on the part of the County, not contrary to law, deemed necessary or appropriate by the Board for the proper security of the purchasers of any bonds, but the County shall enter into no covenant which shall permit the trustee or bondholders in any manner to sell or otherwise divest the County of its title to any project or projects financed with the proceeds of the bonds, without the prior written consent of the County. Subject to the foregoing limitation, any trust indenture may contain covenants for the protection of bondholders, relating to all or any of the following: the nature, extent and procedure for acquiring or constructing any project or projects and the supervision of the project or projects; the maintenance and operation of any project or projects, and the supervision of the project or projects, the employment of consulting engineers, auditors, attorneys and other experts in connection with any acquisition, construction, maintenance or operation; the terms and provisions of the bonds and the securing of the proceeds of the bonds, the imposition and collection of assessments, charges and rentals for the use of any project or projects and the use, application and security of any revenues so collected, including the establishment, deposit and securing from any revenues for debt service on, or prior redemption of, any revenue bonds, or for the maintenance, operation and improvement of any project or projects; the insurance of any project or projects; the issuance of additional revenue bonds for any project or projects and the limitations; the powers, duties and indemnification of any trustee, or its successor, party to any trust indenture; the rights and remedies of the trustee and of bondholders in the event of any default by the County under any trust indenture, which rights and remedies may include the taking over of any operation by the trustee or by a receiver appointed by a court of competent jurisdiction of the project or projects financed with the proceeds of any issue or revenue bonds secured by the trust indenture, and the marshaling of the revenues from any project or projects for the use and benefit of bondholders.

In addition to the covenants enumerated above but subject to the limitations contained in this title, the County is authorized and empowered to make further additional covenants in any trust indenture, of like or different character as, in its judgment, may be necessary, convenient or desirable for the better security of any issue of its revenue bonds secured by any trust indenture or as will, in its judgment, tend to make any bonds more marketable.

14-604. Refunding bonds.

1978, ch. 739; 1999 Supp., sec. 15-17A; 2000, ch. 601.

   (a)   The Board may provide for the issuance of the County’s bonds under this title at any time or times for the purpose of refunding any bonds of the district, a body politic and corporate created by the County pursuant to the provisions of Title 9 of the Environment Article of the Annotated Code of Maryland; the Commission; and the County, acting pursuant to this title, which are then outstanding, including the payment of any redemption premium and any interest accrued or to accrue to the earliest or any subsequent date of redemption, purchase or maturity of the bonds. The authority of the Board to provide for the issuance of the County’s bonds under this section shall be deemed to be in addition to any powers provided in Section 24 of Article 31 of the Annotated Code of Maryland. Refunding bonds may be issued for any corporate purposes including, without limitation, the public purposes of realizing savings in the effective costs of debt service, directly or through a debt restructuring, or alleviating an impending or actual default. Refunding bonds may be issued in an amount in excess of that of the bonds to be refunded.

   (b)   For the purposes of determining whether refunding bonds issued under this section are within the debt limitation specified in § 14-602 of this subtitle, the amount of bonds or other obligations to be refunded shall be subtracted from, and the amount of refunding bonds to be issued shall be added to, the aggregate of the County’s outstanding bonds under this title.