(A) (1) In accordance with I.C. 36-5-2-11(d), the Town Council is authorized to make loans of money for not more than five years and issue notes for the purpose of refunding those loans.
(2) The loans may be made only for the purpose of procuring money to be used in the exercise of the powers of the town, and the total amount of outstanding loans shall not exceed 5% of the town's total tax levy in the current year.
(B) The Town Council is authorized to borrow money in a sum not exceeding $20,000 under the following terms and condition:
(1) A sufficient amount of tax revenues must be pledged for repayment of the loan;
(2) The loan must be evidenced by notes of the town in terms designating the nature of consideration, the time and place payable, and the revenues out of which they will be payable;
(3) The interest accruing on the notes to the date of maturity may be added to and included in their face value or may be made payable periodically;
(4) The funds which the town will receive as a result of the sewer rate increase are to be pledged for the repayment; and
(5) The loan is to be repaid in full, at an interest rate not to exceed 12%, within one year after execution of the note evidencing the indebtedness.
(C) This process is designated as a qualified tax exempt obligation pursuant to the Internal Revenue Code, 26 USC 265(b).
(`93 Code, § 2-133) (Ord. 461, passed 1-9-89)