Sec. 7-244a. Temporary notes. Methods of payment.
Sec. 7-244a. Temporary notes. Methods of payment. (a) In addition to its other
powers described under this chapter, any municipality operating a waterworks system
may issue temporary notes for purposes of financing any capital project related to such
system, and such municipality may renew such notes for not more than fifteen years,
provided in the first year immediately following completion of such project, or if more
than one project is financed by any issue of such notes, in the first year immediately
following completion of the last of such projects, or in the sixth year following the date
of issue of such notes, whichever is sooner, and in each year thereafter, not less than
one-fifteenth of the total of the notes so issued shall be retired using funds derived from
the sources of payment set forth below. Payment of principal and interest on such notes
may be secured by a pledge of (1) the full faith and credit of the municipality, (2) revenues
to be derived from waterworks system use charges, (3) revenues to be derived from
waterworks system connection charges, (4) revenues to be derived from waterworks
system benefit assessments, (5) any other revenues which are collected by the municipal
waterworks department or the municipal authority which is authorized to set rates and
other charges or (6) any combination of the aforementioned sources of payment. Any
temporary notes which are secured by a pledge of the full faith and credit of the municipality shall be obligatory upon the municipality and the inhabitants and property thereof
according to the tenor and purport of such pledge, whether or not such notes are also
secured by one or more additional sources of payment as herein provided. In each year
during which such notes secured by a pledge of the full faith and credit of the municipality
are outstanding, the municipality shall appropriate and there shall be available on or
before the date when any principal, interest or mandatory annual retirement payment
on such notes is required to be paid, an amount of money which, together with all
revenues from other sources available for such purpose, shall be sufficient to pay such
principal, interest or mandatory annual retirement payment on such payment date. There
shall be included in the tax levy for each such year an amount which, together with other
revenues available for such purpose, shall be sufficient to provide for such appropriations.
(b) The legislative body of any municipality issuing temporary notes as provided
in this section shall determine the maximum authorized amount of such notes to be
issued and may determine or may authorize an officer or officers of such municipality
to determine the form of such notes, their date, the dates of principal and interest payments on such notes, provisions for protecting and enforcing the rights and remedies of
the holders of such notes and all other terms, conditions and particular matters regarding
the issuing and securing of and the payment of debt service on such notes. Such legislative body may determine the rate or rates of interest for each issue of such notes or may
provide that such rate or rates of interest shall be determined subsequently by an officer
or officers of such municipality, which determination may be based upon the receipt of
bids to purchase such notes. Each note issued in accordance with this section shall be
exempt, both as to principal and interest, from taxation.
(c) Any powers granted under this section shall be in addition to, and not in derogation of, any powers granted to any municipality under the provisions of its municipal
charter or of any general statute or special act.
(d) Notwithstanding the provisions of subsection (c) of this section, to the extent
payment of principal and interest on such notes is not secured in whole or in part by a
pledge of the full faith and credit of the municipality, any limitations on the powers
granted to any municipality under the provisions of its municipal charter or of any
general statute or special act regarding renewal of such notes or the total amount of such
notes outstanding shall not be applicable to any notes issued pursuant to this section.
(P.A. 83-513, S. 7; P.A. 84-483, S. 1, 2; P.A. 86-309, S. 1.)
History: P.A. 84-483 amended section to permit municipality to use tax resources to pay debt service on notes and to
permit all revenue from water systems use charges or taxes and the full faith and credit of the municipality to be used to
secure the notes; P.A. 86-309 provided that renewal of notes need not be annual and added Subsec. (d) re inapplicability
of limitations on municipal powers to renew certain notes.