15.2-2424 - Loans to local governments.
§ 15.2-2424. Loans to local governments.
Except as otherwise provided in this chapter, money in the Fund shall be usedsolely to make loans to local governments to finance or refinance the cost ofany project. No loan from the Fund shall exceed the total cost of the projectto be financed or the outstanding principal amount of indebtedness to berefinanced plus reasonable financing expenses.
The Authority shall determine the terms and conditions of any loan from theFund, which may vary between local governments. Each loan shall be evidencedby appropriate bonds or notes of the local government payable to the Fund.The bonds or notes shall have been duly authorized by the local governmentand executed by its authorized legal representatives. The Authority isauthorized to require in connection with any loan from the Fund suchdocuments, instruments, certificates, legal opinions, and other informationas it may deem necessary or convenient. In addition to any other terms orconditions which the Authority may establish, the Authority may require, as acondition to making any loan from the Fund, that the local governmentreceiving the loan covenant perform any of the following:
1. Establish and collect rents, rates, fees, and charges to produce revenuesufficient to pay all or a specified portion of (i) the costs of operation,maintenance, replacement, renewal, and repairs of the project; (ii) anyoutstanding indebtedness incurred for the purposes of the project, includingthe principal and premium, if any, and interest on the loan from the Fund tothe local government; and (iii) any amounts necessary to create and maintainany required reserve, including any rate stabilization fund deemed necessaryor appropriate by the Authority to offset the need, in whole or in part, forfuture increases in rents, rates, fees, or charges;
2. Levy and collect ad valorem taxes on all property within the jurisdictionof the local government subject to local taxation sufficient to pay theprincipal and premium, if any, and interest on the loan from the Fund to thelocal government;
3. Create and maintain a special fund or funds for the payment of theprincipal and premium, if any, and interest on the loan from the Fund to thelocal government and any other amounts becoming due under any agreemententered into in connection with the loan, or for the operation, maintenance,repair, or replacement of the project or any portions thereof or otherproperty of the local government, and deposit into any fund or funds amountssufficient to make any payments on the loan as they become due and payable;
4. Create and maintain other special funds as required by the Authority; and
5. Perform other acts, including the conveyance of, or the granting of lienson or security interests in, real and personal property, together with allrights, title and interest therein, to the Fund, or to take other actions asmay be deemed necessary or desirable by the Authority to secure payment ofthe principal and premium, if any, and interest on the loan from the Fund tothe local government and to provide for the remedies of the Fund in the eventof any default by the local government in the payment of the loan, including,without limitation, any of the following:
a. The procurement of insurance, guarantees, letters of credit, and otherforms of collateral, security, liquidity arrangements or credit supports forthe loan from any source, public or private, and the payment therefor ofpremiums, fees, or other charges;
b. The combination of one or more projects, or the combination of one or moreprojects with one or more other undertakings, facilities, utilities, orsystems, for the purpose of operations and financing, and the pledging of therevenues from such combined projects, undertakings, facilities, utilities,and systems to secure the loan from the Fund to the local government made inconnection with such combination or any part or parts thereof;
c. The maintenance, replacement, renewal, and repair of the project; and
d. The procurement of casualty and liability insurance.
All local governments borrowing money from the Fund are authorized to performany acts, take any action, adopt any proceedings, and make and carry out anycontracts that are contemplated by this chapter. Such contracts need not beidentical among all local governments, but may be structured as determined bythe Authority according to the needs of the contracting local governments andthe Fund.
Subject to the rights, if any, of the registered owners of any of the bondsof the Authority, the Authority may consent to and approve any modificationin the terms of any loan to any local government subject to the guidelinesadopted by the Board.
(2009, c. 131.)