§ 101290 Special Bond Election Requirements

This law tells a city how to run a special vote to borrow money, what info must be shown to voters, and that the loan’s interest can’t be higher than 7% a year.

Key Takeaways

•The election date and voting method must be set in advance.
•The notice to voters must list the purpose, estimated cost, loan amount, and interest cap.
•Interest on the loan cannot be higher than 7% per year; after the first year it is paid twice a year.

Example

A town wants to borrow $10 million to build a new bus depot and must hold a special election so voters can say yes or no.

The town must set a voting date, explain why the money is needed, show the estimated cost, state the loan amount ($10 million) and promise that the interest will never be more than 7% per year. Voters then vote on the proposal.

How to Calculate

Interest per period = Principal × (Maximum Annual Rate ÷ Number of periods per year)

Find the loan amount (principal).
Take the maximum allowed yearly interest rate (7%).
Divide that rate by 2 because after the first year interest is paid twice a year (semi‑annually).
Multiply the principal by the semi‑annual rate to get each interest payment.

The town borrows $10,000,000 at the maximum 7% rate.

Result: Interest each half‑year = 10,000,000 × 0.035 = 350,000 dollars. In the first year, if interest is paid once a year, it would be 10,000,000 × 0.07 = 700,000 dollars.

The ordinance calling a special bond election shall fix the date on which the election will be held, and the manner of holding the election and of voting for or against incurring the indebtedness. It shall also recite the objects and purposes for which the indebtedness is proposed to be incurred, the estimated cost of the transit facilities, works, lands, structures, rights, equipment, or other property proposed to be acquired, constructed, or completed, the amount of the principal of the indebtedness to be incurred therefor, and the maximum rate of interest to be paid on the indebtedness, which shall not exceed 7 percent per annum, payable semiannually or annually the first year and thereafter semiannually. (Added by Stats. 1971, Ch. 1161.)

This law tells a city how to run a special vote to borrow money, what info must be shown to voters, and that the loan’s interest can’t be higher than 7% a year.

Key Takeaways

•The election date and voting method must be set in advance.
•The notice to voters must list the purpose, estimated cost, loan amount, and interest cap.
•Interest on the loan cannot be higher than 7% per year; after the first year it is paid twice a year.

Example

A town wants to borrow $10 million to build a new bus depot and must hold a special election so voters can say yes or no.

How to Calculate

Interest per period = Principal × (Maximum Annual Rate ÷ Number of periods per year)

Find the loan amount (principal).
Take the maximum allowed yearly interest rate (7%).
Divide that rate by 2 because after the first year interest is paid twice a year (semi‑annually).
Multiply the principal by the semi‑annual rate to get each interest payment.

The town borrows $10,000,000 at the maximum 7% rate.

Result: Interest each half‑year = 10,000,000 × 0.035 = 350,000 dollars. In the first year, if interest is paid once a year, it would be 10,000,000 × 0.07 = 700,000 dollars.

Key Takeaways

Example

How to Calculate

Key Terms

References

§ 101290 Special Bond Election Requirements

Key Takeaways

Example

How to Calculate

Key Terms

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References

Key Takeaways

Example

How to Calculate

Key Terms

Related Statutes

References