CHAPTER 23

An Act to amend and reenact § 86 of Chapter 84 of the Acts of the
General Assembly of 1918, approved February 7, 1918, as amended,
which provided a new charter for the City of Norfolk, relating to
bond issues, so as to provide for the disposition of surplus funds in
the hands of the board of sinking fund commissioners. CH 91]

Approved February 11, 1964

Be it enacted by the General Assembly of Virginia:

1. That § 86 of Chapter 34 of the Acts of the General Assembly of 1918,
approved February 7, 1918, as amended, be amended and reenacted so as
to read as follows:

§ 86. Bond issues.

(1) The council may in the name and for the use of the city contract
debts and make and issue or cause to be made and issued as evidence
thereof, bonds, notes or other obligations, upon the credit of the city or
solely upon the credit of specific property owned by the city, or solely
upon the credit of income derived from property used in connection wi
any public utility owned and operated by the city, such bonds and notes
or other obligations to be either coupon or registered bonds, or coupon
bonds with the privilege to the holder of having the same registered as to
principal or as to both principal and interest. But except as provided in
clause (4) of this section no debt shall hereafter be contracted for a
longer period than that of the probable life of the work or object for
which the debt is to be contracted, to be determined by the director of
public works and by him certified as hereinafter provided. In determining
the probable life or probable average life of works or objects as herein-
after provided, the director of public works shall not deem the life of the
following classes of work or objects to exceed the following periods,
namely: Roadways of streets having, at the time the debt is contracted,
railroad or street railway tracks thereon, fifteen years; roadways of all
other streets, twenty years; schoolhouses, thirty years; other public build-
ings, forty years; iron bridges, thirty years; concrete bridges, forty years;
parks or other real estate, fifty years; and all other works or objects not

ereinabove specified, thirty years. In the event that a debt shall be
authorized for purposes falling within two or more of the above-named
classes, it shall be the duty of the director of public works to determine
and certify as hereinafter provided the probable average life of the works
or objects for which said debt is contracted, taking into consideration the
nature of said works or objects and the portion of said debt applicable to
said works or objects, respectively. The words “probable life’, as herein
used, shall be construed to mean the length of time that will probably elapse
before any particular improvement (assuming it to be kept in reasonable
current repair) will reasonably require replacement.

(2) No bond, note, or other obligation of the city shall hereafter be
issued except as hereinafter provided in the case of temporary loans,
unless and until there is filed with the city clerk a certificate from the
director of public works in substantially the following form:

“I hereby certify that the probable life (or ‘the probable average
life’) of the work or object (or ‘the works or objects’) for which the debt
authorized by the ordinance entitled (naming it) is contracted is as great
as the longest period fixed for the maturity of any obligation issued or
to be issued under the same ordinance”; and the said certificate shall be
conclusive.

(3) The maximum periods hereinabove fixed for the contracting of
debts for the several purposes hereinabove set forth may be changed at
any time by the General Assembly, or under its authority, as to any bonds
to be issued after said change is made, and such change shall not be
deemed to constitute an impairment of the obligation of the contract of
the city as to any bonds theretofore issued.
(4) Notwithstanding anything in this section contained, it shall be
lawful for the said city to issue, without the certificate of the director of
public works above-mentioned, bonds, notes, or other obligations for the
purpose of refunding, so far as necessary, any obligations of the city
created before April first, nineteen hundred and sixteen, but maturing
thereafter, or for the purpose of refunding bonds of the city heretofore
issued which mature not more than three years after the date of their
issue: but no such refunding bonds, notes, or other obligations shall be
issued for a period of more than twenty-five years, except that bonds
issued for the purpose of refunding bonds of said city heretofore issued
which mature not more than three years after the date of their issue may
be issued for a term not exceeding thirty-five years; and all such refund-
ing bonds shall conform to the requirements set forth in clause (5) or
clause (6) hereof, as the case may be.

(5) Hereafter, except as provided in clause (6) of this section, no
debt shall be contracted, nor any bond, note or other obligation of the city
issued, except as hereinafter provided in the case of temporary loans,
unless by the ordinance or ordinances authorizing the same there be
required the annual or semiannual payment, as a sinking fund, to the
board of sinking fund commissioners of the City of Norfolk of a sum, or
sums, to be fixed in and by said ordinance or ordinances, which, if annually
or semiannually paid as provided by said ordinance or ordinances, will (as
shown by any sinking fund tables in accepted use among bankers), with
interest at four per centum per annum thereon and upon the accumula-
tions thereof, produce at the date of maturity of the bonds the amount
of the debt to retire which said sinking fund was created; and the said
amount shall be annually appropriated by the council and shall be paid
annually if said amount shall have been fixed on the basis of annual pay-
ments, and semiannually if such amount shall have been fixed on the basis
of semiannual payments; provided that after the sinking fund created for
any issue of bonds shall equal the total amount of said issue, the obliga-
tion of the city to make further payments in respect thereof shall cease
and determine, except to make good any losses to the said sinking fund,
and any surplus funds in the hands of the sinking fund commissioners,
and not needed to pay the principal and interest on any such issue, shall
be paid to the city treasurer annually, at such time as the commissioners
shall determine, to be credited to the general fund of the city. Not less
than five nor more than six years after the date of each issue of bonds,
notes or other obligations hereunder, it shall be the duty of the board of
sinking fund commissioners to appraise at their fair market value, not
exceeding par, the securities held in the sinking fund pertaining to that
issue, and if it should then appear that the said fund, together with the
further appropriations to be made thereto, and with interest at four per
centum per annum upon said fund and the accumulations thereof and the
appropriations thereto, will not be adequate to pay the said bonds, notes,
or other obligations, at maturity, it shall then be the duty of the said
board to determine and certify to the council the amount of such further
annual appropriation as will, with interest and accumulations as afore-
said, be adequate for said purpose; and a similar appraisal, determina-
tion, and certification shall be made by the said board every five years
thereafter during the term of the said issue; and the council and the city
treasurer, respectively, shall rest under the same duty in respect of the
appropriation and payment of said further sum or sums as in respect of
the appropriation and payment of the sum originally provided for.

(6) In lieu, however, of creating a sinking fund, or sinking funds,
as in clause (5) hereof provided, the city may issue bonds hereinafter
called “serial bonds”, payable in annual installments, the first of which
shall be payable at any time within the fiscal year succeeding the fiscal
year in which the said issue may be authorized; and the last of which shall
be payable within the period of the probable life of the work or object
for which the debt evidenced by said bonds was created, ascertained and
certified as hereinabove provided. The several installments in which said
serial bonds may be payable may be equal or unequal as the council may.
prescribe; but, if unequal, the greatest of said installments shall not be
more than double the amount of the smallest.

(7) All bonds issued after April first, 1916, shall be paid at their
respective maturities, and, except in the case of obligations of said city
issued after April first, 1916, and prior to the enactment of this Charter,
which mature not more than three years from the date thereof, no refund-
ing bonds shall be issued for the payment thereof; provided, however, that
if for any reason there shall not at the time of the maturity of any such
bonds be sufficient funds of said city available for the payment thereof,
it shall be lawful for the city to borrow money and issue negotiable notes
to the amount required to pay such maturing bonds, which bonds shall
be paid out of taxes to be levied and collected within the three years next
succeeding the year in which such notes were issued. The payment out
of the proceeds of the sale of any bonds of temporary loans made in
anticipation of the sale of such bonds shall not be deemed a refunding of
such temporary loans within the meaning of this clause. If the council
shall fail to make provision for the payment of any sinking fund install-
ment required as to any bonds lawfully issued under this section, or of
any installment of serial bonds lawfully issued under this section, and
such default shall continue for sixty days, then, and in either of said
events, the city treasurer shall, without further direction from the council,
and notwithstanding any contrary direction from the council, pay such
sinking fund or serial bond installments from moneys then in his hands,
if sufficient; and, if not, then from the first moneys that shall come into
his hands thereafter.

(8) Pending the issuance or sale of any bonds, notes or other
obligations by this section authorized, or in anticipation of the receipt
of taxes and revenues of the current fiscal year, or of either of the two
fiscal years immediately preceding the current fiscal year, it shall be lawful
for the city to borrow money temporarily and issue notes or other
evidences of indebtedness therefor, and from time to time to renew such
temporary loans to be ultimately repaid from the proceeds of said bonds,
notes or other obligations, or from the city taxes and revenues, as the
case may be; provided that such temporary loans, including all renewals
thereof, if made pending the issuance or sale of bonds, notes or other
obligations, issued under clause (5) five or clause (6) six hereof, shall not
be made for a period greater than three (3) years, nor shall they exceed
in the aggregate at any one time the amount of such bonds, notes or other
obligations remaining unissued and unsold; and temporary loans made
in anticipation of the receipt of taxes and revenues of any fiscal year
including all renewals thereof, shall not be made for a period greater than
the period ending two years after the expiration of such fiscal year and
shall not exceed in the aggregate at any one time the uncollected portion
of the taxes and revenues in anticipation of which such notes or other
evidences of indebtedness are issued. All such temporary loans shall be
evidenced by instruments upon the face of which there shall be plainly
written “temporary loans’. No such loan made pending the issuance or
sale of bonds, notes, or other obligations under the provisions of clause
(5) five or clause (6) six hereof shall be valid unless the said bonds, notes
or other obligations shall have been first legally authorized. The provisions
of clauses (1) one to (6) six inclusive, of this section, shall not apply to
said temporary loans.

(9) The credit of the city shall not, directly or indirectly, under any
device or pretense whatsoever, be granted to or in aid of any person,
association or corporation. The council shall not issue any bonds, notes
or other obligations of the city, or increase the indebtedness thereof, to
an amount greater than eighteen per centum of the assessed valuation of
the real estate in the city subject to taxation as shown by the last preceding
assessment for taxation; provided, however, that in determining the
limitation of the power of the city to incur indebtedness there shall not
be included the classes of indebtedness mentioned in subsections (a) and
(b) of § 127 of the Constitution of the State.

(10) Bonds of said city predicated solely upon the credit of specific
property owned by the city, or solely upon the credit of income derived
from property used in connection with any public utility owned or
operated by the city, may be issued only after the ordinance authorizing
the same has been approved by the affirmative vote of the majority of the
qualified voters of the city voting upon the question of their issuance at
the general election next succeeding the enactment of the ordinance, or
at a special election held for that purpose, pursuant to any law now in
existence or hereafter enacted providing the method by which cities and
towns may vote upon the issuance of bonds contemplated by clause B,
§ 127 of the Constitution of the State; and in every such case the net
income from such specific property or from such public utility or property
used in connection therewith, after payment of operating expenses or 80
much thereof as shall be necessary for the purpose, shall be paid by the
city treasurer to the board of sinking fund commissioners and by it set
aside to meet the interest and principal of such bonds or other obligations
in accordance with the terms of the contract or contracts evidenced by
such bonds or other obligations.

(11) Every ordinance authorizing the issuance of bonds shall specify
the purpose or purposes for which they are to be issued, the aggregate
amount of the bonds, the term for which they shall be issued, and the
rate or maximum rate of interest to be paid thereon. Any such ordinance
may be amended by ordinance at any time before the bonds to be affected
by such amendment have been sold. All other matters relating to such
bonds may be determined by resolution, within the limitations prescribed
by such ordinance or by this act.

(12) All bonds shall be under the seal of the city and shall be signed
by the city treasurer or one of his deputies and by such other officer or
officers of the city as may be designated in the ordinance authorizing the
bonds. If such ordinance shall so determine, the officer or officers signing
the bonds, other than the city treasurer or his deputy, may sign the bonds
by their facsimile signatures, in lieu of manual signatures; but the signa-
ture of the city treasurer or his deputy on such bonds shall be in his own
proper handwriting. Coupons attached to a bond shall be authenticated by
the facsimile signature of the city treasurer.