Powers to Secure and to Covenant as to General Obligation Refunding Bonds

  1. Law
  2. Tennessee Code
  3. Public Finances
  4. Local Government Public Obligations Act of 1986
  5. General Obligation Refunding Bonds
  6. Powers to Secure and to Covenant as to General Obligation Refunding Bonds

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In order to secure the payment of the principal of and interest on general obligation refunding bonds issued pursuant to this part and part 1 of this chapter, or in connection with such bonds, any local government shall have the power as to such bonds to:

  1. Pledge the full faith, credit and unlimited taxing power of the local government as to all taxable property in the local government or a portion of the local government, if applicable, to the punctual payment of the principal of and interest on such bonds;
  2. Pledge all or any part of the fees, rents, tolls, or other charges received or receivable by the local government from any public works project or projects then existing or thereafter to be constructed, including any revenues derived or to be derived by a local government from a lease, agreement or contract with any other local government, local government instrumentality, the state, or a state or federal agency for the use of or in connection with such public works project or projects, to the punctual payment of the principal of and interest on such bonds issued to finance such public works project or projects or any other public works project or projects, and to covenant against thereafter pledging any such fees, rents, tolls, or charges to any other bonds or any other obligations of the local government;
  3. Provide for the terms, forms, registration, exchange, execution and authentication of the general obligation refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
  4. Covenant as to the use and disposition of the proceeds from the sale of the general obligation refunding bonds in a manner not inconsistent with this part and part 1 of this chapter;
  5. Covenant as to the fees, rents or tolls to be charged in connection with any public works project or projects, covenant that provisions will be made for the retirement of the outstanding obligations from the proceeds of the general obligation refunding bonds being issued, and covenant as to any other use and disposition to be made of the proceeds thereof, and enter into appropriate agreements with any other local government, local government instrumentality, the state, or a state or federal agency for such purpose with respect to a public works project which is owned or leased by a local government or local government instrumentality;
  6. Covenant as to the operation and maintenance of the public works project;
  7. Covenant to set aside or pay over reserves and sinking funds for the general obligation refunding bonds and as to the disposition thereof;
  8. Redeem the general obligation refunding bonds, and covenant for their redemption and provide the terms and conditions thereof;
  9. Covenant as to its books of account, as to the inspection and audit thereof and as to the accounting methods; provided, that an audit of the books and accounts of the local government shall be made at least annually in accordance with §§ 4-3-304 and 6-56-105. All audits shall be performed in accordance with the standards established by the comptroller of the treasury;
  10. Covenant and prescribe as to what occurrences shall constitute “events of default” and the terms and conditions upon which any or all of the general obligation refunding bonds shall become or may be declared due before maturity and as to the terms and conditions upon which such declaration and its consequences may be waived;
  11. Covenant as to the rights, liabilities, powers and duties arising upon the breach by it of any covenant, condition or obligation;
  12. Execute all instruments necessary or convenient in the exercise of the powers herein granted or in the performance of its covenants or duties;
  13. Make such covenants and do any and all such acts and things as may be necessary or convenient or desirable in order to secure the general obligation refunding bonds, or in the discretion of the governing body, make the general obligation refunding bonds more marketable, notwithstanding that such covenants, acts or things may not be enumerated herein; it being the purpose hereof to give the local government power to do all things in the issuance of the general obligation refunding bonds and for their security that may be consistent with the Constitution of Tennessee;
  14. Pledge all or any part of the then unpledged rates, fees, rents or other charges to be received from its waterworks system to the punctual payment of the principal of and interest on any sewer bonds for the acquisition or construction of facilities for the collection, treatment and disposal of sewage and waste matter, including all property, real and personal, appurtenant thereto or in connection therewith, which pledge may be in addition to a pledge of the taxing power and in addition to a pledge of rates, fees, rents and charges received or receivable from a sewer system then existing or to be constructed;
  15. Covenant that it will fix, levy and collect fees, rents, tolls or other charges for the privilege of parking motor vehicles in the space immediately adjacent to any parking meter which, in its discretion, it may install and operate and maintain beside specified portions of the public streets;
  16. Covenant that the costs of operation and maintaining parking facilities payable, in part from the revenues of such parking facilities, shall not include all or any part of the salaries of police officers employed in the enforcement of on-street parking regulations; and
  17. Covenant and provide for the discharge and satisfaction and defeasance of all or any part of general obligation refunding bonds and the indebtedness evidenced thereby.


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