Colorado § 30-26-101 - Exchange of warrants for bonds - notice.

§ 30-26-101. Exchange of warrants for bonds - notice.

(1) It is the duty of the board of county commissioners of any county having a floating indebtedness exceeding five thousand dollars, upon the petition of fifty registered qualified electors of said county, to publish for the period of thirty days, in a newspaper published within said county, a notice requesting the holders of the warrants of such county to submit, in writing, to the board of county commissioners of said county, within sixty days from the date of the first publication of such notice, a statement of the amount of warrants of such county which they will exchange for the bonds of such county, to be issued under the provisions of this part 1, and the rate at which they will exchange such warrants for such bonds, taking such bonds at par. In case no newspaper is published within such county, such notice may be published in such newspaper published in the city of Denver as the board of county commissioners may select.

(2) It is the duty of such board of county commissioners, upon the petition of fifty of the registered qualified electors of such county, to publish, for the period of at least thirty days immediately preceding a general election, in some newspaper published within such county a notice that at said general election there will be submitted the question whether the board of county commissioners shall issue bonds of such county under the provisions of this part 1 in exchange, at a certain rate, for the warrants of such county issued prior to the date of the first publication of the notice, which rate shall be determined by the board of county commissioners, and it shall be stated in said notice. The question of whether such county indebtedness shall be funded under the provisions of this part 1 and the maximum net effective interest rate such funding bonds shall bear shall be submitted at the next ensuing general election or may be submitted at a special election which said board is empowered to call for that purpose, at any time after the expiration of sixty days from the date of the first publication of the notice, on the petition of fifty registered qualified electors. Said board shall publish, for the period of at least thirty days immediately preceding such special election, in some newspaper published within such county a notice that such question will be submitted at such election. In case no newspaper is published within such county, the board of county commissioners shall cause such notice to be posted in at least two conspicuous places in each of the election precincts of such county, at least thirty days prior to the said election, general or special. Such election shall be held and the results thereof determined in the same manner as provided for authorization of other bonded indebtedness in accordance with part 3 of this article.

(3) The county clerk and recorder of such county shall make out and cause to be delivered to the judges of election in each election precinct in the county, prior to the election, a certified list of the registered qualified electors in such county; and no person shall vote upon the question of the funding of the county indebtedness unless he has the necessary qualifications as provided by law.

(4) If the issuance of said bonds is approved at such election, the board of county commissioners may issue to any person or corporation holding any county warrant issued prior to the date of the first publication of the notice coupon bonds of such county in exchange therefor at a rate not exceeding that named in the notice published by the board of county commissioners. Should any of the bonds so voted be not exchanged for county warrants, as provided in this part 1, the board of county commissioners may sell the bonds so voted at, above, or below their par values and with the proceeds of such sale redeem or buy the warrants not so exchanged, subject to the provisions of this part 1, but the proceeds of such sale of bonds shall be applied to the purchase or redemption of such warrants and for no other purpose whatever.

(5) No bond shall be issued of less denomination than fifty dollars and, if issued for a greater amount, for some multiple of that sum. The bonds shall bear interest at a rate such that the net effective interest rate of the issue of bonds does not exceed the maximum net effective interest rate authorized, the interest to be paid semiannually at the office of the county treasurer or at the city of New York, at the option of the holders thereof, upon the production of the proper coupons for the same, the bonds to be payable at the pleasure of the county after ten years from the date of their issuance, but absolutely due and payable twenty years after the date of issue. The whole amount of bonds issued under this part 1 shall not exceed the sum of the county indebtedness at the date of the first publication of the notice submitting the question of funding the county indebtedness; and the amount shall be determined by the board of county commissioners, and a certificate made of the same, and made a part of the records of the county; and any bond issued in excess of that sum shall be void.

Source: L. 1881: p. 85, § 1. G.S. § 676. L. 1885: p. 232, § 1. R.S. 08: § 1369. C.L. § 8847. CSA: C. 45, § 199. CRS 53: § 36-4-1. C.R.S. 1963: § 36-4-1. L. 70: p. 136, § 2. L. 98: (5) amended, p. 1338, § 56, effective June 1. L. 2017: (5) amended, (HB 17-1005), ch. 8, p. 24, § 3, effective August 9.

Cross references: For clarification of terms and requirements for notice by publication, see part 1 of article 70 of title 24; for how county indebtedness is created, the limits on such indebtedness and refunding, see § 6 of art. XI, Colo. Const.

ANNOTATION

The issuance of funding bonds, in exchange for valid warrants, is in no sense the creation of a debt; it is but the substitution of new evidence for a preexisting debt, it changes the form, but does not increase the indebtedness. Bd. of Comm'rs v. Standley, 24 Colo. 1, 49 P. 23 (1897).

Each bond constitutes a separate and independent cause of action against the county, and the presumption of its validity goes with it to the end, and must prevail unless it is overcome by a fair preponderance of competent evidence that the warrants for which that particular bond was exchanged evidence unauthorized obligations. Bd. of Comm'rs v. Keene Five-Cents Sav. Bank, 108 F. 505 (8th Cir. 1901); Bd. of Comm'rs v. Standley, 24 Colo. 1, 49 P. 23 (1897); Bd. of Comm'rs v. Sutliff, 97 F. 270 (8th Cir. 1899).

Validity of each bond tested by validity of each debt. When, in compliance with this section, the county issued a bond in exchange for outstanding valid warrants, its validity could in no way be affected by the fact that other bonds in the same series, issued in exchange for invalid warrants, were unauthorized and void, the validity of each bond, therefore, must be tested by the character of the indebtedness for which it is exchanged, because it is an independent contract, and when issued for preexisting indebtedness, it becomes a valid enforceable obligation against the county. Bd. of Comm'rs v. Standley, 24 Colo. 1, 49 P. 23 (1897).

Merely because some illegal consideration for some one or more of the bonds of a series may have been given, is not sufficient to invalidate the entire series, and though some illegal consideration may have entered into all, or some, of the other bonds of the series than those involved, still unless that taint can be traced into the bonds in question, the county may not escape liability thereon. Bd. of Comm'rs v. Linn, 29 Colo. 446, 68 P. 839 (1902).

But bonds issued upon a contract creating indebtedness in excess of the constitutional limitation render the whole series void. Bd. of Comm'rs v. Standely, 24 Colo. 1, 49 P. 23 (1897).

Presumed validity. In an action upon coupons the county funding bonds issued under this section, where the defense set up in the answer was that the bonds were invalid because the county warrants for which the bonds were exchanged were issued in excess of the limit of indebtedness allowed by the constitution, when plaintiff produced in evidence his coupons and the bonds to which they were attached, regularly and in due form executed by the authorized officers of the county and with the county seal attached, the presumption was that they were valid, and the same presumption attached to the warrants similarly executed and tested which became merged in the bonds, introduced in evidence by the defendant. Bd. of Comm'rs v. Linn, 29 Colo. 446, 68 P. 839 (1902).

Mandamus. An action for a money judgment will not lie upon coupons from county refunding bonds, but mandamus is the exclusive remedy, except in certain cases, such as a diversion of the fund, and if the tax has been levied and collected and is in the hands of the treasurer sufficient to pay the coupons the remedy is mandamus against the treasurer to compel payment, also, if the board of county commissioners fails to levy a tax to pay the coupons the remedy is mandamus against the board to compel the levy. Bd. of Comm'rs v. Sims, 31 Colo. 483, 74 P. 457 (1903).

Purchasers are charged with notice of the prescribed mode of payment, and this method of payment and enforcement of the same is exclusive except, as in case of county warrants, where for some exceptional reason, such as a diversion of the fund, a different procedure may be resorted to. Bd. of Comm'rs v. Sims, 31 Colo. 483, 74 P. 457 (1903).

Burden of proof. The burden was on defendant to show by a fair preponderance of the evidence that the alleged indebtedness which was merged in the bonds was invalid because contracted at a time when the county could not lawfully incur further indebtedness. Bd. of Comm'rs v. Linn, 29 Colo. 446, 68 P. 839 (1902).

In an action upon county bonds, the fact that the county officers failed to preserve in the public records evidence that the indebtedness on which the bonds were founded was contracted after the constitutional limit had been reached does not absolve the county from the ordinary rules relating to the sufficiency of proof or cast upon plaintiff the burden of showing that the bonds were issued for a valid indebtedness. Bd. of Comm'rs v. Linn, 29 Colo. 446, 68 P. 839 (1902).