Accounting for payment of debt service.
Accounting for and cancellation of municipal obligations.
Authentication of municipal obligations.
(3) Borrowed money fund, source and use.
All borrowed money shall be paid into the treasury of the municipality borrowing it, be entered in an account separate and distinct from all other funds, disbursements charged thereto shall be for the purpose for which it was borrowed and for no other purpose, except as provided by s. 67.11
, but including the reimbursement of a temporary advance from other funds of the municipality or the repayment of a temporary loan by the municipality if such advance or loan has been made in anticipation of the borrowed money and for the same purpose, and such disbursements shall be only upon orders or warrants charged to said fund and expressing the purpose for which they are drawn. Money in the borrowed money fund may be temporarily invested as provided in s. 66.0603 (1m)
(4) Time limit for sales and hypothecations.
Except as provided otherwise by sub. (6)
for cities of the 1st class every authorized municipal bond shall be sold or hypothecated within the 5 years next following the adoption, or the approval, when approval by popular vote is required, of the initial resolution authorizing its issue, except when such sale or hypothecation has been delayed by an action to determine the validity of the prior proceedings, in which case the period of such delay may be added to said 5 years.
(5) Anticipatory contracts in general. 67.10(5)(a)(a)
After any municipality has provided, as required by s. 67.05 (11)
, for an issue of bonds, or as required by s. 67.12 (12)
, for an issue of promissory notes, for a lawful purpose which can be accomplished only through performance of an executory contract by some other contracting party, such contract may be entered into before the actual execution, sale or hypothecation of the bonds or promissory notes, or receipt of payment therefor, with like effect as if the necessary cash for payments on the contract were already in the treasury.
Any city having voted bonds at a special referendum election and having sold a portion thereof may negotiate, sell or otherwise dispose of the same in the manner provided by statute within 9 years of the date of the election voting the same.
(6) Anticipatory contracts in 1st class cities. 67.10(6)(a)1.1.
A 1st class city may enter into a contract in anticipation of the sale of bonds and make expenditures prior to the sale of the bonds for the purposes for which the bonds have been authorized if:
The common council has authorized the issuance of the bonds for any lawful purpose.
The commissioners of the public debt have certified to the comptroller of the city that the bonds can be sold if the comptroller determines that there is in the city treasury sufficient money, other than that raised for the payment of interest and principal on bonds, mortgages, mortgage certificates, or similar instruments of indebtedness, to warrant entering the anticipatory contract or making the expenditures prior to the sale of bonds.
Expenditures under this subsection may be made out of any money in the hands of the city treasurer, except money raised for the payment of interest or principal on bonds, mortgages, mortgage certificates, or similar instruments of indebtedness.
A city under this subsection is not required to sell the bonds provided for in the initial resolution of the common council authorizing the issuance of the bonds until the comptroller deems it necessary to replace all or part of the money paid out of the treasury, or to meet maturing obligations of the city on a contract entered into under this subsection which cannot be paid out of the general treasury.
If the comptroller deems it necessary to sell all or part of the bonds under this subsection, the comptroller shall so advise the commissioners of the public debt, in writing, specifying how many of the bonds it will be necessary to sell, and the reason therefor, and the commissioners shall sell the number of bonds specified by the comptroller.
If a contract is entered into, or if an obligation is incurred in anticipation of the sale of bonds for a purpose related to the contract or obligation, the commissioners shall sell as many bonds as necessary to replace the money taken from the treasury, and to meet the obligations on any contracts which have matured or may mature at any time in the future. The sale of bonds under this subdivision may not be later than 3 years after the date of the bonds.
If any bonds have been provided for in the budget of any fiscal year, and if the common council during the fiscal year authorizes the sale of the bonds, but all or part of the bonds are not sold during such year, the bonds may be sold during the ensuing fiscal year even if there is no provision for the unsold bonds in the budget of the ensuing fiscal year.
The common council of a 1st class city may, by a majority vote, appropriate money in the budget and levy taxes for any purpose for which bonds may be lawfully issued by the city. Such taxes shall be in addition to all other taxes which the city is authorized by law to levy.
If the common council of a 1st class city provides in the budget of any year for the issuance of bonds for any lawful purpose, the common council of the city may, in lieu of issuing bonds for such purpose, levy a tax in the year for any such purpose, for all or part of the amount. Such tax shall be in addition to all other taxes which the city is authorized by law to levy. A decision to levy a tax under this paragraph shall be made by resolution passed at a regular meeting of the common council by at least a three-fourths vote of all the members of the council-elect. No contract may be entered into or any obligation incurred for the purpose specified in the resolution, unless a tax is levied sufficient to pay the whole contract price.
Money raised by levy of taxes in lieu of bond issues under pars. (b)
shall be governed by laws relating to the proceeds of bonds insofar as such laws may be applicable. If the purpose for which the taxes were levied is accomplished or completed, any unexpended portion of the moneys raised by the taxes shall become a part of the general revenues of the city.
(7) Attorney's opinion on bond issue.
In any municipality the officers charged with the negotiation and sale of its municipal obligations may employ an attorney whose opinion, in their judgment, will be accepted by buyers thereof as to the legality of municipal obligations issued by the municipality to pass upon the legality of any municipal obligations issued by the municipality and pay a reasonable compensation therefor.
(9) Accounting for and cancellation of coupons and other municipal obligations. 67.10(9)(a)
Any municipality issuing municipal obligations may account for and cancel coupons or other municipal obligations as provided under this subsection. The municipality shall keep in a separate book, provided for the purpose, an accurate description of every municipal obligation issued, specifying its number, date, purpose, amount, rate of interest, when payable, and the coupons attached and shall enter therewith a statement of the date and amount of each payment of principal or interest thereon. Every coupon or other municipal obligation paid or otherwise retired shall be forthwith marked “canceled" by the officer empowered to accept the instrument upon payment, may be delivered to the governing body of the municipality and may be immediately destroyed.
Any municipality, by resolution adopted by its legislative body, may use the following procedure in accounting for and canceling coupons and other municipal obligations. All coupons and other municipal obligations paid by a fiscal agent under sub. (2)
, at their maturities, shall be canceled and destroyed by the fiscal agent. The fiscal agent shall periodically deliver a certificate to such effect to the municipality. A municipality following this procedure which has a treasurer or other designated officer or agent who is also a paying agent for outstanding coupons or other municipal obligations or which has more than one fiscal agent may arrange for the delivery of canceled coupons and other municipal obligations to a designated fiscal agent for the purpose of having the coupons and other municipal obligations destroyed. The designated fiscal agent shall periodically furnish and deliver to the municipality a certificate evidencing the destruction of the coupons and other municipal obligations. Any municipality, prior to authorizing the fiscal agent to cancel and destroy coupons and other municipal obligations, shall enter into an agreement with the fiscal agent providing for such cancellation and destruction. The local governing body of any municipality operating under this paragraph may establish rules or procedures it finds appropriate to carry out this provision effectively.
Legislative Council Note, 1979
: In chapter 385, laws of 1925
, the legislature withdrew s. 67.10 (6) from the statutes. Section 67.10 (6) is amended to reflect current statutory drafting practices, without any intention of making substantive changes in the law. In section 26 of this act, it is declared that s. 67.10 (6) shall be printed in future editions of the statutes. [Bill 458-A]
Debt amortization in 1st class cities. 67.101(1)(1)
In this section “amortization fund" means the public debt amortization fund established under this section and “commission" means the public debt commission created under section 5
of chapter 87, laws of 1861
. In every 1st class city, however incorporated and indebted on account of outstanding municipal bonds, a fund separate and distinct from every other fund and designated as the “Public Debt Amortization Fund" is established. Sources of the fund shall be:
All interest on moneys in the city treasury or which may accrue to the city treasury as interest earned on cash advanced for funding street improvements or delayed special assessments.
Beginning on January 1, 1973, except interest which is received by the city as a part of the aggregate amounts from the sale of capital assets, one-third of all interest money received by the city treasury on any invested city funds and one-third of all interest received by the city treasury on any other funds to the interest of which the city is entitled including one-third of all interest received on delinquent personal property taxes.
All other moneys from any source as the common council may by resolution by a two-thirds vote direct to be paid into the fund.
Moneys received by gift or bequest to the fund, except that as a condition precedent to the acceptance of any such gift or bequest, the city shall enter into a contract to be executed by the proper city officers and custodians of the fund with the donor of such gift, or the heirs of any testator making such bequest. In the contract the city and the custodians of the fund shall in consideration of the gift or bequest bind themselves and their successors in office to keep the fund intact forever, except that the fund may be used as provided under this section. The contract shall be for the express benefit of the donor, the donor's heirs and assigns, the heirs and assigns of the testator, and every taxpayer in the city.
The proper city officers shall segregate annually from the general fund and other funds of the city the moneys under sub. (1) (a)
and credit the moneys to the amortization fund.
The amortization fund may not be considered an offset to the constitutional debt limit.
The commission shall be custodian of the amortization fund subject to the provisions of this chapter.
All necessary work incident to the administration of the amortization fund shall be done by the city comptroller's office.
Expenses incident to the administration of the amortization fund shall be paid from the amortization fund.
The secretary of the commission shall keep a record of all proceedings relating to the amortization fund, and an accurate account of transactions, investments, earnings and expenditures and shall make a report annually on or about September 30 of each year to the common council, and shall permit examination of the accounts and records by any person.
The amortization fund shall be audited annually as part of the annual independent audit of the city's financial records. The commission shall provide annually an independent certified audit of the amortization fund.
The commission shall, when necessary, demand and enforce by proper proceeding the appropriation, segregation and payment of any amortization moneys due under this section.
Disbursements, investments, sale or transfer of securities in the amortization fund shall be by resolution of the commission by majority vote on checks signed by the chairperson of the commission and the city treasurer and countersigned by the city comptroller.
The commission shall cause the proper officer to invest the amortization fund or part thereof as it accrues in any of the following:
Bonds or securities or other evidences of indebtedness of the United States.
Bonds or securities of any instrumentality of the United States or agency thereof if the indebtedness and interest are guaranteed by the United States either primarily or secondarily.
Bonds which are the general obligations of cities or other municipal subdivisions of this state after the bonds have been approved as to the regularity of their issue by the city attorney of the city.
Tax certificates of the city or of the county in which the city is located.
Securities of the city whether a direct obligation thereof or not secured by such tax certificates.
The commission shall cause the proper officer to sell, dispose of, or exchange securities in which the amortization fund is invested and to reinvest the proceeds thereof in any other security enumerated under par. (a)
. If the investment is in tax certificates of the city or county, the city treasurer, commissioner of assessments and such other city officers and employees as the commission may require for the prudent selection, protection and enforcement of the investment shall serve the commission. The time limitations for all actions, proceedings and applications for tax deeds upon such certificates shall be the same as the time limitations applicable to certificates owned or held by the city.
All interest earned by the amortization fund on its investments shall, when it accrues, be added to the fund to augment the fund for the purposes for which the fund is provided.
If the total of principal and accrued interest in the amortization fund is substantially equal to the outstanding general obligation bonds or notes of the city, the fund shall be applied to pay the interest on any outstanding general obligation bonds or notes of the city, and to meet the annual payments on the principal of the debt until maturity thereof. The commission may at any time apply the fund to pay interest on and principal of, or to acquire for cancellation, general obligation bonds or notes of the city except that:
The amount of the fund applied may not exceed in any one year 40 percent of the balance in the fund on the preceding December 31.
The prices of the acquired bonds or notes may not exceed principal plus accrued interest to date of maturity.
The commission may not decrease the fund below $2,000,000 as a result of purchases and cancellations under this subsection.
Nothing in this section may be construed to amend, abolish or take the place of any other sinking fund provided by statute.
Legislative Council Note, 1979:
In chapter 385, laws of 1925
, the legislature withdrew s. 67.101 from the statutes. Section 67.101 is amended to reflect current statutory drafting practices, without any intention of making substantive changes in the law. In section 26 of this act, it is declared that s. 67.101 shall be printed in future editions of the statutes. [Bill 458-A]
Debt service fund. 67.11(1)(1)
Each municipality that issues municipal obligations under this chapter, except obligations issued under s. 67.12 (1)
, shall establish and maintain a debt service fund in accordance with generally accepted accounting principles. The fund may include a separate account for each outstanding municipal obligation issue. Revenues from the following sources shall be recorded to the fund accounts as appropriate:
All moneys accruing to the borrowed money fund prescribed by s. 67.10 (3)
which at any stage are not needed and which obviously thereafter cannot be needed for the purpose for which the money was borrowed.
The premium, if any, for which the municipal obligations have been sold above par value and accrued interest.
Such further sums raised by taxation or otherwise, as may be necessary to make all interest and principal payments due in any year. The levying and collection of the taxes or other revenues are authorized; but the governing body may, in its discretion, levy and collect larger sums than the sums so authorized, in order to speed the payment of municipal obligations.
Debt service for municipal obligations issued under this chapter shall be paid from the appropriate debt service fund account created in sub. (1)
. All investments shall mature in time to make required debt service payments. If invested, the funds to provide for debt service payments due prior to the scheduled receipt of taxes from the next succeeding tax levy shall be invested in direct obligations of the federal government or, if authorized under s. 25.50
, in the local government pooled-investment fund under that section. Thereafter, any balance in an account created in sub. (1)
may be loaned or invested under the direction of the municipality's governing body as follows:
In any outstanding municipal obligations for the payment of which the debt service fund is required, at any price not exceeding the principal, accrued interest and a premium not to exceed 3 years' interest on the municipal obligations. These municipal obligations, when purchased, shall immediately have written on the face thereof a statement, signed by an officer of the municipality, that they have been taken up and cannot again be negotiated or made obligatory; and all of these municipal obligations shall be deemed paid and shall be immediately canceled.
In any bonds or securities issued under the authority of such municipality, whether the same create a general municipal liability or a liability of the property owners of such municipality for special improvements made therein.
In the local government pooled-investment fund, as defined in, and subject to the procedures in, s. 25.50
Investments and earnings under sub. (2)
continue a part of the debt service fund account for each issue. The obligations representing these investments may be sold or hypothecated by the governing body at any time, but the money received shall remain, until used, a part of the debt service fund account for each issue. All payments by the municipality of principal or interest of obligations representing investments under sub. (2)
shall be paid into debt service fund accounts, and, for the purpose of making these payments, the municipality shall levy every tax that it would be legally obligated to levy if the municipal obligations were still outstanding in the hands of purchasers and had not been purchased as an investment.
Money shall not be withdrawn from a debt service fund account and appropriated to any purpose other than the purpose for which the account was instituted until that purpose has been accomplished.
Any balance in any debt service fund account after all of the municipal obligations for the payment of which the account was instituted have been paid and canceled, and after all investments under sub. (2) (b)
have been finally disposed of or realized upon, shall be carried into the general fund of the municipal treasury unless transferred as directed by the municipality's governing body.
Under the facts of the case, when a city created a sinking fund to retire school bonds, and a city school district was reorganized into a financially independent joint school district, surplus moneys in the fund were non-apportionable assets of the district. Joint School Dist. No. 1 of Chilton v. City of Chilton, 78 Wis. 2d 52
, 253 N.W.2d 879
Temporary borrowing and borrowing on promissory notes. 67.12(1)(1)
Borrowing in anticipation of revenues. 67.12(1)(a)(a)
Except for school districts and technical college districts, any municipality that becomes entitled to receive federal or state aids, taxes levied or other deferred payments may, in the same fiscal year it is entitled to receive the payments, issue municipal obligations in anticipation of receiving the payments. The municipal obligations issued under this paragraph shall not exceed 60 percent of the municipality's total actual and anticipated receipts in that fiscal year and shall be repaid no later than 18 months after the first day of that fiscal year.
Any municipality may issue municipal obligations in anticipation of receiving proceeds from clean water fund loans or grants for which the municipality has received a notice of financial assistance commitment under s. 281.58 (15)
, from bonds or notes the municipality has authorized or has covenanted to issue under this chapter or from grants that are committed to the municipality. Any municipal obligation issued under this subdivision may be refunded one or more times. Such obligation and any refundings thereof shall be repaid within 5 years after the original date of the original obligation.
Any municipality may issue municipal obligations in anticipation of receiving proceeds from brownfields revolving loan program loans or grants under the program described in s. 292.72
if the municipality has received written notification from the department of natural resources that the department intends to distribute such proceeds to the municipality. The obligation shall be repaid within 10 years after the original date of the obligation, except that the obligation may be refunded one or more times. Any refundings shall be repaid within 20 years after the original date of the original obligation.
Any municipality that issues a municipal obligation under this subsection shall adopt a resolution indicating the amount and purpose of the obligation and the anticipated revenue to secure the obligation and may pledge or assign all or portions of the revenue due and not yet paid as security for repayment of the obligations. Municipal obligations issued under this subsection shall be executed as provided in s. 67.08 (1)
, may be registered under s. 67.09
, and do not constitute an indebtedness for the purpose of determining the municipality's constitutional debt limitation.
(8) Temporary borrowing by school board. 67.12(8)(a)(a)
The school board of any common, union high school or unified school district may:
After the tax for operation and maintenance of the schools for the current school year has been voted, borrow money as needed to meet the immediate expenses of operating and maintaining the public instruction in the school district during the current school year. No such loan may extend beyond November 1 of the following school year.
In June prior to voting an annual tax for the operation and maintenance of the schools for the subsequent school year, and in July and August prior to voting an annual tax for the operation and maintenance of the schools for the current school year, borrow money as needed to meet the immediate expenses of operating and maintaining the public instruction in the school district from July 1 to the last working day in October. The school board may borrow money under this subdivision only upon a recorded resolution adopted by a two-thirds vote of its members. The resolution shall levy an irrepealable tax sufficient in amount to pay the principal of the loan and the interest thereon as they become due and payable. If the borrowing occurs in June, the loan shall be repaid on or before November 1 of the 2nd school year commencing after the date of the loan. If the borrowing occurs in July or August, the loan shall be repaid on or before November 1 of the school year commencing after the date of the loan.