A district may, by resolution of its board adopted at or prior to the time of issuing any bonds then proposed to be issued, provide for the call and redemption prior to their fixed maturity of any of the bonds.
General Bond ProvisionsCallable Bonds
Section § 25300
This law allows a district board to decide in advance that bonds they plan to issue can be repaid early. This decision must be made by passing a resolution at or before the time the bonds are issued.
district board bond issuance early redemption
Section § 25301
This law explains how callable bonds can be redeemed or paid off early by using specific methods approved in a resolution. They can be redeemed in the order determined by the resolution, either numerically or by random selection (by lot). The redemption can happen on any date when interest is due before the bonds officially mature. Moreover, the bonds can be redeemed at their original value plus interest, or under specific terms laid out in the resolution.
Callable bonds may be redeemed in addition to other methods permitted in the following manner:
(a)CA Water Code § 25301(a) In numerical order or by lot as prescribed in the resolution.
(b)CA Water Code § 25301(b) On any interest payment date prior to their fixed maturity.
(c)CA Water Code § 25301(c) At not exceeding their par value and accrued interest or on the terms provided in the resolution.
callable bonds redemption numerical order
Section § 25302
This law requires that when bonds are being called for redemption, a notice must be published in a widely read local newspaper. The publication should appear once a week for three weeks in a row in a county where the office is located.
Notice designating the bonds called for redemption shall be published once a week for three successive weeks in a newspaper of general circulation printed and published in the office county.
bond redemption notice publication newspaper announcement
Section § 25303
This law requires that a redemption notice must be published at least 30 days and no more than 90 days before the redemption date.
The first publication of the redemption notice shall be not less than 30 days nor more than 90 days prior to the date fixed for redemption.
redemption notice publication timeframe 30-90 days
Section § 25304
If the district has the money ready to pay off both the main amount and interest of certain bonds by their due date, no more interest will accumulate on those bonds after that date.
If on the date fixed for redemption the district has provided funds available for the payment of the principal and interest of the bonds called, interest on them ceases.
bond redemption payment of principal payment of interest
