Virginia Code Title 21. Drainage, Soil Conservation, Sanitation and Public Facilities Districts § 21-127.1. Borrowing in anticipation of bond issue

(a) In anticipation of the issuance of bonds under the provisions of this chapter and of the receipt of the proceeds of sale of such bonds, the governing body may on behalf of the sanitary district borrow money for the purpose for which such bonds have been authorized and within the maximum authorized amount of the bond issue.  Each such loan shall mature and be paid within two years from the date of its original issue;  provided, that on or after such maturity, any loan now outstanding or hereafter made may be extended from time to time, provided, further, that no such extension shall mature and be paid later than five years from the date of the original issue of said loan.  The governing body may, in its discretion, retire any such loans by means of current revenues, special assessments, or other funds, in lieu of retiring them by means of bonds;  provided that the maximum amount of bonds that has been authorized shall be reduced by the amount of such loans retired in such manner.

(b) Negotiable notes or other obligations shall be issued for all moneys borrowed under subsection (a).  Such notes or other obligations may be renewed from time to time and money may be borrowed upon notes or other obligations from time to time for the payment of any indebtedness evidenced thereby, but all such notes or other obligations shall mature within the time limited by said subsection (a).  The issuance of such notes or other obligations and other details thereof shall be governed by the provisions of this chapter with respect to bonds insofar as the same may be applicable.

(c) All such notes or other obligations heretofore issued on behalf of a sanitary district and proceedings had in connection therewith which conform to this section are hereby ratified, validated and confirmed and declared to be legal and as fully binding obligations as if issued under this section.