A.R.S. § 48-3128: Issuance of warrants or promissory notes for loans

A. The board of directors may borrow money for necessary district expenses, obligations and expenditures upon the security of and not exceeding the amount of district taxes then levied and assessed and as evidence of the loan may issue and deliver district warrants drawn upon the district fund or funds levied and assessed for paying the expense items, obligations or expenditures for which such money is borrowed. No borrowing shall be made for any purpose in excess of the taxes then levied and assessed for such purpose.

B. The board of directors may, in lieu of warrants, deliver promissory notes as evidence of loans. The notes may be secured by collateral pledge of district assessments or tax monies as collected and not otherwise appropriated. District notes shall be payable at the district office or at a bank or place designated therein, but shall not be receivable in the payment of taxes.