What is the role of an Estoppel Statement in a bond ordinance?

An Estoppel Statement serves an important function in the context of a bond ordinance by providing a safeguard for potential investors. When a bond ordinance is published, it includes an Estoppel Statement that effectively allows for a period of time during which any challenges to the ordinance can be raised. This is significant because it establishes an official timeframe—specifically, 20 days from the date of publication—during which the ordinance is subject to legal scrutiny.

After this 20-day period, the bond ordinance is considered final and binding, thereby protecting the municipality from future challenges or objections that could delay or invalidate the issuance of bonds. This helps to ensure that the municipality can proceed with the intended financing without the risk of subsequent legal disputes related to the ordinance.

The other options do not accurately reflect the procedural nature of an Estoppel Statement in bond ordinances. For instance, stating that an Estoppel Statement becomes effective immediately upon publication overlooks the necessary waiting period, while claiming it has no effect on bond sales disregards its role in providing legal certainty for investors. Similarly, the idea that it must be approved by the municipal court misrepresents the function of an Estoppel Statement, as it is a part of the publication process rather than a judicial approval requirement.