Chapter 17.08
IMPROVEMENT DISTRICTS
Sections:
17.08.020 Form, content and
interest coupons.
17.08.050 Nonliability of City.
17.08.060 Remedy of bondholders.
17.08.070 Investment for
surplus City funds.
17.08.080 Payment of City for City owned
lots.
17.08.090 Guarantee fund established.
17.08.010
Issuance Authority. a. Special assessment
district bonds to be designated by the name of the special assessment district
for which they are issued, may be authorized and issued to provide funds to pay
any part or all of the costs of improvements in any special assessment
district; provided, that such bonds shall not be issued in a total principal
amount in excess of such costs of improvement, nor shall they be issued prior
to the expiration of the time period allowed for the payment of assessments
without penalty or interest.
b. Such bonds shall be
issued pursuant to ordinance and shall be made payable on a date not sooner
than two years earlier than the date upon which the last installment of the
assessments securing such bonds becomes due and not later than three years
after the date upon which the last installment of the assessments securing such
bonds becomes due. (Ord. 80-9, 1980: prior code §13A-200.201)
17.08.020
Forms, content and interest coupons.
a.
Such bonds shall bear interest payable annually or semiannually, shall be in
such denominations as may be provided in the ordinance authorizing their
issuance, and shall be number from one upward consecutively.
b. Each bond shall:
1.
Be signed with the manual or facsimile signature of the Mayor of the City and
attested by the manual signature of its City Clerk;
2.
Shall have the seal of the City impressed or reproduced thereon;
3.
Refer to the improvement, payment for which the bonds are being issued, and the
ordinance ordering the improvement;
4.
Provide that the principal amount thereof and the interest thereon shall be
payable out of the special assessment district fund of the district or out of the
special assessment district guarantee fund of the City and not otherwise;
5.
Provide that the bondholders’ remedy in case of any nonpayment shall be
confined to the enforcement of the special assessments levied for the improvements
in such special assessment district and to such guarantee fund; and
6.
Have attached thereto interest coupons for each interest payment which coupons
may have been printed or reproduced thereon the facsimile signatures of the Mayor
and City Clerk; provided, however, that any such bond or bonds issued pursuant
to a loan contract with the United States Government or agency thereof may be
issued with privilege of registration as to principal or as to both principal
and interest. (Ord. 80-9, 1980: prior code §13A-200.202)
17.08.030
Sale. Such special
assessment district bonds may be issued to the contactor or contractors constructing
and installing the improvements in such district, or may be sold by the City at
public or private sale. The proceeds of the sale of such bonds shall be deposited
in the applicable special assessment district fund and be applied in payment of
the costs of improvement either in cash or by the redemption of warrants or
other obligations of the City issued to pay such costs. (Ord. 87-14 §2,
1987)
17.08.040
Redemption. a. The City Treasurer
may call in and redeem the principal of one or more bonds of any issue in their
inverse numerical order whenever there is sufficient money in the special
assessment district fund against which the bonds have been issued, over and above
the amount needed for the payment of current annual interest and the annual
interest next to fall due on all unpaid bonds of that issue.
b. The call shall be
made by publication of a notice thereof in a newspaper of general circulation
throughout the City as soon as practicable after the day of delinquency of any
assessment installments, and in any other manner as may be deemed necessary to
advise the holder of the bonds being called of such call.
c. The notice of call
shall state the serial number or numbers of the bonds being called, that they
will be paid on the date the next interest coupons on the same become due, and
that interest thereon will cease on such call date. (Ord.
80-9, 1980: prior code §13A-200.204).
17.08.050 Nonliability of City.
a.
Neither the holder nor the owner of any special assessment district bond, interest
coupons or warrant issued against a special assessment district fund shall have
any claim therefore against the City except for payment from the special
assessments made for the improvements for which such special assessment
district bond was issued and except for payment from the special assessment
district guarantee fund of the City. The remedy of the holder or owner of such
special assessment district bond shall be confined to the enforcement of such
assessments and to the guarantee fund. The City shall not be liable to the holder
or owner of any such bond, interest coupon or warrant for any loss to the guarantee
fund occurring in the lawful operation thereof. (Ord. 80-9,
1980: prior code §13A-200.205).
17.08.060
Remedy of bondholders. If the City fails to
pay any bonds, interest coupons or warrants issued against a special assessment
district fund or to collect promptly any assessments when due, the owner or
holder of any bond may enforce payment of the principal thereof or interest
thereon and costs of collection in a civil action in the same manner and with
the same effect as actions for the foreclosure of mortgages on real property.
Foreclosure shall be against all property on which assessments are in default.
The period for redemption shall be the same as in the case of a mortgage foreclosure
on real property. Any number of owners or holders of bonds of any single
special assessment district may join as plaintiffs, and any number of owners or
property upon which the delinquent assessments are liens may be joined as defendants
in the same suit. Such owner and holders shall also have recourse against the
special assessment district guarantee fund. (Ord. 80-9, 1980:
prior code §13A-200.206).
17.08.070
Investment for surplus City funds.
Special
assessment district bonds which are within the protection of the special
assessment district guarantee fund of the City shall be considered legal
investments for any available surplus funds of the City which now or hereafter
may be authorized by the Council to be invested in such bonds. (Ord. 80-9, 1980: prior code §13A-200-207).
17.08.080
Payment by City for City-owned lots.
Where
City-owned lots are included in a special assessment district, the City shall
levy and collect taxes sufficient to pay the assessments against the City-owned
lots when due and the full faith and credit of the City shall be pledged in
each ordinance issuing special assessment bonds to the effect that such
assessments against City-owned lots will be paid when due into the applicable special
assessment district fund. (Ord. 80-9, 1980: prior code
§13A-200.208).
17.08.090 Guarantee fund established.
a.
There is established a special assessment district guarantee fund of the
City(at times called the “guarantee fund” in this chapter) for the
purpose of guaranteeing the payment of the principal of all special assessments
bonds, interest coupons pertaining thereto, and warrants issued upon any
special assessment district funds. The money in the guarantee fund shall be kept
separate from all other money and funds of the City,
shall be held in trust for the use and purposes provided in this chapter.
b. Within five years
from the date of delivery of any special assessment fund warrants or bonds, the
City shall deposit in the guarantee fund a sum, which when added to existing
moneys in the guarantee fund, shall be not less than five percent of the then
outstanding special assessment bonds and/or warrants including the warrants or
bonds of that issue. Such deposit may be from the proceeds of an interfund loan or other funds legally available therfor. After the expiration of five years from the date
of delivery, the City shall maintain an amount of not less than five percent of
such bonds and warrants then outstanding. Any moneys paid out of the guarantee
fund to redeem special assessment district bonds, coupons pertaining thereto,
or warrants, shall be replaced by the City as soon as possible out of any
legally available sources.(Ord. 80-9, 1980: prior code
§13A-200.209).
17.08.100
Use of fund. a. Defaulted special
assessment bonds, interest coupons pertaining thereto, and special assessment
fund warrants shall be purchased out of the guarantee fund, and as between the
several issues of bonds, coupons or warrants no preference shall exist, but
they shall be purchased in the order of their presentation.
b. Whenever any sum is
paid out of the guarantee fund on account of principal or interest on a special
assessment district bond or warrant, the City as trustee of such fund shall be
subrogated to all the rights of the holder of such bond, interest coupon or
warrant so paid, and the proceeds thereof or of the underlying assessment shall
become a part of the guarantee fund.
c. All interest and
earnings derived from the investment of moneys in the guarantee fund shall be
credited to such fund.
d. If special assessment
district bonds have been issued, all moneys remaining in any special assessment
district fund or of any special assessment district fund after all costs of improvements
in such district including the redemption of all warrants and bonds of such
district have been paid, shall also be paid into the guarantee fund.
e. Should the Council,
after determining that the amount in the guarantee fund meets all required guarantee
requirements plus foreseeable future requirements, find there are excess moneys
in the guarantee fund, it may authorize transfer of the excess to the general
fund or any current expense fund of the City. (Ord. 80-9,
1980: prior code §13A-200.210).