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Ordinance 2774CITY OF ALAEDA ORDINANCE NO. 2774 New Series PROVIDING PROCEDURES FOR THE ISSUANCE AND SALE OF REFUNING IMPROVEMENT BONDS BY THE CITY OF ALAEDA INCLUDING GENERAL PROVISIONS AN DEFINITIONS, POWERS PROCEDURES RELATING TO SUCH BONDS WHEREA, the City of Alameda (the "City ) has previously issued, and may from time to time hereafter issue, its improvement bonds under and pursuant to the Improvement Bond Act of 1915, constituting Division 10 (commending with Section 8500) of the Streets and Highways Code of theState of California (the "Act" ), for the purpose of financing infrastructure improvements of benefit to properties within duly designated assessment districts in the City formed pursuant to the Act; and WHEREAS, the City is a charter city duly organized and existing under a charter pursuant to which the City has the right and power to make and e force all laws and regulations in respect to municipal affairs and certain other matters in accordance with and as more particularly provided in Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 1-2 (D) of Article I of the Charter of the City; and WHEREAS, the City wishes at this time to adopt this Ordinance pursuant to its powers as a charter city, for the purpose of prescribing the procedures under which the City is authorized to issue its refunding u improvement bonds for the. purpose of refunding outstanding bonds issued pursuant to the Act, which procedures shall be alternative and in addition to the procedures applicable to the City under the general laws of the State of California; NOW, THEREFORE, BE IT ORDAINED by the Council of Alameda, and upon the affirmative vote of four members Council that: the City of of the Ci ty Section 1. Short Title. This Ordinance shall be known and may be ci ted as the "City of Alameda Refunding Improvement Bond Law " . Section 2. Findings and Determinations. The City Council of Alameda does hereby find, determine and declare that: (a) the City is a municipal corporation and charter city duly organized and existing under a charter pursuant to which the City has the right and power to make and enforce all laws and regulations in respect to municipal affairs and certain other matters in accordance with and as more particularly provided in Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 1-2 (D) of Article Iof the Charter of the Ci ty; and (b) the Ci ty Council , acting under and pursuant to the powers reserved to the Ci ty under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and Section 1-2 (D) of Article I of the Charter of the City, hereby finds and determines that the public interest and necessity require the establishment by this procedural ordinance of a procedure for the issuance of refunding improvement bonds by the City for the purpose of refunding outstanding improvement bonds of the City (including improvement bonds previously refunded) issued pursuant to the Act, all as provided herein. Section 3. Municipal and State Affairs; Applicability of Laws. This Ordinance is adopted pursuant to Section 1-2 (D) of Article I of the Charter of the City of Alameda. In proceedings had pursuant to this Ordinance which are a municipal affair, any general laws referred to in this Ordinance are deemed a part of this Ordinance. In the event that any proceeding had pursuant to this Ordinance shall be adjudged a state affair, it is declared to be the intention that the proceedings were had pursuant to any applicable general law or laws. This Ordinance providesan alternative method of refunding bonds issued for certain public capital facilities pursuant to the Act. The provisions of this Ordinance shall not affect or limit any other provisions of law authorizing or providing for the refunding of bonds issued for these purposes. Section 4. Conflicting provisions; Severability. Any provision in this Ordinance which conflicts with any general law or act shall prevail over the other such provision in connection with any proceedings taken pursuant to this Ordinance. . In the event any portion of this Ordinanceshall be declared illegal , unenforceable, or unconstitutional , suchprovision. shall be deemed severable from the rest of the provisions of this Ordinance. Section 5. Defined Terms. The following terms shall have the following respective meanings when used in this Ordinance. Any terms used herein and not otherwise defined shall have the meanings given such terms in the Act. Act means the Improvement Bond Act of 1915,constituting Division 10 (commencing with Section 8500) of the Streets and Highways Code of the State of California, amended from time to time. Assessment District " means, with respect to any issue of Bonds to be refunded under this Ordinance, the assessment district formed under applicable law with respect to such issue of Bonds. Bonds " means any bonds issued and outstanding under the Act or under this Ordinance, which are refunded under this Ordinance. City Clerk " means the person performing the functions of the City Clerk of the City. City Council " means the City Council of the City, as the legislative body of the City. Costs of Issuance " means any or all of the following expenses and costs which are incurred in connection with the issuance of Refunding Bonds and the refunding of any Bonds under this Ordinance: (a) All expenses incident to the calling, retiring, or paying of the Bonds to be refunded and tothe issuance of Refunding Bonds, including but not limited to fees and expenses of bond counsel, financial consultants, underwiters, certified public accountants, and rating agencies, printing and advertising costs, City administrative expenses, and the charges of any escrow agent or trustee in connection with the issuanceof the Refunding Bonds or in connection with the redemption or retirement of the Bonds to be refunded. (b) Interest upon the Refunding Bonds from the September 2 next preceding the date of sale thereof to not later than the September 2 next succeeding two years from such date. (c) Any accrued and unpaid interest on the Bonds to be refunded. (d) Any premium necessary in retiring of the Bonds to be refunded. the calling (e)Any amount that the City pays or transfers or has previously paid or transferred, either from a special reserve fund or from surplus funds, into the redemption fund securing the bonds to be refunded and the penalties and interest thereon , if the amounts and the penalties and interest thereon are included in and limited to the particular reassessments levied uponthose subdivisions of land securing the original assessment installments which are delinquent and for which the payments or transfers are made. Federal Securities " means those securities described in Sections 1360 and 1360.1 of the Financial Code of the State ofCalifornia, including but not limited to United States Treasury notes, bonds, bills, or certificates of indebtedness, or obligations for which the faith and credit of the United States are pledged for the payment of principal and interest. Finance Director means the person performing functions of the Director of Finance of the City. the Ordinance " means the provisions of this Ordinance, as amended from time to time. Reassessment Report " means the report prepared with respect to the issuance of any issue of Refunding Bonds and the levy of any reassessments under this Ordinance,- pursuant to Section 10 of this Ordinance. Refunding Bonds " means any issue of Refunding Bonds authorized and issued by the City under this Ordinance. Treasurer " means the person performing the functions of the Treasurer of the Ci ty . Section 6. Authorization to Issue Refunding Bonds. The City Council in the name and on behalf of the City may issue Refunding Bonds and refund outstanding Bonds, under and subj ect to this Ordinance, and may provide for the continuation of the liens of assessments and the levy and collection of assessments and reassessments to pay the Refunding Bonds. Section 7. Effect of Refunding on Original Bonds and Assessments. It is the intention of this Ordinance that the outstanding Bonds and the original assessments shall remain in full force and effect and securedby the original assessments until superseded and supplanted by reassessments and Refunding Bonds validly and legally issued pursuant to this Ordinance, at which time the reassessments shall become the securityfor the Refunding Bonds and the refunding escrow shall become the security for any outstanding Bonds. Section 8. Incorporation of Additional Requirements. Any actionor determination made necessary by reason of state or federal constitutional requirements or otherwise, or any action or determination which is convenient .in the making of the reassessment, or in the refunding and reassessment proceedings, which is not expressly set forth in this Ordinance is hereby authorized and the same when made shall be valid and sufficient. Section 9. Resolution of Intent. The City Council may, at any time, determine by resolution that the public interest or necessity requires the refunding of the issue of Bonds under this Ordinance, and declare its intention to refund any issue of outstanding Bonds and to levy reassessments as security for the Refunding Bonds. Section 10. Reassessment P port The resolution adop ' j by the City Council pursuant to Section 9 shall direct a qualified consultant retained or employed by the City to prepare and file with the City Clerk a Reassessment Report containing the following: (a) A schedule setting forth the unpaid principal and interest on the Bonds to be refunded and the total amounts thereof. (b) The total estimated principal amount of the reassessment and of the Refunding Bonds and the maximum interest rate thereon, together with an estimate of cost of the reassessment and of issuing the Refunding Bonds, including all costs of issuing the Refunding Bonds. (c) The auditor s record kept pursuant to Section 8682 of the Act showing the schedule of principal installments and interest on all unpaid original assessments and the total amounts thereof. For purposes of the Reassessment Report, it shall be sufficient to refer to such record on file with the Finance Director. (d) The estimated amount of each reassessment, identified by reassessment number corresponding to the reassessment number on the reassessment diagram, together with a proposed auditor s record for the reassessment prepared in the manner described in Section 8682 of the Act. (e) A reassessment diagram showing the AssessmentDistrict and the boundaries and dimensions of the subdivisions of land within the Assessment District. Eachsubdivision, including each separate condominium interest as defined in Section 783 of the Civil Code, shall be given a separate number upon the diagram. (f) The proposed disposition of amounts remaining on deposi t in any improvement fund or special reserve fund established for the Bonds to be refunded, consistent with the requirements of Section 17. When the Reassessment Report is filed with the City Clerk , the CityClerk shall present it to the City Council for consideration. The City Council may modify it in any respect. The Reassessment Report as modified shall stand as the report for the purpose of all subsequent proceedings, except that it may be confirmed, modified, or corrected as provided in this Ordinance. Section 11. Approval of Reassessment Report. If the City Council finds that all of the following conditions are satisfied, it may approve and confirm the Reassessment Report and proceed to authorize, issue, and sell Refunding Bonds: (a) That each estimated annual installment of principaland interest on the reassessment, as set forth' in the Reassessment Report, is less than the corresponding annual installment of principal and interest on the portion of the original assessment being superseded and supplanted, as set forth in the Reassessment Report, by the same percentage for subdivisions of land within the Assessment District. Any amount added to the annual installments on the reassessment due to a delinquency in payment on the original assessment need not be considered in this calculation. (b) That the number of years to maturity of all Refunding Bonds is not more than the number of years to the last maturity of the Bonds being refunded. (c) That the principal amount of the , reassessment on each subdivision of land within the Assessment District is less than the unpaid principal amount of the portion of the original assessment being superseded and supplanted by the same percentage for each subdivision of land within the Assessment District. Any amount added to a reassessment because of a delinquency in payment on the original assessment need not be considered in this calculation. Any reassessment that is approved and confirmed pursuant to this Section shall not be deemed to be an assessment within the meaning of and may be ordered without compliance with the procedural requirements of, Article XIIID of the California Constitution. Section 12. Abandonment of Proceedings. If the City Council is unable to make the findings required by Section 11, it shall abandon the proceedings for the issuance of Refunding Bonds, it being hereby declared that such findings shall be a condition precedent to the issuance of Refunding Bonds under this Ordinance. Nothing in this Ordinance is intended or shall be construed to prohibit the City from proceeding under any alternative provision of California law for the issuance of refunding bonds, in the event the City Council is unable to make such findings. Section 13. Issuance of Refunding Bonds. The City Council shall provide for the issuance of the Refunding Bonds by resolution. The Refunding Bonds shall be issued in a principal amount equal to the total principal amount of the reassessment as approved and confirmed by the City Council pursuant to Section 11. The Refunding Bonds shall represent and be secured by the reassessments and any later reassessments which may be levied or issued upon the same property in lieu of the reassessments.At the election of the City Council, Refunding Bonds may be issued pursuant to a trust agreement, fiscal agent agreement or other contract approved by resolution of the City Council. Section 14. Terms of Refunding Bonds. pursuant to this Ordinance shall comply with the Refunding. Bonds issued following requirements: (a) The registered form may determine. Refunding Bonds shall be in the fully and of the denominations as the City Council (b) The Refunding Bonds shall be dated on or after the date of the recording of the reassessment. (c) The Refunding Bonds may be subject to redemption on such dates, and at such prices which may include a redemption premium of any amount, as the City Council shall deem advisable. (d) The Director and signatures may Refunding Bonds shall be signed by the Financethe City Clerk, either or both of which be by facsimile. (e) All of the September 2 in any year. Bonds shall be later than the Bonds to be refunded Refunding Bonds shall mature on The final maturity of the Refunding September 2 of the final maturity of thereby. (f) The rate of interest on Refunding Bonds shall not exceed ten percent (10%) per annum. Such interest shall be payable on March 2 and September 2 of each year, provided that the first date for payment of interest may be any March 2 or September 2 within twelve (12) months following the date of issuance of the Refunding Bonds. Section 15. Sale of Refunding Bonds. The City Council may sell the Refunding Bonds at public or private sale, and at such price above or below the par amount thereof as shall be authorized by resolution of the City Council. Section 16. Application of Proceeds of Refunding Bonds. Proceeds of sale of the Refunding Bonds may be ap lied by the City for the purpose of paying any or all of the Costs of Issuance of the Refunding Bonds and for the purpose of funding a reserve fund for the Refunding Bonds. The remainder of such proceeds shall be deposited in escrow or trust with any bank or trust company within or without the State of California, to be held in trust and applied to pay the principal of and interest on the Bonds to be refunded, together with the principal amount of Bonds to be redeemed and the premium to be paid upon such redemption. Amounts so deposi ted in such escrow fund shall be invested in Federal Securities, the payments of principal and interest with respect to which shall be certified by a certified public accountant licensed to practice in the State of California to be sufficient, together with amounts held in cash in such escrow , to pay the principal of and interest and redemption premiums, if any, on the Bonds to be refunded as they become due or at designated dates prior to maturity (in connection with which the City Council has exercised or has obligated itself to exercise a redemption privilege on behalf of the City) . If the City Council elects to establish a special the Refunding Bonds, it shall provide for the inclusion such special reserve fund in the reassessment. reserve fund for of the amount of Section 17. Application of Prior Bond Proceeds. Any balance remaining in a special reserve fund established for the Bonds to be refunded at the time of the issuance of the Refunding Bonds shall either (a) be used to retire the Bonds to be refunded (b) be transferred to a special reserve fund established for the Refunding Bonds, or (c) be applied to pay Costs of Issuance. Any amounts remaining in the improvement fund for the Assessment District, to the extent not required to be retained therein for completion of the improvements, may be usedeither (a) as a credit upon the reassessment in the manner provided in Section 10427.1 of the Streets and Highways Code or as otherwise provided in Section 10427 of the Streets and Highways Code, (b) for the payment of Costs of Issuance, or (c) to fund a special reserve fund for the Refunding Bonds. Section 18. Security for the Refunding Bonds. Following the issuance of any Refunding Bonds pursuant to this Ordinance, the City Council shall provide for the payment of principal and interest thereon in the same manner and at the same times as it provides for payment of principal and interest on the Bonds to be refunded. The reassessments levied pursuant to this Ordinance shall be and constitute security for the payment of the Refunding Bonds in the same manner as the original unpaid assessments constituted security for the Bonds to be refunded. When Refunding Bonds are issued, the reassessments and any reassessments which may be issued thereon or in lieu thereof , together with interest thereon, shall remain and constitute a trust fund for the redemption and payment of the Refunding Bonds and ,the interest thereon. Section 19. Recording of Reassessments; Filing with Finance Director. When the reassessment, as made or as reviewed and corrected, has been confirmed by the City Council, it shall be recorded in the office of the superintendent of streets. When recorded with the superintendent of streets and the City Clerk, and upon compliance with the provisions of Division 4.(commencing with Section 3100) of the Streets and Highways Code, the reassessment shall become a lien upon the various parcels of land which are reassessed. copy of the resolution of the City Council confirming the reassessments upon the security of which the Refunding Bonds are issued shall be filed in the office of the Finance Director. The Finance Director shall keep a record in his office showing the several installments of principal and interest on the reassessments which are to be collected in each year during the term of the Refunding Bonds. Section 20. Effect of Reassessments. Except as otherwise provided in this Ordinance, assessments originally levied, and all penalties and interest accrued thereon , which are included within the reassessments shall be deemed superseded and supplanted by the reassessments. If , and to the extent that, the reassessments do not include unpaid installments of assessments originally levied and the penalties and interest thereon, the lien of the original assessments is not superseded and supplanted. For purposes of this Section, "unpaid installments means those installments which are delinquent and those which are or may be posted to the tax roll for the fiscal year during which the reassessment is confirmed. Section 21. Reassessment Lien; Priority of Lien. Reassessments and each installment thereof and the interest and penalties thereon shall be a lien against the parcels of land on which made until the same are paid, but for a period not exceeding the time within which an action might be brought on the last series of Refunding Bonds issued upon the security of the unpaid reassessments. The lien of the reassessments shall be gi ven superiority and priori ty as of the date that the original assessments became a lien upon the property reassessed. The lien ofunpaid installments of the assessments originally levied and the penalties and interest thereon , and the lien of any remaining portion ofthe original assessments not securing refunded bonds, are equal in priority to the lien of the reassessments. Section 22. Collection of Reassessments. The reassessments and interest thereon shall be collected on the assessment roll and are subj ect to reassessment, amendment, and prepayment , and are otherwise subj ect to all of the provisions of the Act in the same manner and subject to the same remedies on default and to the payment of interest and penalties on the enforcement thereof as were the original assessments which were superseded and replaced by the reassessments. For these purposes, the applicable provisions of Parts 8, 9, 10, 10.5, 11 , 11. 13, 14, and 15 of the Act are hereby referred to and incorporated hereinby reference. Alternatively, the City Council may provide, by resolution, for the direct billing and collection of the reassessments and may provide, in like manner, for the remedies on default. The City Council may, in its sole discretion, assign its interests with respect to delinquent reassessments pursuant to Section 6516.6 of the Government Code , upon such terms and conditions as the City Council may deem advisable. Unmatured installments, interest, and penalties on unpaid reassessments shall not be deemed to be within the terms of any general warranty of title as to any parcel against which a reassessment is made. In the event of a foreclosure or action to quiet title , process shall be served upon the same person or persons as in other cases of suits against the City. The purchaser , whether at a tax collector's sale or at a resale by the City in the event of the City having become the purchaser , or at a foreclosure sale by order of court, takes the property subj ect to all unpaid reassessment installments , interest, and penal ties under the same proceeding. No bond , reassessment, or installment thereof , or of the interest or penalties thereon, and no certificate of sale or deed shall be held invalid for error in the computation of the proper amount due on it if the error be found to be comparatively negligible or is found to be in favor of the owner of real property affected thereby. Section 23. Finality of Reassessments. After the reassessment has been confirmed pursuant to Section 11, it shall not be contested in any way other than at the time and in the manner specified in this Ordinance, and in any action , all findings , conclusions and determinations of the City Council which conducted the reassessment proceedings shall be conclusive in the absence of actual fraud. No defect in the form of any reassessment levied pursuant to this Ordinance and no statutory defect in any of the proceedings relating to the reassessment and refunding shall in any way invalidate any reassessment or any Refunding Bond. Section 24. Validity of Refunding Bonds and Reassessments. An action to determine the validity of a reassessment and of any Refunding Bonds issued under this Ordinance may be brought pursuant to Chapter (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure by the City Council. For that purpose, the reassessment shall be deemed to be in existence upon its confirmation. If any reassessment is held illegal or invalid in any action or proceeding upon any ground which would apply to the entire reassessment, then the unpaid Bonds andthe assessments securing such Bonds shall remain in full force and effect. No action or proceeding to set aside, cancel, avoid, annul , or correct any reassessment levied under this Ordinance , or to review any of the proceedings, acts, or determinations made in the proceedings for the reassessment and the issuance of Refunding Bonds, or to question the validity of or enjoin the collection of the reassessment or any of the reassessments therein, or to enj oin the issuance of any Refunding Bonds to represent reassessments , shall be maintained by any person, nor shall any person urge, plead or prove , the invalidity of any reassessment or any Refunding Bond in any action, unless the action is commenced within30 days from the date of adoption of the resolution providing for the issuance of the Refunding Bonds. If Refunding Bonds are invalidated or held to be illegal, all of the provisions of the Act shall apply to the original Bonds. Section 25. Non-Liability of City Council Members. No member of the City council shall be personally liable on the Refunding Bonds or be subject to any personal liability or accountability by reason of the issuance of Refunding Bonds. Section 26.Exclusive Application of Code.When proceedings are commenced under this Ordinance, only this Ordinance shall apply. Notwithstanding the foregoing sentence , a reassessment proceeding under this Ordinance may be conducted concurrently with proceedings under any other applicable reassessment law and all resolutions, notices, reportsand other documents and proceedings required by each law may consolidated into single instruments. Section 27. Miscellaneous Provisions. This Ordinance does not affect any other act or acts now existing or which may hereafter be passed covering the same subject matter, nor apply to any proceedings thereunder, but is intended to and does provide an alternative system for the refunding of Bonds. The remedies provided for the enforcement of any reassessment levied under the provisions of this Ordinance are not exclusive and additional remedies may be provided at any time. The curative clauses of this Ordinance are cumulative and each of them is to be given full force and effect. This Ordinance and all of its provisionsshall be liberally construed in order that its purposes may be made effecti ve. Section 28. Limitation on Challenges. The validity of this Ordinance shall .not be contested in any action or proceeding or defense unless such action or proceeding or defens shall have been brought or raised within thirty (30) days from the date of the approval of this Ordinance by the City Council. Unless an action or proceeding is commenced or such defense raised within said period, this Ordinance shall be held valid and in every respect legal and incontestable. Section 29. Effective Date. This ordinance shall be in full force and effect from and after the expiration of thirty (30) days from the date of its final passage. Attest: the undersigned , hereby certifY that the foregoing Ordinance was duly and regularly adopted and passed by the Council of the City of Alameda in regular meeting assembled on the 6th day of October , 1998 , by the following vote to wit: AYES:Councilmembers Daysog, DeWitt , Kerr , Lucas and President Appezzato - 5. NOES:None. ABSENT:None. ABSTENTIONS:None. IN WITNSS, WHEREOF , I have hereunto set my hand and affxed the offcial seal of said City this 7th d ay of October , 1998. 5)tM Diane Felsch , City Clerk City of Alameda