Bakersfield Municipal Code Ch. 3.44 Financing of the Rehabilitation of Historical Properties

Sections:

I. General Provisions

3.44.010 Findings. 3.44.020 Definitions.

II. Power and Purposes

3.44.030 Powers. 3.44.040 Nonoperation. 3.44.050 Applications for financing. 3.44.060 Acceptance of applications.

III. Bonds

3.44.070 Authorization. 3.44.080 Issuance of bonds. 3.44.090 Terms of bonds. 3.44.100 Trust agreement. 3.44.110 Personal liability. 3.44.120 Refunding bonds. 3.44.130 Repayment of bonds.

IV. Financing of Rehabilitation

3.44.140 Authority to assist rehabilitation. 3.44.150 Loan agreements. 3.44.160 Trust funds.

V. Miscellaneous

3.44.170 Liberal construction. 3.44.180 Supplemental and additional powers. 3.44.190 Actions to determine validity of bonds and proceedings. 3.44.200 Amendment of chapter.

I. General Provisions

Each of the recitals set out in the preliminary portion of the ordinance codified in this chapter is true and correct and the council so finds and determines. (Ord. 2675 § I(1), 1981)

Unless the context otherwise requires, the following definitions shall govern the construction of this chapter:

A. Administrative expenses means the reasonable and necessary direct expenses incurred by the city in the administration of the provisions of this chapter with respect to the financing of the rehabilitation of a particular historical property and the issuance of bonds in connection therewith, including without limitation, fees and expenses of paying agents, trustees, bond counsel and other professional consultants and costs of printing and advertising.

B. Bonds means any bonds, notes, interim certificates, debentures, or other obligations issued by the city pursuant to this chapter and which are payable exclusively from the revenues.

C. Costs with reference to the rehabilitation of historical property, means any or all of the following:

1. Obligations of the participating party incurred for labor and materials in connection with the
rehabilitation of historical property;

2. The cost of acquisition of any property, whether real or personal, including franchise rights and other
intangible property, and any interests therein, required for the rehabilitation of historical property;

3. The cost of demolishing, removing or relocating any building or structure, and the cost of making any
relocation assistance payments required by law;

4. The costs of construction and reconstruction of any building or structure;

5. The cost of contract bonds and of insurance of all kinds that may be required or necessary during the
course of the rehabilitation of historical property;

6. All costs of engineering, legal and consultant services, including the costs of the participating party for
surveys, estimates, plans and specifications and preliminary investigation therefor, and for supervising
construction, as well as for the performance of all other duties required by or consequent upon the
rehabilitation of historical property;

7. All costs incurred in connection with proceedings by the participating party necessary to comply with the
California Environmental Quality Act;

8. All amounts required to fund any reserve funds for bonds and any interest on bonds becoming due and
payable during a period not exceeding the period of rehabilitation of the historical property and twelve
months thereafter;

9. All administrative expenses;

10. All costs which the participating party shall be required to pay, under the terms of any contract or
contracts, for the rehabilitation of the historical property;

11. The refinancing of any existing indebtedness secured by an interest in any real property comprising any
portion of the historical property; and

12. Any sums required to reimburse the participating party for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the rehabilitation of the historical property.

D. Financing and its variants means the lending of money or any other thing of value, or the purchase of loans, for the purpose of paying any or all of the costs.

E. Historical property means any building or part thereof, structure, monument or other real property deemed of importance to the history, architecture, or culture of the city of any area thereof as determined by the council and listed on national, state or local historical registers or official inventories, such as the National Register of Historic Places and State Historical Landmarks.

F. Participating party means any person, company, corporation, partnership, firm, association or other entity or group of entities requiring financing for rehabilitation pursuant to the provisions of this chapter. No elective officer of the city shall be eligible to be a participating party under the provisions of this chapter.

G. Rehabilitation means the reconstruction, restoration, renovation or repair of the interiors or exteriors of historical property, the relocation of historical property for the purpose of restoring or preserving its historical or architectural authenticity, preventing its deterioration or destruction, continuing its use, providing for its feasible reuse, or providing for the safety of the occupants or passersby, and any acquisition and construction associated with said reconstruction, restoration, renovation, repair or relocation. Rehabilitation includes, but is not limited to, the repairing of architectural facades or ornamentation; removal of inappropriate additions or materials; replacement of facades, ornamentation or architectural elements previously removed; repairing of roofs, foundations and other essential structural elements; work done on a historical property in order to comply with rehabilitation standards; and any construction of parking facilities or other appurtenant and related improvements and facilities required by law or necessary to enable reuse of the historical property. Rehabilitation includes the purchase, acquisition, installation and restoration of fixtures, furnishings and personal property.

H. Rehabilitation standards means the applicable local or state standards for the rehabilitation of historical property.

I. Revenues means all amounts received as repayment of principal, interest, and all other charges received for, and all other income and receipts derived by, the city from the financing of historical rehabilitation, including moneys deposited in a sinking, redemption, or reserve fund or other fund to secure the bonds or to provide for the payment of the principal of, or interest on, the bonds and such other moneys as the council may, in its discretion, make available therefor. (Ord. 2675 § I(2), 1981)

II. Power and Purposes

The city is authorized and empowered:

A. To determine the location and character of any historical property and to finance the rehabilitation of such historical property by making or purchasing loans to participating parties therefor;

B. To issue bonds for the purpose of financing or otherwise assisting the rehabilitation of historical property authorized by this chapter and for the purpose of funding or refunding bonds;

C. To fix fees, charges and interest rates for financing of the rehabilitation of historical property, and to revise such fees, charges and interest rates from time to time, and to collect interest and principal on any loan made to a participating party together with such fees and charges incurred in such financing, and to contract with any person, partnership, association, corporation or public agency with respect thereto;

D. To hold deeds of trust and financing statements as security for financing of the rehabilitation of historical property and to pledge the same and any lien upon the historical property as security for repayment of bonds issued therefor;

E. To establish the terms and conditions for the financing of the rehabilitation of historical property undertaken pursuant to this chapter;

F. To require that the full amount owed on any loan for the financing of the rehabilitation of historical property pursuant to this chapter shall be due and payable upon sale or other transfer of ownership of such historical property;

G. To acquire, by deed, purchase, lease, contract, gift, devise, or otherwise, any real or personal property, structures, rights, rights-of-way, franchises, easements, deeds of trust, mortgages and other interests in property located within the state necessary or convenient for the financing of the rehabilitation of historical property, upon such terms and conditions as it deems advisable, and to lease, sell or otherwise dispose of the same in such manner as may be necessary or desirable to carry out the objects and purposes of this chapter;

H. To employ or contract for such engineering, architectural, accounting, collection, economic feasibility, or other services in connection with the servicing of loans made to participating parties, as may be necessary in the judgment of the council for the successful financing of the rehabilitation of historical property, to pay the reasonable costs of consulting engineers, architects, accountants, construction experts, and economic feasibility experts, if, in the judgment of the council, such services are necessary to the successful financing of the rehabilitation of historical property and if the city is not able to provide such services and to employ, contract for, and fix the compensation of financing consultants, bond counsel, and other advisers as may be necessary in its judgment to provide for the issuance and sale of bonds;

I. In addition to all other powers specifically granted in this chapter, to do all things necessary or convenient to carry out the purposes of this chapter. (Ord. 2675 § II(1), 1981)

The city shall not have the power to operate any historical property as a business. The city shall take no more action with respect to the historical property than is necessary to promote the public interests of the city. (Ord. 2675 § II(2), 1981)

Participating parties may apply for financing pursuant to this chapter by filing an application with the city in such form and with such person or office as shall be specified by the city manager. Applications shall set forth all information required to evaluate the financial reliability and stability of the participating party, the feasibility of the proposed rehabilitation, and to verify and assure that the property proposed to be rehabilitated constitutes a historical property within the meaning and purpose of this chapter. Among all other information, agreements and undertakings required by the city manager of the city to be contained therein, applications shall include an estimate of the maximum amount of bonds proposed to be issued, a description or itemization of the costs of the proposed rehabilitation, and an agreement to pay all administrative expenses incurred by the city for the proposed financing. (Ord. 2675 § II(3), 1981)

Upon receipt of an application containing all required information, agreements and undertakings, the council shall at such time as is deemed convenient by it review such application and any staff recommendations with respect thereto. If the council chooses to approve any application, it shall adopt a resolution in which it:

A. Finds and determines:

1. That the property proposed to be rehabilitated constitutes a historical property,

2. That the rehabilitation of said historical property will not adversely affect areas outside the boundaries of
the city or transient residents of the state, and

3. That the rehabilitation of said historical property is in the public interests of the city and constitutes a
municipal affair of the city, a valid exercise of the police powers of the city, and a public purpose in which the
city has a peculiar and unique interest; and

B. Accepts and approves such application and the participation of the city in the financing of the rehabilitation of the historical property, subject to the provisions of this chapter, the conclusion of all proceedings undertaken to consummate such financing to the satisfaction of the city, and such other matters as may be determined to be appropriate by the council. (Ord. 2675 § II(4), 1981)

III. Bonds

The city may issue its bonds for the purpose of financing or otherwise assisting the rehabilitation of historical property authorized by this chapter. Every issue of bonds shall be a special obligation of the city, payable solely from all or any part of the revenues. (Ord. 2675 § III(1), 1981)

The bonds may be issued as serial bonds or as term bonds, or the council, in its discretion, may issue bonds of both types. The bonds shall be authorized by resolution of the council and shall bear such date or dates, mature at such time or times, bear interest at such fixed or variable rate or rates, be payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in such manner, be payable in lawful money of the United States of America, at such place or places, and be subject to such terms of redemption as the resolution or resolutions of the council may provide. The bonds may be sold at either a public or private sale and for such prices as the council shall determine. Pending preparation of the definitive bonds, the city may issue interim receipts, certificates, or temporary bonds, which shall be exchanged for such definitive bonds. (Ord. 2675 § III(2), 1981)

Any resolution or resolutions authorizing any bonds or any issue of bonds may contain provisions respecting any of the following terms and conditions, which shall be a part of the contract with the holders of the bonds:

A. The pledge of all or any part of the revenues, subject to such agreements with bondholders as may then exist;

B. The interest and principal to be received and other charges to be charged and the amounts to be raised each year thereby, and the use and disposition of the revenues;

C. The setting aside of reserves or sinking funds and the regulation and disposition thereof;

D. Limitations on the purposes to which the proceeds of a sale of any issue of bonds, then or thereafter issued, may be applied, and pledging such proceeds to secure the payment of the bonds or any issue of bonds;

E. Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds;

F. The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the amount of bonds the holders of which must consent thereto, and the manner in which such consent may be given;

G. Specification of the acts or omissions to act which shall constitute a default in the duties of the city to holders of its obligations, and providing the rights and remedies of such holders in the event of default;

H. The mortgaging of land, improvements, or other assets owned by a participating party for the purpose of securing the bondholders;

I. Such other terms and conditions pertaining to the issuance of the bonds as are deemed advisable by the council. (Ord. 2675 § III(3), 1981)

In the discretion of the council, any bonds issued under the provisions of this chapter may be secured by a trust agreement by and between the city and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust agreement or the resolution providing for the issuance of such bonds may pledge or assign the revenues to be received or proceeds of any contract or contracts pledged, and may convey or mortgage any property. Such trust agreement or resolution providing for the issuance of bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including such provisions as may be included in any resolution or resolutions of the council authorizing the issuance of bonds pursuant to Section 3.44.090. Any bank or trust company doing business under the laws of the state which may act as depositary of the proceeds of bonds or of revenues or other moneys may furnish such indemnity bonds or pledge such securities as may be required by the city. Any such trust agreement may set forth the rights and remedies of the bondholders and of the trustee or trustees, and may restrict the individual right of action by bondholders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the council may deem reasonable and proper for the security of the bondholders. (Ord. 2675 § III(4), 1981)

Neither the members of the council nor any person executing the bonds shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the issuance thereof. (Ord. 2675 § III(5), 1981)

The council may provide for the issuance of bonds all or any portion of which is to be used for the purpose of refunding outstanding bonds, including the payment of the principal thereof and interest and redemption premiums, if any, thereon. The proceeds of bonds issued to refund any outstanding bonds may, in the discretion of the council, be applied to the retirement of such outstanding bonds at maturity, or the redemption (on any redemption date) or purchase of such outstanding bonds prior to maturity, upon such terms and subject to such conditions as the council shall deem advisable. (Ord. 2675 § III(6), 1981)

Revenues shall be the sole source of funds pledged by the city for repayment of bonds issued hereunder. Bonds issued hereunder shall not be deemed to constitute a debt or liability of the city or a pledge of the faith and credit of the city but shall be payable solely from revenues. All bonds shall contain on the face thereof a statement to the following effect:

Neither the faith and credit nor the taxing power of the City of Bakersfield is pledged to the payment of the principal of or interest on this Bond.

The issuance of bonds shall not directly, indirectly or contingently obligate the council to levy or pledge any form of taxation or to make any appropriation for their payment. (Ord. 2675 § III(7), 1981)

IV. Financing of Rehabilitation

The city may provide financing to any participating party for the rehabilitation of any historical property, or otherwise assist the rehabilitation of any historical property pursuant to this chapter. (Ord. 2675 § IV(1), 1981)

The city may enter into loan agreements with any participating party with respect to the financing of the rehabilitation of any historical property, which agreements may provide that the architectural and engineering design of the rehabilitated historical property shall be subject to such standards as may be established by the city and that the rehabilitation of any historical property shall be subject to such supervision as the city deems necessary. The terms and conditions of such loan agreements may be as mutually agreed upon, but shall not be inconsistent with the provisions of this chapter. Any such loan agreement may provide the means or methods by which any deed of trust or mortgage taken by the city shall be discharged, and it shall contain a covenant by the participating party to complete the rehabilitation of the historical property whether or not bond proceeds are sufficient therefor, and such other terms and conditions as the city may require. The city is authorized to fix, revise, charge, and collect interest and principal and all other rates, fees, and charges with respect to the financing of the rehabilitation of historical property. Such rates, fees, charges, and interest shall be fixed and adjusted so that the aggregate of such rates, fees, charges, and interest will provide funds sufficient with other revenues and moneys which it is anticipated will be available therefor, if any, to do all of the following:

A. Pay the principal of and interest on outstanding bonds issued to finance such project, as the same shall become due and payable;

B. Create and maintain reserves required or provided for in any resolution authorizing such bonds. A sufficient amount of the revenues may be set aside at such regular intervals as may be provided by the resolution or trust agreement in a sinking or other similar fund, which shall be pledged to, and charged with, the payment of the principal of and interest on such bonds as the same shall become due, and the redemption price of the purchase price of bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time the pledge is made. The rates, fees, interest, and other charges, revenues, or moneys so pledged and thereafter received by the city shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against the city, irrespective of whether such parties have notice thereof. Neither the resolution, the trust agreement nor any loan agreement by which a pledge is created need be filed or recorded except in the records of the city. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the resolution or trust agreement authorizing the issuance of such bonds.

C. Pay administrative expenses to the extent not paid from proceeds of bonds. (Ord. 2675 § IV(2), 1981)

All moneys received pursuant to the provisions of this chapter, whether proceeds from the sale of bonds or revenues, shall be deemed to be trust funds to be held and applied solely for the purposes of this chapter. Any bank or trust company in which such moneys are deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes specified in this chapter, subject to the terms of the resolution or trust agreement authorizing the bonds. (Ord. 2675 § IV(3), 1981)

V. Miscellaneous

This chapter, being necessary for the health, welfare and safety of the city and its residents, shall be liberally construed to effect its purposes. Furthermore, the council hereby declares that this chapter is an exercise of the power granted to the city by the city Charter and the Constitution of the state and is an exercise by the city of its powers as to municipal affairs and its police powers, and this chapter shall be liberally construed to uphold its validity under the laws of the state. (Ord. 2675 § V(1), 1981)

This chapter shall be deemed to provide a complete, additional, and alternative method for doing the things authorized thereby, and shall be regarded as supplemental and additional to the powers conferred by other laws. The issuance of bonds under the provisions of this chapter need not comply with the requirements of any other law applicable to the issuance of bonds. (Ord. 2675 § V(2), 1981)

An action may be brought pursuant to Chapter 9 (commencing with Section 860 of Title 10 of Part 2 of the Code of Civil Procedure) to determine the validity of bonds and the legality and validity of all proceedings previously taken and, as provided in the bond resolution, proposed to be taken for the authorization, issuance, sale, and delivery of the bonds and for the payment of the principal thereof and interest thereon. (Ord. 2675 § V(3), 1981)

This chapter shall not be amended so as to affect adversely the rights of the holders of any outstanding bonds theretofore issued hereunder, or the rights of participating parties with respect to whom projects have theretofore been financed hereunder, without the written consent of such bondholders and participating parties; provided, however, that this chapter may be amended at any time:

A. To make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision herein contained, as the city may deem necessary or desirable; or

B. If such amendment does not materially impair or adversely affect the interests of any such bondholder or participating party in the opinion of the council; or

C. If such amendments apply solely to bonds not theretofore issued hereunder or participating parties with respect to whom projects have not theretofore been financed hereunder. (Ord. 2675 § V(4), 1981)