Berkeley Municipal Code Ch. 7.64 General Obligation Bonds

A. Pursuant to its charter authority, including but not limited to Sections 51, 115 and 118, the City Council is hereby authorized to provide for the issuance of general obligation bonds in accordance with the Constitution of the State of California.

B. In particular, bonds may be issued and sold and refunded pursuant to the provisions of Chapter 4 of Division 4 of Title 4 of the Government Code, commencing with Section 43600, subject to the modifications set forth in this chapter. (Ord. 7115-NS § 1 (part), 2009)

A. "An issue of bonds" means the aggregate principal amount of all bonds authorized by a proposal approved by the Berkeley electors.

B. "Municipal improvement" includes bridges, waterworks, water rights, sewers, light and power works or plants, buildings for municipal uses, wharves, breakwaters, jetties, seawalls, schoolhouses, fire apparatus, street work, and other works, property, or structures necessary or convenient to carry out the objects, purposes, and powers of the City. "Municipal improvement" also includes the acquisition of real property for a civic center site or for any public use or uses, whether or not the improvement of said real property is part of the purposes for which the bonds are to be issued and whether or not funds for the improvement of said real property are presently available from other sources. (Ord. 7115-NS § 1 (part), 2009)

A. The City may incur indebtedness pursuant to this chapter for any municipal improvement.

B. The City Council may submit a single bond proposition covering a group of municipal improvements if they are related to each other.

C. The City may also incur indebtedness pursuant to this chapter for seismic strengthening of unreinforced buildings and other buildings. Proceeds of bonds authorized pursuant to this section may be used to make loans to public entities or owners of private buildings. Loans shall satisfy all of the following requirements:

1. Any loan used to finance seismic strengthening of a residential structure containing units rented by households specified in Section 50079.5 of the Health and Safety Code before strengthening shall be subject to a regulatory agreement which will ensure that the number of those units in the structure will not be reduced and will remain available at affordable rents pursuant to Section 50053 of the Health and Safety Code as long as any portion of the loan is unpaid.

2. All seismic strengthening financed with any loan funded pursuant to this section shall be in accordance with a plan developed for the structure by a registered civil engineer or a licensed architect, or approved by a City or City and county building official, one of whom shall certify that the work funded is necessary for seismic safety reasons, or is otherwise legally required for completion of the work or occupancy of the building. In no event shall any loan funded pursuant to this section finance the destruction of any existing building or the construction of any new building.

3. Any amount received in payment of interest on or to repay principal on any loan made pursuant to this section shall be used to pay debt service on bonds authorized pursuant to this section, or shall be used to fund additional loans for seismic strengthening, except that the provisions of this paragraph shall not apply after the bonds, including any bonds issued to refund the bonds, are fully repaid.

4. Loans made pursuant to this section shall constitute liens in favor of the City or City and county when recorded by the county recorder of the county in which the real property is located. The lien shall contain the legal description of the real property, the assessor’s parcel number, and the name of the owner of record as shown on the latest equalized assessment roll.

5. The City Council may specify the interest rate, term, and other provisions of any loan made pursuant to this section.

6. The City Council shall establish criteria, terms, and conditions to identify eligible buildings.

7. The City Council may authorize the expenditure of the proceeds of bonds authorized by this section to make loans pursuant to this section if it declares in the bond proposition that loans made from bond proceeds pursuant to this section to owners of private buildings for seismic strengthening of unreinforced buildings or other buildings constitute a public purpose resulting in a public benefit. Loans made pursuant to this section shall not be construed to be gifts of public funds in violation of Section 6 of Article XVI of the California Constitution.

8. Work on qualified historical buildings or structures shall be done in accordance with the State Historical Building Code (Part 2.7 (commencing with Section 18950) of Division 13 of the Health and Safety Code).

D. The City may also incur indebtedness pursuant to this chapter for the purpose of funding affordable local housing. The City may apply bond proceeds designated for affordable housing projects directly to acquire, rehabilitate, preserve or construct affordable housing and/or indirectly as loans, grants, or other disbursements to qualified individuals, business entities, corporations, partnerships, associations and government agencies for the acquisition, rehabilitation, preservation or construction of such affordable housing projects. Proceeds of the bonds may be used to pay or reimburse the City for the costs of City staff when they are performing work on or necessary and incidental to the bond projects.

Grants or loans made pursuant to this section shall not be construed to be gifts of public funds in violation of Section 6 of Article XVI of the California Constitution and shall satisfy all of the following requirements:

1. Any amount received in payment of interest on or to repay principal on any loan made pursuant to this section shall be used to pay debt service on bonds authorized pursuant to this section, or shall be used to fund additional loans for affordable housing, except that the provisions of this paragraph shall not apply after the bonds authorized under this chapter, including any bonds issued to refund the bonds, are fully repaid.

2. Loans made pursuant to this section may constitute liens in favor of the City. The lien shall contain the legal description of the real property, the assessor’s parcel number, and the name of the owner of record as shown on the latest equalized assessment roll.

3. The City Council may specify the interest rate, term, and other provisions of any loan made pursuant to this section.

4. The City Council shall establish criteria, terms, and conditions to identify eligible buildings.

5. Any loan used to finance affordable housing projects pursuant to this chapter shall be subject to a regulatory agreement which will govern the operation of such project as long as any portion of the loan is unpaid. (Ord. 7616-NS § 2, 2018; Ord. 7115-NS § 1 (part), 2009)

A. The City Council may initiate proceedings under this chapter by passing a resolution by a majority vote of all its members, determining that the public interest or necessity demands the acquisition, construction, or completion of any municipal improvement(s) or other work or improvement for which bond proceeds may be used, and ordering the submission of the proposition of incurring a bonded debt for the purpose set forth in said resolution to the qualified voters of the City at the next regular or special municipal election occurring not less than eighty-eight (88) days thereafter.

B. Such resolution shall state:

1. The object and purpose of incurring the indebtedness.

2. The estimated cost of the public improvements.

3. The amount of the principal of the indebtedness.

4. The rate or maximum rate of interest on the indebtedness, which shall not exceed eight percent, and need not be recited if it does not exceed four and one-half percent.

5. The date of the election.

C. The resolution may provide that the estimated cost stated therein of the public improvements includes any or all of the following:

1. Legal or other fees incidental to or connected with the authorization, issuance and sale of the bonds.

2. The costs of printing the bonds and other costs and expenses incidental to or connected with the authorization, issuance and sale of the bonds.

3. If the public improvements are revenue-producing public works, bond interest estimated to accrue during the construction period and for a period of not to exceed twelve (12) months after completion of construction. If such statement is made, the proceeds of the sale of the bonds may be used to pay such of the foregoing as are stated in the ordinance.

4. This subdivision shall not be construed to authorize the City to use the proceeds of the sale of bonds for a purpose for which it could not use its general fund.

D. Propositions for more than one object or purpose may be submitted at the same election. (Ord. 7115-NS § 1 (part), 2009)

A. An election on a proposition of incurring a bonded debt shall be conducted in a manner permitted for other City elections.

B. If two-thirds of the electors voting on the proposition vote for it, the bonds may be issued.

C. When two or more propositions for incurring indebtedness are submitted at the same election, the votes cast for and against each proposition shall be counted separately.

D. If the City Council determines by resolution that the expenditure of money raised by the sale of bonds for the purpose for which the bonds were voted is impracticable or unwise, it may request the consent of the electors to use the money for some other specified municipal purpose at the next regular or special municipal election held in compliance with Charter Section 3. (Ord. 7115-NS § 1 (part), 2009)

A. By a majority vote, the City Council may fund or refund bonded indebtedness at, after, or before maturity and issue bonds of the City for the indebtedness, if:

1. The City has an outstanding indebtedness evidenced by bonds, warrants, notes or other evidences of indebtedness, or a judgment; or

2. Any department, board, or special fund of the City has an outstanding indebtedness evidenced by bonds, warrants, or notes or other evidences of indebtedness, and such indebtedness has been created for a purpose for which bonds of the City could have been lawfully authorized and issued.

B. Bonds to fund or refund the indebtedness shall not be issued unless authorized by the electors of the City voting at an election to be called and held for that purpose, in either of the following cases:

1. When the indebtedness is evidenced by warrants or by judgment obtained for indebtedness or liability incurred by the City exceeding the income and revenue provided for the year in which the indebtedness or liability was incurred.

2. When the indebtedness is that of any department, board, or special fund of the City, and has been incurred without submission of the proposition of incurring the indebtedness to the City electors, and without the assent of two-thirds of the electors voting at an election held for that purpose.

C. Any election for the purpose of approving indebtedness for refunding bonds shall be called and held pursuant to this chapter. (Ord. 7115-NS § 1 (part), 2009)

This chapter, being necessary for the health, peace and safety of the City and its residents, shall be liberally construed in order to effectuate its purposes. No error, irregularity, informality, and no neglect or omission of any officer, in any proceeding taken under this chapter, which does not directly affect the authority of the City to issue bonds under this chapter, shall void or invalidate any such proceeding, any bonds issued by the City or any levy of ad valorem taxes to pay principal of and interest on such bonds. (Ord. 7616-NS § 3, 2018)

This chapter provides a complete, additional and alternative method for doing the things authorized hereby, and shall be regarded as supplemental and additional to the powers conferred by other laws. The issuance of bonds authorized by this chapter need not comply with the requirements of any other law applicable to the issuance of bonds. (Ord. 7616-NS § 4, 2018)