Commerce Municipal Code Ch. 3.24 Financing of Rental Housing

As a result of a long process by the city and its redevelopment agency to develop residential property in city of Commerce, corner of Eastern Avenue and Harbor Street, the city council of the city of Commerce (the "city") enacts the ordinance codified in this chapter pursuant to the authority contained in the Rental Housing Construction Program, Health and Safety Code Sections 50735 et seq.

(Ord. 301 §1, 1981).

The definitions set forth in this section shall govern the construction of this chapter, unless the context otherwise requires:

A. "Construction loan" means a loan to a participating party, or his designee, made for the purposes of facilitating rental housing pursuant to this chapter.

B. "Financing" and "financed" means the lending of moneys or any other thing of value for the purpose of facilitating rental housing pursuant to this chapter.

C. "Insured loan" means a construction loan or a mortgage loan insured or guaranteed, in whole or in part, by any instrumentality of the United States or the State of California, or by any person licensed to insure mortgages in this state. Construction or mortgage loans made hereunder may be but are not required to be, insured loans.

D. "Local codes" means the applicable city, state and federal standards for rental housing, including any higher standards adopted by the city or the redevelopment agency of the city for any of the redevelopment project areas.

E. "Mortgage loan" means a loan secured by a mortgage or trust deed.

F. "Participating party" means any person, corporation, partnership, firm, or other entity or group of entities requiring financing for rental housing pursuant to the provisions of this chapter. No elective officer of the state or any of its political subdivisions, including, without limitation, the city or employee of the city nor of the redevelopment agency of the city shall be eligible to be a participating party under the provisions of this chapter.

G. "Qualified mortgage lender" means a mortgage lender authorized by the city to do business with the city and to aid in financing pursuant to this chapter on behalf of the city, for which service the qualified mortgage lender will be reasonably compensated. Such a qualified mortgage lender shall be a state or national bank, federal or state-chartered savings and loan association, or trust company or mortgage banker which is capable of providing service or otherwise aiding in the financing of mortgages on rental housing within the jurisdiction of the city.

H. "Rental housing" means a rental housing development as defined in Health and Safety Code Section 50735.

I. "Revenue bonds" or "bonds" means any bonds, notes, interim certificates, debentures, or other obligations issued pursuant to this chapter and which are payable exclusively from revenues and from any other funds specified in this chapter upon which the revenue bonds may be made a charge and from which they are payable. Revenue bonds or bonds does not include any obligations, the interest upon which is not exempt from Federal income tax under the Internal Revenue Code of 1954, as amended.

J. "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 rental housing, including, without limitation, moneys deposited in a sinking, redemption, or reserve fund or other fund to secure the Revenue Bonds or to provide for the payment of the principal of, or interest on, the Revenue Bonds and also including, where applicable, the proceeds of mortgage insurance and guarantee claims.

(Ord. 301 §2, 1981).

A. The city council finds and declares that it is necessary and essential that the city be authorized to proceed under the Rental Housing Construction Program, Health and Safety Code Sections 50735 et seq., including, without limiting the generality of the foregoing Health and Safety Code Section 50742 which provides, in part as follows:

"For purposes of acting as a local finance entity pursuant to this chapter, a city, county, or city and county may, pursuant to an enabling ordinance of its legislative body, issue revenue bonds to provide below-market interest financing of a rental housing development."

(Ord. 301 §3, 1981).

A. All moneys received pursuant to the provisions of this chapter, whether revenues, proceeds from the sale of revenue bonds or otherwise, shall be deemed to be trust funds to be held and applied solely as provided in 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 authorizing the revenue bonds.

B. The exercise of the powers granted by this chapter shall be in all respects for the benefit of the people of the city and for their health and welfare.

C. This chapter, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to effect is purposes.

D. If the jurisdiction of the city to order a proposed act is not affected, an omission of any officer or the city in proceedings under this chapter or any other defect in the proceedings shall not invalidate the proceedings or revenue bonds issued pursuant to this chapter.

E. This chapter is full authority for the issuance of revenue bonds by the city for the purpose of financing rental housing.

F. This chapter shall be deemed to provide 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 revenue bonds and refunding revenue bonds under the provisions of this chapter need not comply with the requirements of any other law applicable to the issuance of bonds to the extent not inconsistent with the laws of the State of California.

G. An action may be brought pursuant to Chapter 9 (commencing with Section 860) of Part 2 of Title 10 of the Code of Civil Procedure, or under any other applicable law or legal procedure, to determine the validity of bonds, proceedings, agreements or indentures, including, without limiting the generality of the foregoing, the legality of all proceedings theretofore taken pursuant to this chapter.

(Ord. 301 §13, 1981).

The city is recognized to have all powers which are necessary or appropriate for carrying out the purposes of this chapter, including, without limitation, the following powers, together with all other powers necessary or convenient to carry out the purposes of this chapter:

A. To determine the location and character of any rental housing to be financed under the provisions of this chapter;

B. To make a financing, whether by insured loans or otherwise, to participating parties (or designees, as the case may be) through qualified mortgage lenders or otherwise, for rental housing within the city;

C. To establish the terms and conditions of financings;

D. To acquire by deed, purchase, lease, contract, gift, devise, or otherwise any real or personal property, structures, rights, rights-of-way, franchises, easements, and other interests in lands necessary or convenient for the financing of rental housing, upon such terms and conditions as it deems advisable, and to lease, sell, or dispose of the same in such manner as may be necessary or desirable to carry out the objectives and purposes of this chapter;

E. To provide for the issuance of revenue bonds, from time to time, for the purpose of financing rental housing authorized by this chapter and for the purpose of funding or refunding previously issued revenue bonds;

F. To establish limitations respecting fees, charges, and interest rates to be used by qualified mortgage lenders for financing rental housing pursuant to this chapter, and, from time to time, to revise such fees, charges, and interest rates to reflect changes in interest rates on the city's revenue bonds, losses due to defaults, changes in loan-servicing charges, or other expenses related to administration of the Rental Housing Financing Program. Any change interest rate shall conform to the provisions of Section 1916.5 of the Civil Code, except that paragraph (3) of subdivision (a) of Section 1916.5 shall not apply and that the "prescribed standard" specified in Section 1916.5 shall be periodically determined by the city council after hearing preceded by public notice to affected parties, and shall reflect changes in interest rates on the city's bonds, and bona fide changes in loan servicing charges related to the administration of a program under the provisions of this chapter;

G. To pay fees, charges and expenses incurred in a financing for the purpose of rental housing and, with respect to such financings, to collect and disburse, or contract with any person, partnership, association, corporation, or public agency for the collection and disbursal of payments of principal, interest, taxes, insurance, and mortgage insurance;

H. In connection with a financing, to hold deeds of trust or mortgages, as security for financing rental housing and to pledge or assign the same as security for repayment of revenue bonds. Such deeds of trust or mortgages may (but shall not be required to) be assigned to, and held on behalf of the city, by any bank or trust company appointed to act as trustee or fiscal agent in any indenture or resolution providing for issuance of bonds pursuant to this chapter.

I. To employ and fix the compensation of engineering, architectural, accounting, legal, collection, or other services, including services in connection with the servicing of loans made to participating parties, as may be necessary in the judgment of the city for the successful financing of rental housing pursuant to this ordinance and to the extent that the city is unable to provide such services; and

J. To employ and fix the compensation of financing consultants, bond counsel, and other advisors as may be necessary in its judgment to provide for the issuance and sale of any revenue bonds.

(Ord. 301 §4(A), 1981).

A. Revenues shall be the sole source of funds pledged by the city for repayment of its revenue bonds. Revenue bonds issued under the provisions of this chapter shall not be deemed to constitute a debt or liability of the city for which is pledged the faith and credit of the city but shall be payable solely from revenues.

B. All rental housing financing shall be undertaken or completed subject to such project agreement as may be entered into with a participating party.

C. The provisions of Chapter 16 (commencing with Section 7260) of Division 7 of Title I of the Government Code shall not apply to owners or tenants of any property acquired by foreclosure, trust deed, sale or other proceeding resulting from default on a loan made by the city.

D. The city shall require that any rental housing which is constructed with financing obtained under this chapter shall be open, upon sale or rental or any portion thereof to all, regardless of race, sex, marital status, color, religion, national origin, or ancestry. The city shall also require that contracts and subcontracts engaged in rental housing financed under this chapter shall provide equal opportunity for employment, without discrimination as to race, sex, martial status, color, religion, national origin, or ancestry. All contracts and subcontracts for rental housing financed under this chapter shall be let without discrimination as to race, sex, marital status, color, religion, national origin, or ancestry. It shall be the policy of the city in financing rental housing under this chapter to encourage participation by minority contractors, and the city council shall adopt rules and regulations to implement the provisions of this subsection.

(Ord. 301 §4(B—E), 1981).

The city shall undertake projects for rental housing by entry into a project agreement in substance not inconsistent with the following:

A. The participating party shall comply with all legal requirements relating to the project and the operation, repair and maintenance of the rental housing, including:

1. Obtaining any rezonings or variances, building, development, and other permits and approvals, and licenses and other entitlements for use;

2. Securing the issuance of any certificates of need, convenience, and necessity or other certificates or franchises required by the state;

3. Qualifying any nonexempt issue, offer, or sale of any bonds or other security proposed to be issued by the participating party or others (including the city) in connection with the project; and

4. Providing satisfactory evidence of compliance with this section;

B. The participating party shall provide, or cause to be provided by others, all amounts required for the rental housing and all property of the rental housing project which are not to be provided as or by expenditure of bond proceeds, and in the case of any such amounts and property which the participating party proposes to cause to be provided by others, as by contract, grant, subsidy, loan, or other form of assistance, shall provide satisfactory evidence that such amounts and property will be provided when required.

C. Expenditure of bond proceeds shall be supervised to assure proper application to the rental housing project.

D. The participating party shall, at its own expense, insure, repair and maintain the rental housing, pay such taxes with respect to its interests in the property of the rental housing project as is then required by law, and pay any assessments and other public charges secured by liens, upon such interests as constitute the tax base for property taxation, on the same basis as other property of similar character.

E. The amounts payable by a participating party to, or for, the benefit of the city shall, in the aggregate, not be less than amounts sufficient:

1. To pay any bonds that shall be issued by the city to pay the costs of the rental housing project; and

2. To pay those administrative expenses which relate to the administration of the project agreement, the resolution of issuance and the bonds.

F. The term of the project agreement shall extend at least until the date on which all such bonds and all other obligations incurred by the city in connection with a rental housing project shall have been paid in full or adequate funds for such payment shall have been otherwise provided.

G. Such additional provisions as in the determination of the city are necessary or appropriate to effectuate the purposes of this chapter, including, without limitation, provisions:

1. For payments by a participating party which include amounts for administrative expenses in addition to the amounts which the agreement is required to obligate the participating party to pay, which are incurred by the city subsequent to the preliminary undertaking of the rental housing project by the city;

2. For payment before the rental housing project exists or becomes functional, or after the rental housing project has ceased to exist or be functional to any extent and from any cause;

3. For payment regardless as to whether or not the participating party is in possession or is entitled to be in possession of the rental housing project;

4. Relating to the carrying out and completion of the rental housing project, including the allocation of responsibility between the city and the participating party regarding the acquisition of property, the making of other purchases, and the contracting for construction of the rental housing project, with or without competitive bidding, and the payment therefor;

5. That some or all of the obligations of a participating party shall be unconditional and shall be binding and enforceable in all circumstances whatsoever, notwithstanding any other provision of law; and

6. Relating to the use, maintenance, repair, insurance, and replacement of property of the rental housing project, such as the city and the participating party deem necessary for the protection of themselves or others, including, but not limited to, liability insurance, indemnification, and events of default;

7. That the participating party shall indemnify and hold the city harmless against the claims and demands of all persons arising in any manner from the rental housing project, the project agreement, the rental housing, the property of the rental housing project, its operating, maintenance, repair and the like, including, without limitation, alleged violations of any state or federal law relating thereto or relating to this chapter or any acts taken under this chapter.

H. Notwithstanding any other provisions of this chapter, rental housing projects developed pursuant to this chapter shall be consistent with the requirements of the general plan of the city and any applicable redevelopment plan.

(Ord. 301 §5, 1981).

A. The city may not make a financing which has not been authorized by prior written agreement between the city and the participating party, if such shall be a developer of newly constructed rental housing. All agreements for such loans shall provide that the architectural and engineering design of the rental housing shall be subject to such standards as may be established by the city and that the work of such rental housing shall be subject to such supervision as the city deems necessary.

B. The city may enter into loan agreements with any participating party relating to rental housing of any kind or character. The terms and conditions of such loan agreements may be as mutually agreed upon, but such terms and conditions shall not be inconsistent with the provisions of this chapter or regulations adopted pursuant thereto. Any such loan agreement may provide the means or methods by which any mortgage taken by the city shall be discharged, and it shall contain such other terms and conditions as the city may require. The city may fix, revise, charge and collect interest and principal and all other rates, fees, and charges with respect to financing of residential housing. 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, for all of the following:

1. To pay the principal of, and interest on, outstanding revenue bonds of the city issued to provide funds for the financing of rental housing, as the same shall become due and payable;

2. To create and maintain reserves required or provided for in any resolution authorizing such revenue bonds. A sufficient amount of the revenues derived from rental housing may be set aside at such regular intervals as may be provided by the resolution in a sinking or other similar fund, which fund is pledged to, and charged with, the payment of the principal of and interest on such revenue bonds as the same shall become due, and the redemption price or the purchase price of revenue bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time the pledge is made. The rat 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 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 authorizing the issuance of such revenue bonds. Except as may otherwise be provided in the resolution, such sinking or other similar fund may be a fund for all revenue bonds of the city issued to finance the construction of the rental housing a particular participating party without distinction or priority. The city, however, in any such resolution may provide that such sinking or other similar fund shall be the fund for a particular project or projects for rental housing and for the bonds issued to finance such project or projects and may, additionally, authorize and provide for the issuance of revenue bonds having a lien with respect to the security authorized by this section which is subordinate to the lien of other revenue bonds of the city, and in such case, the city may create separate sinking or other similar funds securing the revenue bonds having the subordinate lien;

3. To pay operating and administrative costs of the city incurred in the administration of the program authorized by this chapter.

(Ord. 301 §12, 1981).

Any and all revenue bonds issued pursuant to this chapter shall be issued in compliance with state laws not in conflict herewith and federal laws and regulations relating to the issuance of securities and the federal laws and regulations relating to the exemption from federal income taxation.

(Ord. 301 §8, 1981).

A. The city may, from time to time, issue its negotiable and/or nonegotiable revenue bonds for the purpose of financing rental housing.

B. In anticipation of the sale of revenue bonds, the city may issue negotiable and/or nonnegotiable bond anticipation notes and may renew such notes from time to time. Bond anticipation notes may be paid from the proceeds of sale of revenue bonds of the city in anticipation of which they were issued. Bond anticipation notes and agreements relating thereto and the resolution or resolutions authorizing such notes and agreements may contain any provisions, conditions, or limitations which a revenue bond, agreement relating thereto, or revenue bond resolution of the city may contain.

C. Every issue of its revenue bonds shall be a special obligation of the city payable from all or any part of the revenues specified in this chapter. If the proceedings so provide, the revenue bonds may be negotiable instruments for all purposes, subject only to the provisions respecting registration thereof; or they be registered bonds.

D. In determining the amount of revenue bonds or bond anticipation notes to be issued, the city may include all costs of the issuance of such revenue bonds or notes, reserve funds, the interest estimated to accrue during the construction period and for a reasonable period thereafter.

E. The revenue bonds may be issued as serial bonds or as term bonds, or the city in its discretion, may issue revenue bonds of both types. The revenue bonds shall be authorized by resolution of the city council and shall bear such date or dates, mature at such time or times, not exceeding fifty years from their respective dates of issuance, bear interest at such fixed or variable rate or rates, not to exceed such interest rate or rates per year, as may be permitted at that time under the Constitution of the State of California, be payable at such time or times, be in such denominations, be in such form either coupon or registered, carry such exchange and registration privileges, be executed in such manner, be payable in lawful money of the United States of America at such place or places within or without the state, and be subject to such terms of redemption as the resolution or resolutions of the city may provide. 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. 301 §6(A—E), 1981).

The revenue bonds shall be signed on behalf of the city by facsimile signature of the mayor and by manual signature of the city clerk, and the seal of the city shall be impressed, imprinted and reproduced thereon. The interest coupons on the bonds shall be signed by facsimile signature of the city clerk. The foregoing officers shall be authorized and directed to sign the bonds and coupons in accordance with Sections 3.24.100 through 3.24.170. If any city official whose manual or facsimile signature appears on the bonds or coupons ceases to be such member or officer before delivery of the bonds, such signature is as effective as if such official had remained in office.

(Ord. 301 §6(F), 1981).

If deemed advisable by the city, there may be retained in the proceedings an option to redeem prior to maturity all or any part of any revenue bonds as may be specified in such proceedings, at such price or prices and after such notice or notices and on such terms and conditions as may be set forth in such proceedings and as may be briefly recited in the bonds. Nothing in this chapter shall be construed to confer on the city any right or option to redeem any bonds, except as may be provided in the proceedings under which they shall have been issued.

(Ord. 301 §6(G), 1981).

Any resolution or resolutions authorizing any revenue bonds or any issue of revenue 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 revenue bonds:

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

B. For the creation and maintenance of special funds from such revenues, including reserve and sinking funds;

C. For limitations on expenditures of bond proceeds;

D. 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;

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

F. For the payment of administrative expenses or other expenses of the city;

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

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

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

J. Limitation on expenditures for operating, administration, or other expenses of the city;

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

L. The mortgaging of any residence and the site thereof for the purpose of securing the bondholders;

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

N. Any other provisions which are necessary or desirable to provide for the security of the bonds or to make the same more marketable.

(Ord. 301 §6(H), 1981).

Neither the members of the city council nor any person executing the revenue bonds shall be liable personally on the revenue bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

(Ord. 301 §6(I), 1981).

The city shall have the power out of any funds available therefor to purchase its revenue bonds. The city may hold, pledge, cancel, or resell such revenue bonds, subject to and in accordance with agreements with the bondholders.

(Ord. 301 §6(J), 1981).

In the discretion of the city, any revenue 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 this state. Such a trust agreement or the resolution providing for the issuance of revenue bonds may pledge or assign the revenues to be received or proceeds of any contract or contracts pledged, and may convey or mortgage any residence the construction of which is to be financed out of the proceeds of such revenue bonds. Such trust agreement or the resolution providing for the issuance of bonds may provide for the assignment to such corporate trustee or trustees of financings, whether insured loans or otherwise, to be held by such trustee or trustees on behalf of the city for the benefit of the bondholders. Such trust agreement or resolution providing for the issuance of revenue 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 city authorizing the issuance of the revenue bonds. Any bank or trust company doing business under the laws of the state which may act as depositary of the proceeds of revenue 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 city may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as a part of the cost of residential housing.

(Ord. 301 §6(K), 1981).

Any holder of revenue bonds issued under the provisions of this chapter or of any of the coupons appertaining thereto, and the trustee or trustees appointed pursuant to any resolution authorizing the issuance of such revenue bonds, except to the extent the rights thereof may be restricted by the resolution authorizing the issuance of the revenue bonds, may, either at law or in equity, by suit, action, mandamus, or other proceedings, protect or enforce any and all rights specified in the laws of this state or in such resolution, and may enforce and compel the performance of all duties required by this chapter or by such resolution to be performed by the city or by any officer, employee, or agent thereof, including the fixing, charging, and collecting of rates, fees, interest, and charges authorized and required by the provisions of such resolution to be fixed, established, and collected.

(Ord. 301 §6(L), 1981).

All revenue bonds issued by the city pursuant to this chapter shall be special obligations, only, of the city, payable solely from the revenues or from the other sources specified in the proceedings. In addition and without limitation to the other provisions of this chapter:

A. The revenue bonds may be executed and delivered by the city at any time and from time to time;

B. The issuance by the city of one or more issues of revenue bonds for one or more purposes shall not preclude it from issuing other revenue bonds in connection with the same project or any other project, subject to such agreements with bondholders as may then exist;

C. Any revenue bonds of the city issued pursuant to this chapter, at any time outstanding may, at any time, and from time to time, be refunded by the city by the issuance of its refunding bonds in such amount as the city may deem necessary or appropriate. Revenue bonds may be issued as one issue for refunding and other authorized purposes. Any refunding may be affected whether the bonds to be refunded shall have then matured or shall thereafter mature, either by sale of the refunding bonds and the application of the bond proceeds to the purchase or redemption of the revenue bonds to be refunded thereby, or by the exchange of the refunding bonds for the revenue bonds to be refunded thereby with the consent of the holders of the revenue bonds so to be refunded and with such cash adjustments as may be agreed, and regardless of whether or not the revenue bonds proposed to be refunded shall be payable at the same date or different dates or shall be due serially or otherwise, and notwithstanding any other provisions of the law, the proceedings for the issuance of such refunding bonds may provide for the payment into an escrow fund such moneys, together with the interest to be earned thereon, which shall be sufficient to pay the principal of, and interest and premium, if any, on the revenue bonds so refunded to the earliest or subsequent date of redemption, purchase or maturity of such refunded bonds; and

D. Each revenue bond shall be deemed to be an investment security under the Uniform Commercial Code as adopted by the state and, if so provided in the proceedings for issuance, a negotiable instrument, subject only to any provisions thereof for registration or other provisions restricting transfer, and shall be deemed to have been issued for an authorized purpose of the city on the exercise of the powers pursuant to this chapter; provided, that the city so determines in the proceedings and such determination is recited in the revenue bond.

(Ord. 301 §7, 1981).

Revenue bonds issued pursuant to this chapter may be sold at such prices and in such manner as the city may direct, at public or private sale. Such revenue bonds may be sold at, above, or below the par or face value thereof, but the sale price shall be not less than ninety-five percent of the par or face value of the bonds.

(Ord. 301 §9, 1981).

A. None of the revenue bonds issued by the city pursuant to this chapter shall 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 the revenues and other funds, if any, provided therefor in the proceedings.

B. The issuance of revenue bonds shall not directly or indirectly or contingently obligate the city to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment.

C. All revenue 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 Commerce is pledged to the payment of the principal of, premium, if any, or interest on this Bond, nor is the City of Commerce in any manner obligated to make any appropriation for payment."

D. Neither the members of the city council nor any persons executing the revenue bonds shall, in any event, be subject to any personal liability or accountability by reason of the issuance of such revenue bonds.

E. The revenue bonds shall be a special obligation of the city, and the city shall, under no circumstances, be obligated to pay revenue bonds or project costs (other than administrative expenses), except from revenues and other funds received for such purposes, nor to pay administrative expenses except from funds received under project agreements for such purposes, or from funds which are made available as otherwise authorized by law. All revenue bonds shall contain on the face thereof a statement of their special obligation nature.

(Ord. 301 §10, 1981).

Any net earnings realized by the city pursuant to this chapter shall insure solely to the benefit of the city and not to the benefit of any participating party or other private person and shall be applied as provided in Health and Safety Code Section 50742.

(Ord. 301 §11, 1981).