Fresno Municipal Code Art. 2 Revenue Bonds—financing Industrial and Commercial Facilities

This article may be cited as the City of Fresno Industrial Development Bond Law.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The Council hereby finds and declares that it is necessary and essential to the well-being of the city that it provide financial assistance to promote the economic development of the city. Such economic development will serve the following public purposes and municipal affairs of the city:

(a) The full and gainful employment of residents of the city;

(b) The full and efficient utilization and modernization of existing industrial, commercial and business facilities;

(c) The development of new industrial, commercial and business facilities;

(d) The growth of the city's tax base through increased property values and consumer purchasing;

(e) The reduction of the need for and costs of welfare and other remedial programs;

(f) The reduction of urban ills, such as crime, attributable in part to inadequate economic opportunities;

(g) The stability and diversification of the city's economy;

(h) The environmentally optimum disposition of waste materials of the city; and

(i) The enhancement of the general economic prosperity, health, safety and welfare of the residents of the city.

The availability of the financial assistance authorized by this article will serve those purposes and the general plan of the city by providing private enterprises with new methods of financing capital outlays in the city and by ensuring that economic development within the city will reflect the local community's needs and objectives and will be environmentally optimum with respect to both the physical and social environment of the city. The city shall promote such public interests pursuant to this article without adversely affecting areas outside the city and without conflicting with efforts by the State of California to solve problems of statewide concern.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The city shall not have the power to operate any facilities as a business.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

Notwithstanding the requirements in Article 1 of this division, the application shall include the following:

(a) An estimate of the maximum amount of bonds proposed to be issued, of the sources of amounts otherwise required for the project, and an itemization of the estimated costs and any other expenses;

(b) The application shall be supplemented with a commitment by the company to comply, and/or to assist the city in complying, with all state and federal laws in the issuance of the bonds, including, without limitation, the making of any required application to a governmental department, for authorization, qualification or registration of the offer, issuance or sale of the bonds, and any amendments thereto, and any permit or other authorization of such governmental department, prior to the delivery by the city of such bonds;

(c) The application shall be supplemented with a commitment by the company to cause and/or to assist the city in causing to be printed any prospectus or other written or printed communication proposed to be published in connection with the issuance, offer or sale of bonds, prior to the delivery by the city of such bonds, and, if deemed necessary by the city, following the delivery of such bonds;

(d) All commitments by the company shall specifically provide for the company to pay all expenses in connection with the issuance, offer or sale of the bonds, whether or not they are finally issued, to hold the city harmless from any and all expenses and liabilities related thereto and to pay items on an ongoing basis so that neither the city, nor its advisors, attorneys, employees and the like will accumulate any claims against the city; and

(e) All additional information, agreements and undertakings as the city may require which are submitted to the city by a company shall be reproduced in written, printed or other tangible form, shall be supplied in as many copies as the city prescribes and shall be deemed supplements or amendments to the application.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

Upon this article becoming effective, the City Clerk shall publish in a newspaper of general circulation within the city, a notice setting forth substantially the following:

(a) that the city has duly adopted and approved this article seeking to promote industrial growth within the city so as to encourage increasing long-term employment for the residents thereof;

(b) that on and after the effective date of this article, the city will accept applications on forms approved by the city from companies interested in entering into project agreements for the financing of facilities hereunder; and

(c) that the city will review such applications and determine the feasibility of each project so submitted, and will undertake to commence the financing thereof as soon as practicable.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

(a) If the Council determines that the public benefit of the project outweighs the public detriment of the project, it may make an affirmative determination that the project will accrue a public benefit.

(b) In determining public benefit of the project, the Council shall consider whether it is likely that the undertaking of the project by the city will be a substantial factor in the accrual of broadened employment opportunities for residents of the city. The Council may also consider whether it is likely that the undertaking of the project by the city will accrue any of the following public purposes:

(1) Broadening the tax and revenue base of the city;

(2) Reducing the number of people receiving public assistance in its various forms;

(3) Reducing crime and juvenile delinquency;

(4) Promoting urban renewal;

(5) Promoting greater balance in the economy by increasing the manufacturing and industrial base of the city;

(6) Training unemployable persons for employment and upgrading the skills of the unemployed; and

(7) Such other factors as the Council deems appropriate.

(c) In determining the public detriment of the project, the Council shall consider whether it is likely that the undertaking of the project by the city will accrue any of the following public detriment:

(1) Increasing the cost of furnishing municipal services, including without limitation, transportation, police and fire services;

(2) Increasing the demands upon the city's sewer and water facilities beyond the design capacity sufficient to accommodate the project; and

(3) Such other factors that the Council deems appropriate.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).

The city may, from time to time, issue bonds pursuant to the procedures set forth in Article 1 of this division for any projects which satisfy the following criteria:

(a) Are issued as part of an issue, all or a major portion of the proceeds of which are to be used directly or indirectly in any trade or business carried on by any person who is not an exempt person within the meaning of the Internal Revenue Code of 1954, as amended; and

(b) The payment of the principal or interest on which (under the terms of such obligation or any underlying arrangement) is, in whole or in major part:

(1) Secured by any interest in property used, or to be used, in a trade or business or in payments in respect of such property; or

(2) To be derived from payments in respect of property, or borrowed money, used or to be used in a trade or business; and

(c) Are issued as part of an issue substantially all of the proceeds of which are to be used, with respect to any one or more of such facilities (none of which shall be deemed to be restricted in scope because of the provisions of any other state law) to provide:

(1) For the acquisition or development of land as the site for an industrial park; or

(2) For any facilities meeting the criteria set forth in subsection (b) above which the city can finance hereunder under the exemptions in the Internal Revenue Code of 1954, as amended, commonly known as the "small issue exemptions;"

(3) Residential property as provided in the Mortgage Subsidy bond Tax Act of 1980;

(4) Sports facilities;

(5) Convention or trade show facilities;

(6) Airports, docks, wharves, mass commuting facilities, parking facilities, or storage or training facilities directly related to any of the foregoing;

(7) Sewage or solid waste disposal facilities or facilities for the local furnishing of electric energy or gas;

(8) Air or water pollution control facilities;

(9) Facilities for the furnishing of water for any purpose if:

(i) The water is or will be made available to members of the general public (including electric utility, industrial, agricultural, or commercial users); and

(ii) Either the facilities are operated by a governmental unit or the rates for the furnishing or sale of the water have been established or approved by the State or political subdivision thereof, by an agency or instrumentality of the United States, or by a public service or public utility commission or other similar body of the State or political subdivision thereof; or

(10) For any other facilities which the city can finance hereunder without violating the applicable federal laws and regulations promulgated thereunder pertaining to industrial development bonds. For purposes of this article, the definitions of the words "bonds" and "bond" as used in this division, shall be construed to include all of the types of industrial development bond facilities that can be financed on a tax-exempt basis under the applicable federal laws and the regulations promulgated thereunder, the details thereof, although also incorporated in such laws and regulations, being omitted herein for the sake of brevity; and, it is intended that the definition in this article will be amended to correspond with any changes in said federal laws (but not in the regulations or in the details of such laws). It is not intended, by including any of the above definitions, to contravene any provisions of the Charter and such definitions shall not be so construed. Furthermore, some of the above items are furnished by privately owned public utilities or private concerns, and it is not intended to, nor shall any proceedings be conducted under those provisions, without the consent of the privately owned public utility or other private concern involved, as the case may be; or

(d) Are issued as part of an issue substantially all of the proceeds of which are to be used, with respect to any one or more of such facilities (none of which shall be deemed to be restricted in scope because of the provisions of any other state law) to provide facilities (for example, hospitals) which are to be used directly or indirectly in any trade or business carried on by any person who is an exempt person within the meaning of the Internal Revenue Code of 1954, as amended; and any company who so qualifies as an exempt person may submit an application for financing hereunder; and any company who does not so qualify as an exempt person may submit an Application for financing of facilities for operation by such an exempt person, it being the intent of this article to encourage all enterprises, either within or without the city, which broaden the employment opportunities for residents of the city and which serve the residents of the city and so make it a more attractive place for industrial and commercial ventures. While bonds issued to provide facilities described in this subsection (d) do not fall within the definition of "industrial development bonds" as set forth in the Internal Revenue Code of 1954, as amended, and the regulations promulgated thereunder, such bonds shall be treated as industrial development bonds for purposes of this article and may be issued substantially in the manner set forth herein pursuant to appropriate proceedings being taken therefor.

(Added Ord. 81-61, § 1, eff. 6-26-81; Am. Ord. 2007-97, § 2, eff. 1-19-08).