Modesto Municipal Code Art. 2 Issuance of Bonds to Finance the Enterprise

The City is authorized and empowered:

(a) To issue Bonds for the purpose of financing or otherwise assisting the acquisition of Enterprises authorized by this chapter and for the purpose of funding or refunding Bonds.

(b) To establish the terms and conditions for the financing of any component of the Enterprise undertaken pursuant to this chapter.

(c) To employ or contract for such legal, consultant, underwriting, economic feasibility, or other services in connection with the financing of the Enterprise or any portion thereof, as may be necessary in the judgment of the City Council for the successful financing of a [an] Enterprise and the issuance and sale of Bonds.

(d) 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.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

The City may issue its Bonds for the purpose of financing or otherwise assisting the acquisition of all or any portion of the Enterprise as authorized by this chapter. Every issue of Bonds shall be a limited obligation of the City, payable solely from all or any part of the Revenues.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

The Bonds may be issued as serial Bonds or as term Bonds, or the City Council, in its discretion, may issue Bonds of both types. The Bonds shall be authorized by resolution of the City 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, 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 City Council may provide. The Bonds may be sold at either a public or private sale and for such prices as the City 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.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

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 owners of the Bonds:

(a) The pledge of all or any part of the Revenues, subject to such agreements with Bond owners 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 Bond owners may be amended or abrogated, the amount of Bonds the owners 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 the owners of the Bonds, and providing the rights and remedies of such owners in the event of default.

(h) Such other terms and conditions pertaining to the issuance of the Bonds as are deemed advisable by the City Council.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

In the discretion of the City Council, any Bonds issued under the provisions of this chapter may be secured by a trust agreement or indenture 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 indenture 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 indenture may contain such provisions for protecting and enforcing the rights and remedies of the Bond owners as may be reasonable and proper and not in violation of law, including such provisions as is permitted to be included in any resolution or resolutions of the City Council authorizing the issuance of Bonds hereunder. 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 or indenture may set forth the rights and remedies of the Bond owners and of the trustee or trustees, and may restrict the individual right of action by Bond owners. In addition to the foregoing, any such trust agreement or indenture may contain such other provisions as the City Council may deem reasonable and proper for the security of the Bond owners.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

Neither the members of the City 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.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

The City Council may provide for the issuance of Bonds 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 City 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 City Council shall deem advisable.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

Revenues, or any portion thereof, as designated in the resolution, agreement or indenture authorizing the issuance of the Bonds, 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 Modesto 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 City Council to levy or pledge any form of taxation or to make any appropriation for their payment.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

All moneys received pursuant to the provisions of this chapter, whether proceeds from the sale of Bonds or Revenues or other moneys or assets authorized by this chapter to be pledged to secure payment of Bonds, shall, to the extent set forth in the resolution or trust agreement authorizing the issuance of the Bonds, 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.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

The City shall have the power out of any funds available therefor to purchase its Bonds. The City may hold, pledge, cancel or resell such Bonds, subject to and in accordance with its agreement with Bond owners.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

In anticipation of the sale of Bonds authorized by this chapter, the City is hereby authorized to issue bond anticipation notes, and to renew the same from time to time, in such series and amounts as are determined by the Council to be necessary or appropriate for the Costs of the Enterprise approved by the Council. Such notes shall be payable from Revenues or other moneys or assets authorized by this Chapter to be pledged to secure payment of Bonds, and which are not otherwise pledged, or from the proceeds or sale of the particular Bonds in anticipation of which they are issued. Such notes shall be issued in the same manner as Bonds.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)

In anticipation of the revenues derived from the proceeds of any Federal or State grants with respect to the Enterprise or any portion thereof, the City is hereby authorized to issue grant anticipation notes, and to renew the same from time to time, in such series and amounts as are determined by the Council to be necessary or appropriate for the Costs of the Enterprise approved by the Council and reimbursable from such grants. Such notes shall be payable from the revenues derived from the proceeds of such grants or other moneys or assets authorized by this chapter to be pledged to secure payment of Bonds, and which are not otherwise pledged, or from the proceeds or sale of the particular Bonds in anticipation of which they are issued. Such notes shall be issued in the same manner as Bonds.

(Added by Ord. 2290-C.S., § 1, effective 11-1-84)