Chapter 3.32 — SPECIAL IMPROVEMENT DISTRICT FINANCING CODE

Article I Definitions

Unless the context otherwise requires, the definitions contained in this section shall govern the construction of this chapter.

A. “Cost” means the expense of constructing or purchasing the public facility and of related
land, right-of-way, easements, including incidental expenses, and the cost of providing
authorized services, including incidental expenses.

B. “Debt” means any binding obligation to pay or repay a sum of money, including obligations
in the form of bonds, certificates of participation, long-term leases, loans from government
agencies, or loans from banks, other financial institutions, private businesses, or
individuals, or long-term contracts.

C. “Incidental expense” includes all of the following:

1. The cost of planning and designing public facilities to be financed pursuant to this
Code, including the cost of environmental evaluations of those facilities.

2. The costs associated with the creation of the special improvement district, issuance
of bonds, determination of the amount of taxes, collection of taxes, payment of
taxes, or costs otherwise incurred to carry out the authorized purposes of the special
improvement district.

3. Any other expenses incidental to the construction, completion, and inspection of the
authorized work.

D. “Landowner” or “owner of land” means any person shown as the owner of land on the last
equalized assessment roll or otherwise known to be the owner of the land by the City. The
City Council has no obligation to obtain other information as to the ownership of the land,
and its determination of ownership shall be final and conclusive for the purposes of this
Code. A public agency is not a landowner or owner of land for purposes of this Code.

E. “Legislative body” means the legislative body or governing board of any local agency.

F. “Local agency” means any city or county, whether general law or chartered, special district,
school district, joint powers entity created pursuant to California Government Code, Title
1, Division 7, Chapter 5, Section 6500 et seq., or any other municipal corporation, district,
or political subdivision of the State.

G. “Rate” means a single rate of tax or a schedule of rates.

H. “Services” means the provision of police and fire protection services, recreation programs, library services, operation and maintenance of museums and cultural facilities, the operation and maintenance of parks and parkways, and the provision of flood and storm protection services, including, but not limited to, the operation and maintenance of storm drainage systems. “Services” includes the performance by employees of functions,

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City of Newport Beach, CA § 3.32.010 NEWPORT BEACH CODE § 3.32.010

operations, maintenance, and repair activities.

I. “Special improvement district” means a legally constituted governmental entity established
pursuant to this Code for the sole purpose of financing facilities and services.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 132, 2023)

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City of Newport Beach, CA § 3.32.020 REVENUE AND FINANCE § 3.32.060

Article II

General Provisions

This chapter shall be known and may be cited as the “City of Newport Beach Special Improvement District Financing Code,” and shall be referred to herein as the “Code.” (Ord. 94-40 § 2 (part), 1994)

Laws.

This Code is adopted pursuant to City Charter Section 200. In proceedings had pursuant to this Code which are a municipal affair, any general laws referred to in this Code are deemed a part of this Code.

In the event that any proceeding had pursuant to this Code shall be adjudged a matter of statewide concern, it is declared to be the intention that the proceedings were had pursuant to any applicable general law or laws.

This Code provides an alternative method of financing certain public capital facilities and services. The provisions of this Code shall not affect or limit any other provisions of law authorizing or providing for the furnishing of governmental facilities or services or the raising of revenue for these purposes. The City may use the provisions of this Code instead of any other method of financing part or all of the cost of providing the authorized kinds of capital facilities and services. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 133, 2023)

The City Council may take any actions or make any determinations which it determines are necessary or convenient to carry out the purposes of this Code and which are not otherwise prohibited by law. (Ord. 94-40 § 2 (part), 1994)

Services.

A special improvement district may be established under this Code to finance any one or more
of the following types of services within an area:

A. Police protection services, including, but not limited to, criminal justice services. However,
criminal justice services shall be limited to providing services for jails, detention facilities,
and juvenile halls.

B. Fire protection and suppression services, and ambulance and paramedic services.

C. Recreation program services, library services and the operation and maintenance of
museums and cultural facilities.

D. Maintenance of parks, parkways, and open space.

E. Flood and storm protection services, including, but not limited to, the operation and

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City of Newport Beach, CA § 3.32.060 NEWPORT BEACH CODE § 3.32.070

maintenance of storm drainage systems, and sandstorm protection systems.

F. Services with respect to removal or remedial action for the cleanup of any hazardous
substance released or threatened to be released into the environment. As used in this
subsection, the terms “remedial action” and “removal” shall have the meanings set forth in
California Health and Safety Code Sections 25322 and 25323, respectively, and the term
“hazardous substance” shall have the meaning set forth in California Health and Safety
Code Section 25281. Special improvement districts shall provide the State Department of
Health Services and local health and building departments with notification of any cleanup
activity pursuant to this subsection at least thirty (30) days prior to commencement of the
activity.

G. Any other municipal service which the City is authorized by law to provide.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 135, 2023)

Improvement, Rehabilitation, or Planning and Design Work of Real or Tangible Property.

A special improvement district may also finance the purchase, construction, expansion, improvement, or rehabilitation of any real or other tangible property with an estimated useful life of three years or longer or may finance planning and design work that is directly related to the purchase, construction, expansion, or rehabilitation of any real or tangible property. The facilities need not be physically located within the district. A district may finance the purchase of facilities whose construction has been completed before or after the adoption of the resolution of formation to establish the district is adopted if the facility is or was constructed pursuant to plans approved by the City, and the facility is inspected by the City and found to be in compliance with applicable City building codes and standards. For example, a special improvement district may finance facilities, including, but not limited to, the following:

A. Local park, recreation, parkway, and open-space facilities.

B. Libraries.

C. Child care facilities, including costs of insuring the facilities against loss, liability insurance
in connection with the operation of the facility and other insurance costs relating to the
operation of the facilities, but excluding all other operational costs. However, the proceeds
of bonds issued pursuant to this Code shall not be used to pay these insurance costs.

D. The district may also finance the construction or undergrounding of water transmission and
distribution facilities, natural gas pipeline facilities, telephone lines, facilities for the
transmission or distribution of electrical energy, and cable television lines. The district may
enter into an agreement with a public utility to utilize those facilities to provide a particular
service and for the conveyance of those facilities to the public utility. “Public utility” shall
include all utilities, whether public and regulated by the Public Utilities Commission, or
municipal. If the facilities are conveyed to the public utility, the agreement shall provide
that the cost or a portion of the cost of the facilities that are the responsibility of the utility
shall be refunded by the public utility to the district or improvement area thereof, to the
extent that refunds are applicable pursuant to: (1) the California Public Utilities Code or
rules of the Public Utilities Commission, as to utilities regulated by the commission; or (2)
other laws regulating public utilities. Any reimbursement made to the district shall be
utilized to reduce or minimize the special tax levied within the district or improvement

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City of Newport Beach, CA § 3.32.070 REVENUE AND FINANCE § 3.32.070

area, or to construct or acquire additional facilities within the district or improvement area,
as specified in the resolution of formation.

E. The district may also finance the acquisition, improvement, rehabilitation, or maintenance
of any real or other tangible property, whether privately or publicly owned, for the purposes
described in subsection (E) of Section 3.32.060.

F. The district may also pay in full all amounts necessary to eliminate any fixed special
assessment liens or to pay, repay, or defease any obligation to pay or any indebtedness
secured by any tax, fee, charge, or assessment levied within the area of a special
improvement district or may pay debt service on that indebtedness. In addition, tax
revenues of a district may be used to make lease or debt service payments on any lease,
lease-purchase contract, or certificate of participation used to finance authorized district
facilities.

G. Any other governmental facilities which the City is authorized by law to contribute revenue
to, or construct, own, or operate.

H. 1. A district may also pay for the following:

a. Work deemed necessary to bring buildings or real property, including privately
owned buildings or real property, into compliance with seismic safety standards
or regulations. No project involving the dismantling of an existing building and
its replacement by a new building, nor the construction of a new or substantially
new building may be financed pursuant to this subsection (H)(1)(a). Work on
qualified historical buildings or structures shall be done in accordance with the
State Historical Building Code (California Health and Safety Code Division 13,
Part 2.7, Section 18950 et seq.)

b. In addition, within any county or area designated by the President of the United
States or by the Governor as a disaster area or for which the Governor has
proclaimed the existence of a state of emergency because of earthquake damage,
a district may also pay for any work deemed necessary to repair any damage to
real property directly or indirectly caused by the occurrence of an earthquake
cited in the President’s or the Governor’s designation or proclamation, or by
aftershocks associated with that earthquake, including work to reconstruct,
repair, shore up, or replace any building damaged or destroyed by the
earthquake. Work may be financed pursuant to this subsection (H)(1)(b) only on
property or buildings identified in a resolution of intention to establish a special
improvement district adopted within seven years of the date on which the county
or area is designated as a disaster area by the President or by the Governor or on
which the Governor proclaims for the area the existence of a state of emergency.

2. Work on privately owned property, including reconstruction or replacement of
privately owned buildings pursuant to subsection (H)(1)(b) of this section, may be
financed by a tax levy only if all of the votes cast on the question of levying the tax
favor levying the tax, or with the prior written consent to the tax of the owners of all
property which may be subject to the tax, in which case the prior written consent shall
be deemed to constitute a vote in favor of the tax and any associated bond issue. Any
district created to finance seismic safety work on privately owned buildings, including
repair, reconstruction or replacement of privately owned buildings pursuant to this
subsection (H) shall consist only of lots or parcels that the City Council finds were

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City of Newport Beach, CA § 3.32.070 NEWPORT BEACH CODE § 3.32.120

the sites of buildings damaged or destroyed by an earthquake cited in the President’s or the Governor’s designation or proclamation.

a. A district may also pay for the following:

i. Work deemed necessary to repair and abate damage caused to privately owned buildings and structures by soil deterioration. “Soil deterioration” means a chemical reaction by soils that causes structural damage or defects in construction materials including concrete, steel, and ductile or cast iron. No project involving the dismantling of an existing building or structure and its replacement by a new building or structure, nor the construction of a new or substantially new building or structure, may be financed pursuant to this subsection (H)(2)(a)(i).

ii. Work on privately owned buildings and structures pursuant to this

subsection (H)(2)(a), including reconstruction, repair, and abatement of

damage caused by soil deterioration, may only be financed by a tax levy if all of the votes cast on the question of levying the tax favor levying the tax. Any district created to finance the work on privately owned buildings or structures, including reconstruction, repair, and abatement of damage caused by soil deterioration, shall consist only of lots or parcels that the City Council finds suffer from soil deterioration.

(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 136, 2023)

Pursuant to Section 3.32.070, a special improvement district may also finance the acquisition, improvement, rehabilitation, or maintenance of any real or other tangible property, whether privately or publicly owned, for the purposes described in Section 3.32.060(F). (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 139, 2023)

The City Council may from time to time transfer moneys to a special improvement district or to an improvement area within a special improvement district, for the benefit of the district or improvement area, from any funds available to the City. The City Council may also appropriate any of its available moneys to a revolving fund to be used for the acquisition of real or personal property, engineering services, or the construction of structures or improvements needed in whole or in part to provide one or more of the facilities of a special improvement district.

The district may reimburse the City for any amount transferred or appropriated pursuant to this section, together with interest at the rate per annum determined by the City Council. (Ord. 94-40 § 2 (part), 1994)

Repayment – Agreement – Conditions.

A. At any time either before or after the formation of the district, the City Council may accept advances of funds or work in kind from any source, including, but not limited to, private persons or private entities and may provide by resolution for the use of those funds or that work in kind for any authorized purpose, including, but not limited to, paying any cost

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City of Newport Beach, CA § 3.32.120 REVENUE AND FINANCE § 3.32.150

incurred by the City in creating the special improvement district. The City Council may
enter into an agreement, by resolution, with the person or entity advancing the funds or
work in kind, to repay all or a portion of the funds advanced, or to reimburse the person or
entity for the value, or cost, whichever is less, of the work in kind, as determined by the
City Council, with or without interest, under all of the following conditions:

1. The proposal to repay the funds or the value or cost of the work in kind, whichever is
less, is included in the resolution of intention to establish the district or in the
resolution of formation to establish the district, or in the resolution of consideration
to alter the types of public facilities and services provided within an established
district.

2. Any proposed special tax or change in a special tax is approved by the qualified
electors of the district. Any agreement shall specify that if the qualified electors of the
district do not approve the proposed special tax or change in a special tax, the local
agency shall return any funds which have not been committed for any authorized
purpose by the time of the election to the person or entity advancing the funds.

3. Any work in kind accepted pursuant to this section shall have been performed or
constructed as if the work had been performed or constructed under the direction and
supervision of, or under the authority of, the local agency.

B. The agreement shall not constitute a debt or liability of the City.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 140, 2023)

This Code shall be liberally construed in order to effectuate its purposes. No error, irregularity, informality, and no neglect or omission of any officer, in any procedure taken under this Code, which does not directly affect the jurisdiction of the City Council to order the installation of the facility or the provision of service, shall void or invalidate such proceeding or any levy for the costs of such facility or service. (Ord. 94-40 § 2 (part), 1994)

Proceedings.

The failure of any person to receive a notice, resolution, order, or other matter shall not affect in any way whatsoever the validity of any proceedings taken under this Code, or prevent the City Council from proceeding with any hearing so noticed. (Ord. 94-40 § 2 (part), 1994)

This Code authorizes the City to create special improvement districts pursuant to this Code within its territorial limits. The City may initiate proceedings pursuant to Section 3.32.180 to include territory proposed for annexation to the City within a special improvement district if a petition or resolution of application for the annexation of the territory to the City has been accepted for filing and a certificate of filing has been issued by the executive officer of the local agency formation commission at the time the proceedings to create the district are initiated. Those proceedings may be completed only if the annexation of the territory to the City is

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City of Newport Beach, CA § 3.32.150 NEWPORT BEACH CODE § 3.32.170

completed. (Ord. 94-40 § 2 (part), 1994)

Transaction or by Gift or Device.

If property not otherwise exempt from a special tax levied pursuant to this Code is acquired by a public entity through a negotiated transaction, or by gift or device, the special tax shall, notwithstanding Section 3.32.630, continue to be levied on the property acquired and shall be enforceable against the public entity that acquired the property. However, even if the resolution of formation that authorized creation of the district did not specify conditions under which the obligation to pay a special tax may be prepaid and permanently satisfied, the City Council may specify conditions under which the public agency that acquires the property may prepay and satisfy the obligation to pay the tax. The conditions may be specified only if the City Council finds and determines that the prepayment arrangement will fully protect the interests of the owners of the special improvement district’s bonds. (Ord. 94-40 § 2 (part), 1994)

Through Eminent Domain.

If property subject to a special tax levied pursuant to this Code is acquired by a public entity through eminent domain proceedings, the obligation to pay the special tax shall be treated, pursuant to California Code of Civil Procedure Section 1265.250, as if it were a special annual assessment. For this purpose, the present value of the obligation to pay a special tax to pay the principal and interest on any indebtedness incurred by the district prior to the date of apportionment determined pursuant to California Code of Civil Procedure Section 5082 shall be treated the same as a fixed lien special assessment. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 141, 2023)

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City of Newport Beach, CA § 3.32.180 REVENUE AND FINANCE § 3.32.200

Article III

Proceedings to Create a Special Improvement District

Proceedings for the establishment of a special improvement district may be instituted by the City Council on its own initiative and shall be instituted by the City Council when any of the following occurs:

A. A written request for the establishment of a special improvement district, signed by two members of the City Council, describing the boundaries of the territory which is proposed for inclusion in the area and specifying the type or types of facilities and services to be financed by the district, is filed with the City Council.

B. A petition requesting the institution of the proceedings signed by the requisite number of registered voters, as specified in subsection (D) of Section 3.32.200, is filed with the Clerk. The petition may consist of any number of separate instruments, each of which shall comply with all of the requirements of the petition, except as to the number of signatures.

C. A petition requesting the institution of the proceedings signed by landowners owning the requisite portion of the area of the proposed district, as specified in subsection (D) of Section 3.32.200, is filed with the Clerk.

D. The written request filed pursuant to subsection (A) of this section and the petitions filed pursuant to subsections (B) and (C) of this section shall be accompanied by the payment of a fee in an amount which the City Council determines is sufficient to compensate the City Council for all costs incurred in conducting proceedings to create a district pursuant to this Code. (Ord. 94-40 § 2 (part), 1994)

or Annexation or Detachment of Territory From a District.

Notwithstanding any provision of California Government Code Title 5, Division 3, Part 1, Section 56000 et seq., a local agency formation commission shall have no power or duty to review and approve or disapprove a proposal to create a special improvement district or a proposal to annex territory to, or detach territory from, such district, pursuant to this Code. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 142, 2023)

A petition requesting the institution of proceedings for the establishment of a special improvement district shall do all of the following:

A. Request the City Council to institute proceedings to establish a special improvement district
pursuant to this Code.

B. Describe the boundaries of the territory which is proposed for inclusion in the district.

C. State the type or types of facilities and services to be financed by the district.

D. Be signed by not less than ten percent of the registered voters residing within the territory
proposed to be included within the district or by owners of not less than ten percent of the

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City of Newport Beach, CA § 3.32.200 NEWPORT BEACH CODE § 3.32.220

area of land proposed to be included within the district. If the City Council finds that the petition is signed by the requisite number of registered voters residing within the territory proposed to be included within the district or by the requisite number of owners of land proposed to be included within the district, that finding shall be final and conclusive.

(Ord. 94-40 § 2 (part), 1994)

Within ninety (90) days after either a written request by two members of the City Council or a petition requesting the institution of proceedings for the establishment of a special improvement district is filed with the City Council, it shall adopt a resolution of intention to establish a special improvement district in the form specified in Section 3.32.220. (Ord. 94-40 § 2 (part), 1994)

Proceedings for the establishment of a special improvement district shall be instituted by the adoption of a resolution of intention to establish the district, which shall do all of the following:

A. State that a special improvement district is proposed to be established under the terms of
this Code and describe the boundaries of the territory proposed for inclusion in the district,
which may be accomplished by reference to a map on file in the office of the Clerk,
showing the proposed special improvement district. The boundaries of the territory
proposed for inclusion in the district shall include the entirety of any parcel subject to
taxation by the proposed district.

B. State the name proposed for the district in substantially the following form: “City of
Newport Beach Special Improvement District No. __________.”

C. Describe the public facilities and services proposed to be financed by the district pursuant
to this Code. The description may be general and may include alternatives and options, but
it shall be sufficiently informative to allow a taxpayer within the district to understand what
the funds of the district may be used to finance. If the purchase of completed public
facilities or the incurring of incidental expenses is proposed, the resolution shall identify
those facilities or expenses. If facilities are proposed to be financed through any financing
plan, including, but not limited to, any lease, lease-purchase, or installment-purchase
arrangement, the resolution shall briefly describe the proposed arrangement.

D. State that, except where funds are otherwise available, a special tax sufficient to pay for all
facilities and services, secured by recordation of a continuing lien against all nonexempt
real property in the district, will be annually levied within the district. The resolution shall
specify the rate, method of apportionment, and manner of collection of the special tax in
sufficient detail to allow each landowner or resident within the proposed district to estimate
the maximum amount that he or she will have to pay. The City Council may specify
conditions under which the obligation to pay the specified special tax may be prepaid and
permanently satisfied.

In the case of any special tax to pay for public facilities and to be levied against any parcel
used for private residential purposes, (1) the maximum special tax shall be specified as a
dollar amount which shall be calculated and thereby established not later than the date on
which the parcel is first subject to the tax because of its use for private residential purposes,

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City of Newport Beach, CA § 3.32.220 REVENUE AND FINANCE § 3.32.240

which amount shall not be increased by more than two percent per year, (2) the resolution shall specify a tax year after which no further special tax subject to this sentence shall be levied or collected, and the resolution shall specify that under no circumstances will the special tax levied against any parcel subject to this sentence be increased by more than ten (10) percent as a consequence of delinquency or default by the owner of any other parcel or parcels within the district. For purposes of this subsection (D), a parcel shall be considered “used for private residential purposes” not later than the date on which an occupancy permit for private residential use is issued. Nothing in this subsection is intended to prohibit the City Council from establishing different tax rates for different categories of residential property, or from changing the dollar amount of the special tax for a parcel if the size of the residence is increased or if the size or use of the parcel is changed.

E. Fix a time and place for a public hearing on the establishment of the district which shall not
be less than thirty (30) nor more than sixty (60) days after the adoption of the resolution.

F. Describe the proposed voting procedure.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 143, 2023)

for Cleanup of Hazardous Substance – Inclusion in Record of Hearing.

At the time of the adoption of the resolution of intention to establish a special improvement district, the City Council shall direct each of its officers who is or will be responsible for providing one or more of the proposed types of public facilities or services to be financed by the district, if it is established, to study the proposed district and, at or before the time of the hearing, file a report with the City Council containing a brief description of the public facilities and services by type which will in his or her opinion be required to adequately meet the needs of the district and his or her estimate of the cost of providing those public facilities and services. If the purchase of completed public facilities or the payment of incidental expenses is proposed, the City Council shall direct its appropriate officer to estimate the fair and reasonable cost of those facilities or incidental expenses. If removal or remedial action for the cleanup of any hazardous substance is proposed, the City Council shall (A) direct its responsible officer to prepare, or cause to be prepared, a remedial action plan based upon factors comparable to those described in California Health and Safety Code Section 25356.1(d) or (B) determine, on the basis of the particular facts and circumstances, which shall be comparable to those described in California Health and Safety Code Section 25356.1(h)(3), that the remedial action is not required. All of those reports shall be made a part of the record of the hearing on the resolution of intention to establish the district. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 144, 2023)

A. The Clerk shall publish a notice of the hearing pursuant to California Government Code Sections 6060 and 6061 in a newspaper of general circulation published in the area of the proposed district. Publication shall be complete at least seven days prior to the date of the hearing.

B. The notice shall contain all of the following information:

1. The text or a summary of the resolution of intention to establish the district which
may refer to documents on file in the office of the Clerk for detail.

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City of Newport Beach, CA § 3.32.240 NEWPORT BEACH CODE § 3.32.280

2. The time and place of the hearing on the establishment of the district.

3. A statement that at the hearing the testimony of all interested persons or taxpayers for
or against the establishment of the district, the extent of the district, or the furnishing
of specified types of public facilities or services will be heard. The notice shall also
describe, in summary, the effect of protests made by registered voters or landowners
against the establishment of the district, the extent of the district, the furnishing of a
specified type of facilities or services, or a specified special tax, as provided in

4. A description of the proposed voting procedure. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 145, 2023)

Proposed District.

The Clerk may also give notice of the hearing by first-class mail to each registered voter and to each landowner within the proposed district. This notice shall be mailed at least fifteen (15) days before the hearing and shall contain the same information as is required to be contained in the notice published pursuant to Section 3.32.240. (Ord. 94-40 § 2 (part), 1994)

At the hearing, protests against the establishment of the district, the extent of the district, or the furnishing of specified types of public facilities or services within the district may be made orally or in writing by any interested persons or taxpayer. Any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the irregularities and defects to which objection is made. All written protests shall be filed with the Clerk on or before the time fixed for the hearing. The City Council may waive any irregularities in the form or content of any written protest and at the hearing may correct minor defects in the proceedings. Written protests may be withdrawn in writing at any time before the conclusion of the hearing. (Ord. 94-40 § 2 (part), 1994)

Special Tax or Types of Facilities or Services From Resolution of Formation.

If fifty (50) percent or more of the registered voters, or six registered voters, whichever is more, residing within the territory proposed to be included in the district, or the owners of one-half or more of the area of the land in the territory proposed to be included in the district and not exempt from the special tax, file written protests against the establishment of the district, and protests are not withdrawn so as to reduce the value of the protests to less than a majority, no further proceedings to create the specified special improvement district or to levy the specified special tax shall be taken for a period of one year from the date of the decision of the City Council.

If the majority protests of the registered voters or of the landowners are only against the furnishing of a specified type or types of facilities or services within the district, or against levying a specified special tax, those types of facilities or services or the specified special tax shall be eliminated from the resolution of formation, but the formation may otherwise proceed. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 146, 2023)

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City of Newport Beach, CA § 3.32.280 REVENUE AND FINANCE § 3.32.290

Resolution of Intention – Determination to Abandon or Proceed With Establishment of District.

The hearing may be continued from time to time, but shall be completed within thirty (30) days, except that if the City Council finds that the complexity of the proposed district or the need for public participation requires additional time, the hearing may be continued from time to time for a period not to exceed six months. The City Council may modify the resolution of intention by eliminating proposed facilities or services, or by changing the rate or method of apportionment of the proposed special tax so as to reduce the maximum special tax for all or a portion of the owners of property within the proposed district, or by removing territory from the proposed district. Any modifications shall be made by action of the City Council at the public hearing. If the City Council proposes to modify the resolution of intention in a way that will increase the probable special tax to be paid by the owners of any lot or parcel, it shall direct that a report be prepared that includes a brief analysis of the impact of the proposed modifications on the probable special tax to be paid by the owners of lots or parcels in the district, and shall receive and consider the report before approving the modifications or any resolution of formation which includes those modifications. At the conclusion of the hearing, the City Council may abandon the proposed establishment of the special improvement district or may, after passing upon all protests, determine to proceed with establishing the district. (Ord. 94-40 § 2 (part), 1994)

Finding Concerning Validity and Conformity of Prior Proceedings.

A. If the City Council determines to establish the district, it shall adopt a resolution of
formation establishing the district.

The resolution of formation shall contain all of the information required to be included in
the resolution of intention to establish the district specified in Section 3.32.220. If a special
tax is proposed to be levied in the district to pay for any facilities or services and the special
tax has not been eliminated by majority protest pursuant to Section 3.32.270, the resolution
shall:

1. State that the proposed special tax to be levied within the district has not been
precluded by majority protest pursuant to Section 3.32.270.

2. Identify any facilities or services proposed to be funded with the special tax.

3. Set forth the name, address, and telephone number of the office, department, or
bureau which will be responsible for preparing annually a current roll of special tax
levy obligations by assessor’s parcel number and which will be responsible for
estimating future special tax levies pursuant to Section 3.32.640.

4. State that upon recordation of a notice of special tax lien pursuant to California Streets
and Highways Code Section 3114.5, a continuing lien to secure each levy of the
special tax shall attach to all nonexempt real property in the district and this lien shall
continue in force and effect until the special tax obligation is prepaid and permanently
satisfied and the lien canceled in accordance with law or until collection of the tax by
the City ceases.

5. Set forth the County of Recordation and the book and page in the Book of Maps of

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City of Newport Beach, CA § 3.32.290 NEWPORT BEACH CODE § 3.32.330

Assessments and Community Facilities Districts in the County Recorder’s office
where the boundary map of the proposed special improvement district has been
recorded pursuant to California Streets and Highways Code Sections 3111 and 3113.

B. In the resolution of formation adopted pursuant to subsection (A) of this section, the City
Council shall determine whether all proceedings were valid and in conformity with the
requirements of this Code. If the City Council determines that all proceedings were valid
and in conformity with the requirements of this Code, it shall make a finding to that effect
and that finding shall be final and conclusive.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 147, 2023)

A tax imposed pursuant to this Code is a special tax and not a special assessment, and there is no requirement that the tax be apportioned on the basis of benefit to any property. However, a special tax levied pursuant to this Code may be on or based on benefit received by parcels of real property, the cost of making facilities or authorized services available to each parcel, or other reasonable basis as determined by the City Council. A special tax apportioned on any of these bases shall not be construed to be on or based upon the ownership of real property. (Ord. 94-40 § 2 (part), 1994)

A. A special improvement district may include areas of territory that are not contiguous.

B. In establishing the boundaries of the district, the City Council may alter the exterior
boundaries of the district to include less territory than that described in the notice of the
hearing but it may not include any territory not described in the notice of the hearing.
(Ord. 94-40 § 2 (part), 1994)

Adjustment.

The City Council may submit a proposition to establish or change the appropriations limit, as defined by subdivision (h) of § 8 of Article XIII B of the California Constitution, of a special improvement district to the qualified electors of a proposed or established district. The proposition establishing or changing the appropriations limit shall become effective if approved by the qualified electors voting on the proposition and shall be adjusted for changes in the cost of living and changes in populations, as defined by California Government Code Sections 7901(b) and (c), except that the change in population may be estimated by the City Council in the absence of an estimate by the Department of Finance, and in accordance with § 1 of Article XIII B of the California Constitution. For purposes of adjusting for changes in population, the population of the district shall be deemed to be at least one person during each calendar year. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 148, 2023; Ord. 2025-37, 1/13/2026)

A. The City Council shall then submit the levy of any special taxes to the qualified electors of the proposed special improvement district subject to the levy or to the qualified electors of the territory to be annexed by the special improvement district subject to the levy in the next general election or in a special election to be held, notwithstanding any other

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City of Newport Beach, CA § 3.32.330 REVENUE AND FINANCE § 3.32.340

requirement, including any requirement that elections be held on specified dates, contained
in the California Elections Code, at least ninety (90) days, but not more than one hundred
eighty (180) days, following the adoption of the resolution of formation. The City Council
shall provide the resolution of formation, a certified map of sufficient scale and clarity to
show the boundaries of the district, and a sufficient description to allow the election official
to determine the boundaries of the district to the official conducting the election within
three business days after the adoption of the resolution of formation. Assessor’s parcel
numbers for the land within the district shall be included if it is a landowner election or the
district does not conform to an existing district’s boundaries and if requested by the official
conducting the election. If the election is to be held less than one hundred twenty-five (125)
days following the adoption of the resolution of formation, the concurrence of the election
official conducting the election shall be required. However, any time limit specified by this
section or requirement pertaining to the conduct of the election, including any time limit
or requirement applicable to any election conducted pursuant to Article VI of this chapter,
may be waived with the unanimous consent of the qualified electors of the proposed district
and the concurrence of the election official conducting the election.

B. Except as otherwise provided in subsection (C) of this section, if at least twelve (12)
persons, who need not necessarily be the same twelve (12) persons, have been registered to
vote within the territory of the proposed special improvement district for each of the ninety
(90) days preceding the close of the protest hearing, the vote shall be by the registered
voters of the proposed district, with each voter having one vote. Otherwise, the vote shall
be by the landowners of the proposed district and each land-owner who is the owner of
record at the close of the protest hearing, or the authorized representative thereof, shall have
one vote for each acre or portion of an acre of land that he or she owns within the proposed
special improvement district. The number of votes to be voted by a particular landowner
shall be specified on the ballot provided to that landowner.

C. If the proposed special tax will not be apportioned in any tax year on any portion of
property in residential use in that tax year, as determined by the City Council, the City
Council may provide that the vote shall be by the landowners of the proposed district whose
property would be subject to the tax if it were levied at the time of the election. Each of
these landowners shall have one vote for each acre, or portion thereof, that the landowner
owns within the proposed district which would be subject to the proposed tax if it were
levied at the time of the election.

D. Ballots for the special election authorized by subsection (A) of this section may be
distributed to qualified electors by mail with return postage prepaid or by personal service
by the election official. The official conducting the election may certify the proper mailing
of ballots by an affidavit, which shall constitute conclusive proof of mailing in the absence
of fraud. The voted ballots shall be returned to the election officer conducting the election
not later than the hour specified in the resolution calling the election. However, if all the
qualified voters have voted, the election may be closed with the concurrence of the official
conducting the election.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 149, 2023)

A. Except as otherwise provided in this Code, the provisions of law regulating elections of the City, insofar as they may be applicable, shall govern all elections conducted pursuant to this Code. Except as provided in subsection (B) of this section, there shall be prepared and

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City of Newport Beach, CA § 3.32.340 NEWPORT BEACH CODE § 3.32.370

included in the ballot material provided to each voter an impartial analysis pursuant to
California Elections Code Section 9280, and arguments and rebuttals, if any, pursuant to
California Elections Code Sections 9281 through 9287.

B. If the vote is to be by the landowners of the proposed district, analysis and arguments may
be waived with the unanimous consent of all the land-owners and shall be so stated in the
order for the election.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 150, 2023)

A. If the election is to be conducted by mail ballot, the election official conducting the election shall provide ballots and election materials pursuant to subsection (D) of Section 3.32.330 and Section 3.32.340, together with all supplies and instructions necessary for the use and return of the ballot.

B. The identification envelope for return of mail ballots used in landowner elections shall
contain the following:

1. The name of the landowner.

2. The address of the landowner.

3. A declaration, under penalty of perjury, stating that the voter is the owner of record
or the authorized representative of the landowner entitled to vote and is the person
whose name appears on the identification envelope.

4. The printed name and signature of the voter.

5. The address of the voter.

6. The date of signing and place of execution of the declaration described in subsection
(B)(3) of this section.

7. A notice that the envelope contains an official ballot and is to be opened only by the
canvassing board.
(Ord. 94-40 § 2 (part), 1994)

After the canvass of returns of any election pursuant to Section 3.32.330, the City Council may levy any special tax as specified in the resolution of formation adopted pursuant to subsection (A) of Section 3.32.290 within the territory of the district if two-thirds of the votes cast upon the question of levying the tax are in favor of levying that tax. (Ord. 94-40 § 2 (part), 1994)

Upon a determination by the City Council that the requisite two-thirds of votes cast in an election held pursuant to Section 3.32.330 are in favor of levying the special tax, the Clerk shall record the notice of special tax lien provided for in California Streets and Highways Code Section 3114.5 whereupon the lien of the special tax shall attach as provided in California Streets and Highways Code Section 3115.5. The notice of special tax lien shall be recorded in the office of

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City of Newport Beach, CA § 3.32.370 REVENUE AND FINANCE § 3.32.400

the County Recorder in each county in which any portion of the district is located. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 151, 2023)

Taxes – Filings.

California Streets and Highways Code Section 3100 et seq. applies with respect to any proceedings undertaken pursuant to this Code. This Code is a “principal act” as that term is defined in California Streets and Highways Code Section 3100. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 152, 2023)

Voters.

After the canvass of returns of any election conducted pursuant to Section 3.32.330, the City Council shall take no further action with respect to levying the specified special tax within the special improvement district for one year from the date of the election if the question of levying that specified special tax fails to receive approval by two-thirds of the votes cast upon the question. (Ord. 94-40 § 2 (part), 1994)

Perform Work – Contract With Original Bidder.

A. The owners of three-fourths of the area of lands taxed or liable to be taxed, or their agents
(who shall declare under penalty of perjury that they are such owners or agents), shall not
be required to present sealed proposals or bids when the City Council calls for bids
preparatory to letting a contract or contracts to do work financed pursuant to this Code, but
may, within ten days after the publication of the notice of the award of the contract, elect
to perform the work and enter into a written contract to do the whole work at prices not
exceeding the prices specified in the bid of the bidder to whom the contract was awarded,
and all work done under the contract shall be subject to any regulations as may be
prescribed by the City Council.

B. If the owners elect not to perform the work and not to enter into a written contract for that
work within ten days of publication of the notice of the award of the contract, or to
commence the work within fifteen (15) days after the date of the written contract entered
into between the owners and the City, and to continue that work with diligence to
completion, as determined by the City Council, a contract shall be entered into by the City
with the original bidder to whom the contract was awarded at the prices specified in his or
her bid.

C. If, in the opinion of the City Council, the public interest will not be served by allowing the
property owners to enter into a contract in accordance with subsection (A) of this section,
the City Council may so provide in the resolution of intention adopted pursuant to Section
3.32.220.
(Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.410 REVENUE AND FINANCE § 3.32.450

Article IV

Extension of Authorized Facilities and Services and Changes in Special Taxes

Upon the establishment of a special improvement district, only the public facilities and services as described in the resolution of formation may be financed by the district under the authority of this Code, except as provided in this article. (Ord. 94-40 § 2 (part), 1994)

or Take Other Action Prohibited.

Under no circumstances shall any buyer or prospective buyer of any completed structure for which a certificate of occupancy for private residential use has been issued which is located within any district formed pursuant to this Code be asked, required, or otherwise induced to waive any right to petition or take any other action authorized pursuant to this article. No contract, agreement or covenant shall be binding with respect to such a waiver. (Ord. 94-40 § 2 (part), 1994)

Upon approval of a special tax pursuant to Article III of this Code, the special tax may be levied only at the rate and may be apportioned only in the manner specified in the resolution of formation, except as provided in this article, and except that the City Council may levy the special tax at a rate lower than that specified in the resolution. In addition, the special tax may be levied only so long as it is needed to pay the principal and interest on debt incurred in order to construct facilities under authority of this Code, or so long as it is needed to pay the costs and incidental expenses of services or of the construction of facilities authorized by this Code.

When the City Council determines that the special tax shall cease to be levied, the City Council shall direct the clerk to record a notice of cessation of special tax which shall state that the obligation to pay the special tax has ceased and that the lien imposed by the notice of special tax lien recorded in Book _____, and Page _____ of the records of the County Recorder of Orange County, State of California, is extinguished. The notice of cessation of special tax shall additionally identify the book and page of the Book of Maps of Assessment and Community Facilities Districts wherein the map of the boundaries of the district is recorded. (Ord. 94-40 § 2 (part), 1994)

Except as otherwise provided in this article, the City Council may, at any time, after conducting a public hearing, eliminate one or more of the types of facilities and services specified in the resolution of intention to establish the district but may not finance any types of facilities and services that were not specified in the resolution of intention. (Ord. 94-40 § 2 (part), 1994)

Financed.

A. If the City Council determines that the public convenience and necessity require any

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City of Newport Beach, CA § 3.32.450 REVENUE AND FINANCE § 3.32.480

change in the types of authorized public facilities or services which should be financed by an established special improvement district, that the rate or method of apportionment of a special tax should be changed, or that a new special tax should be proposed, the City Council may adopt a resolution of consideration to alter the types of public facilities or services to be financed by the district, to levy a new special tax or special taxes, or, except as provided in subsection (B) of this section, to alter the rate or method of apportionment of the special tax. Those proceedings may be commenced at any time.

B. The City Council shall not adopt a resolution of consideration to reduce the rate of any special tax or terminate the levy of any special tax if the proceeds of that tax are being utilized to retire any debt incurred pursuant to this Code unless the City Council determines that the reduction or termination of that tax would not interfere with the timely retirement of that debt.

C. The resolution of consideration adopted pursuant to subsection (A) of this section shall contain all of the information required by subsections (A) to (E), inclusive, of Section 3.32.480. (Ord. 94-40 § 2 (part), 1994)

Taxes – Petition – Fee.

A. If a petition signed by fifty (50) percent or more of the registered voters residing in the
district, or by the owners of fifty (50) percent or more of the territory within the district, is
filed with the City Council requesting that proceedings be commenced to change the types
of public facilities or services financed by the district or that the rate or method of
apportionment of an existing special tax be changed, or that a new special tax be levied, the
City Council shall within forty (40) days thereafter adopt a resolution of consideration in
the form specified in Section 3.32.480 to make those changes within the special
improvement district except that an existing special tax being used to pay off any debt
incurred in order to build or acquire capital facilities under this Code shall not be reduced
or terminated if doing so would interfere with the timely retirement of that debt.

B. Any petition filed by landowners shall be accompanied by the payment of the fee which
the City Council determines. That fee may be imposed in an amount sufficient to
compensate the City Council for all costs incurred in conducting proceedings to change the
district pursuant to this article.
(Ord. 94-40 § 2 (part), 1994)

Instruments – Signatures.

The petition shall request the City Council to commence proceedings to make specified changes to a named special improvement district. The petition may consist of any number of separate instruments each of which shall comply with all the requirements of a petition except as to the number of signatures. (Ord. 94-40 § 2 (part), 1994)

The resolution of consideration to alter the types of public facilities and services financed by an

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City of Newport Beach, CA § 3.32.480 NEWPORT BEACH CODE § 3.32.510

established special improvement district, or to levy a new special tax or special taxes, or to alter
the rate or method of apportionment of an existing special tax, shall do all of the following:

A. State the name of the area.

B. Generally describe the territory included in the area.

C. Specify the changes in public facilities and services which it is proposed that the district
finance.

D. Specify any new special taxes which would be levied to pay for new or existing facilities
and services and any proposed alteration to the rate or method of apportionment of an
existing special tax.

E. Fix a time and place for a hearing upon the resolution which shall not be less than thirty
(30) or more than sixty (60) days after the adoption of the resolution of consideration.
(Ord. 94-40 § 2 (part), 1994)

Taxes – Notice of Hearing.

The Clerk shall give notice of the hearing in the same manner and within the same time as
provided for the giving of notice of a hearing on a resolution of intention to establish a special
improvement district.

The notice shall do all of the following:

A. Contain the text or a summary of the resolution.

B. State the time and place for hearing.

C. State that at the hearing the testimony of all interested persons or taxpayers for or against
the proposed changes in public facilities and services and the levying of additional special
taxes or of changing existing special taxes will be heard. The notice shall also describe, in
summary, the effect of protests made by registered voters or landowners against the
proposed changes in facilities or services and the levying of additional taxes or changes in
existing taxes.

D. Describe the proposed voting procedure.
(Ord. 94-40 § 2 (part), 1994)

Taxes – Protests.

At the hearing, protests against the proposals described in the resolution may be made orally, or in writing by any interested persons. Any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the irregularities or defects to which objection is made. All written protests shall be filed with the Clerk on or before the time fixed for the hearing. The City Council may waive any irregularities in the form or content of any written protest and at the hearing may correct minor defects in the proceedings. Written protests may be withdrawn in writing at any time before the conclusion of the hearing. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.510 REVENUE AND FINANCE § 3.32.530

If fifty (50) percent or more of the registered voters, or six registered voters, whichever is more, residing within the district, or the owners of one-half or more of the area of the land in the territory included in the district and not exempt from the special tax file written protests against changing the public facilities or services financed by the district, those changes in the facilities or services shall be eliminated from the resolution ordering changes in the types of public facilities or services to be financed and the changes shall not be included in a resolution for a period of one year from the date of the decision of the legislative body on the hearing.

If fifty (50) percent or more of the registered voters, or six registered voters, whichever is more,

residing within the district, or the owners of one-half or more of the area of the land in the territory included in the district and not exempt from the special tax file written protests against the levying of any additional special taxes within the district, or against a proposed alteration to an existing special tax within the district, those changes shall be eliminated from the resolution and the changes shall not be included in a resolution for a period of one year from the date of the decision of the legislative body on the hearing. (Ord. 94-40 § 2 (part), 1994)

Qualified Electors – Determination of Legal Effect of Proposed Levy or of Changes in Facilities and Services – Notice of Changes.

A. The hearing may be continued from time to time, but shall be completed within thirty (30)
days, except that if the City Council finds that the complexity of the proposed changes or
the need for public participation requires additional time, the hearing may be continued
from time to time for a period not to exceed six months. At the conclusion of the hearing
the City Council may abandon the proceedings or may, after passing upon all protests,
submit the question of levying a new special tax or of changing the rate or method of
apportionment of an existing tax or of changing the types of facilities and services to be
financed by the district, or any combination, to the qualified electors of the district as
specified in Article III of this chapter.

B. After the canvass of any election conducted pursuant to this section, the City Council shall
adopt a resolution of change determining that the proposed levy of a new special tax or of
changes in the types of facilities and services to be financed by the district, or any
combination, are lawfully authorized, if two-thirds of the votes cast on the proposition are
in favor of the proposed levy or changes.

C. Upon adoption of a resolution of change, the Clerk shall record notice of the changes
pursuant to California Streets and Highways Code Section 3117.5.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 153, 2023)

The City Council may, by ordinance, dissolve any existing special improvement district which it has created upon making all of the following determinations:

A. That the district is not obligated to pay any outstanding debt.

B. That the district has no authorization to levy any special tax. Upon dissolving a district, the
City Council shall cause an addendum to be recorded to the notice of special tax lien

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City of Newport Beach, CA § 3.32.530 NEWPORT BEACH CODE § 3.32.530

recorded pursuant to California Streets and Highways Code Section 3114.5 which shall state that the special improvement district and all associated liens, if any, have been dissolved.

(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 154, 2023)

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City of Newport Beach, CA § 3.32.540 REVENUE AND FINANCE § 3.32.560

Article V

Annexation of Territory

The City Council may annex territory to an existing special improvement district as provided in this article. The annexed territory need not be contiguous to territory included in the existing special improvement district. The territory proposed to be annexed to the special improvement district may be territory located outside the territorial limits of the City provided that the territory to be annexed to the special improvement district will be annexed to the City prior to, or concurrently with, the annexation of the subject territory to the special improvement district and, if the annexation of the subject territory to the City is not completed, the subject territory shall not be annexed to the special improvement district. The City Council shall not adopt a resolution of intention pursuant to Section 3.32.550 if the territory proposed to be annexed includes territory which is outside the territorial limits of the City unless an initial action, petition, or filing for the annexation of that territory to the City has been adopted or filed, as appropriate. (Ord. 94-40 § 2 (part), 1994)

If the City Council determines that public convenience and necessity require that territory be added to an existing special improvement district, or if the voters residing within certain territory or owners of land there request the City Council to include territory within the district, the City Council may adopt a resolution of intention to annex the territory or to provide for future annexation of the territory. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 155, 2023)

The resolution of intention to annex the territory or to provide for future annexation of the territory shall do all of the following:

A. State the name of the existing special improvement district.

B. Generally describe the territory included in the existing district and the territory proposed
to be annexed. As an alternative, the resolution may identify territory proposed for
annexation in the future, with the condition that parcels within that territory may be
annexed only with the unanimous approval of the owner or owners of each parcel or parcels
at the time that parcel or those parcels are annexed.

C. Specify the types of public facilities and services provided pursuant to this Code in the
existing district and the types of public facilities and services to be provided in the territory
proposed to be annexed or to be annexed in the future; and include a plan for sharing
facilities and providing services that will be provided in common within the existing district
and the territory proposed to be annexed or to be annexed in the future.

D. Specify any special taxes which would be levied within the territory proposed to be
annexed or to be annexed in the future to pay for public facilities and services provided
pursuant to this Code within that territory. A special tax proposed to pay for services to be
supplied within the territory proposed to be annexed or to be annexed in the future shall be

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City of Newport Beach, CA § 3.32.560 NEWPORT BEACH CODE § 3.32.590

equal to any special tax levied to pay for the same services in the existing district, except
that a higher or lower tax may be levied within the territory proposed to be annexed or
to be annexed in the future to the extent that the actual cost of providing the services in
that territory is higher or lower than the cost of providing those services in the existing
district. A special tax proposed to pay for public facilities financed with bonds secured by
the existing special improvement district shall be the same as the tax levied in the existing
district for that purpose, except that a higher special tax may be levied for that purpose
within the territory proposed to be annexed or to be annexed in the future to compensate
for the interest and principal previously paid by the existing special improvement district,
less any depreciation allocable to the public facility.

E. Specify any alteration in the special tax rate levied within the existing special improvement
district as a result of the proposed annexation. The maximum tax rate in the existing special
improvement district may not be increased as a result of proceedings pursuant to this
article.

F. Fix a time and place for a hearing upon the resolution which shall not be less than thirty
(30) nor more than sixty (60) days after the adoption by the City Council of the resolution
of intention to annex territory or to provide for future annexation of territory pursuant to

The Clerk shall give notice of the hearing in the same manner and within the same time as provided for the giving of notice of a hearing on a resolution of intention to establish a special improvement district, as required by Section 3.32.240. Notice pursuant to Section 3.32.250 may be mailed to the registered voters and landowners within the territory proposed to be annexed or proposed to be annexed in the future.

The notice shall do all of the following:

A. Contain the text or a summary of the resolution.

B. State the time and place for the hearing.

C. State that at the hearing the testimony of all interested persons for or against the annexation
of territory or the future annexation of territory to the special improvement district or the
levying of special taxes within the territory proposed to be annexed or proposed to be
annexed in the future will be heard.
(Ord. 94-40 § 2 (part), 1994)

At the hearing, protests against the proposals described in the resolution of intention may be made orally by any interested person. Any protests pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the irregularities or defects to which objection is made. All written protests shall be filed with the Clerk prior to the time fixed for the hearing. The City Council may waive any irregularities in the form or content of any written protest and at the hearing may correct minor defects in the proceedings. Written protests may be withdrawn in writing at any time before the conclusion of the hearing. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.590 REVENUE AND FINANCE § 3.32.620

If fifty (50) percent or more of the registered voters, or six registered voters, whichever is more, residing within the existing special improvement district, or if fifty (50) percent or more of the registered voters or six registered voters, whichever is more, residing within the territory proposed for annexation or proposed to be annexed in the future, or if the owners of one-half or more of the area of land included in the existing district or if the owners of one-half or more of the area of land in the territory proposed to be annexed or proposed to be annexed in the future, file written protests against the proposed annexation of territory to the existing special improvement district or the proposed addition of territory to the existing special improvement district in the future, and protests are not withdrawn so as to reduce the protests to less than a majority, no further proceedings shall be undertaken for a period of one year from the date of decision of the City Council on the issues discussed at the hearing. (Ord. 94-40 § 2 (part), 1994)

Submission of Special Tax Question to Electors – Annexation of Territory – Effectiveness of Ballots Contingent on Passage of Other Ballot Measures.

A. The hearing may be continued from time to time but shall be completed within thirty (30)
days, provided that the City Council may extend that time up to six months if it determines
that it is in the public interest to do so. At the conclusion of the hearing, the City Council
may abandon the proceedings, or may, after passing upon all protests, submit the question
of levying a special tax within the area proposed to be annexed to the existing special
improvement district to the qualified electors of the area proposed to be annexed as
specified in Article III of this chapter, or may provide for the annexation of territory
proposed for annexation in the future upon the unanimous approval of the owner or owners
of each parcel or parcels at the time that the parcel or parcels are annexed, without
additional hearings.

B. Notwithstanding any other provision of law, when the question of levying a special tax
within the areas proposed to be annexed into an existing special improvement district
appears on the same ballot as the question of annexation of the same territory to a school
district, the effectiveness of each ballot measure may be made contingent on the passage of
the other ballot measure.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 156, 2023)

A. After the canvass of returns of any election conducted in accordance with Section 3.32.600, the City Council shall determine that the area proposed to be annexed is added to and part of the existing special improvement district with full legal effect, and the City Council may levy any special tax within the annexed territory, as specified in the resolution of intention to annex adopted pursuant to Section 3.32.550, if two-thirds of the votes cast on the proposition are in favor of levying the special tax.

B. Upon a determination by the City Council that the area proposed to be annexed is added to the existing special improvement district, the Clerk shall record notice of the annexation pursuant to California Streets and Highways Code Section 3117.5. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 157, 2023)

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City of Newport Beach, CA § 3.32.620 NEWPORT BEACH CODE § 3.32.620

Action.

After the canvass of returns of any election conducted in accordance with Section 3.32.600, the City Council shall take no further action on annexing the territory proposed to be annexed to the special improvement district for a period of one year from the date of the election if less than two-thirds of the votes cast on the proposition are in favor of levying the special tax. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.630 REVENUE AND FINANCE § 3.32.640

Article VI

Procedures for Levying

Properties and Entities From Special Tax – Use of Tax Proceeds – Tax Collection, Penalties, Etc. – Lien to Secure Levy of Special Taxes.

After a special improvement district has been created and authorized to levy specified special taxes pursuant to Article III, IV, or V of this chapter, the City Council may, by ordinance, levy the special taxes at the rate and apportion them in the manner specified in the resolution adopted pursuant to Article III, IV, or V of this chapter. The City Council may provide, by resolution, for the levy of the special tax in the current tax year or future tax years at the same rate or at a lower rate than the rate provided by ordinance, if the resolution is adopted and a certified list of all parcels subject to the special tax levy, including the amount of the tax to be levied on each parcel for the applicable tax year, is filed by the Clerk or other official designated by the City Council with the County Auditor on or before August 10th of that tax year. The Clerk or other official designated by the City Council may file the certified list after August 10th but not later than August 21st if the Clerk or other official obtains prior written consent of the County Auditor. Properties or entities of the State, Federal, or other local governments shall, except as otherwise provided in Section 3.32.160, be exempt from the special tax. No other properties or entities are exempt from the special tax unless the properties or entities are expressly exempted in the resolution of formation to establish a district adopted pursuant to Section 3.32.290 or in a resolution of consideration to levy a new special tax or special taxes or to alter the rate or method of apportionment of an existing special tax as provided in Section 3.32.480. The proceeds of any special tax may only be used to pay, in whole or part, the cost of providing public facilities, services, and incidental expenses pursuant to this Code. The special tax shall be collected in the same manner as ordinary ad valorem property taxes are collected and shall be subject to the same penalties and the same procedures, sale, and lien priority in case of delinquency as is provided for ad valorem taxes, unless another procedure has been authorized in the resolution of formation establishing the district and adopted by the City Council. The tax collector may collect the special tax at intervals as specified in the resolution of formation, including intervals different from the intervals at which the ordinary ad valorem property taxes are collected. The tax collector may deduct the reasonable administrative costs incurred in collecting the special tax.

All special taxes levied by a special improvement district shall be secured by the lien imposed pursuant to California Streets and Highways Code Section 3115.5. This lien shall be a continuing lien and shall secure each levy of special taxes. The lien of the special tax shall continue in force and effect until the special tax obligation is prepaid, permanently satisfied, and canceled in accordance with Section 3.32.690 or until the special tax ceases to be levied by the City Council in the manner provided in Section 3.32.430. If any portion of a parcel is encumbered by a lien pursuant to this Code, the entirety of the parcel shall be encumbered by that lien. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 158, 2023)

Responsible Office – Estimation of Future Special Tax Levies – Liability for Inaccurate Estimates – Notice of Special Tax – Form.

A. The City Council shall designate an office, department, or bureau of the City which shall be responsible for annually preparing the current roll of special tax levy obligations, by

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City of Newport Beach, CA § 3.32.640 NEWPORT BEACH CODE § 3.32.640

assessor’s parcel number, on nonexempt property within the district and which will be
responsible for estimating future special tax levies.

The designated office, department, or bureau shall establish procedures to promptly
respond to inquiries concerning current and future estimated tax liability. Neither the
designated office, department, or bureau, nor the City Council, shall be liable if any
estimate of future tax liability is inaccurate, nor for any failure of any seller to request a
notice of special tax or to provide the notice to a buyer.

B. For purposes of enabling sellers of real property subject to the levy of special taxes to
satisfy the notice requirements of California Civil Code Section 1102.6a(b), the designated
office, department, or bureau shall furnish a notice of special tax to any individual
requesting the notice or any owner of property subject to a special tax levied by the City
within five business days of receiving a request for such notice. The City may charge a
reasonable fee for this service not to exceed ten dollars ($10.00).

C. The notice shall contain the heading “NOTICE OF SPECIAL TAX” in no smaller than
eight-point type, and shall be in substantially the following form. The form may be
modified as needed to clearly and accurately consolidate information about the tax structure
and other characteristics of two or more districts that levy or are authorized to levy special
taxes with respect to the lot, parcel, or unit. The notice shall be completed by the designated
office, department, or bureau except for the signatures and date of signing:

NOTICE OF SPECIAL TAX
CITY OF NEWPORT BEACH
SPECIAL IMPROVEMENT DISTRICT NO._____ COUNTY OF ORANGE,
CALIFORNIA
TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS:
__________
__________
THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR PURCHASING THIS
PROPERTY.
This property is subject to a special tax, which is in addition to the regular property
taxes and any other charges and benefit assessments on the parcel. This special tax
may not be imposed on all parcels within the City of Newport Beach. If you fail to
pay this tax when due each year, the property may be foreclosed upon and sold. The
tax is used to provide public facilities or services that are likely to particularly benefit
the property. YOU SHOULD TAKE THIS TAX AND THE BENEFITS FROM THE
PUBLIC FACILITIES AND SERVICES FOR WHICH IT PAYS INTO ACCOUNT
IN DECIDING WHETHER TO BUY THIS PROPERTY.
2. The maximum special tax which may be levied against this parcel to pay for public
facilities is $_____ during the - tax year. This amount will increase by
_____ percent per year after that (if applicable). The special tax will be levied each
year until all of the authorized facilities are built and all special tax bonds are repaid,
but in any case not after the _____ tax year.

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City of Newport Beach, CA § 3.32.640 REVENUE AND FINANCE § 3.32.660

An additional special tax will be used to pay for ongoing services, if applicable. The maximum amount of this tax is _____ dollars ($_____) during the - tax year. This amount may increase by _____ (if applicable), and may be levied until the - _____ tax year (or forever, as applicable.) 3. The authorized facilities which are being paid for by the special taxes, and by the money received from the sale of bonds which are being repaid by the special taxes, are: [identify the facilities] These facilities may not yet have all been constructed or acquired and it is possible that some may never be constructed or acquired. In addition, the special taxes may be used to pay for costs of the following services: YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION WHICH AUTHORIZED CREATION OF THE SPECIAL IMPROVEMENT DISTRICT, AND WHICH SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED, FROM THE CITY OF NEWPORT BEACH BY CALLING _____ (telephone number). THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE ESTIMATED REASONABLE COST OF PROVIDING THE DOCUMENT. I (WE) ACKNOWLEDGE THAT I (WE) HAVE RECEIVED A COPY OF THIS NOTICE. I (WE) UNDERSTAND THAT I (WE) MAY TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT AFTER RECEIVING THIS NOTICE FROM THE OWNER OR AGENT SELLING THE PROPERTY. THE CONTRACT MAY BE TERMINATED WITHIN THREE DAYS IF THE NOTICE WAS RECEIVED IN PERSON OR WITHIN FIVE DAYS AFTER IT WAS DEPOSITED IN THE MAIL BY GIVING WRITTEN NOTICE OF THAT TERMINATION TO THE OWNER OR AGENT SELLING THE PROPERTY. DATE:

(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 159, 2023)

Special Tax or Increase in Special Tax – Time for Commencement – Time for Perfection of Appeal From Final Judgment.

Any action or proceeding to attack, review, set aside, void, or annul the levy of a special tax or an increase in a special tax pursuant to this Code shall be commenced within thirty (30) days after the special tax is approved by the voters. Any appeal from a final judgment in that action or proceeding shall be perfected within thirty (30) days after the entry of judgment. (Ord. 94-40 § 2 (part), 1994)

Form – Termination of Agreement – Violations and Penalties.

A. If a lot, parcel, or unit of a subdivision is subject to a special tax levied pursuant to this
Code, the subdivider, his or her agent, or representative, shall not sell, or lease for a term
exceeding five years, or permit a prospective purchaser or lessee to sign a contract of
purchase or a deposit receipt or any substantially equivalent document in the event of a
lease with respect to the lot, parcel, or unit, or cause it to be sold or leased for a term

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City of Newport Beach, CA § 3.32.660 NEWPORT BEACH CODE § 3.32.660

exceeding five years, until the prospective purchaser or lessee of the lot, parcel, or unit has been furnished with and has signed a written notice as provided in this section. The notice shall contain the heading “NOTICE OF SPECIAL TAX” in no smaller than eight-point type, and shall be in substantially the following form, although the form may be modified as needed to clearly and accurately consolidate information about the tax structure and other characteristics of two or more districts that levy or are authorized to levy special taxes with respect to the lot, parcel, or unit:

NOTICE OF SPECIAL TAX CITY OF NEWPORT BEACH

SPECIAL IMPROVEMENT DISTRICT NO. __________ COUNTY OF ORANGE, CALIFORNIA TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS: [address of parcel number] THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A CONTRACT TO PURCHASE THIS PROPERTY. THE SELLER IS REQUIRED TO GIVE YOU THIS NOTICE AND TO OBTAIN A COPY SIGNED BY YOU TO INDICATE THAT YOU HAVE RECEIVED AND READ A COPY OF THIS NOTICE. 1. This property is subject to a special tax, which is in addition to the regular property taxes and any other charges, fees, special taxes, and benefit assessments on the parcel. It is imposed on this property because it is a new development, and may not be imposed generally upon property outside of this new development. If you fail to pay this tax when due each year, the property may be foreclosed upon and sold. The tax is used to provide public facilities or services that are likely to particularly benefit the property. YOU SHOULD TAKE THIS TAX AND THE BENEFITS FROM THE PUBLIC FACILITIES AND SERVICES FOR WHICH IT PAYS INTO ACCOUNT IN DECIDING WHETHER TO BUY THIS PROPERTY. 2. The maximum special tax which may be levied against this parcel to pay for public facilities is $ during the - tax year. This amount will increase by __________ percent per year after that (if applicable). The special tax will be levied each year until all of the authorized facilities are built and all special tax bonds are repaid, but in any case not after the - tax year. An additional special tax will be used to pay for ongoing service costs, if applicable. The maximum amount of this tax is __________ dollars ($__________) during the - tax year. This amount may increase by __________, (if applicable), and that part may be levied until the - tax year (or forever, as applicable.) 3. The authorized facilities which are being paid for by the special taxes, and by the money received from the sale of bonds which are being repaid by the special taxes, are: [identify facilities] These facilities may not yet have all been constructed or acquired and it is possible that some may never be constructed or acquired. In addition, the special taxes may be used to pay for costs of the following services:

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City of Newport Beach, CA § 3.32.660 REVENUE AND FINANCE § 3.32.680

YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION WHICH
AUTHORIZED CREATION OF THE SPECIAL IMPROVEMENT DISTRICT,
AND WHICH SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS
APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED,
FROM THE CITY OF NEWPORT BEACH BY CALLING __________ (telephone
number). THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO
EXCEED THE REASONABLE COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE READ THIS NOTICE AND
RECEIVED A COPY OF THIS NOTICE PRIOR TO ENTERING INTO A
CONTRACT TO PURCHASE, OR DEPOSIT RECEIPT WITH RESPECT TO THE
ABOVE-REFERENCED PROPERTY. I (WE) UNDERSTAND THAT I (WE) MAY
TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT
WITHIN THREE DAYS AFTER RECEIVING THIS NOTICE IN PERSON OR
WITHIN FIVE DAYS AFTER IT WAS DEPOSITED IN THE MAIL BY GIVING
WRITTEN NOTICE OF THAT TERMINATION TO THE OWNER, SUBDIVIDER
OR AGENT SELLING THE PROPERTY.
DATE: __________

B. “Subdivision,” as used in subsection (A) of this section, means improved or unimproved
land that is divided or proposed to be divided for the purpose of sale, lease, or financing,
whether immediate or future, into two or more lots, parcels, or units and includes a
condominium project, as defined by California Civil Code Section 6542, a community
apartment project, a stock cooperative, and a limitedequity housing cooperative, as defined
in California Business and Professions Code Sections 11004, 11003.2, and 11003.4,
respectively.

C. The buyer shall have three days after delivery in person or five days after delivery by
deposit in the mail of any notice required by this section, to terminate his or her agreement
by delivery of written notice of that termination to the owner, subdivider, or agent.

D. The failure to furnish the notice to the buyer or lessee, and failure of the buyer or lessee to
sign the notice of a special tax, shall not invalidate any grant, conveyance, lease, or
encumbrance.

E. Any person or entity who willfully violates the provisions of this section shall be liable to the purchaser of a lot or unit which is subject to the provisions of this section, for actual damages, and in addition thereto, shall be guilty of a public offense punishable by a fine in an amount not to exceed five hundred dollars ($500.00). In an action to enforce such liability or fine, the prevailing party shall be awarded reasonable attorney’s fees. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 160, 2023)

For any special improvement district or zone thereof, the City Council may fix and collect charges in the same manner as for miscellaneous extended services in County service areas. (Ord. 94-40 § 2 (part), 1994)

Any charges collected pursuant to this Code may only be used for facilities and services

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City of Newport Beach, CA § 3.32.680 NEWPORT BEACH CODE § 3.32.690

authorized by this Code. (Ord. 94-40 § 2 (part), 1994)

Lien.

In the event that the special tax is permanently satisfied as to a particular parcel of land, the Clerk shall prepare and record in the office of the County Recorder of the County of Orange, and the County Recorder shall accept for recordation, a notice of cancellation of special tax lien as to that parcel. The notice of cancellation of special tax lien shall identify with particularity the special tax which has been prepaid and permanently satisfied, shall state the book and page number in the records of the County Recorder where the notice of special tax lien being canceled is recorded, shall contain the legal description and assessor’s parcel number of the particular parcel of land subject to the lien, and shall contain the name of the owner of record of the parcel. The recorder shall mail the original notice of cancellation of special tax lien to the owner of the property after recording the document. The City Council may specify a charge for the preparation and recordation of this notice. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.700 REVENUE AND FINANCE § 3.32.740

Article VII

Bonds

Whenever the City Council deems it necessary for the special improvement district to incur a bonded indebtedness, it shall, by resolution, set forth all of the following:

A. A declaration of the necessity for the indebtedness.

B. The purpose for which the proposed debt is to be incurred.

C. The amount of the proposed debt.

D. The time and place for a hearing by the City Council on the proposed debt issue. (Ord. 94-40 § 2 (part), 1994)

Indebtedness.

The amount of the proposed bonded indebtedness may include all costs and estimated costs incidental to, or connected with, the accomplishment of the purpose for which the proposed debt is to be incurred, including, but not limited to, the estimated costs of construction or acquisition of buildings, or both; acquisition of land, rights-of-way, water, sewer, or other capacity or connection fees; satisfaction of contractual obligations relating to expenses or the advancement of funds for expenses existing at the time the bonds are issued pursuant to this Code; architectural, engineering, inspection, legal, fiscal, and financial consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the district estimated to be due and payable within two years of issuance of the bonds; election costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit, other credit enhancement costs, and printing costs. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 161, 2023)

The Clerk shall publish a notice of the hearing pursuant to California Government Code Sections 6060 and 6061 in a newspaper of general circulation circulated within the district. The notice shall state:

A. The time and place of the hearing on the proposal to issue debt.

B. That at the hearing the testimony of all interested persons, including all persons owning
property in the area, for or against the proposed debt issuance, will be heard.
(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 162, 2023)

At the time and place fixed for the hearing on the resolution declaring the necessity for incurring the bonded indebtedness or at any time and place to which the hearing is adjourned, the City Council shall proceed with the hearing. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.740 NEWPORT BEACH CODE § 3.32.760

At the hearing any person interested, including persons owning property within the area, may appear and present any matters material to the questions set forth in the resolution declaring the necessity for incurring the bonded indebtedness. (Ord. 94-40 § 2 (part), 1994)

For purpose of financing of, or contributing to the financing of, specified public facilities, the City Council may by resolution designate a portion or portions of the district as one or more improvement areas. An area shall be known as “Improvement Area No.” of “City of Newport Beach Special Improvement District No..” After the designation of an improvement area, all proceedings for purposes of a bond election and for the purpose of levying special taxes for payment of the bonds, or for any other change pursuant to Article IV of this chapter, shall apply only to the improvement area for those specified facilities. (Ord. 94-40 § 2 (part), 1994)

After the City Council has made its determination pursuant to Section 3.32.750, if it deems it necessary to incur the bonded indebtedness, it shall by resolution state all of the following:

A. That it deems it necessary to incur the bonded indebtedness.

B. The purpose for which the bonded indebtedness will be incurred.

C. Either of the following in accordance with its previous determination:

1. That the whole of the district will pay for the bonded indebtedness.

2. That a portion of the district will pay for the bonded indebtedness, which portion shall
be described in the resolution of the City Council made pursuant to Section 3.32.750.

D. The principal amount of debt to be incurred.

E. The maximum term the bonds to be issued, which term shall not exceed forty (40) years.

F. The maximum annual rate of interest to be paid, payable annually or semiannually, or in
part annually and in part semiannually, or in such other manner as may be provided by the
City Council.

G. That the proposition will be submitted to the voters.

H. The date of the special improvement district election (which may be consolidated with a
general or special district election including an election to levy a special tax) at which time
the proposition shall be submitted to the voters.

I. If the election is not conducted by mail or hand-delivered ballot, the hours between which
the polls shall be open.

J. If the election is conducted by mail or hand-delivered ballot, the hour when the ballots are
required to be received in the office of the election officer conducting the election, and that
if all qualified electors have voted, the election shall be closed.

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City of Newport Beach, CA § 3.32.760 REVENUE AND FINANCE § 3.32.810

(Ord. 94-40 § 2 (part), 1994)

The resolution provided for in Section 3.32.760 shall constitute the notice of such special bond election and such resolution shall be published in a newspaper of general circulation circulating within the special improvement district. (Ord. 94-40 § 2 (part), 1994)

Propositions relating to the levy of a special tax, the incurring of bonded indebtedness, or to establish or change an appropriations limit, or any combination thereof, under this Code, may be combined into one ballot proposition as determined by the City Council. The qualified electors for all of these purposes shall be determined and the election shall be conducted in the same manner as for a special tax election pursuant to Section 3.32.330. (Ord. 94-40 § 2 (part), 1994)

If the area designated in the resolution adopted pursuant to Section 3.32.760 does not include the entire special improvement district, a separate ballot shall be prepared for the vote upon the proposition to authorize bonds and to levy a special tax for payment of such bonds and only the voters entitled thereto shall be given such ballots. (Ord. 94-40 § 2 (part), 1994)

A two-thirds vote shall be required for the issuance of revenue anticipation bonds under authority of this Code. (Ord. 94-40 § 2 (part), 1994)

If the indebtedness is approved by the voters as required under Section 3.32.800, the City Council may, by resolution, at the time or times it deems proper, provide for the following:

A. The form of the bonds.

B. The execution of the bonds.

C. The issuance of any part of the bonds.

D. The appointment of one or more banks or trust companies within or outside of the state
having the necessary trust powers as trustee, fiscal agent, paying agent, or bond registrar.

E. The execution of a trust agreement or indenture securing the bonds.

F. The pledge or assignment of any revenues of the special improvement district to the
repayment of the bonds.

G. The investment of any bond proceeds and other revenues, including special tax revenues,
by the trustee or fiscal agent in any securities or obligations described in the resolution,

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City of Newport Beach, CA § 3.32.810 NEWPORT BEACH CODE § 3.32.830

indenture, trust agreement, or other instrument providing for the issuance of the bonds. The
resolution may provide for payment to the United States from any available revenues of a
special improvement district of any excess investment earnings required to be rebated by
Federal Law.

H. The date or dates to be borne by the bonds and the time or times of maturity of the bonds
and the place or places and time or times that the bonds shall be payable.

I. The interest, fixed or variable, to be borne by the bonds.

J. The denominations, form, and registration privileges of the bonds.

K. Any other terms and conditions determined by the City Council to be necessary or
desirable.
(Ord. 94-40 § 2 (part), 1994)

Pursue Foreclosure Action – Collection of Delinquent Charges.

A. As a cumulative remedy, if debt is outstanding, the City Council may, not later than four
years after the due date of the last installment of principal thereof, order that any delinquent
special taxes levied in whole or in part for payment of the debt, together with any penalties,
interest, and costs, be collected by an action brought in the superior court to foreclose the
lien of special tax.

B. The City Council may, by resolution, adopted prior to the issuance of debt under this Code
covenant for the benefit of debt holders to commence and diligently pursue to completion
any foreclosure action regarding delinquent installments of any amount levied as a special
tax for the payment of interest or principal of any bonds that are issued, or may employ a
trustee to do so on behalf of the debt holders. The resolution may specify a deadline for
commencement of the foreclosure action and any other terms and conditions the City
Council determines reasonable regarding the foreclosure action.

C. Except as provided in Section 3.32.870, all special taxes, interest, penalties, costs, fees, and
other charges that are delinquent at the time of the ordering of a foreclosure action shall be
collected in the action. In the event that a lot or parcel of property has not been sold
pursuant to judgment in the foreclosure action at the time that subsequent special taxes
become delinquent, the court may include the subsequent special taxes, interest, penalties,
costs, fees, and other charges in the judgment or modified judgment.
(Ord. 94-40 § 2 (part), 1994)

Responsibility for Amounts Not Foreclosed – Costs of Removing Sums From Tax Roll.

A. When any foreclosure actions are ordered, the tax collector shall be credited upon the current tax roll with the amount charged on account of the delinquent special taxes to be sued on, including applicable penalties, interest, and costs, and the tax collector shall be relieved of further duty in regard thereto. Any amounts not the subject of a foreclosure action shall remain collectible by the tax collector.

B. The tax collector may charge the actual cost incurred in removing these sums from the tax roll. This charge shall be added to the costs to be recovered in the foreclosure action.

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City of Newport Beach, CA § 3.32.830 REVENUE AND FINANCE § 3.32.870

(Ord. 94-40 § 2 (part), 1994)

Specified Amounts.

At any time after the tax collector has been relieved of his or her duty to collect sums under
Section 3.32.830 and before judgment in a foreclosure action, the City Council or trustee shall
dismiss the action upon payment of all of the following:

A. The amount of any delinquent special taxes together with any penalties, interest, and costs
accrued thereon to date of complete payment hereunder.

B. Costs of suit, including, but not limited to, litigation guarantees provided by title companies
with respect to all claims of ownership or interest in the subject property.

C. Attorneys’ fees authorized by the local agency.

D. The tax collector’s costs authorized by subsection (B) of Section 3.32.830.
(Ord. 94-40 § 2 (part), 1994)

Complaint.

The foreclosure action shall be brought in the name of the City or trustee on behalf of the bond- holders pursuant to Section 3.32.820 and may be brought within the time specified in Section

A. That on a stated date, a certain sum of special taxes, levied against the subject property (describing it) pursuant to this Code, became delinquent.

B. On that date, bonds issued pursuant to this Code, payable in whole or in part by the subject
special taxes, were outstanding.

C. That the City Council or trustee has ordered the foreclosure.
(Ord. 94-40 § 2 (part), 1994)

General Foreclosure Provisions.

Any judgment shall decree the amount of the continuing lien against each parcel to be foreclosed, and shall order the parcel to be sold on execution as in other cases of the sale of the real property by process of the court. The judgment amount shall include reasonable attorneys’ fees to be fixed by the court, together with interest, penalties, and other authorized charges and costs (all calculated up to date of judgment). The foreclosure action shall be governed and regulated by the provisions of this Code, and also where not in conflict with this Code, by other provisions of law generally applicable to foreclosure actions. (Ord. 94-40 § 2 (part), 1994)

Property sold hereunder may not be sold for less than the amount of the judgment plus post- judgment interest and authorized costs without the consent of the owners of a majority by value of the outstanding bonds.

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City of Newport Beach, CA § 3.32.870 NEWPORT BEACH CODE § 3.32.920

(Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 163, 2023)

No special tax installment, interest or penalties thereon, or deed shall be held invalid for any error in computation if the error is found to be comparatively negligible, or is found to be in favor of the owner of the real property affected thereby. (Ord. 94-40 § 2 (part), 1994)

The bonds shall be signed by a signatory authorized to so sign by the City Council and shall be countersigned by a signatory authorized to so countersign by the City Council. All signatures on the bonds may be printed, lithographed, or engraved. If any officer whose signature appears on the bonds ceases to be that officer before the delivery of the bonds, his or her signature is as effective as if he or she had remained in office. All bonds shall be payable at the office of the Director of Administrative Services or at the office of any agent designated by the City. (Ord. 94-40 § 2 (part), 1994; Ord. 2025-37, 1/13/2026)

When the City Council provides for the fixing and levying of special taxes and charges for the special improvement district it shall also provide for the fixing and levying of that amount of special taxes and charges within the special improvement district which is required for the payment of the principal of and interest on any outstanding bonded debt of the special improvement district, including any necessary replenishment or expenditure of bond reserve funds or accumulation of funds for future bond payments, including any amount required by Federal law to be rebated to the United States on that bonded debt. The special tax or charge shall be levied and collected by the same officers and at the same time and in the same manner that all other special taxes and charges are levied and collected for the special improvement district or in any other manner specified by the City Council. The special taxes and charges shall not exceed the authority granted by Articles III and IV of this chapter. All of the collections for payment of principal of and interest on bonds shall be paid into the special improvement district bond fund and reserve or other fund for the particular special improvement district and shall be used solely for the payment of the principal of and interest on the outstanding bonds of the special improvement district. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 164, 2023)

An action to determine the validity of bonds issued pursuant to this Code or the validity of any special taxes levied pursuant to this Code may be brought pursuant to California Code of Civil Procedure Part 2, Title 10, Chapter 9, commencing with Section 860, but shall, notwithstanding the time limits specified in California Code of Civil Procedure Section 860, be commenced within thirty (30) days after the voters approve the issuance of the bonds or the special tax if the action is brought by an interested person pursuant to California Code of Civil Procedure Section 863. Any appeal from a judgment in that action or proceeding shall be commenced within thirty (30) days after entry of judgment. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 165, 2023)

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City of Newport Beach, CA § 3.32.920 REVENUE AND FINANCE § 3.32.980

The City may sell the bonds at public or private sale. However, all bonds sold at public sale shall be sold on sealed proposals to the highest bidder, after advertising for bids by publication of notice of sale pursuant to Section 3.32.240, not less than ten days prior to the date of sale in a newspaper of general circulation circulating in the City. If no bids are received or if the City Council determines that the bids received are not satisfactory as to price or responsibility of the bidders, the City Council may reject all bids received, if any, and either readvertise or sell the bonds at private sale. (Ord. 94-40 § 2 (part), 1994)

The City Council may provide that bonds shall bear a variable interest rate, and for the manner and intervals in which the rate shall vary. The variable rate shall not exceed the maximum rate permitted by California Government Code Section 53531 or any other applicable provision of law limiting the maximum interest rate on bonds. (Ord. 94-40 § 2 (part), 1994; Ord. 2023-22 § 166, 2023)

Any bonds issued by a district organized under the provisions of this Code are hereby given the same force, value and use as bonds issued by any municipality and shall be exempt from all taxation within the State. (Ord. 94-40 2 (part), 1994)

The City Council may, by resolution, issue new bonds to refund any or all of the district bonds outstanding or improvement area bonds outstanding that have been issued pursuant to this article. (Ord. 94-40 § 2 (part), 1994)

Bonds.

Refunding bonds shall not be issued if the total net interest cost to maturity on the refunding bonds plus the principal amount of the refunding bonds exceeds the total net interest cost to maturity on the bonds to be refunded plus the principal amount of the bonds to be refunded. Subject to such limitations, the principal amount of the refunding bonds may be more than, less than, or the same as the principal amount of the bonds to be refunded. (Ord. 94-40 § 2 (part), 1994)

The total authorized amount of the bonded indebtedness of a district or an improvement area therein, as approved by the qualified voters thereof, shall not be reduced by the principal amount of any refunding bonds issued to refund any or all outstanding bonds of the district or improvement area. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.32.980 NEWPORT BEACH CODE § 3.32.1010

Approval of Original Bond Issue.

Except as otherwise provided in this article, the City Council may issue refunding bonds without repeating any of the procedures required for the approval of the original bond issue. (Ord. 94-40 § 2 (part), 1994)

If the City Council determines to issue refunding bonds pursuant to this article it shall adopt a resolution providing for their issuance. The resolution shall:

A. Describe the bonds being refunded and state the date on which it is anticipated that the
exchange or purchase necessary to effect the refunding will occur.

B. Fix the date of the refunding bonds.

C. Designate the denomination or denominations of the refunding bonds.

D. Fix the minimum rate or rates of interest to be paid on the refunding bonds.

E. Fix the maturity dates of the refunding bonds, which shall not exceed the latest maturity
date of the bonds being refunded.

F. Designate the place or places of payment of principal and interest on the refunding bonds
and on the bonds to be refunded.

G. Describe the form of the refunding bonds.

H. State the costs of issuing the refunded bonds.
(Ord. 94-40 § 2 (part), 1994)

The City Council may sell the refunding bonds at public or private sale. The proceeds of any sale of refunding bonds shall be applied as provided in this article. (Ord. 94-40 § 2 (part), 1994)

The proceeds of the refunding bonds and the earnings thereon shall be in an amount sufficient to meet either the requirements of subsections (A) or (B) of this section at the time of issuance of the refunding bonds, as certified by a certified public accountant licensed to practice in this state.

A. The proceeds (including any amounts in any reserve fund established for the bonds to be refunded and not needed for purposes of the refunding bonds) and investments, together with any interest or other gain to be derived from any such investment, shall be in an amount sufficient to pay the principal, interest, and redemption premiums, if any, on the refunded bonds as they become due or at designated dates prior to maturity and the costs of issuance of the refunding bonds.

B. The proceeds (including any amounts in any reserve fund established for the bonds to be refunded and not needed for purposes of the refunding bonds) and investments, together with any interest or other gain to be derived from any such investment, shall be in an

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City of Newport Beach, CA § 3.32.1010 REVENUE AND FINANCE § 3.32.1040

amount sufficient to pay the principal, interest, and redemption premiums, if any, on the refunding bonds prior to the maturity of the bonds to be refunded or prior to a designated date or dates before the maturity of the bonds to be refunded, the principal and any redemption premiums due on the refunded bonds at maturity or upon that date or dates, and the designated costs of issuance of the refunding bonds. (Ord. 94-40 § 2 (part), 1994)

Any savings achieved through the issuance of refunding bonds shall be used to reduce the special taxes which were levied to retire the bonds being refunded. At the time the City Council makes a determination to issue the refunding bonds, it shall determine and cause to be made any reductions in the annual tax in the district, which reduction shall be made on a pro rata basis. (Ord. 94-40 § 2 (part), 1994)

Any bonds may be made callable in the document providing for their terms. When bonds are made callable a statement to that effect shall be set forth on the bonds. Callable bonds may be redeemed on any interest payment date prior to their fixed maturity in the amounts, manner and prices prescribed in the document providing for their terms. (Ord. 94-40 § 2 (part), 1994)

Bond Anticipation Notes – Renewal of Notes.

A. The City Council may, by resolution and without the necessity of calling and holding an
election, borrow money in anticipation of the sale of the bonds which have been authorized
pursuant to this article, but which have not been sold and delivered, issue negotiable bond
anticipation notes therefor, and renew the notes from time to time. The maximum maturity
of any such notes, including the renewals thereof, shall not exceed five years from the date
of delivery of the original notes.

B. The principal and interest on the notes may be paid from any money available for their
payment. Any portion of the principal or interest which is due and payable shall be paid
from the proceeds of the next sale of bonds in anticipation of which the notes were issued.

C. The proceeds of notes issued pursuant to this section may be used for any purpose for which
the bonds in anticipation of which the notes were issued may be used.

D. The notes shall not be issued in any amount in excess of the aggregate principal amount of
bonds which have been authorized to be issued, less the amount of any bonds of such
authorized issue which have been previously sold and less the amount of other bond
anticipation notes issued previously and outstanding at that time.

E. The City Council may, in its resolution authorizing the issuance of notes, provide that the
note shall be subject to call and redemption prior to maturity, at the option of the City, at
such price or prices as may be fixed in the resolution. The resolution shall fix the method
of giving notice of redemption to the holders of notes to be redeemed and the price or prices
at which the note shall be subject to redemption. Any notes that are subject to call and
redemption prior to maturity shall contain a recital to that effect and no note shall be subject

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City of Newport Beach, CA § 3.32.1040 NEWPORT BEACH CODE § 3.32.1040

to call or redemption prior to its fixed maturity date unless it contains that recital.

F. The notes shall be issued and sold in the same manner as the bonds.

G. The notes and the resolution or resolutions authorizing the same may contain any
provisions, conditions, or limitations which a resolution of the City Council may contain.

H. The City Council shall, in its resolution authorizing the issuance of notes, provide a remedy if the anticipated bonds cannot be sold at the time or in the amounts specified in the resolution, or if any default occurs with respect to the notes. Any remedy which is so provided shall limit the obligations of property owners within the special improvement district to the special tax authorized and levied pursuant to this Code, except that the City Council may enter into an agreement with any of the property owners within the district pledging some or all of the real property of those property owners who are a party to the agreement as additional security for the notes. The City Council may authorize the levy of supplemental special tax in an amount sufficient to secure a note issued pursuant to this section, if that special tax is fully described as to the rate, method of apportionment, and conditions under which it may be levied in the resolution of intention prepared pursuant to Section 3.32.220. This special tax shall be subject to the procedures and voting requirements for any special tax levied under the authority of this Code. (Ord. 94-40 § 2 (part), 1994)

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City of Newport Beach, CA § 3.33.005 REVENUE AND FINANCE § 3.33.020