Palm Desert Municipal Code Ch. 17.08 Advance Retirement of Bonds

Upon receiving a partial or full prepayment of a contractual assessment, the treasurer shall deposit it in an assessment prepayment subaccount of the bond redemption fund. All prepayments may be commingled in a single account. From the account, the treasurer shall make disbursements as follows unless provided otherwise in the trust indenture:

A. The administrative fee, if any, shall be deposited in the general fund of the city.

B. Delinquent principal, interest, and penalties shall be transferred to the redemption fund for the bonds. If a special reserve fund has been established for the bonds and has been depleted on account of the delinquencies, the delinquent amounts and penalties shall be transferred instead to the special reserve fund.

C. The installment of principal due in the fiscal year of prepayment shall be transferred to the redemption fund for the bonds.

D. Interest accrued to the next redemption date shall be transferred to the redemption fund for the bonds.

E. The balance in the assessment prepayment account shall be used to advance the maturity of bonds to the next call date. The amount of bonds to be retired shall be the maximum for which principal and redemption premium may be paid in full from the prepayment account. Accrued interest on bonds to be retired shall be paid from the redemption fund.

(Ord. 1175 §1, 2008)

Notice of advanced maturity shall be given in writing to the holder of the bond by personal service, registered or certified mail. Such notice may be conditional and shall be made at least thirty days before the date fixed for advanced maturity, or such shorter period upon the consent of the holder of the bond that is subject to advanced maturity.

(Ord. 1175 §1, 2008)

If notice of advanced maturity is given, the bond shall mature and become payable on the date fixed for maturity in the notice. The holder of the bond may, prior to the date of advanced maturity, with the consent of the treasurer, surrender it and receive the principal and interest thereon to the date of payment together with the redemption premium provided for the bond. If the bond has not been sooner surrendered on the date fixed for advanced maturity, the treasurer shall set aside to the credit of the owner of the bond the amount of principal and accrued interest then due on the bond together with the redemption premium and the bond shall then be deemed to have matured and interest shall cease to accrue on the bond. The amount so set aside shall upon demand and upon the surrender and cancellation of the bond be paid to the holder or owner of the bond.

(Ord. 1175 §1, 2008)

To the extent fund are available for such purpose, the cost of serving the notice of advanced maturity may be paid from the redemption fund.

(Ord. 1175 §1, 2008)

More than one bond may be covered in a single notice of advanced maturity.

(Ord. 1175 §1, 2008)

Prior to the surrender of any bond or the setting aside of any funds, the treasurer may waive and vacate any notice of advanced maturity upon being tendered for cancellation some other bond or bonds of an equivalent amount and of a maturity not earlier than that noticed, if notice of the treasurer's intention so to do is first given, prior to the date of advanced maturity, by mail or otherwise to the holder or owner of the bond noticed for advanced maturity and such holder or owner has not objected to such action.

(Ord. 1175 §1, 2008)

The treasurer shall select bonds for retirement in accordance with the redemption provisions of the trust indenture.

(Ord. 1175 §1, 2008)

Notwithstanding the foregoing provisions of the chapter, the city council may by resolution establish alternative procedures for the advance retirement of bonds.

(Ord. 1175 §1, 2008)

Before issuing bonds pursuant to this title, the city council shall determine, and shall declare in the resolution of intention, whether or not the city will obligate itself to advance available funds from the city treasury to cure any deficiency which may occur in the bond redemption fund.

The determination made pursuant to this section shall be clearly stated in the text of the bonds issued pursuant to this title.

(Ord. 1175 §1, 2008)