Palm Desert Municipal Code Ch. 17.09 Redemption Fund Deficiencies

If it appears to the treasurer that there is danger of an ultimate loss accruing to the holders of the bonds for any reason, he or she shall withhold payment on all matured bonds and interest and report the facts to the city council so that proper action may be taken by the city council to equitably protect all holders.

(Ord. 1175 §1, 2008)

On receipt of the report, the city council shall determine whether in its judgment there will ultimately be insufficient money in the redemption fund to discharge the unpaid bonds and interest. If it determines that in its judgment there will be no such shortage, it shall direct the treasurer to pay matured bonds and interest as long as there is available money in the redemption fund. The city council may make other determinations and take other actions from time to time as may be equitable and proper.

(Ord. 1175 §1, 2008)

If the city council determines that in its judgment there will be a shortage in the redemption fund, it shall direct the treasurer to pay to the holders of all outstanding and unpaid bonds such proportion thereof as the amount of funds on hand bears to the total amount of the unpaid principal of the bonds and the interest which has accrued or will accrue thereon. Similar proportionate payments shall thereafter be made periodically as moneys come into the redemption fund.

(Ord. 1175 §1, 2008)

In order to facilitate the making of proportionate payments, the holders of outstanding bonds shall surrender them to the treasurer for registration and cancellation. Upon cancellation, each holder shall be credited with the amount of the holder's bond so canceled. Thereupon the treasurer shall by warrant pay to each holder the proportionate amount of principal and accrued interest due on his or her bonds as may be available from time to time out of the money in the redemption fund. Interest shall cease on payments made on account of principal from the date of payment, but interest shall continue to run on the unpaid principal at the rate specified in the bonds until payment thereof be made. No premiums shall be paid on payments made in advance of the due date. If bonds are not surrendered for registration and payment the treasurer shall give notice to the holder thereof by registered mail, at the holder's address as last known to the treasurer, of the amount available for payment. Thereupon interest shall cease as to the amount so available for payment ten days from the date of mailing of the notice.

(Ord. 1175 §1, 2008)

If a deficiency occurs in the redemption fund with which to pay past due bonds, past due interest, or bonds or interest which will become due during the current tax collecting year, but it does not appear to the treasurer that there will be an ultimate loss to the bondholders, the treasurer shall pay matured bonds as presented and make interest payments when due as long as there are available funds in the redemption fund, in accordance with the provisions of the trust indenture.

(Ord. 1175 §1, 2008)

When funds become available for the payment of any bond which was not paid upon presentment, the treasurer shall notify the holder thereof by registered mail to present the bond for payment. If the bond is not presented for payment within ten days after the mailing of the notice, interest shall cease to run on the bond.

(Ord. 1175 §1, 2008)