Petaluma Municipal Code Ch. 4.11 Economic Development Revenue Bond Law

Article I. General Provisions and DeDnitions

This chapter may be cited as the "City of Petaluma Economic Development Revenue Bond Law." (Ord. 1520 NCS

§1, 1982.)

The council Lnds and declares that it is necessary and essential to the well being of the city that it provide Lnancial

assistance to promote the economic development of the city. Such economic development will serve the following

public purposes and municipal aPairs of the city:

A. The full and gainful employment of residents of the city;

B. The full and eNcient utilization and modernization of existing industrial, commercial, and business facilities;

C. The development of new industrial, commercial and business facilities;

D. The growth of the city’s tax base through increased property values and consumer purchasing;

E. The reduction of the need for and costs of welfare and other remedial programs;

F. The reduction of urban ills, such as crime, attributable in part to inadequate economic opportunities;

G. The stability and diversiLcation of the city’s economy;

H. The lowering of the cost of city consumers of necessary goods and services;

I. The environmentally optimum disposition of waste materials of the city; and

J. The enhancement of the general economic prosperity, health, safety and welfare of the residents of the city.

The availability of the Lnancial assistance authorized by this chapter will serve those purposes and the general

plan of the city by providing private enterprises with new methods of Lnancing capital outlays in the city and by

ensuring that economic development within the city will reMect the local community’s needs and objectives and

will be environmentally optimum with respect to both the physical and social environment of the city. The city shall

promote such public interests pursuant to this chapter without adversely aPecting areas outside the city and

without conMicting with ePorts by the state of California to solve problems of statewide concern. (Ord. 1520 NCS

§1, 1982.)

Unless the context otherwise requires, the terms deLned in this chapter shall have the following meanings:

A. "Bonds" means the bonds, notes, certiLcates, debentures and other obligations authorized to be issued by

the city pursuant to this chapter and payable as provided in this chapter.

B. "City" means the city of Petaluma.

C. "Cost" means the total of all costs incurred by or on behalf of a participating party to carry out all works and

undertakings and to obtain all rights and powers necessary or incident to the acquisition, construction, installation, reconstruction, rehabilitation or improvement of a facility. "Cost" may include all costs of issuance of

bonds for such purposes, costs for construction undertaken by a participating party as its own contractor,

capitalized bond interest, reserves for debt service and for repairs, replacements, additions and improvements to

a facility, and other working capital incident to the operation of a facility.

D. "Council" means the city council of the city of Petaluma.

E. "Facility" means any of the facilities, places or buildings within the city which are, or will be, maintained and

operated for industrial, commercial or business purposes, conform to the general plan of the city and are

approved by the city for the Lnancing authorized by this chapter, such approval being given only when the city

Lnds and determines that such Lnancing will substantially promote one or more of the public purposes listed in

A "facility" may be an activity which may otherwise be Lnanced pursuant to the California Industrial Development

Financing Act, Government Code Section 91500 et seq., to the extent said Act permits the Lnancing of such activity

under alternative authority. "Facility" includes, without limitation, real and personal property, land, buildings,

structures, Lxtures, machinery and/or equipment and all such property related to or required or useful for the

operation of a facility. "Facility" does not include any facility, place or building used or to be used primarily for

sectarian instruction or study or as a place for devotional activities or religious worship.

F. "Participating party" means any individual, association, corporation, partnership or other entity which is

approved by the city to undertake the Lnancing of the costs of a facility for which this chapter authorizes the

issuance of the bonds.

G. "Revenues" means amounts received by the city as payments of principal, interest, and all other charges with

respect to a loan authorized by this chapter, as payments under a lease, sublease or sale agreement with respect

to a facility, as proceeds received by the city from mortgage, hazard or other insurance on or with respect to such

a loan (or any property securing such loan), lease, sublease or sale agreement, all other rents, charges, fees,

income and receipts derived by the city from the Lnancing of a facility authorized by this chapter, any amounts

received by the city as investment earnings on moneys deposited in any fund securing the bonds, and such other

legally available moneys as the council may, in its discretion, lawfully designate as revenues.

(Ord. 1520 NCS §1, 1982.)

Revenues, as deLned by this chapter, and the expenditure of such revenues shall not be taken into account in any

manner in determining the city’s compliance with Article XIIIB of the California Constitution. (Ord. 1520 NCS §1,

1982.)

Article II. Financing Facilities

The city is authorized to make, purchase, or otherwise contract for the making of, a mortgage or other secured or

unsecured loan, with the proceeds of bonds and upon such terms and conditions as the city shall deem proper, to

any participating party for the costs of a facility. (Ord. 1520 NCS §1, 1982.)

The city is authorized to acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip and lease as

lessee, with the proceeds of bonds, a facility solely for the purpose of selling or leasing as lessor such facility to a

participating party, and is further authorized to make any contracts for such purposes. The city is also authorized

to contract with such participating party to undertake on behalf of the city to construct, enlarge, remodel,

renovate, alter, improve, furnish and equip such facility.

The city is authorized to sell or lease, upon such terms and conditions as the city shall deem proper, to a

participating party any facility owned by the city under this chapter, including a facility conveyed to the city in

connection with a Lnancing authorized by this chapter but not being Lnanced hereunder. (Ord. 1520 NCS §1,

1982.)

Any person may apply to the city for approval as a participating party and for approval of a facility for Lnancing

under this chapter. Applications shall set forth such information as the city may require in order to enable the city

to evaluate the applicant, the facility and its proposed costs. (Ord. 1520 NCS §1, 1982.)

The city is authorized to charge participating parties application, commitment, Lnancing and other fees, in order to

recover all administrative and other costs and expenses incurred in the exercise of the powers and duties

conferred by this chapter. The council shall direct the city clerk to transmit a letter agreement or contract to a

participating party which will obligate such party to pay such fees and expenses as the council may charge or incur

hereunder. (Ord. 1520 NCS §1, 1982.)

The city is authorized to obtain, or aid in obtaining, from any department or agency of the United States or of the

state of California or any private company, any insurance or guarantee as to, or of, or for the payment or

repayment of, interest or principal, or both, rents, fees or other charges, or any part thereof, on any loan, lease or

sale obligation or any instrument evidencing or securing the same, made or entered into as authorized by this

chapter; and is authorized to accept payment in such manner and form as provided therein in the event of default

by a participating party, and to assign any such insurance or guarantee as security for bonds. (Ord. 1520 NCS §1,

1982.)

The city is authorized to Lx rents, payments, fees, charges and interest rates for a Lnancing authorized by this

chapter and to agree to revise from time to time such rents, payments, fees, charges and interest rates to reMect

changes in interest rates on bonds, losses due to defaults or changes in other expenses related to this chapter,

including city administrative expenses. (Ord. 1520 NCS §1, 1982.)

The city is authorized to hold deeds of trust or mortgages or security interests in personal property as security for

loans and other obligations authorized by this chapter and to pledge or assign the same as security for repayment

of bonds. Such deeds of trust, mortgages or security interests, or any other interest of the city in any facility, may

be assigned to, and held on behalf of the city by, any bank or trust company appointed to act as trustee by the city

in any resolution or indenture providing for issuance of bonds. (Ord. 1520 NCS §1, 1982.)

The city is authorized to contract for such engineering, architectural, Lnancial, accounting, legal or other services

as may be necessary in the judgment of the city for the purposes of this chapter. (Ord. 1520 NCS §1, 1982.)

Except as speciLcally provided in this chapter, the acquisition, construction, installation, reconstruction,

rehabilitation or improvement of a facility Lnanced under this chapter shall not be subject to any requirements

relating to buildings, works or improvements owned or operated by the city, and any requirement of public

competitive bidding or other procedural restriction imposed on the award of contracts for acquisition or

construction of a city building, work or improvement or to the lease, sublease, sale or other disposition of city

property shall not be applicable to any action taken under this chapter. (Ord. 1520 NCS §1, 1982.)

In addition to all other powers speciLcally granted by this chapter, the city is authorized to contract for and do all

things necessary or convenient to carry out the purposes of this chapter, provided, however, that the city shall not

have the power to operate a facility Lnanced under this chapter as a business, except temporarily in the case of a

default by a participating party. (Ord. 1520 NCS §1, 1982.)

Article III. Bonds

The city is authorized to issue bonds in an aggregate principal amount not to exceed twenty million dollars and to

issue such bonds, from time to time, in such series and amounts as are determined by the council to be necessary

or appropriate to provide for the costs of facilities approved by the council. Bonds shall be negotiable instruments

for all purposes, subject only to the provisions of such bonds for registration. (Ord. 1520 NCS §1, 1982.)

All of the bonds hereby authorized to be issued shall be limited obligations of the city payable from all or any

speciLed part of the revenues and the moneys and assets authorized in this chapter to be pledged or assigned to

secure payment of bonds. Such revenues, moneys or assets shall be the sole source of repayment of such issue of

bonds. Bonds issued as authorized by this chapter shall not be deemed to constitute a debt or liability of the city

or a pledge of the faith and credit of the city but shall be payable solely from speciLed revenues, moneys and

assets. The issuance of bonds shall not directly, indirectly, or contingently obligate the city to levy or pledge any

form of taxation or to make any appropriation for their payment. All bonds shall contain on the face thereof a

statement to the following ePect:

Neither the faith and credit nor the taxing power of the City of Petaluma is pledged to the payment of the principal

of or premium, if any, or interest on this bond. (Ord. 1520 NCS §1, 1982.)

Bonds shall be issued as serial bonds, term bonds, installment bonds or pass-through certiLcates or any

combination thereof. The mayor or city manager shall determine the terms and timing of the issuance of

particular bonds in accord with the resolution of the council approving the particular facility to be Lnanced

thereby. Bonds shall bear such date or dates, mature at such time or times not to exceed thirty-Lve years, bear

interest at such Lxed or variable rate or rates approved by the participating party whose facility is being Lnanced

but not to exceed the maximum rate permitted by law, be payable at such time or times, be in such denominations, be in such form, either coupon or registered, carry such registration privileges, be executed in

such manner, be payable in lawful money of the United States of America at such place or places, be subject to

such terms of redemption and have such other terms and conditions as such resolution, or any indenture to be

entered into by the city pursuant to such resolution, shall provide. Bonds shall be sold at either public or private

sale and for such prices as the city shall determine. (Ord. 1520 NCS §1, 1982.)

Any resolution relating to the issuance of any bonds, or any indenture to be entered into by the city pursuant to

such resolution, may contain provisions respecting any of the following terms and conditions, which shall be a part

of the contract with the holders of such bonds:

A. The terms, conditions and form of such bonds and the interest and principal to be paid thereon;

B. Limitations on the uses and purposes to which the proceeds of sale of such bonds may be applied and the

pledge or assignment of such proceeds to secure the payment of such bonds;

C. Limitations on the issuance of additional parity bonds, the terms upon which additional parity bonds may be

issued and secured, and the refunding of outstanding bonds;

D. The setting aside of reserves, sinking funds and other funds and the regulation and disposition thereof;

E. The pledge or assignment of all or any part of the revenues and of any other moneys or assets legally

available therefor, including loans, deeds of trust, mortgages, leases, subleases, sales agreements and other

contracts and security interests, and the use and disposition of such revenues, moneys and assets, subject to such

agreements with the holders of bonds as may then be outstanding;

F. Limitation on the use of revenues for operating, administration or other expenses of the city;

G. SpeciLcation of the acts or omissions to act, which shall constitute a default in the duties of the city to holders

of such bonds, and providing the rights and remedies of such holders in the event of default, including any

limitations on the right of action by individual bondholders;

H. The appointment of a corporate trustee to act on behalf of the city and the holders of its bonds, the pledge or

assignment of loans, deeds of trust, mortgages, leases, subleases, sale contracts and any other contracts to such

trustee, and the rights of such trustee;

I. The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated,

the amount of such bonds the holders of which must consent thereto, and the manner in which such consent may

be given; and

J. Any other provisions which the council may deem reasonable and proper for the purposes of this chapter

and the security of the bondholders.

(Ord. 1520 NCS §1, 1982.)

Any pledge of revenues or other moneys or assets as authorized by this chapter shall be valid and binding from

the time such pledge is made. Revenues, moneys and assets so pledged and thereafter received by the city shall

immediately be subject to the lien of such pledge without any physical delivery thereof or further act, and the lien

of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract, or

otherwise against the city, irrespective of whether such parties have notice thereof. Neither the resolution nor any

indenture by which a pledge is created need be Lled or recorded except in the records of the city. (Ord. 1520 NCS

§1, 1982.)

Neither the members of the council, the oNcers or employees of the city, nor any person executing any bonds

shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the

issuance thereof. (Ord. 1520 NCS §1, 1982.)

The city shall have the power out of any funds available therefor to purchase its bonds. The city may hold, pledge,

cancel, or resell such bonds, subject to and in accordance with agreements with the bondholders. (Ord. 1520 NCS

§1, 1982.)

Any holder of bonds issued under the provisions of this chapter or any of the coupons appertaining thereto, and

any trustee appointed pursuant to any resolution relating to the issuance of bonds, except to the extent the rights

thereof may be restricted by such resolution or any indenture authorized thereby to be entered into by the city,

may, either at law or in equity, by suit, action, mandamus or other proceedings, protect or enforce any and all

rights speciLed in law or in such resolution or indenture to be performed by the city or by any oNcer, employee,

or agent thereof, including the Lxing, charging, and collecting of rates, fees, interest, and charges authorized and

required by the provisions of such resolution or indenture to be Lxed, charged, and collected. (Ord. 1520 NCS §1,

1982.)

The city is authorized to issue bonds for the purpose of refunding any bonds then outstanding. (Ord. 1520 NCS §1,

1982.)

In anticipation of the sale of bonds authorized by this chapter, the city is authorized to issue bond anticipation

notes, and to renew the same from time to time, in such series and amounts as are determined by the council to

be necessary or appropriate for the costs of facilities approved by the council. Such notes shall be payable from

revenues or other moneys or assets authorized by this chapter to be pledged to secure payment of bonds, and

which are not otherwise pledged, or from the proceeds of sale of the particular bonds in anticipation of which they

are issued. Such notices shall be issued in the same manner as bonds. The mayor or city manager shall determine

the terms and timing of the issuance of particular bond anticipation notes in accord with the provisions of Section

4.11.303 and the resolution of the council approving the particular facility to be Lnanced thereby. Such notes, any

resolution relating to the issuance of such notes and any indenture to be entered into by the city pursuant to such

resolution may contain any provisions, conditions or limitations permitted under Section 4.11.304. (Ord. 1520 NCS

§1, 1982.)

The validity of the authorization and issuance of any bonds is not dependent on and shall not be aPected in any

way by any proceedings taken by the city for the approval of any Lnancing or the entering into of any agreement,

or by the failure to provide Lnancing or enter into any agreement, for which bonds are authorized to be issued

under this chapter. (Ord. 1520 NCS §1, 1982.)

Article IV. Supplemental Provisions

This chapter, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to ePect its

purposes. (Ord. 1520 NCS §1, 1982.)

Any omission of any oNcer or the city in proceedings under this chapter or any other defect in the proceedings

shall not invalidate such proceedings or the bonds issued pursuant to this chapter. (Ord. 1520 NCS §1, 1982.)

This chapter is full authority for the issuance of bonds by the city for any of the purposes speciLed herein. (Ord.

1520 NCS §1, 1982.)

alternative.

This chapter shall be deemed to provide a complete, additional, and alternative method for doing the things

authorized thereby, and shall be regarded as supplemental and additional to the powers conferred by other laws.

The issuance of bonds under the provisions of this chapter need not comply with the requirements of any other

law applicable to the issuance of bonds. The purposes authorized hereby may be ePectuated and bonds are

authorized to be issued for any such purposes under this chapter notwithstanding that any other law may provide

for such purposes or for the issuance of bonds for like purposes and without regard to the requirements,

restrictions, limitations or other provisions contained in any other law. (Ord. 1520 NCS §1, 1982.)

To the extent that the provisions of this chapter are inconsistent with the provisions of any general statute or

special act or parts thereof the provisions of this chapter shall be deemed controlling. (Ord. 1520 NCS §1, 1982.)

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such

invalidity shall not aPect any other provisions or application of this chapter which can be given ePect without the

invalid provision or application, and to this end the provisions of this chapter are declared to be severable. The

council declares that it would have adopted and passed this chapter and each section, subsection, sentence,

clause, phrase and word hereof, irrespective of the fact that any one or more of the other sections, subsections,

sentences, clauses, phrases or words hereof are declared invalid or unconstitutional. (Ord. 1520 NCS §1, 1982.)