San Diego Municipal Code § 61.1911 City Purchase of Assessment Bonds

The City Manager, for and on behalf of the City, may purchase assessment bonds issued or to be issued upon applicant’s property. The purchase price shall be paid from the Assessment Deferral Fund. In pending 1911 Act proceedings, the purchase price shall be paid to the contractor or his assignee. In pending 1913 Act proceedings, the purchase price shall be paid to the person or persons to whom the bonds are awarded. In completed proceedings, the purchase price shall be paid to the bondholder. If the City Manager elects to purchase bonds to be issued in pending proceedings, prospective bondholders shall be given notice of the City’s right to purchase bonds upon the real property of low–income owners as follows:

(a) In 1911 Act proceedings, the notice inviting construction bids shall state that
the City reserves and has the right to purchase the bonds from the contractor
or his assignee.

(b) In 1913 Act proceedings, the notice inviting bids for the purchase of bonds
shall state that the City reserves and has the right to purchase the bonds from
the person or persons to whom the bonds are awarded.

Ch. Art. Div. 6 1 19 8

San Diego Municipal Code Chapter 6: Public Works and Property, Public Improvement and Assessment Proceedings (6-2000)

The notice shall further state that, at any time prior to delivery of the bonds to the person or persons entitled thereto, the City Manager may purchase any or all bonds to be issued upon the real property of any low–income owner whose application for assessment deferral has been finally approved prior to delivery of the bonds by the City and that the purchase price will be a sum equal to the principal amount of the bonds plus accrued interest from the date of the bonds to the date of bond delivery.

In completed proceedings, the City Manager may negotiate for and purchase bonds from any bondholder. The negotiated purchase price shall not exceed the unpaid principal amount of the bond, the amount due upon the next maturing interest coupon, a premium of five percent (5%) of the unmatured principal and, if any principal or interest coupon is then delinquent, the amount of all delinquent interest coupons and all penalties and costs then due the bondholder by reason of the delinquency. (Amended 10–24–1983 by O–16065 N.S.)

Prior to final approval of any application for assessment deferral and to the City’s purchase of an assessment bond, the applicant shall make and file a bond agreement with the City Manager. Among other things, the bond agreement shall make provision concerning payments then due or thereafter to become due upon the bond, specify the times, amounts and circumstances under which contract payments shall be due the City, and shall specify the events of default under the bond agreement and City’s right to enforce the bond agreement in the event of default. The enforcement provisions may provide for enforcement of the bond by a City Treasurer’s sale or a judicial foreclosure. The bond agreement may also provide for the cancellation of the agreement and the bond and the substitution of a note and a mortgage therefor pursuant to Section 61.1912 and 61.1912.1. (“Same — Bond Agreement with Low–Income Owner” added 10–26–1977 by O– 12196 N.S.)