Chapter 4.36

AIRPORT IMPROVEMENT REVENUE FINANCING

DEFINITIONS

Sections:

Sections:

• 4.36.010 Declaration of policy.

The definitions set forth in this part shall govern the application and interpretation of this chapter.

(Ord. 29429.)

"Lease financing" means any lease or sublease made between the city and another party for the purpose of financing the acquisition, construction or improvement by the city of real property or the city's acquisition of equipment. By way of example and not limitation, the term "lease financing" includes equipment acquisition leases, certificates of participation, lease revenue bonds or lease revenue notes.

(Ord. 29429.)

PART 2

VOTE REQUIREMENT FOR APPROVAL OF A LEASE FINANCING

• 4.36.020 City council powers designated.

• 4.36.030 Loan agreement - Terms and conditions - City council authority.

• 4.36.040 Loan agreement - Covenants.

• 4.36.050 Liability limitations.

• 4.36.060 Municipal airport rates, fees and charges.

• 4.36.070 Accounts and revenues - Duties of city officials.

• 4.36.080 Scope and construction of chapter provisions.

It is hereby declared to be the policy of the city to improve the San José Municipal Airport by the construction of capital improvements under the special circumstances set forth in this chapter and to limit the repayment of funds required for such capital improvements in the manner in this chapter set forth.

(Prior code § 2610.1.)

Sections:

• A. The city council may, on behalf of the City of San José:

  1. Authorize the construction of capital improvements at or near or for the use of and for the improvement of the San José Municipal Airport;

  2. Negotiate with any bank or other financial or lending institution for the advance of funds for the payment of the cost of such capital improvements and enter into a contract or other agreement for the repayment of funds so advanced; and

  3. Pledge to the punctual payment of funds so advanced all or any portion of the revenues derived from the San José Municipal Airport and its facilities and services which now exist or which may hereafter be constructed or provided.

• B. The city council, in determining the cost of such capital improvements, may include any and all costs and estimated costs incurred or to be incurred in connection with the obtaining of funds for such improvements, and all engineering, inspection, fiscal and legal expenses and interest which it is estimated will accrue during the construction period and for six months thereafter.

(Prior code § 2610.2.)

The city council may authorize the execution of a loan agreement with any bank, financial or lending institution for the purpose of obtaining moneys for the payment of the cost of the capital improvements herein authorized, which contract shall set forth the terms and conditions upon which all moneys advanced shall be repaid, including the payment of interest at a rate of not to exceed six percent per year, payable monthly, quarterly, semiannually or annually, and the maximum maturity or time of repayment of any installment of principal, which shall not exceed twenty-five years from the date of the actual advance of funds. Such con-

tract shall provide the terms and conditions upon which the special loan herein authorized shall be subject to prior payment at the option of the city, and may contain such other terms, covenants and conditions as the city council in its discretion may determine. The city council may authorize the execution and delivery of a revenue note to evidence the obligation to repay moneys advanced out of said revenues, which note shall state on its face that it is issued under and subject to the terms and conditions of said loan agreement. (Prior code § 2610.3.)

• A. Any loan agreement executed for the purpose of obtaining the advancement of finds as in this chapter provided may contain appropriate covenants as to:

  1. The purpose or purposes to which the proceeds of the loan shall be applied and the use and disposition thereof;

  2. The use and disposition of the revenues derived from rates, charges and fees for the use of the airport and its facilities and services pledged to the payment of the loan, including the creation and maintenance of reserve funds and operating funds;

  3. The borrowing of additional moneys payable from revenues from the airport and its facilities and services;

  4. The operation and maintenance of the airport and its facilities and services, the revenues from which are pledged to the payment of the loan;

  5. The insurance to be carried on the airport facilities, the revenues of which are pledged to the payment of the loan and the use and application of the proceeds of such insurance;

  6. Books of account of the airport and the inspection and audit thereof.

• B. The provisions of this section and of any contract or loan agreement shall be enforceable by any bank or other lending or financial institu-

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REVENUE, FINANCE AND BUSINESS TAXES

§ 4.36.080

tion by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. (Prior code § 2610.4.)

No contract providing for the advancement of funds or any note issued thereunder shall ever be or become a liability on the part of the City of San José or an indebtedness of the city, and under no circumstances shall the repayment of any moneys, advanced pursuant to such contract or note ever be or become a charge against or be payable out of the general funds of the city, and neither the city nor any officer thereof shall be beholden for the payment of any moneys advanced under any such contract, except solely from the revenues pledged to the repayment of such moneys; provided, however, that the city council, in its sole discretion, may apply to the payment at, or prior to the maturity of any loan, any funds of the city legally available for the payment of such loan. (Prior code § 2610.5.)

• A. It shall be the duty of the city council to make certain that reasonable rates, fees and charges for the use of the airport and its facilities and services, the revenues of which are pledged to the payment of the loan shall at all times, so long as any obligation under a loan agreement is outstanding, be fixed and established so said airport and its facilities and services shall always remain self-supporting.

• B. Such rates, fees or charges so prescribed shall be calculated to be at least sufficient to pay:

  1. The principal and interest of all moneys advanced for said capital improvements; and

2. All expenses of operation and maintenance of the airport and its facilities and services the revenues of which are pledged to the payment of the loan

(Prior code § 2610.6.)

It shall be the duty of the director of finance, the airport manager, and all other officials of the city who have, directly or indirectly, charge of the finances of the San José Municipal Airport to set up suitable accounts and to account for all revenues of the airport and its facilities and services pledged to the payment of the loan, and, at the direction of the city council, to establish a special account for the purpose of accounting for such revenues. The city may agree in any loan agreement to maintain a minimum balance in such account equal to not less than the amount of interest and any installment of principal becoming due in the next succeeding year, provided that the city shall not be required to maintain in said account any amount in excess of the amount required in the then current year and the next succeeding fiscal year for the payment of such interest and installment of principal on moneys advanced for such capital improvements. Any revenues in excess of the maximum so required to be accounted for through such account may be used by the city for any lawful purpose. (Prior code § 2610.7.)

The powers conferred upon the city council by the provisions of this chapter are in addition to and supplemental to the powers conferred by the Charter or any other ordinance or bylaw. The capital improvements designated in this chapter may be constructed, reconstructed, improved, bettered and extended with moneys advanced for that purpose in accordance with the provisions of this chapter, notwithstanding any other law without regard to the requirements, restrictions, limitations or provisions contained in any other law. Insofar as the provisions of this chapter are inconsistent with the provisions of any other law, the provisions of this chapter shall be controlling.

(Prior code § 2610.8.)

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