Ventura Municipal Code Ch. 4.730 Economic Development Bond Law

A. Title. This chapter may be cited as the city of San Buenaventura economic development bond law.

B. Purpose. The council hereby finds and declares that it is necessary, essential, a public purpose and a municipal affair for the city to provide financing for economic development within the city in the interests of the public health, safety and welfare.

C. Definitions. Unless the context otherwise requires, the following definitions shall govern the construction of this chapter:

“Acquisition and construction” means, with respect to any project or portion thereof, the acquisition, construction, improvement, furnishing, equipping, remodeling, repair, reconstruction or rehabilitation thereof.

“Administrative expenses” means all reasonable and necessary expenses incurred by the city in the administration of the provisions of this chapter with respect to a particular project and the financing thereof, including without limitation compensation to city agents, employees and staff, fees and expenses of paying agents, trustees, bond counsel and financing consultants, and costs of printing and advertising.

“Bonds” means any bonds, notes, interim certificates, debentures or other obligations issued by the city pursuant to this chapter, which are payable exclusively from revenues and other funds permitted by this chapter.

“Chapter” means this chapter, as amended from time to time in accordance herewith.

“City” means the city of San Buenaventura, California, a charter city in the state existing under and exercising powers pursuant to the City Charter and the Constitution of the state.

“City Charter” means the charter of the city, as amended from time to time.

“City council” means the city council of the city.

“Costs” means, with reference to a project, any or all of the following costs incurred for the acquisition and construction thereof:

a. Obligations of the participating party incurred for labor and materials in connection with the acquisition and construction of the project;

b. The cost of acquisition and construction of any property, whether real or personal and improved or unimproved, including franchise rights and other intangible property, and any interest therein, required for the acquisition and construction of the project;

c. The cost of demolishing, removing or relocating any building or structure, and the cost of making relocation assistance payments required by law 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;

d. The cost of contract bonds and of insurance of all kinds that may be required or necessary during the course of the acquisition and construction of the project;

e. All costs of engineering, legal and consultant services, including the costs of the participating party for surveys, estimates, plans and specifications and preliminary investigation therefor, and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper acquisition and construction of the project;

f. All costs incurred in connection with proceedings by the participating party necessary to comply with the California Environmental Quality Act of 1970, as amended;

g. All amounts required to fund any reserve funds for bonds and any interest on bonds becoming due and payable during a period not exceeding the period of acquisition and construction of the project and 12 months thereafter;

h. All administrative expenses;

i. All costs which the participating party shall be required to pay, under the terms of any contract or contracts, for the acquisition and construction of the project;

j. The refinancing of any existing indebtedness secured by an interest in any real property comprising any portion of the project, so long as and to the extent that such refinancing does not cause interest on the bonds to become taxable under Section 103 of the Internal Revenue Code of 1954, as amended; and

k. Any sums required to reimburse the participating party for advances made for any of the above items or for any other cost incurred and for work done which are properly chargeable to the project.

“Exempt organization” means an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended.

“Finance and its variants” means the lending of moneys or any other thing of value, or the purchase of loans or the entering into of leases or installment sale agreements, for the purpose of paying or otherwise providing for or assisting the payment of any or all of the costs of a project pursuant to this chapter.

“Participating party” means any person, corporation, partnership, firm or other entity or group of entities, including but not limited to exempt organizations, which require financing for the acquisition and construction of a project pursuant to this chapter.

“Project” means real property improved with an industrial or commercial structure, including but not limited to real property to be used by an exempt organization in connection with its authorized purposes, and all property in connection therewith or incidental thereto, including all machinery, equipment and furnishings, the acquisition and construction of which is financed or otherwise assisted pursuant to this chapter; provided, however, that no project to be financed may be located outside the city unless the city council shall find and determine that such project would directly benefit the citizens of the city by substantially promoting one or more of the public interests recited in this chapter. A project shall also include qualified residential rental property as described in and within the meaning of Section 142(d) of the Internal Revenue Code of 1986, as amended, and regulations and rulings promulgated thereunder, including all property in connection therewith and incidental thereto.

“Revenues” means, with respect to a project, all amounts received as repayment of principal, interest and all other charges received for, and all other income and revenue (including the proceeds of insurance) derived by, the city in connection with such project and receipts derived from the investment of such income or revenues, including moneys deposited in a sinking, redemption or reserve fund or other fund to secure the bonds or to provide for the payment of the principal of or interest on the bonds and such other moneys as the city council may in its discretion make available therefor.

“State” means the state of California. (Code 1971, § 1640)

A. Powers. In connection with the acquisition and construction of a project by the city, the city is authorized and empowered:

1. To issue bonds for the purpose of financing or otherwise assisting the payment of the costs of such project and for the purpose of funding or refunding any issue of bonds.

2. To establish the terms and conditions for the financing of any component of such project undertaken pursuant to this chapter.

3. To employ or contract for such legal, consultant, underwriting, economic feasibility, or other services in connection with the financing of such project, or to contract for bond insurance or other forms of collateral security, as may be necessary in the judgment of the city council for the successful financing of such project and the issuance and sale of bonds therefor.

4. In addition to all other powers specifically granted in this chapter, to do all things necessary or convenient, in the judgment of the city council, to carry out the purposes of this chapter.

B. Nonoperation. The city shall not have the power to operate any project as a business. The city shall take no more action with respect to any project than is necessary to promote the public interests of the city recited in Section 1 of Ordinance No. 93-18. (Code 1971, § 1641)

A. Authorization of Bonds. The city may issue its bonds for the purpose of financing or otherwise assisting the acquisition and construction of all or any portion of a project as authorized by this chapter. Every issue of bonds shall be a special obligation of the city, payable solely from all or any part of the revenues with respect to such project. It shall not be necessary that the issuance of any bonds be subject to authorization by the voters of the city.

B. Issuance of Bonds. The bonds may be issued as term bonds, or the city council, in its discretion, may issue bonds of both types. The bonds shall be authorized by resolution of the city council and shall bear such date or dates, mature at such time or times, bear interest at such fixed or variable rate or rates, 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, and be subject to such terms of redemption as the resolution or resolutions of the city council may provide. The bonds may be sold at either a public or negotiated sale and for such prices as the city council shall determine.

C. Terms of Bonds. Any documents authorizing any bonds or any issue of bonds may contain provisions respecting any of the following terms and conditions, which shall be a part of the contract with the owners of the bonds:

1. The pledge of all or any part of the revenues, subject to such agreements with bondholders as may then exist.

2. The interest and principal to be received and other charges to be charged and the amounts to be raised each year thereby, and the use and disposition of the revenues.

3. The setting aside of reserves or sinking funds and the regulation and disposition thereof.

4. Limitations on the purposes to which the proceeds of a sale of any issue of bonds, then or thereafter issued, may be applied, and pledging such proceeds to secure the payment of the bonds or any issue of bonds.

5. Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds.

6. The procedure, if any, by which the terms of any contract with bond owners may be amended or abrogated, the amount of bonds the owners of which must consent thereto, and the manner in which such consent may be given.

7. Specification of the acts or omissions to act which shall constitute a default in the duties of the city to the owners of the bonds, and providing the rights and remedies of such owners in the event of default.

8. Such other terms and conditions pertaining to the issuance of the bonds as are deemed advisable by the city council.

D. Issuance Under Trust Agreement or Indenture. In the discretion of the city council, any bonds issued under the provisions of this chapter may be secured by a trust agreement or indenture by and between the city and a corporate trustee or trustees, which may be any trust company or bank having the powers of a trust company within or without the state. Such trust agreement or indenture may pledge or assign the revenues to be received or proceeds of any contract or contracts pledged, and may convey or mortgage any property. Such trust agreement or indenture may contain such provisions for protecting and enforcing the rights and remedies of the bond owners as may be reasonable and proper and not in violation of law, including such provisions as are permitted to be included in any documents authorizing the issuance of bonds hereunder. Any bank or trust company doing business under the laws of the state which may act as depository of the proceeds of bonds or of revenues or other moneys may furnish such indemnity bonds or pledge such securities as may be required by the city. Any such trust agreement or indenture may set forth the rights and remedies of the bond owners and of the trustee or trustees, and may restrict the individual right of action by bond owners. In addition to the foregoing, any such trust agreement or indenture may contain such other provisions as the city council may deem reasonable and proper for the security of the bond owners.

E. Personal Liability. Neither the members of the city council nor any person executing the bonds shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

F. Refunding Bonds. The city council may provide for the issuance of bonds any portion of which is to be used for the purpose of refunding outstanding bonds, including the payment of the principal thereof and interest and redemption premiums, if any, thereon. The proceeds of bonds issued to refund any outstanding bonds may, in the discretion of the city council, be applied to the retirement of such outstanding bonds at maturity, or the redemption (on any redemption date) or purchase of such outstanding bonds prior to maturity, upon such terms and subject to such conditions as the city council shall deem advisable.

G. Repayment of Bonds. Revenues, or any portion thereof, as designated in the documents authorizing the issuance of the bonds, shall be the sole source of funds pledged by the city for repayment of bonds issued hereunder. Bonds issued hereunder 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 revenues. All bonds shall contain on the face thereof a statement to the following effect:

Neither the faith and credit nor the taxing power of the city of San Buenaventura is pledged to the payment of the principal of or interest on this bond.

The issuance of bonds shall not directly, indirectly or contingently obligate the city council to levy or pledge any form of taxation or to make any appropriation for their payment. (Code 1971, § 1642)

A. Authority to Assist Projects. The city may provide financing to any participating party for, or otherwise assist the acquisition and construction of, duly approved projects pursuant to this chapter. At the discretion of the city council the financial assistance provided hereunder may take any form deemed advisable for the successful financing of the project, including without limitation in the form of a loan, lease or installment sale.

B. Financing Agreements. The city may enter into agreements with any participating party with respect to the financing of a project, which agreements may provide that the architectural and engineering design of the project shall be subject to such standards as may be established by the city and that the acquisition and construction of the project shall be subject to such supervision as the city deems necessary. The terms and conditions of such agreements may be as mutually agreed upon, but shall not be inconsistent with the provisions of this chapter. Any such agreement may provide the means or methods by which any mortgage taken by the city shall be discharged, and it may contain a covenant by the participating party to complete the project whether or not bond proceeds are sufficient therefor, and such other terms and conditions as the city may require. The city is authorized to fix, revise, charge and collect interest and principal and all other rates, fees, rents, installment purchase payments and charges with respect to the financing of a project. Such rates, fees, rents, installment purchase payments, charges, and interest shall be fixed and adjusted so that the aggregate thereof will provide funds sufficient with other revenues and moneys which it is anticipated will be available therefor, if any, to do all of the following:

1. Pay the principal of and interest on outstanding bonds issued to finance such project, as the same shall become due and payable.

2. Create and maintain reserve required or provided for in the documents authorizing such bonds. A sufficient amount of the revenues derived from the project may be set aside at such regular intervals in a sinking or other similar fund, which shall be pledged to, and charged with, the payment of the principal of and interest on such bonds as the same shall become due, and the redemption price or the purchase price of bonds retired by call or purchase as therein provided. Such pledge shall be valid and binding from the time the moneys 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, contact, or otherwise against the city, irrespective of whether such parties have notice thereof. Neither the resolution, trust agreement, indenture or any agreement by which a pledge is created need be filed or recorded except in the records of the city. The use and disposition of moneys to the credit of such sinking or other similar fund shall be subject to the provisions of the documents authorizing the issuance of such bonds.

3. Pay administrative expenses to the extent not paid from bond proceeds. (Code 1971, § 1643)

All moneys received pursuant to the provisions of this chapter, whether proceeds from the sale of bonds or revenues, shall be deemed to be trust funds to be held and applied solely for the purposes of this chapter. Any bank or trust company in which such moneys are deposited shall act as trustee of such moneys and shall hold and apply the same for the purposes specified in this chapter, subject to the terms of the documents authorizing the bonds. (Code 1971, § 1644)

This chapter, being necessary for the health, welfare and safety of the city, its residents and businesses, shall be liberally construed to effect its purposes. Furthermore, the city council hereby declares that this chapter is an exercise of the power granted to the city by the City Charter and the Constitution of the state and is an exercise by the city of its powers as to municipal affairs and its police powers, and this chapter shall be liberally construed to uphold its validity under the laws of the state. (Code 1971, § 1645)

This chapter shall be deemed to provide a complete, additional and alternative method for doing the things authorized hereby, 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 for a project. The purposes authorized hereby may be effectuated 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. (Code 1971, § 1646)

An action may be brought pursuant to Chapter 9 (commencing with Section 860 of Title 10 of Part 2 of the Code of Civil Procedure) to determine the validity of bonds and the legality and validity of all proceedings previously taken and proposed to be taken for the authorization, issuance, sale, and delivery of the bonds and for the payment of the principal thereof and interest thereon. (Code 1971, § 1647)

This chapter shall not be amended so as to have a material, adverse affect upon the rights of the owners of any outstanding bonds theretofore issued hereunder, without the written consent of such bond owners; provided, however, that this chapter may be amended at any time (A) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision herein contained, as the city may deem necessary or desirable; or (B) if such amendment does not materially impair or adversely affect the interests of any such bond owner in the option of the city council; or (C) if such amendments apply solely to bonds not theretofore issued. (Code 1971, § 1648)

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. (Code 1971, § 1649)