Watsonville Municipal Code Art. 3 Bonds

(a) The City, from time to time, may issue bonds for any of the purposes specified in Article 2 of this chapter.

(b) Every issue of bonds shall be a limited obligation of the City, payable from all or any specified part of the revenues and the moneys and assets authorized by this chapter to be pledged or assigned to secure the payment of bonds. Bonds issued under the provisions of 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 specified 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.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

In determining the amount of bonds to be issued, the City may include:

(a) All costs and estimated costs incidental to or connected with the acquisition, construction, improving, or financing of the enterprise; and

(b) All engineering, inspection, legal, financing, trustees’ and fiscal agents’ fees and all other costs of the issuance of bonds, reserve funds and working capital, and funded bond interest.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

Bonds may be issued as serial bonds, term bonds, installment bonds, or pass-through certificates, or any combination thereof. Bonds shall be authorized by resolution of the 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, be subject to such terms of redemption, and have such other terms and conditions as such resolution may provide. Bonds may be sold at either a public or private sale and for such price or prices as the City shall determine.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

Any resolution 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 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 the 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 bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds;

(d) The setting aside of reserves and sinking funds and such other funds as are necessary or appropriate 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 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) Limitations on the use of revenues for the maintenance and operation costs of the enterprise and administration or other expenses of the City;

(g) The specification 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 or fiscal agent to act on behalf of the City and the holders of its bonds, the pledge or assignment of revenues or security interests to such trustee or fiscal agent, and the rights of such trustee or fiscal agent;

(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 provision which the Council may deem reasonable and proper for the purposes of this chapter and the security of the bondholders.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

Any pledge of revenues or other moneys or assets pursuant to the provisions of 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 filed or recorded, except in the records of the City.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

Neither the members of the Council, the officers or employees of the City, nor any person executing any bond shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the issuance thereof.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

The City shall have the power out of any funds available therefor to purchase its bonds. The City may hold, pledge, cancel, on resell such bonds, subject to and in accordance with agreements with the bondholders.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

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 authorizing the issuance of bonds, except to the extent the rights thereof may be restricted by such resolution, may, either at law or in equity, by suit, action, mandamus, or other proceeding, protect or enforce any and all rights specified in law or in such resolution and may enforce and compel the performance of all duties required by this chapter or by such resolution to be performed by the City or by any officer, employee, or agent thereof, including the fixing, charging, and collecting of rates, fees, interest, and charges authorized and required by the provisions of such resolution to be fixed, charged, and collected.

(§ l, Ord. 535-81 C-M, eff. September 24, 1981)

(a) The City may issue bonds for the purpose of refunding any bonds then outstanding, including the payment of any redemption premiums thereof and any interest accrued or to accrue to the earliest or any subsequent date or dates of redemption, purchase, or maturity of such bonds.

(b) The proceeds of bonds issued for the purpose of refunding any outstanding bonds, in the discretion of the City, may be applied to the purchase or retirement at maturity or redemption of such outstanding bonds, either at their earliest or any subsequent redemption date or dates or upon the purchase on retirement at the maturity thereof and, pending such application, may be placed in escrow to be applied to such purchase or retirement at maturity or redemption on such date or dates as may be determined by the City.

(c) Pending use for the purchase, retirement at maturity, or the redemption of outstanding bonds, any proceeds held in escrow pursuant to subsection (b) of this section may be invested and reinvested as provided in the resolution. Any interest or other increment earned or realized on any such investment may be applied to the payment of the outstanding bonds to be refunded or to the payment of interest on the refunding bonds.

(d) All bonds issued pursuant to this section shall be subject to the provisions of this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

In anticipation of the sale of bonds or the receipt of proceeds of grants, the City may issue bond or grant anticipation notes and may renew such notes from time to time. Such notes shall be payable from any revenue or other money authorized by this chapter to be pledged to secure the payment of bonds which are not otherwise pledged, or from the proceeds of the sale of the bonds or receipt of the grants in anticipation of which they were issued. Such notes shall be issued in the same manner as bonds. Such notes and the resolution providing for their issuance may contain any provision, condition, or limitation which a bond, or a resolution providing for the issuance thereof, may contain.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

The validity of the authorization and issuance of any bond shall not be dependent on and shall not be affected in any way by any proceeding taken by the City for the acquisition, construction, or improving of the enterprise or by contracts in connection therewith.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)

An action to determine the validity of bonds may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil Procedure of the State.

(§ 1, Ord. 535-81 C-M, eff. September 24, 1981)