Chapter 3.27
MUNICIPAL FACILITIES REVENUE BOND CODE
Sections:
3.27.050 Authorization of Bonds.
3.27.080 Issuance Under Indenture or Trust Agreement.
3.27.130 Purchase of Bonds by City.
3.27.140 Bond Anticipation Notes.
3.27.150 Grant Anticipation Notes.
3.27.160 Liberal Construction.
3.27.170 Provisions of This Chapter are Complete, Additional and Alternative.
3.27.180 Judicial Validation Proceedings.
3.27.190 Amendment of Chapter.
3.27.010 Title.
This chapter shall be known and may be cited as the “City of Newport Beach Municipal Facilities Revenue Bond Code,” and shall be referred to as the “Code.” (Ord. 93-29 § 1 (part), 1994)
3.27.020 Purpose.
The Council finds and declares that it is necessary, essential, a public purpose and a municipal affair for the City to provide financing for municipal facilities serving residents and businesses of the City in the interests of the public health, safety and welfare. (Ord. 93-29 § 1 (part), 1994)
3.27.030 Definitions.
Unless the context otherwise requires, the following definitions shall govern the construction of this chapter:
“Acquisition and construction” means, with respect to any enterprise or portion thereof, the acquisition, construction, improvement, furnishing, equipping, remodeling, repair, reconstruction or rehabilitation thereof.
“Bonds” means any bonds, notes, installment sale agreements, leases or other obligations issued or entered into by the City pursuant to this chapter for the purpose of financing the costs of an enterprise, which are payable exclusively from revenues relating to such enterprise and other funds permitted by this chapter.
“Chapter” means this Chapter 3.27 of the Newport Beach City Code, as amended from time to time in accordance herewith.
“Charter” means the Charter of the City, as amended from time to time.
“Costs” mean, with reference to an enterprise or any portion thereof, any or all of the following costs incurred for the acquisition and construction thereof:
a. Obligations of the City incurred for labor and material in connection with the acquisition and construction of such enterprise or portion thereof;
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 interests therein, required for the acquisition and construction of such enterprise or portion thereof;
c. The cost of demolishing, removing or relocating any building or structure, and the cost of making relocation assistance payments required by 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 such enterprise or portion thereof;
e. All costs of engineering, legal and consultant services, including the costs of the City 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 such enterprise or portion thereof;
f. All costs incurred in connection with proceedings by the City 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 such enterprise or portion thereof, and for twelve months thereafter;
h. All costs of issuance of the bonds;
i. All costs which the City shall be required to pay, under the terms of any contract or contracts, for the acquisition and construction of such enterprise or portion thereof;
j. The refinancing of any existing indebtedness relating to such enterprise or portion thereof; and
k. Any sums required to reimburse the City for advances made for any of the above items, or for any other costs incurred and for work done which are properly chargeable to such enterprise or portion thereof.
“Enterprise” means any land, improvements, facilities, equipment and other property of any nature whatsoever, which are used for any of the following municipal operations of the City:
a. The system of the City for the generation, production, transmission and distribution of electricity, gas and other forms of energy for lighting, heating, and power for public uses;
b. The system of the City for the acquisition, storage, treatment and distribution of water for domestic use, irrigation, sanitation, industrial use, fire protection, recreation or any other public use;
c. The system of the City for the collection, treatment and disposal of sewage, waste or storm water, including drainage;
d. Public parking lots, garages or other automotive or vehicular parking facilities, including any and all public off-street vehicular parking facilities;
e. Public marinas;
f. Mobilehome parks; and
g. Public golf courses and facilities and improvements. The precise description of any enterprise for which financing is provided under this chapter shall be set forth in the proceedings of the City Council authorizing such financing.
“Revenues” mean, with respect to an enterprise, all gross income and revenue received by the City from the ownership and operation of such enterprise, including all fees and charges received by the City for the services of such enterprise and all other income and revenue howsoever derived by the City from the ownership and operation of such enterprise or arising from such enterprise, and including all 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. With respect to any grant anticipation notes issued under this chapter, the term revenues shall also include the revenues derived from the proceeds of any Federal or State grant with respect to such enterprise. The precise description of the revenues with respect to any enterprise for which financing is provided under this chapter shall be set forth in the proceedings of the City Council authorizing such financing. (Ord. 2023-22 § 112, 2023; Ord. 93-29 § 1 (part), 1994)
3.27.040 General Powers.
In connection with the acquisition and construction of an enterprise by the City, the City is authorized and empowered:
A. To issue bonds for the purpose of financing or otherwise assisting the payment of the costs of such enterprise and for the purpose of funding or refunding any issue of bonds.
B. To establish the terms and conditions for the financing of any component of such enterprise undertaken pursuant to this chapter.
C. To employ or contract for such legal, consultant, underwriting, economic feasibility, or other services in connection with the financing of such enterprise, 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 enterprise and the issuance and sale of bonds therefor.
D. 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. (Ord. 93-29 § 1 (part), 1994)
3.27.050 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 an enterprise 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 enterprise. It shall not be necessary that the issuance of any bonds be subject to authorization by the voters of the City. (Ord. 93-29 § 1 (part), 1994)
3.27.060 Issuance of Bonds.
Bonds may be issued as serial bonds or as term bonds, as current interest bonds or capital appreciation bonds, or in such other or additional forms as the City Council may deem advisable. 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, 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 City Council may provide. The bonds may be sold at either a public or private sale and for such prices as the City Council shall determine. (Ord. 93-29 § 1 (part), 1994)
3.27.070 Terms of Bonds.
Any proceedings of the City authorizing bonds for an enterprise 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:
A. The pledge of all or any part of the related revenues, subject to such agreements with bond owners as may then exist.
B. The creation of any mortgage, lien or other security interest on any part of an enterprise, or on any other funds, rights or assets of the City of any nature whatsoever relating to such enterprise.
C. 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 such revenues.
D. The setting aside of reserves or sinking funds and the regulation and disposition thereof.
E. 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.
F. Limitations on the issuance of additional bonds, the terms upon which additional bonds may be issued and secured, and the refunding of outstanding bonds.
G. 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.
H. 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.
I. Such other terms and conditions pertaining to the issuance of the bonds as are deemed advisable by the City Council. (Ord. 93-29 § 1 (part), 1994)
3.27.080 Issuance Under Indenture or Trust Agreement.
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 the 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 is permitted to be included in any resolution or resolutions of the City Council 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 the 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. (Ord. 93-29 § 1 (part), 1994)
3.27.090 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. (Ord. 93-29 § 1 (part), 1994)
3.27.100 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. (Ord. 93-29 § 1 (part), 1994)
3.27.110 Repayment of Bonds.
Revenues, or any portion thereof, as designated in the resolution, trust agreement or indenture authorizing the issuance of the bonds, shall be the sole source of funds pledged by the City for repayment of bonds issued hereunder which 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 are 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. (Ord. 2023-22 § 113, 2023; Ord. 93-29 § 1 (part), 1994)
3.27.120 Trust Funds.
All moneys received pursuant to the provisions of this chapter, whether proceeds from the sale of bonds or revenues or other moneys or assets authorized by this chapter to be pledged to secure payment of bonds, shall, to the extent set forth in the resolution or trust agreement authorizing the issuance of the bonds, 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 resolution, agreement or indenture authorizing the bonds. (Ord. 93-29 § 1 (part), 1994)
3.27.130 Purchase of Bonds by City.
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 its agreement with bond owners. (Ord. 93-29 § 1 (part), 1994)
3.27.140 Bond Anticipation Notes.
In anticipation of the sale of bonds authorized by this chapter, the City is hereby 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 City Council to be necessary or appropriate for the costs of an enterprise approved by the City 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 or sale of the particular bonds in anticipation of which they are issued. Such notes shall be issued in the same manner as other bonds which are authorized to be issued hereunder. (Ord. 93-29 § 1 (part), 1994)
3.27.150 Grant Anticipation Notes.
In anticipation of the receipt of funds derived from any Federal or State grants with respect to an enterprise or any portion thereof, the City is hereby authorized to issue grant anticipation notes, and to renew the same from time to time, in such series and amounts as are determined by the City Council to be necessary or appropriate for the costs of an enterprise approved by the City Council and reimbursable from such grants. Such notes shall be payable from the revenues derived from the proceeds of such grants 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 or sale of the particular bonds in anticipation of which they are issued. Such notes shall be issued in the same manner as other bonds which are authorized to be issued hereunder. (Ord. 93-29 § 1 (part), 1994)
3.27.160 Liberal Construction.
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 constructed to uphold its validity under the laws of the State. (Ord. 93-29 § 1 (part), 1994)
3.27.170 Provisions of This Chapter Are Complete, Additional and Alternative.
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 an enterprise. 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. (Ord. 2023-22 § 114, 2023; Ord. 93-29 § 1 (part), 1994)
3.27.180 Judicial Validation Proceedings.
An action may be brought pursuant to Chapter 9 (commencing with California Code of Civil Procedure Section 860) 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. (Ord. 2023-22 § 115, 2023; Ord. 93-29 § 1 (part), 1994)
3.27.190 Amendment of Chapter.
This chapter shall not be amended so as to have a material, adverse effect 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 provisions 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 opinion of the City Council; or (C) if such amendments apply solely to bonds not theretofore issued. (Ord. 2023-22 § 116, 2023; Ord. 93-29 § 1 (part), 1994)
3.27.200 Chapter Controlling.
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. 93-29 § 1 (part), 1994)