Chapter 3-10

The Council hereby finds and declares that it is necessary and essential to the well-being of the City that it provide financial assistance to promote the economic development of the City. Such economic development will serve the following public purposes and municipal affairs of the City:

(a) The full and gainful employment of residents of the City;

(b) The full and efficient utilization and modernization of existing industrial, commercial, and business facilities;

(d) The growth of the City’s tax base through increased property values and consumer purchasing;

(e) The reduction of the need for and costs of welfare and other remedial programs;

(f) The reduction of urban ills, such as crime, attributable in part to inadequate economic opportunities;

(g) The stability and diversification of the City’s economy;

(h) The lowering of the cost to City consumers of necessary goods and services;

(i) The environmentally optimum disposition of waste materials of the City; and

(j) The enhancement of the general economic prosperity, health, safety, and welfare of the residents of the City.

The availability of the financial assistance authorized by this chapter will serve those purposes and the General Plan of the City by providing private enterprises with new methods of financing capital outlays in the City and by ensuring that economic development within the City will reflect the local community’s needs and objectives and will be environmentally optimum with respect to both the physical and social environment of the City. The City shall promote such public interests pursuant to this chapter without adversely affecting areas outside the City and without conflicting with efforts by the State to solve problems of State-wide concern.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.110 Definitions.

Unless otherwise apparent from the context, certain words and phrases used in this chapter are defined as follows:

(a) “Bond” shall mean a bond, note, certificate, debenture, or other obligation authorized to be issued by the City pursuant to this chapter and payable as provided in this chapter.

(b) “City” shall mean the City of Watsonville.

(c) “Cost” shall mean the total of all costs incurred by or on behalf of a participating party to carry out all works and undertakings and to obtain all rights and powers necessary or incident to the acquisition, construction, installation, reconstruction, rehabilitation, or improvement of a facility. “Cost” may include all costs of the issuance of bonds for such purposes, costs for construction undertaken by a participating party as its own contractor, capitalized bond interest, reserves for debt service and for repairs, replacements, additions, and improvements to a facility, and other working capital incident to the operation of a facility.

(d) “Council” shall mean the Council of the City of Watsonville.

(e) “Facility” shall mean any of the facilities, places, or buildings within the City which are, or will be, maintained and operated for industrial, commercial, or business purposes, conform to the General Plan of the City, and are approved by the City for the financing authorized by this chapter, such approval being given only when the City finds and determines that such financing will substantially promote one or more of the public purposes set forth in Section 3-10.105 of this article.

A “facility” may be an activity which may otherwise be financed pursuant to the State Industrial Development Financing Act (Sections 91500 et seq. of the Government Code of the State) to the extent said Act permits the financing of such activity under an alternative authority. “Facility” shall include, without limitation, real and personal property, land, buildings, structures, fixtures, machinery, and/or equipment and all such property related to or required or useful for the operation of a facility. “Facility” shall not include any facility, place, or building used or to be used primarily for sectarian instruction or study or as a place for devotional activities or religious worship.

(f) “Participating party” shall mean any individual, association, corporation, partnership, or other entity which is approved by the City to undertake the financing of the costs of a facility for which this chapter authorizes the issuance of the bonds.

(g) “Revenue” shall mean amounts received by the City as payments of principal, interest, and all other charges with respect to a loan authorized by this chapter, as payments under a lease, sublease, or sale agreement with respect to a facility, as proceeds received by the City from mortgage, hazard, or other insurance on or with respect to such a loan (or any property securing such loan), lease, sublease, or sale agreement, all other rents, charges, fees, income, and receipts derived by the City from the financing of a facility authorized by this chapter, any amounts received by the City as investment earnings on moneys deposited in any fund securing the bonds, and such other legally available moneys as the Council, in its discretion, may lawfully designate as revenue.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982, as amended by § 1, Ord. 757-87 C-M, eff. November 26, 1987)

3-10.115 No limitation on appropriations.

Revenue, as defined by this article, and the expenditure of such revenue shall not be taken into account in any manner in determining the City’s compliance with Article XIIIB of the Constitution of the State.

(§ l, Ord. 541-81 C-M, eff. January 21, 1982)

Article 2. Financing Facilities

3-10.200 Loans for facilities.

The City is hereby authorized to make, purchase, or otherwise contract for the making of a mortgage or other secured or unsecured loan, with the proceeds of bonds and upon such terms and conditions as the City shall deem proper, to any participating party for the costs of a facility.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.205 Acquisition, construction, leasing, and selling of facilities.

The City is hereby authorized to acquire, construct, enlarge, remodel, renovate, alter, improve, furnish, equip, and lease as lessee, with the proceeds of bonds, a facility to such participating party and is further authorized to contract with such participating party to undertake on behalf of the City to construct, enlarge, remodel, renovate, alter, improve, furnish, and equip such facility.

The City is authorized to sell or lease, upon such terms and conditions as the City shall deem proper, to a participating party any facility owned by the City under this chapter, including a facility conveyed to the City in connection with a financing authorized by this chapter but not being financed under this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.210 Applications for approval.

Any person may apply to the City for approval as a participating party and for the approval of a facility for financing under this chapter. Applications shall set forth such information as the City may require in order to enable the City to evaluate the applicant, the facility, and its proposed costs.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.215 Fees.

The City is hereby authorized to charge participating parties application, commitment, financing, and other fees in order to recover all administrative and other costs and expenses incurred in the exercise of the powers and duties conferred by this chapter. The Council shall direct the City Clerk to transmit a letter agreement or contract to a participating party which agreement will obligate such party to pay such fees and expenses as the Council may charge or incur under this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.220 Insurance.

The City is hereby authorized to obtain, or aid in obtaining, from any department or agency of the United States or of the State or any private company, any insurance or guarantee as to, or of, or for the payment or repayment of interest or principal, or both, rents, fees, or other charges, or any part thereof, on any loan, lease, or sale obligation, or any instrument evidencing or securing the same, made or entered into as authorized by this chapter, and is authorized to accept payment in such manner and form as provided therein in the event of a default by a participating party, and to assign any such insurance or guarantee as security for bonds.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.225 Rents and charges.

The City is hereby authorized to fix rents, payments, fees, charges, and interest rates for a financing authorized by this chapter and to agree to revise from time to time such rents, payments, fees, charges, and interest rates to reflect changes in interest rates on bonds, losses due to defaults, or changes in other expenses related to this chapter, including City administrative expenses.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.230 Security for loans.

The City is hereby authorized to hold deeds of trust or mortgages on security interests in personal property as security for loans and other obligations authorized by this chapter and to pledge or assign the same as security for the repayment of bonds. Such deeds of trust, mortgages, or security interests, or any other interest of the City in any facility, may be assigned to, and held on behalf of the City by, any bank or trust company appointed to act as trustee by the City in any resolution or indenture providing for the issuance of bonds.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.235 Professional services.

The City is hereby authorized to contract for such engineering, architectural, financial, accounting, legal, or other services as may be necessary in the judgment of the City for the purposes of this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.240 Public works requirements inapplicable.

Except as specifically provided in this chapter, the acquisition, construction, installation, reconstruction, rehabilitation, or improvement of a facility financed under this chapter shall not be subject to any requirement relating to buildings, works, or improvements owned or operated by the City, and any requirement of public competitive bidding or other procedural restriction imposed on the award of contracts for the acquisition or construction of a City building, work, or improvement or to the lease, sublease, sale, or other disposition of City property shall not be applicable to any action taken under this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.245 Additional powers.

In addition to all other powers specifically granted by this chapter, the City is hereby authorized to contract for and do all things necessary or convenient to carry out the purposes of this chapter; provided, however, the City shall not have the power to operate a facility financed under this chapter as a business, except temporarily in the case of a default by a participating party.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

Article 3. Bonds

3-10.300 Issuance of bonds.

The City is hereby authorized to issue bonds in an aggregate principal amount not to exceed One Hundred Million and no/100ths ($100,000,000.00) Dollars and to issue such bonds from time to time in such series and amounts as are determined by the Council to be necessary or appropriate to provide for the costs of facilities approved by the Council. Bonds shall be negotiable instruments for all purposes, subject only to the provisions of such bonds for registration.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.305 Bonds not debt of the City.

All of the bonds hereby authorized to be issued shall be limited obligations of the City payable from all or any specified part of the revenues and the moneys and assets authorized in this chapter to be pledged or assigned to secure the payment of bonds. Such revenues, moneys, or assets shall be the sole source of repayment of such issue of bonds. Bonds issued as authorized by 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 or to make any appropriation for their payment.

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 Watsonville is pledged to the payment of the principal of or premium, if any, or interest on this bond.”

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.310 Bond terms.

Bonds shall be issued as serial bonds, term bonds, installment bonds, or pass-through certificates or any combination thereof. The Mayor or City Manager shall determine the terms and timing of the issuance of particular bonds in accordance with the resolution of the Council approving the particular facility to be financed thereby. Bonds shall bear such date or dates, mature at such time or times not to exceed forty (40) years, bear interest at such fixed or variable rate or rates approved by the participating party whose facility is being financed but not to exceed the maximum rate permitted by law, 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, or any indenture to be entered into by the City pursuant to such resolution, shall provide. Bonds shall be sold at either public or private sale and for such prices as the City shall determine.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.315 Bond provisions.

Any resolution relating to the issuance of any bonds, or any indenture to be entered into by the City pursuant to such resolution, 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 parity bonds, the terms upon which additional parity bonds may be issued and secured, and the refunding of outstanding bonds;

(d) The setting aside of reserves, sinking funds, and other funds 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 (including loans, deeds of trust, mortgages, leases, subleases, sales agreements, and other contracts and security interests) 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 operating, 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 the 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 to act on behalf of the City and the holders of its bonds, the pledge or assignment of loans, deeds of trust, mortgages, leases, subleases, sale contracts, and any other contracts to such trustee, and the rights of such trustee;

(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. 541-81 C-M, eff. January 21, 1982)

3-10.320 Pledge of revenues, money, or property: Liens.

Any pledge of revenues or other moneys or assets as authorized by 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.

(§ l, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.325 No personal liability.

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 on be subject to any personal liability or accountability by reason of the issuance thereof.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.330 Purchases of bonds by the 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 agreements with the bondholders.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.335 Actions by bondholders.

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 relating to the issuance of bonds, except to the extent the rights thereof may be restricted by such resolution or any indenture authorized thereby to be entered into by the City, may, either at law or in equity, by suit, action, mandamus, or other proceedings, protect or enforce any and all rights specified in law or in such resolution or indenture and may enforce and compel the performance of all duties required by this chapter or by such resolution or indenture 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 or indenture to be fixed, charged, and collected.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.340 Refunding bonds.

The City is hereby authorized to issue bonds for the purpose of refunding any bonds then outstanding.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.345 Bond anticipation notes.

In anticipation of the sale of the 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 Council to be necessary or appropriate for the costs of facilities approved by the Council. Such notes shall be payable from revenues or other moneys or assets authorized by this chapter to be pledged to secure the payment of bonds, and which are not otherwise pledged, or from the proceeds of the sale of the particular bonds in anticipation of which they are issued. Such notes shall be issued in the same manner as bonds. The Mayor on City Manager shall determine the terms and timing of the issuance of particular bond anticipation notes in accordance with the provisions of Section 3-10.310 of this article and the resolution of the Council approving the particular facility to be financed thereby. Such notes, any resolution relating to the issuance of such notes, and any indenture to be entered into by the City pursuant to such resolution may contain any provision, condition, or limitation permitted under Section 3-10.315 of this article.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.350 Validity of bonds.

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 approval of any financing or the entering into of any agreement, or by the failure to provide financing or enter into any agreement, for which bonds are authorized to be issued under this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

Article 4. Supplemental Provisions

3-10.400 Liberal construction.

This chapter, being necessary for the welfare of the City and its inhabitants, shall be liberally construed to effect its purposes.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.405 Omissions not to affect validity of bonds.

Any omission of any officer or the City in proceedings under this chapter or any other defect in the proceedings shall not invalidate such proceedings or the bonds issued pursuant to this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.410 Full authority.

This chapter shall be the full authority for the issuance of bonds by the City for any of the purposes specified in this chapter.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.415 Additional authority.

This chapter shall be deemed to provide a complete, additional, and alternative method for doing the things authorized thereby 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. The purposes authorized by this chapter 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.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.420 Chapter provisions controlling.

To the extent the provisions of this chapter are inconsistent with the previsions of any general statute or special act, or part thereof, the provisions of this chapter shall be deemed controlling.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

3-10.425 Severability.

If any provision of this chapter or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect any other provision or application of this chapter which can be given effect without the invalid provision or application, and to this end the provisions of this chapter are declared to be severable. The Council hereby declares that it would have adopted and passed this chapter and each section, subsection, sentence, clause, phrase, and word of this chapter, irrespective of the fact that any one or more of the other sections, subsections, sentences, clauses, phrases, or words of this chapter be declared invalid or unconstitutional.

(§ 1, Ord. 541-81 C-M, eff. January 21, 1982)

Chapter 10ECONOMIC DEVELOPMENT REVENUE*

3-10.101 Title.

3-10.105 Purpose.

3-10.110 Definitions.

3-10.115 No limitation on appropriations.

3-10.200 Loans for facilities.

3-10.205 Acquisition, construction, leasing, and selling of facilities.

3-10.210 Applications for approval.

3-10.215 Fees.

3-10.220 Insurance.

3-10.225 Rents and charges.

3-10.230 Security for loans.

3-10.235 Professional services.

3-10.240 Public works requirements inapplicable.

3-10.245 Additional powers.

3-10.300 Issuance of bonds.

3-10.305 Bonds not debt of the City.

3-10.310 Bond terms.

3-10.315 Bond provisions.

3-10.320 Pledge of revenues, money, or property: Liens.

3-10.325 No personal liability.

3-10.330 Purchases of bonds by the City.

3-10.335 Actions by bondholders.

3-10.340 Refunding bonds.

3-10.345 Bond anticipation notes.

3-10.350 Validity of bonds.

3-10.400 Liberal construction.

3-10.405 Omissions not to affect validity of bonds.

3-10.410 Full authority.

3-10.415 Additional authority.

3-10.420 Chapter provisions controlling.

3-10.425 Severability.

Chapter 10
ECONOMIC DEVELOPMENT REVENUE*