Chapter 8A
ECONOMIC DEVELOPMENT

Sections:

ARTICLE I. ECONOMIC DEVELOPMENT FINANCING

DIVISION 1. GENERALLY

8A.1    Short title.

8A.2    Purpose; policy; declarations; criteria.

8A.3    Definitions.

8A.4—

8A.9    Reserved.

DIVISION 2. PROCEDURE

8A.10    Authorization.

8A.11    Purpose.

8A.12    Employees and agents; attorney; conflict of interest.

8A.13    Administration.

8A.14    Application for financing.

8A.15    Acceptance or rejection of applications; determinations.

8A.16    Additional determinations.

8A.17    Approval and preliminary undertaking of project.

8A.18    Resolution for issuance of bonds.

8A.19    Bond interest and sale.

8A.20    Exemption from other laws.

8A.21    Application of article.

8A.22    Liberal construction.

8A.23    Maximum amount.

8A.24    Incorporation by reference.

8A.25—

8A.35    Reserved.

ARTICLE II. INDUSTRIAL DEVELOPMENT FINANCING

DIVISION 1. GENERALLY

8A.36—

8A.40    Reserved.

DIVISION 2. INDUSTRIAL DEVELOPMENT AUTHORITY

8A.41    Purposes.

8A.42    Findings.

8A.43    Declarations.

8A.44—

8A.49    Reserved.

ARTICLE III. NONPROFIT CORPORATION PROJECT FINANCING LAW

8A.50    Title.

8A.51    Definitions.

8A.52    Powers.

8A.53    Non-operation.

8A.54    Authorization of bonds.

8A.55    Issuance of bonds.

8A.56    Terms of bonds.

8A.57    Trust agreement.

8A.58    Personal liability.

8A.59    Refunding bonds.

8A.60    Repayment of bonds.

8A.61    Financing agreements.

8A.62    Trust funds.

8A.63    Liberal construction.

8A.64    Supplemental and additional powers.

8A.65    Actions to determine validity of bonds and proceedings.

8A.66    Amendment of article.

8A.67    Partial invalidity.

ARTICLE I. ECONOMIC DEVELOPMENT FINANCING

DIVISION 1. GENERALLY

8A.1 Short title.

This article shall be cited and referred to as the “Economic Development Financing Law” of the city. (Ord. No. 82-10, § 1, 4-5-82)

8A.2 Purpose; policy; declarations; criteria.

(a) It is the purpose of this article to provide industry and commerce with an alternative method of financing in acquiring, constructing or rehabilitating facilities which will increase employment opportunities for the inhabitants of or otherwise contribute to the economic development of the city.

(b) It is the policy of the city, consistent with environmental, resource conservation and other policies, to facilitate for and on behalf of private enterprise the acquisition of property either suitable for or evidencing an obligation respecting industrial, commercial or other business activities or uses, through the issuance by the city of revenue bonds in accordance with the criteria set forth in subsection (c), and it is hereby declared that such additional method of financing, when made available in accordance with such policy, serves a public purpose and municipal affair of the city and will promote the prosperity, health, safety, and welfare of the city and its inhabitants.

(c) (1) The criteria to be utilized to determine whether such method of financing may be made available shall include the following:

a. Whether employment benefits arising out of the facilities may ensue by securing or increasing (i) the number of employees of the company and any other direct users of the facilities or (ii) compensation for such employment, the value of which may be expressed in terms of aggregate direct employment earnings.

b. Whether energy, mineral or natural or cultivated resource conservation benefits arising out of the use of the facilities may ensue by the reduction of waste, improvement or recovery or intensification of utilization of resources that otherwise would be less intensively utilized, or wasted, or not recovered, the value of which may be expressed in terms of the price and amount of the energy, minerals, or other resources saved or recovered, or the price and amount of equivalent energy, minerals or other resources which would be utilized were the resources not utilized as intensively.

c. Whether consumer benefits arising out of the use of the facilities may ensue by (i) improvement of the quantity or quality or reduction in the price of products, energy, or related services or facilities, the value of which may be expressed in terms of quantity and price differentials; and (ii) production of new or improved products, or related services or facilities, the value of which may be expressed in terms of quantity and price.

(2) The criterion to be utilized to determine whether such method of financing may not be made available is whether or not the making of it available would be in violation of the constitution and laws of the state or of the United States. (Ord. No. 82-10, § 1, 4-5-82)

8A.3 Definitions.

Unless the context otherwise requires, the definitions of Government Code Section 91504 [except subdivisions (c), (d), (i), (j), (p) and (r)] of the Act and the following definitions shall apply and shall govern the construction of this article, inclusive of the provisions incorporated by reference by section 8A.24.

“Act” means the California Industrial Development Financing Act (Title 10 (commencing with Section 91500), Government Code).

“Article” means this Article I of Chapter 8A of the Code.

“Authority” means the city acting by the council exercising the powers prescribed for authorities pursuant to this article.

“Board” means the council exercising the powers prescribed for boards of directors of authorities pursuant to this article.

“Division” means Division 2 of Article I of Chapter 8A of the Code.

“Facilities” means property suitable for industrial, commercial or other business activities or uses, including, without limitation, any activities or uses property suitable for or evidencing an obligation respecting which may be acquired for and on behalf of private enterprise pursuant to the Act, to the full extent permitted by the constitution and laws of the state.

“Governing body” means the council exercising the powers prescribed for governing bodies of public agencies pursuant to this article.

“Public agency” means the city acting by the council exercising the powers prescribed for public agencies pursuant to this article. (Ord. No. 82-10, § 1, 4-5-82)

8A.4—8A.9 Reserved.

DIVISION 2. PROCEDURE

8A.10 Authorization.

The city is authorized to issue revenue bonds in the accomplishment of the public purposes and municipal affairs as provided in section 8A.2. The exercise pursuant to this article of the powers conferred by this article, including the power to issue revenue bonds, shall be deemed to be in the performance of an essential governmental function of the city; provided, however, that exercise of the powers conferred by this article in the achievement of such purposes shall be subject to the provisions of, and exclusively as provided in, this division. (Ord. No. 82-10, § 1, 4-5-82)

8A.11 Purpose.

(a) The sole purpose of the city acting pursuant to this article is to undertake projects through the issuance of revenue bonds in accomplishment of the purposes provided in section 8A.2, and to carry out and complete such projects and perform and exercise derivative obligations and powers. All powers vested in the city pursuant to this article shall be exercisable as the council shall provide, solely in the accomplishment of such purposes.

(b) The jurisdiction of the city to undertake projects shall be coincident as to territory with the territory within which the city may, to the full extent permitted by the constitution and laws of the state, finance facilities by the issuance of its revenue bonds. (Ord. No. 82-10, § 1, 4-5-82)

8A.12 Employees and agents; attorney; conflict of interest.

(a) The city may appoint such employees and agents, including, without limitation, financial advisors or consultants, accountants, architects, engineers, or other experts or advisors, as it requires, and determine their qualifications, duties, terms of employment or engagement, and compensation.

(b) The city may contract for such legal counsel as in its judgment is necessary or advisable to enable it to carry out its purposes, including such bond counsel as it deems advisable in connection with any proceedings.

(c) No attorney or firm of attorneys employed as counsel by a company may serve at the same time as legal counsel, including bond counsel, and no person or firm employed as financial advisor by a company may at the same time serve as financial advisor, to the city in connection with any project or proposed project for such company. (Ord. No. 82-10, § 1, 4-5-82)

8A.13 Administration.

The city may use discretion in the undertaking of projects, including the establishment of reasonable priorities among the types and locations of projects and reasonable criteria regarding companies, applications in accord with which priorities and criteria may be accepted. (Ord. No. 82-10, § 1, 4-5-82)

8A.14 Application for financing.

Companies may apply for financing pursuant to this article by filing with the city an application therefor which includes all of the following:

(a) Such financial, legal, and other information as is required by the city;

(b) An estimate of the amount of bonds proposed to be issued, of the sources of amounts otherwise required for the project, and an itemization of the estimated cost and any other expenses;

(c) Sufficient other information as is necessary to the determinations required to be made by subdivision (c) of section 8A.15. An application may be amended, supplemented or clarified from time to time. (Ord. No. 82-10, § 1, 4-5-82)

8A.15 Acceptance or rejection of applications; determinations.

(a) Applications for projects or companies not in accordance with the reasonable priorities and criteria which the city may establish need not be accepted and further processed by the city.

(b) Acceptance of any application in no way obligates the council to adopt a resolution of intention or undertake the project proposed.

(c) Upon acceptance of any application, the council shall determine whether it is likely that the undertaking of the project by the city will be a substantial factor in the accrual of one or more of the public benefits from the use of the facilities as proposed in the application, whether the activities or uses may be classified within the category of industrial, commercial or other business activities or uses, and whether the project is otherwise in accord with the purposes and requirements of this article.

(d) Upon affirmative determinations under subdivision (c), the council may express the present intention of the city to issue bonds in connection with the project and shall evidence the same by the adoption of a resolution of intention to undertake the project. The resolution of intention shall briefly describe the facilities, state the estimated principal amount of the bond issue (which estimate shall not limit the amount of bonds which may be issued), and identify the company that is the applicant, and may include such other provisions as the council shall prescribe.

(e) A notice of the filing of an application, naming the company that is the applicant, briefly describing the facilities, stating the estimated principal amount of the bond issue and referring to the application for further particulars, shall be published by the city clerk once in a newspaper of general circulation in the city. Any amendment, supplement or clarification of an application which changes the company that is the applicant, the description of the facilities, or the estimated principal amount of the bond issue, as previously noticed, shall be noticed in the same manner.

(f) A resolution of intention may be revoked, amended, supplemented or clarified by the council, at any time prior to entry into the project agreements. The project agreements, indenture, bonds and other proceedings shall be consistent with the resolution of intention, and shall supersede it except to the extent otherwise expressed. (Ord. No. 82-10, § 1, 4-5-82)

8A.16 Additional determinations.

(a) Among the requirements of this article, that the council shall determine that the project is in accord with, is the requirement of subsection (b).

(b) It is required that the project complies with the following criteria, in the determination of the council by review of the information submitted by the company:

(1) Public benefits, determined in accordance with the policy stated in section 8A.2, from the use of the facilities likely will substantially exceed any public detriment from issuance of bonds in the estimated principal amount proposed in the application.

(2) Neither the completion of the project nor the operation of the facilities will have the proximate effect of relocation of any substantial operations of the company from one area of the state to another or in the abandonment of any substantial operations of the company within other areas of the state, or, if such completion or operation will have either of such effects, then such completion or operation is reasonably necessary to prevent the relocation of any substantial operations of the company from an area within the state to an area outside the state.

(c) Determinations as provided in section 8A.15, included within which are the determination referred to in this section, shall be final and conclusive. (Ord. No. 82-10, § 1, 4-5-82)

8A.17 Approval and preliminary undertaking of project.

(a) At any time following adoption of the resolution of intention, the council may approve, conditionally or unconditionally, the project.

(b) A project shall be deemed to have been preliminarily undertaken by the city when the application has been accepted, the affirmative determinations under subdivision (c) of section 8A.15 have been made, the resolution of intention has been adopted, the approval of the council has been obtained, and a period of thirty (30) days from the date of publication of the notice referred to in subdivision (e) of section 8A.15 has expired.

(c) Upon the preliminary undertaking of a project by the city, the company shall comply with all conditions imposed by the council in its approval of the project pursuant to subsection (a). (Ord. No. 82-10, § 1, 4-5-82)

8A.18 Resolution for issuance of bonds.

The issuance of bonds shall be authorized by resolution of the council adopted at any time following the determinations provided for in section 8A.15. The resolution may, as the council deems advisable and in accordance with the provisions of this division, provided for, or authorize the execution of a loan agreement, the repayment obligation of which is evidenced by the bonds, providing for, or authorize the execution of an indenture providing for:

(a) The fixing and collection of revenues;

(b) The creation and maintenance of special funds, including reserve and sinking funds;

(c) Limitations on expenditures of bond proceeds;

(d) The procedure, if any, by which any contract represented by bonds may be amended or abrogated;

(e) The acts and omissions which shall constitute, and the rights and remedies available, in an event of default. In such an event of default, the obligations of the city may be enforced, as appropriate, by mandamus, by the appointment of a receiver, by foreclosure or sale, by injunction, by specific performance, by equitable relief, or by any one or more of such remedies or any other remedy; and

(f) Any additional matters authorized to be included in an indenture or which relate to the security, protection, or return of bondholders. (Ord. No. 82-10, § 1, 4-5-82)

8A.19 Bond interest and sale.

(a) The bonds may bear interest on such amount or amounts, payable at such time or times, evidenced in such manner and at such rate or rates as shall be established by or pursuant to method approved by the council.

(b) Bonds may be sold at public or private sale, at such prices as the council directs. (Ord. No. 82-10, § 1, 4-5-82)

8A.20 Exemption from other laws.

All general or special laws or parts thereof inconsistent with this article shall be inapplicable to the exercise of any of the powers conferred under the provisions of this article. Without limiting the generality of the foregoing, no other provision of law shall limit the amounts and other consideration that may be received pursuant to project agreements and the other proceedings or shall restrict the amounts received that may be expended, or shall in any way affect other amounts that may be received or expended by the city. (Ord. No. 82-10, § 1, 4-5-82)

8A.21 Application of article.

(a) The authorizations of this article shall be regarded as supplemental and additional to powers conferred by other laws.

(b) In the exercise of any of the powers conferred, including powers relating to the offer, issuance and sale of bonds, under the provisions of this article, the city need not comply with the provisions of any law applicable to the exercise of similar powers except as referred to in this division. (Ord. No. 82-10, § 1, 4-5-82)

8A.22 Liberal construction.

This article, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to effect its purposes. (Ord. No. 82-10, § 1, 4-5-82)

8A.23 Maximum amount.

The aggregate amount of bonds that may be issued pursuant to this article shall not exceed twenty-five million dollars ($25,000,000). (Ord. No. 82-10, § 1, 4-5-82)

8A.24 Incorporation by reference.

The following provisions of the Act as they now exist or as hereafter amended shall apply: Government Code Sections 91527 and 91528; Section 91533 except subdivision (b); Section 91534; Section 91535 except subdivisions (b) (6) and (7); and Sections 91536, 91541, 91542 and 91548. (Ord. No. 82-10, § 1, 4-5-82)

8A.25—8A.35 Reserved.

ARTICLE II. INDUSTRIAL DEVELOPMENT FINANCING

DIVISION 1. GENERALLY

8A.36—8A.40 Reserved.

DIVISION 2. INDUSTRIAL DEVELOPMENT AUTHORITY

8A.41 Purposes.

The California Industrial Development Financing Act, Title 10 (commencing with Section 91500), Government Code (the “Act”), has established an industrial development authority of this city for the achievement of specified public purposes. The public purposes are to increase opportunities for useful employment or otherwise contribute to economic development. The need for the establishment of an industrial development authority in the achievement of such purposes is based upon findings that industry requires the new and alternative method of capital finance that such authorities can provide in order for it to undertake the acquisition, construction or rehabilitation of facilities the use of which will serve those public purposes. (Ord. No. 82-4, § 1, 2-1-82)

8A.42 Findings.

There is a need in the City of Gilroy for the acquisition, construction or rehabilitation of facilities for the use of industry which will increase employment opportunities or otherwise contribute to economic development, and further, the new and alternative method of capital finance that industrial development authorities can provide will aid in satisfying that need. (Ord. No. 82-4, § 2, 2-1-82)

8A.43 Declarations.

(a) Need. There is a need in the City of Gilroy for an industrial development authority to provide industry with an alternative and additional method of finance in accordance with state policy as set forth in the Act.

(b) Organization. The industrial development authority of this city established by the Act is hereby declared organized and shall function under the name “Industrial Development Authority of the City of Gilroy” and be authorized to transact business and exercise all of the powers and other authority conferred upon industrial development authorities by such Act. (Ord. No. 82-4, § 3, 2-1-82)

8A.44—8A.49 Reserved.

ARTICLE III. NONPROFIT CORPORATION PROJECT FINANCING LAW

8A.50 Title.

This article may be cited as the Nonprofit Corporation Project Financing Law of the City of Gilroy. (Ord. No. 2000-06, § 2, 7-10-00)

8A.51 Definitions.

Unless the context otherwise requires, the following definitions shall govern the construction of this article:

“Acquisition and construction” and its variants means acquisition, construction, improvement, furnishing, equipping, remodeling, repair, reconstruction or rehabilitation.

“Administrative expenses” means all reasonable and necessary expenses incurred by the city in the administration of the provisions of this article 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, underwriter, rebate consultants and financing consultants, and costs of printing and advertising.

“Article” means this article, enacted pursuant to Ordinance No. 2000-06 passed and adopted by the city council of the city on July 10, 2000, as amended from time to time in accordance with the terms of this article.

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

“City” means the City of Gilroy, California, a charter city duly 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 nonprofit corporation 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 interests 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;

(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 nonprofit corporation 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 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 twelve (12) months thereafter;

(g) All administrative expenses;

(h) All costs which the nonprofit corporation shall be required to pay, under the terms of any contract or contracts, for the acquisition and construction of the project;

(i) The refinancing of any existing indebtedness secured by an interest in any real property comprising any portion of the project; and

(j) Any sums required to reimburse the nonprofit corporation for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the project.

“Nonprofit corporation” means any corporation requiring financing for the acquisition and construction of a project pursuant to this article, which corporation is an organization described in section 501(c)(3) of the Tax Code.

“Project” means real property located within the city, including land and improvements, the acquisition and construction of which is financed or otherwise assisted pursuant to this article.

“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 or the financing thereof, and any 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.

“Tax Code” means the Internal Revenue Code of 1986, as amended, or any similar provision of said code then in effect. (Ord. No. 2000-06, § 2, 7-10-00)

8A.52 Powers.

In connection with the financing of a project pursuant to this article, the city is authorized and empowered:

(a) To issue bonds for the purpose of financing or otherwise assisting the acquisition and construction of projects authorized by this article.

(b) To fix fees, charges and interest rates for financing any project, and to revise such fees, charges and interest rates from time to time, and to collect interest and principal on any loan made to a nonprofit corporation together with such fees and charges incurred in such financing, and to contract with any person, partnership, association, corporation or public agency with respect thereto.

(c) To hold deeds of trust as security for financing any project and to pledge the same as security for repayment of bonds issued therefor.

(d) To establish the terms and conditions for the financing of any project undertaken pursuant to this article.

(e) To require that the full amount owed on any loan for the financing of a project pursuant to this article shall be due and payable upon sale or other transfer of ownership of such project.

(f) To acquire, by deed, purchase, lease, contract, gift, devise, or otherwise, any real or personal property, structures, rights, rights-of-way, franchises, easements, mortgages and other interests in property located within the state necessary or convenient for the financing or acquisition and construction of a project, upon such terms and conditions as it deems advisable, and to lease, sell or dispose of the same in such manner as may be necessary or desirable to carry out the objects and purposes of this article. Notwithstanding the foregoing, nothing in this article is intended or shall be construed in any way to authorize any exercise of the power of eminent domain with respect to any project.

(g) To employ or contract for such engineering, architectural, accounting, collection, economic feasibility, or other services in connection with the servicing of loans made to nonprofit corporations, as may be necessary in the judgment of the city council for the successful financing of a project. The city may pay the reasonable costs of consulting engineers, architects, accountants, construction experts, and economic feasibility experts, if, in the judgment of the city council, such services are necessary to the successful financing of a project and if the city is not able to provide such services. The city may employ, contract for, and fix the compensation of financing consultants, bond counsel, and other advisers as may be necessary in its judgment to provide for the issuance and sale of bonds.

(h) In addition to all other powers specifically granted in this article, to do all things necessary or convenient to carry out the purposes of this article. (Ord. No. 2000-06, § 2, 7-10-00)

8A.53 Non-operation.

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. (Ord. No. 2000-06, § 2, 7-10-00)

8A.54 Authorization of bonds.

The city may issue its bonds for the purpose of financing or otherwise assisting the acquisition and construction of projects authorized by this article. Every issue of bonds shall be a special obligation of the city, payable solely from all or any part of the revenues derived from the financing of projects. (Ord. No. 2000-06, § 2, 7-10-00)

8A.55 Issuance of bonds.

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 resolution or resolutions of 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.

The primary purpose of this article is to provide a method for the issuance of bonds which constitute “qualified 501(c)(3) bonds” within the meaning of Section 145 of the Tax Code. Notwithstanding the foregoing, in the event and to the extent a portion of the costs of a project cannot be financed from bonds which constitute “qualified 501(c)(3) bonds,” the city may provide financing for such costs by issuing bonds under this article the interest on which is includable in gross income of the owners thereof for federal income tax purposes. (Ord. No. 2000-06, § 2, 7-10-00)

8A.56 Terms of bonds.

Any resolution or resolutions 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:

(a) The pledge of all or any part of the revenues, subject to such agreements with bond owners as may then exist.

(b) 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.

(c) The setting aside of reserves or sinking funds and the regulation and disposition thereof.

(d) 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.

(e) Limitations on the issuance of obligations on a parity with the bonds, the terms upon which such obligations may be issued and secured, and the refunding of outstanding bonds.

(f) 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.

(g) Specification of the acts or omissions to act which shall constitute a default in the duties of the city to owners of its obligations, and providing the rights and remedies of such owners in the event of default.

(h) The mortgaging of land, improvements, or other assets owned by a nonprofit corporation for the purpose of securing the bond owners.

(i) Such other terms and conditions pertaining to the issuance of the bonds as are deemed advisable by the city council. (Ord. No. 2000-06, § 2, 7-10-00)

8A.57 Trust agreement.

In the discretion of the city council, any bonds issued under the provisions of this article 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 depositary 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. (Ord. No. 2000-06, § 2, 7-10-00)

8A.58 Personal liability.

Neither the members of the city council nor any employee, officer, attorney or other representative of the city, shall be liable personally on the bonds or be subject to any personal liability or accountability by reason of the issuance thereof. (Ord. No. 2000-06, § 2, 7-10-00)

8A.59 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. No. 2000-06, § 2, 7-10-00)

8A.60 Repayment of bonds.

Revenues 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 Gilroy 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. (Ord. No. 2000-06, § 2, 7-10-00)

8A.61 Financing agreements.

The city may enter into agreements with any nonprofit corporation 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 article. 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 nonprofit corporation to complete the project whether or not bond proceeds are sufficient therefore, 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:

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

(b) Create and maintain reserves required or provided for in any resolution authorizing such bonds. A sufficient amount of the revenues derived from the project may be set aside at such regular intervals as may be provided by the resolution or trust agreement 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 pledge is made. The rates, fees, interest, and other charges, revenues, or 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, contract, or otherwise against the city, irrespective of whether such parties have notice thereof. Neither the resolution, the trust agreement nor 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 resolution or trust agreement authorizing the issuance of such bonds.

(c) Pay administrative expenses to the extent not paid from bond proceeds. (Ord. No. 2000-06, § 2, 7-10-00)

8A.62 Trust funds.

All moneys received pursuant to the provisions of this article, 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 article. 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 article, subject to the terms of the resolution or trust agreement authorizing the bonds. (Ord. No. 2000-06, § 2, 7-10-00)

8A.63 Liberal construction.

This article, being necessary for the health, welfare and safety of the city and its residents, shall be liberally construed to effect its purposes. Furthermore, the city council hereby declares that this article 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 article shall be liberally construed to uphold its validity under the laws of the state. (Ord. No. 2000-06, § 2, 7-10-00)

8A.64 Supplemental and additional powers.

This article 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 article need not comply with the requirements of any other law applicable to the issuance of bonds. (Ord. No. 2000-06, § 2, 7-10-00)

8A.65 Actions to determine validity of bonds and proceedings.

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. (Ord. No. 2000-06, § 2, 7-10-00)

8A.66 Amendment of article.

This article 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 article 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 bond owner or nonprofit corporation in the judgment of the city council; or (c) if such amendments apply solely to bonds not theretofore issued hereunder or nonprofit corporations with respect to whom projects have not theretofore been financed hereunder. (Ord. No. 2000-06, § 2, 7-10-00)

8A.67 Partial invalidity.

If any section, paragraph, sentence, clause or phrase of this article shall for any reason be held illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this article. (Ord. No. 2000-06, § 2, 7-10-00)