Chapter 14.22
LOCAL IMPROVEMENT DISTRICT GUARANTY FUND

Sections:

14.22.010    LID guaranty fund created.

14.22.020    Purpose of LID guaranty fund.

14.22.030    Payments on default.

14.22.040    Purchase of property subject to tax foreclosure.

14.22.050    Interest – Subrogation.

14.22.060    Payment of deferred assessments for the economically disadvantaged.

14.22.070    Transfer of funds to general fund.

14.22.010 LID guaranty fund created.

Pursuant to Chapter 35.54 RCW, there is hereby created a fund of the city to be known as the “local improvement guaranty fund” for the purpose of guaranteeing to the extent of such fund the payment of local improvement bonds, notes and short term obligations issued to pay the cost of improvements constructed in all local improvement districts of the city. [Ord. 9536, 1986].

14.22.020 Purpose of LID guaranty fund.

From time to time for the purpose of maintaining the local improvement guaranty fund, the city shall, at the time of making its annual budget and tax levy, provide for the levy of a sum sufficient, when taken with other resources of the fund, to meet the financial requirements of the fund and to establish a balance therein; provided, that the levy in any one year shall not exceed the greater of:

A. Twelve percent of the outstanding local improvement district obligations guaranteed by the fund; or

B. The total amount of delinquent assessments and interest accumulated on the delinquent assessments before the levy as of September 1st each year.

Warrants drawing interest at a rate established by the city finance director, but not exceeding 15 percent, shall be issued against the local improvement guaranty fund to meet any liability accruing against it. The warrants so issued shall at no time exceed five percent of the outstanding obligations guaranteed by the fund. At the time of making its annual budget and tax levy, the city shall provide for the levying of a sum sufficient, with other resources of the fund, to pay warrants issued during the preceding fiscal year. [Ord. 9536, 1986].

14.22.030 Payments on default.

Defaulted bonds and interest thereon and warrants or other short term obligations against local improvement district funds of the city shall be purchased out of the guaranty fund, and as between the several issues of bonds, interest payments and short term obligations, no preference shall exist, but they shall be purchased in the order of their presentation. [Ord. 9536, 1986].

14.22.040 Purchase of property subject to tax foreclosure.

A. For the purpose of protecting the guaranty fund, so much of the guaranty fund as is necessary may be used to purchase certificates of delinquency for general taxes on property subject to local improvement assessments guaranteed by the fund, or to purchase such property at county tax foreclosures, or from the county after foreclosure.

B. The city, as trustee of the fund, may foreclose the lien of general tax certificates of delinquency and purchase the property at foreclosure sale. When doing so, the court costs, costs of publication, expenses for clerical work and other expenses incidental thereto shall be charged to and paid from the local improvement guaranty fund.

C. After acquiring title to property by purchase at general tax foreclosure sale or from the county after foreclosure, the city may lease it or sell it as provided for surplus real property by this code. All proceeds shall belong to and be paid into the local improvement guaranty fund. [Ord. 9536, 1986].

14.22.050 Interest – Subrogation.

A. Interest and earnings from the local improvement guaranty fund shall be paid into the fund. If in any local improvement fund guaranteed by the local improvement guaranty fund there is a surplus remaining after the payment of all outstanding bonds and short term obligations payable therefrom, it shall be paid into the local improvement guaranty fund.

B. Whenever any sum is paid out of the local improvement guaranty fund on account of the principal or interest of a local improvement bond or short term obligation, the city, as trustee of the fund, shall be subrogated to all the rights of the holder of the bond or short term obligation so paid and the proceeds thereof or of the underlying assessment shall be paid into the guaranty fund. [Ord. 9536, 1986].

14.22.060 Payment of deferred assessments for the economically disadvantaged.

Whenever any payment of a local improvement district assessment is deferred pursuant to RCW 35.43.250 and the ordinance forming the LID, the deferred assessment shall be paid out of the local improvement guaranty fund, which fund shall have a lien on the property benefited in an amount equal to the amount deferred together with interest thereon as provided by the establishing ordinance and pursuant to RCW 35.54.100 and 35.43.250. [Ord. 9536, 1986].

14.22.070 Transfer of funds to general fund.

A. Upon certification by the city finance director that the local improvement guaranty fund has sufficient funds currently on hand to meet all valid outstanding obligations of the fund and all other obligations of the fund reasonably expected to be incurred in the near future, the council may by ordinance transfer assets from the local improvement guaranty fund to the general fund.

B. The net cash of the local improvement guaranty fund may be reduced by such transfer to an amount not less than 10 percent of the net outstanding obligations guaranteed by such fund.

C. If, within five years of any such transfer from the local improvement guaranty fund to the general fund, the net cash in the guaranty fund is reduced below the minimum amount of 10 percent of the outstanding and foreseeable obligations, the city shall pay valid claims against the guaranty fund from the general fund, up to the total amount transferred, and shall in addition pay all reasonable costs of collection necessarily incurred by the holders of valid claims against the guaranty fund, from the general fund. [Ord. 9536, 1986].