Chapter 3.60
LOCAL IMPROVEMENT
GUARANTY FUND

Sections:

3.60.010  Created.

3.60.020  Transfer of funds – Purpose.

3.60.030  Additional sums – Purpose.

3.60.040  Warrants.

3.60.050  Administration and use.

3.60.060  Conditional transfer of additional monies.

3.60.010 Created.

There is hereby created a fund of the town of Cathlamet to be known and designated as the "local improvement guaranty fund" for the purpose of guaranteeing, to the extent of the fund and in the manner provided by law and this chapter, the payment of local improvement bonds and warrants issued to pay for any local improvement ordered in the town or in any area wholly or partly outside the town’s corporate boundaries. (Ord. 314 § 1, 1984)

3.60.020 Transfer of funds – Purpose.

For the purpose of maintaining the local improvement guaranty fund herein created, the town council shall, at the time of making the town’s annual budget, provide for the transfer of monies into said fund in a sum sufficient, with other sources of the fund, to pay the warrants issued against the fund during the preceding fiscal year and to establish a balance therein; provided, that the transfer of monies to the fund in any one year shall not exceed the greater of: (1) 12 percent of the outstanding obligations guaranteed by the fund; or (2) the total amount of delinquent assessments and interest accumulated on the delinquent assessments as of September 1st of such year. (Ord. 314 § 2, 1984)

3.60.030 Additional sums – Purpose.

In addition to the transfers provided for in CMC 3.60.020, the following additional sums shall from time to time be paid into the local improvement guaranty fund herein created:

(1) Interest and earnings from the local improvement guaranty fund shall be paid into the fund;

(2) Whenever any sum is paid out of the local improvement guaranty fund on account of principal or interest of a local improvement bond or warrant, the town as trustee of the fund shall be subrogated to all the rights of the holder of the bond or interest coupon or warrant so paid, and the proceeds thereof, or of the underlying assessment, shall be paid into the fund;

(3) 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 warrants and other obligations of such local improvement, said surplus shall be paid into the fund. (Ord. 314 § 3, 1984)

3.60.040 Warrants.

Warrants drawing interest at a rate established by the town treasurer under the direction of the town council shall be issued against the local improvement guaranty fund to meet any liability accruing against said fund. The warrants so issued shall at no time exceed five percent of the outstanding obligations guaranteed by the fund. (Ord. 314 § 4, 1984)

3.60.050 Administration and use.

The local improvement guaranty fund and its assets shall be administered and used as follows:

(1) Defaulted bonds, interest coupons and warrants against local improvement funds shall be purchased out of the guaranty fund, and as between the several issues of bonds, coupons, or warrants, no preference shall exist, but they shall be purchased in the order of their presentation.

(2) 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 which underlie the bonds, coupons, or warrants guaranteed by the fund, or to purchase such property at county tax foreclosures, or from the county after foreclosure.

(3) The town, 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, expense for clerical work and other expenses incidental thereto shall be charged to and paid from the local improvement guaranty fund.

(4) After acquiring title to property by purchase at general tax foreclosure sale or from the county after foreclosure, the town may lease it or sell it at public or private sale at such price on such terms as may be determined by resolution of the council. All proceeds shall belong to and be paid into the local improvement guaranty fund. (Ord. 314 § 5, 1984)

3.60.060 Conditional transfer of additional monies.

Excess monies or other assets in the local improvement guaranty fund may be transferred to the current expense fund under the following terms and conditions:

(1) At any time that the amount in the local improvement guaranty fund exceeds 10 percent of the outstanding obligations guaranteed by said fund, the excess amount or any portion thereof may, by ordinance of the town council, be transferred to the current expense fund of the town, subject to the conditions required by law and set forth in this chapter; provided, that the town shall not permit the amount in the guaranty fund at any time to exceed the maximum amount permitted under Section 103(c) of the United States Internal Revenue Code of 1954, as amended, and the applicable regulations thereunder, recognizing that any such excess could cause obligations guaranteed by the fund to become arbitrage bonds.

(2) Prior to transfer of any amounts pursuant to this section, there shall be on file with the town a certificate of the town treasurer that the 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 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.

(3) If, at any time within five years of any transfer of assets from the local improvement guaranty fund to the current expense fund, the net cash of the local improvement guaranty fund is reduced below the minimum amount specified in subsection (2) of this section, the town shall, to the extent of the amount transferred, pay valid claims against the local improvement guaranty fund as a general obligation of the town. In addition, the town shall pay all reasonable costs of collection necessarily incurred by the holders of valid claims against the local improvement guaranty fund. (Ord. 314 § 6, 1984)