Chapter 3.46
LOCAL IMPROVEMENT GUARANTY FUND
Sections:
3.46.010 Established – Purpose.
3.46.020 Budgeting moneys for fund.
3.46.030 Issuance of warrants.
3.46.040 Purchase of defaulted bonds and warrants.
3.46.050 Acquisition of property with assessments underlying instruments guaranteed by fund.
3.46.060 Interest and earnings – Surpluses in guaranteed local improvement funds.
3.46.070 Subrogation to holder’s rights upon payout.
3.46.080 Transfer of assets to the general fund reserve.
3.46.010 Established – Purpose.
Pursuant to Chapter 35.54 RCW, there is created a fund of the city to be known and designated as the “local improvement guaranty fund,” for the purpose of guaranteeing to the extent of such fund, in the manner provided by law and this chapter, for the payment of local improvements, bonds and warrants issued after the adoption of the ordinance codified in this chapter to pay the cost of improvements constructed in all local improvement districts of the city. (Ord. 1284 § 1, 1969; prior code § 1-2701)
3.46.020 Budgeting moneys for fund.
From time to time after the adoption of the ordinance codified in this chapter, 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, with other resources of the fund, to meet the financial requirements of the fund; provided, that the levy in any one year shall not exceed five percent of the outstanding obligations guaranteed by the fund. (Ord. 1284 § 2, 1969; prior code § 1-2702)
3.46.030 Issuance of warrants.
Warrants drawing interest at not to exceed six percent shall be issued against the local improvement guaranty fund to meet any liability occurring 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 so issued during the preceding fiscal year. (Ord. 1284 § 3, 1969; prior code § 1-2703)
3.46.040 Purchase of defaulted bonds and warrants.
Defaulted bonds, interest coupons and warrants against local improvement district funds of the city 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. (Ord. 1284 § 4, 1969; prior code § 1-2704)
3.46.050 Acquisition of property with assessments underlying instruments guaranteed by fund.
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 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.
B. The city, as trustee of the fund, may foreclose the lien of general taxes, 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.
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 at public or private sale at such price and 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. 1284 § 5, 1969; prior code § 1-2705)
3.46.060 Interest and earnings – Surpluses in guaranteed local improvement funds.
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 warrants payable therefrom, it shall be paid into the local improvement guaranty fund. (Ord. 1284 § 6, 1969; prior code § 1-2706)
3.46.070 Subrogation to holder’s rights upon payout.
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 warrant, the city, as trustee of the fund, shall be subrogated to all the rights of the holder of the bonds or interest coupon or warrant so paid and the proceeds thereof or of the underlying assessment shall become part of the guaranty fund. (Ord. 1284 § 6, 1969; prior code § 1-2706)
3.46.080 Transfer of assets to the general fund reserve.
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 city council may by ordinance transfer assets from such fund to its general fund reserve.
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, at any time within five years of any transfer of assets from the local improvement guaranty fund to the general fund reserve, the net cash of the local improvement guaranty fund is reduced below the minimum amount specified in subsection B of this section, the city shall, to the extent of the amount transferred, pay valid claims against the local improvement guaranty fund as a general obligation of the city. In addition, the city shall pay all reasonable costs of collection necessarily incurred by the holders of valid claims against the local improvement guaranty fund. (Ord. 2634 § 1, 2006)