Chapter 3.16
LOCAL IMPROVEMENT GUARANTY FUND1

Sections:

3.16.010    Purpose.

3.16.025    Trustee – Liability.

3.16.030    Fund maintenance – Tax levy.

3.16.035    Trustee – Costs.

3.16.040    Warrants issued.

3.16.045    Assessment – Deferral – Interest.

3.16.050    Bonds or warrants outstanding.

3.16.055    Installment assessments – Penalties.

3.16.070    Fund proceeds.

3.16.080    Treasurer – Duties and reports.

3.16.110    Foreclosure.

3.16.120    Foreclosure – Acceleration.

3.16.130    Foreclosure – Acceleration – Reinstatement.

3.16.140    Foreclosure – Costs.

3.16.900    Applicability of provisions.

3.16.010 Purpose.

RCW 35.54.010 established a guaranty fund for the city of Chelan, Washington, for the purpose of guaranteeing, to the extent of the fund, payment of local improvement bonds and warrants ordered subsequent to April 7, 1926, by the city. This ordinance is an exercise of the city’s authority to establish rules and regulations for the maintenance and operation of the guaranty fund not inconsistent with RCW 35.54.010. (Ord. 908 § 2 (part), 1991).

3.16.025 Trustee – Liability.

The city shall serve as Trustee of the funds of and assets of the guaranty fund. However, no provision of this chapter shall be interpreted to impose any liability on the city for any losses incurred by the fund as the result of purchasing improvement bonds or warrants or foreclosing on property for non-payment of assessments guaranteed by the guaranty fund. (Ord. 908 § 2 (part), 1991).

3.16.030 Fund maintenance – Tax levy.

For the purpose of maintaining the guaranty fund, the city council shall at the time of making its annual budget and tax levy, provide for a levy not to exceed the maximum amount permitted by Chapter 35.54, as hereafter amended. The tax levies herein authorized and directed shall be additional to, and if need be, in excess of any and all statutory limitations now applicable to the tax levies of the city, and whenever the city has paid under its guarantee any sum on account of principal or interest of a local improvement bond or warrant, the city as trustee for the fund shall be subrogated to all the rights of the holder of such bond or interest coupon, or warrant so paid, the proceeds thereof and/or of the assessment underlying the same, shall become a part of the guaranty fund. All surplus remaining in any local improvement fund, guaranteed and supported by this guaranty fund, after the payment of all outstanding bonds and warrants payable primarily out of such local improvement fund, and any interest received from bank deposits of the moneys in such guaranty fund, shall be paid into the guaranty fund. (Ord. 908 § 2 (part), 1991).

3.16.035 Trustee – Costs.

All costs and charges, including reasonable attorneys’ fees incurred by the city in its capacity as trustee for the guaranty fund, shall be paid by the guaranty fund. (Ord. 908 § 2 (part), 1991).

3.16.040 Warrants issued.

Warrants drawing interest at a rate to be determined by the council not exceeding six percent (6%) per year, shall be issued against the guaranty fund to meet any liability accruing against it, and at the time of making its annual budget and tax levy in each year the council 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; provided, that such warrants shall not exceed five percent (5%) of the outstanding bond obligations guaranteed by this guaranty fund. (Ord. 908 § 2 (part), 1991).

3.16.045 Assessment – Deferral – Interest.

The interest on any assessment deferred pursuant to the provisions of RCW 35.43.250, as hereafter amended, shall be the daily average of the Local Government Investment Pool of the State of Washington (the “Pool”) for the calendar month immediately preceding the deferral; provided that the city treasurer may elect to apply the current six month treasury rate for U.S. Treasury bills. (Ord. 908 § 2 (part), 1991).

3.16.050 Bonds or warrants outstanding.

Whenever any local improvement fund against which bonds and/or warrants are outstanding (guaranteed under the provisions of this chapter), shall not have sufficient funds to pay any matured principal and/or accrued interest, then the deficit shall be made up from the guaranty fund; provided, that as among the several issues of bonds or warrants guaranteed by the fund no preference shall exist, but defaulted interest, bonds and warrants shall be purchased out of the fund and paid in the order of their presentation; and provided further, that the fund shall be under no obligation to call or pay the principal of any local improvement bonds prior to the due date thereof. (Ord. 908 § 2 (part), 1991).

3.16.055 Installment assessments – Penalties.

Unless otherwise specified in a subsequent ordinance creating an LID assessing the costs of an LID or authorizing the issue and sale of LID bonds, the penalty for failure to pay LID assessments shall be five percent (5%) of the assessment due and delinquent. This penalty shall not be waived except by action of the city council. (Ord. 908 § 2 (part), 1991).

3.16.070 Fund proceeds.

All proceeds from leases and/or sales of real property, or of interests or estates therein, by the city in connection with the maintenance and operation of the guaranty fund and all other proceeds or moneys resulting from and incident to or consequent upon the maintenance and operation of the guaranty fund shall belong to and be paid into the guaranty fund for use as a part of the guaranty fund in accordance with this chapter and with the laws of the state. (Ord. 908 § 2 (part), 1991).

3.16.080 Treasurer – Duties and reports.

The city shall have all the rights, duties, and powers with reference to the maintenance and operation of such guaranty fund as permitted by law and the officials of the city are authorized to do any and all things necessary for the establishment, maintenance, conduct, and operation of the guaranty fund for the purposes specified in this chapter and as required by law. The treasurer of the city is authorized, directed, and required to maintain in his office as treasurer of the city, the guaranty fund and to maintain and to conduct the guaranty fund, strictly in accordance with the provisions of this chapter and as required by law. The guaranty fund, together with a true and correct record of the sources of all moneys in the guaranty fund, together with a true and exact record of all bonds, warrants, or interest paid or purchased, of tax certificates or land purchased in the conduct thereof, and of the several local improvement funds and the bonds, warrants or interest thereof for the payment of which the moneys of the guaranty fund may be used. (Ord. 908 § 2 (part), 1991).

3.16.110 Foreclosure.

The mayor, or his/her designee may authorize the commencement of an action for foreclosure of any delinquent assessment on or before the tenth year following the delinquency of the cost installment. This section shall be interpreted to be consistent with the limitation in RCW 35.50.050 as hereafter amended. (Ord. 908 § 2 (part), 1991).

3.16.120 Foreclosure – Acceleration.

Notwithstanding anything in this chapter to the contrary upon failure to pay any installment, the mayor or his designee may provide by notice for the acceleration of the entire assessment and commence collection by foreclosure. (Ord. 908 § 2 (part), 1991).

3.16.130 Foreclosure – Acceleration – Reinstatement.

If following acceleration and before judgment of foreclosure is entered, all delinquent installments together with interest, penalty, and costs, including reasonable attorneys’ fees are paid, the remaining assessments shall be reinstated and paid as if no delinquency had occurred. (Ord. 908 § 2 (part), 1991).

3.16.140 Foreclosure – Costs.

All costs and charges, including reasonable attorneys’ fees incurred by the guaranty fund in recovering property, foreclosure, and litigation or other purpose for the benefit of the guaranty fund shall be a charge against the property securing the assessment and shall be collected upon redemption or sale of the property unless waived by action of the city council. (Ord. 908 § 2 (part), 1991).

3.16.900 Applicability of provisions.

Nothing in this chapter shall be construed as in any way changing the time or manner of calling and paying local improvement bonds, nor the method of levying and collecting assessments and reassessments for the purpose of paying for local improvements. The provisions hereof are cumulative and intended to supplement the existing statutes, including but not limited to RCW Chapter 35.54, and ordinances of the city in relation to the making of local improvements and levying and collection of assessments and reassessments to pay therefor. (Ord. 908 § 2 (part), 1991).


1

For statutory provisions authorizing the establishment of a local improvement guaranty fund, see RCW 35A.43.010 and RCW Ch. 35.54. Prior history: Ord. 268.