HomeMy WebLinkAbout94-40 - Amending the Newport Beach Municipal Code By adding Chapter 3.32 - thereto Providing for the City of Newport Beach Special Improvement District Financing Code, Including General Provisions and Definitions, Powers and Procedures to Issue Special Ta•
24005 -02 JHHW:GH:bct 8/22/94
ORDINANCE NO. 94 -40
ORDINANCE OF THE CITY OF NEWPORT BEACH AMENDING THE
NEWPORT BEACH MUNICIPAL CODE BY ADDING CHAPTER3.37-THERETO
PROVIDING FOR THE CITY OF NEWPORT BEACH SPECIAL IMPROVEMENT
DISTRICT FINANCING CODE, INCLUDING GENERAL PROVISIONS AND
DEFINITIONS, POWERS AND PROCEDURES TO ISSUE SPECIAL TAX BONDS
FOR THE PURPOSE OF PROVIDING FINANCING FOR SPECIFIED PURPOSES,
AND CERTAIN OTHER SUPPLEMENTAL PROVISIONS
THE CITY COUNCIL OF THE CITY OF NEWPORT BEACH ORDAIN AS FOLLOWS:
Section 1. Recitals. The City Council of the City of Newport Beach does hereby find,
determine and declare that:
(a) the City of Newport Beach (the "City ") is a municipal corporation and
charter city duly organized and existing under a charter pursuant to which the City has the
right and power to make and enforce all laws and regulations in respect to municipal affairs
and certain other matters in accordance with and as more particularly provided in Sections
3, 5 and 7 of Article XI of the Constitution of the State of California and Article II of the
Charter of the City (the "Charter "); and
(b) the City Council of the City acting under and pursuant to the powers
reserved to the City under Sections 3, 5 and 7 of Article XI of the Constitution of the State of
California and Article II of the Charter, finds that the public interest and necessity require
the establishment by this procedural ordinance of a procedure for the authorization of the
levy of special taxes and the issuance of special tax bonds by the City for the purpose of
providing financing or refinancing for certain purposes as specified herein.
Section 2. That the Newport Beach Municipal Code is hereby amended by
adding a chapter thereto, to be numbered 3.32 which said chapter reads as
follows:
CHAPTER 3.32
CITY OF NEWPORT BEACH SPECIAL IMPROVEMENT DISTRICT
FINANCING CODE
ARTICLE I
• DEFINITIONS
Section 101. Definitions.
Unless the context otherwise requires, the definitions contained in this article shall
govern the construction of this Code.
(a) "City" means the City of Newport Beach, California.
(b) "Clerk" means the City Clerk of the City.
(c) "Cost" means the expense of constructing or purchasing the public
facility'and of related land, right -of -way, easements, including incidental expenses,
and the cost of providing authorized services, including incidental expenses.
(d) "Debt" means any binding obligation to pay or repay a sum of money,
including obligations in the form of bonds, certificates of participation, long -term
leases, loans from government agencies, or loans from banks, other financial
institutions, private businesses, or individuals, or long -term contracts.
18 (e) "Incidental expense" includes all of the following:
(1) The cost of planning and designing public facilities to be financed
pursuant to this Code, including the cost of environmental evaluations of
those facilities.
(2) The costs associated with the creation of the special improvement
district, issuance of bonds, determination of the amount of taxes, collection of
taxes, payment of taxes, or costs otherwise incurred in order to carry out the
authorized purposes of the special improvement district.
(3) Any other expenses incidental to the construction, completion, and
inspection of the authorized work.
(f) "Landowner" or "owner of land" means any person shown as the owner
of land on the last equalized assessment roll or otherwise known to be the owner of
the land by the City. The City Council has no obligation to obtain other information
as to the ownership of the land, and its determination of ownership shall be final
and conclusive for the purposes of this Code. A public agency is not a landowner or
owner of land for purposes of this Code.
(g) "Legislative body" means the legislative body or governing board of any
local agency.
• (h) "Local agency" means any city or county, whether general law or
chartered, special district, school district, joint powers entity created pursuant to
Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the California
Government Code, or any other municipal corporation, district, or political
subdivision of the state.
(f) "Rate" means a single rate of tax or a schedule of rates.
(j) "Services" means the provision of police and fire protection services,
recreation programs, library services, operation and maintenance of museums and
cultural facilities, the operation and maintenance of parks and parkways, and the
provision of flood and storm protection services, including, but not limited to, the
operation and maintenance of storm drainage systems. "Services" includes the
performance by employees of functions, operations, maintenance, and repair
activities.
(k) "Special improvement district" means a legally constituted
governmental entity established pursuant to this Code for the sole purpose of
financing facilities and services.
• ARTICLE II
GENERAL PROVISIONS
Section 201. Short Title. This ordinance shall be known and may be cited as the
"City of Newport Beach Special Improvement District Financing Code ", and shall be
referred to herein as the "Code ".
Section 202. Municipal and State affairs; authority conferred by Code; applicability of
laws. This Code is adopted pursuant to Section 200 of the Charter of the City of Newport
Beach. In proceedings had pursuant to this Code which are a municipal affair, any general
laws referred to in this Code are deemed a part of this Code.
In the event that any proceeding had pursuant to this Code shall be adjudged a state
affair, it is declared to be the intention that the proceedings were had pursuant to any
applicable general law or laws.
This Code provides an alternative method of financing certain public capital
facilities and services. The provisions of this Code shall not affect or limit any other
• provisions of law authorizing or providing for the furnishing of governmental facilities or
services or the raising of revenue for these purposes. The City may use the provisions of
this Code instead of any other method of financing part or all of the cost of providing the
authorized kinds of capital facilities and services.
Section 203. Conflicting provisions; severability. Any provision in this Code which
conflicts with any general law or act shall prevail over the other such provision in
connection with any proceedings taken pursuant to this Code..
In the event any portion of this Code shall be declared illegal, unenforceable or
unconstitutional, such provision shall be deemed severable from the rest of the provisions
of this Code.
Section 204. Actions or determinations by local agency. The City Council may take
any actions or make any determinations which it determines are necessary or convenient to
carry out the purposes of this Code and which are not otherwise prohibited by law.
Section 205. Establishment of special improvement district to finance certain
additional services. A special improvement district may be established under this Code to
finance any one or more of the following types of services within an area:
(a) Police protection services, including, but not limited to, criminal justice
services. However, criminal justice services shall be limited to providing services
• for jails, detention facilities, and juvenile halls.
(b) Fire protection and suppression services, and ambulance and paramedic
services.
(c) Recreation program services, library services and the operation and
maintenance of museums and cultural facilities.
(d) Maintenance of parks, parkways, and open space.
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(e) Flood and storm protection services, including, but not limited to, the
operation and maintenance of storm drainage systems, and sandstorm protection
systems.
(f) Services with respect to removal or remedial action for the cleanup of any
hazardous substance released or threatened to be released into the environment. As
used in this subdivision, the terms 'remedial action" and "removal" shall have the
meanings set forth in Sections 25322 and 25323, respectively, of the California Health
and Safety Code, and the term "hazardous substance" shall have the meaning set
• forth in Section 25281 of the California Health and Safety Code. Special
improvement districts shall provide the State Department of Health Services and
local health and building departments with notification of any cleanup activity
pursuant to this subdivision at least 30 days prior to commencement of the activity.
(g) Any other municipal service which the City is authorized by law to
provide.
Section 206. Additional financing powers of district; purchase, construction,
expansion, improvement, rehabilitation, or planning and design work of real or tangible
property A special improvement district may also finance the purchase, construction,
expansion, improvement, or rehabilitation of any real or other tangible property with an
estimated useful life of three years or longer or may finance planning and design work that
is directly related to the purchase, construction, expansion, or rehabilitation of any real or
tangible property. The facilities need not be physically located within the district. A district
may finance the purchase of facilities whose construction has been completed before or after
the adoption of the resolution of formation to establish the district is adopted if the facility
is or was constructed pursuant to plans approved by the City, and the facility is inspected by
the City and found to be in compliance with applicable City building codes and standards.
For example, a special improvement district may finance facilities, including, but not
limited to, the following:
(a) Local park, recreation, parkway, and open -space facilities.
• (b) Libraries.
(c) Child care facilities, including costs of insuring the facilities against loss,
liability insurance in connection with the operation of the facility and other
insurance costs relating to the operation of the facilities, but excluding all other
operational costs. However, the proceeds of bonds issued pursuant to this Code shall
not be used to pay these insurance costs.
(d) The district may also finance the construction or undergrounding of
water transmission and distribution facilities, natural gas pipeline facilities,
telephone lines, facilities for the transmission or distribution of electrical energy, and
cable television lines. The district may enter into an agreement with a public utility
to utilize those facilities to provide a particular service and for the conveyance of
those facilities to the public utility. 'Public utility" shall include all utilities, whether
public and regulated by the Public Utilities Commission, or municipal. If the
facilities are conveyed to the public utility, the agreement shall provide that the cost
or a portion of the cost of the facilities that are the responsibility of the utility shall be
refunded by the public utility to the district or improvement area thereof, to the
extent that refunds are applicable pursuant to (1) the Public Utilities Code or rules of
the Public Utilities Commission, as to utilities regulated by the commission, or (2)
other laws regulating public utilities. Any reimbursement made to the district shall
be utilized to reduce or minimize the special tax levied within the district or
• improvement area, or to construct or acquire additional facilities within the district
or improvement area, as specified in the resolution of formation.
(e) The district may also finance the acquisition, improvement,
rehabilitation, or maintenance or any real or other tangible property, whether
privately or publicly owned, for the purposes described in subdivision (e) of Section
205.
(f) The district may also pay in full all amounts necessary to eliminate any
fixed special assessment liens or to pay, repay, or defense any obligation to pay or any
indebtedness secured by any tax, fee, charge, or assessment levied within the area of a
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special improvement district or may pay debt service on that indebtedness. In
addition, tax revenues of a district may be used to make lease or debt service
payments on any lease, lease - purchase contract, or certificate of participation used to
finance authorized district facilities.
(g) Any other governmental facilities which the City is authorized by law to
contribute revenue to, or construct, own, or operate.
(h) (1) A district may also pay for the following:
• (A) Work deemed necessary to bring buildings or real property,
including privately owned buildings or real property, into compliance
with seismic safety standards or regulations. No project involving the
dismantling of an existing building and its replacement by a new building,
nor the construction of a new or substantially new building may be
financed pursuant to this subparagraph. Work on qualified historical
buildings or structures shall be done in accordance with the State
Historical Building Code (Part 2.7 (commencing with Section 18950) of
Division 13 of the California Health and Safety Code).
(B) In addition, within any county or area designated by the
President of the United States or by the Governor as a disaster area or for
which the Governor has proclaimed the existence of a state of emergency
because of earthquake damage, a district may also pay for any work
deemed necessary to repair any damage to real property directly or
indirectly caused by the occurrence of an earthquake cited in the
President's or the Governor's designation or proclamation, or by
aftershocks associated with that earthquake, including work to
reconstruct, repair, shore up, or replace any building damaged or
destroyed by the earthquake. Work may be financed pursuant to this
subparagraph only on property or buildings identified in a resolution of
intention to establish a special improvement district adopted within
• seven years of the date on which the county or area is designated as a
disaster area by the President or by the Governor or on which the
Governor proclaims for the area the existence of a state of emergency.
(2) Work on privately owned property, including reconstruction or
replacement of privately owned buildings pursuant to subparagraph (B) of
paragraph (1), may be financed by a tax levy only if all of the votes cast on the
question of levying the tax, vote in favor of levying the tax, or with the prior
written consent to the tax of the owners of all property which may be subject
to the tax, in which case the prior written consent shall be deemed to
constitute a vote in favor of the tax and any associated bond issue. Any
district created to finance seismic safety work on privately owned buildings,
including repair, reconstruction or replacement of privately owned buildings
pursuant to this subdivision, shall consist only of lots or parcels on which the
City Council finds that the buildings to be worked on, repaired, reconstructed,
or replaced, pursuant to this subdivision, are located or were located before
being damaged or destroyed by the earthquake cited pursuant to
subparagraph (B) of paragraph (1) or by the aftershocks of that earthquake.
(f) A district may also pay for the following:
(1) Work deemed necessary to repair and abate damage caused to
privately owned buildings and structures by soil deterioration. "Soil
• deterioration" means a chemical reaction by soils that causes structural
damage or defects in construction materials including concrete, steel, and
ductile or cast iron. No project involving the dismantling of an existing
building or structure and its replacement by a new building or structure, nor
the construction of a new or substantially new building or structure may be
financed pursuant to this subparagraph.
(2) Work on privately owned buildings and structures pursuant to
this subdivision, including reconstruction, repair, and abatement of damage
caused by soil deterioration, may only be financed by a tax levy if all of the
votes cast on the question of levying the tax vote in favor of levying the tax.
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Any district created to finance the work on privately owned buildings or
structures, including reconstruction, repair, and abatement of damage caused
by soil deterioration, shall consist only of lots or parcels on which the City
Council finds that the buildings or structures to be worked on pursuant to
this subdivision suffer from soil deterioration.
Section 207. Adjustments in ad valorem property taxes; findings. The City Council
may provide for adjustments in ad valorem property taxes pursuant to Section 208 within a
special improvement district only after making both of the following findings at the
conclusion of the public hearing held pursuant to Article III:
• (a) That an ad valorem property tax is levied on property within a proposed
special improvement district for the exclusive purpose of making lease payments or
paying principal or interest on bonds or other indebtedness incurred to finance
construction of capital facilities.
(b) That capital facilities to be financed by the special improvement district
will provide the same services to the territory of the special improvement district as
were provided by the capital facilities mentioned in subdivision (a).
Section 208. Increase in total annual amount of ad valorem property tax revenue
due from parcels within proposed district. (a) Upon making the findings pursuant to
Section 207, the City Council may, with the concurrence of the legislative body which levied
the property tax described in subdivision (a) of Section 207, by ordinance, determine that the
total annual amount of ad valorem property tax revenue due from parcels within the
proposed special improvement district, for purposes of paying principal and interest on the
debt identified in Section 207, shall not be increased after the date on which the resolution
of formation for the special improvement district is adopted, or after a later date determined
by the City Council with the concurrence of the legislative body which levied the property
tax in question.
(b) The City Council may, by ordinance, with the concurrence of the legislative body
• that levied the property tax described in subdivision (a) of Section 207, determine to cease
and eliminate the freeze on property tax revenue established pursuant to subdivision (a),
upon determining that the special improvement district's special tax or portion thereof
levied on the parcels in question to pay for the capital facilities specified in subdivision (b)
of Section 207 shall cease to be levied and collected.
Section 209. Additional district financing powers. Pursuant to Section 206, a special
improvement district may also finance the acquisition improvement, rehabilitation, or
maintenance of any real or other tangible property, whether privately or publicly owned, for
the purposes described in subdivision (f) of Section205.
Section 210. Transfer of funds; use of money, interest. The City Council may from
time to time transfer moneys to a special improvement district or to an improvement area
within a special improvement district, for the benefit of the district or improvement area,
from any funds available to the City. The City Council may also appropriate any of its
available moneys to a revolving fund to be used for the acquisition of real or personal
property, engineering services, or the construction of structures or improvements needed
in whole or in part to provide one or more of the facilities of a special improvement
district.
The district may reimburse the City for any amount transferred or appropriated
pursuant to this Section 210, together with interest at the rate per annum determined by the
City Council.
• Section 211. Advances of funds or work in -kind; acceptance by City Council; use;
repayment; agreement; conditions (a) At any time either before or after the formation of
the district, the City Council may accept advances of funds or work in -kind from any source,
including, but not limited to, private persons or private entities and may provide by
resolution, for the use of those funds or that work in -kind for any authorized purpose,
including, but not limited to, paying any cost incurred by the City in creating a special
improvement district. The City Council may enter into an agreement, by resolution, with
the person or entity advancing the funds or work in -kind, to repay all or a portion of the
funds advanced, or to reimburse the person or entity for the value, or cost, whichever is
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less, of the work in -kind, as determined by the City Council, with or without interest, under
all of the following conditions:
(1) The proposal to repay the funds or the value or cost of the work in -kind,
whichever is less, is included in the resolution of intention to establish a district or
in the resolution of formation to establish the district, or in the resolution of
consideration to alter the types of public facilities and services provided within an
established district.
(2) Any proposed special tax or change in a special tax is approved by the
• qualified electors of the district pursuant to this Code. Any agreement shall specify
that if the qualified electors of the district do not approve the proposed special tax or
change in a special tax, the local agency shall return any funds which have not been
committed for any authorized purpose by the time of the election to the person or
entity advancing the funds.
(3) Any work in -kind accepted pursuant to this section shall have been
performed or constructed as if the work had been performed or constructed under
the direction and supervision, or under the authority of, the local agency.
(b) The agreement shall not constitute a debt or liability of the City.
Section 212. Liberal construction of Code, error, irregularity, neglect or omission.
This Code shall be liberally construed in order to effectuate its purposes. No error,
irregularity, informality, and no neglect or omission of any officer, in any procedure taken
under this Code, which does not directly affect the jurisdiction of the City Council to order
the installation of the facility or the provision of service, shall void or invalidate such
proceeding or any levy for the costs of such facility or service.
Section 213. Failure to receive notice, resolution, order, or other matter not affecting
proceedings. The failure of any person to receive a notice, resolution, order, or other matter
shall not affect in any way whatsoever the validity of any proceedings taken under this
• Code, or prevent the City Council from proceeding with any hearing so noticed.
Section 214. Application of Code; authority to create special improvement districts.
This Code authorizes the City to create special improvement districts pursuant to this Code
within its territorial limits. The City may initiate proceedings pursuant to Section 301 to
include territory proposed for annexation to the City within a special improvement district
if a petition or resolution of application for the annexation of the territory to the City has
been accepted for filing and a certificate of filing has been issued by the executive officer of
the local agency formation commission at the time the proceedings to create the district are
initiated. Those proceedings may be completed only if the annexation of the territory to the
City Is completed..
Section 215. Special tax; property acquired by public entity through negotiated
transaction or by gift or devise If property not otherwise exempt from a special tax levied
pursuant to this Code is acquired by a public entity through a negotiated transaction, or by
gift or devise, the special tax shall, notwithstanding Section 601, continue to be levied on
the property acquired and shall be enforceable against the public entity that acquired the
property. However, even if the resolution of formation that authorized creation of the
district did not specify conditions under which the obligation to pay a special tax may be
prepaid and permanently satisfied, the City Council may specify conditions under which the
public agency that acquires the property may prepay and satisfy the obligation to pay the tax.
The conditions may be specified only if the City Council finds and determines that the
prepayment arrangement will fully protect the interests of the owners of the special
• improvement district's bonds.
Section 216. Special tax; special assessment on property acquired by public entity
through eminent domain. If property subject to a special tax levied pursuant to this Code is
acquired by a public entity through eminent domain proceedings, the obligation to pay the
special tax shall be treated, pursuant to Section 1265.250 of the California Code of Civil
Procedure, as if it were a special annual assessment. For this purpose, the present value of
the obligation to pay a special tax to pay the principal and interest on any indebtedness
incurred by the district prior to the date of apportionment determined pursuant to Section
5082 of the California Revenue and Taxation Code shall be treated the same as a fixed lien
special assessment.
ARTICLE III
PROCEEDINGS TO CREATE A SPECIAL IMPROVEMENT
DISTRICT
Section 301. 301. Institution of proceeding; request; petition; fee. Proceedings for the
establishment of a special improvement district may be instituted by the City Council on its
own initiative and shall be instituted by the City Council when any of the following occurs:
(a) A written request for the establishment of a special improvement district,
signed by two members of the City Council, describing the boundaries of the territory
which is proposed for inclusion in the area and specifying the type or types of
facilities and services to be financed by the district, is filed with the City Council.
(b) A petition requesting the institution of the proceedings signed by the
requisite number of registered voters, as specified in subdivision (d) of Section 303, is
filed with the Clerk. The petition may consist of any number of separate
instruments, each of which shall comply with all of the requirements of the petition,
except as to the number of signatures.
(c) A petition requesting the institution of the proceedings signed by
landowners owning the requisite portion of the area of the proposed district, as
specified in subdivision (d) of Section 303, is filed with the Clerk.
(d) The written request filed pursuant to subdivision (a) and the petitions
filed pursuant to subdivisions (b) and (c) shall be accompanied by the payment of a
fee in an amount which the City Council determines is sufficient to compensate the
• City Council for all costs incurred in conducting proceedings to create a district
pursuant to this Code.
Section 302. Prohibition of LAFCO from review, approval or disapproval of creation
of or annexation or detachment of territory from a district. Notwithstanding any provision
of Part 1 (commencing with Section 56000) of Division 3 of the California Government
Code, a local agency formation commission shall have no power or duty to review and
approve or disapprove a proposal to create a special improvement district or a proposal to
annex territory to, or detach territory from, such district, pursuant to this Code.
Section 303. Petition; contents; findings as to requisite number of signers. A petition
requesting the institution of proceedings for the establishment of a special improvement
district shall do all of the following:
(a) Request the City Council to institute proceedings to establish a special
improvement district pursuant to this Code.
(b) Describe the boundaries of the territory which is proposed for inclusion in
the district.
(c) State the type or types of facilities and services to be financed by the
district.
. (d) Be signed by not less than 10 percent of the registered voters residing
within the territory proposed to be included within the district or by owners of not
less than 10 percent of the area of land proposed to be included within the district. If
the City Council finds that the petition is signed by the requisite number of registered
voters residing within the territory proposed to be included within the district or by
the requisite number of owners of land proposed to be included within the district,
that finding shall be final and conclusive.
Section 304. Resolution of intention to establish district; time for adoption. Within
90 days after either a written request by two members of the City Council or a petition
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requesting the institution of proceedings for the establishment of a special improvement
district is filed with the City Council, it shall adopt a resolution of intention to establish a
special improvement district in the form specified in Section 305.
Section 305. Resolution of intention to establish special improvement district;
contents. Proceedings for the establishment of a special improvement district shall be
instituted by the adoption of a resolution of intention to establish the district which shall do
all of the following:
(a) State that a special improvement district is proposed to be established
• under the terms of this Code and describe the boundaries of the territory proposed
for inclusion in the district, which may be accomplished by reference to a map on file
in the office of the Clerk, showing the proposed special improvement district. The
boundaries of the territory proposed for inclusion in the district shall include the
entirety of any parcel subject to taxation by the proposed district.
(b) State the name proposed for the district in substantially the following
form: "City of Newport Beach Special Improvement District No.
(c) Describe the public facilities and services proposed to be financed by the
district pursuant to this Code. The description may be general and may include
alternatives and options, but it shall be sufficiently informative to allow a taxpayer
within the district to understand what the funds of the district may be used to
finance. If the purchase of completed public facilities or the incurring of incidental
expenses is proposed, the resolution shall identify those facilities or expenses. If
facilities are proposed to be financed through any financing plan, including, but not
limited to, any lease, lease - purchase, or installment - purchase arrangement, the
resolution shall briefly describe the proposed arrangement.
(d) State that, except where funds are otherwise available, a special tax
sufficient to pay for all facilities and services, secured by recordation of a continuing
lien against all nonexempt real property in the district, will be annually levied
• within the area. The resolution shall specify the rate, method of apportionment, and
manner of collection of the special tax in sufficient detail to allow each landowner or
resident within the proposed district to estimate the maximum amount that he or
she will have to pay. The City Council may specify conditions under which the
obligation to pay the specified special tax may be prepaid and permanently satisfied.
In the case of any special tax to pay for public facilities and to be levied against
any parcel used for private residential purposes, (1) the maximum special tax shall
be specified as a dollar amount which shall be calculated and thereby established not
later than the date on which the parcel is first subject to the tax because of its use for
private residential purposes, which amount shall not be increased over time except
that it may be increased by an amount not to exceed 2 percent per year, (2) the
resolution shall specify a tax year after which no further special tax subject to this
sentence shall be levied or collected, and (3) the resolution shall specify that under
no circumstances will the special tax levied against any parcel subject to this sentence
be increased as a consequence of delinquency or default by the owner of any other
parcel or parcels within the district by more than 10 percent. For purposes of this
paragraph, a parcel shall be considered "used for private residential purposes" not
later than the date on which an occupancy permit for private residential use is
issued. Nothing in this paragraph is intended to prohibit the City Council from
establishing different tax rates for different categories of residential property, or from
changing the dollar amount of the special tax for the parcel if the size of the
residence is increased or if the size or use of the parcel is changed.
40 (e) Fix a time and place for a public hearing on the establishment of the
district which shall not be less than 30 or more than 60 days after the adoption of the
resolution.
(f) Describe any adjustment in property taxation to pay prior indebtedness
pursuant to Sections 207 and 208.
(g) Describe the proposed voting procedure.
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Section 306. Reports and estimate of costs by responsible officers; remedial action
plan for cleanup of hazardous substance; inclusion in record of hearing. At the time of the
adoption of the resolution of intention to establish a special improvement district, the City
Council shall direct each of its officers who is or will be responsible for providing one or
more of the proposed types of public facilities or services to be financed by the district, if it is
established, to study the proposed district and, at or before the time of the hearing, file a
report with the City Council containing a brief description of the public facilities and
services by type which will in his or her opinion be required to adequately meet the needs of
the district and his or her estimate of the cost of providing those public facilities and
services. If the purchase of completed public facilities or the payment of incidental expenses
• is proposed, the City Council shall direct its appropriate officer to estimate the fair and
reasonable cost of those facilities or incidental expenses. If removal or remedial action for
the cleanup of any hazardous substance is proposed, the City Council shall (a) direct its
responsible officer to prepare or cause to be prepared, a remedial action plan based upon
factors comparable to those described in subdivision (c) of Section 25356.1 of the California
Health and Safety Code or (b) determine, on the basis of the particular facts and
circumstances, which shall be comparable to those described in subdivision (g) of Section
25356.1 of the California Health and Safety Code, that the remedial action is not required.
All of those reports shall be made a part of the record of the hearing on the resolution of
intention to establish the district.
Section 307. Notice of hearing. (a) The Clerk shall publish a notice of the hearing
pursuant to Section 6061 of the California Government Code in a newspaper of general
circulation published in the area of the proposed district. Publication shall be complete at
least seven days prior to the date of the hearing.
(b) The notice shall contain all of the following information:
(1) The text or a summary of the resolution of intention to establish the
district which may refer to documents on file in the office of the Clerk for detail.
(2) The time and place of the hearing on the establishment of the district.
• (3) A statement that at the hearing the testimony of all interested persons or
taxpayers for or against the establishment of the district, the extent of the district, or
the furnishing of specified types of public facilities or services will be heard. The
notice shall also describe, in summary, the effect of protests made by registered voters
or landowners against the establishment of the district, the extent of the district, the
furnishing of a specified type of facilities or services, or a specified special tax, as
provided in Section 310.
(4) A description of the proposed voting procedure.
Section 308. Notice of hearing by mail to registered voters and landowners within
proposed district. The Clerk may also give notice of the hearing by first -class mail to each
registered voter and to each landowner within the proposed district. This notice shall be
mailed at least 15 days before the hearing and shall contain the same information as is
required to be contained in the notice published pursuant to Section 307.
Section 309. Protests; interested persons or taxpayer. At the hearing, protests against
the establishment of the district, the extent of the district, or the furnishing of specified types
of public facilities or services within the district may be made orally or in writing by any
interested persons or taxpayer. Any protests pertaining to the regularity or sufficiency of the
proceedings shall be in writing and shall clearly set forth the irregularities and defects to
which objection is made. All written protests shall be filed with the Clerk on or before the
• time fixed for the hearing. The City Council may waive any irregularities in the form or
content of any written protest and at the hearing may correct minor defects in the
proceedings. Written protests may be withdrawn in writing at any time before the
conclusion of the hearing.
Section 310. Written protest; further proceedings to create district; elimination of
special tax or types of facilities or services from resolution of formation. If 50 percent or
more of the registered voters, or six registered voters, whichever is more, residing within
the territory proposed to be included in the district, or the owners of one -half or more of the
area of the land in the territory proposed to be included in the district and not exempt from
the special tax, file written protests against the establishment of the district, and protests are
10
not withdrawn so as to reduce the value of the protests to less than a majority, no further
proceedings to create the specified special improvement district or to levy the specified
special tax shall be taken for a period of one year from the date of the decision of the City
Council.
If the majority protests of the registered voters or of the landowners are only against
the furnishing of a specified type or types of facilities or services within the district, or
against levying a specified special tax, those types of facilities or services or the specified
special tax shall be eliminated from the resolution of formation.
Section 311. Hearing; continuances; time limitation, exception; modification of
resolution of intention; determination to abandon or proceed with establishment of district.
The hearing may be continued from time to time, but shall be completed within 30 days,
except that if the City Council finds that the complexity of the proposed district or the need
for public participation requires additional time, the hearing may be continued from time to
time for a period not to exceed six months. The City Council may modify the resolution of
intention by eliminating proposed facilities or services, or by changing the rate or method of
apportionment of the proposed special tax so as to reduce the maximum special tax for all or
a portion of the owners of property within the proposed district, or by removing territory
from the proposed district. Any modifications shall be made by action of the City Council at
the public hearing. If the City Council proposes to modify the resolution of intention in a
way that will increase the probable special tax to be paid by the owners of any lot or parcel, it
shall direct that a report be prepared that includes a brief analysis of the impact of the
proposed modifications on the probable special tax to be paid by the owners of lots or parcels
in the district, and shall receive and consider the report before approving the modifications
or any resolution of formation which includes those modifications. At the conclusion of
the hearing, the City Council may abandon the proposed establishment of the special
improvement district or may, after passing upon all protests, determine to proceed with
establishing the district.
Section 312. Adoption of resolution of formation establishing district; contents;
finding concerning validity and conformity of prior proceedings. (a) If the City Council
determines to establish the district, it shall adopt a resolution of formation establishing the
district. The resolution of formation shall contain all of the information required to be
included in the resolution of intention to establish the district specified in Section 305. If a
special tax is proposed to be levied in the district to pay for any facilities or services and the
special tax has not been eliminated by majority protest pursuant to Section 310, the
resolution shall:
(1) State that the proposed special tax to be levied within the district has not
been precluded by majority protest pursuant to Section 310.
(2) Identify any facilities or services proposed to be funded with the special
M
(3) Set forth the name, address, and telephone number of the office,
department, or bureau which will be responsible for preparing annually a current
roll of special tax levy obligations by assessor's parcel number and which will be
responsible for estimating future special tax levies pursuant to Section 602.
(4) State that upon recordation of a notice of special tax lien pursuant to
Section 3114.5 of the California Streets and Highways Code, a continuing lien to
secure each levy of the special tax shall attach to all nonexempt real property in the
district and this lien shall continue in force and effect until the special tax obligation
is prepaid and permanently satisfied and the lien canceled in accordance with law or
• until collection of the tax by the City ceases.
(5) Set forth the county of recordation and the book and page in the Book of
Maps of Assessments and Community Facilities Districts in the county recorder's
office where the boundary map of the proposed special improvement district has
been recorded pursuant to Sections 3111 and 3113 of the California Streets and
Highways Code.
(b) In the resolution of formation adopted pursuant to subdivision (a), the City
Council shall determine whether all proceedings were valid and in conformity with the
requirements of this Code. If the City Council determines that all proceedings were valid
11
and in conformity with the requirements of this Code, it shall make a finding to that effect
and that finding shall be final and conclusive.
Section 313. Special tax; basis for apportionment. A tax imposed pursuant to this
Code is a special tax and not a special assessment, and there is no requirement that the tax be
apportioned on the basis of benefit to any property. However, a special tax levied pursuant
to this Code may be on or based on benefit received by parcels of real property, the cost of
making facilities or authorized services available to each parcel, or other reasonable basis as
determined by the City Council. A special tax apportioned on any of these bases shall not be
construed to be on or based upon the ownership of real property.
• Section 314. Noncontiguous areas, alteration of boundaries. (a) A special
improvement district may include areas of territory that are not contiguous.
(b) In establishing the boundaries of the district, the City Council may alter the
exterior boundaries of the district to include less territory than that described in the notice of
the hearing but it may not include any territory not described in the notice of the hearing.
Section 315. Establishment or changing appropriations limit; election on
proposition; adjustment. The City Council may submit a proposition to establish or change
the appropriations limit, as defined by subdivision (h) of Section 8 of Article XIII B of the
California Constitution, of a special improvement district to the qualified electors of a
proposed or established district. The proposition establishing or changing the
appropriations limit shall become effective if approved by the qualified electors voting on
the proposition and shall be adjusted for changes in the cost of living and changes in
populations, as defined by subdivisions (b) and (c) of Section 7901 of the California Revenue
and Taxation Code, except that the change in population may be estimated by the City
Council in the absence of an estimate by the Department of Finance, and in accordance with
Section 1 of Article XIII B of the California Constitution. For purposes of adjusting for
changes in population, the population of the district shall be deemed to be at least one
person during each calendar year.
• Section 316. Special tax levy, election; voter qualifications; ballots. (a) The City
Council shall then submit the levy of any special taxes to the qualified electors of the
proposed special improvement district subject to the levy or to the qualified electors of the
territory to be annexed by the special improvement district subject to the levy in the next
general election or in a special election to be held, notwithstanding any other requirement,
including any requirement that elections be held on specified dates, contained in the
California Elections Code, at least 90 days, but not more than 180 days, following the
adoption of the resolution of formation. The City Council shall provide the resolution of
formation, a certified map of sufficient scale and clarity to show the boundaries of the
district, and a sufficient description to allow the election official to determine the
boundaries of the district to the official conducting the election within three business days
after the adoption of the resolution of formation. Assessor's parcel numbers for the land
within the district shall be included if it is a landowner election or the district does not
conform to an existing district's boundaries and if requested by the official conducting the
election. If the election is to be held less than 125 days following the adoption of the
resolution of formation, the concurrence of the election official conducting the election
shall be required. However, any time limit specified by this section or requirement
pertaining to the conduct of the election, including any time limit or requirement
applicable to any election conducted pursuant to Article VI, may be waived with the
unanimous consent of the qualified electors of the proposed district and the concurrence of
the election official conducting the election.
(b) Except as otherwise provided in subdivision (c), if at least 12 persons, who need
• not necessarily be the same 12 persons, have been registered to vote within the territory of
the proposed special improvement district for each of the 90 days preceding the close of the
protest hearing, the vote shall be by the registered voters of the proposed district, with each
voter having one vote. Otherwise, the vote shall be by the landowners of the proposed
district and each landowner who is the owner of record at the close of the protest hearing, or
the authorized representative thereof, shall have one vote for each acre or portion of an
acre of land that he or she owns within the proposed special improvement district. The
number of votes to be voted by a particular landowner shall be specified on the ballot
provided to that landowner.
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(c) If the proposed special tax will not be apportioned in any tax year on any portion
of property in residential use in that tax year, as determined by the City Council, the City
Council may provide that the vote shall be by the landowners of the proposed district
whose property would be subject to the tax if it were levied at the time of the election. Each
of these landowners shall have one vote for each acre, or portion thereof, that the
landowner owns within the proposed district which would be subject to the proposed tax if
it were levied at the time of the election.
(d) Ballots for the special election authorized by subdivision (a) may be distributed to
• qualified electors by mail with return postage prepaid or by personal service by the election
official. The official conducting the election may certify the proper mailing of ballots by an
affidavit, which shall constitute conclusive proof of mailing in the absence of fraud. The
voted ballots shall be returned to the election officer conducting the election not later than
the hour specified in the resolution calling the election. However, if all the qualified voters
have voted, the election may be closed with the concurrence of the official conducting the
election.
Section 317. Election laws governing; ballot materials. (a) Except as otherwise
provided in this Code, the provisions of law regulating elections of the City, insofar as they
may be applicable, shall govern all elections conducted pursuant to this Code. Except as
provided in subdivision (b), there shall be prepared and included in the ballot material
provided to each voter, an impartial analysis pursuant to Section 5011 of the California
Elections Code, and arguments and rebuttals, if any, pursuant to Sections 5012 to 5016,
inclusive, and 5025 of the California Elections Code.
(b) If the vote is to be by the landowners of the proposed district, analysis and
arguments may be waived with the unanimous consent of all the landowners and shall be
so stated in the order for the election
Section 318. Election by mail ballot. (a) If the election is to be conducted by mail
ballot, the election official conducting the election shall provide ballots and election
materials pursuant to subdivision (d) of Section 316 and Section 317, together with all
• supplies and instructions necessary for the use and return of the ballot.
(b) The identification envelope for return of mail ballots used in landowner
elections shall contain the following:
(1) The name of the landowner
(2) The address of the landowner.
(3) A declaration, under penalty of perjury, stating that the voter is the
owner of record or the authorized representative of the landowner entitled to vote
and is the person whose name appears on the identification envelope.
(4) The printed name and signature of the voter.
(5) The address of the voter.
(6) The date of signing and place of execution of the declaration described
in paragraph (3).
(7) A notice that the envelope contains an official ballot and is to be
opened only by the canvassing board.
Section 319. 319. Special tax levy. After the canvass of returns of any election pursuant to
Section 316, the City Council may levy any special tax as specified in the resolution of
formation adopted pursuant to subdivision (a) of Section 312 within the territory of the
district if two- thirds of the votes cast upon the question of levying the tax are in favor of
levying that tax.
Section 320. Recordation and notice of special tax lien; site of record. Upon a
determination by the City Council that the requisite two - thirds of votes cast in an election
held pursuant to Section 316 are in favor of levying the special tax, the Clerk shall record
the notice of special tax lien provided for in Section 3114.5 of the California Streets and
Highways Code, whereupon the lien of the special tax shall attach as provided in Section
13
3115.5 of the California Streets and Highways Code. The notice of special tax lien shall be
recorded in the office of the county recorder in each county in which any portion of the
district is located.
Section 321. Application of Streets and Highway Code with respect to special taxes;
filings. Division 4.5 (commencing with Section 3100) of the California Streets and
Highways Code applies with respect to any proceedings undertaken pursuant to this Code.
This Code is a "principal act" as that term is defined in Section 3100 of the California Streets
and Highways Code.
• Section 322. Special tax levy; effect of failure to receive approval by two - thirds of
voters. After the canvass of returns of any election conducted pursuant to Section 316, the
City Council shall take no further action with respect to levying the specified special tax
within the special improvement district for one year from the date of the election if the
question of levying that specified special tax fails to receive approval by two - thirds of the
votes cast upon the question.
Section 323. Owners not required to present sealed proposals or bids; election not to
perform work; contract with original bidder. (a) The owners of three - fourths of the area of
lands taxed or liable to be taxed, or their agents (who shall declare under penalty of perjury
that they are such owners or agents), shall not be required to present sealed proposals or bids
when the City Council calls for bids preparatory to letting a contract or contracts to do work
financed pursuant to this Code, but may, within 10 days after the publication of the notice of
the award of the contract, elect to perform the work and enter into a written contract to do
the whole work at prices not exceeding the prices specified in the bid of the bidder to whom
the contract was awarded, and all work done under the contract shall be subject to any
regulations as may be prescribed by the City Council.
(b) If the owners elect not to perform the work and not to enter into a written
contract for that work within 10 days of publication of the notice of the award of the
contract, or to commence the work within 15 days after the date of the written contract
entered into between the owners and the City, and to continue that work with diligence to
•completion, as determined by the City Council, a contract shall be entered into by the City
with the original bidder to whom the contract was awarded at the prices specified in his or
her bid.
(c) If, in the opinion of the City Council, the public interest will not be served by
allowing the property owners to enter into a contract in accordance with subdivision (a), the
City Council may so provide in the resolution of intention adopted pursuant to Section 305.
ARTICLE IV
EXTENSION OF AUTHORIZED FACILITIES AND
SERVICES AND CHANGES IN SPECIAL TAXES
Section 401. Types of facilities and services financed. Upon the establishment of a
special improvement district, only the public facilities and services as described in the
resolution of formation may be financed by the district under the authority of this Code,
except as provided in this article.
Section 402. Buyers of certain residential property; induced waiver of right to
• petition or take other action prohibited Under no circumstances shall any buyer or
prospective buyer of any completed structure for which a certificate of occupancy for private
residential use has been issued which is located within any district formed pursuant to this
Code be asked, required, or otherwise induced to waive any right to petition or take any
other action authorized pursuant to this article. No contract, agreement or covenant shall
be binding with respect to such a waiver.
Section 403. Special tax; levy and apportionment; cessation of tax and lien. Upon
approval of a special tax pursuant to Article III, the special tax may be levied only at the rate
and may be apportioned only in the manner specified in the resolution of formation, except
14
as provided in this article, and except that the City Council may levy the special tax at a rate
lower than that specified in the resolution. In addition, the special tax may be levied only
so long as it is needed to pay the principal and interest on debt incurred in order to construct
facilities under authority of this Code, or so long as it is needed to pay the costs and
incidental expenses of services or of the construction of facilities authorized by this Code.
When the City Council determines that the special tax shall cease to be levied, the
City Council shall direct the clerk to record a Notice of Cessation of Special Tax which shall
state that the obligation to pay the special tax has ceased and that the lien imposed by the
• Notice of Special Tax Lien recorded in Book _, and Page _ of the records of the County
Recorder of Orange County, State of California, is extinguished. The Notice of Cessation of
Special Tax shall additionally identify the book and page of the Book of Maps of Assessment
and Community Facilities Districts wherein the map of the boundaries of the district is
recorded.
Section 404. Types of facilities and services provided. Except as otherwise provided
in this article, the City Council may, at any time, after conducting a public hearing,
eliminate one or more of the types of facilities and services specified in the resolution of
intention to establish the district but may not finance any types of facilities and services that
were not specified in the resolution of intention.
Section 405. Resolution of consideration; change in types of facilities and services
financed. (a) If the City Council determines that the public convenience and necessity
require any change in the types of authorized public facilities or services which should be
financed by an established special improvement district, that the rate or method of
apportionment of a special tax should be changed, or that a new special tax should be
proposed, the City Council may adopt a resolution of consideration to alter the types of
public facilities or services to be financed by the district, to levy a new special tax or special
taxes, or, except as provided in subdivision (b), to alter the rate or method of apportionment
of the special tax. Those proceedings may be commenced at any time.
(b) The City Council shall not adopt a resolution of consideration to reduce the rate
• of any special tax or terminate the levy of any special tax if the proceeds of that tax are being
utilized to retire any debt incurred pursuant to this Code unless the City Council
determines that the reduction or termination of that tax would not interfere with the
timely retirement of that debt.
(c) The resolution of consideration adopted pursuant to subdivision (a) shall contain
all of the information required by subdivisions (a) to (e), inclusive, of Section 408.
Section 406. Resolution of consideration to make changes in facilities, services or
special taxes, petition; fee. (a) If a petition signed by 50 percent or more of the registered
voters residing in the district, or by the owners of 50 percent or more of the territory within
the district, is filed with the City Council requesting that proceedings be commenced to
change the types of public facilities or services financed by the district or that the rate or
method of apportionment of an existing special tax be changed, or that a new special tax be
levied, the City Council shall within 40 days thereafter adopt a resolution of consideration
in the form specified in Section 408 to make those changes within the special improvement
district except that an existing special tax being used to pay off any debt incurred in order to
build or acquire capital facilities under this Code shall not be reduced or terminated if doing
so would interfere with the timely retirement of that debt.
(b) Any petition filed by landowners shall be accompanied by the payment of the fee
which the City Council determines. That fee may be imposed in an amount sufficient to
compensate the City Council for all costs incurred in conducting proceedings to change the
• district pursuant to this article.
Section 407. Petition to make specified changes to types of public facilities, separate
instruments; signatures. The petition shall request the City Council to commence
proceedings to make specified changes to a named special improvement district. The
petition may consist of any number of separate instruments each of which shall comply
with all the requirements of a petition except as to the number of signatures.
Section 408. Resolution of consideration, form. The resolution of consideration to
alter the types of public facilities and services financed by an established special
15
improvement district, or to levy a new special tax or special taxes, or to alter the rate or
method of apportionment of an existing special tax, shall do all of the following:
(a) State the name of the area.
(b) Generally describe the territory included in the area.
(c) Specify the changes in public facilities and services which it is proposed
that the district finance.
• (d) Specify any new special taxes which would be levied to pay for new or
existing facilities and services and any proposed alteration to the rate or method of
apportionment of an existing special tax.
(e) Fix a time and place for a hearing upon the resolution which shall not be
less than 30 or more than 60 days after the adoption of the resolution of
consideration.
Section 409. Resolution of intention to make changes in facilities, services or special
taxes; notice of hearing. The Clerk shall give notice of the hearing in the same manner and
within the same time as provided for the giving of notice of a hearing on a resolution of
intention to establish a special improvement district.
The notice shall do all of the following:
(a) Contain the text or a summary of the resolution.
(b) State the time and place for hearing.
(c) State that at the hearing the testimony of all interested persons or
taxpayers for or against the proposed changes in public facilities and services and the
levying of additional special taxes or of changing existing special taxes will be heard.
• The notice shall also describe, in summary, the effect of protests made by registered
voters or landowners against the proposed changes in facilities or services and the
levying of additional taxes or changes in existing taxes.
(d) Describe the proposed voting procedure.
Section 410. Resolution of intention to make changes in facilities, services or special
taxes; protests. At the hearing, protests against the proposals described in the resolution
may be made orally, or in writing by any interested persons. Any protests pertaining to the
regularity or sufficiency of the proceedings shall be in writing and shall clearly set forth the
irregularities or defects to which objection is made. All written protests shall be filed with
the Clerk on or before the time fixed for the hearing. The City Council may waive any
irregularities in the form or content of any written protest and at the hearing may correct
minor defects in the proceedings. Written protests may be withdrawn in writing at any
time before the conclusion of the hearing.
Section 411. Written protests against changes; elimination from resolution. If 50
percent or more of the registered voters, or six registered voters, whichever is more,
residing within the district, or the owners of one -half or more of the area of the land in the
territory included in the district and not exempt from the special tax file written protests
against changing the public facilities or services financed by the district, those changes in the
facilities or services shall be eliminated from the resolution ordering changes in the types of
public facilities or services to be financed and the changes shall not be included in a
• resolution for a period of one year from the date of the decision of the legislative body on
the hearing.
If 50 percent or more of the registered voters, or six registered voters, whichever is
more, residing within the district, or the owners of one -half or more of the area of the land
in the territory included in the district and not exempt from the special tax file written
protests against the levying of any additional special taxes within the district, or against a
proposed alteration to an existing special tax within the district, those changes shall be
eliminated from the resolution and the changes shall not be included in a resolution for a
period of one year from the date of the decision of the legislative body on the hearing.
16
•
C7
Section 412. Hearing; time; abandonment of proceeding or submission of question to
qualified electors; determination of legal effect of proposed levy or of changes in facilities
and services; notice of changes. (a) The hearing may be continued from time to time, but
shall be completed within 30 days, except that if the City Council finds that the complexity of
the proposed changes or the need for public participation requires additional time, the
hearing may be continued from time to time for a period not to exceed six months. At the
conclusion of the hearing the City Council may abandon the proceedings or may, after
passing upon all protests, submit the question of levying a new special tax or of changing
the rate or method of apportionment of an existing tax or of changing the types of facilities
and services to be financed by the district, or any combination, to the qualified electors of the
district as specified in Article III.
(b) After the canvass of any election conducted pursuant to this section, the City
Council shall adopt a resolution of change determining that the proposed levy of a new
special tax or of changes in the types of facilities and services to be financed by the district, or
any combination, are lawfully authorized, if two - thirds of the votes cast on the proposition
are in favor of the proposed levy or changes.
(c) Upon adoption of a resolution of change, the Clerk shall record notice of the
changes pursuant to Section 3117.5 of the California Streets and Highways Code.
Section 413. Dissolution of special improvement district, findings, dissolution of
liens. The City Council may, by ordinance, dissolve any existing special improvement
district which it has created upon making all of the following determinations:
(a) That the district is no obligated to pay any outstanding debt.
(b) That the district has no authorization
dissolving a district, the City Council shall cause an
Notice of Special Tax Lien recorded pursuant to
Streets and Highways Code which shall state that
and all associated liens, if any, have been dissolved.
ARTICLE V
to levy any special tax. Upon
addendum to be recorded to the
Section 3114.5 of the California
the special improvement district
ANNEXATION OF TERRITORY
Section 501. Authorization. The City Council may annex territory to an existing
special improvement district as provided in this article. The annexed territory need not be
contiguous to territory included in the existing special improvement district. The territory
proposed to be annexed to the special improvement district may be territory located outside
the territorial limits of the City provided that the territory to be annexed to the special
improvement district will be annexed to the City prior to, or concurrently with, the
annexation of the subject territory to the special improvement district and, if the
annexation of the subject territory to the City is not completed, the subject territory shall not
be annexed to the special improvement district. The City Council shall not adopt a
resolution of intention pursuant to Section 502 if the territory proposed to be annexed
includes territory which is outside the territorial limits of the City unless an initial action,
petition, or filing for the annexation of that territory to the City has been adopted or filed, as
appropriate.
•Section 502. Adoption of resolution of intention. If the City Council determines that
public convenience and necessity require that territory be added to an existing special
improvement district, or if the voters residing within certain territory or landowners
request the City Council to include territory within the district, the City Council may adopt a
resolution of intention to annex the territory or to provide for future annexation of the
territory.
Section503. Resolution of intention; contents. The resolution of intention to annex
the territory or to provide for future annexation of the territory shall do all of the following:
17
(a) State the name of the existing special improvement district.
(b) Generally describe the territory included in the existing district and the
territory proposed to be annexed. As an alternative, the resolution may identify
territory proposed for annexation in the future, with the condition that parcels
within that territory may be annexed only with the unanimous approval of the
owner or owners of each parcel or parcels at the time that parcel or those parcels are
annexed.
• (c) Specify the types of public facilities and services provided pursuant to this
Code in the existing district and the types of public facilities and services to be
provided in the territory proposed to be annexed or to be annexed in the future; and
include a plan for sharing facilities and providing services that will be provided in
common within the existing district and the territory proposed to be annexed or to be
annexed in the future.
(d) Specify any special taxes which would be levied within the territory
proposed to be annexed or to be annexed in the future to pay for public facilities and
services provided pursuant to this Code within that territory. A special tax proposed
to pay for services to be supplied within the territory proposed to be annexed or to be
annexed in the future shall be equal to any special tax levied to pay for the same
services in the existing district, except that a higher or lower tax may be levied within
the territory proposed to be annexed or to be annexed in the future to the extent that
the actual cost of providing the services in that territory is higher or lower than the
cost of providing those services in the existing district. A special tax proposed to pay
for public facilities financed with bonds secured by the existing special improvement
district shall be the same as the tax levied in the existing district for that purpose,
except that a higher special tax may be levied for that purpose, within the territory
proposed to be annexed or to be annexed in the future to compensate for the interest
and principal previously paid by the existing special improvement district, less any
depreciation allocable to the public facility.
• (e) Specify any alteration in the special tax rate levied within the existing
special improvement district as a result of the proposed annexation. The maximum
tax rate in the existing special improvement district may not be increased as a result
of proceedings pursuant to this article.
(f) Fix a time and place for a hearing upon the resolution which shall not be
less than 30 nor more than 60 days after the adoption by the City Council of the
resolution of intention to annex territory or to provide for future annexation of
territory pursuant to Section 502.
Section504. Notice of hearing. The Clerk shall give notice of the hearing in the
same manner and within the same time as provided for the giving of notice of a hearing on
a resolution of intention to establish a special improvement district, as required by Section
307. Notice pursuant to Section 308 may be mailed to the registered voters and landowners
within the territory proposed to be annexed or proposed to be annexed in the future.
The notice shall do all of the following:
(a) Contain the text or a summary of the resolution.
(b) State the time and place for the hearing.
(c) State that at the hearing the testimony of all interested persons for or
• against the annexation of territory or the future annexation of territory to the special
improvement district or the levying of special taxes within the territory proposed to
be annexed or proposed to be annexed in the future will be heard.
Section 505. Protests. At the hearing, protests against the proposals described in the
resolution of intention may be made orally by any interested person. Any protests
pertaining to the regularity or sufficiency of the proceedings shall be in writing and shall
clearly set forth the irregularities or defects to which objection is made. All written protests
shall be filed with the Clerk prior to the time fixed for the hearing. The City Council may
waive any irregularities in the form or content of any written protest and at the hearing
i_n
may correct minor defects in the proceedings. Written protests may be withdrawn in
writing at any time before the conclusion of the hearing.
Section 506. Abandonment of proposal, required number of written protests. If 50
percent or more of the registered voters, or six registered voters, whichever is more,
residing within the existing special improvement district, or if 50 percent or more of the
registered voters or six registered voters, whichever is more, residing within the territory
proposed for annexation or proposed to be annexed in the future, or if the owners of one -
half or more of the area of land included in the existing district or if the owners of one -half
• or more of the area of land in the territory proposed to be annexed or proposed to be
annexed in the future, file written protests against the proposed annexation of territory to
the existing special improvement district or the proposed addition of territory to the
existing special improvement district in the future, and protests are not withdrawn so as to
reduce the protests to less than a majority, no further proceedings shall be undertaken for a
period of one year from the date of decision of the City Council on the issues discussed at
the hearing.
Section 507. Continuance and duration of hearing; abandonment of proceedings;
submission of special tax question to electors; annexation of territory; effectiveness of ballots
contingent on passage of other ballot measures. (a) The hearing may be continued from
time to time, but shall be completed within 30 days. At the conclusion of the hearing, the
City Council may abandon the proceedings, or may, after passing upon all protests, submit
the question of levying a special tax within the area proposed to be annexed to the existing
special improvement district to the qualified electors of the area proposed to be annexed as
specified in Article III, or may provide for the annexation of territory proposed for
annexation in the future upon the unanimous approval of the owner or owners of each
parcel or parcels at the time that the parcel or parcels are annexed, without additional
hearings.
(b) Notwithstanding any other provision of law, when the question of levying a
special tax within the areas proposed to be annexed into an existing special improvement
district appears on he same ballot as the question of annexation of the same territory to a
• school district the effectiveness of each ballot measure may be made contingent on the
passage of the other ballot measure.
Section 508. Addition of territory with full legal effect; special tax levy. (a) After the
canvass of returns of any election conducted in accordance with Section 507, the City
Council body shall determine that the area proposed to be annexed is added to and part of
the existing special improvement district with full legal effect, and the City Council may
levy any special tax within the annexed territory, as specified in the resolution of intention
to annex adopted pursuant to Section 502, if two - thirds of the votes cast on the proposition
are in favor of levying the special tax.
•
(b) Upon a determination by the City Council that the area proposed to be annexed is
added to the existing special improvement district, the Clerk shall record notice of the
annexation pursuant to Section 3117.5 of the California Streets and Highways Code.
Section 509. Failure to receive approval of two - thirds of voters; prohibition of
further action. After the canvass of returns of any election conducted in accordance with
Section 507, the City Council shall take no further action on annexing the territory proposed
to be annexed to the special improvement district for a period of one year from the date of
the election if less than two - thirds of the votes cast on the proposition are in favor of
levying the special tax.
0
ARTICLE VI
PROCEDURES FOR LEVYING
Section 601. Ordinance; tax rate and apportionment; exemption of governmental
properties and entities from special tax; use of tax proceeds; tax collection, penalties, etc., lien
• to secure levy of special taxes. After a special improvement district has been created and
authorized to levy specified special taxes pursuant to Article III, Article IV, or Article V, the
City Council may, by ordinance, levy the special taxes at the rate and apportion them in the
manner specified in the resolution adopted pursuant to Article III, Article IV, or Article V.
The City Council may provide, by resolution, for the levy of the special tax in the current tax
year or future tax years at the same rate or at a lower rate than the rate provided by
ordinance, if the resolution is adopted and a certified list of all parcels subject to the special
tax levy including the amount of the tax to be levied on each parcel for the applicable tax
year, is filed by the Clerk or other official designated by the City Council with the county
auditor on or before the 10th day of August of that tax year. The Clerk or other official
designated by the City Council may file the certified list after the 10th of August but not later
than the 21st of August if the Clerk or other official obtains prior written consent of the
county auditor. Properties or entities of the state, federal, or other local governments shall,
except as otherwise provided in Section 215, be exempt from the special tax. No other
properties or entities are exempt from the special tax unless the properties or entities are
expressly exempted in the resolution of formation to establish a district adopted pursuant to
Section 312 or in a resolution of consideration to levy a new special tax or special taxes or to
alter the rate or method of apportionment of an existing special tax as provided in Section
408. The proceeds of any special tax may only be used to pay, in whole or part, the cost of
providing public facilities, services, and incidental expenses pursuant to this Code. The
special tax shall be collected in the same manner as ordinary ad valorem property taxes are
collected and shall be subject to the same penalties and the same procedures, sale, and lien
priority in case of delinquency as is provided for ad valorem taxes, unless another
• procedure has been authorized in the resolution of formation establishing the district and
adopted by the City Council. The tax collector may collect the special tax at intervals as
specified in the resolution of formation, including intervals different from the intervals at
which the ordinary ad valorem property taxes are collected. The tax collector may deduct
the reasonable administrative costs incurred in collecting the special tax.
All special taxes levied by a special improvement district shall be secured by the lien
imposed pursuant to Section 3115.5 of the California Streets and Highways Code. This lien
shall be a continuing lien and shall secure each levy of special taxes. The lien of the special
tax shall continue in force and effect until the special tax obligation is prepaid, permanently
satisfied, and canceled in accordance with Section 607 or until the special tax ceases to be
levied by the City Council in the manner provided in Section 403. If any portion of a parcel
is encumbered by a lien pursuant to this Code, the entirety of the parcel shall be
encumbered by that lien.
Section 602. Preparation of current roll of special tax levy obligations; designation of
responsible office; estimation of future special tax levies, liability for inaccurate estimates;
notice of special tax; form. (a) The City Council shall designate an office, department, or
bureau of the City which shall be responsible for annually preparing the current roll of
special tax levy obligations by assessor's parcel number on nonexempt property within the
district and which will be responsible for estimating future special tax levies. The
designated office, department, or bureau shall establish procedures to promptly respond to
inquiries concerning current and future estimated tax liability. Neither the designated
• office, department, or bureau, nor the City Council, shall be liable if any estimate of future
tax liability is inaccurate, nor for any failure of any seller to request a Notice of Special Tax
or to provide the notice to a buyer.
(b) For purposes of enabling sellers of real property subject to the levy of special taxes
to satisfy the notice requirements of subdivision (b) of Section 1102.6 of the California Civil
Code, the designated office, department, or bureau shall furnish a Notice of Special Tax to
any individual requesting the notice or any owner of property subject to a special tax levied
by the City within five working days of receiving a request for such notice. The City may
charge a reasonable fee for this service not to exceed ten dollars ($10.00).
Ell
•
•
•
(c) (1) The notice shall contain the heading 'NOTICE OF SPECIAL TAX" in type no
smaller than 8 -point type, and shall be in substantially the following form. The form may
be modified as needed to clearly and accurately consolidate information about the tax
structure and other characteristics of two or more districts that levy or are authorized to
levy special taxes with respect to the lot, parcel, or unit. The notice shall be completed by
the designated office, department, or bureau except for the signatures and date of signing:
21
NOTICE OF SPECIAL TAX
CITY OF NEWPORT BEACH
SPECIAL IMPROVEMENT DISTRICT NO..
COUNTY OF ORANGE, CALIFORNIA
TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS:
• THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR PURCHASING THIS
PROPERTY.
This property is subject to a special tax, which is in addition to the regular
property taxes and any other charges and benefit assessments on the parcel. This
special tax may not be imposed on all parcels within the City of Newport Beach. If
you fail to pay this tax when due each year, the property may be foreclosed upon and
sold. The tax is used to provide public facilities or services that are likely to
particularly benefit the property. YOU SHOULD TAKE THIS TAX AND THE
BENEFITS FROM THE PUBLIC FACILITIES AND SERVICES FOR WHICH IT PAYS
INTO ACCOUNT IN DECIDING WHETHER TO BUY THIS PROPERTY.
(2) The maximum special tax which may be levied against this parcel to pay
for public facilities is $__ during the _ -_ tax year. This amount will
increase by _ percent per year after that (if applicable). The special tax will be
levied each year until all of the authorized facilities are built and all special tax bonds
are repaid, but in any case not after the _ = tax year.
An additional special tax will be used to pay for ongoing services, if applicable.
The maximum amount of this tax is dollars ($ ) during the _ -_
tax year. This amount may increase by , if applicable, and may be levied until
the --- tax year (or forever, as applicable.)
• (3) The authorized facilities which are being paid for by the special taxes, and
by the money received from the sale of bonds which are being repaid by the special
taxes, are:
These facilities may not yet have all been constructed or acquired and it is
possible that some may never be constructed or acquired.
In addition, the special taxes may be used to pay for costs of the following
services:
YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION
WHICH AUTHORIZED CREATION OF THE SPECIAL IMPROVEMENT DISTRICT,
AND WHICH SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS
APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED, FROM
THE CITY OF NEWPORT BEACH BY CALLING __ (telephone number).
THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE
ESTIMATED REASONABLE COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE RECEIVED A COPY OF THIS
NOTICE. I (WE) UNDERSTAND THAT I (WE) MAY TERMINATE THE
CONTRACT TO PURCHASE OR DEPOSIT RECEIPT AFTER RECEIVING THIS
NOTICE FROM THE OWNER OR AGENT SELLING THE PROPERTY. THE
CONTRACT MAY BE TERMINATED WITHIN THREE DAYS IF THE NOTICE
• WAS RECEIVED IN PERSON OR WITHIN FIVE DAYS AFTER IT WAS
DEPOSITED IN THE MAIL BY GIVING WRITTEN NOTICE OF THAT
TERMINATION TO THE OWNER OR AGENT SELLING THE PROPERTY.
DATE:
�Q7
Section 603. Actions or proceedings to attack, review, set aside, void, or annul levy
of special tax or increase in special tax, time for commencement; time for perfection of
appeal from final judgment. Any action or proceeding to attack, review, set aside, void, or
annul the levy of a special tax or an increase in a special tax pursuant to this Code shall be
commenced within 30 days after the special tax is approved by the voters. Any appeal from
a final judgment in that action or proceeding shall be perfected within 30 days after the
entry of judgment.
Section 604. Sale or lease of lot, parcel or unit of subdivision; notice of special tax;
• form; termination of agreement; violations and penalties. (a) If a lot, parcel, or unit of a
subdivision is subject to a special tax levied pursuant to this Code, the subdivider, his or
her agent, or representative, shall not sell, or lease for a term exceeding five years, or permit
a prospective purchaser or lessor to sign a contract of purchase or a deposit receipt or any
substantially equivalent document in the event of a lease with respect to the lot, parcel, or
unit, or cause it to be sold or leased for a term exceeding five years, until the prospective
purchaser or lessee of the lot, parcel, or unit has been furnished with and has signed a
written notice as provided in this section. The notice shall contain the heading 'NOTICE
OF SPECIAL TAX" in type no smaller than 8 -point type, and shall be in substantially the
following form, although the form may be modified as needed to clearly and accurately
consolidate information about the tax structure and other characteristics of two or more
districts that levy or are authorized to levy special taxes with respect to the lot, parcel, or
unit:
•
0
NOTICE OF SPECIAL TAX
CITY OF NEWPORT BEACH
SPECIAL IMPROVEMENT DISTRICT NO..
COUNTY OF ORANGE, CALIFORNIA
TO: THE PROSPECTIVE PURCHASER OF THE REAL PROPERTY KNOWN AS:
• THIS IS A NOTIFICATION TO YOU PRIOR TO YOUR ENTERING INTO A
CONTRACT TO PURCHASE THIS PROPERTY. THE SELLER IS REQUIRED TO
GIVE YOU THIS NOTICE AND TO OBTAIN A COPY SIGNED BY YOU TO
INDICATE THAT YOU HAVE RECEIVED AND READ A COPY OF THIS NOTICE.
(1) This property is subject to a special tax, which is in addition to the regular
property taxes and any other charges, fees special taxes, and benefit assessments on
the parcel. It is imposed on this property because it is a new development, and may
not be imposed generally upon property outside of this new development. If you fail
to pay this tax when due each year, the property may be foreclosed upon and sold.
The tax is used to provide public facilities or services that are likely to particularly
benefit the property. YOU SHOULD TAKE THIS TAX AND THE BENEFITS FROM
THE PUBLIC FACILITIES AND SERVICES FOR WHICH IT PAYS INTO ACCOUNT
IN DECIDING WHETHER TO BUY THIS PROPERTY.
(2) The maximum special tax which may be levied against this parcel to pay
for public facilities is $__ during the -__ tax year. This amount will
increase by _ percent per year after that (if applicable). The special tax will be
levied each year until all of the authorized facilities are built and all special tax
bonds are repaid, but in any case not after the -_ tax year. An additional
special tax will be used to pay for ongoing service costs, if applicable. The maximum
amount of this tax is dollars ($__) during the __- tax year. This
amount may increase by � if applicable, and that part may be levied until the
• _ tax year (or forever, as applicable.)
(3) The authorized facilities which are being paid for by the special taxes, and
by the money received from the sale of bonds which are being repaid by the special
taxes, are:
These facilities may not yet have all been constructed or acquired and it is
possible that some may never be constructed or acquired.
In addition, the special taxes may be used to pay for costs of the following
services:
YOU MAY OBTAIN A COPY OF THE RESOLUTION OF FORMATION
WHICH AUTHORIZED CREATION OF THE SPECIAL IMPROVEMENT DISTRICT,
AND WHICH SPECIFIES MORE PRECISELY HOW THE SPECIAL TAX IS
APPORTIONED AND HOW THE PROCEEDS OF THE TAX WILL BE USED, FROM
THE CITY OF NEWPORT BEACH BY CALLING __ (telephone number).
THERE MAY BE A CHARGE FOR THIS DOCUMENT NOT TO EXCEED THE
REASONABLE COST OF PROVIDING THE DOCUMENT.
I (WE) ACKNOWLEDGE THAT I (WE) HAVE READ THIS NOTICE AND
RECEIVED A COPY OF THIS NOTICE PRIOR TO ENTERING INTO A CONTRACT
TO PURCHASE OR DEPOSIT RECEIPT WITH RESPECT TO THE ABOVE-
REFERENCED PROPERTY. I (WE) UNDERSTAND THAT I (WE) MAY
TERMINATE THE CONTRACT TO PURCHASE OR DEPOSIT RECEIPT WITHIN
THREE DAYS AFTER RECEIVING THIS NOTICE IN PERSON OR WITHIN FIVE
DAYS AFTER IT WAS DEPOSITED IN THE MAIL BY GIVING WRITTEN NOTICE
OF THAT TERMINATION TO THE OWNER, SUBDIVIDER OR AGENT SELLING
THE PROPERTY.
DATE:
24
(b) "Subdivision ", as used in subdivision (a), means improved or unimproved land
that is divided or proposed to be divided for the purpose of sale, lease, or financing, whether
immediate or future, into two or more lots, parcels, or units and includes a condominium
project, as defined by Section 1350 of the California Civil Code, a community apartment
project, a stock cooperative, and a limited- equity housing cooperative, as defined in Sections
11004, 11003.2, and 11003.4, respectively, of the California Business and Professions Code.
(c) The buyer shall have three days after delivery in person or five days after
delivery by deposit in the mail of any notice required by this section, to terminate his or her
• agreement by delivery of written notice of that termination to the owner, subdivider, or
agent.
(d) The failure to furnish the notice to the buyer or lessee, and failure of the buyer or
lessee to sign the notice of a special tax, shall not invalidate any grant, conveyance, lease, or
encumbrance.
(e) Any person or entity who willfully violates the provisions of this section shall be
liable to the purchaser of a lot or unit which is subject to the provisions of this section, for
actual damages, and in addition thereto, shall be guilty of a public offense punishable by a
fine in an amount not to exceed five hundred dollars ($500). In an action to enforce such
liability or fine, the prevailing party shall be awarded reasonable attorney's fees.
Section 605. Manner of fixing and collecting charges. For any special improvement
district or zone thereof, the City Council may fix and collect charges in the same manner as
for miscellaneous extended services in county service areas.
Section 606. Use of charges for authorized facilities and services. Any charges
collected pursuant to this Code may only be used for facilities and services authorized by
this Code.
Section 607. Prepayment and satisfaction of special tax lien; notice of cancellation of
lien. In the event that the special tax is permanently satisfied as to a particular parcel of
• land, the Clerk shall prepare and record in the office of the county recorder of the County of
Orange, and the county recorder shall accept for recordation, a Notice of Cancellation of
Special Tax Lien as to that parcel. The Notice of Cancellation of Special Tax Lien shall
identify with particularity the special tax which has been prepaid and permanently satisfied,
shall state the book and page number in the records of the county recorder where the Notice
of Special Tax Lien being canceled is recorded, shall contain the legal description and
assessor's parcel number of the particular parcel of land subject to the lien, and shall contain
the name of the owner of record of the parcel. The recorder shall mail the original Notice
of Cancellation of Special Tax Lien to the owner of the property after recording the
document. The City Council may specify a charge for the preparation and recordation of
this notice.
ARTICLE VII
Section 701. Resolution to incur bonded indebtedness. Whenever the City Council
deems it necessary for the special improvement district to incur a bonded indebtedness, it
shall, by resolution, set forth all of the following:
• (a) A declaration of the necessity for the indebtedness.
(b) The purpose for which the proposed debt is to be incurred.
issue.
(c) The amount of the proposed debt.
(d) The time and place for a hearing by the City Council on the proposed debt
Xi
Section 702. Inclusion of certain costs and estimated costs in proposed bonded
indebtedness. The amount of the proposed bonded indebtedness may include all costs and
estimated costs incidental to, or connected with, the accomplishment of the purpose for
which the proposed debt is to be incurred, including, but not limited to, the estimated costs
of construction or acquisition of buildings, or both; acquisition of land, rights -of -way, water,
sewer, or other capacity or connection fees; satisfaction of contractual obligations relating to
expenses or the advancement of funds for expenses existing at the time the bonds are issued
pursuant to this Code, architectural engineering, inspection, legal, fiscal, and financial
consultant fees; bond and other reserve funds; discount fees; interest on any bonds of the
• district estimated to be due and payable within two years of issuance of the bonds; election
costs; and all costs of issuance of the bonds, including, but not limited to, fees for bond
counsel, costs of obtaining credit ratings, bond insurance premiums, fees for letters of credit,
and other credit enhancements costs, and printing costs.
Section 703. Notice of hearing on resolution. The Clerk shall publish a notice of the
hearing pursuant to Section 6061 of the California Government Code in a newspaper of
general circulation circulated within the district. The notice shall state:
(a) The time and place of the hearing on the proposal to issue debt.
(b) That at the hearing the testimony of all interested persons, including all
persons owning property in the area, for or against the proposed debt issuance, will
be heard.
Section 704. Hearing; proceeding with. At the time and place fixed for the hearing
on the resolution declaring the necessity for incurring the bonded indebtedness or at any
time and place to which the hearing is adjourned, the City Council shall proceed with the
hearing.
Section 705. Hearing; interested persons. At the hearing any person interested,
including persons owning property within the area, may appear and present any matters
material to the questions set forth in the resolution declaring the necessity for incurring the
• bonded indebtedness.
Section 706. Improvement area; resolution designating; application of proceedings.
For purpose of financing of, or contributing to the financing of, specified public facilities, the
City Council may by resolution designate a portion or portions of the district as one or more
improvement areas. An area shall be known as "Improvement Area No. _" of "City of
Newport Beach Special Improvement District No. After the designation of an
improvement area, all proceedings for purposes of a bond election and for the purpose of
levying special taxes for payment of the bonds, or for any other change pursuant to Article
IV, shall apply only to the improvement area for those specified facilities.
Section 707. Resolution; bonded indebtedness. After the City Council has made its
determination pursuant to Section 706, if it deems it necessary to incur the bonded
indebtedness, it shall by resolution state all of the following:
(a) That it deems it necessary to incur the bonded indebtedness.
(b) The purpose for which the bonded indebtedness will be incurred.
(c) Either of the following in accordance with its previous determination:
(1) That the whole of the district will pay for the bonded
indebtedness.
• (2) That a portion of the district will pay for the bonded
indebtedness, which portion shall be described in the resolution of the City
Council made pursuant to Section 706.
(d) The principal amount of debt to be incurred.
(e) The maximum term the bonds to be issued, which term shall not exceed
40 years.
(f) The maximum annual rate of interest to be paid, payable annually or
semiannually, or in part annually and in part semiannually, or in such other
manner as may be provided by the City Council.
(g) That the proposition will be submitted to the voters.
(h) The date of the special improvement district election (which may be
consolidated with a general or special district election including an election to levy a
special tax) at which time the proposition shall be submitted to the voters.
• (i) If the election is not conducted by mail or hand - delivered ballot, the hours
between which the polls shall be open.
(j) If the election is conducted by mail or hand - delivered ballot, the hour
when the ballots are required to be received in the office of the election officer
conducting the election, and that if all qualified electors have voted, the election
shall be closed_
Section 708. Resolution to incur bonded indebtedness; notice of election;
publication. The resolution provided for in Section 707 shall constitute the notice of such
special bond election and such resolution shall be published in a newspaper of general
circulation circulating within the special improvement district.
Section 709. Ballot propositions. Propositions relating to the levy of a special tax, the
incurring of bonded indebtedness, or to establish or change an appropriations limit, or any
combination thereof, under this Code, may be combined into one ballot proposition as
determined by the City Council. The qualified electors for all of these purposes shall be
determined and the election shall be conducted in the same manner as for a special tax
election pursuant to Section 316.
Section 710. Separate ballots. If the area designated in the resolution adopted
pursuant to Section 707 does not include the entire special improvement district, a separate
• ballot shall be prepared for the vote upon the proposition to authorize bonds and to levy a
special tax for payment of such bonds and only the voters entitled thereto shall be given
such ballots.
Section 711. Revenue anticipation bonds; votes required for issuance. A two - thirds
vote shall be required for the issuance of revenue anticipation bonds under authority of this
Code.
Section 712. Resolution relating to form, execution and issuance of bonds. If the
indebtedness is approved by the voters as required under Section 711, the City Council may,
by resolution, at the time or times it deems proper, provide for the following:
(a) The form of the bonds.
(b) The execution of the bonds.
(c) The issuance of any part of the bonds.
(d) The appointment of one or more banks or trust companies within or
outside of the state having the necessary trust powers as trustee, fiscal agent, paying
agent, or bond registrar.
(e) The execution of a trust agreement or indenture securing the bonds.
• (f) The pledge or assignment of any revenues of the special improvement
district to the repayment of the bonds.
(g) The investment of any bond proceeds and other revenues, including
special tax revenues, by the trustee or fiscal agent in any securities or obligations
described in the resolution, indenture, trust agreement, or other instrument
providing for the issuance of the bonds. The resolution may provide for payment to
the United States from any available revenues of a special improvement district of
any excess investment earnings required to be rebated by federal law.
27
(h) The date or dates to be borne by the bonds and the time or times of
maturity of the bonds and the place or places and time or times that the bonds shall
be payable.
(i) The interest, fixed or variable, to be borne by the bonds.
(j) The denominations, form, and registration privileges of the bonds.
(k) Any other terms and conditions determined by the City Council to be
• necessary or desirable.
Section 713. Action to foreclose liens; cumulative remedy; resolution to diligently
pursue foreclosure action; collection of delinquent charges. (a) As a cumulative remedy, if
debt is outstanding, the City Council may, not later than four years after the due date of the
last installment of principal thereof, order that any delinquent special taxes levied in whole
or in part for payment of the debt, together with any penalties, interest, and costs, be
collected by an action brought in the superior court to foreclose the lien of special tax.
(b) The City Council may, by resolution, adopted prior to the issuance of debt under
this Code covenant for the benefit of debt holders to commence and diligently pursue to
completion any foreclosure action regarding delinquent installments of any amount levied
as a special tax for the payment of interest or principal of any bonds that are issued, or may
employ a trustee to do so on behalf of the debt holders. The resolution may specify a
deadline for commencement of the foreclosure action and any other terms and conditions
the City Council determines reasonable regarding the foreclosure action.
(c) Except as provided in Section 718, all special taxes, interest, penalties, costs, fees,
and other charges that are delinquent at the time of the ordering of a foreclosure action
shall be collected in the action. In the event that a lot or parcel of property has not been sold
pursuant to judgment in the foreclosure action at the time that subsequent special taxes
become delinquent, the court may include the subsequent special taxes, interest, penalties,
costs, fees, and other charges in the judgment or modified judgment.
• Section 714. Credit to tax collector on current tax roll of amount foreclosed;
responsibility for amounts not foreclosed; costs of removing sums from tax roll. (a) When
any foreclosure actions are ordered, the tax collector shall be credited upon the current tax
roll with the amount charged on account of the delinquent special taxes to be sued on,
including applicable penalties, interest, and costs, and the tax collector shall be relieved of
further duty in regard thereto. Any amounts not the subject of a foreclosure action shall
remain collectible by the tax collector.
(b) The tax collector may charge the actual cost incurred in removing these sums
from the tax roll. This charge shall be added to the costs to be recovered in the foreclosure
action
Section 715. Dismissal of action before judgment in foreclosure action; payment of
specified amounts. At any time after the tax collector has been relived of his or her duty to
collect sums under Section 714 and before judgment in a foreclosure action, the City
Council or trustee shall dismiss the action upon payment of all of the following:
(a) The amount of any delinquent special taxes together with any penalties,
interest, and costs accrued thereon to date of complete payment hereunder.
(b) Costs of suit, including, but not limited to, litigation guarantees provided
by title companies with respect to all claims of ownership or interest in the subject
• Property -
(c) Attorneys' fees authorized by the local agency.
(d) The tax collector's costs authorized by subdivision (b) of Section 714.
Section 716. Complainant and time for bringing foreclosure action; contents of
complaint. The foreclosure action shall be brought in the name of the City or trustee on
behalf of the bondholders pursuant to Section 713 and may be brought within the time
specified in Section 713. The complaint may be brief and need only include the following
allegations:
NO
(a) That on a stated date, a certain sum of special taxes, levied against the
subject property (describing it) pursuant to this Code, became delinquent.
(b) On that date, bonds issued pursuant to this Code, payable in whole or in
part by the subject special taxes, were outstanding.
(c) That the City Council or trustee has ordered the foreclosure.
• Section 717. Judgment decree; contents; amount; attorney's fees; application of
general foreclosure provisions. Any judgment shall decree the amount of the continuing
lien against each parcel to be foreclosed, and shall order the parcel to be sold on execution as
in other cases of the sale of the real property by process of the court. The judgment amount
shall include reasonable attorneys' fees to be fixed by the court, together with interest,
penalties, and other authorized charges and costs (all calculated up to date of judgment).
The foreclosure action shall be governed and regulated by the provisions of this Code, and
also where not in conflict with this Code, by other provisions of law generally applicable to
foreclosure actions.
Section 718. Price of property sold. Property sold hereunder may not be sold for less
than the amount of the judgment plus postjudgment interest and authorized costs without
the consent of the owners of majority by value of the outstanding bonds.
Section 719. Computation errors; validity of special tax installment, interest or
penalty. No special tax installment, interest or penalties thereon, or deed shall be held
invalid for any error in computation if the error is found to be comparatively negligible, or
is found to be in favor of the owner of the real property affected thereby.
Section 720. Signatures on bonds or coupons; place bonds are payable. The bonds
shall be signed by a signatory authorized to so sign by the City Council and shall be
countersigned by a signatory authorized to so countersign by the City Council . All
signatures on the bonds may be printed, lithographed, or engraved. If any officer whose
• signature appears on the bonds ceases to be that officer before the delivery of the bonds, his
or her signature is as effective as if he or she had remained in office. All bonds shall be
payable at the office of the City Treasurer or at the office of any agent designated by the City.
Section721. Special tax or charge for outstanding bonded debt. When the City
Council provides for the fixing and levying of special taxes and charges for the special
improvement district it shall also provide for the fixing and levying of that amount of
special taxes and charges within the special improvement district which is required for the
payment of the principal of an interest on any outstanding bonded debt of the special
improvement district, including any necessary replenishment or expenditure of bond
reserve funds or accumulation of funds for future bond payments, including any amount
required by federal law to be rebated to the United States on that bonded debt. The special
tax or charge shall be levied and collected by the same officers and at the same time and in
the same manner that all other special taxes and charges are levied and collected for the
special improvement district or in any other manner specified by the City Council. The
special taxes and charges shall not exceed the authority granted by Article III and Article IV.
All of the collections for payment of principal and interest on bonds shall be paid into the
special improvement district bond fund and reserve or other fund for the particular special
improvement district and shall be used solely for the payment of the principal of and
interest on the outstanding bonds of the special improvement district.
Section 722. Action to determine validity of bonds or special tax levy. An action to
determine the validity of bonds issued pursuant to this Code or the validity of any special
• taxes levied pursuant to this Code may be brought pursuant to Chapter 9 (commencing with
Section 860) of Title 10 of Part 2 of the California Code of Civil Procedure but shall,
notwithstanding the time limits specified in Section 860 of the California Code of Civil
Procedure, be commenced within 30 days after the voters approve the issuance of the bonds
or the special tax if the action is brought by an interested person pursuant to Section 863 of
the California Code of Civil Procedure. Any appeal from a judgment in that action or
proceeding shall be commenced within 30 days after entry of judgment.
Section 723. Sale of bonds; bids and bidding. The City may sell the bonds at public or
private sale. However, all bonds sold at public sale shall be sold on sealed proposals to the
highest bidder, after advertising for bids by publication of notice of sale pursuant to Section
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307, not less than 10 days prior to the date of sale in a newspaper of general circulation
circulating in the City. If no bids are received or if the City Council determines that the bids
received are not satisfactory as to price or responsibility of the bidders, the City Council may
reject all bids received, if any, and either readvertise or sell the bonds at private sale.
Section 724. Variable interest rate. The City Council may provide that bonds shall
bear a variable interest rate, and for the manner and intervals in which the rate shall vary.
The variable rate shall not exceed the maximum rate permitted by Section — of the
California Government Code or any other applicable provision of law limiting the
• maximum interest rate on bonds.
Section 725. Force, value and use of bonds; exemption from state taxation. Any
bonds issued by a district organized under the provisions of this Code are hereby given the
same force, value and use as bonds issued by any municipality and shall be exempt from all
taxation within the state.
Section 726. Refunding bonds, resolution. The City Council may, by resolution,
issue new bonds to refund any or all of the district bonds outstanding or improvement area
bonds outstanding that have been issued pursuant to this article.
Section 727. Limitation on issuance of refunding bonds; principal amount of
refunding bonds. Refunding bonds shall not be issued if the total net interest cost to
maturity on the refunding bonds plus the principal amount of the refunding bonds exceeds
the total net interest cost to maturity on the bonds to be refunded plus the principal amount
of the bonds to be refunded. Subject to such limitations, the principal amount of the
refunding bonds may be more than, less than, or the same as the principal amount of the
bonds to be refunded.
Section 728. Reduction of bonded indebtedness by amount of issued refunding
bonds. The total authorized amount of the bonded indebtedness of a district or an
improvement area therein, as approved by the qualified voters thereof, shall not be reduced
by the principal amount of any refunding bonds issued to refund any or all outstanding
• bonds of the district or improvement area.
Section 729. Refunding bonds; issuance without repetition of procedures required
for approval of original bond issue. Except as otherwise provided in this article, the City
Council may issue refunding bonds without repeating any of the procedures required for
the approval of the original bond issue.
Section 730. Refunding bonds; resolution for issuance. If the City Council
determines to issue refunding bonds pursuant to this article it shall adopt a resolution
providing for their issuance. The resolution shall:
(a) Describe the bonds being refunded and state the date on which it is
anticipated that the exchange or purchase necessary to effect the refunding will occur.
(b) Fix the date of the refunding bonds.
(c) Designate the denomination or denominations of the refunding bonds.
(d) Fix the minimum rate or rates of interest to be paid on the refunding
bonds.
(e) Fix the maturity dates of the refunding bonds, which shall not exceed the
latest maturity date of the bonds being refunded.
• (f) Designate the place or places of payment of principal and interest on the
refunding bonds and on the bonds to be refunded.
(g) Describe the form of the refunding bonds.
(h) State the costs of issuing the refunded bonds.
Section 731. Refunding bonds; exchange or sale. The City Council may sell the
refunding bonds at public or private sale. The proceeds of any sale of refunding bonds shall
be applied as provided in this article.
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Section 732. Amount of proceeds and investments in funding fund. The proceeds of
the refunding bonds and the earnings thereon shall be in an amount sufficient to meet
either the requirements of paragraph (a) or paragraph (b) at the time of issuance of the
refunding bonds, as certified by a certified public accountant licensed to practice in this state.
(a) The proceeds (including any amounts in any reserve fund established for
the bonds to be refunded and not needed for purposes of the refunding bonds) and
investments, together with any interest or other gain to be derived from any such
• investment, shall be in an amount sufficient to pay the principal, interest, and
redemption premiums, if any, on the refunded bonds as they become due or at
designated dates prior to maturity and the costs of issuance of the refunding bonds.
(b) The proceeds (including any amounts in any reserve fund established for
the bonds to be refunded and not needed for purposes of the refunding bonds) and
investments, together with any interest or other gain to be derived from any such
investment, shall be in an amount sufficient to pay the principal, interest, and
redemption premiums, if any, on the refunding bonds prior to the maturity of the
bonds to be refunded or prior to a designated date or dates before the maturity of the
bonds to be refunded, the principal and any redemption premiums due on the
refunded bonds at maturity or upon that date or dates, and the designated costs of
issuance of the refunding bonds.
Section 733. Refunding bonds, use of savings, reduction of tax levy. Any savings
achieved through the issuance of refunding bonds shall be used to reduce the special taxes
which were levied to retire the bonds being refunded. At the time the City Council makes a
determination to issue the refunding bonds, it shall determine and cause to be made any
reductions in the annual tax in the district, which reduction shall be made on a pro rata
basis.
Section 734. Callable bonds. Any bonds may be made callable in the document
providing for their terms. When bonds are made callable a statement to that effect shall be
• set forth on the bonds. Callable bonds may be redeemed on any interest payment date prior
to their fixed maturity in the amounts, manner and prices prescribed in the document
providing for their terms.
Section 735. Borrowing money in anticipation of sale of bonds, issuance of
negotiable bond anticipation notes, renewal of notes. (a) The City Council may, by
resolution and without the necessity of calling and holding an election, borrow money in
anticipation of the sale of the bonds which have been authorized pursuant to this article,
but which have not been sold and delivered, issue negotiable bond anticipation notes
therefor, and renew the notes from time to time. The maximum maturity of any such
notes, including the renewals thereof, shall not exceed five years from the date of delivery
of the original notes.
(b) The principal and interest on the notes may be paid from any money available
for their payment. Any portion of the principal or interest which is due and payable shall
be paid from the proceeds of the next sale of bonds in anticipation of which the notes were
issued.
(c) The proceeds of notes issued pursuant to this section may be used for any
purpose for which the bonds in anticipation of which the notes were issued may be used.
(d) The notes shall not be issued in any amount in excess of the aggregate principal
amount of bonds which have been authorized to be issued, less the amount of any bonds of
• such authorized issue which have been previously sold and less the amount of other bond
anticipation notes issued previously and outstanding at that time.
(e) The City Council may, in its resolution authorizing the issuance of notes,
provide that the note shall be subject to call and redemption prior to maturity, at the option
of the City, at such price or prices as may be fixed in the resolution. The resolution shall fix
the method of giving notice of redemption to the holders of notes to be redeemed and the
price or prices at which the note shall be subject to redemption. Any notes that are subject
to call and redemption prior to maturity shall contain a recital to that effect and no note
shall be subject to call or redemption prior to its fixed maturity date unless it contains that
recital.
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(f) The notes shall be issued and sold in the same manner as the bonds.
(g) The notes and the resolution or resolutions authorizing the same may contain
any provisions, conditions, or limitations which a resolution of the City Council may
contain.
(h) The City Council shall, in its resolution authorizing the issuance of notes,
provide a remedy if the anticipated bonds cannot be sold at the time or in the amounts
specified in the resolution, or if any default occurs with respect to the notes. Any remedy
which is so provided shall limit the obligations of property owners within the special
improvement district to the special tax authorized and levied pursuant to this Code, except
that the City Council may enter into an agreement with any of the property owners within
the district pledging some or all of the real property of those property owners who are a
party to the agreement as additional security for the notes. The City Council may authorize
the levy of supplemental special tax in an amount sufficient to secure a note issued
pursuant to this section, if that special tax is fully described as to the rate, method of
apportionment, and conditions under which it may be levied in the resolution of intention
prepared pursuant to Section 305. This special tax shall be subject to the procedures and
voting requirements for any special tax levied under the authority of this Code.
Section 3. This Ordinance shall be in full force and effect from and after the
expiration of thirty (30) days from the date
Attest:
•
I, the undersigned, hereby certify that the foregoing Ordinance was duly and regularly
adopted and passed by the Council of the City of Newport Beach in regular meeting
assembled on the 22nd day of August 1994 by the following vote to wit:
AYE: HEDGES, SANSONE, WATT, TURNER, HART, COX
NOES: NONE
ABSENT: DERAY
ABSTENTION: NONE
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of said
City this 9QJ, day of 1994.
City Clerk