HomeMy WebLinkAboutOrdinance 1505 N.C.S. 02/01/19827, ErFECTIVE DATA
Of ORD-INAW
MAR, _ 3 19,82
11 OH&S.
.1/14/82
ORDINANCE, NO.. 1.,505:'N,,.C;S,
INTRODUCED BY'COUNGILMAN SECONDED'BY--C,OUNCILMAN
JAMES-HARBERSON WILLIAM PERRY
AN'bRD',INANCZ PROVIDING FOR THE CITY 'OF
PETALUMA' MULTI -'FAMILY . I -'FAMILY RESIDENTIAL MORTGAGE
REVE�NUE: 'aOND, LAW INCLUDING GENERAL. `.PROV,ISIONs
AND DEFINITIONS, POWER'S ANDJt 15ROCEDURE,S . TO
ISSUE REVENUE'BONDS D� ANd PURCHASE
TO., MAKE AND 'PURCH,
CONSTRUCTION LOANSOR-MORTGAGE- LOANSBOTH
DIRECTLYAND INDIRECTLY THROUGHLOAN'S TO
LENDERS OR THE PURCHASE' OF 'PART IC'UPAT1ON'
I-NTERESTS,--FOR SPECIFIED PURPOSES'AND CERTAIN
OTHER SUPPLEMENTAL PROVISIONS -
R It, C I T A, -L:,
WHEREAS, The City of Petaluma (the City") is -a
municipal.corporation and charter city ,duly
organized and
existing under,a freeholders" charter pursuant to which the
City has the right and, p�owelr to. make and enforce all laws and
regulations in respect to: municipal affairs and certain other
-matters in accordance with and as more'par-titularly provided
in Sections 3, 5 and 7 of Article XI of the Constitution of
the,`St,ate; of 'California and &ecti-on 2"of the Charter of the
City (the"tharter") -'..and
WHEREAS, the City 'Council of the.City *acting under and
p4rsuant to the powers reserved to, the City -under Sections 3,
5, 'and 7' of Article 11 of' the Constitution of the 'State of
California and under the Charter, f1rids. that the public
-
interest and necessity require the establishment by this
0 t, d, 1 bD:5
Page 1 of 18
procedural ordinance of a procedure"for.the authorization;
is'suan�e and sale of multi -family residential mortgage
revenue bonds.' by� the City, for the purpose , of .making
Construction Loans and Mortgage Loans both directly and
indirectly through Lodns•.to Lenders or, Participation
Purchases, all as defined and specified therein;
NOW, THEREFORE,,sBE:IT ORDAINED, by the Council.of The
City of Petaluma; as'fbllows,:
Chapter 4.,10,is hereby added to the Petaluma
Municipal Code,to read and be numbered as follows:
"Chapter .4.10
CITY OF PETALUMA MULTI-,FAMLY.RESIDENT IAL
MORTGAGE . REVENUE BOND. LAW;: '
ARTICLE
GENERAL PROVISIONS', AND DEFINI:T'IONS'
SEC. 4.10.10.1 CPTAT:ION
This chapter,may be cited. as The City of Petaluma
Multi -Family Residential Mortgage Revenue Bond .Law.
SEC. 4. 10.102 DECLARATI<ONSOF ;NECESS'ITY
a. The, Council hereby finds and.,declare's that it 'is
;necessary, essential, a public purpose,arnd.a municipal affair
f'ox the City. to be, authorized to'•m'ake loans or otherwise
provide funds to finance the development of affordable
multi -family rerit;al housing to meet, a substantial housing
need, identified,in the community:
Page 2.0f 18 Ord. 1505
O
b. The Council further finds and declares that it is
nec'ess.ary, essential, a public purpose and a municipal affair
for the City to make loans. or other w.se, provide, funds to
encourage the availability of adequate housing and home
finance. for persons 'and. families of `low or moderate income,
and to develop viable'communiti:es.by providing decent
housing, enh:ance'd living environment,: ' and" = ncrdased economic
opportunities for persons and fami,L es of'low °,or moderate
income.
SEC. 4.10.103 DEFINITIONS
Unless the context otherwise requires, the terms _defined
in this chapter shall have the following meIanings:
a. "Acqui-siti.on'" means the, ac:quis.ition of a Residence
pursuant to th'e-Program.
b. "Bond's" means -any-bonds,;. notes, certificates,
debentures or other- ob'l.i.gati;ons issued by the City pursuant
to this chapter and payable exclusively from revenues as in
this chapter defined and from any other funds specified in
this chapter upon which such obligations may be madeira charge
and from which they are payable.
c. "C,'ty"° means The City of Petaluma.
d.. J"Construction Loari" means a. 'loan 'made pursuant to
the Program to a :Participating Party to'finance Residential
Constru'ction,, Rehabilitation or Acqu,sti;on, whether such
loan is insured 'or uninsured.
Page 3 of ;18 Ord. 1505
e. "Council" means the City Council of The.City of',.
Petaluina.
f. "Loan to Lender" means a general obligation loan to
a Qualified Mortgage Lender,enabling such mortgage lender to
make one or more Construction Loans or Mortgage Loans:
g. "Local -Code's" means applicable local,, state and
federal standard's for Residential Construction or
Rehabilitation.
h. "Mortgage Loan"' means a long-term loan made
pursuant to the Program to a Par-ticipating Party, which -pis
secured by a mortgage or a deed of trust,.whether insured or
uninsured, and which provides for the permanent financing of
Residences pursuant to this, chapter.,.
i. "P'articipating Party" means any person, company,
corporation, partnership, firm or, other entity or group of
entities` receiving fi'nanc-ing for Residential Construct -ion,
Rehabilitation :o,r,Acquistion pursuant to the Program. No
elective officer of the City shall be eligible to be a
Participating Party.
j. "Participation Purchase" means the purchase:of a
participation in a cashflow from single family mortgage loans
from, a:Qualfied Mortgage Lender.,enabling—such Qualified
Mortgage Lender to make one or more,,Construction Loans or
Mortgage Loans.
.k. "Persons or families of low or moderate income"
means persons and families whose income does not exceed the
Page 4 of 18 Ord. 1505
qualifying limits for, "persons. or..fami..lies of low or moderate-
inc orne." .within -the meaning of Section 167(k)}-('3)(B) of the
Internal Revenue Code of 1954,.-as amended. From time to
time, the City shall adopt by resolution the qualifying
income limits for persons or families -of low or moderate
.income.
1. "Program" means the City's program of making
Construction Loans,and Mortgage Loans both d•ir•ectly and
through Loans to ;Lenders:And Partcrpation Purchases pursuant
to this chapter..
M. "Qualified:Mortgage'Lender"means any mortgage
lender authorizedby the City to add the City pursuant to
this chapter. A Quali:fied•Mortgage.Lender. may be a state or
national bank, a federal- or'state-chartered savings and loan
association,. a trust, company, a mortgage:banker, an insurance
company or other lender authorized to finance multi -family
housing in the State of California, which iscapabl.e of
providing service to or otherwiseaiding the City pursuant to
this chapter.
n. "Rehabilitation" means the making of repairs and
improvements to a substandard residence, so.that'it meets the
requirements of the Local Codes.
o.' "Residence"' means real property improved with a
multi -family rental. residential, st`ructur.e of four or more
units and also includes real property improved with a
commercial or mixed 'resi.dential. and!comme.rcial structure
Page 5 of 18 Ord. 1505
which, in the judgment of the City,,-i.s an integral part of a
residential, neighborhood.
P. "Residential Constructionly .means the construction
of new Residences meeting the requirements of the Local Codes.
q. "Revenues".means amounts received as repayment of
princ'ipal,' interest., and all other charges received by the
City with respect t'o..loans under- this chapter, any proceeds
received by the City from mortgage guaranty insurance on such
loans, all other income and -receipts derived,by the City from
7
the making or purchasing of loans or participations therein
under" this chapter, any amounts received by the City as
i'nvestment earnings on moneys deposited in.a sinking,
redemption, or reserve fund or any other fund securing Bonds
or providing for the payment of the principal of, or interest
on, Bonds and such other moneys as the Council may, in its
discretion, make available therefor.,
ARTICLE 2
PROGRAM LOANS
SEC. 4.10.201 LOANS FOR MUL'TI,-FAMILY RESIDENTIAL
REHABI'LITATION.AND CONSTRUCTION
The City may make.Construction Loans and Mortgage Loans
both directly and through Loans to lenders and' Participation
Purchases to finance Residential Construction., Rehabilitation
and Acquisition, provided that ate least 20% of the dwelling
units of any Residence financed pursuant.to the, Program are
Page 6 Of 18 Ord. 1505
to be occupied by persons or families of low or moderate
income::
SEC. 4.10.202 FIXING FEES,. CHARGES", AND RATES FOR
PROGRAM LQANS,
The City may'fix fees, charges, and interest rates for
Construction Loans.,. Mortgage Loans, Loans to Lenders and
Participation Purchases and may from time to time revise such
fees, charges, and interest rates to, reflect changes in
interest rates on the Ciay'•s Bonds. losses due to defaults,
changes in loan servicing charges. or changes in other
expenses related to -'such loans,. including City administrative
expenses. Any change in interest rate shall conform to the
provisions of Section,1,916.5 of the -California Civil Code,
and shall reflect changes in interest rates on the City's
Bonds, losses due to defaults, changes i°n loan servicing
charges, and changesin such other e_xpen:ses related to the
4
Program.
SEC. 4.10.203' FIXING TERMS AND CONDITIONS OF LOANS
The City may fix •the character, terinz and conditions
upon which Constructaon.Loans, Mortgage Loans, Loans to
Lenders .and Participation Purchases' may ,be made..
Constructi-on Loans and Mortgage Loans_ made to Participating
Parties through or by Qualified_Mortgage,'Lenders, and Loans
to Lenders. made to and Participation Pirchases made from
Qualified Mortgage Lenders, shall be: of such character and on
such terms and conditions as are:.established by the City.
The full amount owed on any such loam may be made due and
Page 7 o,f, , 18 Ord. 150.5
payable upon salve or other transfer of ownership of the
Residence financed by such loan and upon such'te'rms.and
conditions as, may be establi.:shed by the City.
SEC. 4.10.204 SERVICING OF LOANS
The City may fix fees for, servicing of, 'loans by
Qualified Mortgage Lenders.
SEC. 4.10.205. DEEDS-OF'TRUST OR MORTGAGES AS SECURITY
The City -may hold deeds of -trust or mortgages as
security for Construction Loans, Mortgage :Loans, Loans to
Lenders° and Participation Purchases .arid may pledge or assign
the same" as ' security; fqr- repayment ;of Bonds. Such deeds of:
trust or mortgages may be assigned to, and held on behalf of
the _City b.y:, any, bank or .trust company o:r:other firmnci.a1
institution zppointed'•to act as trustee ,by the City in any
resolution providing -for the issuance of ;Bond's.
SEC. 4.10.206. EMPLO,YMENT'OF EXPERTS AND CONSULTANTS
The City may employ such engineering, architectural,
financial,' accounting,,, 'legal 'or other- .pro'fessional._services
as may be necessary in the judgment. of the.City for the
purposes .of ..this chapter:
SEC 4. 10.207 ACQtII`SIT'ION: _.OF LAND
The City may :acquire by deeds. purchase,lease.., contract,
gift, dev..ice or . -otherwise any real • or personal' property;,
structures, rights, rights -of -way, franchises, easements.,,and
other interest in lands necessary' 'or .convenient for the,
purposes of thi-s chapter, upon such terms and conditions as
Page 8 of 18 Ord.- .1505
i
it deems advisable, and may lease,, sell, or dispose of the
same in such manner 'as may be necessary, desirable or
convenient to carry out the purposes of this chapter.
SEC. 4.10.208 ADD"IT`IONAL POWERS
In addition,to all other .powers specifically granted by
this chapter, the, City may' -do .all things. necessary,' desirable
or convenient to, carry out the purposes of'this chapter.
ARTICLE 3
:BONDS AND NOTES
SEC. 4:10.301 -ISSUANCE QE LI-MITED. OBLIGAt ION BONDS
a. The City.may, from time to time,. issue Bonds for
any of the purposes specified in Section 4.1'0.201. Bonds
shall be..nego.t:i,able instruments for all purposes, subject
only to the provi ions of such Bonds for registration.
b. Every issue of Bonds shall -be a limited obligation
of the :City payable from -'all or any sp°ecif' ed part of the
revenuers and the moneys and assets authorized'in.this chapter
to be pledged or assigned to secure payment of Bonds. Such
revenues, moneys or assets shall be the sole source of
repayment of such issue of Bonds. Bonds issued under the
provisions of this chapter shall not be deemed to constitute
a debt or li.abi.lity of the City or a pledge of the faith and.
credit of theCity but shall be payable solely from, specified
revenues, moneys and assets. The issuance of Bonds shall not
directly, indirectly, or contingently obligate the City to
0
Page 9 of 18 Ord. 1505
levy or pledge any form of taxation or to makeany
appropriation for their payment.
All Bonds shall contain on'the face thereof a statement
to the following effect. -
Neither the faith and credit nor the.taxing power
of The City of Petaluma'is pledged to the payment
of the -principal of 'or interest on.this Bond.
SEC. 4.10.302 AMOUNT OF BONDS
In determining the amount of Bonds to be issued, the
City may include all costs of issuance of such Bond's, reserve
funds, and capitalized interest for such period as the City
may determine.
SEC. 4.10.303 TYPE,, FORM AND SALE OF BONDS
Bonds may be issued ---as serial Bonds, term,Bonds or
installment. -Bonds, or any combination thereof. Bonds shall
be authorized by'resolution of the Council and shall bear
such date or dates,, mature at such time or times, bear
interest at such fixed or variable rate or rates, be payable
at such time or times, be in such denominations., be in such
form, either coupon or regis.ter'ed, carry such registration
privileges, be -executed in such manner, be payable in lawful
money of the.United States of.America at such place or
places, be subject to such terms of :redemption and have such
other terms and conditions as such resolution or any
indenture authorized by,such resol.ut.on :to be entered into by
the City may provide. Bonds may be sold at either public or
private sale and for such prices -as the City shall
Page 10 of 18 Ord. 1505
determine. The City may, sell any Bonds at a price below the
par value thereof. Pending preparation'of,definitive Bonds,
the City may issue temporary Bonds, which, -shall be exchanged
for definitive Bonds when prepared.
SEC. 4.10.304 TERMS.AND CONDITION OF BONDS
Any resolution authorizing any Bonds. or any issue of
Bonds, or„any indenture authorized by .such,resolution to -be
entered into by, the City, may contain provisions.respecting
any of the following terms and c.onditi:ons',',which shall be a
part 'of the contract with the holders; of such Bonds:
a. The terms, conditions and form of such Bonds and
the interest and principal to be paid ther--e`on; .
b. Limitations on the uses and purposs:es-to which the
proceeds of sale of such Bonds may be applied,. and the pledge
or assignment of such proc;eed's to secure the payment of such
Bonds;
C. Limitations on the issuance of additional parity
Bonds, the terms upon which additional parity Bonds: may be
issued and secured; and the refunding of outstanding,Bonds.;
d. The setting aside of reserves and -sinking funds and
the regulation and disposition there'o.;f,.;
e. The pledge or assignment of all or any part of the
revenues and the use and disposition thereof; subject to such
agreements with�the holders of Bonds as may then be
outstanding;
Page 11 of 1'8.. Ord. 1505
f. Limitation on the use of revenues for expenditures
for operating, administration, or, other expenses of the City;
g. Specification of the act's br omissions to act, if
any, which shall constitute a default in the `duties of the
City to holders of such Bonds, and providing the rights and
remedies of such holders in the event of default, including
. any limitations on the _right of actio;n,by individual
Bondholders;
h. The appointment of a corporate: trustee to a:ct on
behalf of the City and the holders -of its Bonds, the pledge
or assignment of loans, deeds of trust, mortgages and any
other contracts to such trustee, and the 'rights of such
trustee;
i.. The mortgaging of any Residence and the site
thereof for the purpose of securing the Bond's;
j. The procedure, if any, by which the terms of any
contract with Bondholders may be amended or abrogated, the
amount of such Bonds the holders of which must consent
thereto, and the.manner in which such, consent may be given;
and
k. Any other provisions which the, 'Council may deem
reasonable and proper for the purposes of this chapter and
the security of the -Bondholders -
SEC. 4.10.305 PLEDGE OF REVENUES.
Any pledge of -revenues or other moneys or.assets
pursuant to the provisions of this chapte"r shall he valid and
Page 12 of 18: Ord. 1505
N
binding from the time such pledge is made: Revenues, moneys
and assets so pledged and thereafter received.,by the City
shall immediately ,be..,subject to the lien of such pledge
without any physical delivery thereof or further act, and the
lien of any such•'pledge,shall be valid and binding as against
all parties having claims, of any kind :in tort; contract, or
otherwise against the City, irrespective of whether such
parties have notice thereof. Neither the resolution nor any
indenture by which a pledge is created need be filed or
recorded except in the records of the City.
SEC. 4:10.306 NO PERSONAL LIABILITY
Neither the members of the Counci , the officers or
employees ofthe City, nor any person executing any Bonds
shall be liable personally on the Bonds or be subject to any
personal. liability or,acco.untability, by reason of the
issuance thereof.
SEC. 4. 10.3 07 •
PURCHASE -OF BONDS BY. CITY
The City shall have the power out of ;any funds available
therefor at its sole optioh. to purchase its'Bonds. The City
may hold, pledge, cancel, or resell such Bonds, subject to
and in,accordanc,e with agreements with the Bondholders.
SEC. 4.10.30'8 COMPELLING PERFORMANCE.
Any holder of Bonds ssued-.under the provisions ,of this
chapter or any, of the coupons appertaining thereto, and any
trustee appointed -pursuant to any resolution authorizing the
issuance of Bonds;,.except to the extent the -rights thereof
Page 13
,of 1.8 Ord. 1505
may be restricted'by such resolution or any-inden'ture
authorized thereby to .be.:entered into by -the C''ty, m.ay,,
either at law or- in equity; by suit, action_, mandamus, or
other roceedin s p g_, protect or enforce any And all rights
specified in-law or in such resolution or .indenture, and may
enforce and compel the performance of all duties required by
this chapter or. by such -resolution or Indenture. to be
performed by the°City or by any officer,..employee, or :agent
thereof, includingfixing, the xin g, ehargi�ng,;, pand collecting of
rates', fees, interes"t., and charges authorized and required by
the provisions of such resolutd.oh, 'or Indenture to be fixed,
established,, and collected.
SEC. 4,10.30.9, REFUNDING BONDS -USE OF PROCEEDS''
a. The City.ma;y issue:Bonds f.o.r the purpose of
refunding -Any Bonds then outstanding including the .payment .of
any redemption premiums thereof and.any interest accrued or,
to accrue to the •earliest subse I. quent'date o,f.redemption,
purchase, or maturity of such ,Bonds, :and,: if deemed advisable
by 'the 'City,. -for the additional purposes 'specifsd in SEC.. :
4.10.201
b. 'The' proceeds of Bond's issued for the purpose of'
refunding any outstanding Bonds.may, in the discretion of 'the
City, be applied to the purchase•or.r-etirem;ent at Maturity or'
redemption of_such outstanding Bonds:.,. either at their
earliest or any subsequent . redemptio'n date or' upon the
purchase or retirement at the maturity thereof. and may,
Page 14 of 18;
Ord. 1505
pending such application be placed' in escrow, to be 'applied
to such purchase or retirement at maturity or redemption on
such date as may b-e determined by the City..
C. Pending use for purchase,, r-e'tirement at maturity or
redemption of outstanding Bonds, any proceeds held in escrow
pursuant to subdivision (b) m'ay be invested and :reinvested as
provided in the res.olut.on or. indenture_. Any interest or
other increment earned or'reali.:ze'd on any such investment may
also be,app.li:ed.to the: payment of the outstanding.Bonds to be
refunded. After the (terms of the escrow have been fully
satisfied and carried out., 'any balance of such proceeds and
any interest.or increment earned or.realized from the
investment thereof may be returned to the City to be used by
it for any lawful purpgse.
d. All Bonds issued pursuant to this.section shall be
subject to the provisions of this chapter ,in'the same manner
and to the same extent as other Bonds issued pursuant to this
chapter.
SEC.. 4.10.310 INDEPENDENT VALID'IT:Y OF THE BONDS
The .validityof the authorization and issuance of any
Bonds is "not. dependent one and shall not be affected in any
way by any pr•oce'edin_gs—taken. by the. C-ity for the making of
any loan 'or the entering into of ;any agreement; or by the
failure to',make any loan or enter into any agreement; for
which -Bonds ;are authorized to be issued under this chapter.
Page 15 of 18 Ord. 1505
m
ARTICLE 4
SUPPLEMENTAL PROVISIONS
SEC. 4.10.401 LIBERAL'' CONSTRUCTION
This chapter, *be i ng . necessary for the welfare of the
City.and its ih abitants;,.shall be libera.11;y construed to
effect its purposes.
SEC 4.10.402 EFFECT .OF OMISSION OR DEFECT
If the jurisdiction of the Council to order the proposed
act is not affected, any omission of any officer or the City'
,in proceedings under this chapter or. any other defect in the
proceedings shall not invalidate the proceedings or Bonds
issued pursuant to this chapter.
SEC. 4.10.403 AUTHORITY
This chapter is full author.ity'for the issuance of Bonds
by the City for the purpo:s,es specified herein..
SEC. 4.10.404 PROVhSIONS OF THIS CHAPTER"ARE.
COMPLETE,ADDITIONAL AND ALTERNATIVE
This chapter shall be deemed to provide a complete,
additional, and alternative method for doing the things
authorized thereby, and shall be regarded as supplemental and
additional to the powers conferred by other laws. The
issuance of Bonds under the provisions o,f. this chapter need
not comply with:the requirements of any other law applicable
to the issuance of Bonds. The purposes authorized hereby may.
be effectuated and —Bonds may be issued for any such purposes
under this chapter notwithstanding that any other law may
Page 16 of 18 Ord. 1505
provide for ;such. purposes or for :the ' issuance of Bonds for
like purposes and without re.g:ard to ,the requirements,
restrictions, ldmitations,. or other pro- iN$dons contained in
any other law.
SEC. 4.10.4015 EFFECT OF PARTIAL VALIDITY
If any provision of this chapter or- the appl,cation,,..
thereof to any person :or circumstance is; held invalid, such
invalidity shall not affect any other provision or
application of this chapter which can be given effect without
the invalid provision or application, and tq_this end the
provi-sions of this chapter are declared -t& be severable. The
Council hereby declares that.it_would have adopted and passed
this chapter and each division, -section, subsection,
sentence, clause, phrase and word hereof, irrespective of the
fact that any one or more of other divisions, sections,
subsections, sentences, clauses, phr;asels or words hereof be
declared invalid or unconstitutional..,"
Section 2. The City 'C:lerk'is hereby -,authorized and
directed to, cause a dopy of this or-iriance:,to be published at
least once in the: Argus,Coizrier with -in . fifteen days after the
adoption of: this ordinance
Section 3. This,ordinanc;e shall take effect and be in
force 30 days after its date .o_f, adoption.
Page 17 of-"18 Ord. 1505
INTRODUCED AND ORDERED POSTED this' 18:day of. January, 19'82.
PASSED AND -ADOPTED this fi rst day of; February
2
1-983(, by the following. vote:
AYES: PERRY, HARBERSON,; BOND; BALSHAW, BATTAGLIA, VICE` MAYOR CAVANAGH, MAYOR ,MATTEI
NOES: NONE .
ABSENT: NONE:
ABSTAINING. 'NONE
Mayor
Attest: 112 . /)1,2
r
Y
Approve To Form
City Attorney
Page- 18 of 18
Ord. 1505