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HomeMy WebLinkAboutOrdinance No. O11-08 ORDINANCE NO. 011-08 AN ORDINANCE AMENDING CHAPTER 12.36 OF THE LAUREL MUNICIPAL CODE RELATING TO SPECIAL IMPROVEMENT DISTRICTS TO COMPLY WITH CHANGES MADE TO MONTANA LAW BY THE 2009 MONTANA LEGISLATURE. WHEREAS, pursuant to Montana Code Annotated, Title 7, Chapter 12, Parts 41 and 42 (the "Act ") and Ordinance No. 300 adopted August 19, 1930 (the "Original Ordinance "), the City of Laurel, Montana (the "City") created the City's Special Improvement District Revolving Fund (the "Revolving Fund ") and provided for transfers thereto from the general fund, annual tax levies therefore and loans therefrom to special improvement district funds of the City; and WHEREAS, pursuant to HB 630, the 2009 Montana State Legislature amended the Act to provide, among other things, that a municipality is permitted to (i) include in the cost of the improvement to be paid from the proceeds of special improvement district bonds or warrants an amount equal to of at least 5% and not more than 10% of the principal amount of the bonds or warrants for its special improvement district revolving fund and (ii) levy a tax upon all taxable property of the municipality to meet the financial requirements of the revolving fund, provided such tax may not exceed 10% of the principal amount of the then - outstanding special improvement district bonds and warrants secured by the revolving fund after all required transfers have been made to the municipality's special improvement district funds through the fiscal year end; and WHEREAS, the City Council of the City deems it to be in the best interest of the City to amend the existing Ordinance as provided herein to permit the City to fund the Revolving Fund from the proceeds of its special improvement district bonds in an amount of up to 10% of the principal amount of such bonds and to levy a tax upon all taxable property of the City in an amount of up to 10% of the principal amount of the then - outstanding special improvement district bonds to meet the financial requirements of the Revolving Fund, all in accordance with the Act, as amended, and to make other amendments consistent with the Act, as amended. NOW THEREFORE, BE IT ORDAINED by the City Council, Chapter 12.36 is modified and replaced as follows: SPECIAL IMPROVEMENT DISTRICTS 12.36.090 Special Improvement District Revolving fund. 12.36.090 Special Improvement District Revolving fund. • • - e • ! , ' ' To secure the p rompt payment of principal of d interest on special improvement district bonds or warrants issued by the City pursuant to the Act and determined by the Council to be so secured in accordance with the Act (collectively, the "Bonds "), there has been created and established pursuant to Sections 7 -12 -4221 through 7 -12 -4227 of the Act a Revolving Fund to be kept and 011 -08 SID Revolving Fund maintained by the City Clerk/Treasurer separate and apart from all other funds of the City, and designated as the "Special Improvement District Revolving Fund." A. Funding of Revolving Fund. To provide funds for the Revolving Fund, the City: 1. From the proceeds of an issue of Bonds, shall deposit at least 5% and not more than 10% of the original principal amount thereof in the Revolving Fund, as authorized and required by Section 7 -12- 4169(2) of the Act; 2. May, in its discretion and from time to time, but subject to the final paragraph of this Section 2, transfer to the Revolving Fund from the general fund of the City such amount or amounts as may be deemed necessary, and such amounts so transferred shall be considered to be loans from the general fund to the Revolving Fund; and 3. Shall, in addition to or in lieu of such transfers from the general fund, but subject to the final paragraph of this Section 2, levy and collect for the Revolving Fund a property tax on all of the taxable property in the City in amounts and at times sufficient to meet the financial requirements of the Revolving Fund. The aggregate amount of the levies and transfers authorized by clauses (b) and (c) above shall not cause the balance in the Revolving Fund to exceed 10% of the principal amount of the Bonds then outstanding after all required transfers have been made to the district funds through fiscal year end. B. Loans from Revolving Fund. Whenever the principal of or interest on any Bond shall become due and payable during the period of the undertaking of the City to pledge the Revolving Fund to the payment thereof as provided in Section 7- 12- 4225(b) of the Act, and there shall then be either no money or insufficient money to pay the same in the special improvement district fund upon which the Bond is drawn (after the exhaustion of the district reserve account for the district, if any, as provided in Section 7 -12 -4169 of the Act), an amount sufficient to make up the deficiency shall be loaned by the Revolving Fund to such district fund, to the extent such funds are available, as provided in the next succeeding paragraph Thereupon, the principal of or interest on such Bond shall be paid from the money in the district fund, as supplemented by the loan. In the event that the balance on hand in the Revolving Fund fifteen days prior to any date when interest is due on any Bonds is not sufficient to make good all deficiencies then existing in the special improvement district funds for which Bonds are outstanding, the balance on hand in the Revolving Fund shall be allocated to the funds of the special improvement districts in which such deficiencies then exist in proportion to the amounts of the deficiencies, until all interest accrued on all Bonds has been paid. On any date when all accrued interest on Bonds has been paid, any balance remaining in the Revolving Fund shall be loaned or advanced to the special improvement district fund for payment and redemption of Bonds to the extent the special improvement district fund is deficient for such purpose, and, if money in the Revolving Fund is insufficient for all Bonds then to be paid or redeemed, in an amount proportionate to the amount of such deficiencies. 011 -08 SID Revolving Fund C. Lien and Loan Repayment. Whenever any loan is made to any special improvement district fund from the Revolving Fund, the Revolving Fund shall have a lien therefore on the land within the district which is delinquent in the payment of its assessments and on all unpaid assessments and installments of assessments on such district (whether delinquent or not) and on all money thereafter coming into such district fund, to the amount of such loan, together with interest thereon from the time it was made at the rate of interest borne by the Bond with respect to which such loan was made. Whenever there is money in the special improvement district fund which is not required to pay principal of or interest on any Bond, so much of such money as may be necessary to pay the loan provided for in Section 3 shall, by order of the City Council, be transferred to the Revolving Fund. After all of the Bonds drawn on any special improvement district have been fully paid, all money remaining in such district fund including the district reserve account), or so much of such money as may be necessary to pay the loan provided for in Section 3, shall, by order of the City Council, be transferred to the Revolving Fund; provided, however, if the City Council determines that the balance in the Revolving Fund is adequate for the purposes thereof the City Council, in its discretion, may transfer money in the district fund (but not money in the district reserve account) to the district's maintenance fund. If after all the Bonds drawn on any special improvement district have been fully paid and all moneys remaining in such district fund have been transferred to the Revolving Fund and the loan from the Revolving Fund pursuant to Section 3 has not been fully repaid, the City Council may foreclose the lien upon property within the district owing unpaid assessments to the district for the purpose of paying off said loan to the Revolving Fund. D. Covenants To Utilize Revolving Fund. In connection with the sale and issuance of special improvement district bonds or warrants, the City Council may undertake and agree to secure said bonds or warrants by the Revolving Fund and to issue orders annually authorizing loans or advances from the Revolving Fund to the district fund upon which the bonds or warrants are drawn in amounts sufficient to make good any deficiency in the bond and interest accounts thereof to the extent that funds are available in the Revolving Fund; and the City Council may further undertake and agree to provide funds for the Revolving Fund by annually making the tax levy or, in lieu thereof the transfers from the general fund provided in Section 2, subject to any limitations imposed by law. Such covenants to utilize the Revolving Fund in connection with a particular issue of Bonds shall be binding upon the City so long as any principal of or interest on such Bonds remains unpaid or as otherwise then provided by law or in the resolution authorizing the issuance of such Bonds. E. Surplus Funds in Revolving Fund. Subject to any covenants undertaken by the City Council pursuant to Section 5, whenever the moneys on deposit in the Revolving Fund exceed 10% of the principal amount of the Bonds then outstanding, the City Council may order all or any part of the amount the City Council considers greater than the amount necessary to be transferred to the general fund of the City. 011 -08 SID Revolving Fund F. Effect. This Ordinance amends and replaces Chapter 12.36 of the Laurel Municipal Code in its entirety, but it shall not cause the cessation of the Revolving Fund or reduce the security of any Bond currently secured by the Revolving Fund. This Ordinance shall take effect after 30 days of its passage by the City Council and approval by the Mayor. The Revolving Fund of the City shall continue in existence and amounts deposited therein shall, from and after the effective date of this Ordinance, be governed by this Ordinance until further amended by the City Council. This Ordinance shall become effective thirty (30) days after final passage by the City Council and approved by the Mayor. Introduced and passed on first reading at a regular meeting of the City Council on September 6, 2011, by Council Member Eaton • PASSED and ADOPTED by the Laurel City Council on second reading this 4 day of October, 2011, upon motion of Council Member Eaton APPROVED BY THE MAYOR this 4 day of October, 2011. CITY OF LAUREL - eth E. Olson, Jr., May ATTEST) 4,L LL) Shirley Ewan, Clerk/Treasurer .proved as to form: am Painter, Legal Counsel Elk River Law Office, P.L.L.P. 011 -08 SID Revolving Fund