RES 90059 - Laserfiche WebLink

The lien of the Bonds are subordinate to a prior lien of $83,104. The unpaid reassessments, together with interest on the declining balances, will be collected in annual installments on the tax roll on which general taxes on real property are collected and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and properties upon which the reassessments are levied are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes. Obligation of the City Upon Delinquency The City has not obligated itself to advance available funds from the City treasury to cure any deficiency which may occur in the Bond Redemption Fund. A determination not to obligate itself shall not prevent the City from, in its sole discretion, so advancing funds. Therefore, if a delinquency occurs in the payment of any reassessment installments, the City, at the end of the fiscal year of delinquen~ has a duty to transfer into the Redemption Fund the amount of the delinquency out of available funds of the City. Available funds consist of the balance in the Reserve Fund only. This duty of the City is continuing during the period of delinquency, until reinstatement, redemption or sale of the delinquent property. There is no assurance that funds will be available for this purpose and if, during the period of delinquency, there are insufficient available funds, a delay may occur in payments to the owners of the Bonds. For information of City Finances, see Appendix C herein. See also "Bond Reserve Fund" below, and "BONDOWNERS' RISKS" herein. Reserve Fund The Bond Resolution provides for the establishment of a special reserve fund (the "Reserve Fund") for Dublin Canyon Road Reassessment District No. 1990-1 to be held by the City as a separate trust account. The Reserve Fund shall be a source of available funds from which the City can make payment of delinquent reassessment installments with respect to the Bonds. Payments from the Reserve Fund, if required, shall be deemed an advance to be reimbursed from the proceeds of the reinstatement, redemption or sale of the delinquent roperty. _Tt2,,e Reserve Fund shall be funded from Bond proceeds in an amount equal to 62,400 (the Reserve Requirement"). Covenant to Commence Superior Court Foreclosure The Bond Law provides that in the event any reassessment or installment thereof or any interest thereon is not paid when due, the City may order the institution of a court action to foreclose the lien of the unpaid reassessment. In such action, the real property subject to the unpaid reassessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. However, by the resolution providing for the issuance of Bonds the City covenants with the owners of the Bonds that, not later than October 1 in any year, the City shall file an action in the Superior Court to foreclose the lien of each delinquent reassessment if the sum of uncured reassessment delinquencies for the preceding fiscal year exceeds five percent (5%) of the reassessment installments posted to the tax roll for that fiscal year, and if the amount of the Reserve Fund is less than the Reserve Requirement. Prior to July 1, 1983 the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under recently enacted legislation, effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 120 days must elapse after a court adjudges and decrees a lien against the lot or parcel of land covered by an assessment before the sale of such parcel can be given. Furthermore, if the purchaser at the sale is the judgment creditor, i.e., the City, an action may be commenced by the delinquent property owner within six months after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation which repeals the