The assembly shall establish a local improvement guaranty fund of the city and borough (herein at times called the “guaranty fund”) for the purpose of guaranteeing the payment of the principal of all special assessment bonds, notes, and warrants issued upon any special assessment district funds. The money in the guaranty fund shall be accounted for separately from all other money and funds of the city and borough in the central treasury and shall be held in trust for the uses and purposes herein provided.
Prior to the issuance of any special assessment fund warrants, notes or bonds, the city and borough shall acknowledge the moneys in the guaranty fund shall not be less than 10 percent of the principal amount of all physical assessment fund warrants and bonds. The city and borough shall always maintain in the guaranty fund an amount not less than 10 percent of the principal amount of all outstanding special assessment fund warrants, notes and bonds then outstanding. Any moneys paid out of the guaranty fund to redeem special assessment district bonds, notes or warrants shall be replaced by the city and borough as soon as possible out of any legally available sources.
(S.G.C. 17.28.010; S.C.C. 3-9-45; Ord. 86-688 § 4, 1986; Ord. 96-1386 § 4, 1996)
Defaulted special assessment bonds, notes, and special assessment fund warrants shall be purchased out of the guaranty fund, and as between the several issues of bonds, notes or warrants no preference shall exist, but they shall be purchased in the order of their presentation.
Whenever any sum is paid out of the guaranty fund on account of principal or interest on a special assessment district bond, note or warrant, the city and borough as trustee of such fund shall be subrogated to all the rights of the holder of such bond, note or warrant so paid, and the proceeds thereof or of the underlying assessment shall become a part of the guaranty fund.
All interest and earnings derived from the investment of moneys in the guaranty fund shall be credited to such fund.
Money received from actions taken against property for nonpayment of assessments shall be credited to the guaranty fund.
As provided in SGC § 17.20.080, if special assessment district bonds or notes have been issued all moneys remaining in any L.I.D. fund or of any special assessment district fund after all costs of improvements in such district including the redemption of all warrants, notes and bonds of such district have been paid shall also be paid into the guaranty fund.
Should the assembly, after determining that the amount in the guaranty fund meets all required guaranty requirements plus foreseeable future requirements, find there are excess moneys in the guaranty fund, it may authorize transfer of the excess to the revolving fund.
(S.G.C. 17.28.020; S.C.C. 3-9-46; Ord. 86-688 § 4, 1986)