A fund for the purpose of guaranteeing, to the extent of such fund, and in the manner provided in this chapter, the payment of the city's local improvement bonds and warrants, issued to pay for any local improvement ordered subsequent to the date of the ordinance codified in this chapter is established.
(Ord. 213 § 1, 1938)
Such fund shall be designated local improvement guaranty fund. For the purpose of maintaining such fund, the city issuing local improvement bonds or warrants after the date of the ordinance codified in this chapter shall be deemed and held to have pledged to the fund a tax credit of the city in an amount equal to five percent of the bonds or warrants so issued. The credit so pledged shall not constitute an indebtedness of the city within the meaning of any statutory or charter provisions or limitation respecting indebtedness. Such pledge shall be deemed to have been made, as to any particular local improvement district, upon the delivery of the roll to the clerk of the city for collection. Such pledged tax credits, with the other resources of the fund enumerated in SMC § 3.16.030 and § 3.16.040, constitute a reserve wherewith to purchase defaulted bonds and warrants guaranteed by the fund. Among the several issues of bonds or warrants guaranteed by the fund, no preference shall exist, but defaulted interest coupons, bonds and warrants shall he purchased out of the fund in the order of their presentation.
(Ord. 213 § 2, 1938)
After the creation of such guaranty fund, the city shall levy, from time to time, as other taxes are levied, such sums as may be needed to meet the financial requirements of the fund, but not in excess of the total of the tax credits pledged by this act to the guaranty fund. Whenever there shall be paid out of a guaranty fund any sum on account of principal or interest of a local improvement bond or warrant, the city as trustee for the fund, shall be subrogated to all the rights of the holder of the bond or interest coupon or warrant so paid; and the proceeds thereof, or of the assessment underlying the same, shall become part of the guaranty fund. There shall also be paid into each guaranty fund the interest received from bank deposits of the fund, as well as any surplus remaining in any local improvement fund guaranteed under this chapter after the payment of all outstanding bonds or warrants payable primarily out of such local improvement fund. Warrants drawing interest at a rate not to exceed six percent shall be issued, as other warrants are issued by the city, against a guaranty fund to meet any liability occurring against it. At the time of making its annual budget and tax levy, the city shall provide for the levying of a sum sufficient with the other resources of the fund, to pay warrants so issued during the preceding fiscal year; provided, that no warrants shall be issued against the guaranty fund in excess of the cash therein and the tax credits pledged thereto as provided in SMC § 3.16.020; provided further, that no taxes shall be levied for the fund in excess of the tax credits so pledged by SMC § 3.16.020, and that the tax levies directed in this chapter shall be additional to and if need be in excess of, any and all statutory and charter limitations applicable to the tax levies of the city.
(Ord. 213 § 3, 1938)
So much of the money of a guaranty fund as is necessary may be used to purchase certificates of delinquency for general taxes on property subject to local improvement assessments underlying bonds or warrants guaranteed by the fund, or to purchase such property at county tax foreclosures or from the county after foreclosure, for the purpose of protecting the guaranty fund. The fund shall be subrogated to the rights of the city, and the city may foreclose the lien of general tax certificates of delinquency, and purchase the property at the foreclosure sale. After so acquiring title to real property, the city may lease or sell and convey the same at public or private sale for such price and on such terms as may be determined by resolution of the city council, any provisions of law, charter or ordinance to the contrary notwithstanding. All proceeds resulting from such sales shall belong to and be paid into the guaranty fund.
(Ord. 213 § 3, 1938)
Neither the holder nor the owner of any bond issued under the provisions of this act shall have any claim therefor against the city, except for payment from the special assessments made for the improvement for which the bond was issued, and except as against the local improvement guaranty fund of the city. The city shall not be liable to any holder or owner of such bond or warrant for any loss to the guaranty fund occurring in the lawful operation thereof by the city. The remedy of the holder or owner of a bond, in case of nonpayment, shall be confined to the enforcement of the assessment and to the guaranty fund.
(Ord. 213 § 4, 1938)