[1]
For statutory authority for local improvement guaranty fund, see Chapter 35.54 RCW.
There is hereby created a local improvement guaranty fund for the city of Clarkston, which is designated hereby as the local improvement guaranty fund of said city for the purpose of guaranteeing, to the extent of such fund as limited by, and as provided by, this chapter, the payment of local improvement bonds and warrants, both principal and interest thereof, issued subsequent to April 7, 1926, by the city, and which may be issued hereafter by the city; which said local improvement guaranty fund shall be maintained by the treasurer of this city in his office, and into the fund there shall be paid all moneys hereinafter described, which fund and moneys shall be devoted solely to the foregoing purposes and as provided in this chapter.
(Ord. 304 § 1, 1928)
The city of Clarkston shall maintain at all times, solely from and out of the proceeds of the tax levies and other moneys herein described in the local improvement guaranty fund, moneys in an amount equalling, but not exceeding, five percent of the face of the local improvement obligations at any time outstanding and guaranteed by this chapter and by the creation and maintenance of said fund. The city shall and will do all things necessary in the manner permitted and provided by law in order to maintain the guaranty fund for the foregoing purposes by the provisions of this chapter, so that there shall be in the fund at all times such sums as may be necessary to meet the financial requirements thereof, as provided by law and by this section and elsewhere in this chapter. In the event of the nonpayment of the principal or interest of any such bonds or warrants, the holder or owner thereof shall have the right, in addition to all other remedies provided by law, to resort to such guaranty fund for the further payment of such bonds and warrants, to the extent, and in the manner, prescribed by law and by this chapter; provided, however, that as among the several issues of bonds or warrants which shall be guaranteed by said local improvement guaranty fund no preference shall exist, but defaulted bonds and warrants, and defaulted interest coupons, shall be protected under the provisions of this chapter by the purchase thereof out of and by the moneys in the fund or by warrants drawn thereon and payable thereout in the order of the presentation of such defaulted bonds, warrants and interest coupons to the city treasurer after their respective defaults.
(Ord. 304 § 2, 1928)
The city council shall from time to time and in each year hereafter if necessary, in order to meet the financial requirements of the fund and for the purpose of maintaining said fund as required hereby, levy, in addition to all other taxes and if necessary in excess of any statutory limitations applicable to tax levies by this city, as other taxes are levied, such sums as may be necessary to meet the financial requirements thereof and to maintain in such guaranty fund moneys in the amount herein ordained. At the time of making its annual budget and tax levy in each year the city, by its proper officers, shall provide for the levying of a sum sufficient, together with other moneys in the local improvement guaranty fund, in order to pay the outstanding and unpaid warrants issued on and against the guaranty fund during the preceding fiscal year and, in addition thereto, to establish and maintain in said fund a balance, which taken together with the amount levied for the payment of the warrants, shall equal, but shall not exceed, five percent of the amount of the outstanding obligations guaranteed by said fund; provided, that the warrants which may be issued on and against the local improvement guaranty fund, as other warrants are issued by said city, shall in no year be issued for an amount in excess of five percent of the outstanding bond obligations guaranteed by said fund. The warrants which may be drawn against the guaranty fund to meet any liability accruing against it under the provisions of this chapter shall bear interest at the rate of interest borne by the obligations thus guaranteed but not in any event in excess of six percent per annum.
(Ord. 304 § 3, 1928)
The city and the proper officer thereof shall pay into such guaranty fund any and all interest received from bank deposits of the moneys therein. The city and the proper officers thereof shall cause to be transferred, and shall transfer, into the guaranty fund any surplus moneys remaining in any local improvement fund whose obligations are, or may be, guaranteed hereunder after the payment of all outstanding bonds and warrants which are payable primarily out of such special local improvement district fund. The interest from the bank deposits and the surplus shall become a part of the local improvement guaranty fund and the amounts thereof, upon being transferred unto and deposited in the guaranty fund, shall be taken into consideration in estimating and determining the necessary annual tax levy required to be made by this city as provided in this chapter. The interest shall be paid into the fund immediately upon the receipt thereof by the treasurer of this city. Any surplus remaining in any special local improvement district fund shall be transferred and paid into the guaranty fund immediately upon and after the payment of the last outstanding obligation which is payable, as aforesaid, primarily out of the special local improvement district fund.
(Ord. 304 § 4, 1928)
The city of Clarkston, as a municipality, shall be the trustee of said fund for the benefit of the owners and holders of the obligations guaranteed thereby. Upon the payment out of the guaranty fund of any sum on account of principal or interest of any obligation guaranteed thereby, the city of Clarkston as such trustee shall be subrogated to all the rights of the holder and owner of the bond, interest coupon, or warrant so purchased and thus paid by the city, in and to the obligation thus purchased and paid and in and to the proceeds thereof and in and to the local improvement district assessment underlying the same. The obligations purchased and paid and the proceeds thereof and the local improvement district assessment underlying the obligations shall be held by the city as such trustee for the benefit of, and shall become a part of, the guaranty fund. The money proceeds arising from the foregoing, upon and after the deposit of such money proceeds in the guaranty fund, shall be taken into consideration in estimating and determining the necessary annual tax levy required to be made by this city as provided in this chapter. The city, by virtue of the foregoing subrogation, shall have the right to foreclose said underlying assessments and to do all things necessary or proper to the effective foreclosure thereof, as might be done by the individual owner and holder of the obligations secured by such underlying assessments, in addition to any and all rights in relation thereto, or in connection with the foreclosure thereof had by the city in its own right as a municipality of the state of Washington. The proceeds arising from any foreclosure shall be deposited in and shall become a part of the guaranty fund. The amount of the deposit, upon and after being made, shall be taken into consideration in estimating and determining the necessary annual tax levy required to be made by this city as provided in this chapter.
(Ord. 304 § 5, 1928)
The city of Clarkston shall not be required to perform the guaranty of any obligations by the purchase thereof out of the guaranty fund, or by the issuance of warrants drawn on and against the local improvement guaranty fund, as provided in this chapter, prior to default in the payment of such bond, warrant or interest obligations. Acting as such trustee, and for the purpose of protecting the guaranty fund, so much of the guaranty fund moneys as are necessary may be used by the city, in its discretion, to purchase certificates of delinquency for general taxes on property subject to local improvement assessments which underlie bonds or warrants which are guaranteed by the guaranty fund, or to purchase such property at county tax foreclosure sales or from the county after foreclosure and sale. In the event of the purchase of such certificates of delinquency the city may foreclose the lien thereof and may purchase the same at foreclosure sale ensuing therein for the benefit of the guaranty fund. After acquiring title to such property the city may lease or sell and convey the same at public or private sale at the price and on the terms as in the discretion of the city may be determined by resolution of the city council. All proceeds resulting from foreclosure sales and from leases and sales aforesaid shall belong to and be paid into the guaranty fund and become a part thereof. Upon the payment into the guaranty fund of such money proceeds, the proceeds shall be taken into consideration in estimating and determining the necessary annual tax levy required to be made by this city as provided in this chapter.
(Ord. 304 § 6, 1928)
The city of Clarkston shall have all the rights, duties and powers with reference to the maintenance and operation of such guaranty fund as permitted or enjoined by law. The officials of the city of Clarkston are hereby required and enjoined to do any and all things necessary for the establishment, maintenance, conduct and operation of the guaranty fund for the purposes specified in this chapter and as required by law. The treasurer of the city is hereby authorized, directed and required to establish and maintain in his office as treasurer of the city the foregoing local improvement guaranty fund, to pay in, to pay out, to maintain and to conduct the guaranty fund, strictly in accordance with the provisions of this chapter and as required by law. The city treasurer is further authorized, directed and required to maintain and keep in his office the following: true and accurate accounts and records of all funds in, and all funds paid into or out of said guaranty fund, true and correct statements and records of the sources and origin of all moneys in the guaranty fund, true and exact accounts and records of all bonds, warrants, or interest, redeemed, paid or purchased, or tax certificates or lands purchased and leased or sold in the conduct of such guaranty fund, the specific local improvement district funds paid into the guaranty fund, and the bonds and warrants and interest thereon, for the security, payment or solution of which, in whole or in part, the moneys of such guaranty fund may be maintained and used.
(Ord. 304 § 7, 1928)
There shall be plainly written, printed or engraved on each local improvement bond issued by the city and guaranteed under the provisions of the guaranty fund hereby created, a copy of the following paragraph:
This local improvement district bond is issued pursuant to the laws of Washington and to Section 5 of Chapter 141 of the 1923 Session Laws of Washington, as amended, by Section 5 of Chapter 209 of the 1927 Session Laws of Washington, of which said Section 5, as amended, the following is a true copy, viz:
"Section 5: Neither the holder nor the owner of any bond or warrant issued under the provisions of this act shall have any claim therefor against the city or town by which the same is issued, except for payment from the special assessments made for the improvement for which said bond or warrant was issued, and except as against the local improvement guaranty fund of such city or town, and the city or town 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 or town. The remedy of the holder or owner of a bond, or warrant in case of nonpayment, shall be confined to the enforcement of the assessment and to the guaranty fund."
The duty and obligation of the city of Clarkston under the guaranty expressed in this chapter are hereby expressly limited in accordance with the foregoing provisions of said Section 5 of said statute, as amended. The city further reserves the right to prescribe by ordinance further appropriate rules and regulations for the maintenance and operation of the foregoing guaranty fund not inconsistent with the guaranty and security hereby created.
(Ord. 304 § 8, 1928)
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Statutory authority as to liability and remedies, see RCW 35.45.070 – Nonliability of city or town; 35.45.080 – Remedy of bond holders,
Before ordering any improvement the bonds and warrants of which shall be guaranteed under the provisions of this chapter, the city council shall require and receive a report from the city engineer certifying in detail the local improvement assessments outstanding and unpaid against the property in the proposed district, together with the aggregate of the actual value of the real property in the district, exclusive of improvements thereon, according to the valuation last placed upon it for the purpose of general taxation. The city engineer is hereby designated by this chapter as the proper officer and authority to prepare and file such report, as required by Section 4 of Chapter 209 of the Session Laws of Washington of 1927.
(Ord. 304 § 9, 1928)
Nothing in this chapter shall be construed as in any way changing the time or manner of calling and paying local improvement bonds, nor as repealing or altering in any manner the power and method of levying and collecting assessments and reassessments for the purpose of paying for local improvements. The provisions hereof are cumulative and intended to supplement the existing ordinances of the city in relation to the making of local improvements and the making and collecting of assessments and reassessments to pay therefor.
(Ord. 304 § 10, 1928)