Chapter 34
COMMUNITY FACILITIES DISTRICTS
Articles:
1. General Provisions
2. Proceedings
3. Special Tax
4. Changes in Term of District, Authorized Special Improvement, and
Special Tax
5. Early Termination of District
6. Annexation of Territory
7. Bonds
Article 1. General Provisions
Sections:
34-1.1 Definitions.
34-1.2 Provision of alternate method of financing special improvements.
34-1.3 Superiority over conflicting provision of other ordinance.
34-1.4 Limitation on challenges.
34-1.5 Types of special improvements.
34-1.6 Payment of existing assessments or debt service.
34-1.7 Advances of funds, work, or property in-kind.
34-1.8 Construction of chapter.
34-1.9 Validity of proceedings.
Sec. 34-1.1 Definitions.
The following definitions shall apply for the purposes of this chapter.
"Bond ordinance" means an ordinance which authorizes the issuance of community facilities district
bonds.
"Bonds" means community facilities district bonds (including refunding bonds) issued pursuant to this
chapter.
"City clerk" means the city clerk of the City and County of Honolulu.
"Community facilities district" or "district" means a district of land established by the
city pursuant to this chapter for financing special improvements.
"Cost of a special improvement" means the following:
(1) Cost of acquiring, constructing, installing, improving, or rehabilitating a special improvement;
(2) Cost of acquiring real property or right-of-way for a special improvement;
(3) Payment of water, sewer, or other utility connection fee necessary for a special
improvement;
(4) Payment of a planning, architectural, engineering, inspection, legal, financial, or other consultant fee
for a special improvement;
(5) Reimbursement of an advance of funds for acquiring, constructing, installing, improving, or rehabilitating
a special improvement or administrative proceedings to establish a district;
(6) Contribution to a reserve fund for the payment of debt service on bonds
issued for a special improvement;
(7) Not more than two years' worth of interest on bonds for a special
improvement; or
(8) Cost of issuance of bonds for a special improvement, including, but not limited
to, payment of bond counsel or other legal fee, trustee fee, bond insurance
premium, or letter of credit or other credit enhancement cost.
"Debt" means any binding obligation to repay a sum of money, including obligations
in the form of bonds, certificates of participation, long-term leases, or loans from
government agencies, banks, other financial institutions, private businesses, or individuals.
"Financing special improvements by a district" or "financing special improvements" means paying for
the following:
(1) The costs of special improvements through the special taxes levied within a district
or community facilities district bond proceeds; or
(2) The debt service on community facilities district bonds, the proceeds of which have
been used to pay for special improvements.
"Improvement area" means an area within a district designated in accordance with Section
34-2.15.
"Incidental expense of a district" means the following:
(1) Administrative expense of the city associated with the proceedings undertaken pursuant to this
chapter, collection of special taxes, or payment of debt service on bonds; or
(2) Any other expense incidental to the creation or operation of a district.
"Landowner" or "owner of land" is subject to the following:
(1) The term means the owner of land as shown on the real property
tax assessment list, except as otherwise provided under subdivision (2) or (3).
(2) The term means a lessee of land who is not shown as the
owner on the list, unless the fee simple owner files with the council
either of the following before the close of the public hearing on the
establishment of a district or annexation of land to an existing district, as
applicable:
(A) A written statement that the lease does not require the lessee to pay
any proposed special tax and a written undertaking by the owner to pay
any special tax and to refrain from imposing the obligation to pay any
special tax upon any successor lessee; or
(B) A written waiver of any requirement in the lease that the lessee pay
any special tax and a written undertaking by the owner to pay any
proposed special tax and to refrain from imposing the obligation to pay any
special tax upon any successor lessee.
If the fee simple owner files either with the council, the fee simple
owner shall be deemed the "landowner."
(3) The term does not include an entity of the federal, state, or city
government. Such an entity shall have no right to petition under Section 34-2.1,
34-2.7, 34-2.10, 34-4.3, or 34-5.3 or to protest under Section 34-2.9, 34-4.8, 34-5.8,
or 34-6.6. The entity and its land shall be disregarded when computing the
total number of landowners and amount of land eligible for petition or protest
purposes.
Each parcel of land shall be deemed to have one owner, even if
owned by a corporation, partnership, joint tenancy, tenancy by the entirety, tenancy in
common, or other group of persons.
"Ordinance of annexation" means an ordinance which annexes additional land to a district.
"Ordinance of consideration" means an ordinance which changes the term of a district,
special improvements to be financed, or rate or method of apportionment of a
special tax or an ordinance which levies a new special tax within an
existing district.
"Ordinance of early termination" means an ordinance which terminates a district before the
expiration of the term specified in the ordinance of formation.
"Ordinance of formation" means an ordinance which establishes a district.
"Resolution of intention" means a resolution, the adoption of which institutes proceedings to
establish a district.
"Special improvement" means a special improvement referred to in Section 34-1.5.
(Added by Ord. 96-18)
Sec. 34-1.2 Provision of alternate method of financing special improvements.
This chapter is established pursuant to HRS Section 46-80.1. The council may use
the provisions of this chapter in addition to, in combination with, or instead
of any other law for or related to the creation of improvement districts,
the levying, assessment, and collection of special assessments, the financing of improvements, the
issuance of bonds, or other matters covered by this chapter. (Added by Ord.
96-18)
Sec. 34-1.3 Superiority over conflicting provision of other ordinance.
When any provision of this chapter conflicts with any other provision of ordinance,
the provision of this chapter shall prevail. (Added by Ord. 96-18)
Sec. 34-1.4 Limitation on challenges.
Pursuant to HRS Section 46-80.1, no action or proceeding to question the validity
of or enjoin any ordinance, action, or proceeding undertaken pursuant to this chapter
(including the determination of the amount of any special tax levied with respect
to any property or the levy or assessment thereof) or any bonds issued
or to be issued under this chapter shall be maintained, unless begun within
30 days of the effective date of the ordinance, determination, levy, assessment, or
other act, as the case may be. (Added by Ord. 96-18)
Sec. 34-1.5 Types of special improvements.
A district may be established to finance the acquisition, planning, design, construction, installation,
improvement, or rehabilitation of any real property or structure with a useful life
estimated by the council to be five years or longer. Special improvements may
be physically located within or outside a district and may benefit land within
or outside the district.
Special improvements which may be financed by a district include, but are not
limited to, the following:
(1) Streets, roads, highways, bikeways, pedestrian malls, sidewalks, or alleyways, including grading, paving, or
otherwise improving the foregoing;
(2) Public parking facilities;
(3) Lighting systems, including traffic signals, for any public right-of-way;
(4) Local park, recreation, child care, parkway, and open-space facilities;
(5) Libraries, museums, and other cultural facilities;
(6) The undergrounding of natural gas pipeline facilities, telephone lines, facilities for the transmission
or distribution of electrical energy, cable television lines, and other utility facilities. The
city may enter into an agreement with a public utility to utilize those
facilities to provide a particular service and for the conveyance of those facilities
to the public utility. If the facilities are conveyed to the public utility,
the agreement may provide for a refund by the public utility to the
district or improvement area thereof for the cost of the facilities. Any reimbursement
made to the district shall be utilized to reduce the special tax levied
within the district or improvement area or construct or acquire additional special improvements
within the district or improvement area, as specified in the ordinance of formation.
For the purpose of this subdivision only, a cable television company shall be
deemed a "public utility";
(7) Water systems;
(8) Police, criminal justice (including jails), fire suppression (including fire stations), and paramedic facilities;
(9) Wastewater, storm drainage, sewage removal or treatment, solid waste disposal, and recycling or
resource recovery systems or facilities;
(10) Transit or transportation systems;
(11) Telecommunications systems; and
(12) Any other facilities which the city is authorized by law to contribute revenue
to or construct, own, maintain, or operate.
(Added by Ord. 96-18)
Sec. 34-1.6 Payment of existing assessments or debt service.
The district may pay in full all amounts necessary to eliminate or reduce
any assessment liens, repay or defease in whole or in part any indebtedness
secured by any tax, fee, charge, or assessment levied within a district, or
pay debt service on that indebtedness. (Added by Ord. 96-18)
Sec. 34-1.7 Advances of funds, work, or property in-kind.
After the formation of a district, the council may accept advances of funds,
work, or property in-kind from any source. The council may enter into an
agreement, by resolution, with the person or entity advancing the funds, work, or
property in-kind to repay all or a portion of the funds advanced or
to reimburse the person or entity for the value or cost, whichever is
less, of the work or property in-kind, as determined by the council, with
or without interest; provided that the proposal to repay the funds or reimburse
the value or cost of the work or property in-kind is included in
the ordinance of formation for the district. Any such agreement shall not constitute
a debt or liability of the city or be payable from sources other
than the proceeds of the special taxes levied or proceeds of bonds issued
pursuant to this chapter. (Added by Ord. 96-18)
Sec. 34-1.8 Construction of chapter.
This chapter shall be liberally construed in order to effectuate its purposes. No
error, irregularity, or informality and no neglect or omission of any officer in
any procedure taken under this chapter which does not directly affect the jurisdiction
of the city to order the provision of a special improvement shall void
or invalidate such proceeding or any levy for the costs of such improvement.
(Added by Ord. 96-18)
Sec. 34-1.9 Validity of proceedings.
The failure of any person to receive a notice, resolution, ordinance, order, or
other matter shall not affect in any way whatsoever the validity of any
proceedings taken under this chapter or prevent the council from proceeding with any
hearing so noticed or other action. (Added by Ord. 96-18)
Article 2. Proceedings
Sections:
34-2.1 Institution of proceedings.
34-2.2 Petition requesting institution of proceedings.
34-2.3 Adoption of resolution of intention.
34-2.4 Report on special improvements.
34-2.5 Notice of public hearing on proposed district.
34-2.6 Mailed notice of hearing.
34-2.7 Waiver of hearing.
34-2.8 Protests against establishment of district.
34-2.9 Protest by more than 55 percent.
34-2.10 Duration of hearing--Determination.
34-2.11 Approval of ordinance of formation.
34-2.12 District boundaries.
34-2.13 District term.
34-2.14 Financing of special improvements and payment of incidental expenses identified in ordinance of
formation.
34-2.15 Designation of improvement area.
34-2.16 Property owners' election to perform work.
Sec. 34-2.1 Institution of proceedings.
(a) Proceedings for the establishment of a district may be instituted by the council
on its own initiative.
(b) Proceedings for the establishment of a district shall be instituted by the council
after receipt by the city clerk of the following:
(1) A petition requesting the institution of the proceedings signed by the owners of
at least 25 percent of the land in the proposed district; and
(2) A fee which the council determines is necessary to compensate the city for
the costs of proceedings to establish the proposed district.
When required to institute proceedings after the receipt of a petition and fee,
the council shall do so at the first regular meeting for which notice
of a resolution of intention may be posted pursuant to HRS Chapter 92.
The fee shall be nonrefundable, even if the council does not establish the
proposed district.
(Added by Ord. 96-18)
Sec. 34-2.2 Petition requesting institution of proceedings.
A petition requesting the institution of proceedings for the establishment of a district
shall include all of the following:
(1) A request that the council institute proceedings to establish a district pursuant to
this chapter;
(2) A description of the boundaries of the proposed district;
(3) A description of the special improvements to be financed by the proposed district;
and
(4) The signatures of the owners of land comprising at least the minimum percentage
required under Section 34-2.1. If the council finds that the petition is signed
by the owners of the requisite percentage of land, the finding shall be
final and conclusive.
(Added by Ord. 96-18)
Sec. 34-2.3 Adoption of resolution of intention.
Proceedings for the establishment of a district shall be instituted by the adoption
of a resolution of intention to establish the district. The resolution shall do
all of the following:
(1) State that a district is proposed to be established under the terms of
this chapter;
(2) State the name of the proposed district in substantially the following form: "City
and County of Honolulu Community Facilities District No. ______." One or more additional
descriptive words may be used in the name of the proposed district to
indicate its geographic area;
(3) State the term of the proposed district. The term shall be a specified
calendar period and shall not expire until all debt service on bonds and
incidental expenses related thereto are due to be fully paid;
(4) Describe the boundaries of the proposed district. The boundaries may be described by
reference to a map on file in the office of the city clerk
showing the proposed district;
(5) Identify the special improvements to be financed by the proposed district. If the
purchase of completed special improvements or the incurring of incidental expenses is proposed,
the resolution shall identify the improvements or expenses, as the case may be;
(6) Identify the incidental expenses to be paid from special taxes;
(7) State that, except when funds are otherwise available, a special tax sufficient to
pay for the costs of the special improvements and incidental expenses shall be
annually levied within the proposed district. The resolution shall describe the estimated rate
and proposed method of apportionment of the special tax in sufficient detail to
allow each landowner within the proposed district to estimate the maximum annual amount
that the landowner will have to pay;
(8) Specify the principal amount of bonds proposed to be issued to finance the
special improvements;
(9) Fix a time and place for a public hearing on the establishment of
the proposed district, which shall not be less than 30 or more than
60 days from the adoption of the resolution of intention; and
(10) Describe the protest procedure.
If an improvement area is proposed to be established, the resolution of intention
shall also so state and describe the boundaries of the proposed improvement area,
the name proposed for the improvement area, the special improvements proposed to be
financed by the improvement area, and whether and to what extent it is
proposed that special taxes shall be levied in the improvement area for purposes
of financing such improvements.
(Added by Ord. 96-18)
Sec. 34-2.4 Report on special improvements.
At the time of the adoption of the resolution of intention to establish
a district, the council shall direct the chief engineer to study the proposed
district. The council also shall direct the chief engineer to file with the
council a report on the study at least 10 days before the public
hearing on the proposed district. The report shall include, but not be limited
to, an estimate of the cost of providing the proposed special improvements. In
preparing the report, which may be general and preliminary and need not be
based on detailed plans and specifications, the chief engineer may consult with or
rely on reports and materials prepared by other city or state officers or
any financial feasibility or other consultant retained by the city or any landowner
to assist in the proceeding.
For the purpose of this section, "chief engineer" means the director of the
department of facility maintenance or, as designated by the director of the department
of budget and fiscal services, such other appropriate department director responsible for one
or more of the special improvements in the proposed district. (Added by Ord.
96-18; Am. Ord. 00-22)
Sec. 34-2.5 Notice of public hearing on proposed district.
(a) The city clerk shall publish a notice of the public hearing on a
proposed district twice, at least one week apart, in a newspaper of general
circulation in the city. Publication shall be completed at least 10 days prior
to the date of the hearing.
(b) The notice shall contain all of the following information:
(1) A summary of the resolution of intention to establish the district and the
name, address, and telephone number of a city department or officer from whom
a copy of the resolution of intention can be obtained (alternatively, the notice
may contain the full text of the resolution);
(2) The time and place of the hearing on the establishment of the district;
and
(3) A statement that, at the hearing, the testimony of all interested persons and
landowners for or against the establishment of the district, the extent of the
district, the financing of specified special improvements, or the levy of a special
tax will be heard. The notice shall also summarize the protest procedure, including
the respective rights of an owner and the effect of protests against the
establishment of the district, the extent of the district, the financing of specified
special improvements, or the levy of a specified special tax.
(Added by Ord. 96-18)
Sec. 34-2.6 Mailed notice of hearing.
In addition to publishing notice as provided in Section 34-2.5, the city clerk
shall give notice of the hearing by first-class mail to each owner of
land within the proposed district which the city clerk has identified. The notice
shall be mailed at least 15 days before the hearing and shall contain
the same information as required in the published notice pursuant to Section 34-2.5.
Failure to give notice to any owner or failure of any owner to
receive such notice shall not affect the validity or effectiveness of the hearing
or any other proceedings taken under this chapter or any special tax levied
under this chapter if the council determines that a reasonable effort was made
to give such notice. The council's determination shall be final and conclusive. (Added
by Ord. 96-18)
Sec. 34-2.7 Waiver of hearing.
The owners of land proposed to be included in a district may petition
for the waiver of the public hearing required under this article on the
establishment of a district. Waiver petitions shall be submitted in writing to the
city clerk.
If the owners of 100 percent of the land proposed to be included
in a district submit waiver petitions at least 10 days before the hearing,
the council shall not hold the hearing. If a hearing is not held
because of the petitions, the owners shall be deemed to have waived the
right to protest under Section 34-2.8. (Added by Ord. 96-18)
Sec. 34-2.8 Protests against establishment of district.
Protests against the establishment of the district, the extent of the district, the
financing of specified special improvements, or the levy of the special tax may
be made in writing by landowners. All written protests shall be filed with
the city clerk before or at the hearing. The council may waive any
irregularities in the form or content of any written protest. Written protests may
be withdrawn in writing at any time before the conclusion of the hearing.
(Added by Ord. 96-18)
Sec. 34-2.9 Protest by more than 55 percent.
If the owners of more than 55 percent of the land or if
more than 55 percent of the owners of the land proposed to be
included in the district file written protests with the council before or at
the hearing against the establishment of the district and if protests are not
withdrawn so as to reduce the amount of the protests to 55 percent
or less, the proceedings to create the specified district shall cease. No proceedings
to create the district shall again be undertaken for a period of one
year from the close of the hearing.
If the more than 55 percent protests are only against the furnishing of
a specified special improvement or against levying a specified special tax, then proceedings
to create the district may continue, but the specified special improvement or special
tax shall not be part of the applicable ordinance of formation (if approved).
(Added by Ord. 96-18)
Sec. 34-2.10 Duration of hearing -- Determination.
The hearing may be continued from time to time, but shall be completed
within 30 days; except that, if the council finds that the complexity of
the proposed district or the need for public participation requires additional time, the
hearing may be continued from time to time for a period not to
exceed six months.
The council may eliminate proposed special improvements, change the rate or method of
apportionment of the proposed special tax, or remove land from the proposed district.
Or, the council may add land to the proposed district, but only upon
petition of the owners of 100 percent of the additional land.
After the hearing, the council may abandon the proposed establishment of the district
or, after considering all protests and such other relevant factors (such as the
general plan or development plan) as it deems appropriate, may proceed with establishing
the district. (Added by Ord. 96-18)
Sec. 34-2.11 Approval of ordinance of formation.
(a) If the council determines to establish the district, it shall approve an ordinance
of formation. The ordinance of formation shall contain the following, but no provision
which was successfully protested pursuant to Section 34-2.9 shall be included:
(1) The name of the district;
(2) The term of the district;
(3) The boundaries of the district;
(4) The special improvements to be financed by the district;
(5) The incidental expenses to be paid from the special tax;
(6) The rate and method of apportionment of the special tax levied within the
district;
(7) The principal amount of bonds to be issued for financing the special improvements
of the district; and
(8) Any other information required by this chapter.
(b) When the ordinance of formation is passed on third reading, the council shall
determine whether all proceedings were valid and in conformity with the requirements of
this chapter. If the council so determines, it shall make a finding to
that effect. The finding shall be final and conclusive.
(Added by Ord. 96-18)
Sec. 34-2.12 District boundaries.
(a) A community facilities district may include areas of land that are not contiguous.
(b) Land may be included in more than one community facilities district.
(Added by Ord. 96-18)
Sec. 34-2.13 District term.
The term of a district shall be a specified calendar period. Under an
ordinance of formation, the expiration of the term shall not be earlier than
the date on which all outstanding debt service on bonds and incidental expenses
for the district are due to be fully paid. (Added by Ord. 96-18)
Sec. 34-2.14 Financing of special improvements and payment of incidental expenses identified in ordinance
of formation.
(a) Only the special improvements identified in the ordinance of formation for a district
may be financed by the district under the authority of this chapter.
(b) Only the incidental expenses identified in the ordinance of formation may be paid
from the special taxes levied within a district.
(Added by Ord. 96-18)
Sec. 34-2.15 Designation of improvement area.
For the purpose of financing specified special improvements, the council may designate a
portion of a district as an improvement area. The designation shall be made
in the ordinance of formation for the district. An improvement area shall be
known as "Improvement Area No. ______ of City and County of Honolulu Community
Facilities District No. __________." After the designation of an improvement area, all proceedings
to levy special taxes for the financing of the specified special improvements shall
apply only to the improvement area, except to the extent otherwise provided in
the ordinance of formation. (Added by Ord. 96-18)
Sec. 34-2.16 Property owners' election to perform work.
(a) Subsection (b) shall not apply to any contract for the acquisition of special
improvements, and shall apply to contracts other than contracts for the acquisition of
special improvements only if permissible under HRS Chapter 103D, the Hawaii Public Procurement
Code.
(b) The owners of three-fourths of the area of land subject to a special
tax shall not be required to present sealed proposals or bids when the
director of budget and fiscal services calls for bids preparatory to letting a
contract to do work financed pursuant to this chapter, but may, within 10
days after the publication of the notice of the award of the contract,
elect to perform the work and enter into a written contract to do
the whole work at a price not exceeding the bid price of the
bidder to whom the contract would otherwise have been awarded. All work done
under the contract shall be subject to any conditions as may be prescribed
by the council.
If, within the 10-day period, the owners elect not to perform the work,
a contract may be entered into by the director of budget and fiscal
services with the bidder to whom the contract was awarded at the price
specified in the bid.
If, in the opinion of the council, the public interest will not be
served by allowing the landowners to enter into a contract in accordance with
this subsection, the council may prohibit such a contract in the applicable ordinance
of formation.
(Added by Ord. 96-18; Am. Ord. 00-22)
Article 3. Special Tax
Sections:
34-3.1 Special tax apportionment.
34-3.2 Special tax levy.
34-3.3 Minimum special taxes for payment of bond principal and interest.
34-3.4 Prepayment of special taxes.
34-3.5 Exemptions.
34-3.6 Special tax maximum for residential parcel.
34-3.7 Special tax collection.
34-3.8 Special tax lien.
34-3.9 Special tax notice to owners of land.
34-3.10 Special tax notice to prospective buyer or lessee of parcel of land.
34-3.11 Special tax obligation for parcel acquired by city.
Sec. 34-3.1 Special tax apportionment.
(a) There is no requirement that the special tax levied pursuant to this chapter
be fixed in amount or apportioned on the basis of special benefit to
a parcel of land in the district or that the special improvement financed
convey a special benefit to the parcel. The only requirement is that the
special tax benefit the parcel in a general manner.
(b) A special tax levied pursuant to this chapter may be based on benefit
received by a parcel, the cost of making a special improvement available to
a parcel, the stage or type of development or use of a parcel,
the happening of one or more specified events related to the development or
improvement of all or certain parcels, or any other reasonable basis or formula
as determined by the council. Any determination of the reasonableness of any special
tax or the rate or method of the apportionment thereof by the council
shall be final and conclusive.
(Added by Ord. 96-18)
Sec. 34-3.2 Special tax levy.
Special taxes shall be levied and apportioned pursuant to the rate and method
specified in the ordinance of formation. The director of budget and fiscal services
shall be delegated the authority to:
(1) Determine the annual amount due from each landowner subject to the special tax;
and
(2) Make an adjustment to the annual amount due when required by the special
tax base or formula in the applicable ordinance of formation.
Special taxes shall only be used to pay for the costs of special
improvements, debt service on bonds issued to pay the costs, and incidental expenses
permitted under this chapter. Special taxes shall be levied only as long as
needed to pay the costs, debt service, and incidental expenses.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-3.3 Minimum special taxes for payment of bond principal and interest.
Annual special taxes from a district shall at least equal the required annual
bond principal and interest payments for the district. In addition, the special taxes
may generate an amount sufficient to accumulate or replenish bond reserve funds, reimburse
credit enhancement expenses or prior debt service contributions, or pay other costs or
incidental expenses related to the bonds. (Added by Ord. 96-18)
Sec. 34-3.4 Prepayment of special taxes.
The council may prohibit the prepayment of special taxes or specify conditions under
which special taxes may be prepaid and permanently satisfied. The conditions may include
periods during which prepayment shall not be permitted or a requirement that a
premium be paid upon prepayment.
If the council has specified conditions under which special taxes may be prepaid
and permanently satisfied and if the special taxes are so prepaid and permanently
satisfied as to a particular parcel of land, the director of budget and
fiscal services shall prepare a notice of cancellation of the special taxes for
the parcel. The director of budget and fiscal services shall transmit a copy
of the notice to the owner, who may file it with the bureau
of conveyances or land court. The director of budget and fiscal services may
charge a fee for preparation of the notice.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-3.5 Exemptions.
(a) Properties of entities of the federal, state, or city governments shall be exempt
from the special tax, except as otherwise provided by subsection (b). No other
properties or entities within a district shall be exempt from the special tax,
unless expressly exempted in the ordinance of formation.
(b) If a federal, state, or city entity owning property, including property held in
trust for any beneficiary, grants a leasehold or other possessory interest in the
property to a nonexempt person or entity, the special tax shall, notwithstanding subsection
(a), be levied on the leasehold or possessory interest and shall be payable
by the owner of the leasehold or possessory interest.
When entering into a lease or other written contract creating a possessory interest
for a nonexempt person or entity, the federal, state, or city entity shall
include in the contract a statement that the property interest shall be subject
to special taxation pursuant to this chapter. Failure to comply with the requirement
shall not, however, invalidate the contract or affect the special tax or the
obligation of the nonexempt person or entity to pay the special tax.
(Added by Ord. 96-18)
Sec. 34-3.6 Special tax maximum for residential parcel.
(a) The special tax on a residential parcel in a district shall be levied
in a manner which complies with the following:
(1) A maximum annual special tax amount for the residential parcel shall be established
and expressed in dollars;
(2) The special tax amount for the residential parcel shall not be increased by
more than two percent annually, unless a greater increase is required because of
a change in use, development, improvement, subdivision, or consolidation of the parcel; and
(3) The special tax amount for the residential parcel in any year shall not
be more than that established or calculated under subdivision (1) or (2), unless
a higher amount is warranted because of a change in use, development, improvement,
subdivision, or consolidation of the parcel. If the change in use, development, improvement,
subdivision, or consolidation of the parcel warrants a higher special tax amount for
a year than that established or calculated under subdivision (1) or (2), then
the higher amount shall be collected for that year. After that year, however,
the special tax amount shall not be increased by more than two percent
annually, unless the parcel is again subject to a change in use, development,
improvement, subdivision, or consolidation.
The provisions of this subsection shall be included in the applicable ordinance of
formation.
(b) For the purpose of this section, "residential parcel" means a parcel classified as
residential for real property tax purposes.
(Added by Ord. 96-18; Am. Ord. 07-10)
Sec. 34-3.7 Special tax collection.
Special taxes shall be collected by the director of budget and fiscal services
on a monthly, semiannual, or annual basis. Except as otherwise provided by the
council, the same penalties provided for delinquent payment of improvement district assessments shall
apply to special tax delinquencies. The director of budget and fiscal services shall
deduct from special taxes collected the administrative expenses incurred in collection. (Added by
Ord. 96-18; Am. Ord. 00-22)
Sec. 34-3.8 Special tax lien.
(a) The special tax levied on a parcel shall be a lien against the
land and improvements of the parcel. The lien shall attach from the effective
date of the ordinance levying the special tax and shall be extinguished when
the special tax is fully paid or terminated.
(b) The lien of the special tax shall have priority over all other liens,
except the lien of general real property taxes and the lien of assessments
levied under HRS Section 46-80. The lien of the special tax shall be
on a parity with the lien of general real property taxes and the
lien of assessments levied under HRS Section 46-80, unless otherwise provided by law
or ordinance. All liens of special taxes made pursuant to this chapter shall
be on a parity without regard to when made or for what purpose.
(c) If any special tax is not paid when due, the department of budget
and fiscal services may, after not less than two months of delinquency, foreclose
the lien of the special tax in order to collect the delinquent amount
and any penalty, interest, and costs. Foreclosure shall be by way of advertisement
and sale without suit, and shall be made by the director of budget
and fiscal services in the same manner, except as otherwise approved by the
council, under the same conditions and penalties, and with the same effect as
provided by general law for sales of real property pursuant to default in
payment of property taxes.
In any event, the department of budget and fiscal services shall foreclose the
lien before the end of the sixth year of a delinquency.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-3.9 Special tax notice to owners of land.
Within 30 days after the effective date of the ordinance of formation levying
a special tax, the director of budget and fiscal services shall notify all
owners of parcels of land subject to the special tax. Notices shall be
sent by certified mail or registered mail with request for return receipt. Each
of the notices shall set forth the amount of the special tax levied,
the rate and method of apportionment of the special tax, and the date
when the special tax is due. Failure to give or receive such notice
to or by any landowner shall not affect the validity of the special
tax nor entitle the landowner to an extension of time within which to
pay the special tax. (Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-3.10 Special tax notice to prospective buyer or lessee of parcel of land.
Before entering into an agreement to sell or lease a parcel of land
subject to a special tax levy and lien, the parcel owner shall notify
the prospective buyer or lessee of the existence of the levy and lien.
(Added by Ord. 96-18)
Sec. 34-3.11 Special tax obligation for parcel acquired by city.
(a) If a parcel subject to a special tax is acquired by the city
through a negotiated transaction or eminent domain proceeding, the conveyor shall pay the
special tax out of the purchase price or eminent domain award in an
amount sufficient to pay the bond principal and interest that would have been
payable from the special tax on the parcel.
(b) If a parcel subject to a special tax is acquired by the city
by foreclosure or gift or devise, the parcel shall be sold as soon
as practicable, and either:
(1) The special tax shall be paid from the sales price in an amount
equaling the bond principal and interest that would have been payable from the
special tax on the parcel; or
(2) The purchaser of the parcel shall take title subject to the lien of
the special tax and shall be required to pay the special taxes becoming
due from and after the sale date.
(Added by Ord. 96-18)
Article 4. Changes in Term of District, Authorized
Special Improvement, and Special Tax
Sections:
34-4.1 Authorization to change term, special improvement, or special tax
34-4.2 Ordinance of consideration.
34-4.3 Petition for changes in term, special improvement, or special tax.
34-4.4 Director of budget and fiscal services' recommendation to change rate or method of
apportionment of an existing special tax.
34-4.5 Contents of proposed ordinance of consideration.
34-4.6 Notice of hearing on proposed ordinance of consideration.
34-4.7 Protests against the proposed ordinance of consideration.
34-4.8 Protest by more than 55 percent.
34-4.9 Duration of hearing Determination.
34-4.10 Filing of notice.
Sec. 34-4.1 Authorization to change term, special improvement, or special tax.
The council may change the term of an established district, the authorized special
improvements, or the rate or method of apportionment of a special tax or
require the levy of a new special tax. The change or new levy
shall be accomplished in accordance with this article. (Added by Ord. 96-18)
Sec. 34-4.2 Ordinance of consideration.
(a) Except as provided in subsection (b), if the council determines that the public
convenience and necessity require a change permitted under Section 34-4.1 or require the
levy of a new special tax, the council may approve an ordinance of
consideration to do so. The council shall have the full discretion to commence
proceedings to make the change or new levy when deemed appropriate. The receipt
of a petition under Section 34-4.3 shall not require or obligate the council
to commence the proceedings.
(b) The council shall not approve an ordinance of consideration to reduce the term
of a district, reduce the realization from a special tax, or terminate the
levy of a special tax if doing so will jeopardize the payment of
debt service on bonds issued for the district or impair the security for
the bonds.
(c) An ordinance of consideration for a district shall be an amendment of the
ordinance of formation for the district. The ordinance of consideration shall contain the
pertinent information required by Section 34-4.5.
(Added by Ord. 96-18)
Sec. 34-4.3 Petition for changes in term, special improvement, or special tax.
The council may commence proceedings to approve an ordinance of consideration if receiving
the following:
(1) A petition signed by the owners of at least 25 percent of the
land within the district requesting a change permitted under Section 34-4.1 or the
levy of a new special tax; and
(2) A fee which the council determines is necessary to compensate the city for
the costs of proceedings to review the requested change or new levy.
The fee shall be nonrefundable, even if the council does not make the
change or levy.
(Added by Ord. 96-18)
Sec. 34-4.4 Director of budget and fiscal services' recommendation to change rate or method
of apportionment of an existing special tax.
(a) The director of budget and fiscal services may recommend to the council a
change to the rate or method of apportionment of an existing special tax
for a district when:
(1) The annual special taxes from the district are in excess of the annual
debt service and reserve requirements for and incidental expenses of the district; and
(2) The excess of annual special taxes is projected to continue in each year
until expiration of the district.
The recommended change shall result in a rate or method of apportionment which
reduces the annual special taxes from the district to an amount not less
than the annual debt service and reserve requirements for and incidental expenses of
the district.
The recommendation shall be accompanied by a justification and proposed ordinance of consideration.
(b) The council shall review and may approve the ordinance of consideration in accordance
with this article.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-4.5 Contents of proposed ordinance of consideration.
A proposed ordinance of consideration shall do all of the following:
(1) State the name of the district;
(2) Describe the boundaries of the district;
(3) Specify the proposed change to the term of the district or special improvements
to be financed;
(4) Specify any proposed new special tax which will be levied to finance new
or existing special improvements; or
(5) Specify the proposed change to the rate or method of apportionment of an
existing special tax.
(Added by Ord. 96-18)
Sec. 34-4.6 Notice of hearing on proposed ordinance of consideration.
The council shall fix the time and place for a hearing on the
proposed ordinance of consideration. The date of the hearing shall not be less
than 30 or more than 60 days from the date of introduction of
the proposed ordinance.
The city clerk shall publish notice of the hearing in the same manner
as required under Section 34-2.5 for notice of a hearing on a resolution
of intention. In addition, the city clerk shall mail the notice to each
owner of land in the district at least 15 days before the hearing.
The notice shall contain all of the following information:
(1) A summary of the proposed ordinance and the name, address, and telephone number
of a city department or officer from whom a copy of the proposed
ordinance can be obtained (alternatively, the notice may contain the full text of
the proposed ordinance);
(2) The time and place of the hearing; and
(3) A statement that, at the hearing, the testimony of all interested persons and
landowners for or against the proposed changes will be heard. The notice shall
also summarize the protest procedure, including the respective rights of an owner and
the effect of protests made against the proposed changes.
(Added by Ord. 96-18)
Sec. 34-4.7 Protests against the proposed ordinance of consideration.
Protests against the provisions of the proposed ordinance of consideration may be made
in writing by landowners. All written protests shall be filed with the city
clerk before or at the hearing. The council may waive any irregularities in
the form or content of any written protest. Written protests may be withdrawn
in writing at any time before the conclusion of the hearing. (Added by
Ord. 96-18)
Sec. 34-4.8 Protest by more than 55 percent.
If the owners of more than 55 percent of the land or if
more than 55 percent of the owners of the land in the district
file written protests with the council before or at the hearing against a
provision in the proposed ordinance of consideration and if protests are not withdrawn
so as to reduce the amount of the protests to 55 percent or
less, the provision specified in the written protests shall not be in the
approved ordinance of consideration. No proceedings to include the provision in another ordinance
of consideration shall again be undertaken for a period of one year from
the close of the hearing. (Added by Ord. 96-18)
Sec. 34-4.9 Duration of hearing Determination.
The hearing may be continued from time to time, but shall be completed
within 30 days; except that, if the council finds that the complexity of
the proposed changes or the need for public participation requires additional time, the
hearing may be continued from time to time for a period not to
exceed six months. At the conclusion of the hearing, the council may abandon
the proceedings or, after considering all protests and such other relevant factors (such
as the general plan or development plan) as it deems appropriate, may approve
the ordinance of consideration (in the form in which it was introduced or
with such changes as determined by council). The approved ordinance shall not contain
provisions successfully protested in accordance with Section 34-4.8. (Added by Ord. 96-18)
Sec. 34-4.10 Filing of notice.
After the effective date of an ordinance of consideration, the director of budget
and fiscal services shall provide notice of any special tax change or levy
in the manner specified under Section 34-3.9. (Added by Ord. 96-18; Am. Ord.
00-22)
Article 5. Early Termination of District
Sections:
34-5.1 Authorization to terminate district before expiration of term specified in ordinance of formation.
34-5.2 Ordinance of early termination.
34-5.3 Petition for early termination.
34-5.4 Director of budget and fiscal services' recommendation on early termination.
34-5.5 Contents of proposed ordinance of early termination.
34-5.6 Notice of hearing on proposed ordinance of early termination.
34-5.7 Protests against the proposed ordinance of early termination.
34-5.8 Protest by more than 55 percent.
34-5.9 Duration of hearing--Determination.
34-5.10 Construction of article.
Sec. 34-5.1 Authorization to terminate district before expiration of term specified in ordinance of
formation.
The council may terminate a district before the expiration of the term specified
in the ordinance of formation. An early termination shall be accomplished in accordance
with this article. (Added by Ord. 96-18)
Sec. 34-5.2 Ordinance of early termination.
(a) Except as provided in subsection (b), if the council determines that the public
convenience and necessity will be promoted by terminating a district before the expiration
of the term specified in the applicable ordinance of formation, the council may
approve an ordinance of early termination. The council shall have the full discretion
to commence proceedings for the early termination of a district when deemed appropriate.
The receipt of a petition under Section 34-5.3 shall not require or obligate
the council to commence the proceedings.
(b) The council shall not approve an ordinance of early termination for a district
unless provisions are included to assure the payment of the following from the
special taxes or accumulated reserves of the district:
(1) All outstanding debt service on bonds issued for the district; and
(2) All outstanding incidental expenses accrued for the district.
(c) An ordinance of early termination of a district shall amend the term of
the district as specified in the ordinance of formation.
(Added by Ord. 96-18)
Sec. 34-5.3 Petition for early termination.
The council may commence proceedings to approve an ordinance of early termination if
receiving the following:
(1) A petition signed by the owners of at least 25 percent of the
land within a district requesting the early termination of the district; and
(2) A fee which the council determines is necessary to compensate the city for
the costs of proceedings to review the proposed early termination of the district.
The fee shall be nonrefundable, even if the council does not approve the
early termination.
(Added by Ord. 96-18)
Sec. 34-5.4 Director of budget and fiscal services' recommendation on early termination.
The director of budget and fiscal services may recommend to the council that
a district be terminated before the expiration of the term specified in the
ordinance of formation. The recommendation shall be made if the director determines that
the public convenience and necessity will be promoted by the early termination. A
recommendation shall be accompanied by a proposed ordinance of early termination. (Added by
Ord. 96-18; Am. Ord. 00-22)
Sec. 34-5.5 Contents of proposed ordinance of early termination.
A proposed ordinance of early termination shall do all of the following:
(1) State the name of the district;
(2) Describe the boundaries of the district;
(3) Identify the proposed early termination date of the district;
(4) Give a narrative justification for the proposed early termination;
(5) With respect to the debt service on bonds issued for the district:
(A) Specify the method by which the debt service will be fully paid before
the early termination of the district; or
(B) Establish a trust or other fund in the city treasury with a balance
sufficient to pay the debt service outstanding after the early termination of the
district;
and
(6) With respect to incidental expenses accrued for the district:
(A) Guarantee the payment of the incidental expenses before the early termination of the
district; or
(B) Establish a method by which incidental expenses, if any, will be paid after
the early termination of the district.
(Added by Ord. 96-18)
Sec. 34-5.6 Notice of hearing on proposed ordinance of early termination.
The council shall fix the time and place for a hearing on the
proposed ordinance of early termination. The date of the hearing shall not be
less than 30 or more than 60 days from the date of introduction
of the proposed ordinance.
The city clerk shall publish notice of the hearing in the same manner
as required under Section 34-2.5 for notice of a hearing on a resolution
of intention. In addition, the city clerk shall mail the notice to each
owner of land in the district at least 15 days before the hearing.
The notice shall contain all of the following information:
(1) A summary of the proposed ordinance and the name, address, and telephone number
of a city department or officer from whom a copy of the proposed
ordinance can be obtained (alternatively, the notice may contain the full text of
the proposed ordinance);
(2) The time and place of the hearing; and
(3) A statement that, at the hearing, the testimony of all interested persons and
landowners for or against the proposed early termination will be heard. The notice
shall also summarize the protest procedure, including the respective rights of an owner
and the effect of protests made against the proposed early termination.
(Added by Ord. 96-18)
Sec. 34-5.7 Protests against the proposed ordinance of early termination.
Protests against the provisions of the proposed ordinance of early termination may be
made in writing by landowners. All written protests shall be filed with the
city clerk before or at the hearing. The council may waive any irregularities
in the form or content of any written protest. Written protests may be
withdrawn in writing at any time before the conclusion of the hearing. (Added
by Ord. 96-18)
Sec. 34-5.8 Protest by more than 55 percent.
If the owners of more than 55 percent of the land or if
more than 55 percent of the owners of the land in the district
file written protests with the council before or at the hearing against a
provision in the proposed ordinance of early termination and if protests are not
withdrawn so as to reduce the amount of the protests to 55 percent
or less, the provision specified in the written protests shall not be in
the approved ordinance of early termination. No proceedings to again include the provision
in another ordinance of early termination shall be undertaken for a period of
one year from the close of the hearing. (Added by Ord. 96-18)
Sec. 34-5.9 Duration of hearing--Determination.
The hearing may be continued from time to time, but shall be completed
within 30 days; except that, if the council finds that the complexity of
the proposed early termination or the need for public participation requires additional time,
the hearing may be continued from time to time for a period not
to exceed six months. At the conclusion of the hearing, the council may
abandon the proceedings or, after considering all protests and such other relevant factors
as it deems appropriate, may approve the ordinance of early termination. The approved
ordinance shall not contain any provision which is contrary to this article. (Added
by Ord. 96-18)
Sec. 34-5.10 Construction of article.
This article shall not be construed as requiring an ordinance to effectuate the
termination of each district. A district shall automatically terminate upon reaching the expiration
of the term specified in the ordinance of formation.
This article applies only if the council desires to terminate a district earlier
than the expiration date specified in the ordinance of formation. (Added by Ord.
96-18)
Article 6. Annexation of Territory
Sections:
34-6.1 Authorization to annex--Contiguity not required.
34-6.2 Ordinance of annexation.
34-6.3 Contents of proposed ordinance of annexation.
34-6.4 Notice of hearing on proposed ordinance of annexation.
34-6.5 Protests against proposed ordinance of annexation.
34-6.6 Protest by more than 55 percent.
34-6.7 Duration of hearing--Determination.
34-6.8 Filing of notice.
Sec. 34-6.1 Authorization to annex--Contiguity not required.
The council may annex an area of land to an existing district in
accordance with this article. The annexed land need not be contiguous to the
existing district. (Added by Ord. 96-18)
Sec. 34-6.2 Ordinance of annexation.
If the council determines that the public convenience and necessity require the addition
of land to an existing district, the council may approve an ordinance of
annexation adding the land. The ordinance of annexation adding land to an existing
district shall be deemed an amendment of the ordinance of formation for that
district.
The council shall have the full discretion to commence proceedings for the annexation
of land when deemed appropriate. (Added by Ord. 96-18)
Sec. 34-6.3 Contents of proposed ordinance of annexation.
A proposed ordinance of annexation shall do all of the following:
(1) State the name and term of the existing district;
(2) Describe the boundaries of the existing district and the area proposed to be
annexed;
(3) Identify the special improvements financed by the existing district, the special improvements to
be financed by the area proposed to be annexed, and the special improvements
to be financed in common by both;
(4) Specify the proposed new special tax which will be levied within the area
proposed to be annexed; and
(5) Specify any proposed change to the special tax within the existing district as
a result of the proposed annexation. The special tax rate in the existing
district shall not be increased as a result of annexation proceedings pursuant to
this article.
(Added by Ord. 96-18)
Sec. 34-6.4 Notice of hearing on proposed ordinance of annexation.
The council shall fix the time and place for a hearing on the
proposed ordinance of annexation. The date of the hearing shall not be less
than 30 or more than 60 days from the date of introduction of
the proposed ordinance.
The city clerk shall publish notice of the hearing in the same manner
as required under Section 34-2.5 for notice of a hearing on a resolution
of intention. In addition, the city clerk shall mail the notice to each
owner of land in the existing district and area proposed to be annexed.
The notice shall be mailed at least 15 days before the hearing.
The notice shall contain all of the following information:
(1) A summary of the proposed ordinance and the name, address, and telephone number
of a city department or officer from whom a copy of the proposed
ordinance can be obtained (alternatively, the notice may contain the full text of
the proposed ordinance);
(2) The time and place of the hearing; and
(3) A statement that, at the hearing, the testimony of all interested persons and
landowners for or against the proposed annexation will be heard. The notice shall
also summarize the protest procedure, including the respective rights of an owner and
the effect of protests made against the proposed annexation.
(Added by Ord. 96-18)
Sec. 34-6.5 Protests against proposed ordinance of annexation.
Protests against the proposed ordinance of annexation may be made in writing by
landowners. All written protests shall be filed with the city clerk before or
at the hearing. The council may waive any irregularities in the form or
content of any written protest. Written protests may be withdrawn in writing at
any time before the conclusion of the hearing.
(Added by Ord. 96-18)
Sec. 34-6.6 Protest by more than 55 percent.
(a) If the owners of more than 55 percent of the applicable land or
if more than 55 percent of the owners of the applicable land file
written protests with the council before or at the hearing against the proposed
annexation and if protests are not withdrawn so as to reduce the amount
of the protests to 55 percent or less, the annexation proceedings shall cease.
No proceedings to again annex the land shall be undertaken for a period
of one year from the close of the hearing.
(b) For the purpose of this section, "applicable land" means land in the existing
district, land in the area proposed to be annexed, or land in both
the existing district and area proposed to be annexed.
(Added by Ord. 96-18)
Sec. 34-6.7 Duration of hearing--Determination.
The hearing may be continued from time to time, but shall be completed
within 30 days; except that, if the council finds that the complexity of
the proposed annexation or the need for public participation requires additional time, the
hearing may be continued from time to time for a period not to
exceed six months. At the conclusion of the hearing, the council may abandon
the proceedings or, after considering all protests and such other relevant factors (such
as the general plan or development plan) as it deems appropriate, may approve
the ordinance of annexation (in the form in which it was introduced or
with such changes as determined by the council and permitted by this part).
Thereafter, the city may levy the special tax on the annexed land. (Added
by Ord. 96-18)
Sec. 34-6.8 Filing of notice.
After the effective date of an ordinance of annexation, the director of budget
and fiscal services shall provide notice of any special tax change or levy
in the manner specified under Section 34-3.9. (Added by Ord. 96-18; Am. Ord.
00-22)
Article 7. Bonds
Sections:
34-7.1 Bond ordinance.
34-7.2 Costs includable in bond principal.
34-7.3 Minimum value-to-lien ratio.
34-7.4 Covenant to pursue foreclosure sale to collect delinquent special taxes.
34-7.5 Signing of bonds.
34-7.6 Manner of sale.
34-7.7 Bond fund.
34-7.8 Refunding bonds.
34-7.9 Prohibition on issuance of general obligation bonds secured by general credit.
34-7.10 Debt limit calculation.
Sec. 34-7.1 Bond ordinance.
(a) Whenever the council deems it necessary or appropriate that community facilities district bonds
be issued to finance the cost of special improvements or to reimburse the
cost thereof previously paid, the council may authorize the issuance of bonds. The
issuance shall be authorized by a bond ordinance approved with or after the
approval of the ordinance of formation levying the special tax to finance the
special improvements. The bond ordinance shall provide for the following:
(1) The issuance of the bonds in one or more series;
(2) The date the bonds shall bear;
(3) The maturity date or dates of the bonds, which shall not be more
than 30 years after the issuance date of the bonds;
(4) The rate or maximum rate of interest on the bonds, which shall not
exceed the maximum rate permitted by law and which may be fixed or
variable and simple or compound;
(5) The time or times at which interest shall be payable;
(6) The denomination of the bonds;
(7) The form of the bonds;
(8) The conversion or registration privileges carried by the bonds;
(9) The rank or priority of the bonds;
(10) The manner of execution of the bonds;
(11) The medium of payment of the bonds;
(12) The place or places of payment;
(13) The terms of redemption and the redemption price or prices to which the
bonds are subject;
(14) The pledge or assignment of all or part of the special taxes collected
from the district or improvement area thereof, the liens securing such special taxes,
or any other funds which are intended by the council to secure payment
of the bonds. The pledge shall be superior to all other claims on
the special taxes (except to the extent otherwise provided in the bond ordinance);
(15) The establishment and handling of a separate special fund or funds to pay
or secure the bonds or to pay for the special improvements or incidental
expenses;
(16) The obligations in which may be invested the proceeds of the bonds and
any other funds (including special taxes) pledged to secure payment of the bonds;
and
(17) Any other provisions for the issuance, payment, security, credit enhancement, handling of funds,
default, remedy, or other matter related to the bonds which the council deems
appropriate.
(b) The bond ordinance may provide that any or all of the terms listed
in this section or elsewhere in this article may be fixed by or
set out in a certificate signed by the director of budget and fiscal
services at or prior to the delivery of the bonds or in an
indenture, trust agreement, or fiscal agent agreement between the city and a corporate
trustee or fiscal agent located within or without the state.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-7.2 Costs includable in bond principal.
The principal amount of bonds authorized to be issued may include all costs
and estimated costs of special improvements and incidental expenses associated with issuing the
bonds. (Added by Ord. 96-18)
Sec. 34-7.3 Minimum value-to-lien ratio.
The principal amount of bonds issued and outstanding under an indenture or certificate
pursuant to which such bonds are issued for a district shall not exceed
one-third of the value of the real property upon which a special tax
is levied for payment of the debt service on the bonds. The "value
of the real property" shall be the fair market value of the land
and special improvements, within the meaning of Section 34-1.5, to be constructed within
the district, as shown upon an appraisal of the subject property made by
an M.A.I. real estate appraiser. (Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-7.4 Covenant to pursue foreclosure sale to collect delinquent special taxes.
The director of budget and fiscal services may covenant, for the benefit of
bond owners, to commence and diligently pursue to completion any foreclosure by advertisement
and sale regarding delinquent special taxes. The covenant may specify a deadline for
commencement of the foreclosure sale and any other terms and conditions the director
of budget and fiscal services determines reasonable regarding the foreclosure sale. (Added by
Ord. 96-18; Am. Ord. 00-22)
Sec. 34-7.5 Signing of bonds.
Unless otherwise specified in the bond ordinance, the bonds shall be signed by
the mayor and countersigned by the director of budget and fiscal services or
the director's deputy. Signatures on the bonds may be manual or facsimile. If
any officer whose signature appears on the bonds vacates the office before the
delivery of the bonds, the signature shall be as effective as if the
officer had remained in office. (Added by Ord. 96-18; Am. Ord. 00- 22)
Sec. 34-7.6 Manner of sale.
The director of budget and fiscal services may sell bonds at public or
private sale at the times, for the price or prices, and in the
manner the council determines to be appropriate and in the public interest (such
determination being final and conclusive). (Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-7.7 Bond fund.
All of the collections for payment of principal of and interest on bonds
and incidental expenses shall be paid into a district bond or reserve fund
and shall be used solely for the payment of the principal of and
interest on the outstanding bonds of the district and incidental expenses, all as
provided in the bond ordinance. (Added by Ord. 96-18)
Sec. 34-7.8 Refunding bonds.
(a) The council may authorize the issuance of bonds to refund any or all
of the district bonds outstanding that have been issued pursuant to this article.
The refunding bonds shall be authorized by a bond ordinance.
(b) Except as otherwise approved by the council, refunding bonds shall not be issued
if the total net interest cost to maturity on the refunding bonds plus
the principal amount of the refunding bonds exceeds the total net interest cost
to maturity on the bonds to be refunded plus the principal amount of
the bonds to be refunded. Subject to such limitations, the principal amount of
the refunding bonds may be more than, less than, or the same as
the principal amount of the bonds to be refunded. The principal amount of
such refunding bonds shall not count against any maximum amount of bonds authorized
in the original bond ordinance.
(c) The designated costs of issuing refunding bonds shall be paid from proceeds of
the refunding bonds, interest earned on those proceeds, or special taxes from the
district. However, any interest or special taxes paid for the designated costs shall
be added to the total net interest costs to maturity on the refunding
bonds in determining whether the issuance of the refunding bonds complies with subsection
(b).
"Designated costs of issuing the refunding bonds" means any of the following costs
and expenses designated by the council in the bond ordinance authorizing the issuance
of the refunding bonds:
(1) All expenses incident to the calling, retiring, or paying of the bonds to
be refunded and incident to the issuance of refunding bonds, including the charges
of any agent in connection with the issuance of the refunding bonds or
the redemption or retirement of the bonds to be refunded;
(2) The interest upon the refunding bonds from the date of sale of the
refunding bonds to the date of payment of the bonds to be refunded
or the date upon which the bonds to be refunded will be paid
pursuant to call or agreement with the holders of the bonds;
(3) Any premium necessary in the calling or retiring of the bonds to be
refunded;
(4) Any insurance premium or fee payable to the issuer of a bond insurance
policy or letter of credit insuring all or part of the principal and/or
interest due on the refunding bonds; and
(5) Any other incidental expense related to the issuance or carrying of the refunding
bonds or the redemption or refunding of the bonds to be refunded.
(d) The saving achieved through the issuance of refunding bonds shall be used by
the council to reduce:
(1) The special taxes levied in the district; or
(2) The term of the district within which the special taxes are levied.
At the time the council authorizes the issuance of refunding bonds, the council
also shall reduce the special taxes levied in or term of the district.
The reduction shall be made through an ordinance of consideration.
(Added by Ord. 96-18; Am. Ord. 00-22)
Sec. 34-7.9 Prohibition on issuance of general obligation bonds secured by general credit.
No general obligation bonds secured by the city's general credit shall be issued
to finance special improvements identified in an ordinance of formation or pay for
the incidental expenses of a district. (Added by Ord. 96-18)
Sec. 34-7.10 Debt limit calculation.
Bonds issued under this article, when the only security is the special tax
levy or lien in a district, shall be excluded from any determination of
the power of the city to issue general obligation bonds or funded debt
for purposes of Section 13 of Article VII of the State Constitution. (Added
by Ord. 96-18)
Revised Ordinances