ITEM 8-C (CONTINUED FROM 5-23-89 MEETING)
City Council Meeting 5-30-89 Santa Monica, California
STAFF REPORT
TO: Mayor and City Council
FROM: City Staff
SUBJECT: Introduction and First Reading of Ordinance
Amending Santa Monica Municipal Code Section
2651 Pertaining to Powers and Procedures for
Issuance of Revenue Bonds
This Staff Report transmits the accompanying ordinance for
introduction and first reading amending Santa Monica Municipal
Code Section 2651 concerning powers and procedures for the
issuance of Revenue Bonds by the City.
BACKGROUND
On December 20, 1965, Chapter 6.5, entitled "Revenue
Bonds," was added to the Santa Monica Municipal Code by City
Council adoption of Ordinance Number 705 (CCS). Such enactment
allows the City Council, by resolution, when the public interest
and necessity requires, to issue revenue bonds for the purposes
of "obtaining, conserving, treating, and supplying of water for
domestic use, irrigation, sanitation, industrial use, fire
protection, recreation, or any other public or private uses, or
for providing of public airports and facilities appurtenant
thereto."
Existing Section 2651 of the Santa Monica Municipal Code
provides that the procedure for issuance of revenue bonds shall
be that which is set forth in the Revenue Bond Law of 1941 (the
"Act") (commencing with Government Code Section 54300), with the
specific exception that those provisions of the Act which require
an election to be held in order to authorize issuance of the
revenue bonds shall not apply.
The proposed ordinance would amend Section 2651 by further
revising procedures for issuance of revenue bonds by excepting
any such bonds from the requirements of Government Code Section
54388, pertaining to invitation of bids for sale of revenue
bonds.
Since the demand for revenue bonds is always dependent upon
the market conditions at the time of a proposed sale, it is in
the City's best interests to possess flexibility in the selection
of the best purchaser for a particular sale of such bonds.
The amendment of Santa Monica Municipal Code Section 2651,
as set forth in the attached ordinance, would provide the City
with the necessary flexibility to choose between a private
placement sale or invitation for bids, whichever the City, in its
discretion, determines to be most advantageous.
Such choice already exists as to issuance and sale of other
types of municipal bonds. This amendment to Section 2651 would
provide the same option for the sale of revenue bonds.
RECOMMENDATION
It is respectfully recommended that the accompanying
ordinance be introduced for first reading.
PREPARED BY: Robert M. Myers, City Attorney
Linda A. Moxon, Deputy City Attorney
Stanley Scholl, Director of General Services
CA:RMM:linda29/hpw
City Council Meeting 5-23-89 Santa Monica, California
ORDINANCE NUMBER ____
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA AMENDING SANTA MONICA
MUNICIPAL CODE SECTION 2651 TO SPECIFY THE POWERS
AND PROCEDURES FOR THE ISSUANCE OF
REVENUE BONDS
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS
FOLLOWS:
SECTION 1. Santa Monica Municipal Code Section 2651 is
amended to read as follows:
SECTION 2651. Title. The procedure for the issuance of
revenue bonds shall be the procedure set forth in the Revenue
Bond Law of 1941 (commencing with Government Code Section 54300)
and by this reference the provisions of said Law are incorporated
herein, with the following exceptions:
(1) No election to authorize the issuance of said bonds
shall be held and the restrictions of Government Code Section
54388 shall not apply, and to those ends, Sections 54380 through
54388 of said Government Code are not incorporated herein and
shall not be applicable to the issuance of said revenue bonds.
(2) The resolution authorizing the issuance of said
revenue bonds may provide that such bonds shall be payable from
the revenues of the Enterprise (as specifically defined in such
resolution), which may include combined revenues from electric
and water services, from interest earnings on unspent bond
proceeds and from such other funds as may be legally available
for such purpose.
(3) Before selling the revenue bonds, or any part thereof,
the City Council may either negotiate the private sale of the
revenue bonds with a responsible purchaser or purchasers, who may
be purchasing for their own account or for purposes of resale, or
give notice inviting sealed bids pursuant to Government Code
Section 54388.
(4) The interest rate limitation and the limit on discount
contained in Section 54402(b) and 54418, respectively, of the
Government Code shall not be applicable.
SECTION 2. Any provision of the Santa Monica Municipal
Code or appendices thereto inconsistent with the provisions of
this Ordinance, to the extent of such inconsistencies and no
further, are hereby repealed or modified to that extent necessary
to effect the provisions of this Ordinance.
SECTION 3. If any section, subsection, sentence, clause,
or phrase of this Ordinance is for any reason held to be invalid
or unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this Ordinance. The City Council hereby
declares that it would have passed this Ordinance, and each and
every section, subsection, sentence, clause, or phrase not
declared invalid or unconstitutional without regard to whether
any portion of the Ordinance would be subsequently declared
invalid or unconstitutional.
SECTION 4. The Mayor shall sign and the City Clerk shall
attest to the passage of this Ordinance. The City Clerk shall
cause the same to be published once in the official newspaper
within 15 days after its adoption. This Ordinance shall become
effective after 30 days from its adoption.
APPROVED AS TO FORM:
__________________________________
ROBERT M. MYERS
City Attorney