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Ordinance 82-10 City of Gilroy and Gilroy Industrial Development Authority ~ . . ~ ORDINANCE NO. 82-10 AN ORDINANCE ADDING CHAPTER 8A, RELATING TO ECONOMIC DEVELOPMENT, CONSISTING OF TITLE 1, INDUSTRIAL DEVELOPMENT FINANCING, AND TITLE 2, ECONOMIC DEVELOPMENT FINANCING, TO THE GILROY CITY CODE; PROVIDING WITH RESPECT TO TITLE 2 FOR THE CITY OF GILROY ECONOMIC DEVELOPMENT FINANCING LAW AUTHORIZING THE ISSUANCE OF REVENUE BONDS TO PROVIDE FUNDS FOR THE ACQUISITION OF FACILITIES BY COMPANIES; REGULATING THE ISSUANCE OF SAID BONDS; AND PROVIDING FOR THEIR PAYMENT AND THE RIGHTS AND REMEDIES OF BONDHOLDERS THEREOF WHEREAS, the City of Gilroy is a municipal corporation duly organized and existing under a charter adopted, ratified and approved pursuant to law; WHEREAS, under Article II of said charter, the City has the power to make and enforce all laws and regulations in respect to municipal affairs, subject only to such restrictions and limitations as may be provided in said charter and in the Constitution of the State of California, also the power to exercise any and all rights, powers and privileges established, granted or prescribed by any law of said State, by said charter, or by other lawful authority, or which a municipal corporation might or could exercise under the Constitution and laws of said State, and also the power to act pursuant to any procedure established by any law of said State, unless a different procedure is established by said charter or by ordinance; WHEREAS, this Council has, by Ordinance No. 82-4, adopted February 1, 1982, declared the need for an industrial development authority and has organized such an authority under ,the name of the Industrial Development Authority of the City of Gilroy, pursuant to the California Industrial Development Financing Act [Title 10 (commencing with Section 91500), Government Code], in order to increase opportunities for useful employment or otherwise contribute to the economic development of the City; Ordinance No. 82 - 10 . . WHEREAS, this Council has heard and the members of this Council are personally familiar with evidence that there is a need for the City to take additional actions to accomplish those purposes; and WHEREAS, there is a need for, and the public interest and convenience require, the additional actions set forth in this ordinance for the authorization and issuance of revenue bonds by the City to provide funds for the acquisition of facilities for the use of companies, and such new and alternative method of capital finance will aid in accomplishing those purposes; NOW, THEREFORE, the Council of the Ci ty of Gi lroy does ordain as follows: SECTION 1. Chapter 8A is hereby added to the Gilroy City Code to read as follows: CHAPTER 8A ECONOMIC DEVELOPMENT Title 1. Industrial Development Financing Title 2. Eeonomic Development Financing Article I. In General Sec. 8A.I. Short title. This title shall be cited and referred to as the Economic Development Financing Law of the city. Sec. 8A.2. Purpose; pOlicy; declarations; criteria. (a) It is the purpose of this title to provide industry and commerce with an alternative method of financing in acqUiring, constructing or rehabilitating facilities which will increase employment opportunities for the inhabitants of or otherwise contribute to the economic development of the city. (b) It is the policy of the city, consistent with environmental, resource conservation and other policies, to facilitate for and on behalf of private enterprise the acquisition of property either suitable for or evidencing an obligation respecting industrial, -2- . . commercial or other business activities or uses, through the issuance by the city of revenue bonds in accordance with the criteria set forth in subsection (c), and it is hereby declared that such additional method of financing, when made available in accordance with such policy, serves a public purpose and municipal affair of the city and will promote the prosperity, health, safety, and welfare of the city and its inhabitants. (c)(l) The criteria to be utilized to determine whether such method of financing may be made available shall include the following: (I) Whether employment benefits arising out of the use of the facilities may ensue by securing or increasing (i) the number of employees of the company and any other direct users of the facilities or (ii) compensation for such employment, the value of which may be expressed in terms of aggregate direct employment earnings. (II) Whether energy, mineral or natural or cultivated resource conservation benefits arising out of the use of the facilities may ensue by the reduction of waste, improvement of recovery or intensification of utilization of resources that otherwise would be less intensively utilized, or wasted, or not recovered, the value of which may be expressed in terms of the price and amount of the energy, minerals, or other resources saved or recovered, or the price and amount of equivalent energy, minerals or other resources which would be utilized were the resources not utilized as intensively. (III) Whether consumer benefits arising out of the use of the facilities may ensue by (i) improvement of the quantity or quality or reduction in the price of products, energy, or related services or facilities, the value of which may be expressed in terms of quantity and price differentials; and (ii) production of new or improved products, or related services or facilities, the value of which may be expressed in terms of quantity and price. (2) The criterion to be utilized to determine whether such method of financing may not be made available is whether or not the -3- . . making of it available would be in violation of the constitution and laws of the state or of the United states. Sec. SA.3. Definitions. Unless the context otherwise requires, the definitions of Section 91504 (except subdivisions (c), (d), (i), (j), (p) and (r)] of the Act and the following definitions shall apply and shall govern the construction of this title, inclusive of the provisions incorporated by reference by Section 8A.24. (a) .Act- means the California Industrial Development Financing Act [Title 10 (commencing with Section 91500), Government Code]. (b) WArticle. means Article II of Title 2 of Chapter SA of the Code. (c) .Authorityw means the city acting by the council exercising the powers prescribed for authorities pursuant to this title. (d) wBoardw means the council exercising the powers prescribed for boards of directors of author~ties pursuant to this title. (e) -Facilities. means property suitable for industrial, commercial or other business activities or uses, including, without limitation, any activities or uses property suitable for or eVidencing an obligation respecting which may be acquired for and on behalf of private enterprise pursuant to the Act, to the full extent permitted by the constitution and laws of the state. (f) -Governing body. means the council exercising the powers prescribed for governing bodies of pUblic agencies pursuant to this title. (g) .public agency. means the city acting by the council exercising the powers prescribed for public agencies pursuant to this title. (h) -Title- means this Title 2 of Chapter 8A of the Code. -4- . . Article II. Economic Development Financing Procedure Sec. SA.IO. Authorization. The city is authorized to issue revenue bonds in the accomplishment of the public purposes and municipal affairs as provided in Section SA.2. The exercise pursuant to this title of the powers conferred by this title, including the power to issue revenue bonds, shall be deemed to be in the performance of an essential governmental function of the city; provided, however, that exercise of the powers conferred by this title in the achievement of such purposes shall be sUbject to the provisions of, and exclusively as provided in, this article. Sec. 8A.Il. Purpose. (a) The sole purpose of the city acting pursuant to this title is to undertake projects through the issuance of revenue bonds in accomplishment of the purposes provided in Section SA.2., and to carry out and complete such projects and perform and exercise derivative obligations and powers. All powers vested in the city pursuant to this title shall be exerciseable as the council shall provide, solely in the accomplishment of such purposes. (b) The jurisdiction of the city to undertake projects shall be coincident as to territory with the territory within which the city may, to the full extent permitted by the constitution and laws of the state, finance facilities by the issuance of its revenue bonds. Section 8A.12. Employees and agents; attorney; conflict of interest. (a) The city may appoint such employees and agents, including, without limitation, financial advisors or consultants, accountants, architects, engineers, or other experts or advisors, as it requires, and determine their qualifications, duties, terms of employment or engagement, and compensation. (b) The city may contract for such legal counsel as in its judgment is necessary or advisable to enable it to carry out its -5- . . purposes, including such bond counsel as it deems advisable in connection with any proceedings. (c) No attorney or firm of attorneys employed as counsel by a company may serve at the same time as legal counsel, including bond counsel, and no person or firm employed as financial advisor by a company may at the same time serve as financial advisor, to the city in connection with any project or proposed project for such company. Sec. SA.l3. Administration. The city may use discretion in the undertaking of projects, including the establishment of reasonable priorities among the types and locations of projects and reasonable criteria regarding companies, applications in accord with which priorities and criteria may be accepted. Sec. SA.l4. A~elication for financing. Companies may apply for financing pursuant to this article by filing with the city an application therefor which includes all of the following: (a) Such financial, legal, and other information as is required by the city; (b) An estimate of the amount of bonds proposed to be issued, of the sources of amounts otherwise required for the project, and an itemization of the estimated cost and any other expenses; (c) Sufficient other information as is necessary to the determinations required to be made by subdivision (c) of Section SA.15. An application may be amended, supplemented or clarified from time to time. Sec. SA.lS. Acceptance or rejection of applications; determinations. (a) Applications for projects or companies not in accordance with the reasonable priorities and criteria which the city may establish need not be accepted and further processed by the city. -6- . . (b) Acceptance of any application in no way obligates the council to adopt a resolution of intention or undertake the project proposed. (c) Upon acceptance of any application, the council shall determine whether it is likely that the undertaking of the project by the city will be a substantial factor in the accrual of one or more of the public benefits from the use of the facilities as proposed in the application, whether the activities or uses may be classified within the category of industrial, commercial or other business activities or uses, and whether the project is otherwise in accord with the purposes and requirements of this title. (d) Upon affirmative determinations under subdivision (c), the council may express the present intention of the city to issue bonds in connection with the project and shall evidence the same by the adoption of a resolution of intention to undertake the project. The resolution of intention shall briefly describe the facilities, state the estimated principal amount of the bond issue (which estimate shall not limit the amount of bonds which may be issued), and identify the company that is the applicant, and may include such other provisions as the council shall prescribe. (e) A notice of the filing of an application, naming the company that is the applicant, briefly describing the facilities, stating the estimated principal amount of the bond issue and referring to the application for further particulars, shall be published by the City Clerk once in a newspaper of general circulation in the city. Any amendment, supplement or clarification of an application which changes the company that is the applicant, the description of the facilities, or the estimated principal amount of the bond issue, as previously noticed, shall be noticed in the same manner. (f) A resolution of intention may be revoked, amended, supplemented or clarified by the council, at any time prior to entry into the project agreements. The project agreements, indenture, bonds -7- . . and other proceedings shall be consistent with the resolution of intention, and shall supersede it except to the extent otherwise expressed. Sec. SA.16. Additional determinations. (a) Among the requirements of this title that the council shall determine that the project is in accord with is the requirement of subsection (b). (b) The project complies with the following criteria, in the determination of the council by review of the information submitted by the company: (1) Public benefits, determined in accordance with the policy stated in Section SA.2., from the use of the facilities likely will sUbstantially exceed any public detriment from issuance of bonds in the estimated principal amount proposed in the application. (2) Neither the completion of the project nor the operation of the facilities will have the proximate effect of relocation of any substantial operations of the company from one area of the state to another or in the abandonment of any substantial operations of the company within other areas of the state, or, if such completion or operation will have either of such effects, then such completion or operation is reasonably necessary to prevent the relocation of any substantial operations of the company from an area within the state to an area outside the state. (c) Determinations as provided in Section SA.15., included within which are the determinations referred to in this section shall be final and conclusive. Sec. SA.I? Aeproval and preliminary undertaking of project. (a) At any time following adoption of the resolution of intention, the council may approve, conditionally or unconditionally, the project. (b) A project shall be deemd to have been preliminarily undertaken by the city when the application has been accepted, the -8- ~ . . affirmative determinations under subdivision (c) of Section SA.IS have been made, the resolution of intention has been adopted, the approval of the council has been obtained, and a period of 30 days from the date of publication of the notice referred to in subdivision (e) of Section SA.15. has expired. (c) Upon the preliminary undertaking of a project by the city, the company shall comply with all conditions imposed by the council in its approval of the project pursuant to subsection (a). Sec. SA.IS. Resolution for issuance of bonds. The issuance of bonds shall be authorized by resolution of the council adopted at any time fOllowing the determinations provided for in Section SA.IS. The resolution may, as the council deems advisable and in accordance with the provisions of this article, provide for, or authorize the execution of a loan agreement, the repayment obligation of which is evidenced by the bonds, providing for, or authorize the execution of an indenture providing for: (a) The fixing and collection of revenues; (b) The creation and maintenance of special funds, including reserve and sinking funds; (c) Limitations on expenditures of bond proceeds; (d) The procedure, if any, by which any contract represented by bonds may be amended or abrogated; (e) The acts and omissions which shall constitute, and the rights and remedies available, in an event of default. In such an event of default, the obligations of the city may be enforced, as appropriate, by mandamus, by the appointment of a receiver, by foreclosure or sale, by injunction, by specific performance, by equitable relief, or by anyone or more of such remedies or any other remedy; and (f) Any additional matters authorized to be included in an indenture or which relate to the security, protection, or return of bondholders. -9- . . Sec. SA.19. Bond interest and sale. (a) The bonds may bear interest on such amount or amounts, payable at such time or times, evidenced in such manner and at such rate or rates as shall be established by or pursuant to method approved by the counc il. (b) Bonds may be sold at pUblic or private sale, at such prices as the council directs. Sec.SA.20. Exemption from other laws. All general or special laws or parts thereof inconsistent with this title shall be inapplicable to the exercise of any of the powers conferred under the provisions of this title. Without limiting the generality of the foregoing, no other provision of law shall limit the amounts and other consideration that may be received pursuant to project agreements and the other proceedings or shall restrict the amounts received that may be expended, or shall in any way affect other amounts that may be received or expended by the city. Sec. SA.2l. Application of title. (a) The authorizations of this title shall be regarded as supplemental and additional to powers conferred by other laws. (b) In the exercise of any of the powers conferred, including powers relating to the offer, issuance and sale of bonds, under the provisions of this title, the city need not comply with the provisions of any law applicable to the exercise of similar powers except as referred to in this article. Sec. SA.22. Liberal construction. This title, being necessary for the welfare of the city and its inhabitants, shall be liberally construed to effect its purposes. Sec. 8A.23. Maximum amount. The aggregate amount of bonds that may be issued pursuant to this title shall not exceed $25,000,000. -10- . . Sec. 8A.24. Incorporation b~ reference. The following provisions of the Act as they now exist or as hereafter amended shall apply: Sections 91527 and 9lS2S; Section 91533 except subdivision (b); Section 91534; Section 9153S except subdivisions (b)(6) and (7); and Sections 9l536, 9l541, 91542 and 9l54S. Section 2. The appropriate officers of the City are hereby authorized and directed to do any and all things, take any and all actions, and execute and deliver any and all certificates, agreements and documents which they or any of them may deem necessary or advisable in connection with the issuance and delivery of revenue bonds authorized by Section I of this ordinance in accordance with the provisions thereof and the actions which may be taken by the Council with respect to each project and proposed project thereunder. Section 3. The City Clerk shall cause at least the title and a summary of this ordinance, in the form in which introduced and as subsequently altered if the title or summary be changed, to be published in the Gilroy-Morgan Hill Dispatch, a newspaper of general circulation in the City, at least 3 days prior to the meeting of this Council at which it is proposed to be considered for adoption. Section 4. This ordinance shall become effective 30 days from and after the date of its adoption. ATTEST: ~~l;~it~ * * * * * -ll- ..... . . . . . - .. ..