BOOK 21_1946-09-23 to 1948-08-09

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86 removed and that the Company was willing to have it removed provided Broadway was not extended at the present time. Councilman Werder moved, seconded by Councilman Armstrong, the recommendation of the City Manager be accepted if agreeable with the County. Motion passed unanimously. City Attorney McCarthy advised that he had contacted an official of the San Francisco Bank and advised him that the Council would be ready at this date to let the contract for improvements in Redwood Terrace No. I, and wanted assurance that the bonds would be purchased. Attorney Ernest Wilson appeared and advised that he had a bid from the Land Development Company, signed by the Vice President for the total amount of the bonds accompained by $5,000, which shall go into the contract fund. The City may call upon the purchaser monthly for such amounts as are reflected by the engineer's monthly estimate for the necessary bills to be met in the month. In regard to the ability of the Land Development Company to purchase the bonds, they are owners of the land in question and have made arrangements with the San Francisco Bank,by which they are taking an additional mortgage on the property for the proceeds•of the bond issue. Mr. Wilson stated that Mr. Cohn of the Land Development Company has already deposi- ted with the City $4,000 and, therefore, feels he should only advance another $1,000 to make the $5,000 deposit. City Manager Blom advised that the $4,000 had been deposited to cover preliminary engineering plans and specifications and that it was pretty largely available from the bond funds. Mr. Wilson advised that once the bid for the bonds is accepted, demand can be made at once for any monies needed in carrying out this project. Bonds are not to be issued until the conclusion of the work. Under the terms of this bid, interest starts on each advance. If the bonds were issued before completion of the work, interest would be running on the total cost of the project. City Attorney McCarthy read the bid which provided that the Land Development Company would purchase up to $190,077.91 of bonds, under the 1913 Improvement Act but not beyond the cost of construction, at 95% of par value with interest at the rate of 5%. Mr. Wilson's explanation of this figure was that the territory in which thb work is located is largely uninhabited and bonds would probably have to be issued on the open market at a discount of 5 percent. There was some discussion in regard to whether or not there would be ample funds for any contingencies. It was explained by City Attorney McCarthy that taking approximately $146,000 as the low bid plus the engineering and incidentals. $190,000 of bonds would leave ample funds for any contingencies which might arise. The bonds could be issued and sold at 95 per cent and still provide enough money to pay the contract price, engineering and interest on advances and leave an ample surplus. City Manager Blom asked how a•property owner wishing to pay his assessment in cash will be protected from having to pay an increased assessment,due to the sale of bonds at 95 per cent. Mr. Wilson advised that there was a resolution which he was presenting for adoption at the next meeting which provides for a partial distribution of surplus or a reduction of assessment on the•portion of the project outside Redwood Terrace No. I. The property owner, outside the•Redurood Terrace No. I Subdivision, can pay the assessment in cash and obtain a five per cent discount. The assessment will be worked"out on the contract price and