AgdaPkt 2003-07-28 - Laserfiche WebLink

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O. A - qb In addition, the Rate and Method limits the increase of Special Taxes levied on Taxable Parcels in the District to cure delinquencies of other property owners in the District See "SECURITY FOR THE BONDS - Rate and Method" herein. Exe vpt Properties Certain properties are exempt from the Special Tax in accordance with the Rate and Method (see "SECURITY FOR THE BONDS - Rate and Method" herein). In addition, the Act provides that properties or entities of the state, federal or local government are exempt from the Special Tax; provided, however, that property within the District acquired by a public entity through a negotiated transaction or by gift or devise, which is not otherwise exempt from the Special Tax, will continue to be subject to the Special Tax. It is possible that property acquired by a public entity following a tax sale or foreclosure based upon failure to pay taxes could become exempt from the Special Tax. In addition, although the Act provides that if property subject to the Special Tax is acquired by a public entity through eminent domain proceedings, the obligation to pay the Special Tax with respect to that property is to be treated as if it were a special assessment, the constitutionality and operation of these provisions of the Act have not been tested, meaning that such property could become exempt from the Special Tax. In the event that additional property is dedicated to the City or other public entities, this additional property might become exempt from the Special Tax The Act further provides that no other properties or entities are exempt from the Special Tax unless the properties or entities are expressly exempted In a resolution of consideration to levy a new special tax or to alter the rate or method of apportionment of an existing special tax Depletion of Reserve Account The Reserve Account is to be maintained at an amount equal to the Reserve Requirement (see "SECURITY FOR THE BONDS - Reserve Account" herein). Funds in the Reserve Account may be used to pay principal of and Interest on the Bonds in the event the proceeds of the levy and collection of the Special Tax against property within the District are insufficient. If funds in the Reserve Account for the Bonds are depleted, the funds can be replenished from the proceeds of the levy and collection of the Special Tax that are in excess of the amount required to pay all amounts to be paid to the Bondholders pursuant to the Fiscal Agent Agreement. However, no replenishment from the proceeds of a Special Tax levy can occur if the proceeds that are collected from the levy of the Special Tax against property within the District at the maximum tax rates, together with other available funds, remains insufficient to pay all such amounts. Thus it is possible that the Reserve Account could be depleted and not be replenished by the levy of the Special Tax Bankruptcy Proceedings The payment of the Special Tax and the ability of the City to foreclose the Ben of a delinquent unpaid tax, as discussed in "SECURITY FOR THE BONDS," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the laws of the State of California relating to judicial foreclosure. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases. Although bankruptcy proceedings would not cause the Special Taxes to become extinguished, bankruptcy of a property owner could result in a delay in prosecuting superior court foreclosure proceedings and could result in the possibility of delinquent Special Tax installments not being paid in full. Such a delay would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds. To the extent that property in the District continues to be owned by a -31-