Ordinance No. 80-37 �D
CITY OF TIGARD, OREGON
{ ORDINANCE NO. 80- d_j
AN ORDINANCE ESTABLISHING MAXIMUM RATE FOR LOCAL IMPROVEMENTS
FINANCED PURSUANT TO BANCROFT BONDING ACT.
The City of Tigard has from time to time financed local improve-
ments by selling bonds pursuant to the provisions of the Bancroft Bonding
Act, ORS 223.205 through 223.295.
ORS 223.250 provides that "The bonds shall be payable in lawful
money of the United States, and bear interest payable semiannually at a
rate not to exceed the percent per annum fixed by ORS 288.510, the interest
obligations to be evidenced by coupons attached to such bonds. "
At the time of the passage of this ordinance ORS 288.510 provides
that except as provided in certain other sections of Oregon Revised Sta-
tutes not here relevant, "all bonds issued by this state, a city or its
agency *** shall bear interest at not to exceed a net effective rate of
10 percent per annum payable semiannually and shall be sold at not less
than 98 percent of par value. " ORS 223.250 and ORS 288.510 taken to-
gether mean that Bancroft Bonds can be sold for an amount up to a net
effective rate of 10 percent. ORS 223.215, however, another portion of
the Bancroft Bonding Act, provides that applications by property owners
to pay in installments pursuant to the Bancroft Bonding Act "shall pro-
vide that the applicant and property owner agrees to pay the assessment
in equal semiannual instalments over a period not to exceed 30 years, as
the common council or other governing body of the city may provide, with
interest at seven percent per annum on all the assessments which have not
been paid. "
The inconsistency between ORS 223.215 and the provisions of
ORS 223.250 and 288.510 has left the City in a position which could
result in the City's being required to pay the difference between the
7 percent for which a property owner is authorized to apply and the
amount for which a bond issue actually sells, up to the maximum of 10
percent.
During recent inflation the market for municipal bonds of the
character of local improvement bonds has risen to the point that cities
cannot be assured of selling a Bancroft bond issue for an interest rate
less than 7 percent. The result is that the City Council has come to
feel that it cannot authorize the creation of local improvement districts
without jeopardizing the assets of the general fund and the City's income
needed for other City work. ;
The Bancroft Bonding Act specifically authorizes cities to
provide by charter or ordinance their own procedures for bonding improve-
ment assessments and selling bonds.
NOW, THEREFORE, the City of Tigard ordains as follows:
to Chapter 13.04 of the Tigard Municipal Code is hereby amended
by the addition of Section 13.04.085 as follows:
Section 13.04.085. Contents of Application to Pay
in Installments. The provisions of ORS 223.215 not-
eithstanding, the written application of the applicant
and property owner to pay an assessment arising out
of a local improvement shall state the following:
(1) That the applicant and property owner does
thereby waive all irregularities or defects, juris-
dictional or otherwise, in the proceedings to cause
said improvements to be constructed or made for which
the assessment is levied and in the apportionment of
the costs thereof.
(2) The application shall provide that the applicant
and property owner agree to pay an assessment in equal
semiannual installments over a period not to exceed
30 years as the City Council may provide, with inter-
est not to exceed 10 percent per annum on all the
assessments which have not been paid.
(3) A statement, by lots or blocks, or other con-
venient description, of the property of the applicant
assessed for such improvement.
2. Except as set forth in section 1 above, the procedures for
financing improvements pursuant to the Bancroft Bonding Act of the State
of Oregon shall be followed in the financing of local improvements. The
only substantive change accomplished by this ordinance is the increase
of the maximum allowable interest rate from 7 percent to 10 percent.
D3SSED: By i3.�11471 da - vote of the City Council this
y of
ayor, City of Tigard
ATTEST
Recorder, C� of Tigard
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