RES 88015 - Laserfiche WebLink

the assessment' installments will be discontinued and the Redemption Fund will be liquidated in retirement of the Bonds. If there are not sufficient funds in the Reserve Fund to fully cover la Redem tion Fund deficiency and it is determined by the Finance Director that there will not be an u~dmate loss to the holders of the bonds, the Finance Director is required to redeem matured Bonds and pay interest on the Bonds as lon there are transfer from the Reserve Fun~. as available funds in the Redemption Fund, after This procedure could result in some matured Bonds not' being redeemed and interest on the Bonds not being fully paid on the due dates. Such matured Bonds would not be fully redeemed and such delayed interest would not be paid unless and until funds were available from foreclosure sales of properties having delinquent assessment installments. Covenant To Commence Superior Court Foreclosure The 1915 Act provides that in the event any assessment or installment thereof or any interest thereon is not paid when due, the City may institute or cause to be instituted a court action to foreclose the lien of the unpaid assessment. In such an action, the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. This foreclosure saled~rocedure is not mandatory. However, by the Resolution providing for the issuance of Bon , the City covenants to the holders of Bonds that, in the event any assessment or installment thereof, including any interest thereon, is not paid when due, it will cause to be commenced within 150 days following the date of delinquency, and thereafter diligentl prosecute to completion, superior court foreclosure proceedings upon the lien of suc~ delinquent unpaid assessments. Such foreclosure proceedings may, however, be deferred at the d~scretion of the City if the City advances funds to the Reserve Fund to maintain the Reserve Fund at its originally established amount. A judgment debtor (property owner) has 140 days from the date of service of the notice of levy in which to redeem the property to be sold. If a judgment debtor fails to redeem and the property is sold, his only remedy is an action to set aside the sale, which must be brought within 6 months of the date of sale. If, as a result of such an action a foreclosure sale is set aside, the judgment is revived and the judgment creditor is entitled to interest on the revived judgment as ~f the sale had not been made. The constitutionality of the legislation establishing such procedures and repealing the prior provisions for a one year redemption period has not been tested; and there can be no assurance that, if so tested, the legislation would be upheld. In the event such a superior court foreclosure is necessary, there may be a delay in payments to Bondowners pending prosecution of the foreclosure proceedin s and receipt by the City of the proceeds from the foreclosure sale. Bankruptcy and ot~er events could substantially delay a foreclosure sale. (See "SPECIAL RISK FACTORS - Foreclosure Delays and Bankruptcy" herein.) It is also possible that no bid for the purchase of any such property with delinquent assessment installments would be received at the foreclosure sale. Land Values Reference is made to A pendix C which contains a letter from Mills-Carneghio autovich, Inc., of San Jose, ~aFlifornia (the "A praisal Consultant") summarizing the ~DVsptrrpci~.al Consultant's opinion with respect to the vaFule of the land located in the Assessment The valuation of the land discussed in the Appraisal Consultant°s letters assumes completion of the Project. Based upon the analysis set forth therein, the value of each parcel of land will exceed the amount of the full assessment lien against it. However, there is no assurance that, in the event of a foreclosure sale for a delinquent assessment installment any