In lieu of creating and funding a guaranty fund under Section 11-42-701 for an issue of assessment bonds or refunding assessment bonds, a local entity may establish a reserve fund to secure the issue.
payable in part or in whole from assessments levied in an assessment area, improvement revenues, and a guaranty fund or reserve fund. See Utah Code 11-42-102
Bonds: means assessment bonds and refunding assessment bonds. See Utah Code 11-42-102
Property: includes real property and any interest in real property, including water rights and leasehold rights. See Utah Code 11-42-102
Refunding assessment bonds: means assessment bonds that a local entity issues under Section 11-42-607 to refund, in part or in whole, assessment bonds. See Utah Code 11-42-102
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
(2)
If a local entity establishes a reserve fund under this section:
(a)
the bonds secured by the reserve fund are not secured by a guaranty fund under Section 11-42-701;
(b)
the local entity is not required to fund a guaranty fund under Section 11-42-701 for those bonds; and
(c)
unless otherwise provided in this part or in the proceedings authorizing the issuance of bonds, the provisions of this part regarding a guaranty fund have no application to the bonds that are secured by the reserve fund.
(3)
Each local entity that establishes a reserve fund shall:
(a)
fund and replenish the reserve fund in the amounts and manner provided in the proceedings authorizing the issuance of the bonds that are secured by the reserve fund; and
Subject to Subsection (4)(b), a local entity may replenish a reserve fund under this section by any of the methods described in Subsection 11-42-701(1)(b).
(b)
The proceedings authorizing the issuance of assessment bonds or refunding assessment bonds shall provide that if a local entity uses any of the methods described in Subsection 11-42-701(1)(b) to replenish a reserve fund, the local entity shall be reimbursed, with interest at a rate that the local entity determines, with money that the local entity receives from foreclosing on delinquent property.
(5)
Upon the retirement of bonds secured by a reserve fund, the local entity shall:
(a)
terminate the reserve fund; and
(b)
disburse all remaining money in the fund as provided in the proceedings authorizing the issuance of the bonds.
