After the 25-day prepayment period under Subsection 11-42-411(6) has passed or, if the 25-day prepayment period is waived under Section 11-42-104, after the assessment resolution or ordinance takes effect, a local entity may authorize the issuance of bonds to pay the costs of improvements in an assessment area, and other related costs, against the funds that the local entity will receive because of an assessment in an assessment area.
Terms Used In Utah Code 11-42-605
Assessment area: means an area, or, if more than one area is designated, the aggregate of all areas within a local entity's jurisdictional boundaries that is designated by a local entity under 2, for the purpose of financing the costs of improvements, operation and maintenance, or economic promotion activities that benefit property within the area. See Utah Code 11-42-102
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
Assessment ordinance: means an ordinance adopted by a local entity under Section 11-42-404 that levies an assessment on benefitted property within an assessment area. See Utah Code 11-42-102
Assessment resolution: means a resolution adopted by a local entity under Section 11-42-404 that levies an assessment on benefitted property within an assessment area. See Utah Code 11-42-102
Bond anticipation notes: means notes issued under Section 11-42-602 in anticipation of the issuance of assessment bonds. See Utah Code 11-42-102
Bonds: means assessment bonds and refunding assessment bonds. See Utah Code 11-42-102
Governing body: means :
(a)
for a county, city, or town, the legislative body of the county, city, or town;
(b)
for a special district, the board of trustees of the special district;
(c)
for a special service district:
(i)
the legislative body of the county, city, or town that established the special service district, if no administrative control board has been appointed under Section 17D-1-301; or
(ii)
the administrative control board of the special service district, if an administrative control board has been appointed under Section 17D-1-301;
(d)
for the military installation development authority created in Section 63H-1-201, the board, as defined in Section 63H-1-102;
(e)
for the Utah Inland Port Authority, created in Section 11-58-201, the board, as defined in Section 11-58-102; and
(f)
for a public infrastructure district, the board of the public infrastructure district as defined in Section 17D-4-102. See Utah Code 11-42-102
Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
Local entity: means :
(a)
a county, city, town, special service district, or special district;
(b)
an interlocal entity as defined in Section 11-13-103;
(c)
the military installation development authority, created in Section 63H-1-201;
Variable Rate: Having a "variable" rate means that the APR changes from time to time based on fluctuations in an external rate, normally the Prime Rate. This external rate is known as the "index." If the index changes, the variable rate normally changes. Also see Fixed Rate.
(2)
A local entity may, by resolution or ordinance, delegate to one or more officers of the issuer the authority to:
(a)
in accordance with and within the parameters set forth in the resolution or ordinance, approve the final interest rate or rates, price, principal amount, maturity or maturities, redemption features, and other terms of the bond; and
(b)
approve and execute all documents relating to the issuance of a bond.
(3)
The aggregate principal amount of bonds authorized under Subsection (1) may not exceed the unpaid balance of assessments at the end of the 25-day prepayment period under Subsection 11-42-411(6).
(4)
Assessment bonds issued under this section:
(a)
are fully negotiable for all purposes;
(b)
shall mature at a time that does not exceed the period that installments of assessments in the assessment area are due and payable, plus one year;
(c)
shall bear interest at the lowest rate or rates reasonably obtainable;
(d)
may not be dated earlier than the effective date of the assessment ordinance;
(e)
shall be payable at the place, shall be in the form, and shall be sold in the manner and with the details that are provided in the resolution authorizing the issuance of the bonds;
provide that interest be paid semiannually, annually, or at another interval as specified by the governing body.
(5)
(a)
A local entity may:
(i)
(A)
provide that assessment bonds be callable for redemption before maturity; and
(B)
fix the terms and conditions of redemption, including the notice to be given and any premium to be paid;
(ii)
subject to Subsection (5)(b), require assessment bonds to bear interest at a fixed or variable rate, or a combination of fixed and variable rates;
(iii)
specify terms and conditions under which:
(A)
assessment bonds bearing interest at a variable interest rate may be converted to bear interest at a fixed interest rate; and
(B)
the local entity agrees to repurchase the bonds;
(iv)
engage a remarketing agent and indexing agent, subject to the terms and conditions that the governing body agrees to; and
(v)
include all costs associated with assessment bonds, including any costs resulting from any of the actions the local entity is authorized to take under this section, in an assessment levied under Section 11-42-401.
(b)
If assessment bonds carry a variable interest rate, the local entity shall specify:
(i)
the basis upon which the variable rate is to be determined over the life of the bonds;
(ii)
the manner in which and schedule upon which the rate is to be adjusted; and
(iii)
a maximum rate that the bonds may carry.
(6)
(a)
Nothing in this part may be construed to authorize the issuance of assessment bonds to pay for the cost of ordinary repairs to pavement, sewers, drains, curbing, gutters, or sidewalks.
(b)
Notwithstanding Subsection (6)(a), a local entity may issue assessment bonds to pay for extraordinary repairs to pavement, sewers, drains, curbing, gutters, or sidewalk.
(c)
A local entity’s governing body may define by resolution or ordinance what constitutes ordinary repairs and extraordinary repairs for purposes of this Subsection (6).
(d)
Nothing in this Subsection (6) may be construed to limit a local entity from levying an assessment within an assessment area to pay operation and maintenance costs as described in a notice under Section 11-42-402.
(7)
If a local entity has issued interim warrants under Section 11-42-601 or bond anticipation notes under Section 11-42-602 in anticipation of assessment bonds that the local entity issues under this part, the local entity shall provide for the retirement of the interim warrants or bond anticipation notes contemporaneously with the issuance of the assessment bonds.
