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HomeMy WebLinkAboutRES 327 Draft 01 1980-1984O 0 COUNTY OF HAWAII - STATE OF HAWAII RESOLUTION NO. 327 82 WHEREAS, Improvement District No. 11, Discovery Harbor and Adjacent Lands, Waiohinu, District of Ka'u, Hawaii, was created in 1972 for the construction of certain roadway and water improvements; and WHEREAS, the cost of said improvements was financed by the sale of Improvement District bonds; and WHEREAS, because of the failure of certain owners of lots to make timely payment of their installment assessment obligations, said Improvement District was unable to redeem the bonds which matured on May 1, 1977; and WHEREAS, said Improvement District, while paying all accruing bond interest, has thereafter been unable to redeem bonds as they matured; and WHEREAS, said Improvement District has made substantial progress in accumulating funds necessary to allow redemption of matured bonds and now has sufficient funds to redeem all bonds bearing maturity dates between 1977 and 1982 and to pay all bond interest which will accrue through May 1, 1982; and WHEREAS, the accumulation of funds has resulted in the full restoration of the reserve fund for said Improvement District; the payment of the matured bonds and the bond interest will not result in the depletion of said reserve fund; and WHEREAS, it is in the best interest of all bondholders that defaulting lot owners be induced to make prompt payments of their installment obligation so that said Improvement District will continue to have sufficient funds with which to make timely payment of all bond principal and interest obligations; and WHEREAS, it is also in the best interest of all non -defaulting lot owners that defaulting owners be induced to make prompt payments on their installment obligations so that such defaulting owners will bear an equitable share of the cost of said Improvement District; and WHEREAS, it appears that the amount of $450,000.00 would represent a reasonable estimate of the increased costs to said Improvement District caused by the default in installment assessments, and it further appears that the amount of penalties incurred in said Improvement District since its inception until March 3, 1982, is approximately $2,566,000.00; and WHEREAS, after reviewing the financial status of the Improvement District, the recommendations of the Finance Department and counsel for the Improvement District, it appears in the best interest of both bondholders and lot owners to induce payment by defaulting lot owners by a partial waiver of penalty by application of the provisions of Section 8.1, Article 4, Chapter 16, Hawaii County Code. NOW, THERFORE, BE IT RESOLVED BY THE COUNCIL OF THE COUNTY OF HAWAII as follows: -2- 1. Under Section 8.1, Article 4, Chapter 16, Hawaii County Code, a penalty waiver for all penalty incurred in Improvement District No. 11, Discovery Harbor and Adjacent Lands, Waiohinu, District of Ka'u, Hawaii, is authorized under the terms and conditions specified below. 2. Penalty Waiver Credit. The penalty waiver shall be in the form of a penalty waiver credit; there shall be no distribution of cash made to or on account of such penalty waiver credit to any lot owner. 3. Time when Credit is Allowed. a. Lots with Delinquent Installment Assessment. For those lots with delinquencies in installment assessments, the penalty waiver credit shall be allowed for each such lot upon payment of the amount equal to the delinquent installment assessment less the penalty waiver credit. b. Lots Current in Installment Assessment. For those lots current in installment assessments, the penalty waiver credit shall be allowed upon the payment of the next annual installment or at such earlier time as the Finance Director shall determine is in the best interest of the Improvement District. 4. Application of Penalty Waiver Credit. a. Subject to the limitations set forth below, the penalty waiver credit allowed for each lot shall be applied in the following order until depleted: (1) First to reduce the total penalty outstanding on the lot against which the penalty was imposed. -3- (2) Then to reduce the amount of delinquent principal and interest against such lot. (3) Then, if directed by the holder of the penalty waiver credit, to reduce the outstanding delinquent assessment on any other lot in said Improvement District in the same priority as (1) and (2) above. (4) If no directions are given by the holder of the penalty waiver credit under (3) above, then said credit shall be used to reduce the principal and interest of the next assessment installment when it becomes due. b. For purposes of "a" above, "the holder of the penalty waiver credit" is the owner of the lot to which the penalty waiver credit is to be applied, unless in the deed conveying a lot or by contract or otherwise the grantor or any other person reserved the rights to any penalty waiver, in which event such grantor or person shall be "the holder of the penalty waiver credit" for such lot upon proof by such grantor or person of such reservation of the penalty waiver rights. C. The penalty waiver credit shall not be applied to reduce foreclosure sale expenses or collection charges included in the assessment installments. d. The rights, if any, for or on account of any unexpended penalty waiver credit shall be determined by the Council at the termination of said Improvement District. -4- 5. Computation of Penalty Waiver Credit. The penalty waiver credit shall be 82.46 percent of the total penalty accrued in Improvement District No. 11 through March 3, 1982. For purposes of computation of penalty waiver credit, "total penalty accrued" shall include all penalty accrued until March 3, 1982, whether or not said penalty has been paid, and without respect to whether the assessment installments for the affected lot have been paid. The computation for penalty waiver credit shall not include any penalty which accrued after March 3, 1982, although no provision herein shall prohibit the application of the penalty waiver credit to reduce the amount owed for penalties accruing after March 3, 1982. This Resolution shall be effective upon the effective date of passage of Bill 837 , amending Chapter 16, Article 4, Hawaii County Code, to add a new Section 8.1. 1982. Dated at Hilo, Hawaii, this 21st day of April , COUNTY COUNCIL County of Hawaii Hilo, Hawaii I BY: COUNCIL MEMBER, COUN11Y OF HAWAII I hereby certify that the foregoing RESOLUTION was by the vote indicated to the right hereof adopted by the COUNCIL of the County of Hawaii on April 21..r...._198.2 .................................... ATTEST: COUNTY CL K / AIRMAN & PR IDING OFFICER ROLL CALL VOTE Dahlberg x De Luz, III x Domingo x Fujii x Hale x Kawahara x Lai x Schutte x Chr. Yamashiro x 6 0 3 Reference: M.B. Na RESOLUTION N0. 327-82