HomeMy WebLinkAbout1993-03-09; City Council; 12100; ADDITION OF CHAPTER 3.34 TO THE CARLSBAD MUNICIPAL CODE TO DECLARE A TRUST FOR SECURITIES AND RETENTIONSt? b
ADDITION OF CHAPTER 3.34 TO THE
Introduce Ordinance No. flS-227 adding Chapter 3.34 to tl
Carlsbad Municipal Code to provide that securities ai retentions are held in trust for the city of Carlsbad.
ITEM EXPLANATION
The City requires various forms of security, such as securii
to secure obligations for a public works contract or subdivision improvement agreement. If the person providii
the security files bankruptcy certain types of security, su(
as cash, letters of credit and certificates of deposit, may 1
considered part of the bankruptcy estate of the debtor whic
must be turned over to the bankruptcy court. Retentions (
payments to a contractor may also be considered part of tl
bankruptcy estate.
If the City passes an ordinance declaring securities ai retention of funds from a contract are held in trust for tt
defense to the turnover of the security or retention money 1
passage of this ordinance.
FISCAL IMPACT
m benefit of the City, it will enable the City to assert
N N
I the court. Therefore, the city attorney recommends tl E
0 z
a, U G (d G -ri a k 0
a al
L)
a 0 h u G TI
4 .I+ L) G 3 0 V
Has the potential to save the City an undetermined amount (
3 EXHIBITS
Ordinance No. Ns -- dd? .
2 0
4 6
d ib 3 0 0
I
.
1
2
3
4
5
6
7
8
9
10
I
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
0 0
ORDINANCE NO. NS-229
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, AMENDING THE CARLSBAD
MUNICIPAL CODE BY THE ADDITION OF CHAPTER 3.34
DECLARING SECURITIES AND RETENTIONS TO BE HELD
IN TRUST
WHEREAS, securities and retention of contract fur
secure the performance of obligations owed to the City; and
WHEREAS, the loss of securities or retention fui
could have an adverse financial impact on the City; and
WHEREAS, the loss of securities or retention fu
could result in a decrease of funds available to serve
public; and
WHEREAS, securities and retention funds should
considered the property of the city until all obligations to
City have been satisfied.
NOW, THEREFORE, the City Council of the City
Carlsbad does hereby ordain as follows:
SECTION 1: That Chapter 3.34 of the Carls
Municipal Code is hereby adopted to read as follows:
"Chapter 3.34
SECURITIES AND RETENTIONS
Section 3.34.010 Securities and Retentions Helc
Trust. Whenever security or a retention of funds is requj under the Carlsbad Municipal Code or under the terms 0
contract with the City, that security or retention shall be 1
in trust for the City of Carlsbad."
EFFECTIVE DATE: This ordinance shall be effecl
thirty days after its adoption, and the city clerk shall cerl
to the adoption of this ordinance and cause it to be publi:
at least once in the Carlsbad Journal within fifteen days a
its adoption.
1
.
1
2
3
4
5
6
7
8
9
lo
11
l2 9a WE
qn8 Ow8 iU, $055 14
CrZ u->s l5 OnL 9 s<- s&g2
““%Q k2 QOJ
oo
m> &E& 13
oZJ? 16
g2s 17
18
19
20
21
22
23
24
25
26
27
28
e e
INTRODUCED AND FIRST READ at a regular meeting (
Carlsbad City Council on the 9th day of MARCH
and thereafter
i
PASSED AND ADOPTED at a regular meeting of the
day of Council of the City of Carlsbad on the
1993, by the following vote, to wit:
AYES:
NOES :
ABSENT:
APPROVED AS TO FORM AND LEGALITY
RONALD R. BALL, City Attorney
CLAUDE A. LEWIS, Mayor
ATTEST:
ALETHA L. RAUTENKRANZ, City Clerk
2