CHAPTER 319

FORMERLY

SENATE BILL NO. 277

AN ACT AMENDING THE NEWARK CITY CHARTER, BEING CHAPTER 152 OF VOLUME 48, LAWS OF DELAWARE, AS AMENDED, RELATING TO THE CITY'S ABILITY TO BORROW MONEY FOR CURRENT EXPENSES, UNFUNDED LIABILITIES, TAX INCREMENT FINANCING, AND THE CITY'S POWER TO INCUR BONDED INDEBTEDNESS.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each house thereof concurring therein):

WHEREAS, Article IV, Powers of Council, Section 406 of the Newark Municipal Charter provides that the Newark City Council shall have the authority to borrow funds for current expenses incurred by the City, and Section 407 of the Newark Municipal Charter provides that City Council has the power to incur bonded indebtedness for various expenditures; and

WHEREAS, the City of Newark seeks to clarify language in these Charter Sections; and

WHEREAS, the City of Newark seeks additional purchasing flexibility for meeting the City’s financial obligations for its short- and long-term needs, including the purchase of parkland, recreational facilities, surface and multi-level parking facilities, economic development projects, or other required approved unfunded liabilities; and

WHEREAS, the Newark Municipal Charter does not expressly authorize the City to secure letters of credit, or to issue bonds for unfunded liabilities, or to issue bonds for tax increment financing; and

WHEREAS, to facilitate securing bonds for these needs, and to reimburse to the issuer any amount drawn against letters of credit, the City of Newark seeks clarifying authority to designate any amount so drawn to be a general obligation of the City of Newark secured by its full faith, credit and taxing power except for bonds which fund tax increment financing districts or programs; and

WHEREAS, the City of Newark has determined that it is in the best interest of the City to clarify its lawful authority to issue bonds, either by competitive or negotiated sale, in an amount sufficient to satisfy these needs, and to seek the lowest rates for the benefit of our citizens;

NOW THEREFORE,:

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE (Two-thirds of all members elected to each house thereof concurring therein):

Section 1. Amend the title of Section 406 of the Newark Municipal Charter by adding the words “AND OTHER LIABILITIES” to read as follows:

“406 – BORROWING FOR CURRENT EXPENSES AND OTHER LIABILITIES.”

Section 2. Amend Section 406 of Newark Municipal Charter by adding a new third paragraph to read as follows:

“The council shall be authorized to take whatever action is necessary to obtain an appeal bond as may be required for the appeal of a court judgment, including obtaining security for such appeal bond such as through the securing of a letter of credit. The city’s obligation to reimburse any amount drawn under a letter of credit shall constitute a general obligation of the city secured by the full faith, credit and taxing power of the city.”

Section 3. Amend Section 406 of the Newark Municipal Charter by inserting “or bonds” after the word “notes” in the last paragraph thereof.

Section 4. Amend Section 406 of the Newark City Charter by deleting “Such short-term debt shall not” in the last paragraph thereof and inserting in lieu thereof “The short-term debt authorized hereinabove shall not be considered as part of the bonded debt of the city when limitations under indebtedness, as set forth elsewhere in this charter, are computed. The debt authorized for the payment of unfunded court judgments, and any debt incurred with respect to securing an appeal bond shall”.

Section 5. Amend the title of Section 407 of the Newark Municipal Charter by adding the words ‘AND TAX INCREMENT FINANCING” to read as follows:

“407 – POWER TO INCUR BONDED INDEBTEDNESS AND TAX INCREMENT FINANCING.”

Section 6. Amend Section 407.1 of the Newark Municipal Charter, by inserting the following prior to the period at the end of the first paragraph thereof:

“; or to fund tax increment financing districts or programs, as provided in Title 22, Delaware Code, Ch. 17 or to fund the payment of any judgment against the city entered by a court after the conclusion of adversary proceedings”.

Section 7. Amend Section 407.1 of the Newark Municipal Charter by inserting a new paragraph after the first paragraph thereof to read as follows:

“In addition to all other powers the City of Newark may have, and notwithstanding any limitation of law, the City of Newark shall have all powers and may undertake all actions for the purposes set forth in, and in accordance with, Title 22 of the Delaware Code, Chapter 17, relating to the Municipal Tax Increment Financing Act. Bonds to fund tax increment financing districts or programs are non-recourse to the municipality and shall only be paid from tax increment financing district or program assessments. Said bonds are non-recourse to property owners who purchase subject to a tax increment district or program [hereinafter TIF]. Property owners who purchase subject to a TIF shall only be responsible for TIF obligations determined by the individual assessment of their property.”.

Section 8. Amend Section 407.2 (7) of the Newark Municipal Charter by deleting therein “shall be sold to the highest bidder after at least one month’s notice, published at least twice in a newspaper of general circulation in the city and at least once in a publication carrying municipal bond notices and devoted primarily to financial news” and inserting in lieu thereof “may be sold by competitive or negotiated sale”.

Approved July 9, 2008