As soon as practicable after enactment of the ordinance levying assessments, the council shall, by resolution, provide for the issuance of bonds of the county for any improvement district for which there are unpaid assessments. The aggregate principal amount of such bonds shall equal the total amount of unpaid assessments as certified by the director of finance pursuant to Section 14.50.080. Such bonds shall be coupon bonds payable to the bearer in not less than five nor more than twenty years; shall be subject to call as provided in this chapter at such premium, if any, as may have been provided for in the resolution of the council adopted pursuant to Section 14.42.060; shall bear serial numbers; shall be of such denomination, not exceeding five thousand dollars each, as the council shall determine; shall bear interest at a rate of not more than nine percent per year, payable semiannually; and shall bear the name of the improvement district for which same are issued. The council in its resolution authorizing issuance of such bonds shall prescribe the form of the bonds, the number of years in which the bonds shall be payable, and the respective amounts of the aggregate principal of the bonds which shall mature in each year. The bonds maturing in any year shall constitute the annual series of that year. The bonds may be issued without privilege of registration or registrable as to principal only or as to both principal and interest, as determined by the council.

B. Such bonds shall be executed by the director of finance, or by a deputy of the director duly designated by director to execute such bonds, shall bear the lithographed or engraved facsimile signature of the mayor and shall be impressed with a lithographed or engraved facsimile of the seal of the county. Interest coupons shall bear a lithographed or engraved facsimile of the signature of the director of finance.

C. The bonds, by their issuance, shall be conclusive evidence of the regularity of all proceedings had prior thereto under and pursuant to this chapter. (Ord. 827 § 1(b), 1975: Ord. 801 § 1 (part), 1974: prior code § 25-8.1)

If it appears feasible and desirable, the council may provide for issuance of the bonds in two or more separate divisions, with the bonds of each division being sold at separate times and bearing different dates. In such event, however, the bonds of each division after the first shall mature on the same date of the year as the bonds of the first division and interest thereon shall be payable on the same dates of the year as the interest on the bonds of the first division; and if the first interest paying date on the bonds of any such division after the first would thus be less than three months after the date of such bonds, then the first interest coupons thereon shall be dated six months later. The first interest coupons on bonds of any such division after the first shall include interest calculated from the date of the bonds to the date of such coupons notwithstanding that such period is less or more than six months. (Ord. 801 § 1 (part), 1974: prior code 25-8.1.1)

If bonds cannot be issued upon the security of any particular unpaid assessments because of a restraining order, injunction or other cause not applicable to other unpaid assessments, the issuance of bonds upon the security of the assessments not affected by such restraining order, injunction or other cause, shall not be delayed, and such bonds may be issued in advance of the issuance of bonds in the amount so affected. (Ord. 801 § 1 (part), 1974: prior code § 25-8.1.2)

The director of finance shall sell the bonds to be issued to the highest bidder therefor, after public advertisement for tenders for at least once each week for not less than two successive weeks in a newspaper of general circulation in the county; provided, however, the council may, by resolution, authorize sale thereof by the director of finance at private sale upon such terms as provided in the resolution. In the event no purchaser is found, the county may be the purchaser of any such bonds, using any funds available and unspent. Bonds sold to a purchaser other than the county may be sold for such discount as is acceptable to the council. Upon sale of the bonds, the director of finance shall be responsible for all acts necessary to complete such sale and shall receive the proceeds thereof. Proceeds of bonds sold, less only the amount of any reserve fund to be established therefrom pursuant to Section 14.52.070, shall be credited to the improvement account of the special fund referred to in Section 14.50.230. (Ord. 801 § 1 (part), 1974: prior code § 25-8.2)

A. The director of finance shall preserve a record of the bonds for each improvement district in a suitable book kept for that purpose. The bonds shall be payable only out of the moneys collected on the unpaid assessments for which said bonds were issued, or from the reserve fund established for such improvement district pursuant to Section 14.52.070, in the event that the moneys collected on the unpaid assessments are not sufficient to pay the bonds or the interest thereon as the same become due. The county shall not otherwise guarantee payment of any bonds issued under the provisions of this article; provided, that, with the approval of the council, interest payments may be advanced temporarily out of any moneys available in the general fund of the county. Moneys in the bond account of the special fund referred to in Section 14.50.230 shall be applied solely to the payment of interest and principal of bonds issued for such improvement district, and premiums, if any, on payment of bonds before maturity, until such bonds have been paid. In the event that moneys in the account prove insufficient at any time to pay the principal and interest, or the interest only, as the case may be, on bonds outstanding, moneys shall be advanced from the reserve fund established pursuant to Section 14.52.070 into the bond account of the special fund in such amounts as will enable the director of finance to make the payment of principal or interest, or interest only, as the same becomes due.

B. The principal and interest of the bonds shall be payable at the office of any bank or fiduciary company or such other places as may be determined by the director of finance. In all cases, the bonds and coupons shall recite the place of payment. In case any bonds are made payable elsewhere than in Wailuku, Hawaii, the director of finance shall remit the funds necessary to pay the interest and principal when due, of any such bonds, with exchange, to the institution so designated, first assuring himself that such institution is then solvent. (Ord. 801 § 1 (part), 1974: prior code § 25-8.3)

If it appears to the director of finance that there is danger of an ultimate loss accruing to the bondholders for any reason, he shall withhold payment on all matured bonds and coupons and report the facts to the council so that proper action may be taken to equitably protect all bondholders. (Ord. 801 § 1 (part), 1974: prior code § 25-8.3.1)

The council may provide in the resolution adopted pursuant to Section 14.14.050 that a reserve fund shall be established as additional security for the payment of principal and interest on bonds issued in proceedings taken pursuant to this article. Unless the first annual installment on assessments will be payable at least one month prior to the first interest due date on the bonds, the council shall provide in the resolution that a reserve fund shall be established in an amount at least sufficient to pay the interest which will come due on the bonds on the first interest due date. The reserve fund shall be established from the proceeds from the sale of bonds in such amount as is designated by the council in the aforementioned resolution. Moneys in the reserve fund shall be used in accordance with the provisions of subsection A of Section 14.50.170 and Sections 14.50.180 and 14.52.050. All moneys in the reserve fund not reasonably required from time to time shall be invested, as the director of finance shall determine, and the proceeds of such investments shall be added to and become a part of the reserve fund. (Ord. 801 § 1 (part), 1974: prior code § 25-8.4)

If at any time the amount in the reserve fund is less than one-half of the original amount thereof or double the amount of the delinquent unpaid assessment installments for the preceding year, the council shall replenish the reserve fund by providing for the levy and collection of an ad valorem assessment upon the lands assessed in the proceedings sufficient to restore the fund to one-half of the original amount thereof or double the amount of the delinquent unpaid assessment installments for the preceding year, whichever is greater. The ad valorem assessment referred to in this section shall be levied, collected and enforced by the county in the same time and manner as property taxes for general county purposes are levied, collected and enforced. (Ord. 801 § 1 (part), 1974: prior code § 25-8.4.1)

A. Whenever sufficient funds are in the hands of the director of finance in the bond account of the special fund referred to in Section 14.52.050, by reason of advance payment of unpaid assessment installments pursuant to Section 14.50.130, the director of finance shall call for payment such a number of bonds as there are funds to pay. Notice of call of such bonds shall be published once in a newspaper of general circulation in the county, and a copy of such notice shall be mailed, not later than five days after publication thereof, to the person who purchased such bonds at the original sale thereof.

B. At the next interest due date of the bonds after expiration of thirty days from the publication of such notice, interest on the bonds so called for payment shall cease; and the moneys for the payment of such bonds shall be set aside by the director of finance in a special deposit to which deposit only the owners of the bonds so called shall thereafter look for payment. The call price of any bond called for payment before maturity pursuant to this section shall be the principal amount of such bond, interest at the rate stated on the face of the bond from the date on which interest on such bond was last paid to and including the next interest due date of the bonds after the thirtieth day from the publication of such notice, together with the applicable premium payable, if any.

C. In first selecting a bond for payment before maturity, the lowest numbered bond of the annual series midway to the end of the bond term shall be chosen. Successive bonds to be called shall be chosen from the lowest number of each annual series, before and after the annual series from which the first bond is selected, so that bonds called shall be a pro rata part of each annual series. It is intended that the relationship of unpaid assessments to bonds outstanding be disturbed as little as possible by the call of bonds. (Ord. 801 § 1 (part), 1974: prior code § 25-8.5)

In the event the director of finance receives for payment any interest coupon from a bond for which notice of advanced maturity has been given without the bond being surrendered to him, he shall mail a copy of the notice of advanced maturity to the address given for payment of such coupon and, if the coupon received is for interest which has ceased to accrue on the bond by reason of its advanced maturity, shall also return such interest coupon with such copy of notice. Failure of the holder or owner of the bond to receive such additional notice shall not affect the advancing of the maturity of the bond. (Ord. 801 § 1 (part), 1974: prior code § 25-8.5.1)

No bonds issued under the provisions of this article shall be considered as county bonds within the meaning of Section 248-5 of the Hawaii Revised Statutes, nor shall the payment of the same be a charge against the general revenues of the county. (Ord. 801 § 1 (part), 1974: prior code § 25-8.6)

A. In the event that any surplus remains in any reserve fund or bond account for any improvement district after the payment of all of the bonds, and interest thereon, which are payable therefrom, such surplus may be used for any one or more of the following purposes, as determined by the council by resolution or in the ordinance levying assessments:

1. For transfer to the general fund of the county, provided, that the amount shall not exceed the lesser of one thousand dollars or five percent of the total amount expended from the improvement account;

2. For transfer to a special fund for maintenance of the improvements constructed in the proceedings, or a specified part thereon;

3. Pro rata refunds to the owners of the properties assessed in the proceedings.

B. For the purpose of this section, “owners” shall have the following meanings, depending on the circumstances applicable to the particular assessments:

1. The person or persons making the payment, as to an assessment paid during the thirty-day period provided in Section 14.50.060, and as to an unpaid assessment paid in advance pursuant to Section 14.50.130; and

2. The person or persons who owned the property at the time of payment of the last installment paid on the unpaid assessment, as to all other assessments.

C. There shall be transferred to the general fund of the county any portion of the surplus which shall not have been paid to or claimed by the persons entitled thereto within four years after the due date of the last bonds; and any interest earned from the investment of any moneys constituting the part of the surplus remaining during said four-year period.

D. Notwithstanding the provisions of this section, moneys in any reserve fund shall be used by the director of finance to pay the principal or interest or both, in whole or in part, on the last outstanding maturity or maturities the bonds of the improvement district for which such reserve fund was established; and unpaid assessment installments or such portions thereof which would otherwise be collected to make such payment on the bonds shall be canceled unless such moneys are insufficient, after making the provision for delinquencies and the apportionments hereinafter provided for, to result in cancellation of at least twenty-five percent of the total amount of the last annual installment, in which event such use of the moneys shall not be made; and provided further, that if the moneys are so used, the director of finance shall first make provision for and retain a sufficient amount to cover reasonably expected delinquencies in payment of any portions of unpaid assessment installments which will not be canceled by such use of moneys in the reserve fund; and apportion to assessments paid during the thirty-day period and unpaid assessments paid in advance, pursuant to Sections 14.50.060 and 14.50.130, respectively, if any, their proportionate shares of the moneys, same to be paid to the owners (as defined above) of the properties subjected to the assessments. (Ord. 801 § 1 (part), 1974: prior code § 25-8.7)