In accordance with RCW Chapter 35.54, the city establishes and creates a fund for the purpose of guaranteeing, to the extent of such fund, the payment of its bonds and warrants issued to pay for any local improvement ordered in local improvement districts in the city, including local improvement district No. 1 created by Ordinance No. 56, passed and approved July 23, 1957, and any local improvement districts created subsequent to the date of taking effect of the ordinance codified in this chapter. This fund shall be known and designated as “local improvement guaranty fund.” (Ord. 59 § 1, 1957)

After the passage of the ordinance codified in this chapter, there shall be levied, from time to time as other taxes are levied, such sums as may be necessary to meet the financial requirements of the local improvement guaranty fund created by this chapter, and whenever the city pays out of said guaranty fund any sum on account of principal and interest on a local improvement bond or warrant guaranteed under this chapter, the city, as trustee for such fund, shall be subrogated to all of the rights of the holder of the bond, interest coupon, or warrant so paid and the proceeds thereof shall become a part of said fund. (Ord. 59 § 2, 1957)

Whenever any interest coupon, bond or warrant guaranteed under the provisions of the laws of the state, in pursuance of which the ordinance codified in this chapter is passed, is in default, the city clerk shall be and is authorized and directed, upon the presentation and delivery of such defaulted bond, coupon or warrant, to execute, sign and deliver to the person or persons presenting the same, in the order of their presentation, and the city clerk shall honor and pay, a warrant on the local improvement guaranty fund in such amount as may be necessary to pay in full any such coupon, bond or warrant with any interest that may be due thereon. Any defaulted coupon, bond or warrant received by the city clerk under the provision of this chapter shall be held for the benefit of the local improvement guaranty fund. (Ord. 59 § 3, 1957)

Warrants drawing interest at a rate not to exceed six percent shall be issued, as other warrants are issued by the city, against the local improvement guaranty fund to meet any liability accruing against it and, at the time of making its annual budget and tax levy, the city shall provide for the levying of a sum sufficient, with the other resources of the fund, to pay warrants so issued during the preceding fiscal year; provided, that such warrants shall at no time exceed five percent of the outstanding bond obligations guaranteed by the fund. (Ord. 59 § 4, 1957)

The city clerk is authorized and directed to pay into such local improvement guaranty fund all interest received from bank deposits of the fund, as well as any surplus remaining in any local improvement district fund guaranteed under said state laws after the payment of all outstanding bonds or warrants payable primarily out of such local improvement district fund. (Ord. 59 § 5, 1957)

Neither the owner nor the holder of any bond, interest coupon, or warrant issued against a local improvement fund after the passage of the ordinance codified in this chapter shall have any claim therefor against the city, except for payment from the special assessments made for the improvements for which said bond or warrant was issued, and except as against the local improvement guaranty fund created by this chapter, and the city shall not be liable to any holder or owner of such bond, interest coupon, or warrant for any loss to the guaranty fund occurring in the lawful operation thereof by the city. The remedy of the holder or owner of a bond or warrant in case of nonpayment shall be confined to the enforcement of the assessment and to the guaranty fund. A copy of this section of the ordinance codified in this chapter shall be plainly written, printed or engraved on each bond issued and guaranteed under this chapter, and the writing, printing or engraving shall be deemed sufficient compliance with the requirements of RCW 35.45.070. (Ord. 59 § 6, 1957)