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and payment of the principal of the bonds and the interest thereon, and all the bonds are secured by the monies in the redemption fund created pursuant to said proceedings and by the unpaid assessments levied to provide for payment of said acquisitions and improvements, and, including principal and interest, are payable exclusively out of said redemption fund. The unpaid assessments are collected in annual install- ments together with interest on the declining balances on the tax roll on which general taxes for real property are collected and are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest and are subject to the same provisions for sale and redemption as are properties for non-payment of general taxes. In the event of a delinquency in the payment of any installment of principal and interest appearing on the tax roll, the City is obligated to advance from surplus funds the amount of such delinquency to the redemption fund. Passage on June 6, 1978, of the Jarvis-Gann Initiative (Proposition 13), now Article XIIIA of the California Constitution, has sharply reduced the amount of general property tax revenues received by the City; such reduction in tax revenues makes it less likely that the City will have surplus funds to advance to the Redemption Fund to cover delinquencies. In addition, passage of said Initiative and sub~e~5~_~Rry enactments eliminate the formerly applicable mandatory duty on the part of the City to levy and collect a special tax (in the amount necessary to meet delinquencies, but not to exceed 10~ per $100 of assessed valuation of property within the City) if surplus funds are not available to cover delinquencies. COVENANT FOR SUPERIOR COURT FORECLOSURE: In the event of delinquency in the payment of any installment of an unpaid assessment, the City may order institution of an action in the Superior Court of the State of California to foreclose the lien of such unpaid assessment, as authorized in Part 14 of Division 10 of the Streets and Highways Code of the State of California (the "Improvement Bond Act of 1915"). In such action the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. Upon such a sale the right of redemption is limited to one year from the date of sale, as distinguished from the five-year redemption period in the event of a tax sale. Such judicial foreclosure sale, which was authorized in Part 14 of Division 10 of the Streets and Highways Code (the "Improvement Bond Act of 1915"), is not mandatory; and the City could, absent a covenant to use judicial foreclosure, permit a tax sale and the five-year redemption period. However, by the resolution of the City Council, the City covenants with the holders of the bonds that in the event there are no available surplus funds and moneys remaining in the reserve fund from which transfers may be made into the redemption fund, pursuant to and as provided in Sections 8802, 8803 and 8806 of the Streets and Highways Code of the -3-