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7.1.B. - Page <br /> REPORT <br /> To the Honorable Mayor and City Council <br /> From the City Manager <br /> February 9, 2015 <br /> SUBJECT <br /> Selection of financing team to refund the outstanding City of Redwood City Public <br /> Financing Authority Water Revenue Bonds 2006A <br /> RECOMMENDATION <br /> Approve by resolution appointment of William Euphrat Municipal Finance, Inc., Jones <br /> Hall, and Quint and Thimmig, LLP in connection with the refunding of the Public <br /> Financing Authority Water Revenue Bonds, Series 2006A. <br /> BACKGROUND <br /> The City purchases all of its potable water supplies from the San Francisco Public <br /> Utilities Commission (SFPUC) via the Hetch Hetchy regional water system and its <br /> demand for water has consistently exceeded its assured supply of water from the <br /> SFPUC. To address this imbalance, the City initiated a water recycling project in 2005. <br /> The project consists of water recycling equipment and storage tanks at the Silicon <br /> Valley Clean Water Authority (SVCWA, formerly SBSA) treatment facility in Redwood <br /> Shores, and distribution pipes, meters and associated infrastructure for irrigation and <br /> industrial use by businesses and homeowner associations east of US 101 in and <br /> around Redwood Shores and Seaport Boulevard. Bonds were sold in the amounts of <br /> $35,790,000 in 2005, $26,000,000 in 2006, and $15,150,000 in 2007 to finance <br /> construction of the $72 million project. The 2005 Bonds were refunded with lower cost <br /> bonds in June 2013. <br /> ANALYSIS <br /> The 2006 Bonds are approaching their first optional bond redemption date in February <br /> 2015, and now can be efficiently refinanced (or "refunded ") with lower interest cost <br /> bonds to produce lower debt service payments and aggregate net present value (NPV) <br /> savings. These bonds will have an outstanding balance in the amount of $20,705,000 <br /> at the time of refinancing. NPV savings will depend on interest rates at the time <br /> refunding bonds are sold, but, as described below, are presently estimated at more than <br /> double the Government Finance Officers Association (GFOA) recommended "best <br /> practices" 3% minimum NPV savings. <br /> Proposed Financing Team and Bond Structure <br /> The proposed financing team includes William Euphrat Municipal Finance, Inc. (WEMF) <br /> as municipal advisor, Jones Hall as bond counsel, and Quint and Thimmig, LLP as <br /> disclosure counsel. The bond counsel and the disclosure counsel were selected <br /> through a request for proposal process in which three firms were invited to participate. <br /> Page 1 of 4 <br />