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8.A. - Page 26 <br /> Customers entered into a Water Supply Agreement (the "WSA") that replaced a prior <br /> agreement entered into in 1984. The WSA has a 25-year term (with provisions for two <br /> conditional five-year extensions). The City currently receives all of its potable water from the <br /> Regional Water System. See "THE ENTERPRISE" and APPENDIX A—GENERAL <br /> INFORMATION ABOUT THE CITY OF REDWOOD CITY AND SAN MATEO COUNTY. <br /> Authority for Issuance of the Bonds <br /> The Bonds are being issued pursuant to (i) the laws of the State of California (the <br /> "State"), including the Marks-Roos Local Bond Pooling Act of 1985, constituting Article 4, <br /> Chapter 5, Division 7, Title 1 (commencing with Section 6584) of the California Government <br /> Code, as amended (the "Bond Law"), (ii) the Indenture, (iii) a resolution adopted by the <br /> Governing Board of the Authority on April 13, 2015, and (iv) a resolution adopted by the City <br /> Council of the City on April 13,2015. <br /> Purpose of the Bonds <br /> The Bonds are being issued to (a) refund, on a current basis, the Authority's outstanding <br /> City of Redwood City Public Financing Authority Water Revenue Bonds, Series 2006A (the <br /> "2006 Bonds"), (b) fund a reserve fund for the Bonds, and (c) pay the costs of issuance of the <br /> Bonds. See "THE FINANCING PLAN." <br /> Security and Source of Repayment <br /> The City will secure its obligation to pay Installment Payments with its pledge of all of <br /> the "Net Revenues" of the Enterprise, defined generally as all gross income and receipts <br /> derived by the City from the ownership and operation of the Enterprise, less operation and <br /> maintenance costs. The Bonds are also secured by amounts held in any fund or account <br /> established under the Indenture (other than the Project Fund and the Rebate Fund). See <br /> "SECURITY FOR THE BONDS." A reserve fund will be established for the Bonds. See <br /> "SECURITY FOR THE BONDS—Reserve Fund" below, including a description of certain <br /> circumstances under which the Reserve Fund for the Bonds may be terminated. <br /> The City's obligation to make Installment Payments is on a parity with certain other <br /> obligations of the City. See "Outstanding Enterprise Debt"below. <br /> Outstanding Enterprise Debt <br /> The City's obligation to make Installment Payments under the 2015 Installment Purchase <br /> Contract is on a parity with (i) its obligation to make installment payments (the "2007 <br /> Installment Payments") under an Installment Purchase Contract (the "2007 Installment <br /> Purchase Contract") entered into in connection with the issuance of the Authority's $15,150,000 <br /> Water Revenue Bonds, Series 2007(the "2007 Bonds"), and (ii)its obligation to make installment <br /> payments (the "2013 Installment Payments")under an Installment Purchase Contract (the "2013 <br /> Installment Purchase Contract") entered into in connection with the issuance of the Authority's <br /> $26,870,000 Water Revenue Bonds, Series 2013 (the "2013 Bonds"). <br /> Future Parity Debt <br /> The 2015 Installment Purchase Contract, the 2013 Installment Purchase Contract and the <br /> 2007 Installment Purchase Contract permit the City to issue bonds or incur other obligations <br /> payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity <br /> with the 2015 Installment Payments, the 2013 Installment Payments and the 2007 Installment <br /> -2- <br />