AgdaPkt 2015-10-12 Closed and Joint SA and PFA

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8.B. - Page 2 not to exceed $40 million to fund specific projects identified in the CIP. Depending on bond market conditions, SVCW may also refund the 2008 and 2009 bonds in this issuance in order to reduce the cost of debt service on these older bonds. Over time, SVCW expects to pursue additional bonds and SRF loans to fully fund the CIP plan. ANALYSIS Redwood City Share of CIP funding As outlined in the JPA, Redwood City is responsible to fund 48.57% of SVCW capital expenses, aligned with the City's share of the wastewater plant capacity. Since the City of Belmont will fund its share of the upcoming round of SVCW CIP project expenses directly, rather than participating in the 2015 SVCW bond, Redwood City's adjusted share of the $40 million to be raised in 2015 will be 53.64% or $21 ,455,549. Utilities Committee Direction Regarding Cash Contribution in Lieu of Bonds In order to reduce the debt service cost to the City, staff conducted analysis to determine whether it was feasible to make a cash contribution in lieu of some portion of its total financing responsibility. After a careful review of the Redwood City sewer enterprise fund balance and cash flow projections, staff identified the opportunity to contribute up to $10 million from the Redwood City wastewater enterprise fund reserve. The Council Utilities Committee discussed the options at its August 12, 2015 meeting and approved staff's recommendation to contribute $10 million in this manner. This upfront cash contribution will reduce Redwood City's share of the 2015 SVCW bonds to $11,455,589 and will result in savings of approximately $7.9 million over the 30 year life of the 2015 bonds. Council approval of this appropriation is sought as part of this item. Required Council Actions Associated with SVCW Bond Issuance SVCW is responsible for approving and distributing the Preliminary Official Statement (POS) and executing various financing documents, which serve to include all facts associated with the issuance of its 2015 bonds that would be material to an investor. As part of this, the City of Redwood City, like the other member agencies participating in the bond, is required to approve and execute certain documents pertaining to the City. In particular, SVCW requires the City to take the following actions which are recommended to Council as part of this item: • Approve Appendix A to the POS which contains financial and operating information relating to the City's wastewater enterprise • Approve the form of the City's Continuing Disclosure Certificate • Authorize designated officials to make changes to these documents and execute or attest to any and all financial instruments, warrants agreements and other financing documents relating to Redwood City as required for the issuance of the SVCW 2015 Waste Water Revenue Bonds. ALTERNATIVES Council could choose not to approve the documents and actions relating to the issuance of SVCW 2015 Wastewater Revenue Bonds. However, Redwood City is required by the JPA to contribute its share of SVCW capital cost. City Council could direct the appropriation of an alternative amount of cash contribution. Page 2 of 3