AgdaPkt 2016-05-23 Closed, Joint SA and PFA

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7.B. - Page 1 REPORT To the Honorable Mayor and City Council From the City Manager May 23, 2016 SUBJECT City of Redwood City CFD No. 2010-1 (One Marina) 2016 Special Tax Refunding Bonds RECOMMENDATION Adopt a resolution authorizing the issuance of City of Redwood City Community Facilities District No. 2010-1 (One Marina) 2016 Special Tax Refunding Bonds and approving all documents, agreements and actions necessary to issue such bonds. EXECUTIVE SUMMARY The resolution approves the sale of the refunding bonds and authorizes the City Manager or the Finance Director to execute the bond purchase contract on behalf of the City subject to a maximum par amount of $6,000,000 and a true interest cost of not more than 4.5%. The true interest cost treats the underwriter's discount as prepaid interest and takes into account the time value of money. It is the interest rate that discounts all future payments of principal and interest to the purchase price paid by the underwriter. The true interest cost based on current rates is approximately 3.62%. Current estimates show that the refunding will reduce special tax rates by approximately 30%. The resolution also authorizes the City Manager to execute related agreements necessary for the issuance of the bonds. BACKGROUND The One Marina development project consists of 249 townhomes in 24 buildings located northeast of U.S. 101, between Bair Island Road and Redwood Creek. In 2010, the City created a community facilities special tax district (CFD) under the Mello-Roos Community Facilities Act of 1982 (California Government Code Section 53311, et seq.) encompassing future residential parcels in the One Marina project in order to finance public infrastructure serving the development. In April 2011 the City sold bonds in the amount of $5,760,000 at then-advantageous tax-exempt interest rates, of which $5,680,000 remains outstanding. The residential project has subsequently been completed and sold to the public. Debt service on the bonds is paid by One Marina residential property owners via a special tax levied on their properties. The funds from the One Marina CFD bonds were used to pay for the reconstruction of that portion of Bair Island Road providing access to the One Marina development. These improvements will also benefit residents in any new development served by the reconstructed portion of Bair Island Road ("Benefitted Properties"). The Bair Island Road improvement costs attributable to these Benefitted Properties are referred to as "Excess Costs." The financing plan for the One Marina development obligates the City