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12 obligation associated with the agreement there seemed to be some misconceptions relating to the release of bonds from the indemnification agreement . Council was advised that the need for the indemnification of bonds to continue in force according to the criteria set up by Williams -Kuebelbeck & Associates , Inc . , was related more to the level of risk acceptable to the District rather than the extent of financial obligations assumed by the developer . Since the refunding - - program and the associated indemnification agreement would be specifically de - signed to accommodate the developer , it was entirely appropriate that the burden of risk be aligned accordingly . It was noted that the willingness of the devel - opers or their financial backers to assume that risk would be an expression of confidence in their own development program . Mobil Oil Estates , in their report , had recommended four rules be applied with regard to the refunding bond procedure . Williams -Kuebelbeck & Associates con- curred with these as set forth below : 1 . The total amount of refunding bonds that would be issued should not exceed $ 5 million . 2 . The amount of refunding bonds that would be issued in any one year should not exceed 5600 , 000 , 3 . The District would apply the proceeds of such issues to pay District debt service and thereby reduce Dis - trict taxes as much as reasonably possible , but con - sistent with the objective of maintaining the Dist - rict ' s equivalent tax rate at a realistic and relatively steady level both during and after the development program . 4 . Any surplus refunding bond proceeds not applied in accordance with the above would be aggregated and invested to form a contingency fund which could be applied to even out and make more nearly uniform the rate of District taxation in those years immediately following the last issue of such refunding bonds . It was noted that the procedures for further development for applying refund bond proceeds and other District revenues specifically for payment of debt service on reclamation bonds or facilities bonds would continue to proceed in an orderly fashion as the detailed financial program of Mobil Oil Estates became more defi - nitely determined , and would be designed to produce a reasonable and stable tax rate over the development period for the individual property owner . It was noted that Mobil Oil Estates had indicated that the refund bonds would most probably be indemnified by the Bank of America and would be absolutely indemnified until totally paid off- that no refunding bonds would be issued un- less totally indemnified . (I . E . , unless the developer totally indemnifies the District taxpayer against any payment above 1 . 5% of F . M . V . ( fair market value ) in the District , on the refundable bonds , after all other bonds have been paid , after the fact , the developers and/or his financial backers would have to present " cash on the table " at the time the bonds would be paid off . ) To clarify the question regarding "a second party of sufficient financial character, " it was brought out that in this particular case it meant that basi - cally they were talking about either Mobil Oil or the Bank of America , since this could not be a " shell " corporation or an underfinanced corporation . That there could be a third party established , was noted , such as a bonding company , with regard to a performance bond , payment bond , cash contribution , letter of credit , which would involve some type of long term detailed legal documents . Mention was made that attempting to lower the tax rate in Redwood Shores would not only benefit the residents but would allow the area to be more competitive for the development of a shopping center . It was brought to Council ' s attention that the 1 . 5% maximum tax rate recommended would be controlled by the City Council and/or District Board as they would prevail over the number of construc - tion bonds allowed to be issued each year , and provided recommended guidelines were applied taxes would not raise to a point higher than they are now or were in 1968 . More than likely the taxes would be reduced , subject to increases in assessed value , It was suggested that Council ' s concern regarding the economic question and the use of refunding bonds for the next ten to twelve year span , be clarified by a response in writing by Staff . City Manager noted that a report would be forthcoming shortly with reference to the trade off with the State regarding Bair Island and subsequent lands . Mayor Keckley ordered a five -minute recess at 9 : 25 p . m . 9/11/73 Adj . Reg , Mtg .