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<br /> Statement for the Series "D " bonds . He pointed out bonds
<br /> being offered for sale are general obligation bonds secured
<br /> solely by property making up the General Improvement District
<br /> 1 -64 , and not an obligation of the City of Redwood City . He
<br /> advised of the exhibits still to be added to the Official State -
<br /> ment , and then proceeded to highlight the significant changes
<br /> or additions which had been made since submission of the first
<br /> galley proof : Fuller descriptions and acreage information to
<br /> be inserted on Leslie Salt Company holdings and acreage of
<br /> District ; photos and further details of model homes in the
<br /> District , such as square footage of homes and range of prices
<br /> for selling ; change of language for Marine World operation and
<br /> for which ABC had been asked to submit a statement thereon to
<br /> get exact information as to their operation ; fair market value
<br /> projections reviewed and noted exhibit referred to would be
<br /> explained in an appraisal review by Ralph Clark , Appraiser ;
<br /> correction and updating of figures on connection fees for
<br /> sewer and water system ; other minor changes regarding school
<br /> activities , etc .
<br /> These notations cover essentially the areas discussed during
<br /> the day with Council members , consultants , and Staff .
<br /> He noted two documents for Council action at this time were
<br /> resolutions authorizing issuance of bonds which would also
<br /> authorize publicizing the notice for inviting bids and set -
<br /> ting forth the bidding procedures .
<br /> He commented that in previous bond issues a discount allowance
<br /> of 5 % had been anticipated and that this had been increased
<br /> for this issue to a total of 8%, primarily because of bond
<br /> market being the highest in history, and in order to make
<br /> certain these bonds will be marketable , it is necessary to
<br /> offer at prices that will attract investors .
<br /> Question and answer period followed covering effect of increased interest rates and
<br /> relationshipto Feasibility Study , effect of any pending legislation which might become
<br /> effective shortly, Leslie participation procedures , discount limitations , etc .
<br /> Mr . Zelles detailed how discount computed from Bond Buyer
<br /> Index serving as a basis for determining bond yields and prices
<br /> throughout the country and how at the presen time at all time
<br /> high , but why the discount is necessary because yield on bonds
<br /> in excess of statutory interest rate allowable , under City ' s
<br /> ordinance , 6% , and this type of limitation making it impossible ,
<br /> for example , for most schools , cities , counties and State to
<br /> sell bonds , and where it is possible to provide a discount ,
<br /> makes it possible to sell bonds .
<br /> He advised the Feasibility Study did provide for a 5% discount
<br /> in long range planning and that to wait for selling bonds for
<br /> a more favorable interest rate than at present is balanced by
<br /> higher construction costs and with planned projects , District
<br /> almost committed to proceed . He advised when questioned whether
<br /> it was their recommendation to proceed , that this would be en -
<br /> tirely a policy decision of the Council , but there was no ques -
<br /> tion but that the 6 . 31% rate is more than competitive .
<br /> City Attorney advised 6% rate is established in Ordinance No . 112.8 setting up this
<br /> District and not affected by any pending legislation , and this Ordinance also permits
<br /> the discount which other entities don ' t have , or would take an elective measure to pro -
<br /> vide for .
<br /> Mr . Reiter , of DMJM , explained procedure for Leslie participation
<br /> covering engineering , inspection , etc . , of reclamation activities
<br /> and other areas of District covering contracts for construction
<br /> that Leslie funds directly to the District .
<br /> City Manager also explained how on reclamation work , plans and specifications prepared
<br /> by District and Leslie either directly , or on contract , physically does the work which
<br /> is then inspected and approved by City Staff and DMJM . In other areas of contract work ,
<br /> they might participate by funding to the City items for which they are responsible , but
<br /> District contracts for whole of work in order to avoid work by two contractors in the
<br /> same area .
<br /> In reference to legal suit which had been mentioned , Mr . Rowley
<br /> quoted the statement , agreed to by City Attorney , to be included
<br /> in the Official Statement under heading of legal opinion , advising
<br /> legal action of Brod vs . Leslie , etc . , did not affect any of the
<br /> points of the District or validity of any of the bonds , but it was
<br /> felt t should be mentioned ,
<br /> 1m 23189
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