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REPORT <br />To the Honorable Mayor and City Council <br />From the City Manager <br /> <br />January 23, 2017 <br /> <br />SUBJECT <br />City of Redwood City Public Financing Authority Water Revenue Refunding Bonds (City <br />Council and Public Financing Authority) <br /> <br />RECOMMENDATION <br />City Council to adopt a resolution authorizing the City of Redwood City Public Financing <br />Authority (PFA) to sell not more than $12,200,000 of PFA Water Revenue Refunding <br />Bonds, Series 2017 (2017 Bonds) to refinance the PFA Water Revenue Bonds, Series <br />2007A and approving all other related actions necessary in connection with the <br />issuance of the 2017 Bonds <br /> <br />Commission of the Public Financing Authority to adopt a resolution of the Public <br />Financing Authority authorizing the Public Financing Authority to sell not more than <br />$12,200,000 of PFA Water Revenue Refunding Bonds, Series 2017 (2017 Bonds) to <br />refinance the PFA Water Revenue Bonds, Series 2007A and approving all other related <br />actions necessary in connection with the issuance of the 2017 Bonds <br /> <br />BACKGROUND <br />The City purchased all of its potable water supplies from the San Francisco Public <br />Utilities Commission (SFPUC) via the Hetch Hetchy regional water system before the <br />completion of the water recycling project. The demand for water consistently exceeded <br />its assured supply of water from the SFPUC. To address this imbalance, the City <br />initiated a water recycling project in 2005. The project consists of water recycling <br />equipment and storage tanks at the Silicon Valley Clean Water Authority (SVCW, <br />formerly SBSA) treatment facility in Redwood Shores, and distribution pipes, meters <br />and associated infrastructure for irrigation and industrial use by businesses and <br />homeowner associations east of US 101 in and around Redwood Shores and Seaport <br />Boulevard. Bonds were sold in the amounts of $35,790,000 in 2005, $26,000,000 in <br />2006, and $15,150,000 in 2007 to finance construction of the $72 million project. The <br />2005 Bonds were refunded with lower cost bonds in June 2013 and the 2006 Bonds <br />were refunded in May 2015. <br /> <br />The 2007 Bonds are approaching their first optional bond redemption date in February <br />2017, and now can be efficiently refinanced (or “refunded”) with lower interest cost <br />bonds to produce lower debt service payments and aggregate net present value (NPV) <br />savings. These bonds will have an outstanding balance in the amount of $11,635,000 at <br />the time of refinancing. <br />8.C. - Page 1