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expenditure on capital projects, or used to pay down the amount of bonds sold to refund <br />the 2007 bonds. Staff anticipates using the reserve to reduce the refinanced amount to <br />approximately $7.8 million. <br /> <br />Bond Documents <br />The bond documents to be approved for the sale of the refunding bonds include an <br />Installment Purchase Contract, Indenture of Trust, Continuing Disclosure Certificate, <br />Official Notice of Sale, a form of Bond Purchase Agreement, and a Preliminary Official <br />Statement. A summary description of these documents can be found in Attachment <br />Three. The preliminary official statement, which is the primary disclosure document and <br />is included as Attachment Six, is of particular importance for legislative body review. <br /> <br />Responsibilities of Elected Officials Under Federal Securities Laws <br />The preliminary official statement has been reviewed and approved for transmittal to the <br />City Council and the PFA by staff and its financing team. The preliminary official <br />statement must include all facts that would be material to an investor in the 2017 Bonds. <br />Material information is information that would have a substantial likelihood of actual <br />significance in the deliberations of a reasonable investor in deciding whether to buy or <br />sell the 2017 Bonds. Members of the City Council and the PFA should review the <br />preliminary official statement and may question staff and consultants to make sure <br />members feel comfortable that it includes all material facts. <br /> <br />The security for the 2017 Bonds is described in the section of the preliminary official <br />statement entitled “SECURITY FOR THE BONDS”; information about the City and its <br />water system is set forth in “THE ENTERPRISE” and “ENTERPRISE FINANCIAL <br />INFORMATION”; the key risk factors associated with the 2017 Bonds are described in <br />the section of the preliminary official statement entitled “RISK FACTORS RELATING <br />TO THE BONDS”; and certain limitations imposed by the California Constitution are <br />described in “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND FEES.” <br /> <br />The Redwood City Public Financing Authority <br /> <br />The Redwood City Public Financing Authority is a joint powers authority that was <br />formed with two members: the City of Redwood City and the Redwood City <br />Redevelopment Agency. At present, the members of the Public Financing Authority are <br />the City and the Successor Agency to the Redevelopment Agency. Pursuant to Health <br />& Safety Code Section 34187(b), the Successor Agency’s existence would normally <br />terminate no later than July 15, 2033 (one year after the final maturity of the Successor <br />Agency’s bond obligations). The termination of the Successor Agency by action of <br />Health & Safety Code Section 34187(b) would potentially leave the Public Financing <br />authority as a joint powers authority with only a single member prior to the February 1, <br />2035 final maturity date of the Bonds. It is unclear whether a joint powers authority may <br />operate, under normal circumstances, with only a single member. To address this <br />situation, the legal documents for this financing include a covenant by the City and the <br />Public Financing Authority to take or cause to be taken all actions reasonably necessary <br />to continue the Public Financing Authority’s existence until such time as the Bonds have <br />8.C. - Page 4