AgdaPkt 2018-01-22 Joint SA PFA - Laserfiche WebLink

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8.A. - Page 2 The sewer enterprise is financed solely with connection and user charges, which are collected in an amount sufficient to pay the following: the City's sewer enterprise maintenance and operation expenses; the City's pro rata share of Authority maintenance and operation expenses; the City's pro rata share of debt service on capital obligations of the Authority; the City's sewer collection and conveyance system capital expenditure needs; the Authority's capital charges and reserve deposits approved by and imposed on its Members; and prudent operating and capital reserves required for the City's sewer enterprise. Pursuant to advice of bond counsel, the legislative bodies of Members participating in a bond issue must approve the Authority's issuance of such bonds. The resolution before the Council tonight will: 1. Consent to the Authority's issuance of the 2018 Bonds; 2. Deem final Appendix A to the Official Statement, which appendix contains financial and operating information relating to the City and the sewer enterprise; 2. Approve the form of Continuing Disclosure Certificate to be delivered by the City with respect to the 2018 Bonds; and 3. Authorize the Mayor, City Manager, Assistant City Manager of Administrative Services and the City Clerk, or their designees, to execute necessary closing documents. ANALYSIS In 2008, the Authority identified 131 necessary capital projects (the "CIF), and has updated its CIP five times. The most recent 2017 CIP includes 201 projects, half of which are complete. Completed projects and projects in progress have been funded with a combination of cash contributions from Members, three bond sales issued by the Authority (in 2009, 2014, and 2015) and three loans from the State Water Resources Control Board (the "SRF Loans"). SRF Loans are State -subsidized loans that bear interest at approximately one-half the State's general obligation bond rate. Demand for SRF Loans currently exceeds the supply of funds by a factor of three, and the Authority's ability to secure additional SRF Loans is uncertain. Additionally, it is often difficult to comply with State lending terms. At present, the Authority is forecasting that only $64 million of its unfunded CIP will be financed with SRF Loans. The actual amount of future SRF Loans could be less. The Authority expects to finance the balance of its $596 million unfunded CIP with market - rate bonds and cash contributions from Members. Redwood City is responsible for 48.57% of the Authority's capital budget. The City's share of the Authority's unfunded $596 million capital budget is $289.5 million. The 2018 Bonds will fund approximately $86.9 million of this amount. Staff expects that the City will fund its remaining capital obligations to the Authority by participating in future Authority bond issues or loan agreements.