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8.A. - Page 5 of 73 <br />investor in the 2019 Notes. Material information is information that would have a substantial likelihood <br />of actual significance in the deliberations of a reasonable investor in deciding whether to buy or sell the <br />2019 Notes. The City portion of the Preliminary Official Statement has been reviewed and approved for <br />transmittal to the City Council by staff and the financing team. <br />The City has procedures in place for collecting and disseminating information required in the Continuing <br />Disclosure Certificate, and the Disclosure Policy requires that the City Council's responsibilities be outlined <br />in the staff report. An updated Disclosure Policy, as recommended by bond counsel, is included on the <br />Consent agenda this evening and is attached to this report. (Attachment F) <br />Next Steps <br />Closing of the WIFIA loan is scheduled for June 2019; funding will occur in Fiscal Year 2023-24. Sale and <br />closing of the 2019 Notes is scheduled for July 2019. No further action on the part of the City Council is <br />required. <br />FISCAL IMPACT <br />SVCW estimates that Redwood City's share of the 2019 Notes will not exceed $126.0 million. The 2019 <br />Notes will have a balloon payment of all principal at maturity in 2024. Interest on the 2019 Notes will be <br />capitalized for maturity, so there will be no required annual payment of debt service during this time. The <br />WIFIA Loan will be used to repay the 2019 Notes in 2024. That loan will be interest only for 4 years, <br />followed by 31 years of level debt service consisting of interest and principal. Interest on the WIFIA Loan <br />will be capitalized during the interest only period. <br />Annually, the City may elect to capitalize interest, or pay interest on a current basis. If interest were <br />capitalized during the interest only period (currently estimated at $4.0 million annually), the City's level <br />payments of principal and interest during the 31 -year amortization period beginning in FY 2027-28 are <br />expected to be approximately $6.6 million annually. Staff will evaluate the ability to prepay principal <br />annually, and the current recommended approach is to prepay the City's principal balance on the WIFIA <br />Loan during the deferral period to avoid the additional interest cost. <br />The amount of Redwood City's share of the 2019 Notes could differ from SVCW's estimate based on the <br />final pricing of the 2019 Notes and the interest earnings rate obtained on the investment of 2019 Note <br />proceeds. <br />L�I►P1L'T�Ii!I��iI�I��_1 U&V <br />This activity is not a project under California Environmental Quality Act (CEQA) as defined in CEQA <br />Guidelines, section 15378, because it has no potential for resulting in either a direct or reasonably <br />foreseeable indirect physical change in the environment. <br />Statement includes all facts that would be material to an investor in the bonds to be issued by the City, it adopts a <br />resolution that authorizes staff of the City to execute a certificate to the effect that the Preliminary Official Statement <br />has been "deemed final." <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcity.ore <br />519 <br />