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10/26/2020 Section 1. Debt and Bonded Indebtedness; Terms of Debt and Bonded Indebtedness. It is the intention of the City to pay the initial purchase price of the Facilities (the "Initial Purchase Price") with special taxes levied in the CFD, that all or a portion of the Initial Purchase Price will be paid in installments that are structured with principal and interest components, that the interest rate for each fiscal year will be equal to the Wall Street Journal Prime Rate in effect on June 1 of the prior fiscal year plus 200 basis points (calculated on the basis of a 360 -day year consisting of twelve 30 -day months), or such other interest rate determined in connection with the formation of the CFD, and that such obligation constitutes debt as defined in the Act. It is also the intention of this Council to provide for the issuance of bonded indebtedness of the City to be issued for the CFD pursuant to the Act to finance in whole or in part the construction and/or acquisition of the Facilities. Any bonded indebtedness shall be issued in such series and bear interest payable semi-annually or in such other manner as this Council shall determine, at a rate not to exceed the maximum rate of interest as may be authorized by applicable law at the time of sale of each series of bonds, and shall mature not to exceed 40 years from the date of the issuance thereof. The principal amount of the Initial Purchase Price and of any bonded indebtedness to be issued by the City for the CFD shall not exceed 25,000,000. Section 2. Purposes of Debt. The debt and any bonded indebtedness is proposed to be incurred for the purpose of financing the costs of acquiring and/or constructing the Facilities, including all costs incidental to or connected with the accomplishment of said purposes and of the financing thereof, as permitted by Section 53345.3 of the Act. Section 3. Covenant to Foreclose. Under the Act, for the benefit of the owners of the debt, the City Council will order and cause to be commenced, and thereafter diligently prosecute to judgment (unless such delinquency is brought current), an action in the superior court to foreclose the lien of any special taxes or installment thereof not paid when due. The City Attorney shall commence, or cause to be commenced, such proceedings. The fees and expenses of any such foreclosure actions (including a charge for City staff time) shall constitute an administrative expense of the CFD. Section 4. Public Hearing. Section 32.987 of the CFD Law authorizes any procedure not expressly set forth in the CFD Law but deemed necessary or convenient by the City Council to carry out any of the purposes of the CFD Law. The property owners in the CFD have petitioned the City Council to hold the public hearing required by the CFD Law as soon as possible after the adoption of this Resolution. The City Council hereby determines that it is necessary and convenient for Monday, November 23, 2020, at 7:00 p.m. or as soon as possible thereafter, to be appointed and fixed as the time when this Council, as legislative body for the CFD, will conduct a public hearing on the proposed debt and any bonded indebtedness and consider and finally determine whether the public interest, convenience and necessity require the issuance of debt and any bonded ATTY/RESO.0122/CC RESO REDWOOD CITY ROI INCUR DEBT RESO. NO. 15902 REV: 10-21-2020 MI MUFF NO. 506 Page 2 of 3