Agda Pkt 2024.08.26 Regular Meeting

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Attachment A Summary of Principal Legal Documents City Resolution The City Resolution approves the sale of bonds by the Redwood City Public Financing Authority (PFA or Authority) subject to a maximum amount of refunding bonds in the amount of $16,260,000 and minimum net present value savings on the refunding bonds of at least 3%. It further approves key basic legal documents in substantially final form, authorizes the distribution of a preliminary official statement and official notice of sale, and authorizes authorized officers of the City to execute such documents and to take any such action as they, or any of them, may deem necessary or advisable in order for the transactions as described in the resolution in connection with the issuance and sale of the 2024 Bonds. PFA Resolution The PFA Resolution approves the sale of bonds by the PFA subject to a maximum amount of refunding bonds in the amount of $16,260,000 and minimum net present value savings on the refunding bonds of at least 3%. If bonds are sold on a negotiated basis, it further limits the underwriter’s discount to no more than 1.5% of the par amount of bonds sold. It also approves key basic legal documents in substantially final form, authorizes the distribution of a preliminary official statement, and authorizes authorized officers of the PFA to executes such documents and to take any such action as they, or any of them, may deem necessary or advisable in order for the transactions as described in the resolution in connection with the issuance and sale of the 2024 Bonds. Installment Purchase Contract This is the agreement whereby the Authority uses the bond proceeds for the acquisition of the project (i.e., the improvements financed with the 2013 Bonds), the Authority appoints the City as its agent in connection with the acquisition of the project, the Authority sells the project to the City, and the City agrees to make installment purchase payments, together with interest thereon, in satisfaction of the purchase price of the project. Installment purchase payments are a special fund obligation of the City’s water fund, and pursuant to the Installment Purchase Contract, the City pledges water fund net revenues (gross revenues less operating expenses, net of depreciation, defined as “Net Revenues”) in satisfaction of its annual payment obligations. The Installment Purchase Contract is assigned to the bond trustee as security for the 2024 Bonds. The Installment Purchase Contract places a first priority lien on the Net Revenues of the water system enterprise, establishes certain performance, financial and other covenants of the City, including a promise to establish rates annually in an amount sufficient to produce annual Net Revenues that are at least 120% of debt service on the 2024 Bonds and any outstanding parity debt (currently, the 2015 Bonds and the 2017 Bonds), establishes the conditions under which additional bonds secured by the water system Net Revenues may be sold, establishes certain financial and other duties of the City in connection with the operation and maintenance of the water system enterprise, and establishes events of default and the remedies therefore. Indenture of Trust This document establishes a trust estate for the benefit of the owners of the 2024 Bonds. It establishes a lien on installment purchase payments received by the Authority for the purpose of paying the interest on and the principal of the 2024 Bonds. The trust indenture serves as a contract with the owners of the 2024 Bonds. It fixes the denominations, payment terms and similar such terms of the 2024 Bonds, establishes a pledge of installment purchase contract revenues as security for the bonds, establishes covenants of the Authority, establishes events of default, 8.A. - Page 7 of 255 635