AgdaPkt 2013-05-20 Closed Cancelled and Special

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AnA�7.A. - Page 14 Summary of Principal Legal Documents City Resolution The City Resolution approves the sale of bonds by the Public Financing Authority subject to a maximum amount of refunding bonds in the amount of $30,500,000 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 permits 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 Bonds. Public Financinq Authority (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 $30,500,000 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 permits 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 Bonds. Installment Purchase Contract This is the agreement whereby the PFA agrees to permit the use of the bond proceeds for the acquisition of the project, the PFA appoints the City as its agent in connection with the acquisition of the project, the PFA 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 in satisfaction of its annual payment obligations. The Installment Purchase Contract is assigned to the bond trustee as security for the bonds. The Installment Purchase Contract places a first priority lien on the Net Revenues of the water system enterprise, and 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 exceed annual debt service by 120%, • the conditions under which additional bonds secured by the water system Net Revenues may be sold, • certain financial and other duties of the City in connection with the operation and maintenance of the water system enterprise, • events of default and the remedies therefore.