Laserfiche WebLink
7.A. - Page 15 ATTACHMENT 3 <br /> Indenture of Trust <br /> This document establishes a trust estate for the benefit of bond investors and a <br /> lien on installment purchase payments received by the PFA for the payment of <br /> interest on and the principal of bonds issued by the PFA to advance the <br /> purchase price of the recycled water improvements to the City. <br /> The trust indenture serves as a contract with bondholders and establishes: <br /> • the denominations, payment terms and similar such terms of the bonds, <br /> • a pledge of installment purchase contract revenues as security for the <br /> bonds, <br /> • covenants of the PFA, <br /> • events of default, remedies of bondholders, duties of the trustee, bond <br /> redemption provisions and miscellaneous other provisions relating to the <br /> bonds and the security therefore. <br /> Continuinq Disclosure Certificate <br /> The Securities and Exchange Commission (SEC) does not have the authority to <br /> regulate municipal bond issuers. It can, however, regulate bond underwriters. <br /> The official statement provides comprehensive disclosure to investors at the time <br /> bonds are initially sold. In the interest of requiring more up-to-date information to <br /> be provided to investors, the SEC also requires bond underwriters to provide <br /> continuing disclosure of material events and key credit information on all bond <br /> issues that they underwrite. To comply with this requirement, bond underwriters, <br /> as a condition to purchasing the bonds, require issuers to provide this information <br /> to the public on an annual basis. The continuing disclosure certificate requires <br /> the City to annually collect and disseminate to certain firms serving as national <br /> repositories, audited financial statements of the City, information regarding the <br /> sources and amount of the supply of water to the City and the corresponding <br /> use, by source, for water acquired by the City, information regarding bonds <br /> outstanding and debt service coverage, the balance in the debt service reserve <br /> fund, the status of any significant legislative, administrative, and judicial <br /> challenges or investigations to the operation of the leased facilities that are <br /> known to the City, and the occurrence of certain significant events (all of which <br /> are listed) relating to the security provided to investors. <br /> Preliminary Official Statement <br /> The preliminary official statement is the primary disclosure document provided to <br /> investors in connection with the PFA's issuance of bonds. Disclosure of these <br /> risks is a prudent and necessary condition to the issuance of bonds. It discloses <br /> material information regarding the City, the water system enterprise and the PFA, <br /> the authority for and purpose of the bonds, the project to be financed and the <br /> security for the payment of interest on and the repayment of the principal of the <br /> bonds, the terms of the bonds and the redemption provisions therefore, debt <br /> service on the bonds and material risk factors relating to the City's ability to make <br /> installment purchase payments and the PFA's collection of these payments, as <br />