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be limited to Redwood City residents and service organizations in Redwood City, it will be the only geographic area in which we do the outreach. Mayor Howard explained that the set aside units would be held affordable for at least 15 years, unless a buy-out of the bonds occurred, and the attorneys in the audience confirmed that policy. Mayor Howard thanked Director Ponty for his responsiveness to her and to the member of the Housing and Human Concerns Committee. She agreed that Housing Coordinator Debbie Jones-Thomas and the HHCC should have been involved earlier. MEMO 2/10/98 Joe Litten, Litten Financial Consulting, 99 Overhill Road, Orinda, representing the non- profit corporation, said the Age Institute and the newly formed Woodside Senior Care Corporation are closely related: the President of Woodside Senior Care is also the President of the Age Institute, the Secretary for Woodside Senior Care is the attorney for Age Institute; and there are three other board members who are California residents. Mr. Litten said the Age Institute has three nursing homes in the East and owns another of other facilities through single purpose non-profits like this proposed one. He said the Age Institute "emphasizes on the job training and continued training for the people who work in these facilities who themselves typically fall into low and moderate income categories." In response to Council Member Claire's request to explain to the audience what a bond underwriter would do if it questioned the ability of a borrower to carry the asked for debt, William Euphrat, the City's financial advisor, said "if the underwriter felt that the borrower was unable to repay on a timely basis, then the quantity of debt would be lowered until it felt the security underlying the bonds was sufficient." He said probably five or six lenders would fund this transaction, and the bonds would be in $250,000 denominations. Mr. Euphrat said although the Hillsdale Group will not be responsible for the debt, the City asked for their financial information and it is available to the Council, and they will be providing additional indemnification. He said the project itself was being financed and it is not the general obligation of the non-profit, it is the revenues of the Hillsdale current facility that will pay debt service. Mr. Euphrat said, "If the facility revenues are insufficient to pay service the debt, then buyers of the bonds would back out." He said the financial feasibility study of the project is available. Mr. Euphrat provided details of the use of bond funds and the notes that will be issued. He summarized by saying the underwriters believe the revenues ITom this project are sufficient to pay the debt service. Mr. Euphrat said that the Wall Street Journal article cited earlier dealt with a form of financing in California that some cities had taken advantage and involved projects that had nothing to do with activities in those political jurisdictions. Mr. Euphrat said "where the reputed abusive acts came in was when cities ITom the northern part of the State, or central part of the State, would join together and collect a fee to finance a golf course, or a multifamily project in the southern part of the State, or someplace totally separate from REGULAR COUNCIL MEETING MINUTE BOOK NO. S6 FEBRUARY 9,1998 MINUTES Page No. 270 PAGE 28