Human Services Commission Meeting Agenda Packet 10022024

Page 5 of 7 Global Ratings, a nationally recognized rating agency, to obtain a credit rating on the Bonds. The team anticipates receiving the rating prior to May 7, 2024. The City and the Authority intend to sell the Bonds via negotiated sale in May. With that sale timeframe, the City and the Authority will receive proceeds of the Bonds shortly thereafter. The Authority is obligated to pay the debt service on the Bonds using amounts received from the City as installment payments payable by the City under the Installment Sale Agreement. The City is obligated to pay the installment payments from the “Net Revenues” of the City’s water system. Net Revenues are defined in the legal documents to mean the gross revenues received by the City from the water system, less operations and maintenance costs of the system. The use of Net Revenues to pay the installment payments will be on parity with the City’s obligation to make payments with respect to the SRF Agreement executed in 2015 to pay for water improvements. The maximum amount authorized to be borrowed would be $19 million, which includes an amount necessary to cover the costs of issuance. The attached resolution authorizes the sale of the Bonds at a public sale and approves the form of the Preliminary Official Statement and other documents. Further, the Resolution authorizes the City Manager and the Finance Director to take any and all actions necessary to consummate the issuance of the Bonds. Legal Structure and Financing Documents The resolution the City and the Authority are being asked to adopt will approve the following documents. Each of the documents are presented in substantial final form and will be completed after the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined). • Indenture of Trust – The Indenture is a contract between the Authority and U.S. Bank National Association, acting as trustee for the holders of the Bonds. The Indenture specifies the trustee, dated date, maturity date or dates, interest rate or rates, interest payment dates, denominations, forms, registration privileges, manner of execution, place or places of payment, terms of redemption and other terms of the Bonds. • Installment Sale Agreement – The Installment Sale Agreement is a contract between the Authority and the City, under which the Authority agrees to provide financing for the water projects and to sell the completed water projects to the City in consideration of the payment by the City of semiannual installment payments which are sufficient to provide revenues with which to pay principal of, and interest on, the Bonds when due. • Bond Purchase Agreement – The Bond Purchase Agreement is a contract among the Authority, the City and Siebert Williams Shank & Co., LLC., as underwriter, whereby the Authority agrees to sell the Bonds to the Underwriter and the Underwriter agrees to buy the Bonds from the Authority for resale to the public. • Preliminary Official Statement – The Preliminary Official Statement is the offering statement used by the Underwriter to inform the marketplace of the Page 214 of 448Page 223 of 557