1998 AGN NOV 10 I02 - Laserfiche WebLink

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LAW OFFICES OF BEST BEST & KRIEGER LLP MEMORANDUM To: Tom Clarke FROM: Francis Baum DATE: November 2, 1998 RE: Actions to be Taken by City Council and Board of Directors of Colton Public Financing Authority With Respect to the Proposed Issuance of 1998 Water Revenue Bonds by the Authority BACKGROUND The City of Colton wishes to finance various improvements to its City water system (the "Project"). In order to raise moneys for the Project, it has been proposed that the Colton Public Financing Authority (the "Authority") issue 1998 Water Revenue Bonds and advance the proceeds to the City under an installment financing arrangement. The City will then use the proceeds of the borrowing to 'finance the Project and will pledge revenues from the water enterprise to secure repayment of its installment payment obligations to the Authority. The Authority, in turn, will pledge the installment payments of the City to repayment of the Bonds. It has further been proposed that the Bonds be sold at competitive sale. In order to undertake the financing, both the Board of the Authority and the City Council will need to adopt approving resolutions which authorize the following actions. ACTIONS UNDER AUTHORITY RESOLUTION The Authority Resolution approves the following actions: 1. Approval of Financing Documents. The Authority Resolution approves and authorizes the Authority to enter into the following basic legal documents: a. Indenture of Trust, between the Authority and Union Bank of California, National Association, as Trustee. Under the Indenture, the Authority will issue the Bonds in an amount not to exceed $11,500,000. Proceeds of the Bonds will be used to finance the Project, to fund a reserve fund for the Bonds and to pay costs of issuance of the Bonds. b. Installment Purchase Agreement, between the Authority, as Seller, and the City, as Purchaser. Under the Installment Purchase Agreement, the Authority agrees to cause the Project to be built and agrees to sell it to the City on an installment basis. The City, in turn, agrees to make installment payments to the RVPUB\FJB\52427