RES 2024025 - Laserfiche WebLink

40 Limitations on Remedies Available to Bond Owners The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenues sufficient to pay principal of and interest on the Installment Payments and Parity Debt may be adversely affected by actions and events outside of the control of the City, and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or payers of assessments, fees and charges. Furthermore, any remedies available to the owners of the 2024 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions, which are often subject to discretion and delay and could prove both expensive and time consuming to obtain. In addition to the limitations on Bondholder remedies contained in the Indenture, the rights and obligations of the Authority under the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights. Seismic and other Natural Disasters; Climate Change General. The City is located in a seismically active area of California. If there were to be an occurrence of severe seismic activity in the area of the City, there could be an interruption in the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments. There are known earthquake faults near the City and the Water system could be damaged by an earthquake event, resulting in required unanticipated expense and repairs. Other natural disasters, such as flooding, landslides or wildfires, could also affect or interrupt the service provided by the Water System, resulting in a temporary reduction in the amount of Net Revenues available to timely pay the Installment Payments. Droughts. California is subject to droughts from time-to-time. The Governor issued a State of Emergency Proclamation on April 21, 2021, for Mendocino and Sonoma counties due to drought conditions in the Russian River watershed. Then on May 10, 2021, the emergency declaration was expanded to include 39 additional counties, including Alameda County, due to drought conditions within the Klamath River, Tulare Lake Watershed, and Sacramento-San Joaquin Delta. Most recently, on July 8, 2021, the Governor further expanded the drought emergency and requested all Californians to reduce water use by 15 percent to help protect water reserves if drought conditions continue. The heavy rain in early 2023 has significantly helped drought conditions. On March 24, 2023, Governor Newsom ended the 15 percent water conservation target and requirement for water agencies to implement level 2 of their drought contingency plans. However, there can be no assurance that drought conditions would not re-appear in the future, leading to decreased