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Bond counsel outlines bond‑validation process and upcoming resolutions
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Summary
Bond counsel briefed the Finance Committee on the multi‑month bond validation process and said staff will bring two resolutions — authorization to file validation pleadings and an initial bond resolution (preview of bond documents) — for committee recommendation to the full Authority before any final bond issuance.
Bond counsel updated the Finance Committee on the upcoming bond validation process that must precede any future CBTA bond issuance.
Megan Gilliland (bond counsel, presented by staff) described the two primary steps staff will ask the committee to recommend to the Authority: a short resolution authorizing bond counsel and general counsel to file validation pleadings and defend any legal challenges, and an initial (preview) bond resolution that approves the form of indenture and other bond documents necessary for the validation filing. Gilliland emphasized these initial resolutions are preparatory; final bond issuance would be brought back to the Authority following successful validation and further approvals.
Counsel explained that the indenture sets the covenants with bondholders (debt amounts, debt service coverage ratio expectations, reserve covenants and additional bonds tests) and that the validation pleading asks the court to review CBTA's statutory authority and the form of the bond documents. Staff said they will return with full bond documents and resolutions at a future meeting for recommendation and subsequent Authority consideration.
Next step: staff and counsel will prepare validation pleadings and the preview bond documents for committee review and recommendation; final approval of any bond issuance will follow the validation process and later Authority action.
