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Agreements with Urban Futures, Orrick & BBK August 21, 2018 Page 2 costs. The analysis disclosed that interest rates have decreased since the original issuance of the bonds in both 2003 and 2011. As a result, staff began to discuss its options with its financial advisor Urban Futures, Inc. ("UR"). After conducting its due diligence, which encompassed evaluation of the current interest rate and financing environment, it was determined that both the 2003 and 2011 Tax Allocation Bonds (TAB's) were appropriate to initiate the Refunding Process ("refunding"). Both the 2003 and 2011 TAB's were originally issued by the former Santa Ana Redevelopment Agency (RDA). Staff began analyzing the feasibility of a refunding in 2016. In preparation for the refunding, staff directed UFI to issue Requests for Proposals ("RFPs") for bond and disclosure counsel services. Six proposals were received. After evaluating the proposals, staff recommended the Successor Agency to engage Orrick, Herrignton & Sutcliffe ("Orrick") as the bond counsel and Best Best & Krieger, LLP (BBK) as disclosure counsel. Both Orrickand BBK, presented the lowest cost of the experienced firms available for bond and disclosure counsel services respectively. Staff utilized the pool of financial advisors previously authorized by the City Council to select and engage UFI as its financial advisor. However, due to litigation surrounding the California Department of Finance's ("DOF") decision on unencumbered funding for affordable housing (Cuenca v. Cohen 2017), the efforts of refunding the Tax Allocation Bonds in 2016 were temporarily halted. Subsequent to the California Supreme Court upholding the DOF's decision, staff has resumed the process of refunding the 2003 A & B bonds and is now recommending to include the 2011 bonds to generate additional debt service savings. The Oversight Board and the Successor Agency approved the authorizing resolutions to refund the Tax Allocation Bonds at their respective meetings on June 27, 2018 and July 17, 2018. Currently, and per AB 1484, the DOF is reviewing the resolutions and the issuance of the refunding bonds. The DOF has sixty days to review and upon approval, staff will present to the Successor Agency the financing documents in order to execute the refunding. CURRENT MARKET ANALYSIS Currently, market interest rates are at 3.49%. Refinancing the 2003A & B and 2011A Bonds through the issuance of a refunding bond issue (the "2018 Bonds") is expected to generate a total debt service savings of approximately $19.9 million, without extending the current maturity date of the bonds. In order to maximize the savings amount, the Agency will contribute the existing cash funded reserve account (approx. $6.7 million) and unexpended proceeds (approx. $5.8 million) from the 2011 A Bonds, to the refunding escrow for the 2018 Bonds. The former RDA was prohibited from entering into new agreements for the use of the 2011 bond proceeds upon enactment of AB X1 26, shortly after the issuance of the 2011 Bonds. As such, the $5.8 million remain unexpended and is available to be used in this refunding transaction. The final savings amount will depend on the market interest rates in effect at the time the 2018 Bonds are priced, which is anticipated to be during the first week of October 2018. Based on the redevelopment dissolution laws, the estimated annual savings amount (approximately $1.97 million per year through 2028 and then $100,000 from 2029 to 2031) would be allocated towards enforceable obligations, or shared among taxing entities (including: Santa Ana Unified School SA -3-2