75C - PH ISSUANCE OF OBLIGATIONS

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TEFRA Public Hearing for Orangewood Foundation February 5, 2019 Page 2 The Foundation is one of the leading providers of services to current and former foster youth in Orange County. The Foundation helps almost 2,000 foster and community youth annually prepare for independent adulthood. The "Orangewood Way" recognizes that the Foundation's relationship with the youth it serves is one of collaboration and partnership. The Foundation's staff works one-on-one with the youth to help them identify their own strengths, attributes, and aptitudes to empower them to overcome their challenges and reach their greatest potential. The Foundation's staff works with youth in four critical areas: health & wellness, housing, life skills & employment, and education. The Foundation meets a broad array of needs: from groceries and a hot meal, to transitional housing, to life skills workshops and employment leads, to its innovative Samueli Academy charter high school and scholarships for college and graduate school. The City of Santa Ana is an associate member of the Authority, a joint powers agency established by the California Association for Local Economic Development whose purpose is to issue tax-exempt and taxable conduit revenue bonds to fund commercial and industrial development projects within member jurisdictions. The Joint Powers Act, comprising Articles 1, 2, 3 and 4 of Chapter 5 of Division 7 of Title 1 (commencing with Section 6500) of the Government Code of the State of California and Internal Revenue Code Section 145 provide for the issuance of tax-exempt "private activity' obligations by a conduit governmental issuer on behalf of a 501(c)(3) corporation to finance facilities used, owned and/or operated by such entity. For interest on such private activity obligations to be tax- exempt, Section 147(f) of the Internal Revenue Code requires, among other things, the obligations and the facilities financed thereby must be approved by both the governmental unit which will issue the obligations (in this case, the Authority) and the governmental unit in which the obligation -financed facilities are located (City of Santa Ana). Further, a public hearing, for which reasonable notice has been given, must be held. This hearing and process is referred to as TEFRA, after the Tax Equity and Fiscal Responsibility Act of 1982. The assets to be financed and refinanced with the proceeds of the Obligations are located within the jurisdiction of the City. Therefore, the City has been asked to conduct the public hearing, and to approve the Obligations as the host governmental unit. The City has effectuated proper notice of the hearing via publication at least 14 days in advance. The Obligations will be payable solely from amounts received pursuant to the terms and provisions of one or more loan agreements to be executed by the Authority and the Borrower. The City will not be a party to any loan agreement or any other documents in connection with the issuance of the Obligations. The Obligations will not be secured by any form of taxation or by any obligation of either the City or the Authority. Neither will the Obligations represent or constitute a general obligation of either the City or the Authority. In addition, this TEFRA Hearing and the adoption of the Resolution shall not obligate the City or any department thereof to (i) provide any financing to acquire or construct the Project or any refinancing of the Project; (ii) approve any application or request for or take any other action in connection with any planning approval, permit or other action necessary for the acquisition, construction, rehabilitation, installation or operation of the Project; (iii) make any contribution or advance any funds whatsoever to the Authority; or (iv) take any further action with respect to the Authority or its membership therein. In general, this action by the City of Santa Ana will not obligate the City or 75C-2