75D - PH ISSUANCE OF OBLIGATION SAMUELI

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TEFRA Public Hearing for Orangewood Real Property, LLC and Samueli Academy February 5, 2019 Page 2 The Borrower will lease the Facilities to Samueli Academy, a California nonprofit public benefit corporation (the "Academy"), and an organization described under Section 501(c)(3) of the Code. The Academy is a charter school established pursuant to the Charter Schools Act of 1992, as amended (constituting Part 26.8 of Division 4 of Title 2 of the Education Code). The Academy currently operates a high school at the Facilities, serving students in grades 9 through 12. The Facilities will allow the Academy to serve students in junior high school (grades 7 and 8), provide an innovative student dormitory and provide additional facilities to meet the needs of its students. The Academy derives its name from its key benefactors, Henry and Susan Samueli. Henry and Susan Samueli are passionate philanthropists whose generosity extends throughout Orange County and worldwide. They are committed to investing in creative, sustainable and entrepreneurial approaches to promote scholastic achievement, build communities of acceptance and altruism, increase knowledge and opportunities, and enhance the quality of life of the underserved. They have provided significant, varied and ongoing support to the Academy for many years. The City of Santa Ana is an associate member of the Authority, a joint powers authority 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 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 the loan agreement to be executed by the Authority and the Borrower. The City will not be a party to the 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. The Obligations do not 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, 4819-8240-9091.2 75D-2