Item 9 Preliminary Official Statment Dated February 25, 1994

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the creditworthiness of the Insurer and its ability to pay claims on its policies of insurance. Any further explanation as to the significance of the above ratings may be obtained only from the applicable rating agency. The above ratings are not recommendations to buy, sell or hold any of the Bonds and such ratings may be subject to revision or withdrawal at any time by the rating agencies. Any downward revision or withdrawal of either or both ratings may have an adverse effect on the market price of the Bonds. In the event the Insurer were to become insolvent, any claims arising under a policy of financial guaranty insurance are excluded from coverage by the California Insurance Guaranty Association, established pursuant to Article 14.2 (commencing with Section 1063) of Chapter 1 of Part 2 of Division 1 of the California Insurance Code. There can be no assurances that payments made by the Insurer representing interest on the Bonds will be excluded from gross income, for federal tax purposes, in the event of nonappropriation by the Authority. THE AUTHORITY The Authority is a joint powers authority, organized pursuant to a Joint Exercise of Powers Agreement, dated as of August 1, 1993, by and between the City and the Community Redevelopment Agency of the City of Santa Ma (the "Joint Powers Agreement"). The Joint Powers Agreement was entered into pursuant to he Government Code of the State of California, commencing with Section 6500. The Authority is a separate entity constituting a public instrumentality of the State of California and was formed for the public purpose of assisting in financing of projects pursuant to the Bond Law for the benefit of the City. The Authority is governed by a board of seven directors. The City Council of the City constitutes the Board of Directors of the Authority. The Authority is specifically granted all of the powers specified in the Bond Law, including but not limited to the power to issue bonds and to sell such bonds to public or private purchasers at public or by negotiated sale. The Authority is entitled to exercise the powers common to its members and necessary to accomplish the purposes for which it was formed. These powers include the power to make and enter into contracts; to employ agents and employees; to acquire, construct, manage, maintain and operate buildings, works or improvements; to acquire, hold or dispose of property within the City; and to incur debts, liabilities or obligations. THE CITY General The City of Santa Ana, county seat of Orange County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Port of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City was established by William H. Spurgeon in 1869. The City was incorporated on June 1, 1886 and reorganized under a City Charter in 1888. In 1952 the Voters approved a charter which established a council-manager form of government. The charter was modified by an election in 1986 to provide for the mayor to be elected by the voters for a two year term. A 1988 redistricting resulted in a six-member City Council which is elected at large for four year terms. The City provides traditional city services including fire protection (254 employees with ten stations) and police protection (406 police officers and seven stations). The City has approximately 1,600 classified employees and 13 exempt employees. The City provides water service through the municipal water department 15