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OFFICIAL STATEMENT $107,399,438.50 SANTA ANA FINANCING AUTHORITY POLICE ADMINISTRATION AND HOLDING FACILITY LEASE REVENUE BONDS, SERIES 1994A INTRODUCTION The purpose of this Official Statement of the Santa Ana Financing Authority (the "Authority")is to furnish information regarding the issuance and sale of$107,399,438.50 principal amount of Santa Ana Financing Authority Police Administration and Holding Facility hone Revenue Bonds, Series 1994A (the "Bonds") pursuant to the provisions of an Indenture, dated as of March 1, 1994(the "Indenture") between the Authority and Meridian Trust Company of California(the "Trustee"). The Bonds will be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985 (Article 4, Chapter 5, Division 7, Title 1 of the California Government Code) (the "Bond Law"). The Bonds are being issued to finance the acquisition, construction and equipping of a police administrative and holding facility (the "Project") for the City of Santa Ana (the "City"), to fund a reserve account and to pay certain costs of issuance. See "THE PROJECT AND THE LEASED PROPERTY" herein. The Authority will initially lease 38 parcels of real property owned by the City (the "Leased Property"), including the parcel on which the Project will be constructed (the "Site"), pursuant to a Ground Lease, dated as of March 1, 1994, between the City and the Authority (the "Ground Lease") and will lease-back the Leased Premises to the City pursuant to a Lease, dated as of March 1, 1994, between the Authority and the City (the "Lease"). Pursuant to the Lease, the City has been appointed to act as the agent responsible for the acquisition, construction and installation of the Project. Upon completion of the Project and issuance of a certificate of occupancy with respect thereto, the City expects to release all parcels of real property, other than the Site, from Ground Lease and the Lease. See the caption "SECURITY FOR THE BONDS -- The Lease -- Release of Leased Property". The City is obligated to pay rental payments under the Lease from any legally available moneys, including its general fund. The City will covenant in the Lease that, so long as the City has the use and occupancy of the Leased Property, it will make rental payments ("Base Rental") to the Authority. Pursuant to an Assignment Agreement dated as of March 1, 1994 (the "Assignment Agreement"), the Authority has assigned to the Trustee, among other things, its right to receive Base Rental. The Base Rental is calculated to be an amount sufficient to permit the Authority to pay all debt service on the Bonds when due. The obligation of the City to make Base Rental payments is not a debt of the City and is payable only from funds legally available therefor, including amounts on deposit in the general fund of the City. The obligation of the City to make Base Rental payments may be abated in whole or in part in the event of damage to, condemnation or destruction of, or title defects relating to, the Leased Property. Municipal Bond Investors Assurance Corporation (the "Insurer"), has issued a commitment to issue, simultaneously with the delivery of the Bonds, a municipal bond insurance policy (the "Municipal Bond Insurance Policy") relating to the Bonds, effective as of the date of delivery of the Bonds. By the terms of the Municipal Bond Insurance Policy, the Insurer agrees to pay the principal of and interest evidenced by the Current Interest Bonds and the accreted value of the Capital Appreciation Bonds (all as defined below) which shall become due for payment but shall be unpaid to the extent that the Trustee has not received sufficient funds from the Authority to make such payment. THE BONDS ARE LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM AND SECURED SOLELY BY THE REVENUES PLEDGED THEREFOR IN THE INDENTURE. THE BONDS ARE NOT A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL 1