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City of Santa Ana, California <br />Proposal for Municipal Financial Advisory Services March 12, 2020 <br />3. Analyze existing outstanding debt to determine parity test requirements, feasibility of refunding <br />certain outstanding series of Bonds, and debt affordability <br />4. Perform a comprehensive credit analysis of the City to determinethe anticipated rating, preferred <br />structure, and interest rate scale for the Bonds <br />5. Prepare a summary of cost of issuance <br />6. Independently structure the financing and present results to the City <br />Activity 2: Assemble the Finance Team and Manage the Financing Process <br />After an evaluation of financing options/alternatives, should it be determined that financing targets will <br />be met through a bond issuance, UFI will begin work on the financing schedule and the implementation <br />of the agreed upon financing strategy. Most likely, for the City's upcoming water or sewer financings, we <br />would propose a negotiated sale. The scope of work includes, but is not limited to, the following: <br />1) Develop the financing timetable: UFI will coordinate with staff to develop a schedule that is <br />consistent with the City's goals, staff availability, financing timing, and existing City Council <br />meeting schedules. <br />2) Monitor the transaction process: Our role as Municipal Advisor has always included the close <br />monitoring of the financing to ensure successful completion. In this area, UFI will coordinate all <br />activities of the finance team, and will assist in the preparation and review of Official Statements, <br />Trust Indentures, Installment Purchase Agreements, Escrow Agreements, Loan Term Sheets, staff <br />reports, and all other applicable documents or presentations to the Council or rating agency. <br />3) Assist in the selection of additional service providers: UFI is knowledgeable of, and has worked <br />with, most major firms which operate in the public finance realm in California. Should the City <br />wish to go for services such as Trustee, Bond Counsel, Disclosure Counsel, or Underwriter, we are <br />experienced and able to manage or assist staff with the selection process for these services. <br />4) Provide support to the City relating to financing documents: We are experienced in the delivery of <br />presentations to City Councils and drafting of applicable staff reports. <br />5) Compute Sizing and Design Structure of Debt Issue: Utilizing municipal market data and bond <br />sizing applications, UFI has the ability to prepare an independent financing structure. <br />6) Plan and Coordinate Presentations to RotingsAgencies and Investors: UFI is well prepared to assist <br />in the preparation and delivery of credit presentations to rating agencies. While many factors go <br />into the investment decision -making process, the bond rating is often the single most important <br />factor affecting the interest cost on bonds. <br />7) Interest Rates and Timing: As a result of the ever -changing interest rate environment, UFI will <br />constantly monitor market rates to ensure that financial alternatives as well as refinancing <br />assumptions and recommendations are maximized through proper timing. As we have seen with <br />recent market volatility, it is more important than ever to have an experienced municipal advisor <br />to help understand and navigate financial markets. Our advisors have previous experience as <br />investment bankers and will advocate foryou on pricing dayto extract every basis point of savings. <br />Activity 3: Independently Verify Pricing <br />Performance matters, and we care about the rates at which the City will ultimately be issuing bonds — <br />they should be in line with the current market and other similar bond sales. To ensure the underwriter is <br />performing in the best interest of the City, we will monitor proposed rates throughout the pre -pricing and <br />pricing process, culminating with a post -sale book that is provided to summarize the basis for investors <br />approving or not approving a credit, the allotment sizes, and the orders themselves. We view this as a <br />crucial step toward maintaining a strong understanding of movements in investor preferences which pays <br />VUH <br />25F-32 <br />13 <br />