Laserfiche WebLink
Resolution authorizing the issuance and refinancing of the City’s Pension obligations with <br />CalPERS <br />August 17, 2021 <br />Page 3 <br />1 <br />9 <br />9 <br />3 <br />Pension Liability Cost Reduction Policy. City Council directed staff to <br />proceed and approved the proposed Policy. <br />February 16, 2021 City Council approved the bond counsel contract with Stradling Yocca <br />Carlson & Rauth (Stradling). <br />March 16, 2021 City Council approved a Resolution authorizing issuance of the Bonds. <br />May 18, 2021 City Council approved selection of the bond underwriting team. <br />August 17, 2021 City Council final action to approve the sale of pension debt refinancing <br />bonds. <br />September 8, 2021 Expected closing date for the bonds. <br />Debt Validation <br />State law allows the City to refinance existing debt without voter approval. The City was <br />required to obtain a validation of the existing debt from the Orange County Superior Court. <br />The City received a validation for $711 million of debt on June 25, 2021 and the 30-day <br />appeal period for the validation ended on July 25. With the validation, the City can <br />refinance up to $711 million of debt through one or more debt issuances. There is no <br />expiration on the validation. However, the validation does not allow the City to refinance <br />new pension debt incurred in the future. <br />Credit Rating <br />A better credit rating leads to better financing interest rates. Standard & Poor’s issued a <br />credit rating of AA for the proposed bond sale, noting the following factors. <br />Adequate economy in the City of Santa Ana. <br />Very strong management, with strong financial policies and practices. <br />Strong budgetary performance. <br />Very strong budget flexibility and liquidity. <br />Weak debt and contingent liability profile, primarily due to the large pension debt. <br />Strong institutional framework. <br />Documents for City Council Consideration <br />Preliminary Official Statement (Exhibit 2) - This is the City’s document used by <br />the Underwriters to market the bonds for purchase. This document must contain <br />all facts significant or material to the Bonds and the City (with certain permitted <br />exceptions to complete with the final Official Statement), and must not omit any <br />such material facts. <br />Continuing Disclosure Certificate (Exhibit 2 – Appendix E) - This document <br />outlines the City’s requirements to provide certain annual reports to investors and <br />notices of certain enumerated events in order to allow the Underwriters to comply <br />with federal securities laws.