Item 40 - Refinancing City’s Pension Obligations with California Public Employees Retirement System

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37 4826-7904-2280v7/200434-0005 Police Lease Revenue Bonds. On March 23, 1994, the Santa Ana Financing Authority (the “SAFA”) issued the Police Administration and Holding Facility Lease Revenue Bonds (the “1994 Bonds”) in the amount of $107.4 million to provide funds for the construction and equipping of a police administration and holding facility. The 1994 Bonds mature in 2024 with annual principal payments ranging up to $8.7 million. As of June 30, 2021, the 1994 Bonds were outstanding in the aggregate principal amount of $12.4 million. The 1994 Bonds are payable from revenues of the SAFA, consisting principally of base rental payments by the City pursuant to a lease agreement between the City and the SAFA. Southern California Edison On-Bill Financing Program. On August 2011, the City Council approved the installation of energy-efficient LED street lights on Main Street and Edinger Avenue. The project was funded through Southern California Edison’s On-Bill Financing Program. Through this program, the City received zero percent financing for approved energy reduction projects for $2.1 million. Since the inception of this program, the City Council has approved the installation of streetlights at various other locations in the City. The costs are repaid from energy savings over a period of up to ten years. The unpaid balance as of June 30, 2021 was $1.5 million. Private Placement Financing. On June 18, 2014, the SAFA executed a 2014 Private Lease Financing in the amount of $45.1 million with three private placement providers: TPB Investment, Inc. ($22.0 million), Compass Mortgage Corporation ($10.0 million), and Capital One Public Funding, LLC ($13.1 million) for the purpose of refinancing existing debt. The unpaid balance as of June 30, 2021 was $17.0 million. Streetlights Acquisition and Upgrade Project Financing. On April 6, 2018, the City executed an agreement with Siemens Industry, Inc., to purchase and install light emitting diode fixtures for citywide streetlight upgrades. The City also execute an agreement with Magellan Advisors to provide citywide fiber- optic and wireless broadband network consulting services. The City financed the project by entering into an equipment lease-purchase agreement with Holman Capital and an escrow deposit agreement with Signature Bank on April 6, 2018. The total amount financed was $6.6 million at an interest rate of 3.3% per annum. The amount outstanding as of June 30, 2021 was 6.0 million. In addition to the obligations described above, the City has certain compensated absences and claims payable that qualify as long-term liabilities. See Note 5 to the City’s audited financial statements set forth in Appendix A for further information with respect to General Fund-Supported Obligations. Short-Term Debt. The City currently has no short-term debt outstanding and does not expect to issue any in Fiscal Year 2022. City Investment Policy General. The City invests its funds in accordance with the City’s investment policy (the “Investment Policy”), the most recent version of which was adopted on June 1, 2021. In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. The City’s Investment Policy sets forth the policies and procedures applicable to the investment of City funds and designates eligible investments. The Investment Policy sets forth the following primary goals: (i) assure compliance with all federal, state and local laws governing investment of moneys, (ii) provide the safety of principal and sufficient liquidity and (iii) provide an investment return within the parameters of the Statement of Investment Policy and Investment Portfolio Guidelines. The Investment Policy applies to all financial assets of the City, with the exception of bond proceeds. Finance and Management Services, Agency Treasury and customer service staff continually analyze the portfolio and act to safeguard assets and maintain liquidity, while earning a reasonable rate of return. On an annual basis, Treasury staff conducts an evaluation of the Investment Policy to determine compliance and applicable Federal