Item 23 - Pension Debt Refinancing Update and Underwriter Selection

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Finance and Management Services https://www.santa-ana.org/finance Item # 23 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report May 18, 2021 TOPIC: Pension Debt Refinancing Update and Underwriter Selection AGENDA TITLE: Pension Debt Refinancing Update and Underwriter Selection RECOMMENDED ACTION 1. Receive and File Pension Debt Refinancing Update. 2. Approve the Selection of the following Underwriter(s) to assist the City with refinancing its existing Pension Debt: • Bank of America Securities, Inc.- Senior Manager • Stifel Financial Corp. — Co -Manager Ramirez & Co., Inc. — Co -Manager EXECUTIVE SUMMARY On March 16, the City Council adopted a resolution authorizing the initiation of judicial validation proceedings (Validation) to refinance the City's employee pension debt. While the Validation is in process, Staff and the City's financial advisor, Urban Futures, Inc. (UFI), conducted a competitive procurement process for bond underwriting services. The Underwriter's role is to develop disclosure documents related to the City's potential debt, assist with a presentation to a credit rating agency, market the bonds to investors, and ultimately sell the bonds. DISCUSSION Subsequent to the March 16, 2021 City Council action, the City's Validation Counsel, Stradling Yocca Carlson & Rauth (Stradling), filed a validation action with the County of Orange Superior Court (Court). The Court has commenced the process to determine that the City can refinance its existing employee pension debt. The Court distributed a publication of summons to all interested parties, which include the City's employee bargaining groups. The City is on track to receive a decision (i.e. judgement) from the Court on the legality of issuing debt to refinance its pension debt obligations. Pending any challenges to the summons, staff anticipates receiving the decision within the next sixty (60) to ninety (90) days.