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REQUEST FOR <br />COUNCIL ACTION <br />CITY COUNCIL MEETING DATE: <br />SEPTEMBER 16, 2014 <br />TITLE: <br />AGREEMENT WITH URBAN <br />FUTURES INC. FOR BOND <br />COMPLIANCE CONTINUING <br />DISCLOSURE SERVICES <br />l CITY MANAGE <br />RECOMMENDED ACTION <br />CLERK OF COUNCIL USE ONLY: <br />APPROVED <br />❑ As Recommended <br />❑ As Amended <br />❑ Ordinance on 1 "Reading <br />❑ Ordinance on 2n °Reading <br />❑ Implementing Resolution <br />❑ Set Public Hearing For <br />CONTINUED TO <br />FILE NUMBER <br />Authorize the City Manager and Clerk of the Council to execute an agreement with Urban <br />Futures, Inc., for bond continuing disclosure services for a three -year period in an annual amount <br />of $5,500, subject to non - substantive changes approved by the City Manager and City Attorney. <br />DISCUSSION <br />The City of Santa Ana as part of its financial strategy for critical infrastructure and project needs, <br />engages financing bond issuances through the municipal bond and private placement markets. <br />Currently, the City has approximately $160 million in City related debt and $100 million in <br />Successor Agency debt. The federal government via the US Securities and Exchange <br />Commission (SEC), through the Municipal Securities Rulemaking Board (MSRB), requires annual <br />and special reporting of the City's financial condition and status including specified material <br />reportable events. Continuing disclosure overall is to promote a consistent level of financial <br />transparency to the municipal bond market and our bond holders. <br />Such mandatory reporting requires access to emerging bond ratings from the three national <br />ratings agencies- Standard & Poor's, Moody's, and Fitch. These ratings are not information <br />forwarded to municipalities or the SEC, and must be posted within ten days of the rating with the <br />MSRB or the City is out of reporting compliance. This new reporting procedure was put in place <br />to increase investor confidence and rectify bond industry irregularities. <br />In order to ensure the City's financial bonding capacity and ratings, Urban Futures, Inc. (UFI), will <br />provide all continuing disclosure duties for the City's municipal and private placement financing <br />portfolio. UFI maintains specialized industry software for receiving immediate notification of bond <br />issuance rating changes providing time to respond with accurate information and post to the <br />MSRB on time. Purchase of the software is cost prohibitive for the continuing disclosure tasks <br />required by the City. Furthermore, UFI will respond to the SEC's current Municipal Continuing <br />Disclosure Cooperation Initiative (March 2014), and any other such efforts, to report and respond <br />to inquiries related to determinations of materiality related to current and prior compliance. In <br />addition, such ongoing continuing disclosure requires UFI to work with Finance staff in preparing <br />regular and specialized tables for producing each bond's appropriate annual report and any other <br />25J -1 <br />