SA 3 - RESO - TAX ALLOCATION BONDS

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Resolution Authorizing the Refunding of 2003 Tax Allocation Bonds July 5, 2016 Page 4 cost of the experienced firms available for bond and disclosure counsel services respectively. Keyser Marston and Associates is also recommended due to their knowledge of the data analysis regarding the applicable project areas obtained while providing fiscal consultant services since the issuance of the 2003 Bonds. As a result, staff is recommending the referenced firms to provide the necessary services for this transaction. On June 28, 2016, Stradling Yocca Carlson & Rauth (underwriter's counsel) informed the City, via issuance of correspondence, of a potential conflict of interest. Stradling Yocca Carlson & Rauth represents and have represented the Successor Agency as special counsel with respect to various matters from time to time as requested by the Successor Agency. As such, they are requesting the Successor Agency to authorize a waiver of the said potential conflict of interest. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's effort to meet Goal #4 — City Financial Stability, Objective #2 — (Provide a reliable five -year financial forecast that ensures financial stability in accordance with the strategic plan), Strategy D (Conduct an assessment of the City's debt and refinancing options to achieve savings). FISCAL IMPACT All costs associated with this transaction will be paid at closing with proceeds from the refunding 2016 Bonds. The proposed 2016 Bonds will generate an estimated total debt service savings of $2.7 million net of all costs of issuance equal to $300,000 annually through 2019 and $100,000 from 2020 through 2031. An estimated 15% of the savings will be obtained in the City's General Fund with the balance going to the local school district and Orange County. The term of the 2016 Bonds will not exceed the term of the 2003 Bonds being refunded. The source of repayment of the 2016 Bonds would be limited to tax revenues (in amounts equivalent to the former tax increment revenues) and deposited by the County into the Successor Agency's Redevelopment Property Tax Trust Fund, and the 2016 Bonds will not be designated as a debt of the City. Robert C. Cortez Special Assistant to the City Manager City Manager's Office APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez Executive Director 6 6 Finance and Management Services Agency Exhibits: 1. Resolution 2. Supplement to the Bond Indenture 3. Bond Purchase Agreement 3 -4