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HomeMy WebLinkAbout80A - RESO - TAX ALLOCATION BONDSREQUEST FOR COUNCIL/ AGENCY / FINANCING AUTHORITY ACTION MEETING DATE: DECEMBER 6, 2010 TITLE: RESOLUTIONS APPROVING PURCHASE, ISSUANCE AND SALE OF TAX ALLOCATION BONDS AND TAXABLE RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS AND APPROVING RELATED DOCUMENTS AND ACTIONS CITY MANAGER EXECUTIVE ]RECTOR RECOMMENDED ACTION CITY COUNCIL ACTION CLERK OF COUNCIL USE ONLY: APPROVED ? As Recommended ? As Amended ? Ordinance on 1st Reading ? Ordinance on 2nd Reading ? Implementing Resolution ? Set Public Hearing For CONTINUED TO FILE NUMBER Adopt a resolution approving the issuance and sale of the tax allocation bonds of the Community Redevelopment Agency of the City of Santa Ana to finance and refinance redevelopment activities within or for the benefit of the Agency's Merged Project Area. COMMUNITY REDEVELOPMENT AGENCY ACTION 1. Adopt a resolution authorizing the issuance and sale of tax allocation bonds to finance and refinance redevelopment activities within or for the benefit of the Agency's Merged Project Area and approving related documents and actions. 2. Authorize the payment of the credit rating fee to Standard and Poors in an amount not to exceed $27,000. 3. Authorize the payment of the credit rating fee to Fitch Ratings in an amount not to exceed $30,000. 4. Authorize the payment of fees to Keyser Marston Associates, Inc. for preparation of the Fiscal Consultant Report and related services in an amount not to exceed $35,000. 5. Direct the Agency General Counsel to prepare and authorize the Executive Director and Agency Secretary to execute agreements with the financing team composed of financial advisor CSG Advisors, Incorporated (up to $85,000 plus expenses), underwriters Stone and Youngberg and De La Rosa & Co. (expected $6.00-$6.25 per $1,000 of bonds, approximately 8OA-1 Resolutions - Tax Allocation Bonds December 6, 2010 Page 2 $470,000), bond counsel Quint & Thimmig (up to $110,000 plus expenses), and special disclosure counsel Stradling, Yocca, Carlson & Rauth (up to $90,000 plus expenses), subject to non-substantive changes approved by the Executive Director and Agency General Counsel. FINANCING AUTHORITY ACTION Adopt a resolution authorizing the purchase and sale of tax allocation bonds of the Community Redevelopment Agency of the City of Santa Ana issued to finance redevelopment activities within or for the benefit of the Agency's Merged Project Area and approving related documents and actions. DISCUSSION The proposed actions will facilitate a refinancing of existing Agency debt, as well as allow for the issuance of approximately $6 million in new debt to finance improvements to the public parking structures in the Downtown. The City received an allocation of $5,872,000 for Recovery Zone Economic Development Bonds (RZEDB) which allow for the construction of public infrastructure facilities. Capital improvements, including security enhancements, structural repairs, architectural enhancements and energy- efficient improvements to the Downtown parking facilities are proposed to be funded with the proceeds of the Recovery Zone Bonds. The federal government will provide a subsidy equal to 45% of the interest cost over the life of the bonds to the City, resulting in a considerable cost savings. Over the last several years, the Redevelopment Agency has taken a number of steps to maximize the effectiveness of the Redevelopment program, including merging all six Project areas, eliminating the dates in the Redevelopment Plans to incur debt, planning time limits and exploring bond refinancing opportunities. In 1998, the Santa Ana Financing Authority issued bonds which refunded (refinanced) prior Agency 1989 bonds and obligations. In 2008, the Agency initiated an effort to refund the 1998 bonds, but the market deteriorated significantly, thereby raising the Agency's borrowing costs to unacceptable levels. Recently, financial conditions stabilized and interest rates have been more favorable. When we initiated the refunding analysis over 60 days ago, the Agency's borrowing rate had decreased below 5%. However, due to recent volatility in the bond market and the high volume of bonds slated to be issued by year's end, the market conditions may change and impact interest rates. Even with these uncertain borrowing conditions, the restructuring of the Agency's existing debt can improve net cash flow by approximately $3 to $4 million per year through 2018 so that funds are available to repay other existing obligations, including those created by State ERAF and SERAF 8OA-2 Resolutions - Tax Allocation Bonds December 6, 2010 Page 3 payments. The Agency has been required to pay to the State just under $39 million beginning in FY 1992. This includes the most recent payment of $17.9 million in FY 2009-10, and another $3.7 million due in May 2011. State "take aways" have resulted in the elimination of funding for needed capital projects in the various project areas, reduction in staff, and borrowing over $10 million from the Low and Moderate Housing Fund, and $6.3 million from the South Main Corridor Fund. With the current economic downturn, the Agency's tax increment revenues have diminished, thereby affecting its cash flow. Without this refunding, it will be very difficult for the Agency to repay the two borrowings within the required time limits and impact its ability to facilitate development activities in the City. The proposed action authorizes the issuance of up to $75 million in tax allocation and Recovery Zone bonds assuming favorable market conditions at the time of bond pricing in mid-December. If market conditions have deteriorated at pricing, the resolution authorizes the Executive Director of the Community Redevelopment Agency to postpone the financing until early 2011. This will allow the greatest flexibility in order to time the sale and issuance of the bonds to the Agency's best advantage. Under the federal legislation, any issuance of RZEDBs must be closed by December 31, 2010. If the Agency elects not to issue by December 31, 2010, thereby losing the RZEBD allocation, the Agency can still issue an additional $6 million of tax allocation bonds in early 2011 to finance the required improvements to the downtown parking structures as traditional tax exempt bonds. Under the terms of the 1998 bonds, the refunding must close no later than March 1, 2011, or else it will need to be delayed until after June 1, 2011. When the Agency first initiated refunding of the 1998 Bonds in 2008, a competitive Request for Proposal process resulted in the Agency's selection of Stone & Youngberg as lead bond underwriter, with De La Rosa & Co. assisting in marketing of the bonds for purchase. The firm of Quint & Thimmig LLP is serving as bond counsel; CSG Advisors as financial advisor; and Stradling Yocca Carlson & Rauth as disclosure counsel. The firm of Keyser Marston Associates, Inc. is serving as fiscal consultant and Jones Hall as underwriter counsel. All costs associated with this transaction will be paid at closing with bond proceeds, with the exception of the Standard and Poors and Fitch Ratings credit rating fees (up to $27,000 and $30,000 respectively), and Keyser Marston's fiscal consultant fees (up to $35,000), which will need to be paid even if the transaction is postponed until 2011. The final compensation for the financing team will be determined based on the size and structure of the bond issuance and market conditions at the time of the sale. The proposed compensation will be as follows: CSG Advisors, financial advisor, an amount not to exceed $85,000 plus expenses; Quint & Thimmig, bond counsel's compensation will be as follows: 1% of the first $1,000,000, .5% of the next $5,000,000, .25% of the next $15,000,000, and .125% of the remaining principal, not to exceed $110,000, plus out-of-pocket costs not to exceed $5,000; Stradling, Yocca, Carlson & Rauth, disclosure counsel, an amount not to exceed $90,000 plus out- of-pocket expenses not to exceed $1,500. The proposed underwriter's discount is $6.00 - $6.25/$1,000 of bonds, approximately $470,000; however, due to current market conditions, the underwriter's discount may need to be adjusted at the time of bond sale. Separately, both underwriting firms have executed an Agreement Among Underwriters stipulating each firm's share 8OA-3 Resolutions - Tax Allocation Bonds December 6, 2010 Page 4 of the underwriting fees. All of the bond transaction documents, including the Preliminary Official Statement, Indenture and Bond Purchase Agreement, are on file with the Clerk of the Council. FISCAL IMPACT All costs associated with this transaction will be paid at closing with bond proceeds, with the exception of the Standard and Poors and Fitch Ratings credit rating fees (up to $27,000 and $30,000 respectively), and Keyser Marston's fiscal consultant fees (up to $35,000), which will need to be paid even if the transaction is postponed until 2011. Funds are available in the Merged Project Area Admin Account (no. 57018843-62300/03717801022. Proceeds from the sale of the Recovery Zone Economic Development Bonds will be deposited in the 2010 Tax Allocation Refunding Bond Series A and Bond Series B, and Recovery Zone Economic Development Bond accounts. APPROVED AS TO FUNDS AND ACCOUNTS: Cynthia J. Nelson Deputy City Manager for Development Services Community Development Agency Francisco Gutierrez Executive Director Finance & Management Services Agency/- CJN/NTE/mlr Exhibit: 1. Council Resolution 2. CRA Resolution 3. Santa Ana Financing Authority Resolution 8OA-4 JF 12/1/10 RESOLUTION NO. 2010-XXX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA APPROVING THE ISSUANCE AND SALE OF TAX ALLOCATION BONDS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA TO FINANCE AND REFINANCE REDEVELOPMENT ACTIVITIES WITHIN OR FOR THE BENEFIT OF THE AGENCY'S MERGED PROJECT AREA BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SANTA ANA AS FOLLOWS: Section 1. The City Council of the City of Santa Ana hereby finds, determines and declares as follows: A. the Community Redevelopment Agency of the City of Santa Ana (the "Agency") is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code (the "Law"), including the power to issue 2010 Bonds for any of its corporate purposes B. the Agency adopted six redevelopment project areas between 1973 and 1989, including the Central City Redevelopment Project Area, the Inter- City Commuter Station Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South Harbor Boulevard/Fairview Street Redevelopment Project Area, the South Main Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the "constituent Redevelopment Projects" or "Redevelopment Projects");; C. to allow tax increment revenues to be shared between Redevelopment Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged Project Area; and D. the Redevelopment Projects continue to retain their respective boundaries, time, and financial limits;; i 80 w/??? esolution No. 2010-XXX Page 1 of 4 E. the Agency has determined that, due to financial conditions of the Agency and prevailing financial market conditions, it is in the best interests of the Agency at this time to finance and refinance redevelopment activities for the benefit of the Redevelopment Projects and, in particular, to: (a) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series A (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "1998A Bonds"), (b) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series B (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "1998B Bonds"), (c) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series C (Inter-City Commuter Station Redevelopment Project) (the "1998C Bonds"), (d) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series D (MainPlace Project) (the "1998D Bonds" and, with the 1998A Bonds, the 1998B Bonds and the 1998C Bonds, the "1998 Bonds"), and (e) finance certain public parking and infrastructure improvements (the "2010 Project"); F. to provide moneys to refund the 1998 Bonds and, if for any reason the Agency is unable to issue or determines not to issue the 2010B Bonds (hereinafter defined), to finance the 2010 Project, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2010 Series A, in the aggregate principal amount of not to exceed $75,000,000 (the "2010A Bonds"), under the provisions of Article 9 of Chapter 3 (commencing with section 53570) of Division 2 of Title 5 of the California Government Code and, if the 2010A Bonds include provision for the 2010 Project, under the provisions of Part 1 of Division 24 of the California Health and Safety Code, commencing with section 33640 of said Code; G. the American Recovery and Reinvestment Act of 2009 (the "Federal Stimulus Act"), added sections 14000-1 and 14000-2 to the Internal Revenue Code of 1986 (the "Code"), authorizing state and local governmental agencies to issue recovery zone economic development bonds ("Recovery Zone Economic Development Bonds") upon compliance with various requirements of the Code; Resolution No. 2010-XXX 80A-6 Page 2 of 4 H. among other requirements, the Code requires that the net proceeds of any Recovery Zone Economic Development Bonds be used for a "qualified economic development purpose," including to fund capital expenditures paid or incurred with respect to property located in a "recovery zone;" on August 17, 2009, the City Council of the City of Santa Ana (the "City") adopted Resolution No. 2009-046, designating the City as a "recovery zone" (the "Santa Ana Recovery Zone") for purposes of section 14000- 1(b) of the Code; J. under the Federal Stimulus Act, the City has been allocated the authority to issue up to $5,872,000 principal amount of Recovery Zone Economic Development Bonds; K. to finance the 2010 Project, which will promote development or other economic activity in the Santa Ana Recovery Zone, as contemplated by section 14000-2(c) of the Code, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area-Taxable Recovery Zone Economic Development Bonds), 2010 Series B, in the aggregate principal amount of not to exceed $5,870,000 (the "201013 Bonds" and, with the 2010A Bonds, the "2010 Bonds"), under the provisions of the Redevelopment Bond Law; L. the 2010B Bonds will be issued as bonds the interest on which is not excluded from gross income for purposes of federal income taxation; M. the Agency expects to receive a cash subsidy payment from the United States Treasury equal to 45% of the interest payable on the 2010B Bonds; N. the 2010 Bonds will be secured by a pledge of and lien on certain tax increment revenues allocated to the Agency for the Redevelopment Projects; and 0. in accordance with the requirements of section 33640 of the California Health and Safety Code, the City Council wishes at this time to approve the issuance and sale of the 2010 Bonds by the Agency; SECTION 2. Approval of the 2010 Bonds. The issuance and sale of the 2010 Bonds by the Agency to refund the 1998 Bonds and to finance the 2010 Project, is hereby approved. 80 w ?? Resolution No. 2010-XXX /? Page 3 of 4 SECTION 3. Effect. This Resolution shall take effect from and after the date of its passage and adoption. ADOPTED this day of , 2010. Miguel A. Pulido Mayor APPROVED AS TO FORM: Joseph W. Fletcher City Attorney AYES: NOES: ABSTAIN: NOT PRESENT: Councilmembers Councilmembers Councilmembers Councilmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUISAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2010-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on Date: Clerk of the Council City of Santa Ana Resolution No. 20"0-XXX /? Page 4 of 4 8OA-8 CRA RESOLUTION NO. 2010- A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA AUTHORIZING THE ISSUANCE AND SALE OF TAX ALLOCATION BONDS TO FINANCE AND REFINANCE REDEVELOPMENT ACTIVITIES WITHIN OR FOR THE BENEFIT OF THE AGENCY'S MERGED PROJECT AREA AND APPROVING RELATED DOCUMENTS AND ACTIONS BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, AS FOLLOWS: Section 1. The Board of the Community Redevelopment Agency of the City of Santa Ana hereby finds, determines and declares as follows: A. the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code (the "Law"), including the power to issue 2010 Bonds for any of its corporate purposes; B. the Agency adopted six redevelopment project areas between 1973 and 1989, including the Central City Redevelopment Project Area, the Inter City Commuter Station Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South Harbor Boulevard/Fairview Street Redevelopment Project Area, the South Main Street Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the "constituent Redevelopment Projects" or "Redevelopment Projects"); C. to allow tax increment revenues to be shared between Redevelopment Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged Project Area; D. the Redevelopment Projects continue to retain their respective boundaries, time, and financial limits; E. the Agency has determined that, due to financial conditions of the Agency and prevailing financial market conditions, it is in the best interests of the Agency at this time to finance and refinance 80A-9 19036.02 redevelopment activities for the benefit of the Redevelopment Projects and, in particular, to: (1) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series A (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "1998A Bonds"), (2) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series B (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "19988 Bonds"), (3) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series C (Inter-City Commuter Station Redevelopment Project) (the "1998C Bonds"), (4) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series D (MainPlace Project) (the "1998D Bonds" and, with the 1998A Bonds, the 1998B Bonds and the 1998C Bonds, the "1998 Bonds"), and (5) finance certain public parking and infrastructure improvements (the "2010 Project"); F. to provide moneys to refund the 1998 Bonds and, if for any reason the Agency is unable to issue or determines not to issue the 2010B Bonds (hereinafter defined), to finance the 2010 Project, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2010 Series A, in the aggregate principal amount of not to exceed $75,000,000 (the "2010A Bonds"), under the provisions of Article 9 of Chapter 3 (commencing with section 53570) of Division 2 of Title 5 of the California Government Code (the "Refunding Bond Law") and, if the 2010A Bonds include provision for the 2010 Project, under the provisions of Part 1 of Division 24 of the California Health and Safety Code, commencing with section 33640 of said Code (the "Redevelopment Bond Law"); G. the American Recovery and Reinvestment Act of 2009 (the "Federal Stimulus Act"), added sections 14000-1 and 14000-2 to the Internal Revenue Code of 1986 (the "Code"), authorizing state and local governmental agencies to issue recovery zone economic development bonds ("Recovery Zone Economic Development Bonds") upon compliance with various requirements of the Code; H. among other requirements, the Code requires that the net proceeds of any Recovery Zone Economic Development Bonds be -2- 80--10 used for a "qualified economic development purpose," including to fund capital expenditures paid or incurred with respect to property located in a "recovery zone;" on August 17, 2009, the City Council of the City of Santa Ana (the "City") adopted Resolution No. 2009-046, designating the City as a "recovery zone" (the "Santa Ana Recovery Zone") for purposes of section 14000-1(b) of the Code; J. under the Federal Stimulus Act, the City has been allocated the authority to issue up to $5,872,000 principal amount of Recovery Zone Economic Development Bonds; K. to finance the 2010 Project, which will promote development or other economic activity in the Santa Ana Recovery Zone, as contemplated by section 14000-2(c) of the Code, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area- Taxable Recovery Zone Economic Development Bonds), 2010 Series B, in the aggregate principal amount of not to exceed $5,870,000 (the "201013 Bonds" and, with the 2010A Bonds, the "2010 Bonds"), under the provisions of the Redevelopment Bond Law; L. the 201013 Bonds will be issued as bonds the interest on which is not excluded from gross income for purposes of federal income taxation; M. the Agency expects to receive a cash subsidy payment from the United States Treasury equal to 45% of the interest payable on the 2010B Bonds; N. the 2010 Bonds will be secured by a pledge of and lien on certain tax increment revenues allocated to the Agency for the Redevelopment Projects; and 0. the Agency has duly considered such transactions and wishes at this time to authorize proceedings for the issuance and sale of the 2010 Bonds; SECTION 2. Authorization. The Agency hereby authorizes the issuance of the 2010A Bonds to refund the 1998 Bonds and, if for any reason the Agency is unable to issue or determines not to issue the 2010B Bonds (hereinafter defined), to finance the 2010 Project, and authorizes the issuance of the 2010B Bonds. The 2010A Bonds will not include provision for the 2010 Project if the 2010B Bonds are issued. The 2010B Bonds will not be issued unless the 2010A Bonds are also issued although the 2010A Bonds may be issued alone. -3- 80--11 SECTION 3. Issuance of the 2010 Bonds• Approval of the Indenture. The 2010A Bonds shall be issued pursuant to the Refunding Bond Law and, if the 2010A Bonds include provision for the 2010 Project, pursuant to the Redevelopment Bond Law, and pursuant to an indenture of trust (the "Indenture"), by and between the Agency and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Indenture"). The 2010B Bonds shall be issued pursuant to the Redevelopment Bond Law and pursuant to the Indenture. The Agency hereby approves the Indenture in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the Indenture for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the Indenture. SECTION 4. Approval of the Escrow Agreements. (a) The Agency hereby approves an escrow agreement relating to the refunding of the 1998A Bonds (the "1998A Escrow Agreement"), by and among the Santa Ana Financing Authority (the "Authority"), the Agency and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998A Escrow Agreement for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the 1998A Escrow Agreement. (b) The Agency hereby approves an escrow agreement relating to the refunding of the 1998B Bonds (the "1998B Escrow Agreement'), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998B Escrow Agreement for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the 1998B Escrow Agreement. (c) The Agency hereby approves an escrow agreement relating to the refunding of the 1998C Bonds (the "1998C Escrow Agreement'), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee -4- 80--12 thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998C Escrow Agreement for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the 1998C Escrow Agreement. (d) The Agency hereby approves an escrow agreement relating to the refunding of the 1998D Bonds (the "1998D Escrow Agreement"), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998D Escrow Agreement for and in the name and on behalf of the Agency. The Agency hereby authorizes the delivery and performance of the 1998D Escrow Agreement. SECTION 5. Sale of the 2010 Bonds. The Agency hereby authorizes the sale of the 2010A Bonds to the Authority for concurrent re-sale to Stone & Youngberg LLC and E. J. De La Rosa & Co., Inc. (the "2010A Underwriters"), so long as the total 2010A Underwriters' discount, excluding original issue discount which does not constitute compensation to the 2010A Underwriters, does not exceed 1% of the principal amount of the 2010A Bonds, so long as the true interest cost of the 2010A Bonds does not exceed 6.5% and so long as the final maturity date of the 2010A Bonds is no later than September 1, 2035. The Agency hereby authorizes the sale of the 2010B Bonds to the Authority for concurrent re-sale to Stone & Youngberg LLC (the "2010B Underwriter"), so long as the total 2010B Underwriter's discount, excluding original issue discount which does not constitute compensation to the 2010B Underwriter, does not exceed 1 % of the principal amount of the 2010B Bonds, so long as the true interest cost of the 2010B Bonds does not exceed 9% and so long as the final maturity date of the 2010B Bonds is no later than September 1, 2035. The Agency hereby approves a bond purchase agreement relating to the 2010 Bonds, by and among the 2010A Underwriters, the Authority and the Agency with respect to the 2010A Bonds, and by and among the 2010B Underwriter, the Authority and the Agency with respect to the 2010B Bonds, in the form on file with the Secretary (the "2010 Bond Purchase Agreement"), together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute the final form of the 2010 Bond Purchase Agreement for and in the name and on behalf of the Agency. SECTION 6. Approval of the Preliminary Official Statement. The preliminary official statement describing the 2010 Bonds on file with the Secretary (the "Preliminary -5- 80--13 Official Statement") is hereby approved for distribution by the Underwriter to municipal bond broker-dealers, to banking institutions and to members of the general public who may be interested in purchasing the 2010 Bonds. The Executive Director, or any designee thereof, is authorized to approve, upon advice of Agency counsel, modifications to the Preliminary Official Statement, from time to time, pending such distribution as shall be required to cause the Preliminary Official Statement to contain any further information necessary to accurately describe the 2010 Bonds. With respect to the distribution of the Preliminary Official Statement, the Executive Director, or any designee thereof, is authorized and directed, on behalf of the Agency, to deem the Preliminary Official Statement "final" pursuant to Rule 15c2-12 under the Securities Exchange Act of 1934. SECTION 7. Approval of the Final Official Statement. A final official statement, which shall include such changes and additions thereto deemed advisable by Executive Director, or any designee thereof, and upon advice of Agency counsel (the "Final Official Statement"), is hereby approved for delivery to the purchasers of the 2010 Bonds, and the Executive Director, or any designee thereof, is authorized and directed to execute the Final Official Statement for and on behalf of the Agency. The Executive Director, or any designee thereof, is authorized and directed to deliver (i) a certificate with respect to the information set forth therein, and (ii) a continuing disclosure certificate substantially in the form appended to the Final Official Statement. SECTION 8. Bond Counsel and Disclosure Counsel. (a) Quint & Thimmig LLP, San Francisco, California, is hereby designated as bond counsel to the Agency in connection with the issuance of the 2010 Bonds. The Executive Director, or any designee thereof, is hereby authorized and directed in the name and on behalf of the Agency to execute an agreement for legal services with such firm, with compensation to be paid there under subject to the approval of the Executive Director, or any designee thereof. (b) Stradling Yocca Carlson & Rauth, Newport Beach, California, is hereby designated as disclosure counsel to the Agency in connection with the issuance of the 2010 Bonds. The Executive Director, or any designee thereof, is hereby authorized and directed in the name and on behalf of the Agency to execute an agreement for legal services with such firm, with compensation to be paid there under subject to the approval of the Executive Director, or any designee thereof. SECTION 9. Official Actions. The Executive Director and the Secretary, and any and all other officers of the Agency, are hereby authorized and directed, for and in the name and on behalf of the Agency, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2010 Bonds as described herein. Whenever in this resolution any officer of the Agency is authorized to execute or countersign any document or take any action, such execution, countersigning or action -6- 80--14 may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. SECTION 10. Effect. This Resolution shall take effect from and after the date of its passage and adoption. ADOPTED this day of , 2010. APPROVED AS TO FORM: Joseph W. Fletcher Agency General Counsel AYES: Boardmembers NOES: Boardmembers ABSTAIN: Boardmembers NOT PRESENT: Boardmembers Miguel A. Pulido Chairman CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary of the Agency, do hereby attest to and certify the attached Resolution No. 2010-XXX to be the original resolution adopted by Community Redevelopment Agency of the City of Santa Ana on Date: Agency Secretary -7- 80--15 RESOLUTION NO. SAFA- 2010- A RESOLUTION OF THE GOVERNING BOARD OF THE SANTA ANA FINANCING AUTHORITY AUTHORIZING THE PURCHASE AND SALE OF TAX ALLOCATION BONDS OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA ISSUED TO FINANCE REDEVELOPMENT ACTIVITIES WITHIN OR FOR THE BENEFIT OF THE AGENCY'S MERGED PROJECT AREA AND APPROVING RELATED DOCUMENTS AND ACTIONS BE IT RESOLVED BY THE SANTA ANA FINANCING AUTHORITY AS FOLLOWS: Section 1. The Governing Board of the Santa Ana Financing Authority hereby finds, determines and declares as follows: A. the City of Santa Ana (the "City") and the Community Redevelopment Agency of the City of Santa Ana (the "Agency") have heretofore entered into a Joint Exercise of Powers Agreement, dated as of August 1, 1993, establishing the Authority for the purpose, among others, of issuing its bonds to be used to provide financial assistance to the City and to the Agency; B. the Agency is a public body, corporate and politic, duly established and authorized to transact business and exercise powers under and pursuant to the provisions of the Community Redevelopment Law of the State of California, constituting Part 1 of Division 24 of the California Health and Safety Code (the "Law"), including the power to issue 2010 Bonds for any of its corporate purposes; C. the Agency adopted six redevelopment project areas between 1973 and 1989, including the Central City Redevelopment Project Area, the Inter- City Commuter Station Redevelopment Project Area, the North Harbor Boulevard Redevelopment Project Area, the South Harbor Boulevard/Fairview Street Redevelopment Project Area, the South Main Street Redevelopment Project Area, and the Bristol Corridor Redevelopment Project Area (the "constituent Redevelopment Projects" or "Redevelopment Projects"); D. to allow tax increment revenues to be shared between Redevelopment Projects and thereby facilitate redevelopment of the Redevelopment Projects, the Redevelopment Projects were merged in 2004 in compliance with all requirements of the Law, creating the Merged Project Area; /? Resolution No. SAFA 2010- 8OA-16 Page 1 of 2 E. the Redevelopment Projects continue to retain their respective boundaries, time, and financial limits; F. the Agency has determined that, due to financial conditions of the Agency and prevailing financial market conditions, it is in the best interests of the Agency at this time to finance and refinance redevelopment activities for the benefit of the Redevelopment Projects and, in particular, to: (1) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series A (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "1998A Bonds"), (2) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series B (City of Santa Ana and South Harbor Boulevard/Fairview Street Redevelopment Projects) (the "19988 Bonds"), (3) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series C (Inter-City Commuter Station Redevelopment Project) (the "1998C Bonds"), (4) refund, on a current basis, the outstanding Santa Ana Financing Authority Refunding Revenue Bonds, 1998 Series D (MainPlace Project) (the 1998D Bonds" and, with the 1998A Bonds, the 1998B Bonds and the 1998C Bonds, the "1998 Bonds"), and (5) finance certain public parking and infrastructure improvements (the "2010 Project"); G. to provide moneys to refund the 1998 Bonds and, if for any reason the Agency is unable to issue or determines not to issue the 2010B Bonds (hereinafter defined), to finance the 2010 Project, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area), 2010 Series A, in the aggregate principal amount of not to exceed $75,000,000 (the "2010A Bonds"), under the provisions of Article 9 of Chapter 3 (commencing with section 53570) of Division 2 of Title 5 of the California Government Code and, if the 2010A Bonds include provision for the 2010 Project, under the provisions of Part 1 of Division 24 of the California Health and Safety Code, commencing with section 33640 of said Code (the "Redevelopment Bond Law"); H. the American Recovery and Reinvestment Act of 2009 (the "Federal Stimulus Act'), added sections 14000-1 and 14000-2 to the Internal Revenue Code of 1986 (the "Code"), authorizing state and local Resolution No. SAFA 2010- Page 2 of 2 8OA-1 7 governmental agencies to issue recovery zone economic development bonds ("Recovery Zone Economic Development Bonds") upon compliance with various requirements of the Code; among other requirements, the Code requires that the net proceeds of any Recovery Zone Economic Development Bonds be used for a "qualified economic development purpose," including to fund capital expenditures paid or incurred with respect to property located in a "recovery zone;" on August 17, 2009, the City Council of the City of Santa Ana (the "City") adopted Resolution No. 2009-046, designating the City as a "recovery zone" (the "Santa Ana Recovery Zone") for purposes of section 14000- 1(b) of the Code; K. under the Federal Stimulus Act, the City has been allocated the authority to issue up to $5,872,000 principal amount of Recovery Zone Economic Development Bonds; L. to finance the 2010 Project, which will promote development or other economic activity in the Santa Ana Recovery Zone, as contemplated by section 14000-2(c) of the Code, the Agency has determined to issue its Community Redevelopment Agency of the City of Santa Ana Tax Allocation Bonds (Merged Project Area-Taxable Recovery Zone Economic Development Bonds), 2010 Series B, in the aggregate principal amount of not to exceed $5,870,000 (the "2010B Bonds" and, with the 2010A Bonds, the "2010 Bonds"), under the provisions of the Redevelopment Bond Law; M. the 2010B Bonds will be issued as bonds the interest on which is not excluded from gross income for purposes of federal income taxation; N. the Agency expects to receive a cash subsidy payment from the United States Treasury equal to 45% of the interest payable on the 2010B Bonds; 0. the 2010 Bonds will be secured by a pledge of and lien on certain tax increment revenues allocated to the Agency for the Redevelopment Projects; and P. the Authority has duly considered such transactions and wishes at this time to approve the form and authorize execution of escrow agreements relating to the refunding of the 1998 Bonds and to authorize the purchase and sale of the 2010B Bonds and to approve the form and authorize execution of a bond purchase agreement in connection therewith; Resolution No. SAFA 2010- 8OA-18 Page 3 of 2 SECTION 2. Approval of the Escrow Agreements. (a) The Board hereby approves an escrow agreement relating to the refunding of the 1998A Bonds (the "1998A Escrow Agreement"), by and among the Authority, the Agency and The Bank of New York Mellon Trust Company, N.A., as escrow bank (the "Escrow Bank"), in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998A Escrow Agreement for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the 1998A Escrow Agreement. (b) The Board hereby approves an escrow agreement relating to the refunding of the 1998B Bonds (the "19988 Escrow Agreement"), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998B Escrow Agreement for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the 1998B Escrow Agreement. (c) The Board hereby approves an escrow agreement relating to the refunding of the 1998C Bonds (the "1998C Escrow Agreement"), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998C Escrow Agreement for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the 1998C Escrow Agreement. (d) The Board hereby approves an escrow agreement relating to the refunding of the 1998D Bonds (the "1998D Escrow Agreement'), by and among the Authority, the Agency and the Escrow Bank, in the form on file with the Secretary, together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee Resolution No. SAFA 2010- Page 4 of 2 8OA-19 thereof, is hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to, the final form of the 1998D Escrow Agreement for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of the 1998D Escrow Agreement. SECTION 3. Purchase and Sale of the 2010 Bonds. The Board hereby authorizes the purchase by the Authority of the 2010A Bonds for concurrent re-sale to Stone & Youngberg LLC and E. J. De La Rosa & Co., Inc. (the "2010A Underwriters"), so long as the total 2010A Underwriters' discount, excluding original issue discount which does not constitute compensation to the 2010A Underwriters, does not exceed 1 % of the principal amount of the 2010A Bonds, and so long as the final maturity date of the 2010A Bonds is no later than September 1, 2035. The Board hereby authorizes the purchase by the Authority of the 2010B Bonds for concurrent re-sale to (the "2010B Underwriter"), so long as the total 2010B Underwriter's discount, excluding original issue discount which does not constitute compensation to the 2010B Underwriter, does not exceed 1 % of the principal amount of the 2010B Bonds, and so long as the final maturity date of the 2010B Bonds is no later than September 1, 2035. The Board hereby approves a bond purchase agreement relating to the 2010 Bonds, by and among the 2010A Underwriters, the Authority and the Agency with respect to the 2010A Bonds, and by and among the 2010B Underwriter, the Authority and the Agency with respect to the 2010B Bonds, in the form on file with the Secretary (the "2010 Bond Purchase Agreement"), together with such additions thereto and changes therein as the Executive Director, or any designee thereof, shall deem necessary, desirable or appropriate, and the execution thereof by the Executive Director, or any designee thereof, shall be conclusive evidence of the approval of any such additions and changes. The Executive Director, or any designee thereof, is hereby authorized and directed to execute the final form of the 2010 Bond Purchase Agreement for and in the name and on behalf of the Authority. SECTION 4. Official Actions. The Executive Director and any and all other officers of the Authority, are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and sale of the 2010 Bonds as described herein. Whenever in this resolution any officer of the Authority is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable. SECTION 5. Effect. This Resolution shall take effect from and after the date of its passage and adoption. Resolution No. SAFA 2010- 80A-20 Page 5 of 2 ADOPTED this day of December, 2010 Miguel A. Pulido Chairman APPROVED AS TO FORM: Joseph W. Fletcher Authority General Counsel AYES: NOES: ABSTAIN: NOT PRESENT Boardmembers Boardmembers Boardmembers Boardmembers CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Secretary of the Authority, do hereby attest to and certify the attached Resolution No. SAFA 2010- to be the original resolution adopted by the Santa Ana Financing Authority on Date: Secretary, Financing Authority City of Santa Ana Resolution No. SAFA 2010- Page 6 of 2 8OA-21 Draft financial documents pertaining to December 6, 2010 Council/Redevelopment Agency/Santa Ana Financing Authority Action are available for public inspection in the Clerk of the Council office, 20 Civic Center, 8th floor, 8:00 a. m. - 5:00 p.m. 8OA-22