Loading...
HomeMy WebLinkAbout55B - RESO - WARNER ASSESSMENT DISTRICTo 0. ! CITY COUNCIL MEETING DATE: JUNE 21, 2016 TITLE: RESOLUTION FOR ISSUANCE OF BONDS RELATED TO THE WARNER INDUSTRIAL COMMUNITY ASSESSMENT DISTRICT 2015 -01 (PROJECT NO. 16 -6868) (STRATEGIC PLAN NOS. 6, 1B & 1G) TY MANAGEIV RECOMMENDED ACTION CLERK OF COUNCIL USE ONLY: APPROVED ❑ As Recommended ❑ As Amended ❑ Ordinance on 1" Reading ❑ Ordinance on 2 n Reading ❑ Implementing Resolution ❑ Set Public Hearing For iK•�.�nnaasir•� t7tlux21 t tl.telae7 1. Adopt a resolution to authorize issuance of Limited Obligation Improvement Bonds for the City of Santa Ana Assessment District No. 2015 -01 - Warner Industrial Community and approve documents related to the issuance of such bonds. Approve receipt of $27,443 from the Public Works Traffic & Transportation Engineering account into the Special Assessment District Capital Improvement Fund (Non -City Contribution) for FY 2016 -17, Warner Industrial Assessment District revenue account and appropriating the same into the Warner Industrial Assessment District expenditure account and authorize that the proceeds of such bonds be delivered to the Fiscal Agent for deposit in the fund established under Fiscal Agent Agreement as provided for therein. 3. Authorize the City Manager to execute prepayments totaling $27,443 for the assessment of City -owned Parcels No. 408 - 113 -11 and No. 408 - 161 -17. Approve the Financing Structure for the total estimated project cost of $6,166,831 identifying the City's share of $3,133,415 (51 percent) and parcel owners' share of $3,033,416 (49 percent). 5. Approve an Appropriation Adjustment for FY 2016 -17 recognizing receipt of funds up to $1,229,122 in bond proceeds into the WIC Capital Improvements Fund revenue account and appropriating the same into the WIC Capital Improvements Fund expenditure account, and authorize that the proceeds of such bonds be delivered to the Fiscal Agent for deposit in the fund established under Fiscal Agent Agreement as provided for therein. 6. Approve an Appropriation Adjustment in FY 2016 -17 recognizing an estimated $869,495 in assessment prepayment revenue received from Warner Industrial Community Assessment District property owners into the Special Assessment District Capital Improvement Fund (Non- 55B -1 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 2 City Contribution), Warner Industrial Assessment District revenue account and appropriating the same into the Warner Industrial Assessment District expenditure account. 7. Authorize issuance of a Notice to Proceed to Psomas to provide assessment district administration services for the period of June 21, 2016, through August 5, 2019, in an amount not to exceed $22,250, subject to nonsubstantive changes approved by the City Manager and City attorney, in accordance with Agreement No. A- 2015 -167 for on -call engineering services, which was executed on August 5, 2015, with the option for up to two one -year renewal options exercisable by the City Manager and the City Attorney. 8. Authorize the City Manager to execute prepayment totaling $47,441 on behalf of the Santa Ana Unified School District for assessment of their Parcel No. 408- 021 -01. 9. Authorize ongoing negotiations with the Santa Ana Unified School District for the above - referenced amount for the purpose of receiving payment of assessed prepayment value. The issuance of Limited Obligation Improvement Bonds (Bonds) and approval of documents related to the issuance of such bonds (Resolution of Issuance) will allow bond financing in a principal amount equal to the remaining unpaid assessments levied on properties within the Warner Industrial Community (WIC) Assessment District (AD) following the closure of the prepayment. The bond proceeds, together with the prepaid assessments, will fund the contribution by the property owners toward the cost of the public streets improvements in the WIC area. The City of Santa Ana owns two properties within the WIC AD. Together, these properties provide an easement to access the Santa Ana Police Department Training Facility from Castor Street (Exhibit 1). The total assessment for these properties is $38,300 if paid over the next 20 years. However to save $10,857 in administrative fees, staff recommends prepayment of these assessments in the amount of $13,107 for Parcel No. 408 - 113 -11 and $14,336 for Parcel No. 408 - 161 -17, for a total amount of $27,443. Background In July 2015, the City Council, at the request of, and in cooperation with, WIC property owners, adopted a Resolution of Intention to consider the formation of the assessment district. In April 2016, City Council held a public hearing pertaining to the declaration of the City Council's intention to form the AD, and received public testimony on the matter. Upon the closure of the public hearing, the Clerk of the Council, acting as the tabulation official, tabulated the assessment ballots. The Clerk reported that 70.3 percent of the ballots were in support of levying the assessments and, consequently, there was not a majority protest against the assessments. Following the Clerk's report, the City Council adopted Resolution No. 2016 -021 approving the report of the assessment engineer, declaring the results of the assessment ballot tabulation, and confirming the formation of the AD. 55B -2 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 3 Analysis Adopting the Resolution for Issuance (Exhibit 2) approves the following actions: • Issuance of the Bonds in an aggregate principal amount of the unpaid assessments. • Execution of Bond documents: • Fiscal Agent Agreement by and between the City and U.S. Bank National Association, as fiscal agent, to establish the terms and conditions pertaining to the issuance (Exhibit 3). • Preliminary Official Statement containing information regarding the AD, the Bonds, including the terms and conditions thereof, the security therefor, and the risks of investment related thereto (Exhibit 4). • Bond Purchase Agreement by and between the City and the underwriter for the Bonds to establish the terms and conditions pursuant to which the City will sell the Bonds to the underwriter and the underwriter will purchase such Bonds from the City (Exhibit 5). • Continuing Disclosure Agreement (CDA) whereby the City will agree to provide certain annual reports to the municipal bond market regarding the Bonds and the AD, and to provide reports regarding the occurrence of listed events specified in the CDA (Exhibit 6). • Establish the financial parameters to which the sale of the Bonds will be subject: • The principal amount of the Bonds will not exceed $ 2,173,500. • The principal amount will be reduced by assessment prepayments received prior to issuance of the bonds. • The interest rate on any maturity of the Bonds shall not exceed 6.50 percent. • The purchase price for the Bonds shall not be less than 98% of the aggregate principal amount of the Bonds. • The final maturity of the Bonds shall be no later than September 2, 2036. • Determination that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the redemption fund, (i.e., the fund used to pay debt service on the Bonds). Following the adoption of the resolution of issuance of the bonds, the steps below remain to complete the issuance of the Bonds and construction of the public street improvements: 55B -3 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 4 Approximate Date I Action Concurrent Award construction contract . July 13, 2016 ., .. ..... ................. .... ,... . Price bonds and enter bond purchase contract July 27, 2016 $1,733,415 .... Bond closing — proceeds are available September 2016 CITY CONTRIBUTION (51 %) ..... Notice to Proceed given to the contractor . November 2016 ........ Construction commences Spring 2017 Assessment District Prepay (Parcels and SAUSO) _ ..... .. ....... ........ .,.... .........., ..__...... Construction completed Financing Structure The financing structure for the WIC AD will be through Bond proceeds and City Measure M2 Local Fairshare funds. The following tables summarize all the revenue sources and proposed expenditures for the project: Revenues SOURCE OF FUNDS Fund Type CITY CONTRIBUTION City Measure M2 Local Falrshare FY 13114 & 14/15 $1,733,415 City Measure M2 Local Fairshare FY 16/17 $1,400,000 CITY CONTRIBUTION (51 %) $3,133,416 ASSESSMENT DISTRICT City Owned Parcel Prepay (City General Fund) $27,443 Assessment District Prepay (Parcels and SAUSO) $916,935 Assessment District Proceeds Principal $1,229,122 * Cost of Issuance/ Financing Costs $859,916 * $2,089,038 ASSESSMENT DISTRICT CONTRIBUTION (49 %) $3,033,416 TOTAL REVENUE $6,166,831 -it adumonar payments are received, the pnncrpar will oe reducea oy the same amount, tot a total assessment amount not to exceed $2,146,058 (excluding the City's prepayment). "The updated Costs of Issuance and Financing are estimated to be $436,301 as of June 3, 2016; the final amounts will be determined at the time of issuance. Any savings from the Cost of Issuance and Financing will be credited to the finance component of the district assessments. 55B -4 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 5 Expenditures PROJECT PHASE COST OF ISSUANCE Cost Item $50,000 Disclosure Counsel PRELIMINARY — Assessment District Financial Advisor $40,000 Engineering $50,000 $317,191 CONSTRUCTION Official Statement Printing $5,000 Construction Contract $3,946,915 Costs of Issuance Contingencies Contract Contingency $600,000 $30,000 Construction Administration & Inspection $442,809 $4,989,724 $4,989,724 ASSESSMENT DISTRICT ADMINISTRATION Bond Cost of Issuance $859,916 TOTAL DISTRICT COSTS $6,166,831 On August 5, 2015, the City entered into an agreement with Psomas to provide engineering services related to the preparation of the WIC AD engineering report. Staff is recommending authorization to issue a Notice to Proceed for assessment district administrative services in an amount not to exceed $22,250 (Exhibit 7). The scope of work includes annual assessment administration and delinquency management. The recommended action for the City to prepay the assessment on behalf of the SAUSD is to relieve any concerns that the bond underwriters may have related to debt that goes unpaid. The City prepayment still allows the City to attempt collection from the SAUSD. The estimated cost associated with the issuance and administration of the WIC AD bonds is $859,916. The following table details the components of this cost: COST OF ISSUANCE I FINANCING COSTS COST OF ISSUANCE Bond Counsel $50,000 Disclosure Counsel $25,000 Financial Advisor $40,000 Assessment En Ineer $50,000 Bond Re Istration, Pa in /TransferAgent $5,000 Official Statement Printing $5,000 Printing, Publication, Postage & Miscellaneous Costs $15,000 Costs of Issuance Contingencies $42,010 District Administration $30,000 Subtotal — Cost of Issuance 1 $262,010 55B -5 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 6 FINANCING COSTS Capitalized Interest $216,456 Bond Discount $60,700 Reserve Fund $285,750 Other Legal Expenses $15,000 Land Market Value Appraisal $20,000 Subtotal — Financing Costs $597,906 TOTAL COST OF ISSUANCE /FINANCING COSTS $859,916 Expenditures made for issuance or financing that are less than the estimated amounts in the table above shall be proportionally credited to the property assessments. Additionally, please note the estimated Cost of Issuance (COI) and Financing Costs totaling $859,916 was as of May 31, 2016 and indicated in the draft Preliminary Offering Statement (POS). However, as of June 3, 2016 the City has received a revised estimate of COI and Financing Costs in the amount of $436,301. The amounts provided are estimates and the actual amounts to be incurred will be finalized at the time of issuance and will be reflected in the corresponding bond documents including but not limited to the POS. STRATEGIC PLAN ALIGNMENT Approval of this item supports the City's efforts to meet Goal #6 Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy B (equitably maintain existing streets and associated assets in a state of good repair so they are clean, safe, and aesthetically pleasing for all users), and Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment Plan [e.g., neighborhood streets, traffic improvements, etc.]). Approval of this item supports the City's efforts to meet Goal #6 - Community Facilities & Infrastructure, Objective #1 (establish and maintain a Community Investment Plan for all City assets), Strategy B (equitably maintain existing streets and associated assets in a state of good repair so they are clean, safe and aesthetically pleasing for all users) and Strategy G (develop and implement the City's Capital Improvement Program in coordination with the Community Investment and Deferred Maintenance Plans). ENVIRONMENTAL IMPACT In accordance with the California Environmental Quality Act, the recommended actions are exempt from further review. Categorical Exemption Environmental Review No. 2016 -59 was filed for this project, and a Certification of Categorical Exemption and Statutory Worksheet have been prepared in accordance with the National Environmental Policy Act. FISCAL IMPACT All actions noted below will by reflected during FY 2016 -17 at the time of bond closing /issuance: 55B -6 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 7 The proposed assessment district revenue of $3,033,416 is comprised of the prepaid assessments from the City ($27,443), prepaid assessment from other property owners ($916,935), bond principal ($1,229,122), and bond proceeds for Cost of Issuance ($859,916). The prepayment amounts of $27,443 for the City's property assessments and $47,441 for the SAUSD's property assessment are available in the Public Works Traffic & Transportation Engineering fund (Account No. 01117620- 63001). An Appropriation Adjustment (FY 2016 -17) will transfer these funds into the Special Assessment District Capital Improvement Fund (Non - City Contribution), Warner Industrial Assessment District Assessment District Contributions account (No. 14917002 - 57083), and appropriate the same into the Warner Industrial Assessment District expenditure account (No. 14917660 - 66220). Approval of this action allows for the transfer of funds from the City to the fiscal agent (US Bank) funding the City's contribution towards to the transaction. An Appropriation Adjustment (FY 2016 -17) will recognize an estimated $916,935 in prepayments from other property owners into the Special Assessment District Capital Improvement Fund (Non - City Contribution), Warner Industrial Assessment District Assessment District Contributions account (No. 14917002 - 57083), and appropriate the same into the Warner Industrial Assessment District expenditure account (No. 14917660 - 66220). Approval of this action allows for the transfer of funds from the City to the fiscal agent (US Bank) funding the City's contribution towards to the transaction. An Appropriation Adjustment will recognize bond proceeds of up to $1,229,122 into the Special Assessment District Capital Improvement Fund (Non -City Contribution), Warner Industrial Assessment District Assessment donations contributions revenue account (No. 14917002- 57083, and appropriate the same into the Warner Industrial Assessment District expenditure account (No. 14917660-66220). Initial proceeds for Cost of Issuance are estimated to be up to $859,915. The bond reserve (a component of Cost of Issuance) totaling $285,750 will be deposited into the Warner Industrial Assessment District Trust and Agency account (No. 99301001 - 24047). Council approval of this action will allow the City to contract with Psomas to provide annual assessment district administrative services, including assessment fee calculation, submission of levies to County Auditor, and delinquency management, which are components of the transactions costs of issuance. Proceeds from future cost of issuance assessments will be used to pay for these services. The City's share of project costs in the amount of $3,133,415 will be available for expenditure in Fiscal Year 2016 -17 in the Measure M2 Street Construction account (No. 03217662- 66220) upon approval of a separate Council action for construction contract award. Approval of this action allows for the transfer of funds from the City to the fiscal agent (US Bank) funding the City's contribution towards to the transaction. 55B -7 Resolution to Issue Bonds related to the Warner Industrial Community Assessment District June 21, 2016 Page 8 I-red Mlousavipour Executive Director Public Works Agency FM /EWG /TC /MO /KN Exhibits: 1. Map of Assessment District 2. Resolution APPROVED AS TO FUNDS AND ACCOUNTS: Francisco Gutierrez c Executive Director Finance & Management Services Agency 3. Fiscal Agent Agreement 4. Preliminary Official Statement 5. Bond Purchase Agreement 6. Continuing Disclosure Agreement 7. Psomas NTP and Proposed Scope of Work 55B -8 =08 C 2j] 7� f� U� C C C I I l/ � e , `aY ffi i ' L HARVARD gr / HARVARO TIT FBIDHAM AV MAYWOOD AV PENDLETON AV 5 1 1 1 1 CENTRAL AV �' 1 l e I I 0 s I I a 1 1 YYY I 1 PEIDLETON AV PNA 1 ANNE ST e 1 1 CENTRAL AV 1 1 CENTRAL AV 1 1 1 1 ADAMS Rf SANTA ANA Trrm C"-OWNED PARCELS WITHIN WARNER INDUSTRIAL COMMUNITY ASSESSMENT •'ti w q� 55B -10 RESOLUTION NO. 2016 -xx A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA ANA, CALIFORNIA, AUTHORIZING THE ISSUANCE OF CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015 -01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS, APPROVING FISCAL AGENT AGREEMENT, OFFICIAL STATEMENT, BOND PURCHASE AGREEMENT AND CONTINUING DISCLOSURE AGREEMENT AND AUTHORIZING THE EXECUTIVE DIRECTOR, FINANCE & MANAGEMENT SERVICES AGENCY TO NEGOTIATE THE TERMS OF THE PURCHASE OF THE BONDS WHEREAS, the City Council of the City of Santa Ana, California, has previously adopted its Resolution No. 2015 -30 (the "Resolution of Intention "), pursuant to the provisions of Division 12 of the Streets and Highways Code of the State of California (the "Municipal Improvement Act of 1913 ") with respect to the reconstruction of street pavement, construction of curb ramps, repair of driveway approaches, sidewalks, curbs and gutters, adjustment of surface utility frames and covers, and installation of pavement markings, together with appurtenances and appurtenant work (collectively, the 'Improvements ") within, and for the benefit of property within, an assessment district, identified as Assessment District No. 2015 -01 (Warner Industrial Community), City of Santa Ana, Orange County, State of California (the "Assessment District"), and the levy of assessments on the lots and parcels of property within the Assessment District to finance the costs of the construction of the Improvements; WHEREAS, the Resolution of Intention provides for the issuance of bonds pursuant to Division 10 of the Streets and Highways Code of the State of California (the "Improvement Bonds Act of 1915 ") to represent and be secured by unpaid assessments levied on lots and parcels of property within the Assessment District; WHEREAS, proceedings for the formation of the Assessment District and the levy of assessments on the assessable lots and parcels of property therein have been completed, the Assessment District has been formed and assessments have been levied on the lots and parcels of property therein; WHEREAS, the City Council proposes to issue bonds for the Assessment District to be designated "City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds (the "Bonds ") in an aggregate principal amount which shall not exceed the amount of the unpaid assessments on lots and parcels of property within the Assessment District, the proceeds of which will be used to finance the costs of the construction of the Improvements; EXHIBIT 2 Resolution No. 2016 -XXX Page 1 of 6 55B -11 WHEREAS, there has been made available to the City Council a form of Fiscal Agent Agreement providing for the issuance, administration and payment of the Bonds; WHEREAS, there has been presented to the City Council a form of Preliminary Official Statement describing the Bonds, the City and the Assessment District; WHEREAS, there has been presented to the City Council a form of Bond Purchase Agreement whereby Brandis Tallman LLC (the "Underwriter ") will purchase the Bonds from the City; WHEREAS, there has also been presented to the City Council a form of continuing disclosure agreement to be executed and delivered to the City with respect to the Assessment District and the Bonds (the "Continuing Disclosure Agreement') for the benefit of the owners of the Bonds in order to assist the Underwriter in complying with Rule 1502- 12(b)(5) of the Securities and Exchange Commission (the "Rule "); and WHEREAS, the City Council has determined that the Bonds should be issued and sold on the terms and conditions hereinafter specified. NOW, THEREFORE, be it resolved by the City Council of the City of Santa Ana, California as follows; SECTION 1. The above recitals are all true and correct. SECTION 2. Approval of Issuance of the Bonds. The issuance of not to exceed $3,033,415 aggregate principal amount of the Bonds in order to construct the Improvements within and for the Assessment District is authorized and approved. SECTION 3. Fiscal Agent Agreement. The form of the Fiscal Agent Agreement with respect to the Bonds by and between the City and U.B. Bank National Association, as fiscal agent (the "Fiscal Agent Agreement "), made available to the City Council at the meeting at which this resolution is adopted, is approved and the Mayor, the City Manager or the Executive Director, Finance & Management Services Agency is authorized and directed, for and in the name of and on behalf of the City, to execute and deliver the Fiscal Agent Agreement in substantially the form made available at said meeting with such changes thereto as the Executive Director, Finance & Management Services Agency may approve, such approval to be conclusively evidenced by the execution and delivery thereof. SECTION 4. Appointment of Fiscal Agent. U.S. Bank National Association is appointed as fiscal agent (the "Fiscal Agent') pursuant to the Fiscal Agent Agreement, to take any and all action provided for therein to be taken by the Fiscal Agent. SECTION 5. Form of Bonds. The form of the Bonds as set forth in the Fiscal Agent Agreement is approved. The City Treasurer and the City Clerk are authorized and directed to execute by manual or facsimile signature, in the name of and on behalf Resolution No. 2016 -XXX Page 2 of 6 55B -12 of the City, the Bonds in either temporary or definitive form and to deliver the Bonds to the Underwriter as provided in the Fiscal Agent Agreement. SECTION 6. Approval of Preliminary Official Statement Preparation of Final Official Statement. The Preliminary Official Statement is approved, and the Executive Director, Finance & Management Services Agency is authorized to consent to and assist in the preparation of such modifications thereto as may be approved by Best Best & Krieger LLP, bond counsel to the City ( "Bond Counsel "), The Executive Director, Finance & Management Services Agency is authorized to determine, with the assistance of Bond Counsel, when the Preliminary Official Statement is to be deemed final within the meaning of the Rule and to deliver a certificate to that effect to the Underwriter. When the Executive Director, Finance & Management Services Agency is satisfied that the conditions specified in Section 7 hereof will be satisfied, the Executive Director, Finance & Management Services Agency may authorize the Underwriter to distribute the Preliminary Official Statement as approved hereby, or as modified with the consent of the Executive Director, Finance & Management Services Agency, to prospective purchasers of the Bonds. The Executive Director, Finance & Management Services Agency is authorized to participate in the preparation of the Final Official Statement, based on the Preliminary Official Statement, and such modification thereto as may be agreed to by Bond Counsel and the Underwriter. The Mayor, the City Manager or the Executive Director, Finance & Management Services Agency is authorized to sign the Final Official Statement on behalf of the City. SECTION 7. Sale of Bonds. The City Council approves and authorizes the issuance and sale of the Bonds by negotiation with the Underwriter pursuant to the Bond Purchase Agreement between the City and the Underwriter in the form presented to the City Council at the meeting at which this resolution is adopted, together with any changes therein or additions thereto which are deemed advisable by the Executive Director, Finance & Management Services Agency and Bond Counsel. The Mayor, the City Manager or the Executive Director, Finance & Management Services Agency is authorized and directed to execute and deliver the final form of the Bond Purchase Agreement on behalf of the City upon the submission of an offer by the Underwriter to purchase the Bonds, which offer is acceptable to the Executive Director, Finance & Management Services Agency and is consistent with the requirements of this resolution; provided that the interest rate on any maturity of the Bonds shall not exceed six and a half percent (6.50 %) per annum; the purchase price to be paid by the Underwriter for the purchase of the Bonds shall not be less than an amount equal to ninety -eight percent (98 %) (exclusive of original issue discount) of the aggregate principal amount of the Bonds; the last maturity of the Bonds shall be paid and redeemed no later than September 2, 2036. The Executive Director, Finance & Management Services Agency is authorized to allow original issue discount in determining the purchase price to be paid by investors who purchase the Bonds from the Underwriter if the Executive Director, Finance & Management Services Agency determines that allowing such discount will result in a lower total interest cost for the Bonds. When the Executive Director, Finance & Management Services Agency has negotiated the Bond Purchase Agreement with the Underwriter within the parameters specified above and when the other terms and conditions of the Bond Purchase Agreement are satisfactory to the Resolution No. 2016 -XXX Page 3 of 6 55B -13 Executive Director, Finance & Management Services Agency and Bond Counsel, the Mayor, the City Manager or the Executive Director, Finance & Management Services Agency is authorized to execute and deliver the Bond Purchase Agreement on behalf of the City. All action which has been taken by or at the direction of the Executive Director, Finance & Management Services Agency prior to the adoption of this resolution with respect to the sale of the Bonds, including but not limited to the negotiation of the terms of the Bond Purchase Agreement, is ratified and approved. SECTION 8. No City Obligation. Pursuant to Section 8769 of the Streets and Highways Code of the State of California, the City Council has determined in the Resolution of Intention, and does hereby determine, that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the Redemption Fund for the Bonds established pursuant to the Fiscal Agent Agreement. SECTION 9. Approval of Continuing Disclosure Agreement. The form of the Continuing Disclosure Agreement is approved and the Mayor, the City Manager or the Executive Director, Finance & Management Services Agency is authorized to execute and deliver the final form of the Continuing Disclosure Agreement, which may include such changes or modifications as are deemed appropriate by Bond Counsel, for and in the name and on behalf of the City. SECTION 10. Modifications. The approval of the form of the Fiscal Agent Agreement, Continuing Disclosure Agreement and Bond Purchase Agreement given by this resolution shall apply to any modification or amendment of any of said agreements which is agreed upon and approved by the City Attorney and Bond Counsel and the Executive Director, Finance & Management Services Agency as being necessary to carry out the provisions thereof and the authorization and direction provided in this resolution. SECTION 11. Further Action. The Executive Director, Finance & Management Services Agency is authorized to take any and all action which is directed by the City Attorney and Bond Counsel with respect to the execution and delivery of the Fiscal Agent Agreement, the Continuing Disclosure Agreement and the Bond Purchase Agreement and the issuance, sale and delivery of the Bonds, which in the opinion of the City Attorney and Bond Counsel is necessary in order for the authorization and direction provided in this resolution to be carried out. SECTION 12. Conditions of Approval. The approvals, authorization and direction given by this resolution are conditioned upon the satisfaction of the requirements of Section 7 hereof with respect to the issuance and sale of the Bonds. The officers of the City designated above shall not take any action with respect to the execution and delivery of the Fiscal Agent Agreement, the Continuing Disclosure Agreement and the Bond Purchase Agreement or the issuance, sale and delivery of the Bands unless and until such conditions are satisfied; provided, however, that upon satisfaction of such conditions, this resolution shall be fully effective and shall be carried Resolutior No. 2016 -XXX Page 4 of 6 55B -14 out by such officers without further approval or action of the City Council. The approvals, authorization and direction provided by this resolution shall continue, subject to the satisfaction of such conditions, until June 30, 2017, and the Bonds may be sold, and the Bonds, the Fiscal Agent Agreement, the Continuing Disclosure Agreement, the Bond Purchase Agreement, the Preliminary Official Statement and the Final Official Statement may be dated, entered into, executed and delivered or distributed, as appropriate, on any date selected by the Executive Director, Finance & Management Services Agency and the Underwriter prior to said date. SECTION 13. Effective Date. This resolution shall take effect upon adoption and shall remain in effect until June 30, 2017, or if the Bonds are issued prior to said date, until all of the Bonds are paid at or redeemed prior to maturity. ADOPTED this 21 st day of June 2015, APPROVED AS TO FORM: Sonia R:)Carv9lho, City Attorney 0 Attorney AYES: Councilmembers NOES: Councilmembers ABSTAIN: Councilmembers NOT PRESENT: Councilmembers Miguel A. Pulido Mayor 55B -15 Resolution No. 2016 -XXX Page 5 of 6 CERTIFICATE OF ATTESTATION AND ORIGINALITY I, MARIA D. HUIZAR, Clerk of the Council, do hereby attest to and certify the attached Resolution No. 2016 -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 55B -16 Resolution No. 2016 -XXX Page 6 of 6 FISCAL AGENT AGREEMENT by and between THE CITY OF SANTA ANA and U.S. BAND NATIONAL ASSOCIATION as Fiscal Agent Dated as of July 1, 2016 Relating to City of Santa Ana Assessment District No. 2015 -01 (Wainer Industrial Community) Limited Obligation Improvement Bonds EXHIBIT 3 55B -17 TABLE OF CONTENTS Page ARTICLE I AUTHORITY AND DEFINITIONS Section 1.01 Authority for this Agreement ................................................. ............................... 2 Section 1.02 Agreement for Benefit of Bondowners ................................... ............................... 2 Section1.03 Definitions ............................................................................... ............................... 2 Section 2.01 Section 2.02 Section 2.03 Section 2.04 Section 2.05 Section 2.06 Section 2.07 Section 2.08 Section 2.09 Section 2.10 Section 2.11 Section 2.12 ARTICLE II THE BONDS Principal Arnount; Designation ....... ............................... Termsof Bonds ............................... ............................... Redemption..................................... ............................... Formof Bonds ................................ ............................... E 4 fB d ...... .....I ......................... Pledge of Assessment Revenues; Transfers of Assessment Revenues 11 ........ .............................11 Redemption Fund .................................................................. ............................... 21 ...... .............................. Reserve Fund ........................................................................ ............................... 12 ........ .............................15 ARTICLE V xemon o on s.................................. .......1.....I.. "........ Transferof Bonds ..................................... ............................... Exchange of Bonds ................................... ............................... Bond Register .r. ........................................... ............................... TemporaryBonds ...................................... ............................... Bonds Mutilated, Lost, Destroyed or Sto len ............................ S ' 1 Obi' t' ...................1.....1.15 ...........................15 ...........................16 ...........................16 ...........1....I.......... 16 ........................... 16 Peega ion ................................................................. ............................... 17 Refundina.............................................................................. ............................... 17 ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; IMPROVEMENT FUND; COST OF ISSUANCE FUND Section 3.01 Issuance and Delivery of Bonds ........................................... ............................... 17 Section 3.02 Application of Proceeds of Sale of Bonds ............................ ............................... 18 Section 3.03 Improvement Fund ................................................................ ............................... 18 Section 3.04 Cost of Issuance Fund ........................................................... ............................... 19 Section 3,05 Book -Entry System; Delivery of the Bonds to the Depository 19 ARTICLE IV ASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND Section 4.01 Pledge of Assessment Revenues; Transfers of Assessment Revenues ................ 21 Section4.02 Redemption Fund .................................................................. ............................... 21 Section4.03 Reserve Fund ........................................................................ ............................... 23 ARTICLE V OTHER COVENANTS OF THE CITY Section 5.01 Punctual Payment .................................................................. ............................... 25 Section 5.02 Special Obligation ................................................................. ............................... 25 Section 5.03 Extension of Time for Payment ............................................ ............................... 25 Section 5.04 Against Encumbrances .......................................................... ............................... 25 Section 5.05 Protection of Security and Rights of Owners ....................... ............................... 25 -i- 55B -18 TABLE OF CONTENTS (continued) Page Section 5.06 Compliance with Laws, Completion of Project .................... ............................... 25 Section 5.07 Collection of Assessment Revenues ...... ............................... 25 Section 5.08 Further Assurances... ............................................................. 25 Section5.09 Tax Covenants ...................................................................... ............................... 26 Section5.10 Covenant to Foreclose ........................................................... ............................... 26 Section 5.11 Continuing Disclosure .......................................................... ............................... 26 ARTICLE VI INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY Section 6.01 Deposit and Investment of Moneys in Funds ....................... ............................... 26 Section 6.02 Rebate Fund; Rebate to the United States ............................................................ 27 Section 6.03 Liability of City ..................................................................... ............................... 28 Section 6,04 Employment of Agents by City ............................................ ............................... 29 ARTICLE VII THE FISCAL AGENT Section7.01 Appointment of Fiscal Agent ................................................ ............................... 29 Section 7.02 Liability of Fiscal. Agent ....................................................... ............................... 30 Section7.03 Information ........................................................................... ............................... 31 Section7.04 Notice to Fiscal Agent .......................................................... ............................... 31 Section 7.05 Compensation, Indenuvfcation ............................................ ............................... 31 Section 7.06 Books and Accounts ............................................................. ............................... 32 ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01 Amendments Permitted ......................................................... ............................... 32 Section 8.02 Owners' Meetings. .......................................................... .................................... 33 Section 8.03 Procedure for Amendment with Written Consent of Owners .............................. 33 Section 8.04 Disqualified Bonds ................................................................ ............................... 34 Section 8.05 Effect of Supplemental Agreement ....................................... ............................... 34 Section 8.06 Endorsement or Replacement of Bonds Issued After Amendments .................... 34 Section 8.07 Amendatory Endorsement of Bonds ..................................... ............................... 34 ARTICLE IX MISCELLANEOUS Section 9.01 Benefits of Agreement Limited to Parties ............................ ............................... 35 Section 9.02 Successor is Deemed Included in All References to Predecessor ....................... 35 Section 9.03 Discharge of Agreement ....................................................... ............................... 35 Section 9.04 Execution of Documents and Proof of Ownership by Owners ............................ 36 Section 9.05 Waiver of Personal Liability ................................................. ............................... 36 Section 9.06 Notices to and Demands on City and Fiscal Agent .............. ............................... 36 Section 9.07 Partial Invalidity .................................................................... ............................... 37 Section 9.08 Unclaimed Moneys ....................................... .- ................................................... 37 Section9.09 Applicable Law ..................................................................... ............................... 37 -ii- 55B -19 TABLE OF CONTENTS (continued) Page Section 9.10 Conflict with Act ................................................................... ............................... 37 Section 9.11 Conclusive Evidence of Regularity ...................................... ............................... 37 Section 9.12 Payment on Business Day .................................................... ............................... 37 Section 9.13 Counterparts ........... .. ................. . ................................................... ....................... 37 EXHIBIT A — FORM OF BOND ............................................................... ............................... A4 -iii- 55B -20 FISCAL AGENT AGREEMENT THIS FISCAL AGENT AGREEMENT (the "Agreement') is dated and entered into as of July 1, 2016, by and between the City of Santa Ana, California (the "City "), and U.S. Bank National Association, a national barking association duly organized and existing tinder the laws of the United States of America, as fiscal agent (the "Fiscal Agent'). WITNESSETH: WHEREAS, the City Council of the City (the "City Council ") has formed Assessment District No. 2015.01 (Warner Industrial Comrnunity), City of Santa Ana, County of Orange, State of California (the "Assessment District "), and has levied an assessment on the property in the Assessment District pursuant to the provisions of the Municipal Improvement Act of 1913, Division 12 (commencing with Section 10000) of the California Streets and Highways Code, and provided for the issuance of bonds for the Assessment District pursuant to the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the California Streets and Highways Code, to be secured by such assessment, to finance the design and construction of public improvements for the benefit of the property within the Assessment District; and WHEREAS, pursuant to the Municipal Bond Act of 1915, the City Council adopted its Resolution No. which resolution, among other matters, authorized the issuance of Limited Obligation Improvement Bonds (the `Bonds "), in an aggregate principal amount of not to exceed $ , the unpaid amount of the assessment levied on parcels of property within the Assessment District, and provided that such issuance would be in accordance with the Improvement Bond Act of 1915 and this Agreement, and authorized the execution hereof; and WHEREAS, it is in the public interest and for the benefit of the owners of the property within the .Assessment District and the owners of the Bonds that the City enter into this Agreement to provide for the issuance of the Bonds, the disbursement of proceeds of the Bonds, and the administration and payment of the Bonds; and WHEREAS, the Bonds will be secured by and paid from the assessments levied on the parcels of property within the Assessment District and the annual installments of such assessments collected with respect to such parcels; and WHEREAS, all things necessary to cause the Bonds, when executed by the City and authenticated by the Fiscal Agent and issued as in the Improvement Bond Act of 1915, the Resolution (as hereinafter defined) and this Agreement provided, to be legal, valid and binding special obligations of the City in accordance with their terms, and all things necessary to cause the authorization, execution and delivery of this Agreement and the authorization, execution, authentication and delivery of the Bonds, subject to the terms hereof, have in all respects been duly authorized; NOW, THEREFORE, in consideration of the covenants and provisions herein set forth and for other valuable consideration, the receipt and sufficiency of which is hereby aclmowledged, the parties hereto do hereby agree as follows: -I- 55B-21 ARTICLE I AUTHORITY AND DEFINITIONS Section 1.01 Authority for this Agreement. This Agreement is entered into pursuant to the provisions of the Tmprovement Bond Act of 1915 and the Resolution. Section 1.02 Agreement for Benefit of Bondowners. The provisions, covenants and agreements herein set forth to be perfonned by or on behalf of the City shall be for the equal benefit, protection and security of the Owners. All of the Bonds, without regard to the time or times of their issuance or maturity, shall be of equal rank without preference, priority or distinction of any of the Bonds over any other thereof, except as expressly provided in or permitted by this Agreement. The Fiscal Agent may become the owner of any of the Bonds with the same rights it would have if it were not Fiscal Agent. Section 1.03 Definitions. Unless the context otherwise requires, the terms defined in this Section 1.03 shall, for all purposes of this Agreement, of any Supplemental Agreement, and of any certificate, opinion or other document herein mentioned, have the meanings herein specified. All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement, and the words "herein," "hereof," "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof. "Agreement" mearrs this Agreement, as it may be amended or supplemented from time to time by any Supplemental Agreement entered into pursuant to the provisions hereof. "Annual Debt Service" means, for each Bond Year, the sum of (i) the interest due on the Outstanding Bonds in such Bond Year, assuming that the Outstanding Bonds are retired as scheduled, and (ii) the principal amount of the Outstanding Bonds scheduled to be paid. "Assessment" or "Assessments" means the assessment levied on the lots and parcels of property within the Assessment District by the adoption by the City Council of Resolution No. 2016 -021 on April 5, 2016 and the recording of the assessment diagram and notice of assessment for the Assessment District with the County Recorder of the County of Orange pursuant to Section 3114 of the California Streets and Highways Code. "Assessment District" means Assessment District No. 2015 -01 (Warner Industrial Community), City of Santa Ana, County of Orange, State of California. "Assessment Prepayment" means an amount received by the City from a property owner as a payment in full of the unpaid amount of the Assessment levied on his or her property. "Assessment Revenues" means the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid Assessments, including penalties and interest on delinquent installments of the unpaid Assessments and proceeds from the sale of property for delinquent Assessment installments, but excluding the amounts of the annual assessments collected by the City for the payment of administration costs pursuant to Sections 8682, 8682.1 and 10204(f) of the California Streets and Highways Code and Assessment Prepayments. -2- 55B -22 "Authorized Officer" means any officer or employee of the City authorized by the City Council as evidenced by an Officer's Certificate delivered to the Fiscal Agent, or by an Authorized Officer to undertake the action referenced in this Agreement as required to be undertaken by an Authorized Officer. "Bond Counsel" means any attorney or firm of attorneys acceptable to the City and nationally recognized for expertise in rendering opinions as to the legality and tax- exempt status of securities issued by public entities. "Bond Year" means the period beginning on the Closing Date and ending on September 2, 2016 and thereafter the period beginning on each September 3 and ending on the following September 2. "Bonds" means the Bonds at any time Outstanding tinder this Agreement, "Business Day" means any day other than (i) a Saturday or a Sunday or (ii) a day on which banking institutions in the State of California, the State of New York, or in the state in which the Fiscal Agent has its Principal Office are authorized or obligated by law or executive order to be closed. "City Treasurer" means the City Treasurer of the City, "Closing Date" means the date upon which there is an exchange of the Bonds for the proceeds representing payment of the purchase price of the Bonds by the Original Purchaser, "Code" means the Internal Revenue Code of 1986, as amended. "Continuing Disclosure Agreement" means the Continuing Disclosure Agreement between the City and Urban Futures, Inc., as Dissemination Agent, entered into pursuant to Rule 150- 12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, dated the Closing Date, as originally executed and as it may be amended from time to time in accordance with the terms thereof. "Costs of Issuance" means items of expense payable or reimbursable directly or indirectly by the City and related to the authorization, sale and issuance of the Bonds, which items of expense shall include, but not be limited to, printing costs, costs of reproducing and binding documents, including but not limited to the preliminary official statement and official statement regarding the Bonds, closing costs, filing and recording fees, initial fees and charges of the Fiscal Agent, including its first annual administration fee and the fees of its counsel, expenses incurred by the City in connection with the issuance of the Bonds and the formation of the Assessment District, bond (underwriter's) discount, legal fees and charges, including the fees of Bond Counsel and counsel to the underwriter, fees of consultants, advisors and engineers, charges for authentication, transportation and safekeeping of the Bonds and other costs, charges and fees in connection with the foregoing, hereof. "Cost of Issuance Fund" means the fund by that name established by Section 3.04(A) -3- 55B -23 "Debt Service" means the amount of interest and principal payable on the Bonds scheduled to be paid during the period of computation, excluding amounts payable during such period which relate to principal of the Bonds which are scheduled to be retired and paid before the beginning of such period. "Depository" means The Depository Trust Company, New York, NY, or any successor thereof, the depository for the Bonds. "Federal Securities" means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein: (i) Cash; and (ii) Direct general obligations of the United States (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States), or obligations, the payment of principal of and interest on which is unconditionally guaranteed by the United, States. "Fiscal Agent" means U,S. Bank National Association, the Fiscal Agent appointed by the City, acting as an independent fiscal agent with the duties and powers as herein expressly provided, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 7.01 hereof. "Fiscal Year" means the twelve -month period extending from July I in a calendar year to June 30 of the succeeding year, both dates inclusive. "Improvement Fund" means the fund by that name established by Section 3.03(A) hereof. "Independent Financial Consultant" means a firm of certified public accountants, a financial consulting firm, a consulting engineering firm or an engineer which is not an employee of, or otherwise controlled by, the City, "Information Services" means the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board at www.cmma.msrb.org; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other services providing information with respect to called bonds as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Interest Payment Dates" means March 2 and September 2 of each year, commencing March 2, 2017. "Investment Agreement" means one or more agreements with respect to the investment of the proceeds of the Bonds to be entered into between the Fiscal Agent and an entity or entities whose long term unsecured obligations are rated at the time of investment in either of the two highest categories by Standard & Poor's. 0 55B -24 "Investment Earnings" means all interest earned and any gains and losses on the investment of moneys in any fund or account created by this Agreement excluding interest earned and gains and losses on the investment of moneys in the Rebate Fund. "Maximum Annual Debt Service" means the greatest amount of Annual Debt Service for any Bond Year after calculation is made through the final maturity date of any Outstanding Bonds. " Moody's" shall mean Moody's Investors Service, Inc., a national rating service with offices in New York, New York. "Nominee" means CEDE & Co., the nominee of the Depository. "Officer's Certificate" means a written certificate of the City signed by an Authorized Officer of the City. "Original Purchaser" means the first purchaser of the Bonds from the City. "Outstanding," when used as of any particular time with reference to the Bonds, means (subject to the provisions of Section 8.04 hereof) all Bonds except: (i) Bonds theretofore canceled by the Fiscal Agent or surrendered to the Fiscal Agent for cancellation; (ii) Bonds called for redemption which, for the reasons specified in Section 2.03 (G) hereof, are no longer entitled to any benefit under this Agreement other than the right to receive payment of the redemption price therefor; (iii) Bonds paid or deemed to have been paid within the meaning of Section 9.03 hereof; and (iv) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City and authenticated by the Fiscal Agent pursuant to this Agreement or any Supplemental Agreement, "Owner" means any person who shall be the registered owner of any Outstanding Bond. "Permitted Investments" means: (i) Federal Securities; (ii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America (stripped securities are only permitted if they have been stripped by the agency itself): (a) U.S. Export -Import Bank Direct obligations or fully guaranteed certificates of beneficial ownership -5- 55B -25 (b) Farmers Horne Administration Certificates of beneficial ownership (c) Federal Financing Baulc (d) Federal Housing Administration Debentures (e) General Services Administration Participation certificates (1) Government National Mortgage Association (GNMA) GNMA - guaranteed mortgage - backed bonds GNMA - guaranteed pass - through obligations (g) U.S Maritime Administration Guaranteed Title XI financing (h) U S Department of Housing and Urban .Development Project Notes Local Authority Bonds New Communities Debentures - United States government guaranteed debentures U.S. Public Housing Notes and Bonds - United States government guaranteed public housing notes and bonds; (iii) Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non -full faith and credit United States government agencies (stripped securities are only permitted if they have been stripped by the agency itself): (a) Federal Home Loan Bank Syste Senior debt obligations (b) Federal Home Loan Mortgage Corporation Participation Certificates Senior debt obligations (c) Federal National Mortgage Association Mortgage- backed securities and senior debt obligations (d) Student Loan Marketing Association Senior debt obligations (e) Resolution Funding Corporation CUFCQRP) obligations (f) Farm Credit System Consolidated systemwide bonds and notes; 55B -26 (iv) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating by Standard & Poor's of "AAAm -G," "AAA -m" or "AA -m" and, if rated by Moody's, rated "Aaa," "Aal" or "Aa2" by Moody's, including funds for which the Fiscal Agent or any of its affiliates provides investment management services; (v) Certificates of deposit secured at all times by collateral described in clauses (i) and /or (ii) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks. The collateral must be held by a third party and the Fiscal Agent on behalf of the Owners of the Bonds must have a perfected first security interest in the collateral; (vi) Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by Federal Deposit Insurance Corporation (FDIC), including Bank Insurance Fund (BIF) and Savings Association Insurance Fund (SAIF); (vii) Investment agreements with domestic or foreign banks or corporations the long- term debt or claims paying ability of which or, in the case of a guaranteed corporation, the long- term debt, or, in the case of a monoline financial guaranty insurance company, the financial strength, of the guarantor is rated in at least the double A category by Standard & Poor's and Moody's; provided, that, by the terms of the investment agreement: (a) interest payments are to be made to the Fiscal Agent at times and in amounts as necessary to pay debt service on the Bonds; (b) the invested funds are available for withdrawal without penalty or premium, at any time upon not more than seven (7) days' prior notice; (c) the investment agreement shall provide that it is the unconditional and general obligation of, and is not subordinated to any other obligation of, the provider thereof, (d) the City and the Fiscal Agent receive the opinion of domestic counsel (which opinion shall be addressed to the City) that such investment agreement is legal, valid, binding upon and enforceable against the provider in accordance with its terns and of foreign cormsel (if applicable) in form and substance acceptable, and addressed to, the City; (e) the investment agreement shall provide that if during its term (1) the provider's rating by either Standard & Poor's or Moody's falls below "AA-" or "Aa3", respectively, the provider shall, at its option, within ten (10) days of receipt of publication of such downgrade, either (i) collateralize the investment agreement by delivering or transferring in accordance with the applicable state and federal laws (other than by means of entries on the provider's books) to the City, the Fiscal Agent or a third party acting solely as agent therefor (the "Holder of the Collateral ") collateral free and clear of any third -party liens or claims, the market value of which collateral is maintained at levels and upon such conditions as would be -7- 55B-27 acceptable to Standard & Poor's and Moody's to maintain an "A" rating in an "A" rated structured financing (with a market value approach); or (ii) assign the investment agreement and all of its obligations thereunder to a financial institution mutually acceptable to the provider and the City which is rated either in the first or second highest category by Standard & Poor's and Moody's; and (2) the provider's rating by either Standard & Poor's or Moody's is withdrawn or suspended or falls below "A -" or "AY, respectively, the provider must, at the direction of the City or the Fiscal Agent, as appropriate, within ten (10) days of receipt of such direction, repay the principal of and accrued but unpaid interest on the invested funds, in either case with no penalty or premium to the City or the Fiscal Agent, as appropriate; and (f) the investment agreement shall provide and an opinion of counsel shall be rendered, in the event collateral is required to be pledged by the provider under the terms of the investment agreement at the time such collateral is delivered, that the Holder of the Collateral has a perfected first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this shall mean the Haider of the Collateral is in possession of such collateral); and (g) the investment agreement shall provide that if during its term (1) the provider shall default in its payment obligations, the provider's obligations under the investment agreement shall, at the direction of the City or the Fiscal Agent, be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the City or the Fiscal Agent, as appropriate; and (2) the provider shall become insolvent, not pay its debts as they become due, be declared or petition to be declared banla-upt, etc., the provider's obligations shall automatically be accelerated and amounts invested and accrued but unpaid interest thereon shall be paid to the City or the Fiscal Agent, as appropriate; (viii) Commercial paper rated, at the time of purchase, "Prime - 1" by Moody's and "A- 1" or better by Standard & Poor's; (ix) Bonds or notes issued by any state or municipality which are rated by Moody's and Standard & Poor's in one of the two highest rating categories assigned by them; (x) Deposit accounts, federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or "AY or better by Moody's and "A -1" or better by Standard & Poor's; (xi) Repurchase agreements which satisfy the following criteria: (a) Repurchase agreements must be between the City or the Fiscal Agent, as appropriate, and a dealer bank or securities firm which is: N 55B -28 (1) A primary dealer on the Federal Reserve reporting dealer list which is rated "A" or better by Standard & Poor's and Moody's, or (2) A bank rated "A" or above by Standard & Poor's and Moody's; (b) The written agreement must include the following: (1) Securities which are acceptable for transfer are: (A) direct obligations of the United States government, or (B) obligations of federal agencies backed by the full faith and credit of the United States of America (or the Federal National Mortgage Association (FNMA) or the Federal Home Loan Mortgage Corporation (FHLMC)), (2) The collateral must be delivered to the, City or the Fiscal Agent (if the Fiscal Agent is not supplying the collateral) or a third party acting as agent for the Fiscal Agent (if the Fiscal Agent is supplying the collateral) before or simultaneous with payment (perfection by possession of certificated securities), (A) The securities must be valued weekly, marked -to- market at current market price plus accrued interest, and (B) The value of the collateral must be at least equal to one hundred four percent (104 %) of the amount of money transferred by the Fiscal Agent to the dealer, bank or security firm under the agreement plus accrued interest. If the value of the securities held as collateral is reduced below one hundred four percent (104 %) of the value of the amount of money transferred by the Fiscal Agent, then additional acceptable securities and /or cash must be provided as collateral to bring the value of the collateral to one hundred four percent (104 %); provided, however, that if the securities used as collateral are those of FNMA or FHLMC, then the value of the collateral must be equal to one hundred five percent (105 %) of the amount of money transferred by the Fiscal Agent; and (c) A legal opinion must be delivered to the City and. the Fiscal Agent that the repurchase agreement meets the requirements of California law with respect to the investment of public funds; and (xii) the Local Agency Investment Fund in the State Treasury of the State of California as permitted by the State Treasurer pursuant to Section 16429.1 of the California Government Code. "Principal Office" means with respect to the payment, registration, surrender, exchange or transfer of any Bond or Bonds, the principal corporate trust office of the Fiscal Agent initially in St. Paul, Minnesota; provided, however, that for purposes of administering this Agreement, the principal office shall be the principal office at which the Fiscal Agent administers its corporate trust business in Los Angeles, California which, as of the date of this Agreement, is at the address set forth in Section 9.06 hereof. -9- 55B -29 "Proceeds," when used with reference to the Bonds, means the aggregate principal amount of the Bonds, plus accrued interest and premium, if any, less original issue discount, if any, less underwriter's discount. "Project" means the public improvements within and for the Assessment District as described in the Resolution of Intention. "Rebate Certificate" means the certificate delivered by the City upon the delivery of the Bonds relating to Section 148 of the Code, or any functionally similar replacement certificate. "Rebate Fund" means the fund by that name established by Section 6.02 hereof. "Record Date" means the fifteenth (15th) day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day. "Redemption Fund" means the fund by that name established by Section 4.02(A) hereof. "Regulations" means the temporary and permanent regulations of the United States Department of the Treasury promulgated under the Code. "Reserve Fund" means the fund by that name established by Section 4.03(A) hereof. "Reserve Requirement" means on any date in any Bond Year the lesser of (i) 10 percent (10 %) of the issue price of the Bonds as defined in the Regulations, (ii) Maximum Annual Debt Service, or (iii) 125 percent (125 %) of average Annual Debt Service. "Resolution" means Resolution No. , adopted by the City Council on, June 21, 2016. "Resolution of Intention" means Resolution No. 2015 -30 adopted by the City Council on July 7, 2015. "Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York, 10041 -0099, Call Notification Department, Fax (212) 855 -7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may designate in an Officer's Certificate delivered to the Fiscal Agent. "Standard & Poor's" shall mean Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., a national rating service with offices in New York, New York. ARTICLE II THE BONDS Section 2.01 Principal Amonit Desienation. The Bonds in the aggregate principal amount of $ are hereby authorized to be issued by the City for the Assessment District under and subject to the terms of the Resolution, this Agreement, the Improvement Bond Act of 1915 and. other applicable laws of the State of California. The Bonds shall be designated -10- 55B -30 "City of Santa Ana, Assessment District No. 2015 -01 (Warner Industrial Community), Limited Obligation Improvement Bonds," and shall be secured by the Assessments. Section 2.02 Terms of Bonds. (A) The Bonds. The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple thereof. The Bonds shall be lettered and numbered in a customary manner as determined by the Fiscal Agent. The Bonds shall be dated as of the Closing Date. (B) Maturities, The Bonds shall mature and become payable on September 2 of each year, as follows: Maturity Dates (September 2) 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Principal Amounts Interest Rates $ Rio (C) Interest. The Bonds shall bear interest at the rates set forth in subsection (B) above payable on the Interest Payment Dates in each year. Interest shall be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated after a Record Date and before the close of business on the next Interest Payment Date, in Which event it shalt bear interest from such Interest Payment Date, or (ii) it is authenticated on or before the Record Date preceding the first Interest Payment Date, in which event it shall bear interest from the Closing Date; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the -It- 55B-31 Interest Payment Date to which interest has previously been paid or made available for payment thereon or from the Closing Date, if no interest has previously been paid or made available for payment thereon. (D) Method of Pa, ran ent. Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner's address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date. All Bonds paid by the Fiscal Agent pursuant to this subsection shall be canceled by the Fiscal Agent. Principal of, redemption premium, if any, and interest payable to any Owner of Bonds in aggregate principal amount of $1,000,000 or more will be paid, upon the written request of any such Owner in form and substance satisfactory to the Fiscal Agent, by wire transfer of immediately available funds to an account within the United States designated by such Owner on or before a Record Date. (E) CUSIP Identification Numbers. " CUSIP" identification numbers shall be imprinted on the Bonds, but such numbers shall not constitute a pant of the contract evidenced by the Bonds. In addition, failure on the part of the City or the Fiscal Agent to use such CUSIP nuinbers in any notice to the Owners shall not constitute an event of default or any violation of the City's contract with the Owners and shall riot impair the effectiveness of any such notice. Section 2.03 Redem tp ioin. (A) Optional Redemption. Tlae Bonds maturing on and after September 2, 20_ are subject to redemption prior to their stated maturity dates on September 2, 20 or on any Interest Payment Date thereafter, in full or in part, on a pro rata basis among maturities (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption: Redemption Dates Redemption Price September 2, 20 and March 2, 20_ 10 % September 2, 20� and March 2, 20_ 10 % September 2, 20_ and thereafter 10_% (B) Mandatory Redemption From Assessment Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Assessment Prepayments, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption: Redemption Dates Redemption Price -12- 55B -32 September 2, 20 through March 2, 20_ 10 % September 2, 20 and March 2, 20 10 % September 2, 20V and March 2, 20_ 10 September 2, 26— thereafter 10_% In selecting Bonds for redemption pursuant to this subsection (B), the City shall select such Bonds in such a way that the ratio of the principal amount of the Bonds in each maturity of the Bonds that will remain Outstanding to the aggregate principal amount of the Bonds that will remain Outstanding will be approximately the same as it was prior to the redemption of such Bonds, insofar as possible. (C) Sinking Fund Redmption. The Outstanding Bonds maturing on September 2, 20_, are subject to mandatory sinking fund redemption, in part, on September 2, 20_, and on each September 2 thereafter prior to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, from sinking fund payments as follows; Redemption Dates (September 2) Sinking Fund Pavments (maturity) The amounts in the foregoing schedule shall be reduced pro rata among redemption dates, in order to maintain substantially level Annual Debt Service, as directed in writing to the Fiscal Agent by an Authorized Officer, as a result of any prior partial redemption of the Bonds pursuant to subsection (A) or subsection (B) above. (D) Purchase of Bonds. In lieu of payment at maturity or redemption under this Section 2.03, moneys in the Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase. The Fiscal Agent shall be absolutely protected and shall incur no liability in relying on such an Officer's Certificate. (E) Notice to Fiscal Agent. An Authorized Officer shall give the Fiscal Agent written notice of the City's intention to redeem Bonds (other than for mandatory sinking fund redemption) not less than forty -five (45) days prior (or such lesser number of days acceptable to the Fiscal Agent, such notice for the sole use and convenience of the Fiscal Agent) to the applicable redemption data and shall specify the principal amount and the maturities of the Bonds to be redeemed. -13- 55B -33 (F) Redemption Procedure by Fiscal Agent, The Fiscal Agent shall cause notice of any redemption to be mailed by first class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services selected by all Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Such notice shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall requite that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. The cost of the mailing of any such redemption notice shall be paid by the City, Redemption notices may be conditional. Upon the payment of the redemption price of Bonds being redeemed, each check or other transfer of fluids issued for such purpose shall, to the extent practicable, bear the CUSIP number identifying, by issue and maturity, the Bonds being redeemed with the proceeds of such check or other transfer. In the event of an optional redemption pursuant to Section 2.03 (A) hereof or a mandatory redemption pursuant to Section 2,03(B) or a purchase of Bonds pursuant to Section 2.03(D) hereof, the City shall transfer or cause to be transferred to the Fiscal Agent for deposit in the Redemption Fund moneys in an amount equal to the redemption price of the Bonds being redeemed or the purchase price of the Bonds being purchased on or before the fifteenth, (15th) day of the month preceding the Interest Payment Date upon which such Bonds are to be redeemed or the date upon which the Bonds are to be purchased, as the case may be. Whenever provision is made in this Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the Bonds for redemption in such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the same in each maturity of the Bonds insofar as possible, and shall select Bonds for redemption within each maturity of the Bonds by lot. Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds. -14- 55B-34 (G) Effect of Redeniption. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption, together with accrued interest to the date of redemption, shall have been deposited in the Redemption Find, such Bonds shall cease to be entitled to any benefit under this Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption. All Bonds redeemed and purchased by the Fiscal Agent pursuant to this Section 2.03 shall be canceled and destroyed by the Fiscal Agent in accordance with the customary practice of the Fiscal Agent. Section 2.04 Form of Bonds. The Bonds, the Fiscal Agent's certificate of authentication and the assignment to appear thereon shall be substantially in the forms, respectively, set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions as permitted or required by this Agreement. Section 2.05 Execution of Bonds, The Bonds shall be executed by the manual or facsimile signatures of the City Treasurer and the City Clerk of the City, who are in office on the date of this Agreement or at any time thereafter, If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bond to the Owner, such signature shall nevertheless be as effective as if the officer had remained in office until the delivery of the Bond to the Owner. Any Bond may be signed and attested by such persons as at the actual date of the execution of such Bond shall be the proper officers of the City notwithstanding that on the nominal date of such Bond any such person shall not have been such officer of the City. Only such Bonds as shall bear thereon a certificate of authentication in substantially the form sett forth in Exhibit A hereto, manually executed and dated by the Fiscal Agent, shall be valid or obligatory for any purpose or entitled to the benefits of this Agreement, and such certificate of authentication of the Fiscal Agent shall be conclusive evidence that such Bands have been duly authenticated, registered and delivered hereunder, and are entitled to the benefits of this Agreement. Section 2.06 Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the books required to be kept pursuant to the provisions of Section 2.08 hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Fiscal Agent. The cost for any services rendered or any expenses incurred by the Fiscal Agent in connection with any such transfer shall be paid by the City, The Fiscal Agent shall collect from the Owner requesting transfer of a Bond any tax or other governmental charge required to be paid with respect to such transfer. Whenever any Band or Bonds shall be surrendered for transfer, the City shall execute and the Fiscal Agent shall authenticate and deliver a new Bond or Bonds of like aggregate principal amount, -15- 55B -35 No transfers of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption. Section 2.07 Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Fiscal Agent only for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The cost for any services rendered or any expense incurred by the Fiscal Agent in connection with any such exchange shall be paid by the City. The Fiscal Agent shall collect from the Owner requesting exchange of a Bond any tax or other governmental charge required to be paid with respect to such exchange. No exchanges of Bonds shall be required to be made (i) during the fifteen (15) days preceding the date established by the Fiscal Agent for selection of Bonds for redemption, or (ii) with respect to Bonds which have been selected for redemption. Section 2.08 Bond Register. The Fiscal Agent shall keep, or cause to be kept, at its Principal Office sufficient books for the registration and transfer of the Bonds which books shall show the series, number, CUSIP identification number, date of issuance, amount, rate of interest and Owner of each Bond and shall at all times be open to inspection by the City during regular business hours upon reasonable notice; and, upon presentation for such purpose, the Fiscal Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the ownership of the Bonds as hercinbefore provided. Section 2.09 Temporary Bonds, The Bonds may be initially issued in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the City, and may contain such reference to any of the provisions of this Agreement as may be appropriate. Every temporary Bond shall be executed by the City upon the same conditions and in substantially the same manner as the definitive Bonds. If the City issues temporary Bonds, it will execute and furnish definitive Bonds without delay and thereupon the temporary Bonds shall be surrendered, for cancellation, in exchange for the definitive Bonds at the Principal Office of the Fiscal Agent or at such other location as the Fiscal Agent shall designate, and the Fiscal Agent shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Agreement as definitive Bonds authenticated and delivered hereunder. Section 2.10 Bonds Mutilated Lost, Destroyed or Stolen. If any Bond shall become mutilated, the City, at the expense of the Owner of said Bond, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Fiscal Agent of the Bond so mutilated. Every mutilated Bond so surrendered to the Fiscal Agent shall be canceled and destroyed by the Fiscal Agent. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Fiscal Agent and, if such evidence be satisfactory to it and indemnity satisfactory to it shall be given, the City, at the expense of the Owner, shall execute, and the Fiscal Agent shall authenticate and deliver, a replacement Bond of like tenor and principal amount in lieu of and in substitution for the Bond -16- 55B -36 so lost, destroyed or stolen. The City or Fiscal Agent may require payment of a sum not exceeding the actual cost of preparing each replacement Bond delivered under this Section 2.10 and of the expenses which may be incurred by the City and the Fiscal Agent for the preparation, execution, authentication and delivery thereof. Any Bond delivered under the provisions of this Section 2.10 in replacement of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Agreement with all other Bonds issued pursuant to this Agreement. Section 2.11 Special Obli ation. All obligations of the City under this Agreement and the Bonds shall be special obligations of the City, payable solely from the Assessment Revenues. Neither the faith and credit nor the taxing power of the City (except to the limited extent set forth herein) or the State of California or any political subdivision thereof is pledged to the payment of the Bonds. Pursuant to Section 8769 of the California Streets and Highways Code, the City Council of the City has determined in the Resolution of Intention that the City will not obligate itself to advance fiords from the City treasury to cure any deficiency in the Redemption Fund, Section 2.12 Refundine. The Bonds are subject to refunding pursuant to the procedures of the Refunding Act of 1984 for 1915 Improvement Bond Act Bonds, Division 11.5 (commencing with Section 9500) of the California Streets and Highways Code. ARTICLE III ISSUANCE OF BONDS; APPLICATION OF PROCEEDS; IMPROVEMENT FUND; COST OF ISSUANCE FUND Section 3.01 Issuance and Delivery of Bonds. At any time after the execution of this Agreement, the City may issue the Bonds in the aggregate principal amount set forth in Section 2.01 hereof and deliver the Bonds to the Fiscal Agent for authentication and delivery to, or upon the order of, the Original Purchaser, The Authorized Officers of the City are hereby authorized and directed to deliver any and all documents and instruments necessary to cause the issuance of the Bonds in accordance with the provisions of the Improvement Bond Act of 1915, the Resolution and this Agreement, to authorize the payment of Costs of Issuance and costs of the Project by the Fiscal Agent from the proceeds of Bonds, and to do and cause to be done any and all acts and things necessary or convenient for delivery of the Bonds to the Original Purchaser. Section 3.02 Application of Proceeds of Sale of Bonds. The Proceeds of the sale of the Bonds to the Original Purchaser shall be paid to the Fiscal Agent, who shall forthwith set aside, pay over and deposit such Proceeds on the Closing Date as follows: (A) Deposit in the Reserve Fund the amount of $ the Reserve Requirement as of the Closing Date; (B) Deposit in the Cost of Issuance Fund the amount of $ ; and -17- 55B -37 (C) Deposit in the Improvement Fund the amount of $ , being the remaining Proceeds of the Bonds to be paid on the Closing Date by the Original Purchaser. Section 3.03 Improvement Fund. (A) Establishment of Improvement Fund, There is hereby established, as a separate fiord to be held by the Fiscal Agent, the "Assessment District No. 2015 -01 of the City of Santa Ana Improvement Bonds Improvement Fund," to the credit of which a deposit shall be made as required by paragraph (D) of Section 3.02 hereof. Moneys in the Improvement Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed, except as otherwise provided in subsection (D) of this Section 3.03, for the payment or reimbursement of the costs of the design, acquisition and construction of the Project and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. (B) Procedure for Disbursement. Disbursements from the Improvement Fund shall be made by the Fiscal Agent upon receipt of an Officer's Certificate which shall: (1) set forth the amount required to be disbursed, the purpose for which the disbursement is to be made and the person to which the disbursement is to be paid; and (2) certify that no portion of the amount then being requested to be disbursed was set forth in any Officer's Certificate previously filed with the Fiscal Agent requesting disbursement, and that the amount being requested is an appropriate disbursement from the Improvement Fund. (C) Investient. Moneys in the Improvement Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained by the Fiscal Agent in the Improvement Fund to be used for the purposes of such fiord. (D) Closing of Fund. Upon the filing of an Officer's Certificate stating that the Project has been completed and that all costs of the Project have been paid or are not required to be paid from the Improvement Fund, and further stating that moneys on deposit in the Improvement Fund are not needed to complete the Project or reimburse the cost thereof, the Fiscal Agent shall transfer the amount, if any, remaining in the Improvement Fund to the City, and the City shall apply such amount as provided in Section 10427.1 of the California Streets and Highways Code. (E) Officer's Certificate. Upon receipt of an Officer's Certificate delivered pursuant to this Section 3.03, the Fiscal Agent is authorized to act thereon without further inquiry and shall not be responsible for the accuracy of the statements made in such Officer's Certificate or the application of the funds disbursed pursuant thereto, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. Section 3.04 Cost of Issuance Fund. (A) Establishment of Cost of Issuance Fund. There is hereby established, as a separate account to be held by the Fiscal Agent, the "Assessment District No. 2015 -01 of the City of Santa Ana Improvement Bonds Cost of Issuance Fund" to the credit of which a deposit sm 55B -38 shall be made as required by paragraph (C) of Section 3.02 hereof, Moneys in the Cost of Issuance Fund shall be held by the Fiscal Agent and shall be disbursed as provided in subsection (B) of this Section for the payment or reimbursement of Costs of Issuance, (B) Disbursement. Amounts in the Cost of Issuance Fund shall be disbursed to pay Costs of Issuance, as set forth in a requisition containing respective amounts to be paid to the designated payees, signed by an Authorized Officer and delivered to the Fiscal Agent concurrently with the delivery of the Bonds, The Fiscal Agent shall, to the extent of the moneys on deposit in the Cost of Issuance Fund, pay all Costs of Issuance upon receipt of an invoice from any such payee which requests payment in an amount which is less than or equal to the amount set forth with respect to such payee in such requisition, or upon receipt of an Officer's Certificate requesting payment of a Cost of Issuance not listed on the initial requisition delivered to the Fiscal Agent on the Closing Date. The Fiscal Agent is authorized to act on such a requisition or Officer's Certificate without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such a requisition or Officer's Certificate, The Fiscal Agent shall maintain the Cost of Issuance Fund for a period of ninety (90) days after the Closing Date and shall then transfer and deposit any moneys remaining therein, including any Investment Earnings thereon, to the Improvement Fund for payment or reimbursement of costs of the Project, and the Cost of Issuance Fund shall be closed. (C) Investment, Moneys in the Cost of Issuance Fund shall be invested and deposited in accordance with Section 6.01 hereof, Investment Earnings shall be retained by the Fiscal Agent in the Cost of Issuance Fund to be used for the purposes of such fund. Section 3.05 Book -Entry System; Delivery of the Bonds to the Depository. (A) Book -Entry System; Limited Obligation of the City and the Fiscal Agent. Notwithstanding any other provision of this Agreement, the Bonds shall be initially delivered to the Depository in the form of a separate single fully registered Bond (which may be typewritten) for each of the maturities of the Bonds, Upon such initial delivery, the ownership of each such Bond shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee, as nominee of the Depository. Except as provided in subsection (C) below, all of the Outstanding Bonds shall be registered in the registration books kept by the Fiscal Agent in the name of the Nominee. With respect to Bonds registered in the registration books kept by the Fiscal Agent in the name of the Nominee, the City and the Fiscal Agent shall have no responsibility or obligation to any Participant of the Depository or to any person, corporation or firm on behalf of which the Participant holds an interest in the Bonds. Without limiting the immediately preceding sentence, the City and the Fiscal Agent shall have no responsibility or obligation with respect to (1) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in the Bonds, (2) the delivery to any Participant or any other person, other than an Owner as shown in the registration books kept by the Fiscal Agent, of any notice with respect to the Bonds, (3) the selection by the Depository and its Participants of the beneficial interest in the Bonds to be redeemed in the event the Bonds are redeemed in part, or (4) the payment to any Participant or any other persons, other than an Owner as shown in the 19- 55B -39 registration books kept by the Fiscal Agent, of any amount with respect to principal of, premium, if any, or interest due with respect to the Bonds. The City and the Fiscal Agent may treat and consider the person in whose name each Bond is registered in the registration books kept by the Fiscal Agent as the holder and absolute owner of such Bond for the purpose of payment of principal, premium, if any, and interest with respect to such Bond, for the purpose of giving notices with respect to such Bond, for the purpose of registering transfers with respect to such Bond and for all other purposes whatsoever. The Fiscal Agent shall pay all principal of, premium, if any, and interest due with respect to the Bonds only to or upon the order of the Owners thereof, as shown in the registration books kept by the Fiscal Agent, or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to satisfy and discharge fully the City's obligations with respect to payment of principal, premium, if any, and interest dixe with respect to the Bonds to the extent of the sum or sums so paid, No person other than an Owner, as shown in the registration books kept by the Fiscal Agent, shall receive a Bond evidencing the obligation of the City to make payments of principal, premium, if any, and interest pursuant to this Agreement. Upon delivery by the Depository to the Fiscal Agent and the City of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Agreement shall refer to such now nominee of the Depository. (B) Renresentation Letter. In order to qualify the Bonds for the Depository's book - entry system, an authorized representative of the City is hereby authorized to execute from time to time and deliver to such Depository a representation letter in the standard form prescribed by the Depository (the "Representation Letter "). The execution and delivery of the Representation Letter shall not in any way limit the provisions of subsection (A) above or impose upon the City or the Fiscal Agent any obligation whatsoever with respect to persons having interests in the Bonds other than the Owners, as shown on the registration books kept by the Fiscal Agent. The Fiscal Agent agrees, to the extent not inconsistent with the provisions hereof, to take all action necessary to continuously comply with all representations made with respect to the Fiscal Agent in the Representation Letter. In addition to the execution and delivery of the Representation Letter, the City Cleric, the City Treasurer, the City Manager, the Executive Director, Finance & Management Services Agency, the Authorized Officers and all other officers of the City, are hereby authorized to take any other actions, not inconsistent with this Agreement, to qualify the Bonds for the Depository's book -entry program. (C) Transfers Outside Book -Entry System. In the event (1) the Depository determines not to continue to act as securities depository for the Bonds or (2) the City determines that the Depository shall no longer so act, then the City shall discontinue the book -entry system with the Depository. If the City fails to identify another qualified securities depository to replace the Depository then the Bonds shall no longer be restricted to being registered in the registration books kept by the Fiscal Agent in the name of the Nominee, but shall be registered in whatever name or names persons transferring or exchanging Bonds shall designate, in accordance with the provisions of this Agreement. (D) Payments to the Nominee. Notwithstanding any other provisions of this Agreement, so long as any Bond is registered in the name of the Nominee, all payments with respect to principal, premium, if any, and interest due with respect to such Bond and all notices -20- 55B -40 with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository. ARTICLE IV ASSESSMENT REVENUES; REDEMPTION FUND; RESERVE FUND Section 4.01 Pledge of Assessment Revenues; Transfers of Assessment Revenues. (A) Pledge of Assessment Revenues. The Bonds shall be secured by a pledge (which pledge shall be effected in the manner and to the extent herein provided) of all of the Assessment Revenues and all moneys deposited in the Redemption Fund, all moneys deposited in the Reserve Fund and, until disbursed as provided in subsections (B) and (D) of Section 3.03 hereof, all moneys deposited in the Improvement Fund, The Assessment Revenues and all moneys deposited into such funds (except as otherwise provided herein with respect to moneys disbursed from the Improvement Fund) are hereby dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided herein and in the Improvement Bond Act of 1915, until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with Section 9.03 hereof. (B) Transfers of Assessment Revenues. On or before the second (2nd) Business Day preceding each interest Payment Date, the City Treasurer shall transfer to the Fiscal Agent for deposit in the Redemption Fund an amount of the Assessment Revenues which the Fiscal Agent has advised the City Treasurer will be needed to pay Debt Service on the Bonds on such Interest Payment Date. Upon receipt of each such transfer of Assessment Revenues, the Fiscal Agent shall deposit the amount thereof in the Redemption Fund for the payment of Debt Service on the Bonds on the Interest Payment Date for which the transfer is made. Section 4.02 Redemption Fund. (A) Deposits. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Assessment District No. 2015 -01 of the City of Santa Ana Improvement Bonds Redemption Fund" to the credit of which deposits shall be made as required by paragraph (A) of Section 3.02, Section 4.01(B), Section 4.03(B) and Section4.03(D) hereof and any other provision of this Agreement or the Improvement Bond Act of 1915. Moneys in the Redemption Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds, shall be disbursed for the payment of the principal of, and interest and any premium on, the Bonds as provided below, and, pending such disbursement, shall be subject to a lien in favor of the Owners of the Bonds. The Fiscal Agent shall deposit to the Redemption Fund all moneys transferred from the Reserve Fund pursuant to Section 4.03(B) and Section 4.03(D) hereof. (B) Disbursements. On each Interest Payment Date, the Fiscal Agent shall withdraw from the Redemption Fund and pay to the Owners of the Bonds the principal of and interest and any premium then due and payable on the Bonds on the Interest Payment Date. -21- 55B -41 In the event that amounts on deposit in the Redemption Fund are insufficient for the purpose set forth in the preceding paragraph, the Fiscal Agent shall transfer from the Reserve Fund, to the extent of any funds therein, to the Redemption Fund the amount of such insufficiency. If, after such a transfer from the Reserve Fund, there are insufficient funds in the Redemption Fund to make the payments provided for in the first paragraph of this Section 4.02(B), the Treasurer shall instruct the Fiscal Agent in writing to apply the available funds to the payment of the principal of and interest on the Bonds in the mamier and in the priorities provided in Section 8775 of the California Streets and Highways Code, as it existed on the Closing Date or as it may thereafter be amended. The Treasurer shall specify in such written instructions how the available funds shall be utilized to pay interest on and principal of the Bonds and the Fiscal Agent may conclusively rely upon such written instructions, and shall not have any responsibility or liability as a result of its reliance upon any such written instructions. When funds become available for the payment of the portion of the principal of any Bond which was not paid upon its maturity date, the Treasurer shall provide notice to the Owner of such Bond as provided in Section 8776 of the California Streets and Highways Code, On September 3 of each year, beginning on September 3, 2017, the amount on deposit in the Redemption Fund shall not exceed the greater of (i) one year's earnings on such amount, or (ii) one - twelfth (1 /12th) of Annual Debt Service for the then current Bond Year. If on September 3 of any year the amount on deposit in the Redemption Fund exceeds the maximum amount allowable pursuant to the preceding sentence and if on such September 3 the City shall have delivered to the Fiscal Agent an Officer's Certificate containing the information required below in this paragraph, the excess shall be transferred by the Fiscal Agent as directed by such Officer's Certificate to the Reserve Fund to the extent that the amount on deposit therein is less than the Reserve Requirement, and any such excess remaining thereafter shall be paid by the Fiscal Agent to the City as directed by such Officer's Certificate, On September 3 of each year, after any such excess amount has been transferred as hereinabove provided, the amount on deposit in the Redemption Fund shall not exceed the greater of (i) one year's earnings thereon, or (ii) one - twelfth (1 /12th) of Annual Debt Service for the then current Bond Year, An Officer's Certificate delivered by the City to Fiscal Agent pursuant to this paragraph shall (1) specify the dollar amount of the excess determined pursuant to the first sentence of this paragraph, (2) specify the dollar amount of such excess which the Fiscal Agent is to transfer to the Reserve Fund, and (3) specify the dollar amount of such excess which the Fiscal Agent is to pay to the City. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. Amounts in the Redemption Fund shall also be withdrawn and deposited in the Rebate Fund as provided in Section 6.02 hereof. (C) Investment. Moneys in the Redemption Fund shall be invested and deposited in accordance with Section 6.01 hereof. Investment Earnings shall be retained in the Redemption Fund, except to the extent they are required to be deposited by the Fiscal Agent in the Rebate Fund in accordance with Section 6.02 hereof. -22- 55B -42 (D) Deficiencv. Upon malting a transfer from the Reserve Fund to the Redemption Fund, pursuant to subsection (B) of this Section 4.02 or Section 4,03(B) hereof, the Fiscal Agent shall report such fact to the City. As provided in the form of the Bonds attached hereto as Exhibit A, the City Council has determined in the Resolution of Intention that the City will not obligate itself to advance funds from the City Treasury to cure any deficiency which may occur in the Redemption Fund. (E) Determination of Ultimate Loss. Notwithstanding the provisions of subsection (B) of this Section 4.02, if the Treasurer determines, pursuant to Section 8770 of the California Streets and Highways Code, that there is a danger of an ultimate loss accruing to the Bond Owners, for any reason, the provisions of that section and Sections 8771, 8772 and 8773 of the California Streets and Highways Code shall govern with respect to the procedures which shall be followed in paying the principal of and interest on the Outstanding Bonds, Section 4,03 Reserve Fund, (A) Establishment of Fund. There is hereby established, as a separate fund to be held by the Fiscal Agent, the "Assessment District No. 2015 -01 of the City of Santa Ana Improvement Bonds Reserve Fund" to the credit of which a deposit shall be made as required by Section 3.02(B) hereof, which deposit is equal to the Reserve Requirement as of the Closing Date, and to which deposits shall be made as provided in Section 4.02(B) hereof. Moneys in the Reserve Fund shall be held, by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds. (B) Use of Fund. Except as otherwise provided in this Section, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on the Bonds or, in accordance with the provisions of subsection (E) of this Section 4,03, or for the purpose of redeeming Bonds. Anrormts transferred from the Reserve Fund to the Redemption Fund pursuant to this subsection shall be restored by the City from the collection of delinquent installments on the Assessments levied on parcels for which such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest. (C) Transfer Due to Deficiency in Redemption Fund. Whenever transfer is made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fetid, the Fiscal Agent shall report such fact to the City. (D) Transfers on Payment of Assessments. Whenever an Assessment levied on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Assessment, transfer from the Reserve Fund to the Redemption Fund an amount equal to the reduction in such Assessment determined pursuant -23- 55B -43 to Section 8881 of the California Streets and Highways Code, which amount shall be specified in the Officer's Certificate. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. (E) Transfer of Excess of Reserve Requirement, Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to Section 6.02 hereof must be rebated to the United States (the "Rebate Amount "), exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of Section 6.02 hereof, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with Section 4.02 hereof. (F) Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer the amount in the Reserve Fund to the Redemption Fund to be applied, on the next succeeding Interest Payment Date to the payment and redemption, in accordance with Section 2.03 and Section 4.02 hereof, as applicable, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways Code. Upon receipt of such an Officer's Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer's Certificate. (G) Investment. Moneys in the Reserve Fund shall, except as provided in subsection (D) above, be invested and deposited in accordance with Section 6.01 hereof. ARTICLE V OTHER COVENANTS OF THE CITY Section 5.01 Punctual Pa ny rent. The City will punctually pay or cause to be paid the principal of and interest and any premium on the Bonds when and as due in strict conformity with the terms of this Agreement and any Supplemental Agreement to the extent that the Assessment Revenues are available therefor, and it will faithfully observe and perform all of the conditions, covenants and requirements of this Agreement and all Supplemental Agreements and of the Bonds. Section 5.02 Special Obligation. The Bonds are special obligations of the City and are payable solely from and secured solely by the Assessment Revenues and the amounts in the Redemption Fund, the Reserve Fund and the Improvement Fund. -24- 55B -44 Section 5.03 Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City shall not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and shall not, directly or indirectly, be a party to the approval of any such arrangement by purchasing or funding said claims for interest or in any other manner. In case any such claim for interest shall be extended or faded, whether or not with the consent of the City, such claim for interest so extended or funded shall not be entitled, in case of default hereunder, to the benefits of this Agreement, except subject to the prior payment in Rill of the principal of all of the Bonds then Outstanding and of all claims for interest which shall not have been so extended or funded. Section 5.04 Against Encumbrances. The City shall not encumber, pledge or place any charge or lien upon any of the Assessment Revenues or other amounts pledged to the Bonds superior to or on a parity with the pledge and lien herein created for the benefit of the Bonds, except as permitted by this Agreement. Section 5.05 Protection of Security and Ri hts of Owners. The City will preserve and protect the security of the Bonds and the rights of the Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the delivery of any of the Bonds by the City, the Bonds shall be incontestable by the City Section 5.06 Compliance with Laws, Completion of Project. The City will comply with all applicable provisions of the laws of the State of California in completing the construction and acquisition of the Project. Section 5.07 Collection of Assessment Revenues. The City shall comply with all requirements of the Improvement Bond Act of 1915 so as to assure the timely collection of Assessment Revenues, including without limitation, the enforcement of the payment or collection of delinquent Assessments. Section 5.08 Further Assurances, The City will adopt, make, execute and deliver any and all such further ordinances, resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement, and for better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Agreement. Section 5.09 Tax Covenants. The City hereby covenants that: (A) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of the initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "arbitrage bonds" within the meaning of Section 103(b) and Section 148 of the Code; (B) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would result in loss of exclusion from gross income for purposes of federal income taxation under Section 103(x) of the Code of interest paid with respect to the Bonds; -z5- 55B -45 (C) It will not take any action or omit to take any action, which action or omission, if reasonably expected on the date of initial issuance and delivery of the Bonds, would have caused any of the Bonds to be "private activity bonds" within the meaning of Section '141 of the Code; (D) It will comply with the Rebate Certificate as a source of guidance for achieving compliance with the Code; and (E) In order to maintain the exclusion from gross income for purposes of federal income taxation of interest paid with respect to the Bonds, it will comply with each applicable requirement of Section 103 and Sections 141 through 150 of the Code. The covenants of the City contained in this Section 5.09 shall survive the payment, redemption or defeasance of Bonds pursuant to Section 9.03 hereof. Section 5.10 Covenant to Foreclose. The City hereby covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, judicial foreclosure proceedings against properties with delinquent Assessment installments in excess of $[1OOf1B by the October 1 following the close of the Fiscal Year in which such installments were due, and will commence judicial foreclosure proceedings against all properties with delinquent Assessment installments by the October 1 following the close of each Fiscal Year in which it receives Assessment Revenues in an amount which is less than ninety -five percent (95 %) of the total Assessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings. Section 5.11 Continuing Disclosure„. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Agreement. ARTICLE VI INVESTMENTS; DISPOSITION OF INVESTMENT PROCEEDS; LIABILITY OF THE CITY Section 6.01 Deposit and Investment of Moneys in Funds. Subject in all respects to the provisions of Section 6.02 hereof, moneys in any fluid or account created or established by this Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys in Permitted Investments in clause (iv) of the definition of Permitted Investments in Section 1.03 hereof. The Fiscal Agent shall have no obligation to pay additional interest or maximize investment income on any funds held by it. Neither the City nor the Owners of the Bonds shall have any claim of any kind against the Fiscal Agent in connection with investments properly made pursuant to this Section 6.01. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account, subject, however, to the requirements of this Agreement for transfer of Investment Earnings in funds and accounts. The Fiscal Agent may act as principal or agent in the acquisition or disposition of any investment. The Fiscal Agent shall not incur any liability for losses arising from any investments made pursuant to this Section 6.01. For purposes of determining the amount on deposit in any -26- 55B -46 fund or account held hereunder, all Permitted Investments or investments credited to such fund or account shall be valued at the cost thereof (excluding accrued interest and brokerage commissions, if any). The Fiscal Agent shall be entitled to rely conclusively upon the written instructions of the City directing investments in Permitted Investments as to the fact that each such investment is permitted by the laws of the State, and shall not be required to make further investigation with respect thereto. With respect to any restrictions contained in the definition of Permitted Investments which embody legal conclusions (e,g., the existence, validity and perfection of security interests in collateral), the Fiscal Agent shall be entitled to rely conclusively on an opinion of counsel obtained at the City's expense. Subject in all respects to the provisions of Section 6.02 hereof, investments in any and all Surds and accounts may be commingled in a single fund for purposes of malting, holding and disposing of investments, notwithstanding provisions herein for transfer to or holding in or to the credit of particular funds or accounts of amounts received or held by the Fiscal Agent hereunder, provided that the Fiscal Agent shall at all times account for such investments strictly in accordance with the fiords and accounts to which they are credited and otherwise as provided in this Agreement. The Fiscal Agent shall sell or present for redemption any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited, and the Fiscal Agent shall not be liable or responsible for any loss resulting from the acquisition or disposition of any such investment security in accordance herewith. The City acknowledges that notwithstanding regulations of the Comptroller of the Currency or other applicable regulatory entity may grant the City the right to receive brokerage confirmations of securities transactions as they occur, the City agrees that the Fiscal Agent shall not send such confirmations to the City to the extent permitted by law. The Fiscal Agent shall furnish the City periodic cash transaction statements which will include detail for all investment transactions made by the Fiscal Agent hereunder. Section 6,02 Rebate Fund; Rebate to the United States. There is hereby created, to be held by the Fiscal Agent, as a separate fund distinct from all other funds and accounts held by the Fiscal Agent under this Agreement, the Rebate Fund. The Fiscal Agent shall, in accordance with written directions received from an Authorized Officer, deposit into the Rebate Fund moneys transferred by the City to the Fiscal Agent pursuant to the Rebate Certificate or moneys transferred by the Fiscal Agent from the Reserve Fund. The Rebate Fund shall be held either uninvested or invested only in Federal Securities at the written direction of the City. Moneys on deposit in the Rebate Fund shall be applied only to payments made to the United States, to the extent such payments are required by the Rebate Certificate. The Fiscal Agent shall, upon written request and direction of the City, make such payments to the United States. The Fiscal Agent's sole responsibilities under this Section 6.02 are to follow the written instructions of the City pertaining hereto, The City shall be responsible for any fees and expenses incurred by the Fiscal Agent pursuant to this Section 6.02. _27_ 55B -47 The Fiscal Agent shall, upon written request and direction from the City, transfer to or upon the order of the City any moneys on deposit in the Rebate Fund in excess of the amount, if any, required to be maintained or held therein in accordance with the Rebate Certificate. Upon receipt of such a written request and direction the Fiscal Agent is authorized to act thereon without father inquiry, shall not be responsible for the accuracy thereof, and shall be absolutely protected and incur no liability in relying thereon. Section 6.03 Liability of Citv. The City shall not incur any responsibility in respect of the Bonds or this Agreement other than in connection with the duties or obligations explicitly herein or in the Bonds assigned to or imposed upon it. The City shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The City shall not be bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements of the Fiscal Agent herein or in any of the documents executed by the Fiscal Agent in connection with the Bonds. In the absence of bad faith, the City may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished, to the City and conforming to the requirements of this Agreement, The City shall not be liable for any error of judgment made in good faith unless it shall be proved that it was negligent in ascertaining the pertinent facts. No provision of this Agreement shall require the City to expend or risk its own general fuunds or otherwise incur any financial liability (other than with respect to the Assessment Revenues) in the performance of any of its obligations hereunder, or in the exercise of and of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. The City may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, Bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The City may consult with counsel, who may be counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith. Section 6.04 Ernplovment of Agents by City. In order to perform its duties and obligations hereunder, the City may employ such persons or entities as it deems necessary or advisable. The City shall not be liable for any of the acts or omissions of such persons or entities employed by it in good faith hereunder, and shall be entitled to rely, and shall be fully protected in doing so, upon the opinions, calculations, determinations and directions of such persons or entities. ARTICLE VII THE FISCAL AGENT Section 7.01 Anoointment of Fiscal Agent. U. S. Bank National Association is hereby appointed Fiscal Agent, registrar and paying agent for the Bonds. The Fiscal Agent undertakes 6" 55B -48 to perform such duties, and only such duties, as are specifically set forth in this Agreement, and no implied covenants or obligations shall be read into this Agreement against the Fiscal Agent. Any company into which the Fiscal Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Fiscal Agent may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under the following paragraph of this Section 7.01, shall be the successor to the Fiscal Agent without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding. The City may remove the Fiscal Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company having a combined capital (exclusive of borrowed capital) and surplus of at least $75,000,000, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 7.01, the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Fiscal Agent may at any time resign by giving written notice to the City and by giving to the Owners notice by mail of such resignation. Upon receiving notice of such resignation, the City shall, promptly appoint a successor Fiscal Agent by an instrument in writing. Any resignation or removal of the Fiscal Agent shall become effective upon acceptance of appointment by the successor Fiscal Agent. If no appointment of a successor Fiscal Agent shall be made pursuant to the foregoing provisions of this Section 7.01 within forty -five (45) days after the Fiscal Agent shall have given to the City written notice or after a vacancy in the office of the Fiscal Agent shall have occurred by reason of its inability to act, the Fiscal Agent, at the expense of the City, or any Owner may apply to any federal or state court to appoint a successor Fiscal Agent, Said court may thereupon, after such notice, if any, as such court may deem proper, appoint a successor Fiscal Agent. Section 7.02 Liability of Fiscal Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City and the Fiscal Agent assumes no responsibility nor shall have any liability for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Agreement or of the Bonds, nor shall the Fiscal Agent incur any responsibility or shall have any liability in respect thereof, other than in connection with the express duties or obligations herein or in the Bonds assigned to or imposed upon it. The Fiscal Agent shall not be liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. The Fiscal Agent assumes no responsibility or liability for any information, statement or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of the Bonds. _29_ 55B -49 In the absence of willful misconduct, the Fiscal Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates, written directions or opinions furnished to the Fiscal Agent and conforming to the requirements of this Agreement. Except as provided above in this paragraph, the Fiscal Agent shall be protected and shall incur no liability in acting or proceeding, or in not acting or not proceeding in accordance with the terms of this Agreement, upon any resolution, order, notice, request, consent or waiver, certificate, statement, affidavit, or other paper or document which it shall in good faith reasonably believe to be genuine and to have been adopted or signed by the proper person or to have been prepared and furnished pursuant to any provision of this Agreement, and the Fiscal Agent shall not be under any duty to make any investigation or inquiry as to any statements contained or matters referred to in any such instrument. The Fiscal Agent shall not be bound to ascertain or inquire as to the performance or observance of any of the terns, conditions, covenants or agreements of the City herein or in any of the documents executed by the City in connection with the Bonds. The Fiscal Agent shall not be liable for responsible officer of the Fiscal Agent unlos: negligent in ascertaining the pertinent facts. any error of judgment made in good faith by a it shall be proved that the Fiscal Agent was No provision of this Agreement shall require the Fiscal Agent to expend or risk its own fruids or otherwise incur any financial liability in the performance of any of its duties heretmder, or in the exercise of any of its rights or powers unless indemnity and security satisfactory to the Fiscal Agent shall have been provided to the Fiscal Agent. The Fiscal Agent shall not be responsible for accounting for, or paying to, any party to this Agreement, including, but not limited to the City and the Owners, any returns on or benefit from funds held for payment of unredeemed Bonds or outstanding checks and no calculation of the same shall affect, or result in any offset against, fees due to the Fiscal Agent under this Agreement. The Fiscal Agent shall be under no obligation to exercise any of the rights or powers vested in it by this Agreement at the request or direction of any of the Owners pursuant to this Agreement unless such Owners shall have offered to the Fiscal Agent reasonable security or indemnity against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction. The Fiscal Agent shall have no responsibility with respect to the payment of Debt Service by the City or with respect to the observance or performance by the City of the other conditions, covenants and terms contained herein, or with respect to the investment of any moneys in any fund or account established, held or maintained by the City pursuant to this Fiscal Agent Agreement or otherwise. All indemnification and releases from liability granted herein to the Fiscal Agent shall extend to the agents, consultants, directors, officers and employees of the Fiscal Agent (including legal counsel). The Fiscal Agent may exercise any of its duties or powers or perform its duties through attorneys, agents or receives. -30- 55B -50 Section 7.03 huformation. The Fiscal Agent shall provide to the City such information relating to the Bonds and the funds and accounts maintained by the Fiscal Agent hereunder as the City shall reasonably request, including, but not limited to, quarterly (or other frequency agreed to by the City and the Fiscal Agent) statements reporting funds held and transactions by the Fiscal Agent, Section 7.04 Notice to Fiscal Agent. The Fiscal Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, written direction, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Fiscal Agent may consult with counsel, who may be counsel to the City, with regard to legal questions, and the written opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Fiscal Agent hereunder in good faith and in accordance therewith. Whenever in the administration of its duties under this Agreement the Fiscal Agent shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of willful misconduct on the part of the Fiscal Agent, be deemed to be, conclusively proved and established by a certificate of the City, and such certificate shall be full warranty to the Fiscal Agent for any action taken or suffered under the provisions of this Agreement or any Supplemental Agreement upon the faith thereof, but in its discretion the Fiscal Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may seem reasonable. Section 7.05 Compensation, Indemnification. In addition to any written fee agreement, the City shall pay to the Fiscal Agent from time to time reasonable compensation for all services rendered as Fiscal Agent under this Agreement, and also all reasonable expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Agreement, and the Fiscal Agent shall have a lien therefor on any funds at any time held by it under this Agreement, and the Fiscal Agent shall pay and reimburse all expenses, charges, fees and other disbursements, including those of its attorneys, agents and employees, incurred in connection therewith from the funds held by it under this Agreement. The City further agrees, to the extent permitted by applicable law, to indemnify and save the Fiscal Agent, its officers, employees, directors and agents, harmless from and against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or willful misconduct. The obligation of the City under this Section 7.05 shall survive resignation or removal of the Fiscal Agent under this Agreement and payment of the Bonds and discharge of this Agreement. Section 7.06 Books and Accounts. The Fiscal Agent shall keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the Fiscal Agent, in which complete and correct entries shall be made of all transactions made by it to the expenditure of amounts disbursed from the Redemption Fund, the Reserve Fund, the Improvement Fund, the Rebate Fund and the Cost of Issuance Fund. Such books of record and accounts shall, upon reasonable notice, at all times during business hours be subject to the inspection of the City and the Owners of not less than ten percent (10 %) of the aggregate -31- 55B -51 principal amount of the Bonds then Outstanding, or their representatives duly authorized in writing. ARTICLE VIII MODIFICATION OR AMENDMENT OF THIS AGREEMENT Section 8.01 Amendments Permitted. (A) This Agreement and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Agreement pursuant to the affirmative vote at a meeting of the Owners, or with the written consent, without a meeting, of the Owners of at least sixty percent (60 %) in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 8,04 hereof. No such modification or amendment shall (i) extend the maturity of any Bond or the time for paying interest thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the Owner of such Bond, or (ii) permit the creation of any pledge of or lien upon the Assessment Revenues, or the moneys on deposit in the Redemption Fund, the Reserve Fund or the Improvement Fund, superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Improvement Bond Act of 1915, the laws of the State of California or this Agreement), or (iii) reduce the percentage of Bonds required for the amendment hereof, or (iv) reduce the principal amount of or redemption premium on any Bond or reduce the interest rate thereon. Any such amendment may not modify any of the rights or obligations of the Fiscal Agent without its written consent. The City shall provide to the Fiscal Agent an opinion of counsel that any such Supplemental Agreement entered into by the City and the Fiscal Agent complies with the provisions of this Section 8.01 and the Fiscal Agent may conclusively rely on such opinion. (B) This Agreement and the rights and obligations of the City and the Owners may also be modified or amended at any time by a Supplemental Agreement, without the consent of any Owners, only to the extent permitted by law and only for any one or more of the following purposes: (1) to add to the covenants and agreements of the City in this Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power herein reserved to or conferred upon the City; (2) to make modifications not adversely affecting any Outstanding series of Bonds in any material respect; (3) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provisions of this Agreement, or in regard to questions arising under this Agreement, as the City and the Fiscal Agent may deem necessary or desirable and not inconsistent with this Agreement, and which shall not adversely affect the rights of the Owners; (4) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code relating to required rebate of -32- 55B -52 moneys to the United States or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations. Section 8.02 Owners' Meetings, The City may at any time call a meeting of the Owners, In such event the City is authorized to fix the time and place of any such meeting and to provide for the giving of notice thereof and to fix and adopt rules and regulations for the conduct of the meeting. Section 8.03 Procedure for Amendment with Written Consent of Owners. The City may at any time adopt a Supplemental Agreement amending the provisions of the Bonds or of this Agreement or any Supplemental Agreement, to the extent that such amendment is permitted by Section 8.01(A) hereof, to take effect when and as provided in this Section 8.03. A copy of the Supplemental Agreement, together with a request to Owners for their consent thereto, shall be mailed by first class mail, postage prepaid, by the Fiscal Agent to each Owner of Bonds Outstanding, but failure to mail copies of the Supplemental Agreement and request shall not affect the validity of the Supplemental Agreement when assented to as in this Section provided. Such a Supplemental Agreement shall not become effective unless there shall be filed with the Fiscal Agent the written consents of the Owners of at least sixty percent (60 %) in aggregate principal amount of the Bonds then Outstanding (exclusive of Bonds disqualified as provided in Section 8.04) and a notice shall have been mailed as hereinafter in this Section provided. Each such consent shall be effective only if accompanied by proof of ownership of the Bonds for which such consent is given, which proof shall be such as is permitted by Section 9,04 hereof. Any such consent shall be binding upon the Owner of the Bonds giving such consent and on any subsequent Owner (whether or not such subsequent Owner has notice thereof) unless such consent is revolted in writing by the Owner giving such consent or a subsequent Owner by filing such revocation with the Fiscal Agent prior to the date when the notice hereinafter in this Section provided for has been mailed. After the Owners of the required percentage of Bonds shall have filed their consents to the Supplemental Agreement, the City shall mail a notice to the Owners in the manner hercinbefore provided in this Section for the mailing of the Supplemental Agreement, stating in substance that the Supplemental Agreement has been consented to by the Owners of the required percentage of Bonds and will be effective as provided in this Section (but failure to mail copies of said notice shall not affect the validity of the Supplemental Agreement or consents thereto). Proof of the mailing of such notice shall be filed with the Fiscal Agent. A record, consisting of the papers required by this Section 8.03 to be filed with the Fiscal Agent, shall be proof of the matters therein stated until the contrary is proved. The Supplemental Agreement shall become effective upon the filing with the Fiscal Agent of the proof of mailing of such notice, and the Supplemental Agreement shall be deemed conclusively binding (except as otherwise hereinabove specifically provided in this Article VIII) upon the City and the Owners of all Bonds then Outstanding at the expiration of sixty (60) days after such filing, except in the event of a final decree of a court of competent jurisdiction setting aside such consent in a legal action or equitable proceeding for such purpose commenced within such sixty (60) -day period. -33- 55B -53 Section 8.04 Disqualified Bonds. Bonds owned or held for the account of the City, excepting any pension or retirement fund, shall not be deemed Outstanding for the purpose of any vote, consent or other action or any calculation of Outstanding Bonds provided for in this Article VIII, and shall not be entitled to vote upon, consent to, or participate in any action provided for in this Article VIII. Section 8.05 Effect of Supplemental Agreement. From and after the time any Supplemental Agreement becomes effective pursuant to this Article VIII, this Agreement shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Agreement of the City and all Owners of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modifications and amendments, and all the terns and conditions of any such Supplemental Agreement shall be deemed to be part of the terms and conditions of this Agreement for any and all purposes. Section 8,06 Endorsement or Replacement of Bonds Issued After Amendments, The City may determine that Bonds issued and delivered after the effective date of any action taken as provided in this Article VIII shall bear a notation, by endorsement or otherwise, in form approved by the City, as to such action. In that case, upon demand of the Owner of any Bond Outstanding at such effective date and upon presentation of his or her Bond for that purpose at the Principal Office of the Fiscal Agent or at such other office as the City may select and designate for that purpose, a suitable notation shall be made on such Bond. The City may determine that new Bonds, so modified as in the opinion of the City is necessary to conform to such action, shall be prepared, executed and delivered. In that case, upon demand of the Owner of any Bonds then Outstanding, such new Bonds shall be exchanged at the Principal Office of the Fiscal Agent without cost to any Owner, for like Bonds then Outstanding, upon surrender of such Bonds. Section 8.07 Amendatory Endorsement of Bonds. The provisions of this Article VIII shall not prevent any Owner from accepting any amendment as to the particular Bonds held by him or her, provided that due notation thereof is made on such Bonds. ARTICLE IX MISCELLANEOUS Section 9.01 Benefits of Agreement Limited to Parties. Nothing in this Agreement, expressed or implied, is intended to give to any person other than the City, the Fiscal Agent and the Owners, any right, remedy or claim under or by reason of this Agreement. Any covenants, stipulations, promises or agreements in this Agreement contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners and the Fiscal Agent. Section 9.02 Successor is Deemed Included in All References to Predecessor. Whenever in this Agreement or any Supplemental Agreement either the City or the Fiscal Agent is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Agreement contained by or on behalf of the City or the Fiscal Agent shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not, -34- 55B -54 Section 9,03 Discharge ofAsreemont If the City shall pay and discharge the entire indebtedness on all Bonds in any one or more of the following ways: (A) by well and truly paying or causing to be paid the principal of and interest and any premium on all Bonds, as and when the same become due and payable; (B) by depositing with the Fiscal Agent, in irrevocable escrow, at or before maturity, an amount of money which, together with the amounts then on deposit in the Redemption Fund and the Reserve Fund, is fully sufficient to pay all Bonds, including all principal, interest and redemption premiums, if any; or (C) by irrevocably depositing with the Fiscal Agent, in irrevocable escrow, cash or non - callable Federal Securities in such amount as the City shall determine, as confirmed by an Independent Financial Consultant, will, together with the interest to accrue thereon and amounts then on deposit in the Redemption Fund and Reserve Fund, be fully sufficient to pay and discharge the indebtedness on all Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as in this Agreement provided or provision satisfactory to the Fiscal Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the Assessment Revenues and other funds provided for in this Agreement and all other obligations of the City under this Agreement with respect to all Bonds shall cease and terminate, except the obligation of the City to pay or cause to be paid to the Owners of the Bonds not so surrendered and paid all sums due thereon, the obligation of the City to pay all amounts owing to the Fiscal Agent pursuant to Section 7.05 hereof, and the obligations of the City pursuant to the covenants contained in Section 5.09 hereof; and thereafter Assessment Revenues shall not be payable to the Fiscal Agent. Notice of such election shall be filed with the Fiscal Agent. The satisfaction and discharge of this Agreement shall be without prejudice to the rights of the Fiscal Agent to charge and be reimbursed by the City for the expenses which it shall thereafter incur in connection herewith. Any funds held by the Fiscal Agent to pay and discharge the indebtedness on all Bonds, upon payment of all fees and expenses of the Fiscal Agent, which are not required for such purpose, shall be paid over to the City. Section 9.04 Execution of Documents and Proof of Ownership by Owners. Any request, declaration or other instrument which this Agreement may require or permit to be executed by Owners may be in one or more instruments of similar tenor, and shall be executed by Owners in person or by their attorneys appointed in writing. Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such a request, declaration or other instnunent, or of a writing appointing such an attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded, in the state in which he -35- 55B-55 purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such a notary public or other officer. Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same shall be proved by the registration books maintained by the Fiscal Agent pursuant to Section 2.08 hereof. Any request, declaration or other instrument or writing of the Owner of any Bond shall bind all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Fiscal Agent in good faith and in accordance therewith. Section 9.05 Waiver of Personal Liability. No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of, or interest or any premium on, the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law. Section 9.06 Notices to and Demands on City and Fiscal Agent. Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the Fiscal Agent to or on the City may be given or served by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the City with the Fiscal Agent) as follows: City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 Attention: Executive Director, Finance & Management Services Agency Any notice or demand which by any provision of this Agreement is required or permitted to be given or served by the City to or on the Fiscal Agent may be given or seined by being deposited postage prepaid (first class, registered or certified) in a post office letter box addressed (until another address is filed by the Fiscal Agent with the City) as follows: U.S. Bank National Association 633 West Fifth Street, 24th Floor Los Angeles, CA 90071 Attention: Global Corporate Trust Services Section 9.07 Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Agreement shall for any reason be held by a court of competent jurisdiction to be illegal or unenforceable, such holding shall not affect the validity of the remaining portions of this Agreement. The City hereby declares that it would have executed and delivered this Agreement and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant thereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable. -36- 55B -56 Section 9.08 Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, and subject to the escheat laws of the State, any moneys held by the Fiscal Agent in trust for the payment and discharge of the principal of, and the interest and any premium on, the Bonds which remains unclaimed for two (2) years after the date when the payment of such principal, interest and premium have become payable, if such moneys were held by the Fiscal Agent at such date, shall be paid by the Fiscal Agent to the City as its absolute property free from any trust, and the Fiscal Agent shall thereupon be released and discharged with respect thereto and the Owners of such Bonds shall look only to the City for the payment of the principal o£, and interest and any premium on, their Bonds. Section 9.09 Annlicable Law. This Agreement shall be governed by and enforced in accordance with the laws of the State of California applicable to contracts made and performed in the State of California. Section 9.10 Conflict with Act. In the event of a conflict between any provision of this Agreement with any provision of the Improvement Bond Act of 1915 as in effect on the Closing Date, the provision of the Improvement Bond Act of 1915 shall prevail over the conflicting provision of this Agreement. Section 9.11 Conclusive Evidence of Regularity. Bonds issued pursuant to this Agreement shall constitute conclusive evidence of the regularity of all proceedings under the Act relative to their issuance. Section 9.12 Payment on Business Day. In any case where the date of the payment of interest or of principal (and premium, if any) of the Bonds or the date fixed for redemption is other than a Business Day, the payment of interest or principal (and premium, if any) need not be made on such date but may be made on the next succeeding day which is a Business Day with the same force and effect as if made on the date required, and no interest shall accrue for the period from and after such date. Section 9.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. IN WITNESS WHEREOF, the City has caused this Agreement to be executed in its name and attested, and the Fiscal Agent, in acknowledgment of its acceptance of the duties of the Fiscal Agent created hereunder, has caused this Agreement to be executed in its name, all as of July 1, 2016. -37- 55B-57 City Attorney CITY OF SANTA ANA By _ ..... Executive Director, Finance & Management Services Agency U.S. BAND. NATIONAL ASSOCIATION as Fiscal Agent By :__ Authorized Officer W-1 55B -58 EXHIBIT "A" [FORM OF BOND] UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AS DEFINED IN THE AGREEMENT) TO THE FISCAL AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY BOND AUTHENTICATED AND DELIVERED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. Registered Number Interest Rate Registered Owner: Principal Stun: UNITED STATES OF AMERICA STATE OF CALIFORNIA COUNTY OF ORANGE CITY OF SANTA ANA ASSESSMENT DISTRICT NO, 2015-01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BOND Maturity Date CEDE & CO. Registered Amount Original Issue Date CUSIP NO, Under and by virtue of the Improvement Bond Act of 1915, Division 10 (commencing with Section 8500) of the Streets and Highways Code of the State of California (the "Act "), the City of Santa Ana, (the "City "), will, out of the redemption fund for the payment of the Bonds issued upon the unpaid portion of assessments made for the construction and acquisition of certain public improvements in and for Assessment District No. 2015 -01 (Warner Industrial Community), City of Santa Ana, County of Orange, State of California (the "Assessment District "), which improvements and the Assessment District are more fully described in proceedings taken pursuant to Resolution No. 2015 -30, the Resolution of Intention for the Assessment District, adopted by the City Council of the City on July 7, 2015, pay to the registered owner identified above, or registered assigns, on the maturity date specified above the principal sum specified above in lawful money of the United States, and in like manner will pay interest from the interest payment date next preceding the date on which this Bond is authenticated, unless this Bond is authenticated after a Record Date (as hereinafter defined) and FEW 55B -59 before the close of business on the next interest payment date, in which event it shall bear interest from such interest payment date, or unless this Bond is authenticated on or before the Record Date preceding the first interest payment date, in which event it shall bear interest from the original issue date specified above, until payment of such principal sum shall have been discharged, at the rate of interest per anmun specified above, payable semiannually on March 2 and September 2 in each year commencing on March 2, 2017. Both the principal hereof and redemption premium hereon are payable at the principal corporate trust office of U.S, Bank National Association, the Fiscal Agent (the "Fiscal Agent ") in St. Paul, Minnesota, or such other office as shall be designated by the Fiscal Agent as its principal corporate trust office for such purpose, and the interest hereon is payable by check mailed to the owner hereof at the owner's address as it appears on the records of the Fiscal Agent, or at such address as may have been filed with the Fiscal Agent for that purpose, as of the fifteenth (15th) day of the month preceding each interest payment date (the "Record Date "). Principal of, redemption premium, if any, and interest payable to any Owner of Bonds in aggregate principal amount of $1,000,000 or more will be paid, upon the written request of any such Owner in form and substance satisfactory to the Fiscal Agent, by wire transfer of immediately available funds to an account within the United States designated by such Owner on or before a Record Date. Interest on the Bonds will be calculated on the basis of a 360 -day year composed of twelve 30 -day months. This Bond will continue to bear interest after maturity at the rate specified above, provided it is presented at maturity and payment thereof is refused upon the sole ground that there are not sufficient moneys in said redemption fund, with which to pay the same. If it is not presented at maturity, and there are sufficient moneys in said redemption fund with which to pay the same, interest on this Bond will run until maturity. Pursuant to Section 8769 of the Streets and Highways Code of the State of California, the City Council of the City has determined that the City will not obligate itself to advance funds from the City treasury to cure any deficiency in the redemption fund, This Bond is one of several annual series of bonds of like date, tenor and effect, but differing in amounts, maturities and interest rates, issued by the City pursuant to the Act and a Fiscal Agent Agreement dated as of July 1, 2016 by and between the City and the Fiscal Agent (the "Fiscal Agent Agreement ") in the aggregate principal amount of $ (the "Bonds ") for the purpose of providing means for paying for the construction of the improvements which are to be constructed within and for the Assessment District, as described in said proceedings, and is secured by the moneys in said redemption Rind and by the unpaid portion of the assessments levied on parcels of property within the Assessment District for the payment of said improvements, and, including principal and interest, is payable exclusively out of said fund. Reference is hereby made to the Act and the Fiscal Agent Agreement, and all amendments thereto, for a description of the rights, ditties and obligations of the City and the owners of the Bonds, the terms upon which the Bonds are issued and the terms and conditions on which the Bonds will be deemed to be paid, at or prior to maturity or redemption of the Bonds, to all the provisions of which agreement the owner of this Bond, by acceptance hereof, assents and agrees. The Bonds are issuable only as fully registered Bonds in denominations of $5,000, or any integral multiple thereof. A -2 55B -60 This Bond is transferable by the registered owner hereof, in person or by the owner's attorney duly authorized in writing, at the office of the Fiscal Agent, subject to the terms and conditions provided in the Fiscal Agent Agreement, including the payment of certain charges, if any, upon surrender and cancellation of this Bond. Upon such transfer, a new registered Bond or Bonds, of any authorized denomination or denominations, of the same maturity, for the same aggregate principal amount, will be issued to the transferee in exchange for this Bond. Bonds shall be registered only in the name of an individual (including joint owners), a corporation, a partnership or a trust. The Fiscal Agent shall not be required to make any exchange or registration of transfer of Bonds during the fifteen (15) days preceding the date established by the Fiscal Agent for the selection of Bonds for redemption, or with respect to any Bonds which have been selected for redemption. The Fiscal Agent may treat the owner hereof" as the absolute owner for all purposes, and the Fiscal Agent shall not be affected by any notice to the contrary. The Bonds maturing on and after September 2, 20 are subject to redemption prior to their stated maturity dates on September 2, 20 or on any Interest Payment Date thereafter, on a pro rata basis among maturities (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption: Redemption Dates Redemption Price September 2, 20_ and March 2, 20 10% September 2, 20_ and March 2, 20_ 10% September 2, 20 and thereafter 10% The Bonds are also subject to mandatory redemption on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Assessment Prepayments (as defined in the Fiscal Agent Agreement), at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption: Redemption Dates Redemption Price September 2, 20_ through March 2, 20� 10% September 2, 20 and March 2, 20 10% September 2, 20_ and March 2, 20_ 10% September 2, 20_ and thereafter t0% The Bonds maturing on September 2, 20_, are subject to mandatory sinking fund redemption, in part, on September 2, 20 , and on each September 2 thereafter prior to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with A -3 55B -61 accrued interest to the date of redemption, without premium, from sinlcing fiend payments as provided in the Fiscal Agent Agreement. This Bond is subject to refunding pursuant to the procedures of Division 11.5 (commencing with Section 9500) of the Streets and Highways Code of the State of California. This Bond shall not be entitled to any benefit under the Act or the Fiscal Agent Agreement, or become valid or obligatory for any purpose, until the certificate of authentication and registration hereon endorsed shall have been dated and signed by the Fiscal Agent. IN WITNESS WHEREOF, the City of Santa Ana, California, has caused this Bond to be signed in facsimile by its City Treasurer and City Cleric, and has caused its official seal to be reproduced in facsimile hereon all as of the day of July, 2016, City Cleric A -4 55B -62 CITY OF SANTA ANA, CALIFORNIA City Treasurer CERTIFICATE OF AUTHENTICATION This is one of the Bonds described in the within - defined Fiscal Agent Agreement. Fiscal Agent By: Authorized Signatory A -5 55B -63 ASSIGNMENT For value received the undersigned hereby sells, assigns and transfers unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within- registered Bond and hereby irrevocably constitute(s) and appoints(s) attorney, to transfer the same on the registration books of the Fiscal Agent with fall ,power of substitution in the premises. Dated: Signature Guaranteed: Note: Signature(s) must be guaranteed by an eligible guarantor institution Note: The signature(s) on this Assignment must correspond with the fact of the within registered Bond in every particular without alteration or enlargement or any change whatsoever. A -6 55B -64 3.S 0i h v NwS 4-0 oy o y cc � v �A yV N.G T.G a N T b. A 0 0 m Edo c o.t u �wb 0 0'� A'� V o „y TAO N Eh u DES o .S �'t o � o o ° m O � 6 0 ate' o V 0 0 7,F C o.� o c4 Cv U,dv c 0 E C.� y,� s ropnV NaN a � c n0 a.Ss v> u ^GD �u wS� Far d PRELIMINARY OFFICIAL STATEMENT DATED 2016 NEW ISSUE — BOOK -ENTRY ONLY NOT RATED In the opinion of Best Best & Krieger LLP, San Diego, California, ( "Bond Counsel'), subject, however. to certain qualifications described herein, under existing statutes, regulations, rulings and Judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations, although for the purpose of computing the alternative minimum lax imposed on certain corporations, such interest is taken into account in determining certain income and earnings. In the fimther opinion of Bond Counsel, interest on The Bonds is exentpl fl-om California personal income tax. See "TAXMATTERS" herein. Dated: Date of Delivery CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015 -01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS Due: September 2, as shown on inside cover The City of Santa Ana Assessment District No, 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds (the "Bonds ") are being issued pursuant to provisions of the Improvement Bond Act of 1915 (Division 10 of the California Streets and Highways Code) (the "Act' and a Fiscal Agent Agreement, dated as of July 1, 2016 by and between the City of Santa Ana, California (the "City") and U.S. Bank National Association, as fiscal agent (tire "Fiscal Agent "). The Bonds are limited obligation bonds issued to pay the cost of the reconstruction of street pavement, coustmetion of curb ramps, repair of driveway approaches, sidewalks, curbs and gutters, adjustment of surface utility tames and covers, and installation of pavement markings, together with appurtenances and appurtenant work within the City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) (the "Assessment District "). The construction of the public improvements shall be undertaken as provided by the Municipal Improvement Act of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act"). The Bonds are being issued as fully- registered bonds in the denomination of $5,000 or any integral multiple thereof, with the exception of one Bond due on the rust maturity date which may be in an odd denomination. Interest on the Bonds will be payable on March 2 and September 2 of each year (each, an "Interest Payment Date "), commencing March 2, 2017, to owners of record on the fifteenth day of the month hmnedburly preceding each Interest Payment Date (a "Record Date "). The Bonds will be registered in the name of Cede & Co., as Bondowner and nominee for The Depository Trust Company ("DTC") Purchases of beneficial interest in the Bonds will be made in book -entry-only form. Accordingly, principal of and premium, if any, and interest on the Bonds will be paid by the Fiscal Agent, directly to DTC as the registered owner thereof. Upon receipt of payments of principal and interest, DTC is to remit such principal and interest to the DTC Participants for subsequent disbursement to the beneficial owners of the Bonds. Purchasers will not receive certificates representing Bonds purchased by them. The Bonds are subject to redemption prior to maturity as described herein. See "THE BONDS — Redemption of the Bonds" herein. MATURITY SCHEDULE (See Inside Cover) Under Ore provisions of tire Act, insra0ments of principal and interest sufficient to meet annual bond debt service are to be included air the regular county property tax bills sent to owners of property against which there are unpaid assessments. These annual installments are to be paid into a redemption fiord (the `Redemption Fund ") established for the Bonds to be held by the Fiscal Agent and used to pay debt service on the Bonds as it becomes due. Unpaid assessmarte constitute fixed liens on the lots and parcels assessed within the Assessment District and do not constitute a personal indebtedness of the respective owners of such lots and parcels. Accordingly, in the event of delinquency, proceedings may be had only against the real property securing The delinquent assessment. Thus, the value of land within the Assessment District is a critical factor in detennining the investment quality of the Bonds. See "THE ASSESSMENT DISTRICT — Estimated Value to Lien Ratios" herein. The Fiscal Agent will establish a Reserve Fund (defined herein) and deposit Bond proceeds equal to the amount of the Reserve Requirement (defined herein), to provide funds for payment of principal and interest on the Bonds in the event of any delinquent assessment installments, The City's obligation to advance funds to the Redemption Fund as a result of delinquent installments is limited to the balance in the Reserve Fund, The City has covenanted to initiate judicial foreclosure in the event of a delinquency. See `SECURITY FOR THE BONDS — Covenant to Continence Superior Court Foreclosure Proceedings" herein. The Bonds are not a debt or a liability of the City, the State of California (the "State ") or any political subdivision thereof, Neither the faith and credit nor the taxing power of the City, the State or any political subdivision thereof is pledged to the payment of the Bonds, or the interest or any premium thereon, and no Bondowners may compel the exercise of the taxing power of the City or the forfeiture of any of its property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or encumbrance upon mry of its property or upon any of its income, receipts or revenues, other than the assessments. See "SPECIAL RISK FACTORS" herein for a discussion of certain risk factors that should be considered, in addition to the matters set forth herein, in evaluating the investment quality of the Bonds. This cover page contains certain information for reference only, It is not a summary of this financing. Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. The Bonds are to be offered when, as and if issued and delivered to the Underwriter, subject to the approval as to their legality by Best Best & Krieger LLP, San Diego, California, as Bond Counsel. Certain legal matters will be passed upon for the City by Best Best & Krieger LLP, San Diego, California, as Disclosure Counsel. It is anticipated that the Bonds in book -entry form will be available for delivery through the facilities of DTC on or about ,2016. Dated: , 2016 Preliminary, subject to change. EXHIBIT 4 55B -65 MATURITY SCIIEDULE CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015-01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS Base CUSIP ®t No. Serial Bonds Maturity Date Principal Interest September 2 Amount Rate Yield Tenn Bonds due September 2, 20_, Yield _% CUSIP ®t No. CUSIPW " Preliminary, subject to change. t CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S &P Capital IQ. Copyright© 2016 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers. t CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S &P Capital IQ. Copyright© 2016 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers. 55B -66 CITY OF SANTA ANA MAYOR AND CITY COUNCIL Miguel Pulido, Mayor Vicente Sarmiento, Mayor Pro Tern, Ward 1 Michele Martinez, Councilmember, Ward 2 Angelica Amezcua, Councilmember, Ward 3 David Benavides, Councilmember, Ward 4 Roman A. Reyna, Councilmember, Ward 5 Sal Tinajero, Councilmember, Ward 6 CITY STAFF David Cavazos, City Manager Maria Huizar, City Clerk Francisco Gutierrez, City Treasurer Edwin "William" Galvez, P.E., City Engineer /Superintendent of Streets SPECIAL SERVICES Bond and Disclosure Counsel Best Best & Krieger LLP San Diego, California Assessment Engineer Psomas San Diego, California Financial Advisor to the City Fieldman, Rolapp & Associates Irvine, California Fiscal Agent U.S. Bank National Association Los Angeles, California 55B -67 GENERAL INFORMATION ABOUT THE OFFICIAL STATEMENT Use of Official Statement. This Official Statement is submitted in connection with the offer and sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the City in any press release and in any oral statement made with the approval of an authorized officer of the City or any other entity described or referenced herein, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project," "forecast," "expect," "intend," and similar expressions identify "forward looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward - looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the City or any other entity described or referenced herein since the date hereof. The City does not plan to issue any updates or revision to the forward- looking statements set forth in this Official Statement. Limited Offering. No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. Involvement of Underwriter. The Underwriter has submitted the following statement for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or any other entity described or referenced herein since the date hereof. All summaries of the documents referred to in this Official Statement are made subject to the provisions of such documents, respectively, and do not purport to be complete statements of any or all of such provisions. Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the Bonds at a level above that which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the cover page hereof and said public offering prices may be changed from time to time by the Underwriter. THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS CONTAINED IN SUCH ACT. THE BONDS HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE. 55B -68 TABLE OF CONTENTS INTRODUCTION ................... ..............................1 SANTA ANA AND THE COUNTY Purpose of the Bonds ......... ..............................1 ORANGE .............. ............................... Security for the Bonds ...... ............................... I Covenant for Superior Court Foreclosure ........ 2 Assessment District ............ ..............................2 APPENDIX D - SUMMARY OF CERTAIN Description of the Bonds ... ..............................3 30 Assessed Values and Value -to -Lien Ratios .....3 AGENT AGREEMENT ......................D Tax Exemption ................... ..............................3 APPENDIX E - FORM OF CONTINUING Special Risk Factors ........... ..............................4 31 Forward Looking Statements ...........................4 APPENDIX F - THE BOOK -ENTRY Continuing Disclosure ....... ..............................4 SYSTEM .............. ............................... Other Information .............. ..............................4 32 THE BONDS .......................... ..............................6 ASSESSMENT ROLL AND Authority for Issuance ....... ..............................6 VALUE -TO -LIEN RATIOS ...............G Amount and Purpose of the Bonds ..................6 General.............................. ............................... 6 Redemption of the Bonds .. ..............................6 Transfer and Exchange of Bonds .....................8 Book -Entry System ............ ..............................8 33 Sources and Uses of Funds ..............................9 34 Investment of Moneys ....... ..............................9 Annual Debt Service Schedule ......................10 35 SECURITY FOR THE BONDS .........................11 Assessment Installments ... .............................11 35 Reserve Fund .................... .............................11 Obligation of the City Upon Delinquency ..... 12 Covenant to Commence Superior Court Foreclosure Proceedings ...........................12 Sales of Tax Defaulted Property Generally ...13 Delinquency Resulting in Ultimate or Temporary Default on Bonds ................... 13 Priority of Lien .................. .............................15 Assessments and the Teeter Plan ...................15 THE IMPROVEMENT PROJECT .....................16 Description of Work ......... .............................16 Cost Estimate .................... .............................17 Method of Assessment Spread .......................18 THE ASSESSMENT DISTRICT ........................21 Location and Description .. .............................21 Development in the Assessment District ....... 22 County Assessed Valuations ..........................22 Value -to -Lien Ratios ......... .............................23 Property Tax Status ........... .............................23 Direct and Overlapping Debt .........................24 Top Property Owners ........ .............................26 Historical Property Tax Collections and Delinquencies .............. .............................27 SPECIAL RISK FACTORS ... .............................28 General............................ ............................... 28 Assessments Are Not Personal Obligations ................ ............................... 28 Risks of Real Estate Secured Investments Generally................... ............................... 28 Foreclosure Shortfall ......... .............................28 SANTA ANA AND THE COUNTY Non - Availability of City Funds .....................28 ORANGE .............. ............................... Bankruptcy and Foreclosure ..........................29 APPENDIX C - FORM OF BOND Topography; Seismic Activity; Other COUNSEL OPINION ......................... Events.......................... .............................29 APPENDIX D - SUMMARY OF CERTAIN Parity Taxes and Special Assessments ........... 30 Property Values ................. .............................31 AGENT AGREEMENT ......................D Absence of Secondary Market for the APPENDIX E - FORM OF CONTINUING Bonds......................... ............................... 31 Right to Vote on Taxes Act ...........................31 APPENDIX F - THE BOOK -ENTRY Ballot Initiatives and Legislative SYSTEM .............. ............................... Measures .................... ............................... 32 Impact of Legislative Proposals, ASSESSMENT ROLL AND Clarifications of the Code and Court VALUE -TO -LIEN RATIOS ...............G Decisions on Tax Exemption ....................32 No Acceleration ................ .............................32 Loss of Tax Exemption ..... .............................32 ABSENCE OF LITIGATION .............................33 TAX MATTERS .................. ............................... 33 CONTINUING DISCLOSURE .......................... 34 NO RATING .......................... .............................35 UNDERWRITING ............... ............................... 35 FINANCIAL ADVISOR ........ .............................35 MISCELLANEOUS ............. ............................... 35 APPENDIX A - ASSESSMENT DIAGRAM ... A -1 APPENDIX B - GENERAL ECONOMIC DATA CONCERNING THE CITY OF SANTA ANA AND THE COUNTY OF ORANGE .............. ............................... B -1 APPENDIX C - FORM OF BOND COUNSEL OPINION ......................... C -1 APPENDIX D - SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT ......................D -1 APPENDIX E - FORM OF CONTINUING DISCLOSURE AGREEMENT........... E -1 APPENDIX F - THE BOOK -ENTRY SYSTEM .............. ............................... F -1 APPENDIX G - UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS ...............G -1 -I- 55B-69 [THIS PAGE INTENTIONALLY LEFT BLANK] 55B -70 CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015-01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS INTRODUCTION This Introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and Appendices hereto, and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. Purpose of the Bonds The purpose of this Official Statement, which includes the cover page and Appendices hereto (the "Official Statement "), is to provide certain information concerning the sale and issuance of the City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds in the principal amount of $ ' (the "Bonds "). The improvement proceedings establishing Assessment District No. 2015 -01 (Warner Industrial Community) (the "Assessment District ") were conducted pursuant to the Municipal Improvement Act of 1913 (the "1913 Act"), being Division 12 (commencing with Section 10000) of the Streets and Highways Code of the State of California (the "Code "). The Bonds are proposed to be issued pursuant to the Improvement Bond Act of 1915 (the "Act "), being Division 10 (commencing with Section 8500) of the Code and a Fiscal Agent Agreement, dated as of July 1, 2016 by and between the City and U.S. Bank National Association as fiscal agent (the "Fiscal Agent ") (the "Fiscal Agent Agreement "). The Bonds shall be as described in, and shall be issued and secured under and pursuant to the Fiscal Agent Agreement. See APPENDIX D - "SUMMARY OF THE FISCAL AGENT AGREEMENT" herein. The Assessment District has been formed and the proceeds from the sale of the Bonds will be used to: (i) finance the reconstruction of street pavement, construction of curb ramps, repair of driveway approaches, sidewalks, curbs and gutters, adjustment of surface utility frames and covers, and installation of pavement markings, together with appurtenances and appurtenant work (collectively, the "Improvements "), (ii) pay the costs of issuing the Bonds and certain administrative expenses, and (iii) fund a reserve fund for the Bonds (the "Reserve Fund "). Security for the Bonds The Bonds are issued upon and secured by the unpaid assessments, together with interest thereon, which will be collected as herein described for the redemption and payment of the principal of and premium, if any, on the Bonds and the interest thereon. All the Bonds are additionally secured by the moneys in the redemption fund created under the Fiscal Agent Agreement (the "Redemption Fund ") and the Reserve Fund. Principal of and interest on the Bonds are payable out of the Redemption Fund. The unpaid assessments represent fixed liens on the lots and parcels assessed. They do not, however, constitute a personal indebtedness of the respective owners of said lots and parcels. See "SECURITY FOR THE BONDS - General" herein. Under the provisions of the Act, installments of principal and interest sufficient to meet annual debt service on the Bonds (the "Assessment Installments ") are to be included on the regular county tax bills sent to owners of property against which there are unpaid assessments. These Assessment Installments are to be transferred by the City Treasurer (the "Treasurer ") to the Fiscal Agent. The Assessment Installments billed against each property represent that property's pro rata share of the total principal of and interest on the Bonds " Preliminary, subject to change. 55B -71 coming due that year. All assessments are based on special benefits received by the properties within the boundaries of the Assessment District. In connection with the issuance of the Bonds, the Reserve Fund has been established as additional security for the Bonds. Proceeds from the sale of the Bonds in the amount of $ equal to the Reserve Requirement (defined herein) will be deposited in the Reserve Fund. The Reserve Fund will be a source of available funds to advance to the Redemption Funds in the event of delinquent installments. The City's obligation to advance funds to the Redemption Fund in the event of delinquent installments is limited to the balance in the Reserve Fund. Pursuant to the Fiscal Agent Agreement, the City has no obligation to replenish the Reserve Fund except to the extent that delinquent Assessments are paid or proceeds from foreclosure sales are realized. See "SECURITY FOR THE BONDS - Reserve Fund" herein. In addition to the Reserve Fund and the Redemption Fund, the Fiscal Agent has established an Improvement Food (the "Improvement Fund "), to be maintained and disbursed by the Fiscal Agent only for the purposes authorized in the assessment proceedings. To the extent required, the Fiscal Agent may establish various subaccounts within each fund. See "SECURITY FOR THE BONDS," "SPECIAL RISK FACTORS" and "THE IMPROVEMENT PROJECT - Method of Assessment" herein. Covenant for Superior Court Foreclosure The City will pursue judicial foreclosure proceedings against properties with delinquent Assessment Installments in excess of $10,000 by the October 1 following the close of the Fiscal Year in which such installments were due, and will commence judicial foreclosure proceedings against all properties with delinquent Assessment Installments by the October 1 following the close of each Fiscal Year in which it receives Assessment Revenues in an amount which is less than ninety -five percent (95 %) of the total Assessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings. See "SECURITY FOR THE BONDS - Covenant to Commence Superior Court Foreclosure" herein. Assessment District The City - The City, county seat of the County of Orange (the "County "), is a community of approximately 342,930 residents, located approximately 33 miles southeast of the City of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, and 90 miles north of San Diego. Numerous government offices have taken advantage of the City's central location and position as County seat. City, County, State and federal offices are conveniently located in the multi - government Civic Center in the heart of the City. The City has an industrial base which supports the local economy. The Assessment District - The land in the Assessment District, consisting of 205 assessable parcels is located in an industrial area of the City. A resolution of intention was adopted by the City Council of the City (the "City Council ") on July 7, 2015 and directed the Assessment Engineer to prepare the Engineer's Report. Resolutions establishing the boundaries of the Assessment District and preliminarily approving the Engineer's Report were adopted by the City Council of the City on January 19, 2016. The public hearing to receive comments on the Preliminary Engineer's Report and collect ballots was held on April 5, 2016. After conclusion of the public hearing, a tabulation of the votes was compiled. A majority of ballots cast by parcel owners (70.29 %) were determined to be affirmative, and the City Council proceeded to confirm the assessments and order the assessments to be levied as proposed in the Engineer's Report. The streets to be improved within the Assessment District include: Adams Street, Anne Street, Castor Street, Central Avenue, Fordham Avenue, Harvard Street, Maywood Avenue, Otis Street, Pendleton Avenue, Susan Street and Yale Street. See "THE IMPROVEMENT PROJECT" herein. 2 55B -72 Of the 205 assessable parcels, _ parcels were paid in full during the 30 -day cash payment period provided in the Act, leaving _ parcels with unpaid assessments securing the Bonds. The cash payments received, totaling $ , together with proceeds of the Bonds, and the City's contribution, will be used by the City to finance the improvements. See "THE IMPROVEMENT PROJECT" herein. The parcels with unpaid assessments in the Assessment District have a Fiscal Year 2015 -16 County assessed land value of $ , with the value of improvements (buildings) being $ resulting in a total assessed value of $ . See "THE ASSESSMENT DISTRICT" herein. A complete listing of the land values and the associated burden for all assessable parcels is set forth in APPENDIX G — "UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS." Description of the Bonds Maturity Dates. The Bonds will mature on September 2 in the years and in the principal amounts set forth on the inside cover page of this Official Statement. Payment Dates. The Bonds will be dated their date of delivery. Interest on the Bonds accrues from their dated date at the rates set forth on the inside cover page of this Official Statement, and is payable semiannually on each March 2 and September 2, commencing March 2, 2017 (each, an "Interest Payment Date "). The principal amount of the Bonds is payable at maturity or at earlier redemption upon surrender of the applicable Bond for payment. Registration. The Bonds will be issued in fully registered form only, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( "DTC "), and will be available to actual purchasers of the Bonds (the "Beneficial Owners ") in authorized denominations, under the book -entry only system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. See "THE BONDS — Book -Entry System" and APPENDIX E `BOOK -ENTRY ONLY SYSTEM" herein. Denominations. The Bonds will be issued and beneficial ownership interests may be purchased by Beneficial Owners in denominations of $5,000 or any integral multiple thereof. Redemption! The Bonds are subject to redemption prior to maturity. See "THE BONDS Redemption of the Bonds" herein. Assessed Values and Value -to -Lien Ratios The aggregate assessed value of the parcels in the Assessment District, with unpaid assessments, as shown on the Orange County (the "County ") Assessor's roll for Fiscal Year 2015 -16 is $ . The ratio of the assessed value of such parcels to the total amount of the unpaid assessments and direct and overlapping debt secured by ad valorem taxes, special taxes and assessments on such parcels is approximately to 1. See "THE ASSESSMENT DISTRICT — Estimated Value -to -Lien Ratios" herein. A complete listing of the land values and the associated burden for all assessable parcels is set forth in APPENDIX G — "UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS" herein. Tax Exemption In the opinion of Best Best & Krieger LLP ( "Bond Counsel"), under existing statutes, regulations, rulings and judicial decisions and assuming compliance with certain covenants and provisions of the Internal Revenue Code of 1986, as amended (the "Code "), interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Code, although it may be includable in the calculation for * Preliminary, subject to change. 55B -73 certain taxes. In the further opinion of Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is exempt from State of California (the "State ") personal income tax. See "TAX MATTERS" herein. Special Risk Factors Unpaid assessments do not constitute a personal indebtedness of the owners of the parcels within the Assessment District. There is no assurance the owners will be able to pay the Assessment Installments or that they will pay such installments even though financially able to do so. Because the City has not obligated itself to advance funds to pay Bond debt service in the event of delinquent Assessment Installments, failure by owners of the parcels to pay Assessment Installments when due, depletion of the Reserve Fund, or the inability of the City to sell parcels which have been subject to foreclosure proceedings for amounts sufficient to cover the delinquent Assessment Installments levied against such parcels may result in the inability of the City to make full or punctual payments of debt service on the Bonds, and Owners of the Bonds would therefore be adversely affected. See "SPECIAL RISK FACTORS" herein. Forward Looking Statements Certain statements included or incorporated by reference in this Official Statement constitute "forward - looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as "plan," "expect," "estimate," "project," "budget" or other similar words. Such forward - looking statements include, but are not limited to, certain statements contained in the information under the caption "THE ASSESSMENT DISTRICT" herein. THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD - LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD- LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD - LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. Continuing Disclosure The City will covenant for the benefit of the Owners and Beneficial Owners to make available certain financial and operating data relating to the Bonds, the Assessment District and the City and to provide notices of the occurrence of certain enumerated events in compliance with Rule 15c2- 12(b)(5) adopted by the Securities and Exchange Commission. The specific nature of information to be made available and the enumerated events are summarized under the caption "CONTINUING DISCLOSURE" and set forth in APPENDIX E — "FORM OF CONTINUING DISCLOSURE AGREEMENT" herein. Other Information This Official Statement speaks only as of its date, and the information contained herein is subject to change. The summaries and references to documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each document, statute, report or instrument. Copies of documents referred to herein and information concerning the Bonds are available from the City, 20 Civic Center Plaza, Santa Ana, California 92701. The City may impose a charge for copying, mailing and handling. 55B -74 No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations other than as contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact. The summaries and references to documents, statutes and constitutional provisions referred to herein do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each of such documents, statutes and constitutional provisions. The information set forth herein, other than that provided by the City, has been obtained from official sources which are believed to be reliable but it is not guaranteed as to accuracy or completeness by the City. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. All terms used herein and not otherwise defined shall have the meanings given such terns in the Fiscal Agent Agreement. 55B -75 TILE BONDS Authority for Issuance The Bonds are issued pursuant to the provisions of the Act and the Fiscal Agent Agreement. The formation and assessment proceedings for the Assessment ,District were conducted pursuant to the Municipal Improvement Act of 1913 (the "1913 Act"), Article XIIID of the California Constitution and the Proposition 218 Omnibus Implementation Act (Statutes of 1997, Chapter 38). The City Council confirmed a total assessment of $3,033,415 on April 5, 2016, and recorded such confirmed assessment on April 22, 2016. Amount and Purpose of the Bonds The Bonds are being issued in the aggregate principal amount of $ which, together with cash payments on the assessments of $ , and the City's contribution of $ will be used to finance the Improvements, to pay costs of issuing the Bonds, and to fund the Reserve Fund. See the below captioned "Sources and Uses of Funds" and "THE IMPROVEMENT PROJECT" herein. General The Bonds will be issued as fully registered bonds in the denomination of $5,000 or any integral multiple of $5,000. The Bonds will be dated the date of delivery and will bear interest at the rates per annum and will mature, subject to the redemption provisions set forth below, on the dates and in the principal amounts, all as set forth on the cover page hereof. Interest on the Bonds is payable semiannually on March 2 and September 2 of each year, commencing March 2, 2017 (each an "Interest Payment Date ") to the persons in whose names ownership of the Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided in the Fiscal Agent Agreement. Such interest will be paid by check mailed by the Fiscal Agent on such Interest Payment Date, by first class mail, postage prepaid, to such Registered Owners at their respective addresses shown on the Registration Books as of the close of business on the immediately preceding Record Date, except as provided in the Fiscal Agent Agreement. Interest on the Bonds will be calculated on the basis of a 360 -day year composed of twelve 30 -day months. Principal of and premium, if any, on the Bonds will be payable upon presentation and surrender thereof upon maturity or earlier redemption at the principal corporate trust office (the "Trust Office ") of the Fiscal Agent in St. Paul, Minnesota, or such other address as specified by the Fiscal Agent. Principal of and premium, if any, and interest on the Bonds will be paid in lawful money of the United States of America. The Bonds will be issued in book -entry form, initially registered in the name of Cede & Co., New York, New York, as nominee of The Depository Trust Company ( "DTC "), New York, New York. Payment of interest on any Bond registered as of each Record Date in the name of Cede & Co. will be made by wire transfer of same -day funds to the account of Cede & Co. See "THE BONDS Book-Entry System" and APPENDIX E "BOOK -ENTRY ONLY SYSTEM" herein. Redemption of the Bonds Optional Redemption. The Bonds maturing on or after September 2, 20, are subject to redemption prior to their stated maturity dates on September 2, 20 or on any Interest Payment Date thereafter, in full or in part, on a pro rata basis among maturities (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: 55B -76 Redemption Dates Redemption Price September 2, 20_ and March 2, 20 10_% September 2, 20 and March 2, 20_ 10 % September 2, 20 and thereafter to —% Mandatory Redemption from Assessment Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Assessment Prepayments, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest thereon to the date of redemption: Redemption Dates Redemption Price March 2, 2017 through March 2, 20_ 10_% September 2, 20 and March 20 10_% September 2, 20_ and March 20 10% September 2, 20_ and March 20 Sinking Fund Redemption. The Outstanding Bonds maturing on September 2, 20 , are subject to mandatory sinking fund redemption, in part, on September 2, 20 , and on each September 2 thereafter prior to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, from sinking fund payments as follows: Redemption Dates (September 2) Sinking Fund Payments The amounts in the foregoing schedule shall be reduced pro rata among redemption dates, in order to maintain substantially level Annual Debt Service, as directed in writing to the Fiscal Agent by an Authorized Officer, as a result of any prior partial redemption of the Bonds pursuant to the Fiscal Agent Agreement. Purchase of Bonds. In lieu of payment at maturity or redemption under the Fiscal Agent Agreement, moneys in the Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer's Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer's Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase. The Fiscal Agent shall be absolutely protected and shall incur no liability in relying on such an Officer's Certificate. Refunding Bonds. Pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the California Streets and Highways Code), the City may issue refunding bonds for the purpose of redeeming the Bonds. The City may issue and sell refunding bonds without giving notice to and conducting a hearing for the owners of property in the Assessment District, or after giving notice to the owners of the Bonds after the making of certain required findings by the City Council. Selection of Bonds for Redemption. Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the Bonds for redemption in such a way that the ratio of Outstanding Bonds to issued Bonds shall be approximately the same in each maturity of the Bonds insofar as possible, and shall select Bonds for redemption within each maturity of the Bonds by lot. Notice of Redemption and Effect Thereof. Notice of any redemption will be given by the Fiscal Agent by first class mail, postage prepaid, to the respective Owners of any Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to one or more 55B -77 Information Services, at least 30 but not more than 60 days prior to the date fixed for redemption. Such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds. Redemption notices may be conditional. From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption, together with accrued interest to the date of redemption, shall have been deposited in the Redemption Fund, such Bonds shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption. Transfer and Exchange of Bonds So long as the Bonds remain in book -entry form, transfer and exchange of any of the Bonds shall be accomplished in accordance with the provisions of such book -entry system. In the event of the termination of such book -entry system with respect to the Bonds, then any Bond may be transferred upon the registration books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a duly executed written instrument of transfer in a form approved by the Fiscal Agent. Whenever any Bond or Bonds are surrendered for transfer, the City will execute and the Fiscal Agent will authenticate and deliver a new Bond or Bonds of a like aggregate principal amount. The Fiscal Agent will collect from the Bondowner requesting such transfer any tax or other governmental charge required to be paid with respect to such transfer. The Bonds may be exchanged at the Principal Office of the Fiscal Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The Fiscal Agent will collect from the Bondowner requesting such exchange any tax or other governmental charge required to be paid with respect to such exchange. The Fiscal Agent will not be obligated to make any transfer or exchange of Bonds during the 15 day period preceding the selection of Bonds for redemption, or with respect to any Bonds selected for redemption. Book -Entry System The Depository Trust Company ( "DTC "), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully registered Bond certificate will be issued for each maturity of the Bonds, in the aggregate principal amount of such maturity, and will be deposited with DTC. See APPENDIX F — "BOOK -ENTRY SYSTEM." 55B -78 Sources and Uses of Funds The sources and uses of funds for the Bonds are summarized as follows: Sources of Funds Principal Amount of Bonds Plus /Less Net Original Issue Premium/Discount City Contribution Prepayments Total Sources Uses of Funds Improvement Fund Reserve Fund (I) Underwriter's Discount Costs of Issuance Fund cz> Total Uses Equals the initial Reserve Requirement for the Bonds. Includes amounts to reimburse the City for certain expenses, fees and expenses of Bond Counsel, Disclosure Counsel, the Financial Advisor, the assessment Engineer, the Fiscal Agent, printing expenses and other issuance costs. Investment of Moneys Moneys in any fund or account created or established by the Fiscal Agent Agreement and held by the Fiscal Agent shall be invested by the Fiscal Agent in Permitted Investments, as directed pursuant to an Officer's Certificate filed with the Fiscal Agent at least two (2) Business Days in advance of the making of such investments. In the absence of any such Officer's Certificate, the Fiscal Agent shall invest any such moneys Permitted Investments pursuant to the Fiscal Agent Agreement. See APPENDIX D — "SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT" herein. 55B -79 Annual Debt Service Schedule The following table presents the annual debt service schedule for the Bonds, assuming no optional redemptions are made: Year Ending September 2 Principal Interest Total 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 Totals 10 55B -80 SECURITY FOR THE BONDS Assessment Installments The Bonds are secured by the Assessments, together with interest thereon at fixed interest rates, and the Bonds, including principal and interest, are payable, exclusively out of the Redemption Fund. Pursuant to the Fiscal Agent Agreement, the Fiscal Agent will establish, maintain and hold in trust specifically for the Bonds, the Improvement Fund, the Redemption Fund, the Reserve Fund, the Costs of Issuance Fund and the Rebate Fund. The Bonds are secured by the amounts held in such funds and accounts (other than the Rebate Fund). Principal of and interest on the Bonds are payable exclusively out of the Redemption Fund. PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON THE BONDS IS SECURED SOLELY BY THE ASSESSMENTS (INCLUDING PREPAYMENTS THEREOF) ON THE PARCELS, TOGETHER WITH INTEREST THEREON AND ANY PENALTIES RECEIVED WITH RESPECT THERETO, AND ANY OTHER AMOUNTS (INCLUDING PROCEEDS OF THE SALE OF THE BONDS) HELD IN ANY FUND ESTABLISHED PURSUANT TO THE FISCAL AGENT AGREEMENT FOR THE BONDS (OTHER THAN THE REBATE FUND). Under the provisions of the Act, the Assessment Installments will be included annually on the regular County tax bills sent to the owners of the parcels within the Assessment District against which there are unpaid Assessments. Such Assessment Installments are to be paid into the Redemption Fund for the payment of principal of, premium, if any, and interest on the Bonds as they become due. Collection of Assessment Installments will commence with Fiscal Year 201647. Any Assessment may be prepaid at any time, together with any applicable premium to the redemption date, plus interest thereon, as the City may determine with respect to the portion of the prepayment which cannot be applied to the redemption of Bonds on the first available redemption date. THE BONDS ARE NOT GENERAL OBLIGATIONS OF THE CITY, BUT ARE LIMITED OBLIGATIONS, PAYABLE SOLELY FROM THE ASSESSMENTS AND THE OTHER FUNDS PLEDGED THEREFOR UNDER THE FISCAL AGENT AGREEMENT. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF TIIE CITY OR THE STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE BONDS. NOTWITHSTANDING ANY OTHER PROVISION OF TIIE FISCAL AGENT AGREEMENT, TIIE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO CURE ANY DEFICIENCY IN THE REDEMPTION FUND ESTABLISHED UNDER TIIE FISCAL AGENT AGREEMENT. Reserve Fund Under the Fiscal Agent Agreement, the Fiscal Agent is required on the Closing Date to deposit in the Reserve Fund from proceeds of sale of the Bonds an amount equal to the "Reserve Requirement," which is defined in the Fiscal Agent Agreement to mean, with respect to the Bonds, as of the date of any calculation, the least of (1) 10% of the issue price of the Bonds, (2) maximum annual debt service on the Bonds and (3) 125% of average annual debt service on the Bonds. Amounts on deposit in the Reserve Fund will be transferred to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, premium, if any, and interest on the Bonds or, in accordance with the terms of the Fiscal Agent Agreement, for the purpose of redeeming Bonds from the Redemption Fund. The moneys in the Reserve Fund may be invested in any Permitted Investment, as said tern is defined in the Fiscal Agent Agreement. See APPENDIX D — "SUMMARY OF CERTAIN PROVISIONS OF TIIE FISCAL AGENT AGREEMENT" herein. Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which pursuant to the Fiscal Agent Agreement must be rebated to the 11 55B -81 United States (the "Rebate Amount "), exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of the Fiscal Agent Agreement, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with the Fiscal Agent Agreement. Whenever an Assessment on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer's Certificate regarding such Assessment, transfer from the Reserve Fund to the Redemption Fund an amount equal to the reduction in such Assessment determined pursuant to Section 8881 of the California Streets and Highways Code, which amount shall be specified in the Officer's Certificate. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer the amount in the Reserve. Fund to the Redemption Fund to be applied, on the next succeeding Interest Payment Date to the payment and redemption, in accordance with the Fiscal Agent Agreement, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways Code. Obligation of the City Upon Delinquency The City is under no obligation to transfer any funds of the City into the Redemption Fund for payment of the principal of or interest on the Bonds if a delinquency occurs in the payment of any Assessment Installments. See "SECURITY FOR THE BONDS — Covenant to Commence Superior Court Foreclosure Proceedings" for a discussion of the City's obligation to foreclose Assessment liens upon delinquencies. Covenant to Commence Superior Court Foreclosure Proceedings The Act provides that in the event any Assessment Installment or any interest thereon is not paid when due, the City may order the institution of a court action to foreclose the lien of the unpaid Assessment. In such an action, the real property subject to the unpaid Assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. The City has covenanted in the Fiscal Agent Agreement that it will order, and cause to be commenced, judicial foreclosure proceedings against properties with delinquent Assessment installments in excess of $10,000 by the October 1 following the close of the Fiscal Year in which such installments were due, and will commence judicial foreclosure proceedings against all properties with delinquent Assessment Installments by the October 1 following the close of each Fiscal Year in which it receives Assessment Revenues in an amount which is less than 95% of the total Assessment Revenues which were to be received in the Fiscal Year and diligently pursue to completion such foreclosure proceedings. Upon the redemption or sale of the real property responsible for such delinquencies, the City will apply the net proceeds thereof to deposit to the Reserve Fund the amount of any delinquency advanced therefrom to the Redemption Fund for payment of interest on or principal of the Bonds, including Assessment Revenues including net proceeds of redemption or sale of the real property and all such moneys are dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided in the Fiscal Agent Agreement and the 1915 Act. IN THE EVENT SUCH SUPERIOR COURT FORECLOSURE OR FORECLOSURES ARE NECESSARY, THERE MAY BE A DELAY IN PAYMENTS TO BONDOWNERS PENDING PROSECUTION OF THE FORECLOSURE PROCEEDINGS AND RECEIPT BY THE CITY OF THE PROCEEDS OF THE FORECLOSURE SALE; IT IS ALSO POSSIBLE THAT NO BID FOR THE 12 55B -82 PURCHASE PRICE OF APPLICABLE PROPERTY WOULD BE RECEIVED AT THE FORECLOSURE SALE. SEE "SPECIAL RISK FACTORS." NOTWITHSTANDING ANY OTHER PROVISION OF THE FISCAL AGENT AGREEMENT, THE CITY IS NOT OBLIGATED TO ADVANCE AVAILABLE FUNDS FROM THE CITY TREASURY TO CURE ANY DEFICIENCY IN THE REDEMPTION FUND OR RESERVE FUND ESTABLISHED UNDER THE FISCAL AGENT AGREEMENT. The 1913 Act provides that the court in a foreclosure proceeding has the power to order property securing delinquent assessment installments to be sold for an amount not less than all assessment installments, interest, penalties, cost, fees and other charges that are delinquent at the time the foreclosure action is ordered and certain other fees and amounts as provided in the 1913 Act. The court may also include subsequent delinquent assessment installments and all other delinquent amounts. If the property to be sold fails to sell for the minimum price described above, the City may petition the court to modify the judgment so that the property may be sold at a lesser price or without a minimum price. In certain circumstances, the court may modify the judgment after a hearing if the court makes certain determinations, including, but not limited to, a determination that the sale at less than the minimum price will not result in an ultimate loss to the owners of the bonds or a determination that the owners of at least 75% of the principal amount of the bonds outstanding have consented to the petition and the sale will not result in an ultimate loss to the non - consenting bondowners. Neither the property owner nor any owner of a security interest in the property nor any defendant in the foreclosure action nor any agent thereof may purchase the property at the foreclosure sale for less than the minimum price. Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, the statutory right of redemption from such foreclosure sales has been repealed. However, a period of 140 days must elapse after the date notice of levy of the interest in real property was served on the judgment debtor before the sale of such lot or parcel can be made. Furthermore, if the purchaser at the sale is the judgment creditor (e.g., the City), an action may be commenced by the delinquent property owner within 90 days after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation which repeals the one year redemption period has not been tested and there can be no assurance that, if tested, such legislation will be upheld. (Section 701.680 of the Code of Civil Procedure of the State.) Sales of Tax Defaulted Property Generally Property securing delinquent Assessment Installments which is not sold pursuant to the judicial foreclosure proceedings described above may be sold, subject to redemption by the property owner, in the same manner and to the same extent as real property sold for nonpayment of general County property taxes. On or before June 30 of the year in which such delinquency occurs, the property becomes tax defaulted. This initiates a five year period during which the property owner may redeem the property. At the end of the five year period the property becomes subject to sale by the County Treasurer and Tax Collector. Except in certain circumstances, as provided in the 1915 Act, the purchaser at any such sale takes such property subject to all unpaid Assessments, interest and penalties, costs, fees and other charges which are not satisfied by application of the sales proceeds and subject to all public improvement assessments which may have priority. See "SECURITY FOR THE BONDS — Covenant to Commence Superior Court Foreclosure Proceedings" for the circumstances under which the City is required to take action to foreclose the lien of delinquent Assessments. Delinquency Resulting in Ultimate or Temporary Default on Bonds If a temporary deficiency occurs in the Redemption Fund with which to pay Bonds which have matured, past due interest or the principal and interest on Bonds coming due during the current tax year, but it does not appear to the Treasurer of the City that there will be an ultimate loss to the Bondowners, the Treasurer shall, pursuant to the 1915 Act, direct the Fiscal Agent to pay the principal of Bonds which have matured as presented 13 55B -83 and make interest payments on the Bonds when due as long as there are available funds in the Redemption Fund, in the following order of priority: (1) All matured interest payments shall be made before the principal of any Bonds is paid. (2) Interest on Bonds of earlier maturity shall be paid before interest on ,Bonds of later maturity. (3) Within a single maturity, interest on lower numbered Bonds shall be paid before interest on higher numbered Bonds. (4) The principal of Bonds shall be paid in the order in which the Bonds are presented for payment. Any Bond which is presented but not paid shall be assigned a serial number according to the order of presentment and shall be returned to the Bondowner. When funds become available for the payment of any Bond which was not paid upon presentment, the Treasurer shall notify the registered owner of such Bond by registered mail to present the Bond for payment. If the Bond is not presented for payment within ten days after the mailing of the notice, interest shall cease to run on the Bond. If it appears to the Treasurer that there is a danger of an ultimate loss accruing to the Bondowners for any reason, he or she is required pursuant to the 1915 Act to withhold payment on all matured Bonds and interest on all Bonds and report the facts to the City Council so that the City Council may take proper action to equitably protect all Bondowners. Upon the receipt of such notification from the Treasurer, the City Council is required to fix a date for a hearing upon such notice. At the hearing the City Council shall determine whether in its judgment there will ultimately be insufficient money in the Redemption Fund to pay the principal of the unpaid Bonds and interest thereon. If the City Council determines that in its judgment there will not be an Ultimate Default, it shall direct the Treasurer to pay matured Bonds and interest as long as there is available money in the Redemption Fund. I£ the City Council determines that in its judgment there will ultimately be a shortage in the Redemption Fund to pay the principal of the unpaid Bonds and interest thereon (an "Ultimate Default "), the City Council shall direct the Treasurer to pay to the owners of all outstanding and unpaid Bonds such proportion thereof as the amount of funds on hand in the Redemption Fund bears to the total amount of the unpaid principal of the Bonds and interest which has accrued or will accrue thereon. Similar proportionate payments shall thereafter be made periodically as moneys come into the Redemption Fund. Upon the determination by the City Council that an Ultimate Default will occur, the Treasurer shall notify all Bondowners to surrender their Bonds to the Treasurer for cancellation. Upon cancellation of the Bonds, the Bondowner shall be credited with the principal amount of the Bond so canceled. The Treasurer shall then pay by warrant the proportionate amount of principal and accrued interest due on the Bonds of each Bondowner as may be available from time to time out of the money in the Redemption Fund. Interest shall cease on principal payments made from the date of such payment, but interest shall continue to accrue on the unpaid principal at the rate specified on the Bonds until payment thereof is made. No premiums shall be paid on payments of principal on Bonds made in advance of the maturity date thereon. If Bonds are not surrendered for registration and payment, the Treasurer shall give notice to the Bondowner by registered mail, at the Bondowner's last address as shown on the registration books maintained by the Fiscal Agent, of the amount available for payment. Interest on such amount shall cease as of ten days from the date of mailing of such notice. 14 55B -84 Priority of Lien The Assessment Installments and any interest and penalties thereon constitute a lien against the parcels on which they were imposed until the same is paid. Such lien has priority over all private liens and over all fixed special assessment liens which may thereafter be created against such property. Such lien is co -equal to and independent of the lien for general taxes and special taxes. See "THE ASSESSMENT DISTRICT — Direct and Overlapping Debt' herein for a description of other special taxes, assessments or reassessments secured by a lien on property within the Assessment District. Assessments and the Teeter Plan The County has adopted a Teeter Plan as provided for in Section 4701 et seq. of the California Revenue and Taxation Code, under which a tax distribution procedure is implemented and secured roll taxes are distributed to taxing agencies within the County on the basis of the tax levy, rather than on the basis of actual tax collections. By policy, the County does not include assessments, reassessments and special taxes, including the Assessments of the Assessment District, in its Teeter program. 15 55B -85 TIIE IMPROVEMENT PROJECT All of the information in this section, "THE IMPROVEMENT PROJECT," is taken from the Engineer's Report for Assessment District No. 2015 -01 (Warner Industrial Community), prepared by Psomas, San Diego, California (the "Assessment Engineer "), on file with the City Clerk (the "Engineer's Report "). Description of Work The City is using assessment financing to improve the pavement of the local, interior roadway network within the Assessment District. The location of the Assessment District may be generally described as being within the following streets and landmark boundaries: Beginning at the intersection of Harbor Boulevard and Warner Avenue, on the north side of Warner Avenue, east to the abandoned Union Pacific Railroad line, then south along the eastern edge of the abandoned railroad line to Segerstrom Avenue, then east along the northern edge of Segerstrom Avenue to an Orange County Flood Control Channel (D03) /Greenville Banning Channel, then north along the western edge of the channel, continuing north on the western edge of Fairview Street (where it crosses Harvard Street) to the southern edge of Centennial Park, then west along the southern edge of the park to the Santa Ana River, then south along the eastern edge of the river, and continuing south along the eastern edge of IIarbor Boulevard to the point of origin at Warner Avenue. The streets to be improved within the Assessment District include: • Adams Street • Anne Street • Castor Street • Central Avenue • Fordham Avenue • Harvard Street • Maywood Avenue • Otis Street • Pendleton Avenue • Susan Street • Yale Street Only parcels having access to the streets being improved were included, therefore, if parcels have direct access to major thoroughfares, and none of the streets listed above, these parcels were excluded from the Assessment District. The major thoroughfares include: • Fairview Street • Segerstrom Avenue • Harbor Boulevard • Warner Avenue 16 55B -86 Cost Estimate The estimated costs associated with the Improvements, as determined by the Assessment Engineer, are set forth in the following table. TABLE 1 City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Cost Estimate RECAPITULATION I. TOTAL CONSTRUCTION COSTS $ 5,206,915 $ 5,206,915 II. CITY OF SANTA ANA CONTRIBUTIONS $(3,033,415) $(3,033,415) III. FINANCING COSTS $ 859,915 $ 859,915 TOTAL AMOUNT TO ASSESSMENT $ 3,033,415 $ 3,033,415 Includes a construction cost contingency contribution amount of not to exceed $500,000 to pay for construction expenses resulting from unforeseen conditions not within the scope of work of the construction contract. Source: Psomas. 17 55B -87 PRELIMINARY MODIFIED ITEM COSTS COSTS I. CONSTRUCTION COSTS Engineering and Construction Costs $ 4,706,915 $ 4,706,915 Construction Cost Contingency 500,000 500,000 TOTAL CONSTRUCTION COSTS $ 5,206,915 $ 5,206,915 II. CONTRIBUTIONS City of Santa Ana Construction Cost Contribution $ 2,533,415 $ 2,533,415 City of Santa Ana Contingency Contribution(l) 500,000 500,000 TOTAL CONTRIBUTIONS $ 3,033,415 $ 3,033,415 III. FINANCING COSTS Capitalized Interest $ 216,811 $ 216,455 Bond Discount 60,800 60,700 Reserve Fund 286,075 285,750 Bond Counsel 50,000 50,000 Disclosure Counsel 25,000 25,000 Other Legal Expenses 15,000 15,000 Financial Advisor 40,000 40,000 Official Statement Printing 5,000 5,000 Land Market Value Appraisal 20,000 20,000 Assessment Engineer 50,000 50,000 Bond Registration, Paying /Transfer Agent 5,000 5,000 Printing, Publication, Postage & Miscellaneous Costs 15,000 15,000 District Administration 30,000 30,000 Costs of Issuance Contingencies 41,229 42,010 TOTAL FINANCING COSTS $ 859,915 $ 859,915 RECAPITULATION I. TOTAL CONSTRUCTION COSTS $ 5,206,915 $ 5,206,915 II. CITY OF SANTA ANA CONTRIBUTIONS $(3,033,415) $(3,033,415) III. FINANCING COSTS $ 859,915 $ 859,915 TOTAL AMOUNT TO ASSESSMENT $ 3,033,415 $ 3,033,415 Includes a construction cost contingency contribution amount of not to exceed $500,000 to pay for construction expenses resulting from unforeseen conditions not within the scope of work of the construction contract. Source: Psomas. 17 55B -87 Method of Assessment Spread Background The law requires and the statutes provide that assessments, as levied pursuant to the provisions of the Assessment Law, must be based on the special benefit that the properties receive from the works of improvement. The statute does not specify the method or formula that should be used in any special assessment district proceedings. The responsibility rests with the Assessment Engineer, who is retained for the purpose of making an analysis of the facts and determining the correct apportionment of the assessment obligation. The Assessment Engineer then makes his recommendation at the public hearing on the Assessment District, and the final authority and decision rests with the City Council of the City. After hearing all testimony and evidence presented at that public hearing, and upon conclusion of the public hearing, the City Council must make the final decision determining whether or not the assessment spread has been made in direct proportion to the special benefits received. AnalysisMeeomntended Financing Mechanism The purpose of the assessment methodology is to determine the proportionate amount of the assessment to be assessed to each parcel of land based on special benefits received by each parcel. For purposes of this study the following options, which are commonly used in the public finance industry, were considered: Street Frontage. The street frontage is defined as the length of the side of a parcel that is directly adjacent to the street. The street frontage method is a direct measure of the static utilization of each parcel and its corresponding special benefit proposed from the street improvement. A common way of apportioning costs to a parcel for assessment financing is to apply the cost based on the street frontage. However, this methodology works best when the area under consideration is comprised of parcels with mostly uniform depths, so that the parcel sizes are fairly consistent with their street frontage. Examples of the size versus frontage diversity in the Warner Industrial Community (WIC) is shown in the following examples: two properties have approximately 30 feet of frontage and one is 0.5 acres and the other is 2.8 acres; another two properties have approximately 125 feet of frontage and one is 0.4 acres and the other is 1.2 acres. Also, the WIC includes parcels that take access from private access easements and therefore have no frontage on the improved roadways, but still receive special benefit from the improvements. Another issue with this methodology is that comer properties fronting on two interior streets would carry an additional burden based on both sides of the parcel being counted. Due to the reasons above, utilizing this method is not recommended. Traffic Generation. The amount of traffic generated by each parcel is a direct measure of the special benefit received. This can be determined in terms of trips per day (average daily traffic or ADT) using industry standard factors per acre based on the land use of the parcel. A drawback to this methodology is that the actual land use of each parcel is difficult to determine and may change in the future, which is important since the bond term is anticipated to be up to 20 years. ADT does not characterize the spatial patterns of demand either. Based on the City's general plan, this area is typically industrial and /or commercial; and the ADT factors that can be utilized are typically based on employees and /or customers for industrial and commercial land use. Accurate employee counts can be generated from acreage only if specific industrial or commercial land use categories are known. Since a warehouse would generate far fewer trips than a manufacturing or retail -type use this poses potential problems (due to inequities) in determining the appropriate assessment. Due to the reasons above, utilizing this method is not recommended. Parcel Area. The size of a parcel (in square feet or acres) is a direct measure of current and future development capacity of each parcel and its corresponding special benefit received from street improvements. This methodology works well when there is a large diversity of parcel sizes, shapes and frontage within a specific area. The more a property can be developed, the more it specially benefits from the proposed improvements. There is a direct correlation between the size of a property and the extent to which a property MI.* may be utilized, because parcel size is one of the main limiting factors on what can be built on a specific parcel. Appendix C represents the area of each parcel within the Assessment District boundary. Length of Travel Footage. The length of travel footage is defined as the length from the farthest access point of the property to the nearest major thoroughfare. The length of travel footage method is a direct measure of the actual utilization of the street improvements by each parcel and its corresponding special benefit derived from the street improvements. Recommended Direct and Special Benefit Methodology Spreads For the purpose of assessing the special benefits to each parcel in the Assessment District, a combination of two components of special benefit have been identified to quantify the value of the Improvements to be received by each parcel in the Assessment District. The first component of special benefit is based on the parcel acreage and the second is length of travel along the roads to be improved by the projects this assessment is funding. The first level of special benefit was assigned based on the size of the parcel (in acres) as parcel size dictates, to some degree, the size of the business, and how much employee and customer traffic it generates. The size of a parcel is an indicator of how much traffic will be generated and how much the parcel will specially benefit from the improved roadways within the Assessment District. This special benefit is assigned a value or weighting of 50% of the total assessment. Some parcels are land - locked (having no driveway outlet to the streets being improved), but the potential future use of these parcels would specially benefit from the improvements of the interior roadways in proportion to the parcel size. Furthermore, many of these parcels are already being used in combination with adjoining parcels which do have access to the interior roadways, thereby specially benefiting from the improvements. A total of 29 parcels (22 north of Warner Avenue, and 7 to the south) have been identified as receiving this level of special benefit and only this level. These parcels will be charged only the acreage -based component of the assessment. The second level of special benefit was assigned based on the length of the improved street or streets over which vehicles will travel to arrive at each individual parcel. This benefit was determined by measuring the length of travel in linear feet from the nearest major thoroughfare along one or more of the streets to be improved to the farthest driveway on a particular parcel. Longer lengths of travel contribute more to the wear and tear of the roadway than do shorter trips. This special benefit is thought to be a true measure of how much of the improved streets each particular parcel will utilize and is therefore assigned a value or weighting of 50% of the total assessment. Only parcels having direct access to the interior roadways to be improved will be assessed this component. Therefore, the special benefits will be apportioned to the parcels within the Assessment District in the following manner: Methodology Percentage Applied Parcel Area 50% Length of Travel 50% The total amount to bond equals $3,033,415, assuming the City will contribute $3,033,415 of the total costs Proposition 218 mandates that "Parcels within a District that are owned or used by any Agency, the State of California, or the United States shall not be exempt from assessment, unless the Agency can demonstrate by clear and convincing evidence, that these publicly owned parcels in fact receive no benefit." Roadway parcels upon which improvements are located do not receive benefit and are not assessed. 19 55B -89 There is one publicly owned parcel within the Assessment District which does benefit and is being assessed. Due to the multiple unrelated structures located on this parcel and their different access points to this parcel, it has been determined that only a portion of the parcel's acreage specially benefits from the roadway improvements being funded by the Assessment District. In the southern portion of the parcel, a museum and a school have access to Harvard Street. The 8.18 acres dedicated to these purposes will specially benefit from the improvements and will be assessed. The school located in the northern portion of the parcel is accessed only from Centennial Road, outside the Assessment District, and therefore receives no special benefit from the improvements of the Assessment District. The parcel's total size being 16.96 acres, 8.78 non - benefiting acres are exempted from assessment. In addition, three undeveloped parcels have been determined to be non - benefiting as they are zoned M- 1, but do not meet the Planting Department's requirements for development of M -1 property. These three parcels appear on the Assessment Roll with a $0 assessment amount. In conclusion, the assessments for the above referenced Assessment District have been spread in direct proportion to the special benefits each parcel will receive from the works of improvements and are for the sole special benefit of those parcels within the Assessment District. Therefore, the improvements do not result in any general benefits. 20 55B -90 THE ASSESSMENT DISTRICT Location and Description The City - The City, county seat of the County, is a community of approximately 342,930 residents, located approximately 33 miles southeast of the City of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, and 90 miles north of San Diego. Numerous government offices have taken advantage of the City's central location and position as County seat. City, County, State and federal offices are conveniently located in the multi- government Civic Center in the heart of the City. The City has an industrial base which supports the local economy. The Assessment District - The land in the Assessment District, consisting of 205 assessable parcels, is located in an industrial area of the City. A resolution of intention was adopted by the City Council of the City (the "City Council ") on July 7, 2015 and directed the Assessment Engineer to prepare the Engineer's Report. City staff completed the design work, specifications and cost estimates. These documents were combined into a single construction contract document and advertised for bids. Bids were opened on November 11, 2015. Resolutions establishing the boundaries of the Assessment District and preliminarily approving the Engineer's Report were adopted by the City Council of the City on January 19, 2016. The preliminary Engineer's Report was filed with the Clerk of the City, and a time and place for a public hearing was set. This District was authorized and will be administered under the provisions of the "Municipal Improvement Act of 1913," being Division 12 of the Streets and Highways Code of the State of California (the "1913 Act "), applicable provisions of Article XIIID of the California Constitution, being the "Right to Vote on Taxes Act" ( "Proposition 218 "), and provisions of Government Code Section 53750 et seq., being the "Proposition 218 Omnibus Implementation Act" (the aforementioned provisions are hereinafter referred to collectively as "Assessment Law "). The Engineer's Report was prepared in compliance with Assessment Law. A meeting for owners of property within the Assessment District was held on March 7, 2016. The public hearing to receive comments on the Preliminary Engineer's Report and collect ballots was held on April 5, 2016. The City Clerk gave notice of the public meeting and public hearing and proposed assessments by mailing an official notice to all persons owning real property proposed to be assessed as part of the Assessment District. In accordance with Assessment Law, a ballot was mailed with the official notice, making provision for casting a vote either for or against the proposed assessment. The public hearing included presentation and consideration of the Preliminary Engineer's Report, hearing of public testimony and recordation of affirmative and protest votes. After conclusion of the public hearing, a tabulation of the votes was compiled. A majority of ballots cast by parcel owners (70.29 %), weighted in accordance with Assessment Law, were determined to be affirmative, and the City Council proceeded to confirm the assessments and order the assessments to be levied as proposed in the Engineer's Report. Had the majority of the weighted ballots been cast against the proposed assessments, the proposed assessments for the Assessment District would have been abandoned for a minimum period of one year in accordance with the requirements of Assessment Law. Following confirmation of the assessments, the validity of an assessment levied under the 1913 Act shall not be contested in any action or proceeding unless the action or proceeding is commenced within 30 days after the assessment is levied. In the case of the Assessment District and the assessments levied on April 5, 2016, there has been no proceeding or action taken and the assessments are considered final under the 1913 Act. On November 5, 1996, Proposition 218 (now Articles XIIIC and XIIID of the California Constitution) (the "Initiative ") was approved by the voters of the State. It became effective on July 1, 1997. The City followed the provisions of the Initiative in the authorization and sale of the Bonds. The Initiative contains a provision found in Article XIIIC, Section 3, stating that "the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge" (the "Repeal Provision "). While the 21 55B -91 Repeal Provision appears to be constitutional in concept, it fails when applied to a tax or assessment securing outstanding debt obligations because the Repeal Provision (1) is an unconstitutional impairment of contract under Article 1, Section 10 of the United States Constitution (the California Constitution has a similar prohibition), and (2) is unenforceable as applied to special taxes and assessments securing bonds after the expiration of the statutory limitations regarding protest and challenge contained in the Improvement Bond Act of 1915 (under which the Bonds were issued). IY is the City's reasoned belief that invoking the Repeal Provision in a judicial proceeding to limit or repeal the assessment in this instance would not be successful. See "SPECIAL RISK FACTORS — Right to Vote on Taxes Act" herein. Of the assessable parcels, _ parcels were paid in full during the 30 -day cash payment period provided in the Act, leaving parcels with unpaid assessments securing the Bonds. The cash payments received, totaling $ , together with proceeds of the Bonds, and the City's contribution will be used by the City to finance the Improvements. See "THE IMPROVEMENT PROJECT" herein. Development in the Assessment District [TO COME] County Assessed Valuations The total assessed value of the parcels in the Assessment District with unpaid assessments securing the Bonds is $ Based on the share of the lien representing the $ * principal amount of Bonds, the overall value -to -lien ratio for Fiscal Year 2015 -16 is approximately to lk. Table 2 shows value to lien ratios for the Bonds as a percentage of the share of Bond lien by ratio category. Following the enactment of Proposition 13 (Article XIIIA of the California Constitution), County assessed values shown on the assessment roll reflect 1975 values as increased by a maximum 2% per annum, unless a parcel has changed ownership or experienced new construction, in which case the assessed valuation will more closely approximate current market value. To the extent that the base years of improved parcels in the Assessment District indicate 1975 values, the County assessed values are expected to be substantially less than actual market values. . Preliminary, subject to change. 22 55B -92 Value -to -Lien Ratios Table 2 below summarizes the range of overall value -to -lien ratios for the assessable parcels in the Assessment District based on the secured property roll assessed valuations (AV) of the parcels and may not reflect the actual market valuations of the parcels. Value to Lien 50.00:1 and Over 40.00:1 to 49.99:1 30.00:1 to 39.99:1 20.00:1 to 29.99:1 10.00:1 to 19.99:1 Under 10.00:11'1 TABLE 2 City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Assessed Value -to -Lien Summary Assessment Lien $2,141,552 197,718 202,577 $23,991 92,736 145.820 $3,015,394 �') Assessed Values as of January 1, 2015. (2) Includes 15 parcels for which no ratio could be calculated due to $0 Assessed Value. Source: Orange County Assessor's office as compiled by Psomas. Percent of Assessment Lien 71.02% 6.56 6.72 7.79 3.08 4.84 100.00% A complete listing of the land values and the associated burden for all assessable parcels is set forth in APPENDIX G - "UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS." Property Tax Status As of May 17, 2016, there were 14 parcels in the Assessment District with unpaid property taxes totaling $128,675. The 14 parcels with delinquent property taxes in the Assessment District have a 2015 -16 County assessed land value of $13,681,646, with the value of improvements (buildings) being $7,053,089, resulting in a total value of $20,734,735. The total value is approximately 103.7 times the outstanding unpaid assessment lien of $199,838. See "THE IMPROVEMENT PROJECT - Cost Estimate" and "THE ASSESSMENT DISTRICT - Value -to -Lien Ratio" herein. 23 55B -93 Fiscal Year Number 2015 -16 Total of Parcels AssessedValuelll 131 $284,768,688 16 8,853,196 15 7,061,680 13 6,033,101 9 1,531,952 21 594,199 205 $308,842,816 Assessment Lien $2,141,552 197,718 202,577 $23,991 92,736 145.820 $3,015,394 �') Assessed Values as of January 1, 2015. (2) Includes 15 parcels for which no ratio could be calculated due to $0 Assessed Value. Source: Orange County Assessor's office as compiled by Psomas. Percent of Assessment Lien 71.02% 6.56 6.72 7.79 3.08 4.84 100.00% A complete listing of the land values and the associated burden for all assessable parcels is set forth in APPENDIX G - "UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS." Property Tax Status As of May 17, 2016, there were 14 parcels in the Assessment District with unpaid property taxes totaling $128,675. The 14 parcels with delinquent property taxes in the Assessment District have a 2015 -16 County assessed land value of $13,681,646, with the value of improvements (buildings) being $7,053,089, resulting in a total value of $20,734,735. The total value is approximately 103.7 times the outstanding unpaid assessment lien of $199,838. See "THE IMPROVEMENT PROJECT - Cost Estimate" and "THE ASSESSMENT DISTRICT - Value -to -Lien Ratio" herein. 23 55B -93 Direct and Overlapping Debt The following table shows the direct and overlapping debt affecting the territory within the City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) as of May 1, 2016. TABLE 3 City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Direct and Overlapping Debt 2015 -16 Land and Iim rovement Assessed Valuation: $276,255,752 DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 5/1/16 Metropolitan Water District 0.012% $ 10,946 Rancho Santiago Community College District 0.433 1,161,546 Rancho Santiago Community College District SFID No. 1 0.837 537,505 Santa Ana Unified School District 1.029 2,818,172 City of Santa Ana Assessment District No. 2015 -01 100. (0 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $4,528,169 OVERLAPPING GENERAL FUND DEBT Orange County General Fund Obligations 0.058% $ 44,346 Orange County Pension Obligation Bonds 0.058 285,443 Orange County Board of Education Certificates of Participation 0.058 8,794 Santa Ana Unified School District Certificates of Participation 1.029 730,068 City of Santa Ana General Fund Obligations 1.255 836,562 TOTAL GROSS OVERLAPPING GENERAL FUND DEBT $1,905,213 Less: City of Santa Ana Certificates of Participation supported by parking revenues 6 967 TOTAL NET OVERLAPPING GENERAL FUND DEBT $1,898,246 OVERLAPPING TAX INCREMENT DEBT (Successor Agency): $2,945,014 GROSS COMBINED TOTAL DEBT $9,378,396121 NET COMBINED TOTAL DEBT $9,371,429 Ratios to 2015 -16 Assessed Valuation DirectDebt ........................................................................ ............................... - % Total Direct and Overlapping Tax and Assessment Debt ..... ..........................1.64% Gross Combined Total Debt .................. ............................... ..........................3.39% Net Combined Total Debt ..................... ............................... ..........................3.39% 1) Excludes issue to be sold. (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue bonds and non - bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity. Source: California Municipal Statistics, Inc. 24 55B -94 Table 5 provides information breaking down the overall value -to -lien ratio of parcels by land use within the Assessment District. TABLE 4 City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Assessed Value -to -Lien Ratios by Permitted Land Use Assessed Values as of January 1, 2015. Source: Orange County Assessor's office as compiled by Psomas. 25 55B -95 Total Direct Total and Number Assessed Assessment Overlapping Value Land Use of Parcels Value(n Lien Debt to Lien Commercial 205 $308,842,816 $3,015,394 Assessed Values as of January 1, 2015. Source: Orange County Assessor's office as compiled by Psomas. 25 55B -95 v O 0 O F 55B -96 N O o Qw° tl O �°�wornoo �n7<n ��oo �O�V d rD O M ti M d' N lO N 7 vNi vii �F] OwiO r°r°vl �n d' V d' `D M O N VNI as+ Q� Vj 3 nO�.N.In M l� •^ W M N DA � fn o0 li l Ino<r0 p + O to 69 O y �•+ '" CO M W 00 �° 7 N� b V O vl vl s o 5 a jN z ° o rr--O�� 1n t`t` t`MNOO loo rn P.r OIn W M � rn N�o; ,-. of .-, oo oo, r� d' N N N ❑ 6M4 l� [n -i �O •-- N M N N Q ~ � U d z O o 5 a rn rn d' d' M N ti Ar L p� cC O y �n N � m a Q N N a y FL ti' G. N V ro p•� � arc aax b �� o m o Q��.❑ � rn � o F O .. b� h e cct cR,. F" a •^ c W E a� w> ro v m ❑c m��a��s�:;,5a � OEo bA C v .� L �i 55B -96 N Historical Property Tax Collections and Delinquencies As of May 17, 2016, $128,675 of the property taxes levied in Fiscal Year 2015 -16 on the parcels with unpaid assessments was delinquent. The level of delinquencies relating to property taxes in Fiscal Year 201546 reflects payment on or before May 17, 2016, of delinquent property taxes and may not be indicative of future delinquencies for the Assessment Installments. Table 7 sets forth ad valorem property tax collections and delinquencies for properties in the Assessment District for Fiscal Year 2015 -16. The 14 delinquent parcels listed below represent approximately 6.63% of the total unpaid assessment of $199,838. TABLE 6 City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Property Tax Delinquencies as of May 17, 2016111 % of Total 27 55B -97 Fiscal Assessment Year Fiscal Year Fiscal Year Improvements Total Assessment of APN 2015 -101 2014 -15131 2013 -14(31 Land Value Value Value( 4) Amount $3,015,394 408- 135 -10 T 4,363 $ 778,142 $ 0 $ 778,142 $ 15,213 0.50% 408 - 144 -04 25,457 530,049 1,297,374 2,509,354 3,806,728 18,041 0.60% 408 - 161 -03 10,501 1,700,028 0 1,700,028 26,670 0.88% 408- 161 -04 23,342 3,400,060 312,135 3,712,195 34,341 1.14% 408 - 201 -01 $3,491 246,657 167,390 414,047 8,708 0.29% 408 - 201 -02 8,746 373,102 319,801 $692,903 8,286 0.27% 408 - 201 -03 4,190 $5,241 $5,889 373,101 0 373,101 7,963 0,26% 408 - 202 -02 $10,645 306,910 718,764 1,025,674 11,354 0.38% 414 - 121 -08 11,157 723,058 933,942 1,657,000 14,566 0.48% 414 - 121 -13 6,842 829,018 292,982 1,122,000 12,924 0.43% 414 - 121 -14 9,093 1,021,403 467,180 1,488,583 12,107 0.40% 414- 121 -15 16,407 1,918,808 719,553 2,638,361 17,815 0.59% 932- 892 -25 4,253 351,423 305,994 657,417 5,925 0.20% 932- 892 -26 4,324 362,562 305,99 66&556 5,925 0.20% $128,675 $49,425 $5,889 $13,681,646 $7,053,089 $20,734,735 $199,838 6.63% No delinquencies due from Fiscal Years 2010 -11 through 2012 -13. (2) Does trot include any penalties or interest. Tax amount delinquent as of May 17, 2016. 131 Prior years' delinquencies include penalties, interest, and redemption fees. Total due as of May 17, 2016. (4) Assessed Values from 2015 -16 Secured Property Roll. Source: Orange County Tax Collector as compiled by Psomas. 27 55B -97 SPECIAL RISK FACTORS The purchase of the Bonds involves certain investment risks. The following is a discussion of certain risk factors which should be carefully considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. The City cautions prospective investors that this discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the Assessment District to pay their assessments when due. Any such failure to pay assessments could result in the inability of the City to make full and punctual payments of debt service on the ,Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the Assessment District. General To provide for the payment of debt service on the Bonds, it is necessary that unpaid Assessment Installments be paid in a timely manner. Although the unpaid assessments constitute fixed liens on the parcels within the Assessment District, they do not constitute a personal indebtedness of the respective owners of such parcels. There is no assurance that such owners will be financially able to pay the Assessment Installments or that they will pay such installments even though financially able to do so. Failure by the owners of the parcels within the Assessment District to pay Assessment Installments when due, depletion of the Reserve Fund or the inability to sell the parcels within the Assessment District at foreclosure proceedings for amounts sufficient to cover delinquent Assessment Installments levied against such parcels would result in the inability to make full or punctual payments of debt service to the Bondowners. Assessments Are Not Personal Obligations The current and future owners of land within the Assessment District are not personally liable for the payment of the assessments. Rather, the assessments are a lien secured only by the parcels of land with unpaid Assessment Installments within the Assessment District. Risks of Real Estate Secured Investments Generally The Bondowners will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (i) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the Assessment District, the supply of or demand for competitive properties in such area, and the market value of homes and/or sites in the event of sale or foreclosure, (ii) changes in real estate tax rate and other operating expenses, governmental rules (including, without limitation, zoning laws) and fiscal policies, and (iii) natural disasters (including, without limitation, earthquakes, fires and floods), which may result in uninsured losses. Foreclosure Shortfall Pursuant to the Act, if a parcel which is included in the Assessment District is foreclosed upon and cannot be sold at the foreclosure sale at a price equal to the amount of the judgment for delinquent Assessment Installments with costs and interest thereon, the City may petition a court to authorize the sale of such parcel at a lower price upon the consent of Bondowners owning 75% or more in principal amount of the Bonds and certain other conditions. Any such sale would produce a shortfall in the aggregate Assessment Installments payable with respect to such parcel and, ultimately, could cause a default in the payment of principal on the Bonds. Non - Availability of City Funds If a delinquency occurs in the payment of any Assessment Installment, the Fiscal Agent is required to transfer the amount of such delinquent installment from the Reserve Fund to the Redemption Fund. If the 28 55B -98 Reserve Fund is depleted and if there are additional delinquencies, the City is not required to transfer into the Redemption Fund the amount of the delinquency out of any other moneys of the City. Bankruptcy and Foreclosure The payment of Assessment Installments and the ability of Bondowners to foreclose on a delinquent unpaid Assessment Installment, as discussed in the section entitled "SECURITY FOR THE BONDS - Covenant to Commence Superior Court Foreclosure," may be limited by bankruptcy, insolvency or other laws generally affecting creditors' rights or by the law of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to crowded local court calendars or procedural delays. In addition, potential investors should be aware that judicial foreclosure proceedings are not summary remedies and can be subject to significant procedural and other delays caused by crowded court calendars and other factors beyond the control of the City. Potential investors should assume that, under current conditions, it is estimated that a judicial foreclosure of the lien of assessments may take two or three years from initiation to the lien foreclosure sale. At an assessment lien foreclosure sale, each parcel will be sold for not less than the "minimum bid amount" which is equal to the sum of all delinquent Assessment Installments, penalties and interest thereon, costs of collection (including reasonable attorneys' fees), post - judgment interest and costs of sale. Each parcel is sold at foreclosure for the amounts secured by the assessment lien on such parcel and multiple parcels may not be aggregated in a single "bulk" foreclosure sale. If any parcel fails to obtain a "minimum bid," the City may, but is not obligated to, seek superior court approval to sell such parcel at an amount less than the minimum bid. Such superior court approval requires the consent of the owners of 75% of the aggregate principal amount of the outstanding Bonds. Delays and uncertainties in the assessment lien foreclosure process create significant risks for Bondowners. High rates of assessment payment delinquencies which continue during the pendency of protracted assessment lien foreclosure proceedings, could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of property upon foreclosure. In that event, there could be a delay or default in payment of the principal of, and interest on, the Bonds. The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel's approving legal opinion) will be qualified as to the enforceability of the various legal instruments by bankruptcy, reorganization, insolvency or other similar laws affecting the rights of creditors generally. Although bankruptcy proceedings would not cause the obligation to pay the assessment to become extinguished, bankruptcy of a property owner or of a partner or other equity owner of a property owner, could result in a stay of enforcement of the lien for the assessments, a delay in prosecuting superior court foreclosure proceedings or adversely affect the ability or willingness of a property owner to pay the assessments and could result in the possibility of delinquent assessments not being paid in full. In addition, the amount of any lien on property securing the payment of delinquent assessments could be reduced if the value of the property were determined by the bankruptcy court to have become less than the amount of the lien, and the amount of the delinquent assessments in excess of the reduced lien could then be treated as an unsecured claim by the court. Any such stay of the enforcement of the lien for the assessment, or any such delay or non - payment, would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds and the possibility of delinquent assessments not being paid in full. Moreover, amounts received upon foreclosure sales may not be sufficient to fully discharge delinquent installments. Topography; Seismic Activity; Other Events [DISCUSS] Topography. The Assessment District is located in the portion of the City of Santa Ana. As described in the studies referenced in the following paragraphs, the Assessment District is not in an area specifically determined to be in danger of potential slope instability but is adjacent to areas subject to surficial creep and/or mudflow in the event of heavy rains, particularly following the occurrence of wildfires 29 55B -99 that damage the groundcover. Such damage could reduce the value of the parcels securing the Bonds and, if Assessment Installments are not paid, could result in the default on timely payment of principal and interest when due. [DISCUSS] Seismic Activity. The Assessment District is also located in a seismically active area of Southern California and is subject to unpredictable seismic activity. There is no evidence that a ground surface rupture will occur in the event of an earthquake, but there is significant potential for destructive ground - shaking during the occurrence of a major seismic event. Known active faults that could cause significant ground shaking in the Assessment District include, but are not limited to, the San Andreas Fault and the Newport - Inglewood Fault. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such an event. In the event of a severe earthquake, there may be significant damage to both property and infrastructure in the Assessment District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Assessment Installments when due. In addition, the value of land in the Assessment District could be diminished in the aftermath of such an earthquake, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of Assessment Installments. The information in this section about topographic and seismic considerations affecting the Assessment District is summary in nature and was obtained from The information provided herein is qualified by reference to the full studies which are on file at the office of the Director of Public Works /City Engineer and open for public inspection. Other Events. The value of the assessed property in the Assessment District in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on the assessed parcels and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, wildfires and climatic conditions such as high winds, droughts and the possible reduction in water allocation or availability. The City of Santa Ana, including the District, is in an area that has been designated as a "Very High Fire Hazard Severity Zone" on the State (Cal Fire) maps. [DISCUSS/CONFIRK It is possible that one or more of the conditions referenced above may occur and may result in damage to improvements of varying seriousness, that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the value of the assessed property may well depreciate or disappear. Parity Taxes and Special Assessments The assessments and any penalties thereon will constitute liens against the lots and parcels of land on which they will be annually imposed until they are paid. Such lien is on a parity with all special taxes levied by the City and other agencies and is coequal to and independent of the lien for general property taxes regardless of when they are imposed upon the same property. The assessment has priority over all existing and future private liens and all future fixed special assessment liens imposed on the property. The City, however, has no control over the ability of other entities and districts to issue indebtedness secured by special taxes or assessments payable from all or a portion of the property within the Assessment District. In addition, the landowners within the Assessment District may, without the consent or knowledge of the Assessment District, petition other public agencies to issue public indebtedness secured by special taxes or assessments. Any such special taxes or assessments may have a lien on such property on a parity with the assessment. The City has no control over the amount of indebtedness that could be issued by other public agencies in the future; and the liens on the property within the Assessment District could greatly increase, without any corresponding increase in the value of the property within the Assessment District and thereby severely reduce the ratio that exists at the time the Bonds are issued between the value of the property and the debt secured by all taxes and assessments thereon. The imposition of such additional indebtedness could also reduce the willingness 30 55B -100 and ability of the property owners within the Assessment District to pay the assessments when due. See "THE ASSESSMENT DISTRICT - Direct and Overlapping Debt" herein. Moreover, in the event of a delinquency in the payment of the assessment levy, no assurance can be given that the proceeds of any foreclosure sale would be sufficient to pay the delinquent assessments and any other delinquent assessments, special taxes or taxes. See the caption "Property Values" below. Property Values The value of land within the Assessment District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of Assessment Installments, the Bondowner's only remedy is to request the City to commence foreclosure proceedings in an attempt to obtain funds to pay the delinquent assessment. See the caption `Bankruptcy and Foreclosure" above. Reductions in Assessment District property values could occur due to a downturn in the economy, occurrences such as earthquakes, landslides or flooding or other events, all of which will adversely impact the value of the security underlying the assessments. Absence of Secondary Market for the Bonds There can be no assurance that there will be a secondary market for purchase or sale of Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. From time to time, there may be no secondary market for the Bonds, depending upon prevailing market conditions, the financial condition or market position of firms (if any) who may make the secondary market in the Bonds and the financial condition of the owners of property within the Assessment District. The Bonds should therefore be considered long -tern investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein. Right to Vote on Taxes Act An initiative measure commonly referred to as the "Right to Vote on Taxes Act" (the "Initiative ") was approved by the voters of the State of California at the November 5, 1996, general election. The Initiative added Article XIIIC ( "Article XIIIC") and Article XIIID ( "Article XIIID ") to the California Constitution. According to the "Title and Summary" of the Initiative prepared by the California Attorney General, the hnitiative limits "the authority of local governments to impose taxes and property- related assessments, fees and charges." The provisions of the Initiative have not yet been interpreted by the courts, although a number of lawsuits have been filed requesting the courts to interpret various aspects of the Initiative. Article XIIID requires that, beginning July 1, 1997, the proceedings for the levy of any assessment by the City under the Act (including, if applicable, any increase in such assessment or any supplemental assessment under the Act) must be conducted in conformity with the provisions of Section 4 of Article XIIID. The City has completed its proceedings for the levy of assessments in the Assessment District in accordance with the provisions of Section 4 of Article XIIID and the "Proposition 218 Omnibus Implementation Act" (Statutes of 1997, Chapter 38). Under Section 10400 of the Streets and Highways Code of the State, any challenge (including any constitutional challenge) to the proceedings or the assessment must be brought within 30 days after the date the assessment was levied. Article XIIIC removes limitations on the initiative power in matters of local taxes, assessments, fees and charges. Article XIIIC does not define the term "assessment." In the case of the unpaid assessments which are pledged as security for payment of the Bonds, the Act provides a mandatory, statutory duty of the City and the County Auditor to post installments on account of the unpaid assessments to the property tax roll of the County 31 55B -101 each year while any of the Bonds are outstanding, commencing with property tax year 2016 -17, in amounts equal to the principal of and interest on the Bonds coining due in the succeeding calendar year. Although the matter is not free from doubt, it is likely that a court would hold that Article XIIIC has not conferred on the voters the power to reduce or repeal the unpaid assessments which are pledged as security for payment of the Bonds or to otherwise interfere with performance of the mandatory, statutory duty of the City and the County Auditor with respect to the unpaid assessments which are pledged as security for payment of the Bonds. The interpretation and application of the Initiative will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination. Ballot Initiatives and Legislative Measures The Initiative was adopted pursuant to a measure qualified for the ballot pursuant to California's constitutional initiative process; and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provision for particular activities. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the Legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the City or local districts to increase revenues or to increase appropriations. Impact of Legislative Proposals, Clarifications of the Code and Court Decisions on Tax Exemption Future legislative proposals, if enacted into law, clarification of the Code of court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Beneficial Owners of the Bonds from realizing the full current benefit of the tax status of such interest. For example, Congress has considered in the past, is currently considering and may consider in the future, legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or eliminate the exclusion from gross income for federal income tax purposes of interest on municipal bonds, such as the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation. The introduction or enactment of any such future legislative proposals, clarification of the Code or court decisions may also affect the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation as to which Bond Counsel expresses no opinion. No Acceleration The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the terns of the Bonds or the Bond Resolution. There is no provision in the Act or the Bond Resolution for acceleration of the Assessment Installments in the event of a payment default by an owner of a parcel within the Assessment District or otherwise, or upon any adverse change in the tax status of interest on the Bonds. Pursuant to the Bond Resolution, a Bondowner is given the right for the equal benefit and protection of all Bondowners to pursue certain remedies described in the Fiscal Agent Agreement. Loss of Tax Exemption As discussed under the caption "TAX EXEMPTION" herein, interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Bond Resolution. Should such an event of taxability occur, the Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Bond Resolution. 32 55B -102 ABSENCE OF LITIGATION The City will certify at closing that there is no litigation of any nature now pending to restrain or enjoin the issuance, sale, execution or delivery of the Bonds or in any way contesting or affecting the validity of the Bonds, the proceedings of the City, taken with respect to the issuance of sale thereof, the proceedings of the City taken with respect to the assessment of property within the Assessment District, the existence or powers of the City or the title of any officers of the City to their respective position. TAX MATTERS In the opinion of Best Best & Krieger LLP, San Diego, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes. In the further opinion of Bond Counsel, interest on the Bonds is exempt from State of California personal income tax. Bond Counsel notes that interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. Bond Counsel further notes, however, that, with respect to corporations, such interest may be included as an adjustment in the calculation of alternative minimum taxable income, which may affect the alternative minimum tax liability of corporations. Bond Counsel's opinion as to the exclusion from gross income for federal income tax purposes of interest on the Bonds is based upon certain representations of fact and certifications made by the City, the Underwriter and others and is subject to the condition that the City complies with all requirements of the Code and the regulations adopted pursuant to the Code (the "Treasury Regulations ") that must be satisfied subsequent to the issuance of the Bonds to assure that interest on the Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code and the Treasury Regulations might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted to comply with all such requirements. To the extent the issue price of any maturity of the Bonds is less than the amount to be paid at maturity of such Bonds (excluding amounts stated to be interest and payable at least annually over the term of such Bonds), the difference constitutes "original issue discount," the accrual of which, to the extent properly allocable to each Owner thereof, is treated as interest on the Bonds which is excluded from gross income for federal income tax purposes and State of California personal income taxes. For this purpose, the issue price of a particular maturity of the Bonds is the first price at which a substantial amount of such maturity of the Bonds is sold to the public (excluding bond houses, brokers, or similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The original issue discount with respect to any maturity of the Bonds accrues daily over the term to maturity of such Bonds on the basis of a constant interest rate compounded semiannually (with straight -line interpolations between compounding dates). The accruing original issue discount is added to the adjusted basis of such Bonds to determine taxable gain or loss upon disposition (including sale, redemption, or payment on maturity) of such Bonds. Owners of the Bonds should consult their own tax advisors with respect to the tax consequences of ownership of Bonds with original issue discount, including the treatment of purchasers who do not purchase such Bonds in the original offering to the public at the first price at which a substantial amount of such Bonds is sold to the public. Bonds purchased, whether at original issuance or otherwise, for an amount greater than their principal amount payable at maturity (or, in some cases, at their earlier call date) ( "Premium Bonds ") will be treated as having amortizable bond premium. No deduction is allowable for the amortizable bond premium in the case of bonds, like the Premium Bonds, the interest on which is excluded from gross income for federal income tax purposes. However, a purchaser's basis in a Premium Bond, and under Treasury Regulations, the amount of tax exempt interest received will be reduced by the amount of amortizable bond premium properly allocable to such purchaser. Owners of Premium Bonds should consult their own tax advisors with respect to the proper treatment of amortizable bond premium in their particular circumstances. 33 55B -103 Should the interest on the Bonds become includable in gross income for federal income tax purposes, the Bonds are not subject to early redemption as a result of such occurrence and will remain outstanding until maturity or until otherwise redeemed in accordance with the Fiscal Agent Agreement. Current and future legislative proposals, if enacted into law, clarification of the Code or court decisions may cause interest on the Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent Bondowners from realizing the full current benefit of the tax status of such interest. For example, proposals are announced from time to time which, generally would limit the exclusion from gross income of interest on obligations like the Bonds to some extent for taxpayers who are individuals and whose income is subject to higher marginal income tax rates. Other proposals have been made that could significantly reduce the benefit of, or otherwise affect, the exclusion from gross income of interest on obligations like the Bonds. The introduction or enactment of any such legislative proposals, clarification of the Code or court decisions may also affect, perhaps significantly, the market price for, or marketability of, the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, and regarding the impact of future legislation, regulations or litigation, as to which Bond Counsel expresses no opinion. Bond Counsel's opinion may be affected by action taken (or not taken) or events occurring (or not occurring) after the date of issuance of the Bonds. Bond Counsel has not undertaken to determine, or to inform any person, whether any such action or events are taken or do occur, or whether such actions or events may adversely affect the value or tax treatment of a Bond, and Bond Counsel expresses no opinion with respect thereto. The IRS has initiated an expanded program for auditing tax- exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the IRS. It is also possible that the market value of the Bonds might be affected as a result of such an audit (or by an audit of similar bonds). Although Bond Counsel has rendered an opinion that interest on the Bonds is excluded from gross income for federal income tax purposes provided the City continue to comply with certain requirements of the Code, the accrual or receipt of interest on the Bonds may otherwise affect the tax liability of the recipient. The extent of these other tax consequences will depend upon the recipient's particular tax status and other items of income or deductions. Bond Counsel expresses no opinion regarding any such consequences. Accordingly, all potential purchasers should consult their tax advisors before purchasing any of the Bonds. A copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix C. CONTINUING DISCLOSURE The City has covenanted for the benefit of Owners and Beneficial Owners of the Bonds to provide certain financial information and operating data relating to the Assessment District by not later than nine months following the end of the City's Fiscal Year (which currently would be April 1) (the "Annual Report") and to provide notices of the occurrence of certain enumerated events. The Annual Report for Fiscal Year 201546 will be satisfied by this Official Statement. The Annual Report will be filed by Urban Futures, Inc., as dissemination agent (the "Dissemination Agent ") on behalf of the City with the Municipal Securities Rulemaking Board's Electronic Municipal Market Access system (the "EMMA System "), for purposes of Rule 15c2- 12(b)(5) (the "Rule ") adopted by the U.S. Securities and Exchange Commission ( "SEC "). The notices of enumerated events will be filed by the Dissemination Agent on behalf of the City with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is set forth in APPENDIX E — "FORM OF CONTINUING DISCLOSURE AGREEMENT" herein. These covenants have been made in order to assist the Underwriter in complying with the Rule. [INSERT INFORMATION REGARDING CONTINUING DISCLOSURE COMPLIANCE] 34 55B -104 NO RATING The City has not made, and does not contemplate malting, application to any rating agency for the assignment of a rating to the Bonds. UNDERWRITING The Bonds are being purchased through negotiation by Brandis Tallman LLC (the "Underwriter "). The Underwriter has agreed to purchase the Bonds for $ which represents the par amount of the Bonds, plus /less net original issue premium /discount of $ , less an Underwriter's discount of $ . The purchase contract for the Bonds provides that the Underwriter will purchase all of the Bonds, if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in such purchase contract, the approval of certain legal matters by counsel and certain other conditions. The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside cover page hereof. The offering prices may be changed from time to time by the Underwriter. FINANCIAL ADVISOR The City has retained Fieldman, Rolapp & Associates, Irvine, California, as municipal advisor (the "Municipal Advisor ") in connection with the delivery of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume any responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement, The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities. Compensation of the Municipal Advisor is contingent upon the issuance and delivery of the Bonds. MISCELLANEOUS Insofar as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the Owners of the Bonds. The execution and delivery of this Official Statement have been duly authorized by the City. CITY OF SANTA ANA 35 55B -105 APPENDIX A ASSESSMENT DIAGRAM A -1 55B -106 APPENDIX B GENERAL ECONOMIC DATA CONCERNING THE CITY OF SANTA ANA AND THE COUNTY OF ORANGE The following material is descriptive of the City of Santa Ana (the "City ") and the surrounding areas of Orange County (the "County "). It has been prepared by or excerpted from sources as noted herein, and has not been independently verified by Bond Counsel, Disclosure Counsel or the Underwriter. The Bonds are payable solely from the sources described herein (see "SECURITY FOR THE BONDS "). General The City, county seat of the County and one of the oldest communities in Southern California, is located 33 miles southeast of Los Angeles, 20 miles east of the Ports of Los Angeles and Long Beach, ten miles inland from the Pacific Ocean and 90 miles north of San Diego. The City encompasses an area of approximately 27 square miles and lies on generally level land at an elevation approximately 135 feet above sea level. The City was established by William H. Spurgeon in 1869. The City was incorporated on June 1, 1886 and reorganized under a City Charter in 1888. In 1952, the voters approved a charter which established a council- manager form of government. The charter was modified by an election in 1986 to provide for the mayor to be elected by the voters. A 1988 redistricting resulted in a six - member City Council, in addition to the Mayor. The City Council is elected biannually at large for four -year terms and the Mayor is elected directly for two -year terns. The City has served as the county seat since the formation of the County in 1889. Numerous government offices have taken advantage of the City's central location and position as county seat. City, County, State of California (the "State ") and federal offices are conveniently located in the multi- government civic center in the heart of the City. The City has an industrial base which supports the local economy. Orange County The County is located in southern California, north of San Diego County and south of Los Angeles County. The County occupies a land area of approximately 798 square miles, with a coastline of approximately 42 miles, and serves a population of over 3 million. The County represents the third most populous county in the State, and ranks sixth in the United States. B -1 55B -107 Population The following table summarizes population estimates for the State, County, and City for the last five years. POPULATION ESTIMATES The State of California, County of Orange and the City of Santa Ana 2012 - 2016(1 January 1 of each year. Source: California State Department of Finance, Demographic Research Unit. Income The following tables show the personal income and per capita income for the County, State, and United States for calendar years 2010 through 2014. PERSONAL INCOME(1 County of Orange, State of California, and United States California County of Year State Total Orange Santa Ana 2012 37,881,357 3,069,454 331,198 2013 38,239,207 3,103,654 336,668 2014 38,567,459 3,127,403 338,572 2015 38,907,642 3,151,910 341,017 2016 39,255,883 3,183,011 342,930 January 1 of each year. Source: California State Department of Finance, Demographic Research Unit. Income The following tables show the personal income and per capita income for the County, State, and United States for calendar years 2010 through 2014. PERSONAL INCOME(1 County of Orange, State of California, and United States All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2010 -2014 reflect Census Bureau midyear state population estimates available as of December 2014. Estimates for 2010- 2014 reflect County population estimates available as of March 2015. (2) Last year such data is available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. Im 55B -108 County of Year Orange California United States 2010 $144,888,672 $1,583,446,730 $12,459,613,000 2011 154,486,157 1,691,002,503 12,233,436,000 2012 164,970,595 1,812,314,643 13,904,485,000 2013 165,857,885 1,849,505,496 14,064,468,000 2014(') 173,305,650 1,939,527,656 14,683,147,000 All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2010 -2014 reflect Census Bureau midyear state population estimates available as of December 2014. Estimates for 2010- 2014 reflect County population estimates available as of March 2015. (2) Last year such data is available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. Im 55B -108 PER CAPITA PERSONAL INCOME(" County of Orange, State of California, and United States Per capita personal income is the total personal income divided by the total midyear population estimates of the Census Bureau. All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2010 -2014 reflect Census Bureau midyear state population estimates available as of December 2014. Estimates for 2010 -2014 reflect County population estimates available as of March 2015. (z) Last year such data is available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. B -3 55B -109 County of Year Orange California United States 2010 $48,007 $42,411 $40,277 2011 50,547 44,852 42,453 2012 53,390 47,614 44,266 2013 53,128 48,125 44,438 201412) 55,096 49,985 46,049 Per capita personal income is the total personal income divided by the total midyear population estimates of the Census Bureau. All dollar estimates are in current dollars (not adjusted for inflation). Estimates for 2010 -2014 reflect Census Bureau midyear state population estimates available as of December 2014. Estimates for 2010 -2014 reflect County population estimates available as of March 2015. (z) Last year such data is available. Source: U.S. Department of Commerce, Bureau of Economic Analysis. B -3 55B -109 Employment The following table summarizes the labor force, employment and unemployment figures for calendar years 2011 through 2015 for the City, County, State of California and the United States. CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT City of Santa Ana, County of Orange, State of California and the United States 2011- 2015t'1 Data is based on annual averages, unless otherwise specified, and is not seasonally adjusted. (2) Includes persons involved in labor - management trade disputes. t31 Includes all persons without jobs who are actively seeking work. (4) The unemployment rate is computed from an-rounded data; therefore, it may differ from rates computed from rounded figures in this table. tsl Population in thousands. Source: U.S. Department of Labor - Bureau of Labor Statistics, California Employment Development Department. March 2010 Benclunark. ICS' 55B -110 Unemployment Area Labor Force Emulovmentt �1 Unemoloymentt'1 Rate(a 2011 City of Santa Ana 157,500 141,200 16,300 10.3% Orange County 1,546,400 1,406,400 140,000 9.1 State of California 18,419,500 16,260100 2,159,400 11.7 United States(5) 153,618 139,869 13,747 8.9 2012 City of Santa Ana 158,700 144,400 14,300 9.00 Orange County 1,564,500 1,441,400 123,100 7.9 State of California 18,554,800 16,630,100 1,924,700 10.4 United States(5) 154,975 142,469 12,506 8.1 2013 City of Santa Ana 158,800 146,800 12,000 7.5 Orange County 1,569,200 1,465,900 103,300 6.6 State of California 18,671,600 17,002,900 1,668,700 8.9 United States(5) 155,389 143,929 11,460 7.4 2014 City of Santa Ana 158,200 148,200 9,9000 6.3 Orange County 1,578,200 1,491,800 86,400 5.5 State of California 18,811,400 17,397,100 1,414,300 7.5 United Statestsl 155,922 146,305 9,617 6.2 2015 City of Santa Ana 159,800 151,600 8,200 5.2 Orange County 1,597,100 1,525,600 71,500 4.5 State of California 18,981,800 17,798,600 1,183,200 6.2 United States(5) 157,130 148,834 8,296 5.3 Data is based on annual averages, unless otherwise specified, and is not seasonally adjusted. (2) Includes persons involved in labor - management trade disputes. t31 Includes all persons without jobs who are actively seeking work. (4) The unemployment rate is computed from an-rounded data; therefore, it may differ from rates computed from rounded figures in this table. tsl Population in thousands. Source: U.S. Department of Labor - Bureau of Labor Statistics, California Employment Development Department. March 2010 Benclunark. ICS' 55B -110 Industry The following table summarizes employment figures by industry for the County. INDUSTRY EMPLOYMENT & LABOR FORCE ANNUAL AVERAGES County of Orange Fiscal Years 2010 -2011 through 2014 -15 Note: Items may not add to total due to independent rounding. Source: California Employment Development Department, Labor Market Information Division. March 2011 Benchmark B -5 55B -111 2011 2012 2013 2014 2015 Total Farm 3,200 2,800 2,900 2,800 2,500 Mining and Logging 600 600 600 700 700 Construction 69,200 71,300 76,800 82,000 90,400 Manufacturing 154,300 158,300 158,000 157,400 156,900 Retail Trade 142,600 144,000 145,500 148,500 151,200 Transportation, Warehousing and Utilities 27,500 28,000 27,500 26,500 26,900 Information 23,800 24,300 25,000 24,500 25,500 Financial Activities 104,800 108,300 113,100 113,600 116,800 Professional and Business Services 247,700 260,600 267,300 276,600 285,400 Education and Health Services 172,000 177,000 186,000 190,800 198,800 Leisure and Hospitality 174,000 180,600 187,800 194,500 204,000 Other Services 43,200 44,600 45,600 47,300 48,800 Government 149,300 147,900 148,700 152,200 156,200 Note: Items may not add to total due to independent rounding. Source: California Employment Development Department, Labor Market Information Division. March 2011 Benchmark B -5 55B -111 Principal Employers The following tables present the principal employers in the City and County for Fiscal Year 2014 -15. PRINCIPAL EMPLOYERS County of Orange Fiscal Year 2014 -15 Source: Comprehensive Annual Financial Report of the City of Santa Ana for Fiscal Year 2014 -15 C 55B -112 Number of Percentage of Total Name of Business Employees Rank County Employment Walt Disney Co. 27,000 1 1.69% University of California, Irvine 22,385 2 1.40 County of Orange 18,135 3 1.13 St. Joseph Health System 12,227 4 0.76 ICaiserPermanente 7,000 5 0.44 Boeing Co. 6,890 6 0.43 Walmatt 6,000 7 0.38 Memorial Car Health System 5,650 8 0.35 Bank of America 5,500 9 0.34 Target Corporation 5,400 10 0.34 Source: Comprehensive Annual Financial Report of the County of Orange for Fiscal Year 2014 45. PRINCIPAL EMPLOYERS City of Santa Ana Fiscal Year 2014 -15 Number of Percentage of Total Name of Business Employees Rank County Employment County of Orange 16,464 1 10.3% Santa Ana Unified School District 4,500 2 2.8 Santa Ana College 1,928 3 1.2 First American Title Co. 1,928 4 0.9 City of Santa Ana 1,500 5 0.9 KPC Healthcare 1,130 6 0.7 Superior Court of CA — County of Orange 742 7 0.5 Orange County Register 601 8 0.4 Abbott Medical Optics Inc. 601 9 0.4 New Century Mortgage 600 10 0.4 Source: Comprehensive Annual Financial Report of the City of Santa Ana for Fiscal Year 2014 -15 C 55B -112 Taxable Sales The history of taxable transactions in the City from calendar year 2009 through third quarter 2014 is shown in the following table. TAXABLE SALES City of Santa Ana 2009 -2014 Taxable transactions in thousands of dollars. (2) Most recent data available, through third quarter 2014. Source: "Taxable Sales in California (Sales & Use Tax)," California Board of Equalization. Assessed Value The history of assessed values of taxable property within the City from fiscal years 2005 -06 through 2014 -15 is shown in the following table. ASSESSED VALUE (UNAUDITED) OF TAXABLE PROPERTY CITY OF SANTA ANA Fiscal Years 2005 -2006 through 2014 -15 (in thousands of dollars) Retail Retail and Food Total Outlets Year Permits Taxable Transactions( �) Total Permits Taxable Transactionslrl 2009 3,715 2,139,858 6,717 $3,116,988 2010 3,863 2,235,903 6,838 3,178,264 2011 3,926 2,363,736 6,845 3,326,962 2012 4,003 2,518,026 6,848 3,492,395 2013 3,988 2,608,681 6,745 3,655,025 2014(`) 4,146 681,445 6,918 9,58,190 Taxable transactions in thousands of dollars. (2) Most recent data available, through third quarter 2014. Source: "Taxable Sales in California (Sales & Use Tax)," California Board of Equalization. Assessed Value The history of assessed values of taxable property within the City from fiscal years 2005 -06 through 2014 -15 is shown in the following table. ASSESSED VALUE (UNAUDITED) OF TAXABLE PROPERTY CITY OF SANTA ANA Fiscal Years 2005 -2006 through 2014 -15 (in thousands of dollars) The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of not more than two - percent annually, plus any local over - rides. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation described above. (a) California cities do not set their own direct tax rate. The State Constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. Source: Comprehensive Annual Financial Statement of the City of Santa Ana for Fiscal Year 2014 -2015. B -7 55B -113 Total Fiscal Total Real Unsecured Total Direct Year Secured Property Property Assessedo) Tax Rate(2) 2006 $16,039,774 $1,415,202 $17,268,935 1.0% 2007 17,927,887 1,631,584 19,378, 852 1.0 2008 19,553,630 1,630,486 21,006,625 1.0 2009 20,220,321 1,711,122 21,756,428 1.0 2010 18,811,560 1,700,267 20,337,726 1.0 2011 18,313,282 1,575,006 19,714,394 1.0 2012 18,509,578 1,591,287 19,928,684 1.0 2013 18,829,929 1,432,409 20,093,576 1.0 2014 19,579,938 1,539,745 20,955,423 1.0 2015 20,432,992 1,642,391 21,914,119 1.0 The State Constitution requires property to be assessed at one hundred percent of the most recent purchase price, plus an increment of not more than two - percent annually, plus any local over - rides. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitation described above. (a) California cities do not set their own direct tax rate. The State Constitution establishes the rate at 1% and allocates a portion of that amount, by an annual calculation, to all the taxing entities within a tax rate area. Source: Comprehensive Annual Financial Statement of the City of Santa Ana for Fiscal Year 2014 -2015. B -7 55B -113 APPENDIX C FORM OF BOND COUNSEL OPINION [TO COME] C -1 55B -114 APPENDIX D SUMMARY OF CERTAIN PROVISIONS OF THE FISCAL AGENT AGREEMENT D -1 55B -115 APPENDIX E FORM OF CONTINUING DISCLOSURE AGREEMENT E -1 55B -116 APPENDIX F THE BOOK -ENTRY SYSTEM The following description under the heading "Procedures and Record Keeping" with respect to beneficial ownership interests in the Bonds, payment of principal of and interest on the Bonds to Direct Participants, Indirect Participants or Beneficial Owners (as such terms are defined below) of the Bonds, confirmation and transfer of beneficial ownership interests in the Bonds and other Bond - related transactions by and between DTC, Direct Participants, Indirect Participants and Beneficial Owners of the Bonds is based solely on information furnished by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be. Procedures and Record Keeping The Depository Trust Company ( "DTC "), New York, NY, will act as securities depository for the Bonds. The Bonds will be issued as fully- registered securities registered in the name of Cede & Co. (DTC's partnership nominee) or such other name as may be requested by an authorized representative of DTC. One (ally- registered Bond will be issued for each maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC. DTC, the world's largest securities depository, is a limited- purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code, and a "clearing agency" registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non -U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC's participants ( "Direct Participants ") deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants' accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( "DTCC "). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non -U.S. securities brokers and dealers, banks, trust companies and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( "Indirect Participants "). DTC has a Standard & Poor's rating of AA +. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtce.com and www.dtc.org. Purchases of Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the Bonds on DTC's records. The ownership interest of each actual purchaser of each Bond (the "Beneficial Owner ") is in turn to be recorded on the Direct and Indirect Participants' records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive F -1 55B -117 certificates representing their ownership interests in the Bonds, except in the event that use of the book -entry system for the Bonds is discontinued. To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC's partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC's records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Bonds, such as redemptions, tenders, defaults, and proposed amendments to the Bonds documents. For example, Beneficial Owners of Bonds may wish to ascertain that the nominee holding the Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Fiscal Agent and request that copies of notices be provided directly to them. Redemption notices shall be sent to DTC. If less than all of the Bonds are being redeemed, DTC's practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed. Neither DTC nor Cede & Co. (nor such other DTC nominee) will consent or vote with respect to the Bonds unless authorized by a Direct Participant in accordance with DTC's MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.'s consenting or voting rights to those Direct Participants to whose accounts the Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy). Principal, redemption price and interest payments on the Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC's practice is to credit Direct Participants' accounts upon DTC's receipt of fonds and corresponding detail information from the City or the Fiscal Agent, on a payable date in accordance with their respective holdings shown on DTC's records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in "street name," and will be the responsibility of such Participant and not of DTC, the Fiscal Agent or the City, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Fiscal Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants. DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the City and the Fiscal Agent. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered. The City may decide to discontinue use of the system of book -entry transfers through DTC (or a successor securities depository). In that event, Bond certificates will be printed and delivered to DTC. The information in this section concerning DTC and DTC's book- entry -only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the accuracy thereof. F -2 55B -118 Discontinuance of DTC Services In the event that (a) DTC determines not to continue to act as securities depository for the Bonds, or (b) the City determines that DTC shall no longer act and delivers a written certificate to the Fiscal Agent to that effect, then the City will discontinue the Book -Entry System with DTC for the Bonds. If the City determines to replace DTC with another qualified securities depository, the City will prepare or direct the preparation of a new single separate, fully- registered Bond for each maturity of the Bonds registered in the name of such successor or substitute securities depository as are not inconsistent with the terms of the Bond Resolution. If the City fails to identify another qualified securities depository to replace the incumbent securities depository for the Bonds, then the Bonds shall no longer be restricted to being registered in the Bond registration books in the name of the incumbent securities depository or its nominee, but shall be registered in whatever name or names the incumbent securities depository or its nominee transferring or exchanging the Bonds shall designate. In the event that the Book -Entry System is discontinued, the following provisions would also apply: (i) the Bonds will be made available in physical form, (ii) principal of, and redemption premiums if any, on the Bonds will be payable upon surrender thereof at the trust office of the Fiscal Agent identified in the Bond Resolution, and (iii) the Bonds will be transferable and exchangeable as provided in the Bond Resolution. The City and the Fiscal Agent do not have any responsibility or obligation to DTC Participants, to the persons for whom they act as nominees, to Beneficial Owners, or to any other person who is not shown on the registration books as being an owner of the Bonds, with respect to (i) the accuracy of any records maintained by DTC or any DTC Participants; (ii) the payment by DTC or any DTC Participant of any amount in respect of the principal of, redemption price of or interest on the Bonds; (iii) the delivery of any notice which is permitted or required to be given to registered owners under the Bond Resolution; (iv) the selection by DTC or any DTC Participant of any person to receive payment in the event of a partial redemption of the Bonds; (v) any consent given or other action taken by DTC as registered owner; or (vi) any other matter arising with respect to the Bonds or the Bond Resolution. The City and the Fiscal Agent cannot and do not give any assurances that DTC, DTC Participants or others will distribute payments ofprincipal of or interest on the Bonds paid to DTC or its nominee, as the registered owner, or any notices to the Beneficial Owners or that they will do so on a timely basis or will serve and act in a manner described in this Official Statement The City and the Fiscal Agent are not responsible or liable for the failure ofDTC or any DTC Participant to make any payment or give any notice to a Beneficial Owner in respect to the Bonds or any error or delay relating thereto. F -3 55B -119 APPENDIX G UNPAID FINAL ASSESSMENT ROLL AND VALUE -TO -LIEN RATIOS G -1 55B -120 CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015-01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS BOND PURCHASE AGREEMENT ,2016 City Council City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 Members of the City Council: Brandis Tallman LLC (the "Underwriter ") acting not as fiduciary or agent for you, but on behalf of itself, offers to enter into this Bond Purchase Agreement with the City of Santa Ana, California (the "City ") which, upon acceptance, will be binding upon the City and the Underwriter. This offer is made subject to its acceptance by the City on the date hereof, and it is subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance by the City. Capitalized terms that are used in this offer and not otherwise defined herein shall have the respective meanings ascribed to them in the Fiscal Agent Agreement (as hereinafter defined), The City acknowledges and agrees that: (i) the purchase and sale of the Bonds (as such term is defined below) pursuant to this Bond Purchase Agreement is an arm's - length commercial transaction between the City and the Underwriter; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not and has not been acting as a "municipal advisor" (as such term is defined in Section 15B of the Securities Exchange Act of 1934, as amended) to the City; (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); (iv) the Underwriter has financial interests that may differ from and be adverse to those of the City; and (v) the City has consulted its own legal, fnraneial and other advisors to the extent that it has deemed appropriate on this transaction. EXHIBIT 5 55B -121 Purchase, Sale and Delivery of the Bonds. (a) Subject to the terms and conditions, and in reliance upon the representations, warranties and agreements set forth herein, the Underwriter agrees to purchase from the City, and the City agrees to sell to the Underwriter, all (but not less than all) of the City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds (the `Bonds ") in the aggregate principal amount specified in Exhibit A hereto. The Bonds shall be. dated the Closing Date (as hereinafter defined), bear interest from said date (payable semiannually on March 2 and September 2 in each year, commencing March 2, 2017) at the rates per annum, and mature on the dates and in the amounts set forth in Exhibit A hereto. The purchase price for the Bonds shall be the amount specified, as such in Exhibit A. (b) The Bonds are issued under: (i) the Improvement Bond Act of 1915, being Division 10 of the California Streets and Highways Code (the "1915 Act'); (ii) the Fiscal Agent Agreement, dated as of July 1, 2016 (the "Fiscal Agent Agreement "), by and between the City and U,S. Bank National Association, as fiscal agent (the "Fiscal Agent'); and (iii) a resolution (the "Resolution ") approving the issuance of the Bonds adopted by the City Council (the "City Council ") of the City on June 21, 2016. (c) All of the proceedings of the City undertaken to form the City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) (the "Assessment District') and to levy the assessment (the "Assessments ") were undertaken under the Municipal Improvement Art of 1913 (Division 12 of the California Streets and Highways Code) (the "1913 Act"). (d) Subsequent to its receipt of a certificate from the City deeming the Preliminary Official Statement for the Bonds, dated , 2016 (which Preliminary Official Statement, together with the cover page and all appendices thereto, is herein collectively referred to as the "Preliminary Official Statement" and which, as amended with the prior approval of the Underwriter and executed by the City, will be referred to herein as the "Official Statement'), final for purposes of Rule 15c2 -12 of the Securities and Exchange Commission ( "Rule 15c2 -12 "), the Underwriter distributed copies of the Preliminary Official Statement to potential purchasers of Bonds. The City hereby ratifies the use by the Underwriter of the Preliminary Official Statement and authorizes the Underwriter to use and distribute the Official Statement, the Fiscal Agent Agreement, the Continuing Disclosure Agreement, dated as of 1, 2016, by and between the City and Urban Futures, Inc. (the "Continuing Disclosure Agreement'), this Bond Purchase Agreement, any other documents or contracts to which the City is a party, and all information contained therein, and all other documents, certificates and statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Bond Purchase Agreement, in connection with the offer and sale of the Bonds by the Underwriter. (e) At 8:00 A.M., Pacific Daylight Time, on 2016, or at such earlier time or date as shall be agreed upon by the Underwriter and the City (such time and date being herein referred to as the "Closing Date "), the City will deliver (i) to The Depository Trust Company in New York, New York, the Bonds in definitive form (all Bonds being in book -entry form 2 55B -122 registered in the name of Cede & Co. and having the CUSIP numbers assigned to them printed thereon), duly executed by the officers of the City as provided in the Fiscal Agent Agreement and with the facsimile seal of the City printed thereon, and (ii) to the Underwriter, at the offices of Best, Best & Krieger LLP, San Diego, California, the other documents herein mentioned; and the Under writer shall accept such delivery and pay the purchase price of the Bonds in same day funds (such delivery and payment being herein referred to as the "Closing "). The Bonds, as so registered, shall be made available to the Underwriter for inspection not later than the second to last business day before the Closing Date. The City acknowledges and agrees that (i) the reoffering and purchase of the Bonds pursuant to this Bond Purchase Agreement is an arm's - length commercial transaction between the City and the Underwriter, (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as a principal and is not acting as the agent or fiduciary of the City, (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters), and (iv) the City has consulted its own legal, financial and other advisors to the extent it has deemed appropriate. 2. Representations, Warranties and Agreements of the Cites The City represents, warrants and covenants to and agrees with the Underwriter that: (a) Due Organization and Existence. The City is a municipal corporation duly organized and validly existing under the laws of the State of California and has, and at the Closing Date will have, fail legal right, power and authority (i) to execute, deliver and perform its obligations under this Bond Purchase Agreement, the Fiscal Agent Agreement, and the Continuing Disclosure Agreement (collectively, the "City Documents ") and to carry out all transactions contemplated by each of the City Documents, (ii) to issue, sell and deliver the Bonds to the Underwriter pursuant to the Resolution and Fiscal Agent Agreement as provided herein, and (iii) to carry out, give effect to and consummate the transactions contemplated by the Official Statement and the City Documents; (b) Compliance with Laws and Agreements. The City has complied, and at the Closing Date will be in compliance, in all material respects, with the City Documents; and an immaterial compliance therewith by the City, if any, will not impair the ability of the City to carry out, give effect to or consurmnate the transactions contemplated by the foregoing. From and after the date of issuance of the Bonds, the City will continue to comply with the covenants of the City contained in the City Documents; (c) Lase Adoption and Enforceability. The City has, or prior to the Closing Date, will have, duly and validly: (i) adopted the Resolution and approved and authorized the execution and delivery of the Bonds, the City Documents, and any other applicable agreements; and (ii) authorized and approved the performance by the City of its obligations contained in, and the taking of any and all action as may be necessary to carry out, give effect to and consummate the transactions contemplated by, the Bonds and the City Documents; and at the Closing Date (assuming due authorization, execution and delivery by the respective other parties thereto, 55B -123 where necessary) the Bonds, the City Documents and any other applicable agreements will constitute the valid, legal and binding obligations of the City, enforceable in accordance with their respective terms, subject to bankruptcy, insolvency and other laws affecting the enforcement of creditors' rights in general and to the application of equitable principles if equitable remedies are sought. (d) No Defaults. The City is not in breach of or default under any applicable law or administrative rule or regulation of the United States or the State of California, or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound, a consequence of which could be to materially and adversely affect the performance by the City of its obligations under the City Documents or the Bonds; and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the United States or the State of California, or of any department, division, agency or instrumentality of either of them, or under any applicable court or administrative decree or order, or a material breach of or default under any loan agreement, note, resolution, fiscal agent agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound,; (e) Approvals and Consents. Except for compliance with the blue sky or other states securities law filings, as to which the City makes no representations, all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which would constitute a condition precedent to, or the absence of which would materially adversely affect, the performance by the City of its obligations hereunder, or under the City Documents or the Bonds, have been obtained and are in firll force and effect; (f) Form and Validity of the Bonds and City Documents. The Bonds, the City Documents, and other applicable agreements conform as to form and tenor to the descriptions thereof contained in the Bonds, when delivered to and paid for by the Underwriter on the Closing Date as provided herein, will be validly issued and outstanding and entitled to all the benefits and security of the Fiscal Agent Agreement. (g) Validity of Assessments. The Assessments have been duly and lawfally levied under the 1913 Act, and the Assessments constitute valid and legally binding liens on the properties on which they have been levied. (h) Underwriting Period. Until the date which is twenty -five (25) days after the "end of the underwriting period" (as hereinafter defined), if any event shall occur of which the City becomes aware, as a result of which it may be necessary to supplement the Official Statement in order to make the statements in the Official Statement, in light of the circumstances existing at such time, not misleading, the City shall forthwith notify the Underwriter of such event and shall cooperate fully in famishing any information available to it for any supplement to the Official Statement necessary so that the statements therein, as so supplemented, will not be misleading in light of the circumstances existing at such time; and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement (as used herein, the term "end of 55B -124 the underwriting period" means the later of such time as (i) the City delivers the Bonds to the Underwriter, or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Bonds for sale to the public); (i) Pledge of Assessments. The Fiscal Agent Agreement creates a valid pledge of the Assessments and the moneys in the Redemption Fund, and the Reserve Fund established pursuant to the Fiscal Agent Agreement, including the investments thereof, subject in all cases to the provisions of the Fiscal Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein; and said pledge constitutes a first lien on and security interest in all of the foregoing; 0) Absence of Litigation. Except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or, to the knowledge of the City, threatened against the City (i) which would materially adversely affect the ability of the City to perform its obligations under the City Documents or the Bonds, or (ii) seeking to restrain or to enjoin: (A) the issuance, sale or delivery of the Bonds, (B) the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or (C) the collection or application of the Assessments, or the pledge thereof, or in any way contesting or affecting the validity or enforceability of the Bonds, the City Documents, or any action contemplated by any of said documents, or (iii) in any way contesting the completeness or accuracy of the preliminary Official Statement or the Official Statement or the powers or authority of the City with respect to the Bonds, the City Documents, or any action of the City contemplated by any of said documents; nor is there any action pending or, to the knowledge of the City, threatened against the City which alleges that interest on the Bonds is not excludable from gross income for federal income tax purposes or is not exempt from California personal income taxation; (k) City Cooperation, The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order for the Underwriter to qualify the Bonds for offer and sale under the `Blue Sky" or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate; provided, however, the City shall not be required to register as a dealer or a broker of securities or to consent to service of process in connection with any blue sky filing; (1) City Certificates, Any certificate signed by any authorized official of the City authorized to do so shall be deemed a representation and warranty to the Underwriter as to the statements made therein; (m) Application of Bond Proceeds, The City will apply the proceeds of the Bonds in accordance with the Fiscal Agent Agreement and as described in the Official Statement; (n) Official Statement. The Official Statement (except the information relating to The Depository Trust Company and its book -entry only- system, as to which no view need be expressed) is, as of the date thereof, and will be, as of the Closing Date, true, correct and completcin all material respects; and the Official Statement (except the information relating to The Depository Trust Company and its book - entry -only system, as to which no view need be 55B -125 expressed), does not, as of the date thereof, and will not, as of the Closing Date, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; and (o) Rule 15c2 -12, The Preliminary Official Statement heretofore delivered to the Underwriter has been deemed final by the City as of its date, except for the omission of such information as is permitted to be omitted in accordance with paragraph (b)(1) of Rule 15c2 -12. The City. hereby covenants and agrees that, within seven (7) business days from the date hereof, or (upon reasonable written notice from the Underwriter) within sufficient time to accompany any confirmation requesting payment from any customers of the Underwriter, the City shall cause the Official Statement to be delivered to the Underwriter in a quantity and /or in an electronic format as mutually agreed upon by the Underwriter and the City so that the Underwriter may comply with paragraph (b)(4) of Rule 15c2 -1.2 and Rules G -12, G -15, G -32 and G -36 of the Municipal Securities Rulemaking Board. 3. Conditions to the Obligations of the Underwriter. The obligations of the Underwriter to accept delivery of and pay for the Bonds on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the representations and warranties on the part of the City contained herein, as of the date hereof and as of the Closing Date, to the accuracy in all material respects of the statements of the officers and other officials of the City made in any certificates or other documents furnished pursuant to the provisions hereof, to the performance by the City of its obligations to be performed hereunder at or prior to the Closing Date and to the following additional conditions: (a) Validity of City Documents and Actions. At the Closing Date, the City Documents shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to in writing by the Underwriter, and there shall have been taken in connection therewith, with the issuance of the Bonds and with the transactions contemplated thereby and by this Bond Purchase Agreement, all such actions as, in the opinion of Best, Best & I{rieger, LLP, Bond Counsel for the City, shall be necessary and appropriate; (b) Official Statement. The information contained in the Official Statement will, as of the Closing Date and as of the date of any supplement or amendment thereto pursuant to Section 2(g) hereof, be true and correct in all material respects and will not, as of the Closing Date or as of the date of any supplement or amendment thereto pursuant to Section 2(h) hereof, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (c) Termination Events, Between the date hereof and the Closing Date, the market price or marketability of the Bonds at the initial offering prices set forth in the Official Statement shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds), which judgment shall be formed (to the maximum extent reasonably 55B -126 practicable under the circumstances) only after consultation with the City's financial advisor, by reason of any of the following; (1) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America or recommended to the Congress by the President of the United States, the Department of the Treasury, the Internal Revenue Service, or any member of Congress, or favorably reported for passage to either House of Congress by any committee of such House to which such legislation had been referred for consideration or a decision rendered by a court established under Article III of the Constitution of the United States of America or by the Tax Court of the United States of America, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Treasury Department or the Internal Revenue Service of the United States of America, with the purpose or effect, directly or indirectly, of imposing federal income taxation upon the interest that would be received by the owners of the Bonds beyond the extent to which such interest is subject to taxation as of the date hereof; (2) legislation introduced in or enacted (or resolution passed) by the Congress of the United States of America, or an order, decree or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary or proposed), press release or other form of notice issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Fiscal Agent Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering or sale of obligations of the general character of the Bonds, or of the Bonds, including any or all underlying arrangements, as contemplated hereby or by the Official Statement or otherwise is or would be in violation of the federal securities laws, rides or regulations as amended and then in effect; (3) any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the City, its property, income, securities (or interest thereon), the validity or enforceability of the Assessments; (4) any event occurring, or information becoming known, which, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Preliminary Official Statement or the Official Statement, or results in the Preliminary Official Statement or the Official Statement containing any untrue statement of a material fact or omitting to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading•, (5) the declaration of war or the escalation of, or engagement in, military hostilities by the United States or the occurrence of any other national or international emergency or calamity relating to the effective operation of the government of, or the financial cotmnunity in, the United States which, in the judgment of the Underwriter, makes it impracticable or 55B -127 inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner contemplated in the Preliminary Official Statement or the Official Statement; (6) the declaration of a general banking moratorium by federal, State of Now York or State of California authorities, or the general suspension of trading on any national securities exchange or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on the New York Stock Exchange or other national securities exchange, whether by virtue of determination by that exchange or by order of the Securities and Exchange Commission (the "SEC ") or any other governmental authority having jurisdiction that, in the Underwriter's reasonable judgment, makes it impracticable for the Underwriter to market the Bonds or enforce contracts for the sale of the Bonds; (7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental authority, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (S) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; (9) there shall have been any material adverse change in the affairs of the City that in the Underwriter's reasonable judgment will materially adversely affect the market for the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; (10) there shall be established any new restriction on transactions in securities materially affecting the free market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a change to the net capital requirements of, underwriters established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or (I1) a stop order, release, regulation, or no- action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made to the effect that the issuance, offering, or sale of the Bonds, including all the underlying obligations as contemplated hereby or by the Official Statement, or any document relating to the issuance, offering or sale of the Bonds is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act, and the Trust Indenture Act of 1939, as amended. (d) Closing Documents. On the Closing Date, the Underwriter shall have received counterpart originals or certified copies of the following documents, in each case satisfactory in form and substance to the Underwriter: (1) The City Documents, together with a certificate dated as of the Closing Date of the City Cleric to the effect that each such document is a true, correct and complete copy of the one duly approved by the City Council; 55B -128 (2) The Official Statement, duly executed by the City; (3) Unqualified approving opinion for the Bonds, dated the Closing Date and addressed to the City, of Best, Best & Krieger, LLP, Bond Counsel for the City, in the form attached to the Preliminary Official Statement as Appendix C, and a reliance letter dated the Closing Date and addressed to the Underwriter, to the effect that such approving opinion addressed to the City may be rolled upon by the Underwriter to the same extent as if such opinion was addressed to them; (4) Supplemental opinion, dated the Closing Date and addressed to the Underwriter, of Best, Best & Krieger, LLP, Bond Counsel for the City, to the effect that (i) this Bond Purchase Agreement, the Fiscal Agent Agreement and the Continuing Disclosure Agreement have been duly authorized, executed and delivered by the City, and, assuming such agreements constitute valid and binding obligations of the other parties thereto, constitute the legally valid and binding agreements of the City enforceable in accordance with their terms, except as enforcement may be limited by banlauptcy, moratorium, insolvency or other laws affecting creditor's rights or remedies and is subject to general principles of equity; (ii) the Bonds are not subject to the registration requirements of the Securities Act of 1933, as amended, and the Fiscal Agent Agreement is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and (iii) the statements contained in the Official Statement under the captions "INTRODUCTION," "THE BONDS," "SECURITY FOR THE BONDS," "TAX MATTERS" and Appendices C and D (except that no opinion or belief need be expressed as to any financial or statistical data, any forecasts, any assumptions or any expressions of opinion contained in the Official Statement), insofar as such statements expressly summarize certain provisions of the Bonds, the Fiscal Agent Agreement and the opinion of such firm concerning the exclusion from gross income for federal income tax purposes and the exemption from State of California personal income taxes of interest on the Bonds, are accurate in all material respects; (5) An opinion, dated the Closing Date and addressed to the City and to the Underwriter, of Best, Best & Krieger, LLP, Disclosure Counsel for the City, to the effect that, without having undertaken to determine independently the accuracy or completeness of the statements contained in the Official Statement, but on the basis of their participation in conferences with representatives of the City, the Underwriter, Psomas and others, and their exarnination of certain documents, nothing has come to their attention which has led them to believe that the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading (except that no opinion or belief need be expressed as to any financial or statistical data, any forecasts, any assumptions or any expressions of opinion contained in the Official Statement); (6) A certificate, dated the Closing Date and signed by an authorized representative of the City, ratifying the use and distribution by the Underwriter of the Preliminary Official Statement and the Official Statement in connection with the offering and sale of the Bonds and certifying that (i) the representations and warranties of the City contained in Section 2 hereof are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date except that all references therein to the Preliminary Official Statement shall be deemed to be references to the Official Statement; (ii) to 55B -129 the best of his or her knowledge, no event has occurred since the date of the Official Statement affecting the matters contained therein which should be disclosed in the Official Statement for the purposes for which it is to be used in order to make the statements and information contained in the Official Statement not misleading in any material respect, and the Bonds and the City Documents conform as to form and tenor to the descriptions thereof contained in the Official Statement; and (iii) the City has complied with all the agreements and satisfied all the conditions on its part to be performed or satisfied under the City Documents and the Official Statement at or prior to the Closing Date; (7) An opinion, dated the Closing Date and addressed to the Underwriter, of the City Attorney, to the effect that (i) to the best of his or her knowledge and except as disclosed in the Official Statement, no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body is pending or threatened which would materially adversely affect the ability of the City to perform its obligations under the City Documents or the Bonds, or seelcing to restrain or to enjoin the issuance of the Bonds, or the application of the proceeds thereof in accordance with the Fiscal Agent Agreement, or the collection of the Assessments, or in any way contesting or affecting the validity or enforceability of the City Documents or the BOrtdS or the accuracy of the Official Statement, or any action of the City contemplated by any of said documents; (ii) the City is duly organized and validly existing as a municipal corporation, under the Constitution and laws of the State of California, with fiAl legal right, power and authority to perform all of its obligations under the City Documents; (iii) the City has obtained all approvals, consents, authorizations, elections and orders of or filings or registrations with any State governmental authority, board, agency or commission having jurisdiction which constitute a condition precedent to the collection of the Assessments, the issuance of the Bonds or the performance by the City of its obligations thereunder or under the Fiscal Agent Agreement, except that no opinion need be expressed regarding compliance with blue sky or other securities laws or regulations; and (iv) the City Council has duly and validly adopted the resolutions forming the Assessment District, confirming the Assessments, approving the City Documents and authorizing the sale and issuance of the Bonds at meetings of the City Council which were called, held and conducted pursuant to law and with all public notice required by law and at which a quorum was present and acting throughout, and that such resolutions are now in full force and effect; (8) A certificate dated the Closing Date of Psomas to the effect that the information contained in the Official Statement provided by it therein does not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; (9) A certificate of the City dated the Closing Date, in a form acceptable to Bond Counsel, that the Bonds are not arbitrage bonds within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended; (10) A certificate of U,S. Bank National Association, as Fiscal Agent, dated the Closing Date in form and substance reasonably acceptable to the Underwriter; 10 55B -130 (11) Such additional legal opinions, certificates, instruments and other documents as the Underwriter may reasonably request to evidence the truth and accuracy, as of the date hereof and as of the Closing Date, of the statements and information contained in the Preliminary Official Statement and the Official Statement, of the City's representations and warranties contained herein, and the due performance or satisfaction by the City at or prior to the Closing of all agreements then to be performed and all conditions then to be satisfied by the City in connection with the transactions contemplated hereby and by the Official Statement. If the City shall be unable to satisfy the conditions to the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds contained in this Bond Purchase Agreement, or if the obligations of the Underwriter to purchase, accept delivery of and pay for the Bonds shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement shall terminate and neither the Underwriter nor the City shall be under any further obligation hereunder, except that the respective obligations of the City and the Underwriter set forth in Section 5 and Section 6 hereof shall continue in full force and effect. 4. Conditions of the City's Obligations. The City's obligations hereunder are subject to the Underwriter's performance of their obligations hereunder, and are also subject to the following conditions: (a) As of the Closing Date, no litigation shall be pending or, to the lmowledge of the duly authorized officer of the City executing the certificate referred to in Section 3(d)(6) hereof, threatened, to restrain or enjoin the issuance or sale of the Bonds or in any way affecting any authority for or the validity of the Bonds or the City Documents or the existence or powers of the City; and (b) As of the Closing Date, the City shall receive the approving opinions of Bond Counsel and Disclosure Counsel referred torn Section 3(d)(3) and (5) hereof, dated as of the Closing Date. Expenses. Whether or not the Bonds are delivered to the Underwriter as set forth herein: (a) The Underwriter shall be under no obligation to pay, and the City shall pay or cause to be paid (out of any legally available funds of the City) all expenses incident to the performance of the City's obligations hereunder, including, but not limited to, the cost of printing, engraving and delivering the Bonds to the Underwriter, the cost of preparation, printing, distribution and delivery of the Fiscal Agent Agreement, the Preliminary Official Statement, the Official Statement and all other agreements and documents contemplated hereby (and drafts of any thereof) in such reasonable quantities as requested by the Underwriter; and the fees and disbursements of the Financial Advisor, the Assessment Engineer, the Fiscal Agent, Bond Counsel and Disclosure Counsel and any accountants, engineers or any other experts or consultants the City has retained in connection with the Bonds; and (b) The City shall be under no obligation to pay, and the Underwriter shall pay, any fees of the California Debt and Investment Advisory Commission, the cost of preparation of any "blue sky" or legal investment memoranda and this Bond Purchase Agreement; expenses to 11 55B -131 qualify the Bonds for sale under any "blue sky" or other state securities laws; and all other expenses incurred by the Underwriter in connection with its public offering and distribution of the Bonds (except those specifically enuunerated in paragraph (a) of this section), including the fees and disbursements of its counsel and any advertising expenses, 6. Notices. Any notice or other communication to be given to the City under this Bond Purchase Agreement may be given by delivering the same in writing to the City's Executive Director, Finance & Management Services Agency, 20 Civic Center Plaza, Santa Ana, California 92701, and any notice or other communication to be given to the Underwriter under this Bond Purchase Agreement may be given by delivering the same in writing to Brandis Tallman LLC 22 Battery Street, Suite 500, San Francisco, California 94111. 7. Parties in Interest. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including their successors or assigns), and no other person shall acquire or have any tight hereunder or by virtue hereof. 8. Survival of Representations, Warranties and Agreements. The representations, warranties and agreements of the City set forth in or made pursuant to this Bond Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Bonds. 9. Effective. This Bond Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. 10. No Prior Agreements, This Bond Purchase Agreement supersedes and replaces all prior negotiations, agreements and understandings between the parties hereto in relation to the sale of Bonds for the City. 11. Governing Law. This Bond Purchase Agreement shall be governed by the laws of the State of California. 12 55B -132 12. Counterparts. This Bond Purchase Agreement may be executed simultaneously in several counterparts, each of which shall be an original and all of which shall constitute one and the same instrument. WWI � t ui Attorney Very truly yours, BRANDIS TALLMAN LLC M Principal ACCEPTED: 2016, at p.m. (Pacific) CITY OF SANTA ANA 13 55B -133 EXHIBIT A MATURITY SCHEDULE CITY OF SANTA ANA ASSESSMENT DISTRICT NO. 2015-01 (WARNER INDUSTRIAL COMMUNITY) LIMITED OBLIGATION IMPROVEMENT BONDS Maturity Date (September 2) Principal Amount Interest Rate Yield The purchase price of the Bonds shall be $ , which is the principal amount thereof less Underwriter's Discount of $ and [plus /less] an Original Issue [Premium/Discount] of A -1 55B -134 CONTINUING DISCLOSURE AGREEMENT This Continuing Disclosure Agreement (the "Disclosure Agreement ") is executed and entered into as of ' 2016, by and between the City of Santa Ana (the "City "), and Urban Futures, Inc., as dissemination agent (the "Dissemination Agent "), in connection with the issuance by the City of its Assessment District No. 2015.01 (Warner Industrial Community) Limited Obligation Improvement Bonds in the aggregate principal amount of $ (the "Bonds "). The Bonds are being issued pursuant to the provisions of the Improvement Bond Act of 1915 (the "Act "), and a Fiscal Agent Agreement dated as of July 1, 2016 (the "Fiscal Agent Agreement "), by and between the City and U.S. Bank National Association, as fiscal agent (the "Fiscal Agent "), The City and the Dissemination Agent hereby covenant and agree as follows: Section 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the parties hereto for the benefit of the Owners and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2- 12(b)(5) promulgated under the Securities and Exchange Act of 1934. Section 2. Definitions. In addition to the definitions set forth in the Fiscal Agent Agreement, which apply to any capitalized terms used but not otherwise defined in this Disclosure Agreement, the following capitalized terms shall have the following meanings: "Annual Report" shall mean any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Agreement. "Annual Report Date" shall mean the date in each year that is the first day of the month following the ninth month after the end of the City's fiscal year, which date, as of the date of this Disclosure Agreement, is April I. "Assessment District" means Assessment District No. 201.5 -01. "Assessments" means the assessments levied on properties within the Assessment District which secure the payment of Debt Service. "Beneficial Owner" shall mean any person which has or shares the power, directly or indirectly, to make invesurient decisions concerning ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries). "Dissemination Agent" shall mean initially, Urban Futures, Inc., as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the City and which has filed with the Fiscal Agent a written acceptance of such designation. "EMMA" shall mean the Electronic Municipal Market Access system information about which may be found at the following Internet address: http: / /cmma.msrb.org /. "Listed Events" shall mean any of the events listed in Section 5(a) of this Disclosure Agreement. EXHIBIT 6 55B -135 "MSRB" shall mean the Municipal Securities Rulemaking Board or any other entity designated or authorized by the Securities and Exchange Commission to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the Securities and Exchange Coina ission, filings with the MSRB are to be made through the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http : / /emma.msrb.org. "Official Statement" shall mean the Official Statement dated . 2016 relating to the Bonds. "Owner" shall mean the person in whose name any Bond shall be registered. "Participating Underwriter" shall mean Brandis Talhnan LLC, the original underwriter of the Bonds required to comply with the Rule in connection with the offering of the Bonds. "Rule" shall mean Rule 15c2- 12(b)(5), promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. Section 3. Provision of Annual Reports. (a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement, The Annual Report for the fiscal year ending June 30, 2016 shall be satisfied by the Official Statement. The Annual Report may include by reference other information as provided in Section 3 hereof; provided, however, that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the date required above for the filing of the Annual Report if they are not available by that date. If the City's fiscal year changes, it shall, or it shall instruct the Dissemination Agent to, give notice of such change in a filing with the MSRB. (b) So long as the Dissemination is an entity other that the City, then the provisions of this Section 3(b) shall apply. Not later than 15 business days prior to the date specified in subsection (a) of this Section for the providing of the Annual Report to the MSRB, the City shall provide the Annual Report to the Dissemination Agent and the Participating Underwriter, If by such date, the Dissemination Agent has not received, a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the first sentence of subsection (a). (c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the MSRB by the date required in subsection (a) of this Section, the Dissemination Agent shall, in a timely manner, send a notice to the MSRB in substwitially the form attached as Exhibit A. (d) The Dissemination Agent shall: (i) provide any Annual Report received by it to the MSRB as provided herein; and 55B -136 (ii) file a report with the City certifying that the Annual Report has been provided to the MSRB pursuant to this Disclosure Agreement, and stating the date it was provided to the MSRB. Section 4. Content of Annual Reports. The City's Annual Report shall contain or incorporate by reference the following: (a) audited financial statements of the City, for the fiscal year most recently ended, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board and reporting standards as set forth by the State Controller in "State of California Accounting Standards and Procedures for Cities," Audited financial statements of the City may be submitted separately and later than the Annual Report if they are not available by the filing date of the Annual Report. If the City's fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(c); (b) the following additional items with respect to the Bonds and the property in the Assessment District subject to the levy of the Assessments: 1. the principal amount of Bonds outstanding as of the September 3 preceding the Amnial Report Date; 2, the balance in each fund under the Fiscal Agent Agreement as of the September 30 preceding the Annual Report Date; 3, an update of Tables 2, 4 and 5 in the Official Statement for the Bonds based on the assessed values within the Assessment District for the current fiscal year, the assessment levy for the fiscal year in which the Annual Report is being filed and the delinquency status for the current fiscal year; and 4. the status of any foreclosure proceedings being pursued by the City with respect to delinquent Assessments. Any or all of the items listed above may be set forth in one or a set of documents or may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities or with respect to which the City is an `obligated person" (as defined by the Rule), which have been made available to the public on the MSRB's website. The City shall clearly identify each such other document so included by reference. (c) In addition to any of the information expressly required to be provided under subsections (a) and (b), the City shall provide such further infornation, if any, as may be necessary to make the. specifically required statements, in light of the circumstances under which they are made, not misleading. 55B -137 Section 5. Reporting of Significant Events. (a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not later than ten business days after the oecurence of the event: Principal and interest payment delinquencies; 2. Unscheduled draws on debt service reserves reflecting financial difficulties; Unscheduled draws on credit enhancements reflecting financial difficulties; 4. Substitution of credit or liquidity providers, or their failure to perform; 5. Adverse tax opinions or issuance by the Internal Revenue Service of proposed or final determination of taxability or of a Notice of Proposed Issue (IRS Form 5701 TEB); 6. Tender offers; 7. Defeasances; 8. Rating changes; or 9. Banluptcy, insolvency, receivership or similar event of the City. Note: for the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person. (b) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not later than ten business days after the occurrence of the event: 1. Unless described in paragraph 5(a)(5), other material notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other material events affecting the tax status of the Bonds; 2. Modifications to rights of Bond holders; Bond calls; 4. Release, substitution, or sale of property securing repayment of the Bonds; 55B -138 51 Non - payment related defaults; 6. The consummation of a merger, consolidation, or acquisition involving an obligated person or the sale of all or substantially all of the assets of the obligated person, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms; or 7. Appointment of a successor or additional fiscal agent or the change of name of a fiscal agent. (c) The Fiscal Agent shall, within one business day of obtaining actual knowledge of the occurrence of any of the Listed Events, contact the Disclosure Representative and inform such person of the event. The Fiscal Agent, in notifying the Disclosure Representative of a Listed Event, shall not be required to make any determinations with respect to such Listed Event, including whether such Listed Event is material or reflects financial difficulties. (d) If a Listed Event described in subsection (b) of this Section occurs, the City shall determine if such event would be material under applicable federal securities law. (e) If a Listed Event described in subsection (a) of this Section occurs, or if the City determines that the occurrence of a Listed Event described in subsection (b) of this Section would be material under applicable federal securities law, the City shall, or shall cause the Dissemination Agent to, file a notice of the occurrence of such Listed Event with the MSRB, within ten business clays of such occurrence. (f) Notwithstanding the foregoing, notices of Listed Events described in paragraph (vii) of subsection (a) of this Section and paragraph (iii) of subsection (b) of this Section need not be given any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds pursuant to the Fiscal Agent Agreement. Section 6. Format for Filings with MSRB. Any report or filing with the MSRB pursuant to this Disclosure Agreement must be submitted in electronic format, accompanied by such identifying information as is prescribed by the MSRB. Section 7. Termination of Reporting Obligation. The City's and the Dissemination Agent's obligations under this Disclosure Agreement shall terminate upon the legal defeasance, prior redemption or payment in fall of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in a filing with the MSRB. Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Agreement, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent, The Dissemination Agent may resign by providing 30 days' written notice to the City and the Fiscal Agent (if the Fiscal Agent is not the Dissemination Agent). The initial Dissemination Agent shall be Urban Futures, Inc. If at any time there is not any other designated Dissemination Agent, the Fiscal Agent shall be the Dissemination Agent. 55B -139 Section 9. Amendment; Waiver, Notwithstanding any other provision of this Disclosure Agreement, the City and the Dissemination Agent may amend this Disclosure Agreement (and the Dissemination Agent shall agree to any amendment so requested by the City; provided, however, that the Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties, rights or obligations), and any provision of this Disclosure Agreement may be waived, provided that the following conditions are satisfied; (a) if the amendment or waiver relates to the provisions of Section 3(a) hereof, Section 4 hereof, or Section 5(a) or (b) hereof, it may only be made in comiection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the Bonds, or the type of business conducted; (b) the undertalcings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by the Owners in the same manner as provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of Owners, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Owners or Beneficial Owners of the Bonds. In the event of any amendment or waiver of a provision of this Disclosure Agreement, the City shall describe such amendment or waiver in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the City. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements (i) notice of such change shall be given in a filing with the MSRB, and (ii) the Annual Report for the year in which the change is made shall present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Section 10. Additional Information, Nothing in this Disclosure Agreement shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Agreemment or any other means of communication, or including any other information in any Annual Report or notice' required to be filed pursuant to this Disclosure Agreement, in addition to that which is required by this Disclosure Agreement. If the City chooses to include any information in any Annual Report or notice in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Disclosure Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event or any other event required to be reported, Section 11, Default. In the event of a failure of the City, the Fiscal Agent or the Dissemination Agent to comply with any provision of this Disclosure Agreement, the Fiscal Agent may (and, at the written direction of any Participating Underwriter or the Owners of at 55B -140 least 25% of the aggregate principal amount of Outstanding Bonds, shall, upon receipt of indemnification reasonably satisfactory to the Fiscal Agent), or any Owner or Beneficial Owner of the Bonds may, take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City, the Fiscal Agent or the Dissemination Agent, as the case may be, to comply with its obligations under this Disclosure Agreement. A default under this Disclosure Agreement shall not be deemed an Event of Default under the Fiscal Agent Agreement, and the sole remedy under this Disclosure Agreement in the event of any failure of the City, the Fiscal Agent or the Dissemination Agent to comply with this Disclosure Agreement shall be an action to compel performance. Section 12. Duties. Immunities and Liabilities of Fiscal Agent, Article VII of the Fiscal Agent Agreement is hereby made applicable to this Disclosure Agreement as if this Disclosure Agreement were (solely for this purpose) contained in the Fiscal Agent Agreement. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Fiscal Agent thereunder. Neither the Fiscal Agent nor the Dissemination Agent shall be responsible for the form or content of any Annual Report or notice of Listed Event. The Dissemination Agent shall receive reasonable compensation for its services provided under this Disclosure Agreement. The Dissemination Agent (if other than the Fiscal Agent or the Fiscal Agent in its capacity as Dissemination Agent) shall have only such duties as are specifically set forth in this Disclosure Agreement. To the extent permitted by law, the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys' fees and expenses) of defending against any claim of liability, and which are not due to its negligence or its willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and the termination of this Disclosure Agreement. Section 13, Beneficiaries, The Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, the Fiscal Agent, the Participating Underwriter and Owners and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. Section 14. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or nnenforceability shall not affect any other provision herein. Section 15, State of California Law Governs. The validity, interpretation and. performance of this Disclosure Agreement shall be governed by the internal laws of the State of California. Section 16, Notices. Any notice or communications to be among any of the parties to this Disclosure Agreerneat may be given as follows: If to the City: City of Santa Ana 20 Civic Center Plaza Santa Ana, California 92701 55B -141 I£ to the Dissemination Agent: If to the Participating Underwriter: Section 17. Counterpart s. This Disclosure Agreement may be executed in multiple counterparts, all of which shall constitute one and the same instrument, and each of which shall be deemed to be an original. 55B -142 IN WITNESS WHEREOF, the parties hereto have executed this Disclosure Agreement as of the date first above written. Dated: 2016 M1T1T5'i3 S Attorney CITY OF SANTA ANA 0 as Dissemination Agent LE Authorized Officer [EXECUTION PAGE OF CONTINUING DISCLOSURE AGREEMENT] 55B -143 EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of Santa Ana Name of Bond Issue: City of Santa Ana Assessment District No. 2015 -01 (Warner Industrial Community) Limited Obligation Improvement Bonds Date of Issuance: , 2016 NOTICE IS I4EREBY GIVEN that the City of Santa Ana (the "City"), has not provided an Annual Report with respect to the above -named Bonds as required by the Continuing Disclosure Agreement, dated as of 2016, by and between the City and Urban Futures, Inc„ as dissemination agent (the "Dissemination Agent "). The City anticipates that the Annual Report will be filed by _ Dated: 0 55B -144 Authorized Signatory MAYOR Miguel A. Puljdo MAYOR PRO TEM Vicente Sarmiento COUNCILMEMBERS Angelica Amezcua P. David Benavides Michele Martinez Roman Rayne Sal Tinajero PUBLIC WORKS AGENCY P.O. Box 1988 M -36 Santa Ana, California 92702 www.santa- ana.oro !1IIRMAW21110 Ms. Leni Zarate Psomas 1500 Iowa Avenue, Suite 210 Riverside, CA 92507 CITY MANAGER David Cavazos CITY ATTORNEY Sonia R. Carvalho CLERK OF THE COUNCIL Maria D. Huizar SUBJECT: NOTICE TO PROCEED —Warner Industrial Community Assessment District Dear Ms. Zarate Thank you for your Proposal dated June 8, 2016 for tasks related to the Warner Industrial Community Assessment District. Please accept this letter as a formal Notice To Proceed (NTP) with administration services for the not -to- exceed amount of $22,250.00. If you have any further questions or need additional information, please do not hesitate to contact me at (714) 647 -5632. We look forward to working with you. Sincerely, Kenny Nguyen Senior Civil Engineer Attachment: Proposal (dated June 8, 2016) Exhibit 7 SANTA ANA CITY COUNCIL Miguel A. Pulido Vicente 9annienld Michele MaNnez Angelica Anamwa P. David Benavides Roman Reyna Sal Tinajero Mayor Mayor Pro Than, Ward i Ward Ward Ward6 MPUrtlonsanra- aaorg Martnez/asantao No"can 1 DBenavdes0eantaanaoar j RRevna�anta- ana.00 I STinaieroCAsanla ena.oro 65B_112 ' Balancing the Natural and Bull[ Fnvoonvtem June S, 2016 Mr. Francisco Gutierrez Executive Director Finance & Management Services Agency 20 Civic Center Plaza, M -17 Santa Ana, CA 92701 Subject: Annual Administration Proposal for Warner Business Assessment District Financing Dear Mr. Gutierrez: Psomas appreciates the opportunity to continue partnering with the City of Santa Ana (City) by submitting this proposal for District Administration Services for the above referenced project. We are confident that our relationship with the formation of Warner and current work experience will prove to be an asset to the annual administration process. The following is Psomas' proposed Scope of Work and Fee and Term. Setae of Work Task t Annual Administration Objective I Coordinate timely enrollment of Assessments and assure quality by consistently applying the method of apportionment. Communicate with the City and its citizens by providing information, prepayment, and monitoring services. Apportion Parcels. Psomas will receive from the City staff assigned to administer the District information necessary to create the annual Special Assessment. City staff will approve the total Special Assessment requirement for the current fiscal year and Psomas will apportion the Special Assessment to each parcel consistent with the method of apportionment. h Coordinate with Fiscal Agent. Psomas will help the City coordinate with the Fiscal Agent to review current debt service schedules and determine the amount needed to pay principal and interest on the outstanding bonds or calculate any capitalized interest for the bond year in question, where applicable. f, Determine Administrative Fees. Psomas will help the City determine the amount needed to meet the anticipated administrative expenses for the current 16001owa Avenue fiscal year. suite 210 Riverside, CA 02607 1'oi 051.797.0421 Fax 951.692.3379 V~ psomas.com 55B -146 Page 2 of 4 Mr. Francisco Gutierrez Senior Civil Engineer City of Santa Ana Submit to Auditor. Psomas will prepare the annual levy in a format and media acceptable for direct submission to the County Auditor's office prior to the statutory deadline and will perform adjustments and corrections to rejected parcels by resubmitting the levies, as necessary. Direct Billing. Psomas will coordinate the direct billing of certain parcels, as requested by the City, if the parcel is non - taxable pursuant to Orange County Taxability Code and is subject to the levy. Apportionments *. Psomas will facilitate the preparation of assessment apportionment applications, if necessary. Psomas will, in a timely manner and pursuant to the applicable statutory provisions, prepare assessment apportionments, which shall include: a) preparation of amended assessment diagrams; b) apportioning the assessment to divided parcels; c) preparation and delivery of the required notice to the original bond purchaser(s); d) recordation of required notice and amended assessment diagrams, e) preparation (if necessary) of required disclosure documents, as required by the Department of Real Estate (RE624 Forms). Services related to reapportionments shall be at the expense of the requesting party or placed on the tax bill. Primary Contact. Psomas will serve as the Initial and primary contactwith the public regarding the levy of the Special Assessment. Atoll free telephone number of the Consultant's designation will appear on the regular property tax billing next to the Special Assessment to facilitate contact with the public. Psomas will provide qualified and competent staff members to answer taxpayer questions regarding the purpose of the Special Assessment, the facilities constructed and/or maintained by the District, the use of bond proceeds and the method of apportionment of the Special Assessment. Prepayment Calculations *. At the request of the landowners, Psomas will calculate the prepayment amount for a parcel(s) and provide any additional information as requested related thereto. Services related to requests for payoff information will be at the expense of the requesting party. If a prepayment is received, Psomas will comply with Revenue Taxation Code 163 by preparing the Release of Lien. Psomas will coordinate with City staff to have a City representative sign the Release. Psomas will record the Release within 5 days of receiving the signed Release and provide a copy to the City. Task 2. Delinquency Management Objective I Determine delinquency status and coordinate the City's foreclosure requirements. 55B -147 Page 3 of 4 Mr. Francisco Gutierrez. Senior Civil Engineer City of Santa Ana * Delinquency Policy. Psomas will review and make recommendations to the City to ensure that any policies established related to the collection of delinquent Special Assessments are consistent with the foreclosure covenant and/or with the requirements of the District formation documents, * Delinquency History. Psomas will maintain a database that includes a delinquency history of the parcels, as derived from the County property tax system. Delinquency history will include delinquent amounts for each parcel including reference to those parcels that have been referred to Foreclosure Counsel, and prior year delinquencies that have been paid. * Delinquency Tracking and Reporting. Psomas will research the records of the County Tax Collector for payment information to determine which parcels are delinquent after the December 10 and April 10 property tax installment due dates, after June 30 and prior to the date in which the City is obligated to initiate foreclosure proceedings under the foreclosure covenant. Delinquency reports will include parcel lists showing the Assessor Parcel Numbers, property owner and delinquent amount for each parcel. * Notification to Delinquent Property Owners. At the request of the City, Psomas will prepare letters to property owners at the times and in the format determined by the delinquency policy. Psomas will respond to public requests regarding delinquent notices and will prepare, as necessary, statements to the requesting party of all amounts delinquent including penalties, interest, and roll removal fees. * Removal from Rolls. Psomas will prepare correspondence to the Auditor's Office for removal of delinquent Special Taxes or Special Assessments from the tax rolls in the event these amounts are paid directly to the District. The City will pay for any County required fees. Foreclosure Coordination. Psomas will provide delinquent amounts (including penalty and interest) to Foreclosure Counsel in the event that foreclosure proceedings are initiated. Direct Payments. Psomas will coordinate direct collections of individual delinquencies and deposits with the Fiscal Agent. City Support Responsibilities Psomas will coordinate with City staff to create a partnership to facilitate successful project completion. We will rely on the City to provide the following information including, but not limited to: * Adopt a resolution setting the public hearing for the District * Direct the City Clerk to set the date and publish a notice for the Public hearing * Conduct public hearing 55B-148 Page 4 of 4 Mr. Francisco Gutierrez Senior Civil Engineer City of Santa Ana * Certified copies (where required) of Resolutions or other documentation required by the County for direct levy or assessment administration * Mail Delinquency notices Proposed Frye and °farm Psomas proposes to complete the Scope of Services above during Fiscal Years: 2016 -17, 2017 -2018, and 2018 -2019 for a total not -to- exceed amount of $22,250. This amount will be billed on a time and material basis each month. This proposal also includes the option to extend the contract in two one -year increments at the not -to- exceed amount of 7,564 per year. Please note that proposed fees do not include Apportionments and Prepayment Requests which will be paid for by the requesting party. These fees are as follows: APPORTIONMENTS. The base fee for preparing any apportionment is $2,555. However, Psomas reserves the right to adjust this amount depending on the size of each project, its required services, and level of effort specific to the development. Prior to commencing this work, Psomas will coordinate with the City once a deposit has been made by the requesting party. No. of Newly Created Parcels Base Fee Per Parcel Fee 1 through 10 $2,555 $25.00 111 150 $3,484 $20.00 151 through 400 $4,416 v� $10.00 400+ $5,347 $2.50 PREPAYMENT CALCULATIONS. Psomas shall be compensated $800.00 per Assessor Parcel Number requested for prepayment. Please feel free to contact me to discuss the proposal or any technical questions that arise. can be reached on my cell 951 - 205 -8364 or via email at Izaratq psomas.com. Cc: Mr. Alvaro Castellon, City of Santa Ana Ms. Anna Sarabian, Fieldman, Rolapp & Associates 55B -149 55B -150