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RAMIREZ
<br />March 11, 2021
<br />Kathryn Downs,
<br />Executive Director of Finance &
<br />Management Services Agency
<br />City of Santa Ana
<br />20 Civic Center Plaza
<br />Santa Ana, CA 92701
<br />Dear Kathryn
<br />Thank you forthe opportunity to present Samuel A. Ramirez & Co., Inc.'s ("Ramirez & Co.") proposal for Underwriting
<br />Services for Pension Refinancing Bonds to the City of Santa Ana (the "City"'). It has been our honor and pleasure to
<br />have served the City on its two most recent refinancings. Ramirez & Co. is prepared to roll up our sleeves, once
<br />again, and make the City's pension obligation bond (POB) issue our top priority.
<br />In making your selection, we ask that you consider the following!
<br />We paid attention to the City; and paid attention early. Few, if any, firrns responding to this RFP have dedirated
<br />Lhe time, resources or paid attention to the City, like Ramirez & Co. IrnporlanLly, in October of 2019, Ramirez & Co.
<br />was the first to present PCB data to the City. Our team has presented subsequent POB analyses in November 2019,
<br />February 2020, March 2020 and June 2020. Additionally, in the height of the COVID-19 shutdown, our team
<br />developed the Ramirez Cash Flow Protection Program to help preserve liquidity. And, we have prnvidt'd a weekly
<br />market update since April 2020.
<br />We developed a statewide strategy to change an SCO policy and deliver savings. In 2007, the City issued Gas Tax
<br />Bonds to fund street improvements. Subsequently, the State Controller's Office ("SCO") restricted the use of this
<br />financing structure, thereby limiting the City's ability to refinance the 2007 Gas Tax Bonds. Ramirez & Co.
<br />coordinated a statewide strategy that included three cities across three counties and statewide policy makers, to
<br />successfully change the SCO's policy, allowing the City to safely refinance its 2007 Gas Tax Bonds.
<br />We delivered two (2) double 'AA' category rating upgrades; we are ready to deliver a 3'd. As senior manager for
<br />the City's Tax Allocation Refunding Bonds, Series 2018AB, our banking team delivered a two notch rating upgrade
<br />from 'A+'to 'AA'that saved the City $545,000 in issuance costs by eliminating the need of bond insurance. Similarly,
<br />our team helped the City secure a three notch rating upgrade on the City's Gas Tax Revenue Refunding Bonds, Series
<br />2019, from 'A-' to 'AA-' that reduced issuance cost by $1/0,000 by eliminating the need for bond insurance as well.
<br />Our team knows the City and we will build on that institutional knowledge to help deliver better than expected
<br />results, once again.
<br />We know the City's General Fund credit. In the credit discussion, we include specific recommendations that will
<br />build on our prior rating success. Notably, the Ramirez & Co. team includes Peter Block, a former 14-year S&P State
<br />& Local Gov't Rating Analyst. With Peter's help, we developed a credit model to provide an indicative rating for the
<br />City's upcoming POB transaction. We assign the highest rating to the City's Budgetary Flexibility, Budgetary
<br />Performance and Liquidity. However, like most California cities, the City's debt and contingency liability is weak due
<br />to large unfunded pension/OPEB liabilities. Hence, like we did in 2018 and 2019, our focus will be to articulate the
<br />strengths of the City's Management Tearn and the local/regional Economy. Based on our recent rating successes,
<br />we firmly expect that the City should earn a strong 'AA' category POB rating.
<br />Relevant California City POBs Experience. Since 2017, Ramirez & Co. has senior -managed eight (8) California City
<br />POB transactions, representing 26% of all California city POBs. Moreover, Ramirez & Co. set the standard by
<br />incorporating a 10-year option call in our City of Brawley POB financing in 2017. Importantly, with each subsequent
<br />POB issue, we have broadened the investor base for POBs. Our recent California POB clients include the cities of
<br />Monterey Park, Coachella Hawthorne, EI Monte, Baldwin Park, Pomona. Brawleu, and San Fernando (pending);
<br />City Council 23 — 237 5/18/2021
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