Item PFA-3 - Water Revenue Bonds

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TABLE OF CONTENTS INTRODUCTION....................................................................I General............................................................................ I The Authority and the City ..............................................1 Purpose............................................................................ I Security for the Bonds.....................................................2 Parity Obligations............................................................2 Limited Obligations.........................................................2 Forward -Looking Statements..........................................3 Summaries Not Definitive...............................................3 THE FINANCING PLAN.........................................................3 Refunding of Prior Obligations........................................3 TheProject......................................................................4 Environmental Compliance.............................................4 ESTIMATED SOURCES AND USES OF FUNDS .................5 DEBT SERVICE.......................................................................6 THEBONDS............................................................................7 Description of the Bonds.................................................7 Redemption of the Bonds................................................7 Parity Obligations............................................................9 Subordinate Obligations................................................10 Book -Entry Only System...............................................10 Transfer and Exchange of Certificates ...........................10 SECURITY FOR THE BONDS.............................................10 General..........................................................................10 Net System Revenues .................................................... I I Obligations of City Under Installment Purchase Agreement...............................................................12 Rate Covenant...............................................................12 Pledge Under the Indenture...........................................13 Application of System Revenues...................................13 Application of Revenues................................................14 THE AUTHORITY.................................................................16 THECITY..............................................................................16 THE WATER SYSTEM.........................................................16 General; Service Area....................................................16 Organization and Staff...................................................17 WaterSales....................................................................18 LandUse........................................................................18 The Project; Future Water System Improvements..........................................................19 Storage Capacity ............................................................19 Water Sources and Supply; Water Purchases ................19 MWDSupplies..............................................................24 Water Demand, Deliveries and Sales Revenues ............24 Water System Rates and Charges..................................25 Collection Procedures....................................................27 Outstanding Water System Indebtedness .......................28 Largest Customers.........................................................28 Historic Operating Results and Debt Service Coverage.................................................................29 RISKFACTORS.....................................................................29 Water System Demand and Growth..............................29 Water System Expenses.................................................30 Parity Obligations..........................................................30 Proposition 218..............................................................30 Constitutional Limit on Appropriations, Fees andCharges.............................................................31 Limited Recourse on Default.........................................31 No Debt Service Reserve Account................................31 -1- Limitations on Remedies Available; Bankruptcy............................................................. 31 No Obligation or Ability to Tax .................................... 32 Changein Law.............................................................. 32 Geologic and Topographic ............................................ 32 Cybersecurity................................................................ 32 Drought Measures......................................................... 33 ClimateChange............................................................ 34 Environmental Regulation ............................................ 35 Risks Associated with OCWD and MWD.................... 35 Impact of State Budget ................................................. 35 Secondary Market for Bonds ........................................ 35 Federal Tax -Exempt Status of the Bonds ...................... 36 IRS Audit of Tax -Exempt Issues .................................. 36 Taxpayer Protection and Government Accountability Act Initiative .................................. 36 Global Health Emergencies and Considerations; Infectious Disease Outbreak................................................................. 36 TAX MATTERS.................................................................... 37 CONTINUING DISCLOSURE ............................................. 38 NO LITIGATION.................................................................. 39 RATING 39 FINANCIAL ADVISOR........................................................ 39 PROFESSIONAL FEES ........................................................ 39 APPROVAL OF LEGALITY ................................................ 39 UNDERWRITING................................................................. 39 ADDITIONAL INFORMATION .......................................... 40 APPENDIX A — CITY OF SANTA ANA GENERAL DEMOGRAPHIC INFORMATION .......................... A-1 APPENDIX B — SUMMARY OF CERTAIN DEFINED TERMS AND PRINCIPAL LEGAL DOCUMENTS........................................................... B-1 APPENDIX C — FORM OF FINAL OPINION OF BOND COUNSEL ..................................................... C-1 APPENDIX D — FORM OF CONTINUING DISCLOSURE AGREEMENT .................................. D-1 APPENDIX E — BOOK ENTRY PROVISIONS ................E-1 APPENDIX F - COMPREHENSIVE AUDITED FINANCIAL REPORT ............................................... F-1