Resolution No. 2024-XXX
RESOLUTION NO. 2024-XXX
A RESOLUTION OF THE CITY COUNCI L OF THE CITY OF
SANTA ANA APPROVING REVISIONS TO THE
MUNICIPAL SECURITIES DISCLOSURE POLICY
AND PROCEDURES
BE IT RESOLVED BY THE CITY COUNC IL OF THE CITY OF SANTA ANA AS
FOLLOWS
Section 1. The City Council of the City of Santa Ana hereby finds determines and declares as follows:
A. The City of Santa Ana and its related entities issue mu nicipal bonds, notes, and other obligations ( “Obligations”) from time to time that are offered to the investing public.
B. Publicly offered debt obligations and securities, such as bo nds or certificates of participation, are offered pursuant to an Official Statement or other type of offering document t hat must comply with the “anti-fraud rules ” of the federal securities laws. ( “Antifraud rules” refers to Section 17 of the Sec urities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934, and regulations adopted by the Securities and Exchange Commission under those Acts, particularly “Rule 10-b-5” under the 1934 Act.)
C. The City of Santa Ana determined that it would be proper in the management of its financial affairs to establish policies of the City and its related entitie s with respect to the preparat ion of disclosure documents and the continuing disclosure requirements related to the public offering Obligations.
D. On June 21, 2016, the City Council approved the Munici pal Secu rities Disclosure Policy and Procedures.
E. City staff has determined that revisions to the policy to maintain best practices are recommended. These revisions include changes to the obligations of the Disclosure Coordinator, training obligations and minor clerical changes.
Section 2. The City Council of the City of Santa Ana hereby approves and adopts the revised Munici pal Securi ties Disclosure Policy and Procedures, a copy of which is attached as Exhibit A.
Section 3. This resolution shall supersede and replace Resolution No. 20 16- 051.
EXHIBIT 1
Resolution No. 2024-XXX
Section 4. This Resolution shall take effect immed iately upon its adoption by the City Council , and the City Clerk shall attest to and certify the vote adopting this Resolution.
ADOPTED this 3rd day of December, 2024.
__________________________
Valerie Amezcua
Mayor
APPROVED AS TO FORM:
SONIA R. CARVALHO
City Attorney
By: ____________________________
Laura A. Rossini
Chief Assistant City Attorney
AYES: Councilmembers _______
NOES: Councilmembers ________
ABSTAIN: Councilmembers _______
NOT PRESENT: Councilmembers ______
CERTIFICATE OF ATTESTATION AND ORIGINALITY
I, City Clerk, Jennifer L. Hall do hereby attest to and certify that the attached Resolution No. 2024-XXX to be the original resolution adopted by the City Council of the City of Santa Ana on ___________, 2024.
Date: _____________________
Jennifer L. Hall
City Clerk
City of Santa Ana
PURPOSE
The purpose of this Municipal Securities Disclosure Policy (“Policy”) is to memorialize and communicate the polic ies and procedures in connection with both the initial and annual continuing disclosure undertakings for municipal securities issued by the City of Santa Ana, California (the "City"), the Santa Ana Public Financing Authority, the Successor Agency to the Santa Ana Redevelopment Agency and certain community facility districts and assessment districts (collectiv ely, the "Santa Ana Issuers"). Adherence to the Policy will ensure compliance with federal securities law s, promote best practices, and enhance the City’s internal controls and control environment . In addition, the Policy will also establish a Continuing Disclosure Committee which will have general oversight of the disclosure process.
This Policy is subject to recommendations for improvements during the annual disclosure process. As such, the Executive Director of Finance & Management Services Agency (“Finance”) is authorized and has the responsibility to update, modify, and/or make recommended changes when appropriate.
BACKGROUND
The Santa Ana Issuers have issued and expect that they will in the future issue bonds, certificates of participation, notes o r other obligations (collectively, “Obligations”) which are offered to the investing public. Issuers of publicly offered municipal securities are required under most circumstances to provide certain financial and operating information on an annual basis to the Municipal Securities Rulemaking Board (MSRB) utilizing the database Electronic Municipal Mark et Access system (EMMA) to assist the underwriter of such municipal securities in complying with Rule 15c2 -12(b)(5) promulgated under the Securities and Exchange Act of 1934 (the “Rule”). The Santa Ana Issuers have covenanted or will covenant to assist such underwriters in complying with the Rule through the execution and delivery of continuing disclosure agreements or certificates (each, a "Continuing Disclosu re Undertaking") applicable to each issue of Obligations. The Santa Ana Issuers must comply with any required f ilings in a timely manner in accordance with its respective offering documents for the Obligations . This Policy and the associated procedures are intended to ensure that all filings required under the Rule are made timely and all requirements set forth in the Continuing Disclosure Undertakings are met.
The Rule requires that an underwriter, prior to purchasing or selling an issue of municipal securities in connection with a covered offering, determine that the issuer, and any other “Obligated Person” ( as defined in the Rule) for whom financial or operating data is presented in the official statement, has undertaken in writing to provide the following information to the MSRB using EMMA:
• By a specified date, annual financial and operating information for each Obligated Person for whom financial information or operating data is presented in the official statement (an "Annual Information Filing");
City of Santa Ana
Administrative
Policies and Procedures
City Manager’s Authorization
Subject
Municipal Securities Disclosure Policy & Procedures
Date
November 19, 2024
Municipal Securities Disclosure Policy & Procedures
November 19, 2024
• By a specified date, if available, audited annual financial statements for each Obligated Person ("Audited Financial Statements" and together with the Annual Information Filing, the “Annual Report”) and, if not available by the date required, unaudited financial statements with Audited Financial Statements;
• In a timely manner within 10 business days of occurrence, notice of the occurrence of one or more of the listed events described in the Rule (a "Rule 15c2-12 Event Notice"); and
• In a timely manner, notice of a failure of any Obligated Person required to make the Annual Information Filing and/or file the Audited Financial Statements on or before the date(s) specified in the Continuing Disclosure Undertaking ("Notice of Failure").
DISCLOSURE COMMITTEE
The Disclosure Committee (“Committee”) shall be responsible for the general oversight of the disclosure process, which includes:
A. Initial Offering Disclosure
• Participating in due diligence activities
• Reviewing each disclosure document
• Identifying subject matter reviewers (“Subject Matter Reviewers”) • Approving draft preliminary official statement before it is submitted to the City Council or such other legislative body of the respective Santa Ana Issuer B. Continuing Disclosure
• Periodically reviewing the Policy
• Periodically reviewing compliance difficulties and recommending changes • Waiving procedures when appropriate
The composition of the Committee shall include, but not limited to the following:
• Executive Director of Finance
• Assistant Director of Finance
• Accounting Manager
• Disclosure Coordinator
• Representative from the City Attorney’s Office (CAO)
Municipal Securities Disclosure Policy & Procedures
November 19, 2024
The Disclosure Coordinator shall be appointed by the Executive Director of Finance. The duties of the Disclosure Coordinator include:
• Oversee the preparation, drafting and dissemination of the annual filings and other event notices required by the Continuing Disclosure Undertakings.
• Coordinate the gathering of financial and operating data needed for preparation of the initial offering documents.
• Ensure compliance with the Policy
• Maintain a compliance file; and
Stay informed on requirements for the Continued Disclosure Undertakings, the timing required for disclosures, and any changes thereto.
GENERAL PRINCIPLES
In accordance with this Policy, any member of the Committee may raise potential disclosure concerns or issues at any time during the disclosure process (the “Process”). The Process is designed to facilitate the review of all disclosure and offering documents, including but not limited to, Continuing Disclosure Undertakings, Annual Information Filings , Audited Financial Statements , Rule 15c2 -12 Event Notices, Notices of Failure, official statements, preliminary official statements, fiscal agent agreements, trust agreements, and bond indentures for revisions, clarifications and/or improvements. Any other disclosure or offering documents that are not specifically listed shall be reviewed and verified during the Process.
PREPARATION OF OFFERING DOCUMENTS
The Committee and/or the Disclosure Coordinator shall coordinate the City's process for reviewing and commenting on the preliminary official statement (the “Preliminary Official Statement”). The drafts of the Preliminary Official Statement shall be reviewed by the Committee, Subject Matter Reviewers, financia l advisor, bond counsel, disclosure counsel and other assigned parties. The final draft of the Preliminary Official Statement shall be reviewed by the Executive Director of Finance and/or his/her designee and/or the Assistant Director of Finance and/or his /her designee prior to approval by the City Council, or such other legislative body of the respective Santa Ana Issuer. The Preliminary Official Statement and financing documents must be approved as discussion items on the agenda and may not be placed on t he consent calendar. The Preliminary Official Statement and the final official statement will not be finalized nor posted until all of the parties have signed-off.
PREPARATION & DOCUMENTATION OF ANNUAL REPORTS
The Disclosure Coordinator shall establish a disclosure calendar outlining the annual submission dates for the Annual Report required pursuant to each Continuing Disclosure Undertaking. Approximately 90 days before the submission date for each required filing established under such Continuing Disclosure Undertaking, the Disclosure Coordinator shall initiate the process of preparing the financial and operating information required to be submitted thereunder and shall assemble the information available at that time and determine the scope of addit ional information to be required. The Disclosure Coordinator shall also contact the third-party, engaged to complete the required filing, to establish a schedule for completion and submission of the Annual Report.
Municipal Securities Disclosure Policy & Procedures
November 19, 2024
Not less than 30 days before the submis sion date, the Disclosure Coordinator, in coordination with the Subject Matter Reviewers, shall prepare a draft submission of financial and operating information required to be included in the Annual Information Filing, highlighting any information still unavailable.
Additionally, the draft of the Annual Information Filing and Audited Financial Statements shall be submitted to CAO for review.
ANNUAL REPORT FILING PROCESS
The Disclosure Coordinator along with the Subject Matter Reviewers shall review the drafts of the Annual Reports. The Disclosure Coordinator shall make any changes recommended by the Committee and resubmit the Annual Information Filings . The Disclosu re Coordinator shall maintain and update the compliance files for each Continuing Disclosure Undertaking.
On or before the submission date established under each Continuing Disclosure Undertaking, the Disclosure Coordinator or the dissemination agent, if applicable, shall file the Annual Report with the MSRB using EMMA the Annual Inform ation Filing that includes any changes recommended by the Committee. If the Audited Financial Statements are not available, unaudited financial information shall be filed with the MSRB using EMMA and the Audited Financial Statements shall be filed within 1 0 business days of their receipt and acceptance.
LISTED EVENTS
The Rule also requires filing of a Rule 15c2 -12 Event Notice upon the occurrence of certain listed events described in the Continuing Disclosure Undertakings including rating changes. The Disclosure Coordinator shall coordinate the preparation and filing of any Rule 15c2-12 Event Notice to the MSRB using EMMA within 10 business days of occurrence of any such listed event.
The listed events most likely to occur on a regular basis relate to bond redemptions or defeasances of outstanding issues and rating changes.
REPORTING REQUIREMENTS
The Committee shall identify any incidents of non-compliance and prepare a report for the City Manager, Executive Director of Finance and the CAO. Such repo rt shall include recommendations to resolve any non-compliance with the respective Continuing Disclosure Undertaking.
AUDITED FINANCIAL STATEMENTS (COMPREHENSIVE ANNUAL FINANCIAL REPORT) The Committee shall review and provide feedback in the preparation of the Management Discussion & Analysis (MD&A) and the debt-related footnotes to the Audited Financial Statements. Additionally, the Committee along with the disclosure counsel shall compare the MD&A and related footnote sections to the Annual Information Filing and any Preliminary Official Statement being prepared at the time to ensure consistency.
RECORDS RETENTION
The Disclosure Coordinator shall maintain records with respect to the filings with the MSRB using EMMA, including, but not limited to, EMMA posting receipts showing dates and nature of contents of all filings for each issue of Obligations outstanding.