That the City Council and Utility Authority:
A. APPROVE AND ADOPT RESOLUTION NO. CC 2025-__ ENTITLED: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LA HABRA APPROVING THE ISSUANCE BY THE LA HABRA UTILITY AUTHORITY OF ITS LA HABRA UTILITY AUTHORITY (ORANGE COUNTY, CALIFORNIA) WATER REVENUE REFUNDING BONDS, SERIES 2025, TO REFUND THE OUTSTANDING LA HABRA UTILITY AUTHORITY (ORANGE COUNTY, CALIFORNIA) REVENUE BONDS, SERIES 2013A, AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH; AND,

B. APPROVE AND ADOPT A RESOLUTION NO. UA 2025-__ ENTITLED: RESOLUTION OF THE LA HABRA UTILITY AUTHORITY AUTHORIZING THE ISSUANCE AND SALE OF LA HABRA UTILITY AUTHORITY (ORANGE COUNTY, CALIFORNIA) WATER REVENUE REFUNDING BONDS, SERIES 2025, TO REFUND THE OUTSTANDING LA HABRA UTILITY AUTHORITY (ORANGE COUNTY, CALIFORNIA) REVENUE BONDS, SERIES 2013A, AUTHORIZING THE FORMS OF AND DIRECTING THE EXECUTION AND DELIVERY OF A SUPPLEMENTAL WATER REVENUE BOND INDENTURE, A PRELIMINARY OFFICIAL STATEMENT, A BOND PURCHASE AGREEMENT, A CONTINUING DISCLOSURE CERTIFICATE, AN ESCROW AGREEMENT AND RELATED FINANCING DOCUMENTS AND AGREEMENTS, AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION THEREWITH.

In October 2013, the La Habra Utility Authority issued $20,210,000 in Water Revenue Bonds, Series 2013A (the "Series 2013A Bonds"), to finance certain water system improvements and to refinance both the Authority's Series 2003 Bonds and a loan used for acquiring water rights. Currently, $14,500,000 of the principal amount of the Series 2013A Bonds remains outstanding.

Staff, in consultation with the City's financial advisors at Fieldman, Rolapp & Associates, Inc. (the City’s “Municipal Advisor”), have determined that current bond market conditions are favorable for the issuance of refunding bonds to refund the outstanding Series 2013A Bonds. The proposed Refunding Plan includes refunding the remaining Series 2013A Bonds on a tax-exempt, current refunding basis, without extending the original final maturity date of November 1, 2043. The estimated average annual debt service savings, based on market conditions as of April 10, 2025, is approximately $57,250 per year through the remaining life of the refunding bonds, providing a cost reduction and additional financial flexibility for the City’s Water Fund. However, given recent volatility in the bond market, staff and the City's financing team may choose to delay issuing the refunding bonds to a later date if market conditions in May are not favorable.
 

It is recommended that the Authority approve the sale and issuance of the La Habra Utility Authority Refunding Water Revenue Bonds, Series 2025 (the “Series 2025 Bonds”) in order to refund the La Habra Utility Authority Refunding Water Revenue Bonds, Series 2013A (the “Series 2013 Bonds”). The Series 2025 Bonds will be on parity with the Authority’s other outstanding La Habra Utility Authority Refunding Water Revenue Bonds, Series 2019A (Federally Taxable), and La Habra Utility Authority Refunding Water Revenue Bonds, Series 2019B (Tax-Exempt). The Authority has obtained an underlying AA credit rating for the Series 2025 Bonds from Standard & Poor’s, which is expected to help the Authority obtain the best possible interest rates at the time of sale.

The resolutions being presented for approval authorizes the issuance of the Series 2025 Bonds and approves the form and authorizes execution of the related financing documents including:

Next Steps:
The key milestones to complete the proposed refunding are identified below:

As noted above, should market conditions in May be unfavorable for this refunding, staff and the City's financing team may delay the sale of the refunding bonds to a future date when market conditions improve.

Based on current market conditions, refunding the outstanding Series 2013 Bonds is expected to generate total gross savings of approximately $1,087,434 over the remaining life of the indebtedness. The total issuance costs associated with this transaction are estimated at $244,911.67 and are detailed in the table below. Issuance costs will be paid for from proceeds derived from the refunding bonds. The term of the refunding bonds will match the original maturity date of November 1, 2043, with no extension to the repayment schedule.
 

Estimated Costs of Issuance
Bond/Disclosure Counsel	Stradling Yocca Carlson & Rauth	85,000.00
Municipal Advisor	Fieldman, Rolapp & Associates, Inc.	46,500.00
Trustee/Trustee's Counsel	The Bank of New York Mellon Trust Co.	5,050.00
Rating Agency	Standard & Poor's	26,800.00
Verification Agent	Causey Public Finance, LLC	2,000.00
Printer	Royce Printing	2,000.00
Underwriter	Oppenheimer	44,263.60
Contingency/Miscellaneous Expenses		33,298.07
Total Estimated Cost of Issuance		$           244,911.67