16. Preliminary Official Statement (Water) — Anaheim City Council, September 22, 2026

Norton Rose Fulbright US LLP draft 08/05/26
303814149.5 1001384651
NEW ISSUE–BOOK-ENTRY ONLY Credit Ratings: S&P:“___”
Fitch:“___”
KBRA:“___”
(See “CREDIT RATINGS”)
In the opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, under existing law, interest on the 2026 Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the tax covenants described herein, interest on the 2026 Bonds will be excludable from the gross income of the owners thereof for federal income tax purposes and will not be treated as an item of tax preference for purposes of the federal alternative minimum tax on individuals. See “TAX MATTERS” herein.

ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY
$____________*
Revenue Refunding Bonds, Series 2026-A
(Water System Refunding)
$____________*
Revenue Refunding Bonds, Series 2026-B
(Water System Refunding)
(Forward Delivery)
Dated: Date of Delivery Due: As shown on the inside front cover pages This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Investors are advised to read the entire Official Statement to obtain information essential to making an informed investment decision. Capitalized terms used on this cover page and not otherwise defined shall have the meanings set forth herein.

The Anaheim Housing and Public Improvements Authority (the “Authority”) is issuing its Revenue Refunding Bonds, Series 2026- A (Water System Refunding) (the “2026-A Bonds”) to (i) pay the purchase price of portions of certain maturities of its Revenue Refunding Bonds, Series 2020-B (Water System Refunding) (Taxable) (the “2020-B Bonds”), Revenue Bonds, Series 2022-A (Water System Project) (the “2022-A Bonds”), Revenue Refunding Bonds, Series 2022-B (Water System Refunding) (Taxable) (the “2022-B Bonds”) and Revenue Refunding Bonds, Series 2022-C (Water System Refunding) (the “2022-C Bonds,” and such maturities of the 2020-B Bonds, the 2022-A Bonds, the 2022-B Bonds and the 2022-C Bonds are referred to herein as the “Target Bonds”), in each case that are accepted for tender for cash; and (ii) pay costs of issuance of the 2026-A Bonds. The Authority is issuing its Revenue Refunding Bonds, Series 2026-B (Water System Refunding) (Forward Delivery) (the “2026-B Bonds” and together with the 2026-A Bonds, the “2026 Bonds”) to (i) refund, on a forward delivery basis, [all] or [certain maturities] of the Target Bonds that are not being purchased with the proceeds of the 2026-A Bonds, and (ii) pay costs of issuance of the 2026-B Bonds. See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.”
The 2026 Bonds are being issued pursuant to an Indenture of Trust, dated as of _______ 1, 2026 (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee. Interest on the 2026 Bonds is payable on April 1 and October 1 of each year, commencing [April 1, 2027]. The 2026 Bonds are special, limited obligations of the Authority, payable solely from Project Revenues which consist primarily of purchase payments (the “2026 Purchase Payments”) to be made by the City under an Installment Purchase Agreement, dated as of _______ 1, 2026 (the “Installment Purchase Agreement”), by and between the Authority and the City, and other sources described herein. Pursuant to the Installment Purchase Agreement, the City’s obligation to make 2026 Purchase Payments is payable from and secured by Surplus Revenues of the City’s Water System in the Qualified Obligations Account of the Surplus Revenue Fund, all as defined herein. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS.”
The 2026 Purchase Payments are payable from Surplus Revenues on a parity with each other and with the City’s purchase payments in connection with other Qualified Obligations, outstanding in the aggregate principal amount of $239,065,000 as of June 30, 2026 (including the aggregate principal amount of Qualified Obligations to be refunded with proceeds of the 2026 Bonds), and any other Qualified Obligations payable from Surplus Revenues on a parity therewith that may hereafter be incurred by the City. The 2026 Purchase Payments and the purchase payments relating to such Qualified Obligations are payable from the net revenues of the Water System on a basis junior and subordinate to (i) any voter-approved water revenue bonds, notes or other evidences of indebtedness of the City that may be issued in the future pursuant to the City Charter (“Senior Bonds”) and (ii) maintenance and operation expenses of the Water System. There are no Senior Bonds currently authorized or outstanding. The City has no ability to issue Senior Bonds (other than bonds issued to refund any Senior Bonds) without authorization by the electorate of the City. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS.”
The 2026 Bonds are being issued in fully registered form, registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository for the 2026 Bonds. Purchases of beneficial ownership interests in the 2026 Bonds will be made in book-entry form only, in denominations of $5,000 principal amount or any integral multiple thereof. Purchasers (“Beneficial Owners”) of 2026 Bonds will not receive physical certificates representing their ownership interests in the 2026 Bonds purchased. So long as Cede & Co. is the registered owner of the 2026 Bonds, references herein to Bondholders or registered owners shall mean Cede & Co. and shall not mean the Beneficial Owners of the 2026 Bonds. See “DESCRIPTION OF THE BONDS – General” and APPENDIX E – “BOOK-ENTRY ONLY SYSTEM.” The 2026 Bonds are subject to redemption prior to maturity as described herein. See “DESCRIPTION OF THE BONDS.” _____________________________
*Preliminary, subject to change.
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THE 2026 BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE AUTHORITY PAYABLE SOLELY FROM THE PROJECT REVENUES, CONSISTING PRIMARILY OF THE 2026 PURCHASE PAYMENTS MADE BY THE CITY UNDER THE INSTALLMENT PURCHASE AGREEMENT, AND SUCH OTHER AMOUNTS AS PROVIDED IN THE INDENTURE. THE 2026 BONDS SHALL NOT IN ANY WAY BE CONSTRUED AS A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR

ANY POLITICAL SUBDIVISION THEREOF IN CONTRAVENTION OF ANY CONSTITUTIONAL OR STATUTORY DEBT

LIMITATION, NOR SHALL ANYTHING CONTAINED IN THE INSTALLMENT PURCHASE AGREEMENT OR THE

INDENTURE BE CONSTRUED AS A PLEDGE OF GENERAL REVENUES, FUNDS OR MONEYS OF THE CITY OR THE

AUTHORITY OR AN OBLIGATION OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER.

The 2026 Bonds are offered by the Underwriter when, as and if issued by the Authority, subject to approval of legality by Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, and subject to certain other conditions. Norton Rose Fulbright US LLP is also serving as Disclosure Counsel to the Authority and the City in connection with the 2026 Bonds. Certain legal matters will be passed upon for the Authority and the City by the City Attorney of the City of Anaheim, and for the Underwriter by Stradling Yocca Carlson & Rauth LLP, Sacramento, California, Underwriter’s Counsel. It is expected that the 2026 Bonds in definitive form will be available for delivery through the DTC book-entry system by Fast Automated Securities Transfer (FAST) on or about _______, 2026.

It is expected that the 2026-B Bonds, in book-entry form, will be available for delivery through the facilities of DTC on or about ________, 2027*, subject to the satisfaction of certain conditions. Potential investors should carefully review the information under the caption “DELAYED DELIVERY OF THE 2026--B BONDS.” The 2026-B Bonds will be sold only to investors who execute and deliver to the Underwriter a Delayed Delivery Contract as a condition to any 2026-B Bonds being allocated to such investor, the form of which is included herein as APPENDIX H.

RBC Capital Markets
The date of this Official Statement is ____________, 2026. _____________________________
*Preliminary, subject to change.
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MATURITY SCHEDULES*
$_____________

ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY
Revenue Refunding Bonds, Series 2026-A
(Water System Refunding)
$___________ Serial 2026-A Bonds
Maturity
Date
(October 1)
Principal
Amount
Interest
Rate Yield CUSIP†
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
$_________ ___% Term 2026-A Bonds maturing on October 1, ____ – Yield ____%C; CUSIP†: _________ _____________________
c Yield to first optional redemption date of October 1, ____, at par. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority or the City and are included solely for the convenience of the holders of the 2026-A Bonds. The Authority and the City are not responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the 2026-A Bonds or as indicated above. The CUSIP number for a specific bond is subject to being changed after the issuance of the bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such bonds. _____________________________
*Preliminary, subject to change.
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MATURITY SCHEDULES*
(continued)
$_____________

ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY
Revenue Refunding Bonds, Series 2026-B
(Water System Refunding)
(Forward Delivery)
$____________ Serial 2026-B Bonds
Maturity
Date
(October 1)
Principal
Amount
Interest
Rate Yield CUSIP†
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
$__________ ____% Term 2026-B Bonds maturing on October 1, ___ – Yield ____%; CUSIP†: __________ _____________________
c Yield to first optional redemption date of October 1, ____, at par. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority or the City and are included solely for the convenience of the holders of the 2026-B Bonds. The Authority and the City are not responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the 2026-B Bonds or as indicated above. The CUSIP number for a specific bond is subject to being changed after the issuance of the bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such bonds. _____________________________
*Preliminary, subject to change.
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GENERAL INFORMATION
No dealer, broker, salesperson or other person has been authorized by the Authority, the City or the City’s Public Utilities Department (the “Department”) to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by the Authority, the City or the Department. 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 2026 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale. This Official Statement is not to be construed as a contract with the purchasers of the 2026 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 representation of facts.

All other information set forth herein has been furnished by the Authority, the City and the Department, and includes information obtained from other sources which are believed to be reliable. The information and expressions of opinion contained herein are subject to change without notice and neither the 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 Authority, the City or the Department since the date hereof. This Official Statement is delivered for use in connection with the sale of the 2026 Bonds and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the Authority, the City and the Department. All summaries of the documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

The Underwriter has provided the following two paragraphs for inclusion in this Official Statement:

The Underwriter has reviewed the information in this Official Statement in accordance with, and as 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.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR

EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2026 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

Certain statements included or incorporated by reference in this Official Statement constitute “forwardlooking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “project,” “expect,” “anticipate,” “intend,” “believe,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that 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. Except as specifically set forth herein, the City does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations or events, conditions or circumstances on which such statements are based occur.

This Official Statement, including any supplement or amendment hereto, is intended to be deposited with the Municipal Securities Rulemaking Board through the Electronic Municipal Market Access (EMMA) web site. The City also maintains a web site. However, the information presented therein is not part of this Official Statement and must not be relied upon in making an investment decision with respect to the 2026 Bonds.

References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Unless specified otherwise, such websites and the information or links contained therein are not incorporated into, and are not part of, this Official Statement for purposes of, and as that term is defined in, SEC Rule 15c2-12. 303814149.5

CITY OF ANAHEIM

CITY COUNCIL
Ashleigh Aitken
Mayor
Carlos A. Leon, Mayor Pro Tem Natalie Rubalcava, Council Member Ryan Balius, Council Member Norma Campos Kurtz, Council Member Natalie Meeks, Council Member Kristen Maahs, Council Member

CITY PUBLIC UTILITIES BOARD
John Seymour, Chairperson
Anh Pham, M.Ed., Vice-Chairperson Ivan Castillo, Member Albert McMenamin, Member Talab Ibrahim, Member
Hemant (Shashi) Kewalramani, Member Mitch Lee, Member

OFFICIALS OF THE CITY
Greg Garcia, Interim City Manager
Deborah A. Moreno, Finance Director/City Treasurer
Robert Fabela, City Attorney
Theresa Bass, City Clerk

CITY PUBLIC UTILITIES DEPARTMENT
Brian Beelner, Acting General Manager
Janet Lonneker, Assistant General Manager–Electric Services Craig Parker, Assistant General Manager–Water Services
Jonathan Sanks, Assistant General Manager–Administration & Risk Services

BOND COUNSEL AND DISCLOSURE COUNSEL
Norton Rose Fulbright US LLP
Los Angeles, California

MUNICIPAL ADVISOR
PFM Financial Advisors LLC
Los Angeles, California

TRUSTEE
U.S. Bank Trust Company, National Association
Los Angeles, California

VERIFICATION AGENT

TABLE OF CONTENTS
Page
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INTRODUCTION .......................................................................................................................................1 Purpose............................................................................................................................................1 Plan of Finance ...............................................................................................................................1 Forward Delivery of the 2026-B Bonds..........................................................................................2 Security and Sources of Payment for the 2026 Bonds....................................................................2 The City and the Water System ......................................................................................................3 Continuing Disclosure ....................................................................................................................4 Other Information and Definitions..................................................................................................4 PLAN OF FINANCE...................................................................................................................................5 DELAYED DELIVERY OF THE 2026-B BONDS .................................................................................10 ESTIMATED SOURCES AND USES OF FUNDS .................................................................................14 DESCRIPTION OF THE 2026 BONDS ...................................................................................................14 General..........................................................................................................................................14 Redemption of the 2026 Bonds.....................................................................................................15 SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS ................................................17 General; Background ....................................................................................................................17 Pledge Under the Indenture ..........................................................................................................17 Limited Obligation of the Authority .............................................................................................17 2026 Purchase Payments...............................................................................................................18 Water System Flow of Funds........................................................................................................19 Water System Funds and Accounts ..............................................................................................19 Water System Surplus Revenues..................................................................................................20 Rate Covenant...............................................................................................................................23 No Reserve Account for the 2026 Bonds......................................................................................23 Insurance.......................................................................................................................................23 Additional Qualified Obligations..................................................................................................23 THE CITY’S PUBLIC UTILITIES DEPARTMENT ...............................................................................24 Organization..................................................................................................................................24 Management of the Public Utilities Department...........................................................................24 Public Utilities Board....................................................................................................................25 THE WATER SYSTEM............................................................................................................................26 History of the Water System.........................................................................................................26 Existing Facilities .........................................................................................................................27 Groundwater Sources and PFAS ..................................................................................................27 Sources of Water...........................................................................................................................30 Water Treatment and Quality Control ..........................................................................................32 Consumers ....................................................................................................................................33 Rates and Charges.........................................................................................................................34 Operating Expenses and Transfers................................................................................................37 Outstanding Water System Revenue Obligations.........................................................................38 Historical Financial Results..........................................................................................................40 Water System Capital Program.....................................................................................................42 Insurance.......................................................................................................................................43 Labor Relations.............................................................................................................................43

TABLE OF CONTENTS
(continued)
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Retirement Programs ....................................................................................................................44 Litigation Affecting the Water System......................................... Error! Bookmark not defined.

ADEQUACY OF WATER SUPPLIES.....................................................................................................49 Orange County Water District – Groundwater Basin ...................................................................49 Metropolitan Water District of Southern California – Imported Water........................................51 Water Conservation Actions and Drought Response....................................................................55 Water Use Efficiency ....................................................................................................................57 CONSTITUTIONAL AND CHARTER LIMITATIONS.........................................................................58 Constitutional Limitations on Governmental Spending................................................................58 Proposition 218.............................................................................................................................58 Proposition 26...............................................................................................................................60 Future Initiatives...........................................................................................................................60 City Charter Revenue Bond Limitations.......................................................................................60 RISK FACTORS .......................................................................................................................................61 Limited Obligations......................................................................................................................61 System Operation and Expenses...................................................................................................61 Limitations on Revenues...............................................................................................................61 No Debt Service Reserve Account................................................................................................62 Casualty Risk ................................................................................................................................62 Risks Relating to Water Supply and Drought...............................................................................62 Regulatory Risk ............................................................................................................................62 Cybersecurity; Other Safety and Security Risks...........................................................................63 Climate Change.............................................................................................................................63 Limited Recourse on Default........................................................................................................63 THE AUTHORITY ...................................................................................................................................63 LITIGATION.............................................................................................................................................64 The Authority................................................................................................................................64 The City ........................................................................................................................................64 CREDIT RATINGS...................................................................................................................................64 TAX MATTERS........................................................................................................................................65 CERTAIN LEGAL MATTERS.................................................................................................................66 MUNICIPAL ADVISOR...........................................................................................................................66 FINANCIAL STATEMENTS...................................................................................................................67 VERIFICATION OF MATHEMATICAL COMPUTATIONS................................................................67 UNDERWRITING ....................................................................................................................................67 CERTAIN RELATIONSHIPS ..................................................................................................................68 CONTINUING DISCLOSURE.................................................................................................................68 MISCELLANEOUS ..................................................................................................................................69

TABLE OF CONTENTS
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APPENDIX A – AUDITED FINANCIAL STATEMENTS OF THE ANAHEIM WATER UTILITY FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2025......................A-1 APPENDIX B – GENERAL INFORMATION REGARDING THE CITY OF ANAHEIM .................B-1 APPENDIX C – SUMMARY OF PRINCIPAL LEGAL DOCUMENTS..............................................C-1 APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT .......................................D-1 APPENDIX E – BOOK-ENTRY ONLY SYSTEM................................................................................E-1 APPENDIX F – FORMS OF OPINION OF BOND COUNSEL............................................................ F-1 APPENDIX G – DEBT SERVICE SCHEDULE....................................................................................G-1 APPENDIX H – FORM OF DELAYED DELIVERY CONTRACT .....................................................H-1 1 303814149.5

OFFICIAL STATEMENT

INTRODUCTION
This Introduction is not a summary of this Official Statement, and is qualified by more complete and detailed information contained in the entire Official Statement. A full review should be made of the entire Official Statement, including the cover page and attached appendices. The offering of the Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used in this Introduction but not defined shall have the meanings given such terms elsewhere in this Official Statement.

Purpose
This Official Statement, which includes the cover page, inside cover pages and attached appendices, provides certain information in connection with the issuance and sale of $__________* in aggregate principal amount of Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2026-A (Water System Refunding) (the “2026-A Bonds”), and $__________* in aggregate principal amount of Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2026-B (Water System Refunding) (Forward Delivery) (the “2026-B Bonds” and together with the 2026-A Bonds, the “2026 Bonds”).

The 2026 Bonds are being issued pursuant to an Indenture of Trust, dated as of ________ 1, 2026 (the “Indenture”), by and among the Anaheim Housing and Public Improvements Authority (the “Authority”), the City of Anaheim, California (the “City” or “Anaheim”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

Plan of Finance
Tender for Purchase. On _______, 2026, the Authority and the City, with the assistance of RBC Capital Markets LLC, dealer manager (the “Dealer Manager”), released an “Invitation to Tender Water Revenue Bonds made by the Anaheim Housing and Public Improvements Authority and the City of Anaheim” (the “Invitation to Tender”) inviting owners of certain maturities of the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2020-B (Water System Refunding) (Taxable) (the “2020-B Bonds”), the Anaheim Housing and Public Improvements Authority Revenue Bonds, Series 2022-A (Water System Project) (the “2022-A Bonds”), the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2022-B (Water System Refunding) (Taxable) (the “2022-B Bonds”), and the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2022-C (Water System Refunding) (the “2022-C Bonds,” and such maturities of the 2020-B Bonds, the 2022-A Bonds, the 2022-B Bonds and the 2022-C Bonds are referred to herein as the “Target Bonds”) to tender such bonds for purchase by the Authority. See “PLAN OF FINANCE – Tender for Purchase.” Any such purchase will be funded by the Authority from a portion of the proceeds of the 2026- A Bonds, as described herein. See “ESTIMATED SOURCES AND USES FUNDS.” * Preliminary, subject to change. The principal amount of 2026-A Bonds will be determined by the principal amount of Target Bonds (defined herein), if any, tendered for purchase and accepted. See “PLAN OF FINANCE.”
2 303814149.5
Forward Delivery of 2026-B Bonds. The Authority and the City anticipate that, subject to market conditions, certain Target Bonds that are not tendered and accepted for purchase or exchange may be refunded on a forward delivery basis from proceeds of the 2026-B Bonds, as described below. See “DELAYED DELIVERY OF THE 2026-B BONDS.”
Application of Proceeds. The proceeds of the 2026-A Bonds will be used to (i) pay the purchase price of portions of certain portions of the Target Bonds that are accepted for tender for cash, if any and (ii) pay costs of issuance of the 2026-A Bonds. The proceeds of the 2026-B Bonds will be used to (i) refund certain portions of the Target Bonds that are not accepted for tender for cash, and (ii) pay costs of issuance of the 2026-B Bonds.

See “PLAN OF FINANCE” and “ESTIMATED SOURCES AND USES OF FUNDS.” Forward Delivery of the 2026-B Bonds
The Authority expects to deliver the 2026-B Bonds, in book-entry form to DTC, on or about __________, 2027* (the “Settlement Date”) pursuant to a forward delivery purchase contract (the “2026- B Purchase Contract”) among the Authority, the City and RBC Capital Markets LLC (the “Underwriter”).

The forward delivery of the 2026-B Bonds is necessary to comply with certain federal income tax requirements for a tax-exempt refunding of certain portions of the Target Bonds not tendered for purchase, using proceeds of the 2026-B Bonds. The Settlement Date and certain conditions to the obligations of the Underwriter to purchase the 2026-B Bonds give rise to certain risks to investors. See “DELAYED DELIVERY OF THE 2026-B BONDS” herein. The Underwriter has advised the Authority and the City that the 2026-B Bonds will be sold only to investors who execute a delayed delivery contract in substantially the form of Appendix H attached hereto (the “Delayed Delivery Contract”).

Security and Sources of Payment for the 2026 Bonds
The 2026 Bonds will be special, limited obligations of the Authority, secured by a pledge, charge and lien upon Project Revenues, which consist primarily of purchase payments (the “2026 Purchase Payments”) to be made by the City pursuant to an Installment Purchase Agreement, dated as of _____ 1, 2026 (the “Installment Purchase Agreement”), by and between the Authority and the City, and other sources described herein. Pursuant to the Indenture, the Authority will assign and transfer in trust to the Trustee substantially all of its rights in and to the Installment Purchase Agreement, including the right to receive the 2026 Purchase Payments thereunder and any and all of the other rights of the Authority under the Installment Purchase Agreement as may be necessary to enforce the payment of such 2026 Purchase Payments pursuant to the Installment Purchase Agreement.

Pursuant to the Installment Purchase Agreement, the City is obligated to make 2026 Purchase Payments solely from Surplus Revenues in the Qualified Obligations Account of the City’s Water System Surplus Revenue Fund (the “Qualified Obligations Account”). The 2026 Purchase Payments and the purchase payments relating to any other outstanding Qualified Obligations are payable from the Surplus Revenues of the Water System on a basis junior and subordinate to (i) any voter-approved Senior Bonds of the City that may be issued in the future pursuant to the City Charter and (ii) maintenance and operation expenses of the Water System, and on a parity with (a) existing Qualified Obligations, currently outstanding in the aggregate principal amount of $239,065,000 as of June 30, 2026 (including the aggregate principal amount of Qualified Obligations to be refunded with proceeds of the 2026 Bonds), and (b) any additional Qualified Obligations that may be issued in the future. There are no Senior Bonds currently authorized or outstanding. The City has no ability to issue Senior Bonds (other than bonds issued to refund any Senior Bonds) without authorization by the electorate of the City. The City has, and may in the future, incur additional maintenance and operation expenses of the Water System. As of May 1, 2026, the City has no ____________________________
*Preliminary, subject to change.
3 303814149.5
outstanding borrowings incurred for purposes of the Water System under its revolving credit agreement evidenced by Water Revenue Anticipation Notes. Water Revenue Anticipation Notes, if any, are payable from Surplus Revenues of the Water System on a basis junior and subordinate to the Qualified Obligations.

See “THE WATER SYSTEM – Outstanding Water System Revenue Obligations.” The City may in the future incur additional obligations evidenced by Water Revenue Anticipation Notes and other subordinate obligations. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and APPENDIX G – “DEBT SERVICE SCHEDULE.” See also “CONSTITUTIONAL AND CHARTER LIMITATIONS – City Charter Revenue Bond Limitations.”
The Bonds will also be secured by (i) all moneys deposited and held from time to time by the Trustee in the funds and accounts established under the Indenture, and (ii) income and gains with respect to the investment of amounts on deposit in the funds and accounts established under the Indenture.

Pursuant to the Installment Purchase Agreement, the City has agreed to prescribe, revise and collect such charges for the services and facilities of the Water System so that, in each Fiscal Year, the Surplus Revenues shall at least equal the sum of (i) 1.10 times the amount of Qualified Obligation Service with respect to such Fiscal Year; (ii) 1.00 times the principal of and interest on the outstanding Water Revenue Anticipation Notes due and payable and to be paid from Surplus Revenues in such Fiscal Year; and (iii)

1.00 times all other payments required to be made from Surplus Revenues in such Fiscal Year. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Rate Covenant.” The 2026 Bonds are special, limited obligations of the Authority payable solely from the Project Revenues, consisting primarily of the 2026 Purchase Payments made by the City under the Installment Purchase Agreement, and such other amounts as provided in the Indenture. The 2026 Bonds shall not in any way be construed as a debt of the City, the State of California or any political subdivision thereof in contravention of any constitutional or statutory debt limitation, nor shall anything contained in the Installment Purchase Agreement or the Indenture be construed as a pledge of general revenues, funds or moneys of the City or the Authority or an obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The Authority has no taxing power.

The City and the Water System
The City is a chartered city of the State of California (the “State”). The City encompasses approximately 50 square miles and is located in the northern portion of Orange County, about 28 miles southeast of downtown Los Angeles and about 90 miles north of San Diego. The City operates under the Charter of the City of Anaheim (the “Charter”) and with a Council-Manager form of government, whereby policies of the City Council are administered by a City Manager, who is appointed by the City Council.

Municipal departments operate under the supervision of the City Manager and/or City Council. Under the provisions of the California Constitution, the Charter and Title 10 of the Municipal Code of the City, the City owns and operates both a Water System and an electric system (the “Electric System”) for the citizens of the City. The Public Utilities Department of the City (the “Department” or the “Public Utilities Department”) exercises jurisdiction over both the Water System and the Electric System and is under the supervision of the Public Utilities General Manager (the “General Manager”).

The municipal water utility of the City commenced operations in 1879. The Water System serves virtually the entire area within the limits of the City and a small area that lies outside of the incorporated City boundary. The Water System consists of facilities designed to serve an existing population of over 353,000 people as well as having the ability to serve an expanded population of nearly 390,000 expected by the year 2030.
4 303814149.5
During Fiscal Year 2024-25 (i.e., the City’s Fiscal Year ending June 30, 2025), total water sales of approximately 17.1 billion gallons were recorded to approximately 64,897 connected meters. The Water System’s peak day distribution was 65.0 million gallons and daily distribution averaged 49.0 million gallons. The City provides water to its customers from two main sources: (1) production wells overlying the Orange County groundwater basin, which have provided approximately 46% of the City’s water supply needs during the last five years, with less than 1% coming from recycled water; and (2) from water purchased from The Metropolitan Water District of Southern California (“MWD”), which provided the remaining 54%. MWD imports water into the region from the California State Water Project and the Colorado River Aqueduct. The City is approximately 18 miles wide (from the west to east boundary) and varies in elevation from 60 feet to over 1,200 feet above sea level. Because of this geographical diversity, the Water System was designed to serve the flatlands of west and central Anaheim, as well as the hill and canyon area of east Anaheim. Major facilities include the Lenain Water Filtration Plant, a facility designed to treat raw water stored in Walnut Canyon Reservoir (920 million gallon capacity) and distribute the resulting treated water throughout most areas of east Anaheim, 19 production wells with the capacity to extract groundwater at a combined rate of over 84 million gallons per day (“MGD”) and the capability to distribute this high-quality water directly into the distribution system, and 12 other storage facilities representing an approximately 36 million gallons of additional treated water storage capacity. In addition, the City has eight MWD connections with a combined capacity of 110 MGD.

The City previously took a significant number of its groundwater wells offline due to the detection of per- and polyfluoroalkyl substances (“PFAS”) at levels exceeding applicable regulatory thresholds; however, by the fall of Fiscal Year 2024-25, all fourteen such wells had been returned to service following the completion of the City’s groundwater treatment program in partnership with the Orange County Water District (“OCWD”). As of April 2026, five additional wells have been taken offline as part of the next phase of the City’s PFAS treatment program, with construction of treatment facilities anticipated to be completed in phases by summer 2029. See “THE WATER SYSTEM – Groundwater Sources and PFAS” herein.

For a more detailed discussion of the Water System, see “THE WATER SYSTEM” and “ADEQUACY OF WATER SUPPLIES.”
Continuing Disclosure
Pursuant to a Continuing Disclosure Agreement, dated the date of delivery of the 2026 Bonds (the “Continuing Disclosure Agreement”), between the City and the Trustee, the City will covenant for the benefit of the registered owner and the Beneficial Owners of the 2026 Bonds, to provide certain financial information and operating data relating to the City and the Water System annually and to provide notices of certain events. See “CONTINUING DISCLOSURE.”
Other Information and Definitions
This Official Statement includes brief descriptions of the Bonds and the City’s Water System, and summaries of the Indenture, the Installment Purchase Agreement, certain provisions of the Charter and certain other documents. Such descriptions and summaries do not purport to be comprehensive or definitive.

The summaries of and references to all documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definite, and each such summary and reference is qualified in its entirety by reference to each such document, statute, report or instrument.

Terms capitalized but not defined herein have the meanings set forth in the Indenture or the Installment Purchase Agreement. See APPENDIX C – “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS – Definitions for the Indenture” and “– Definitions for the Installment Purchase Agreement.”
5 303814149.5

PLAN OF FINANCE
General. The 2026-A Bonds are being issued to: (i) pay the purchase price of portions of certain maturities of the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2020-B (Water System Refunding) (Taxable) (the “2020-B Bonds”), the Anaheim Housing and Public Improvements Authority Revenue Bonds, Series 2022-A (Water System Project) (the “2022- A Bonds”), the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2022-B (Water System Refunding) (Taxable) (the “2022-B Bonds”), and the Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2022-C (Water System Refunding) (the “2022-C Bonds,” and such maturities of the 2020-B Bonds, the 2022-A Bonds, the 2022-B Bonds and the 2022-C Bonds are referred to herein as the “Target Bonds”), in each case, that are accepted for tender for cash, if any, and (ii) pay the costs of issuance of the 2026-A Bonds.

The 2026-B Bonds are being issued to: (i) refund, on a forward delivery basis, portions of certain maturities of the Target Bonds not accepted for tender for purchase, and (ii) pay the costs of issuance of the 2026-B Bonds. See “Forward Delivery of the 2026-B Bonds” below.

The Target Bonds. The 2020-B Bonds were issued by the Authority on March 4, 2020 pursuant to an Indenture of Trust, dated as of March 1, 2020 (the “2020 Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee. The 2020-B Bonds were issued primarily for the purpose of refunding a portion of the Authority’s outstanding Revenue Bonds, Series 2016-A (Water System Refunding and Improvements). As of ________, 2026, $___________ aggregate principal amount of the 2020-B Bonds remained outstanding. The 2020-B Bonds are payable for project revenues of the Authority pledged therefor, consisting primarily of 2020 Purchase Payments to be made by the City to the Authority under an Installment Purchase Agreement dated as of March 1, 2020.

The 2022-A Bonds, the 2022-B Bonds and the 2022-C Bonds were issued by the Authority on April 12, 2022 pursuant to an Indenture of Trust, dated as of April 1, 2022 (the “2022 Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee. The 2022-A Bonds were issued primarily for the purpose of financing the acquisition of certain improvements to the City’s Water System. The 2022-B Bonds were issued primarily for the purpose of refunding a portion of the outstanding California Municipal Finance Authority Revenue Bonds, Series 2015-A (City of Anaheim Water System Project) and a portion of the Authority’s Revenue Bonds, Series 2020-A (Water System Project). The 2022-C Bonds were issued primarily for the purpose of refunding all of the Anaheim Public Financing Authority’s outstanding Revenue Bonds, Series 2010-B (Water System Project) (Federally Taxable Build America Bonds). As of _________, 2026, $___________ aggregate principal amount of the 2022-A Bonds remained outstanding, $___________ aggregate principal amount of the 2022-B Bonds remained outstanding and $____________ aggregate principal amount of the 2022-C Bonds remained outstanding. The 2022-A Bonds, the 2022-B Bonds and the 2022-C Bonds are payable from project revenues of the Authority pledged therefor, consisting primarily of the 2022 Purchase Payments to be made by the City to the Authority under an Installment Purchase Agreement dated as of April 1, 2022, between the Authority and the City.

The 2020 Purchase Payments and the 2022 Purchase Payments constitute Qualified Obligations payable by the City from Surplus Revenues on a parity with any other Qualified Obligations heretofore or hereafter incurred by the City. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS – Water System Surplus Revenues.”
Upon payment of the purchase price thereof when accepted for tender, the tendered Target Bonds will be cancelled and the liability of the City with respect to the tendered Target Bonds and the related 6 303814149.5
portion of the 2020 Purchase Payments and the 2022 Purchase Payments, as applicable, will cease and such tendered Target Bonds will no longer be outstanding under the applicable indenture.

Tender for Purchase of Target Bonds. On ________, 2026, the Authority and the City, with the assistance of RBC Capital Markets LLC (the “Dealer Manager”), released an “Invitation to Tender Water Revenue Bonds Made by the Anaheim Housing and Public Improvements Authority and the City of Anaheim” (the “Tender Invitation”), inviting owners of the bonds listed and maturing on the dates set forth in the tables below (the “Target Bonds”) to tender such bonds for purchase by the Authority and cancellation of such Target Bonds. Any purchase of Target Bonds will be funded by the Authority from the proceeds of the 2026-A Bonds. See “ESTIMATED SOURCES AND USES OF FUNDS.” Anaheim Housing and Public Improvements Authority
Revenue Refunding Bonds, Series 2020-B
(Water System Refunding) (Taxable)
Maturity Date
(October 1)
Interest
Rate
Par Amount
Outstanding
CUSIP
(Base No.
032556)
2027 1.998% $1,670,000 FB3
2028 2.123 1,700,000 FC1
2029 2.203 1,745,000 FD9
2030 2.273 1,785,000 FE7
2031 2.453 1,825,000 FF4
2032 2.553 1,875,000 FG2
2033 2.573 1,920,000 FH0
2034 2.673 1,985,000 FJ6
2035 2.703 2,035,000 FK3
2038 3.033 6,485,000 FL1
7 303814149.5
Anaheim Housing and Public Improvements Authority
Revenue Bonds, Series 2022-A
(Water System Project)
Maturity Date
(October 1)
Interest
Rate
Par Amount
Outstanding
CUSIP
(Base No. 032556)
2027 5.00% $ 810,000 JK9
2028 5.00 850,000 JL7
2029 5.00 895,000 JM5
2030 5.00 940,000 JN3
2031 5.00 985,000 JP8
2032 5.00 1,040,000 JQ6
2033 5.00 1,090,000 JR4
2034 5.00 1,145,000 JS2
2035 5.00 1,205,000 JT0
2036 5.00 1,270,000 JU7
2037 5.00 1,335,000 JV5
2038 5.00 1,400,000 JW3
2039 5.00 1,475,000 JX1
2040 5.00 1,550,000 JY9
2041 5.00 1,630,000 JZ6
2042 5.00 1,710,000 KA9
2047 5.00 9,970,000 KB7
2052 5.00 12,800,000 KC5
8 303814149.5
Anaheim Housing and Public Improvements Authority
Revenue Refunding Bonds, Series 2022-B
(Water System Refunding) (Taxable)
Maturity
Date
(October 1)
Principal
Amount
Interest
Rate
CUSIP†
(Base No. 032556) ISIN†
Common
Code‡
2027 $ 4,655,000 3.102% KH4 US032556KH42 241224864
2028 4,800,000 3.139 KJ0 US032556KJ08 241224856
2029 4,950,000 3.239 KK7 US032556KK70 241224848
2030 5,105,000 3.240 KL5 US032556KL53 241224830
2031 5,275,000 3.340 KM3 US032556KM37 241224821
2032 5,460,000 3.440 KN1 US032556KN10 241224813
2033 1,270,000 3.590 KP6 US032556KP67 241224805
2034 1,315,000 3.740 KQ4 US032556KQ41 241224791
2035 1,365,000 3.840 KR2 US032556KR24 241224783
2042 16,065,000 4.093 KS0 US032556KS07 241224775
2049 22,770,000 4.295 KT8 US032556KT89 241224767
____________________________
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP and ISIN data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP and ISIN numbers have been assigned by an independent company not affiliated with the Authority or the City and are included solely for the convenience of the holders of the 2022-B Bonds. The Authority and the City are not responsible for the selection or use of these CUSIP and ISIN numbers and no representation is made as to their correctness on the 2022-B Bonds (Taxable) or as indicated above. The CUSIP and/or ISIN number for a specific bond is subject to being changed after the issuance of the bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of such bonds.
‡ The Common Codes are provided herein by Euroclear Bank S.A./N.V. Common Codes are provided for convenience of reference only. The Authority and the City are not responsible for the selection or use of these of these Common Codes, and no representation is made as to their correctness on the 2022-B Bonds or as indicated above. 9 303814149.5
Anaheim Housing and Public Improvements Authority
Revenue Refunding Bonds, Series 2022-C
(Water System Refunding)
Maturity
Date
(October 1)
Principal
Amount
Interest
Rate
CUSIP†
(Base No. 032556)
2027 $ 990,000 5.00% KY7
2028 1,050,000 5.00 KZ4
2029 1,100,000 5.00 LA8
2030 1,165,000 5.00 LB6
2031 1,225,000 5.00 LC4
2032 1,290,000 5.00 LD2
2033 1,360,000 5.00 LE0
2034 1,430,000 5.00 LF7
2035 1,510,000 5.00 LG5
2036 1,595,000 5.00 LH3
2037 1,680,000 5.00 LJ9
2038 1,770,000 5.00 LK6
2039 5,795,000 5.00 LL4
2040 6,085,000 5.00 LM2
____________________________
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein are provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. CUSIP numbers have been assigned by an independent company not affiliated with the Authority, the City or the Underwriters and are included solely for the convenience of the holders of the 2022-C Bonds. None of the Authority, the City or the Underwriters is responsible for the selection or use of these CUSIP numbers and no representation is made as to their correctness on the 2022-C Bonds or as indicated above. The CUSIP number for a specific maturity is subject to being changed after the issuance of the 2022-C Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part of such maturity or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of the 2022-C Bonds.

Owners of the Target Bonds must review the Invitation to Tender for further information regarding the Authority’s offer. The Invitation to Tender provides that all tenders for purchase must be made on or before _________, 2026 (the “Expiration Date”). Following the Expiration Date, on ________, 2026, the Authority will determine whether to accept the Target Bonds tendered for purchase. [The Authority and the City anticipate that, subject to market conditions, all Target Bonds that are not tendered for purchase will be refunded with proceeds of the 2026-B Bonds.]
The Authority and the City reserve the right to cancel or modify the Invitation to Tender at any time on or prior to the acceptance date and reserves the right to make a future invitation to tender bonds at prices different than the offer purchase prices described in the Invitation to Tender, or a future invitation to exchange bonds for new bonds with terms different than the terms described in the Invitation to Tender, subject to certain conditions. The Authority and the City will have no obligation to purchase Target Bonds offered pursuant to the Invitation to Tender that do not meet the Financing Conditions (defined therein).

Nothing in the Invitation to Tender limits the ability of the Authority and the City to refund the Target Bonds at any time or in the future.
10 303814149.5
DELAYED DELIVERY OF THE 2026-B BONDS
The Authority, the City and the Underwriter will enter into a Forward Delivery Bond Purchase Contract (the “Forward Delivery Bond Purchase Contract”) with respect to the 2026-B Bonds. Subject to the terms of the Forward Delivery Bond Purchase Contract, the Authority expects to deliver the 2026-B Bonds, in book-entry form through the facilities of DTC, on or about _________, 2027* (such date, or such later date as is agreed to by the Authority, the City and RBC Capital Markets LLC (the “Underwriter”) for delivery of the 2026-B Bonds, is referred to herein as the “Settlement Date”), for the account of the Underwriter identified in the Forward Delivery Bond Purchase Contract.

The obligation of the Underwriter to purchase the 2026-B Bonds from the Authority is subject to the satisfaction of certain conditions, as outlined in the Forward Delivery Bond Purchase Contract, on or about ___________, 2026, or such later date as is agreed to by the Authority and the Underwriter (the “Closing Date”) and on the Settlement Date. The conditions to be satisfied on the Closing Date and the Settlement Date are, in general, comparable to those in connection with a bond closing that utilizes a standard time period between the sale date and the settlement date. Because of the forward delivery of the 2026-B Bonds, there are certain additional termination rights and settlement conditions that are not generally present in a bond transaction that does not involve a forward delivery. Certain of those rights and conditions are summarized below.

BY PLACING AN ORDER WITH THE UNDERWRITER FOR THE PURCHASE OF THE 2026-B BONDS, THE PURCHASER ACKNOWLEDGES AND AGREES THAT THE 2026-B BONDS ARE BEING SOLD ON A “FORWARD” BASIS AND THAT THE PURCHASER IS OBLIGATED TO ACCEPT DELIVERY OF AND PAY FOR THE 2026-B BONDS ON THE SETTLEMENT DATE

SUBJECT TO THE CONDITIONS IN THE DELAYED DELIVERY CONTRACT (AS DEFINED

BELOW), AND THAT EACH PURCHASER IS REQUIRED TO SIGN, AND DELIVER TO THE REPRESENTATIVE, A DELAYED DELIVERY CONTRACT AS A CONDITION TO ANY 2026-B BONDS BEING ALLOCATED TO SUCH PURCHASER. ADDITIONALLY, EACH PURCHASER ACKNOWLEDGES AND AGREES THAT ANY SALE OF THE 2026-B BONDS BY THE

PURCHASER FROM THE DATE OF THIS OFFICIAL STATEMENT THROUGH THE SETTLEMENT

DATE MUST BE ACCOMPANIED BY AN INVESTOR DELAYED DELIVERY CONTRACT

EXECUTED BY THE NEW PURCHASER, TOGETHER WITH DELIVERY OF THIS OFFICIAL

STATEMENT TO THE NEW PURCHASER
_______________________________
*Preliminary, subject to change.
11 303814149.5
Termination Rights of Underwriter [SUBJECT TO REVIEW BY UW] Under the Forward Delivery Bond Purchase Contract, at any time between the Closing (as defined in the Forward Delivery Bond Purchase Contract) and the Settlement, the Underwriter shall have the right to terminate its obligation to purchase the 2026-B Bonds under the Forward Delivery Bond Purchase Contract, by written notification by the Underwriter to the Authority, if at any time after the Closing and prior to the Settlement any of the following events shall have occurred:

1. any Change in Law shall have occurred (defined below);

2. as a result of any legislation, regulation, ruling, order, release, court decision or judgment or action by the U.S. Department of the Treasury, the Internal Revenue Service, or any agency of the State either enacted, issued, effective, or adopted, Bond Counsel cannot issue an opinion on the date of Settlement (in substantially the form attached to the Official Statement as of the Closing Date) to the effect that: (a) the interest on the 2026-B Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code (or comparable provisions of any successor federal tax laws); and (b) the interest on the 2026-B Bonds is exempt from the State of California income taxation;

3. legislation shall be enacted, or a decision by a court of the United States shall be rendered, or any action shall be taken by, or on behalf of, the Securities and Exchange Commission which has the effect of requiring the 2026-B Bonds to be registered under the Securities Act, or requires the qualification of any Authority Documents (as defined in the Forward Delivery Bond Purchase Contract) or the Indenture under the Trust Indenture Act;

4. the Official Statement, as of the Closing Date through 25 days after the Closing Date, or the Updated Official Statement, as of its date and through the Settlement Date, contained or contains any untrue statement of a material fact or omitted or omits 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;

5. a general banking moratorium shall have been declared by federal, New York or State authorities having jurisdiction and shall remain in force as of the date of Settlement, or material disruption in commercial banking or securities settlement or clearances services shall have occurred and is continuing on the date of Settlement;

6. a material failure of the Authority to comply with the provisions of the Indenture shall have occurred and be continuing as of the Settlement Date; and

7. as of the date of Settlement, any of the rating agencies that rated the 2026-B Bonds as disclosed in the Official Statement as of the Closing Date no longer maintains a rating on the 2026-B Bonds.

A “Change in Law” means (i) any change in or addition to applicable federal or state law, whether statutory or as interpreted by the courts or by federal or state agencies, including any changes in or new rules, regulations or other pronouncements or interpretations by federal or state agencies; (ii) any legislation enacted by the Congress of the United States (if such enacted legislation has an effective date which is on or before the Settlement), (iii) any law, rule or regulation enacted by any governmental body, department or agency (if such enacted law, rule or regulation has an effective date which is on or before the Settlement) or (iv) any judgment, ruling or order issued by any court or administrative body, which in any such case would, (A) as to the Underwriter, prohibit the Underwriter from completing the underwriting of the 2026- 12 303814149.5
B Bonds or selling the 2026-B Bonds or beneficial ownership interests therein to the public, or (B) as to the Authority, make the completion of the issuance, sale or delivery of the 2026-B Bonds illegal.

If the Change in Law involves the enactment of legislation which only diminishes the value of, as opposed to eliminating the exclusion from gross income for federal income tax purposes of interest payable on “state or local bonds,” the Authority may, nonetheless, be able to satisfy the requirements for the delivery of the 2026-B Bonds. In such event, the Underwriter would be obligated to purchase the 2026-B Bonds from the Authority and the Purchaser would be required to accept delivery of the purchased 2026-B Bonds from the Underwriter.

Neither Authority Nor City a Party to Investor Delayed Delivery Contracts The Underwriter has advised the Authority and the City that the 2026-B Bonds will be sold only to Purchasers who execute an Investor Delayed Delivery Contract (the “Delayed Delivery Contract”) with the Underwriter substantially in the form of APPENDIX H attached hereto. The Delayed Delivery Contract restricts the ability of Purchasers of the 2026-B Bonds to transfer their interests in the 2026-B Bonds prior to the Settlement Date and no representation is made that any such transfer will be permitted. Neither the Authority nor the City is a party to the Delayed Delivery Contracts and is not in any way responsible for the performance thereof or for any representations or warranties contained therein. The rights and obligations of the Authority, the City and the Underwriter under the Forward Delivery Bond Purchase Contract are not conditioned or dependent upon the performance of any Delayed Delivery Contract.

Certain Risks Related to the Delayed Delivery
During the period of time between the date of this Official Statement and the Settlement Date, certain information contained in this Official Statement could change in a material respect. Any changes in such information will not permit the Underwriter to terminate the Forward Delivery Bond Purchase Contract or release the Purchasers from their commitments to purchase the 2026-B Bonds unless the change reflects an event described under “Termination Rights of Underwriter” above. Pursuant to the terms of the Forward Delivery Bond Purchase Contract, the Authority and the City have agreed to deliver an updated Official Statement with respect to the 2026-B Bonds not more than 25 days or less than 10 days prior to the Settlement Date. Although neither the Authority nor the City is aware, as of the date of this Official Statement, of any information that would lead it to believe that it will be unable to satisfy its obligations under the Forward Delivery Bond Purchase Contract on the Settlement Date, no assurances can be made that, as of the Settlement Date: (a) there will have been no Change in Law (as defined herein and in the Forward Delivery Bond Purchase Contract); (b) the facts and circumstances that are material to one or more of the required legal opinions will not differ from the facts and circumstances as of the Closing Date; or (c) that all necessary certifications and representations can or will be delivered and made in connection with the proposed issuance and delivery of the 2026-B Bonds. As a consequence of any of the foregoing or other unforeseen events, including the events described below, one or more of the conditions required to be met by the Authority or the City on the Settlement Date, as set forth in the Forward Delivery Bond Purchase Contract, may not be met, with the possible result that the 2026-B Bonds will not be issued by the Authority.

THE UNDERWRITER (NOR, IN TURN, THE PURCHASERS OF THE 2026-B BONDS) MAY REFUSE TO PURCHASE THE 2026-B BONDS BY REASON OF GENERAL MARKET OR

CREDIT CHANGES, INCLUDING, BUT NOT LIMITED TO, (A) CHANGES IN THE RATING ASSIGNED TO THE 2026-B BONDS ON THE CLOSING DATE OR (B) CHANGES IN THE

FINANCIAL CONDITION, OPERATIONS, PERFORMANCE, PROPERTIES OR PROSPECTS OF THE AUTHORITY OR THE CITY PRIOR TO THE SETTLEMENT DATE. 13 303814149.5
IN ADDITION TO THE RISKS SET FORTH ABOVE, PURCHASERS OF THE 2026-B

BONDS ARE SUBJECT TO CERTAIN ADDITIONAL RISKS, SOME OF WHICH ARE

DESCRIBED BELOW, AND WHICH WILL NOT CONSTITUTE GROUNDS FOR PURCHASERS TO REFUSE TO ACCEPT DELIVERY OF AND PAY FOR THE 2026-B BONDS.

Rating Risk. Issuance of the 2026-B Bonds and the Underwriter’s obligations under the Forward Delivery Bond Purchase Contract are not conditioned upon the assignment of any particular rating for the 2026-B Bonds or the maintenance of the rating assigned to the 2026-B Bonds as of the Closing Date. A change in rating does not entitle the Underwriter to terminate the Forward Delivery Bond Purchase Contract or release the Underwriter from their obligations to purchase the 2026-B Bonds from the Authority and in turn the obligation of the Purchasers to purchase the 2026-B Bonds from the Underwriter.

Secondary Market Risk. The Underwriter is not obligated to make a secondary market in the 2026- B Bonds and no assurances can be given that a secondary market will exist for the 2026-B Bonds between the date of this Official Statement and the Settlement Date (the “Delayed Delivery Period”). Purchasers of the 2026-B Bonds should assume that the 2026-B Bonds will be illiquid throughout the Delayed Delivery Period.

Market Value Risk. The market value of the 2026-B Bonds as of the Settlement Date may be affected by a variety of factors including, without limitation, general market conditions, the rating then assigned to the 2026-B Bonds, the financial condition and business operations of the City’s Water System and federal, state and local income tax and other laws. The market value of the 2026-B Bonds as of the Settlement Date could therefore be higher or lower than the price to be paid by the initial purchasers of the 2026-B Bonds and that difference could be substantial. The Underwriter will nevertheless be obligated to take delivery of and pay for the 2026-B Bonds if the Settlement Date conditions in the Forward Delivery Bond Purchase Contract are satisfied. None of the Authority, the City or the Underwriter makes any representation as to the expected market price of the 2026-B Bonds as of the Settlement Date. Further, no assurance can be given that the introduction or enactment of any future legislation will not affect the market price for the 2026-B Bonds as of the Settlement Date or thereafter or not have a materially adverse impact on any secondary market for the 2026-B Bonds.

Tax Law Risk. Subject to the additional conditions of settlement described above, the Forward Delivery Bond Purchase Contract obligates the Authority to deliver and the Underwriter to purchase and accept delivery of the 2026-B Bonds if the Authority causes to be delivered an opinion of Bond Counsel with respect to the 2026-B Bonds substantially in the form and to the effect as set forth in “APPENDIX F— PROPOSED FORMS OF OPINIONS OF BOND COUNSEL.” During the Delayed Delivery Period, new legislation, new court decisions, new regulations, or new rulings may be enacted, delivered, or promulgated, or existing law, including regulations adopted pursuant thereto, may be interpreted in a manner that might prevent Bond Counsel from rendering its opinion or otherwise affect the substance of such opinion. In addition, if the Change in Law involves the enactment of legislation which only diminishes the value of, as opposed to eliminating the exclusion from gross income for federal income tax purposes of interest payable on “state or local bonds,” the Authority may, nonetheless, be able to satisfy the requirements for the delivery of the 2026-B Bonds.
14 303814149.5

ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds in connection with the 2026 Bonds are as follows:
2026-A Bonds 2026-B Bonds Total(1)
Sources:

Principal Amount $ $ $
Original Issue Premium...........................................................

Transfers from Refunded Bonds funds and accounts ..............

Total Sources(1)............................................................ $ $ $
Uses:

Deposit to Escrow Funds......................................................... - $ Tendered Target Bonds Purchase Price ................................... - Costs of Issuance(2)..................................................................

Total Uses(1)................................................................ $ $ $ __________________
(1) Totals may not add due to rounding.
(2) Includes Underwriters’ discount, legal fees, fees of the Trustee and escrow agents, verification agent fees, municipal advisory fees, rating agency fees, printing costs and other miscellaneous expenses.

DESCRIPTION OF THE 2026 BONDS
General
The 2026 Bonds of each Series will be issued in the form of fully registered bonds, without coupons, in Authorized Denominations of $5,000 and any integral multiple thereof. The 2026 Bonds of each Series will be dated their date of delivery and will bear interest at the respective rates per annum and will mature (subject to redemption provisions set forth below), on the respective dates and in the principal amounts, all as set forth on the inside cover pages hereof.

Interest on the 2026 Bonds of each Series will be payable semiannually on April 1 and October 1 of each year (each, an “Interest Payment Date”), commencing [April 1, 2027]. Interest on the 2026 Bonds of each Series will be computed on the basis of a 360-day year consisting of twelve 30-day months.

The 2026 Bonds of each Series will be registered in the name of Cede & Co., as initial nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as Depository for the 2026 Bonds. Ownership interests in the 2026 Bonds may be purchased by the purchasers thereof (“Beneficial Owners”) in book-entry form only, in the denominations hereinabove set forth. In the event (i) DTC determines not to continue to act as Depository for the 2026 Bonds, or (ii) the Authority determines that DTC is unable to discharge its responsibilities with respect to the 2026 Bonds or that continuation of the book-entry system is not in the best interest of the Beneficial Owners and the Authority elects to terminate the services of DTC, then the use of the DTC book-entry system with respect to the 2026 Bonds will be discontinued. The Authority may replace DTC with another qualified Depository. If another qualified Depository is not identified to replace DTC, then the 2026 Bonds will be registered in whatever name or names the Owners transferring or exchanging such Bonds shall designate, in accordance with the provisions of the Indenture and the 2026 Bonds. See APPENDIX E – “BOOK-ENTRY ONLY SYSTEM.” 15 303814149.5
Notwithstanding the foregoing, so long as records of ownership of the 2026 Bonds are maintained through the DTC book-entry system described above, all payments to the Beneficial Owners of the 2026 Bonds will be made in accordance with the procedures described in Appendix E hereto.

Redemption of the 2026 Bonds
Redemption of the 2026-A Bonds
Optional Redemption. The 2026-A Bonds maturing on or prior to October 1, ____ are not subject to optional redemption prior to maturity. The 2026-A Bonds maturing on and after October 1, ____ are subject to redemption, at the option of the City, in whole or in part in integral multiples of $5,000, on any date on or after October 1, ____, from funds provided by the City for such purpose, upon notice as provided in the Indenture, at a price equal to the principal amount to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.

Mandatory Sinking Account Redemption. The 2026-A Bonds maturing on October 1, ____ are subject to redemption prior to maturity from mandatory sinking account installments due on October 1 of each of the years set forth in the following table in the respective redemption amounts set forth opposite such years in said table (together with accrued interest thereon), without premium:
2026-A Bonds maturing October 1, ____
Redemption Date
(October 1)
Redemption
Amount
Redemption of the 2026-B Bonds
Optional Redemption. The 2026-B Bonds maturing on or prior to October 1, ____ are not subject to optional redemption prior to maturity. The 2026-B Bonds maturing on and after October 1, ____ are subject to redemption, at the option of the City, in whole or in part in integral multiples of $5,000, on any date on or after October 1, ____, from funds provided by the City for such purpose, upon notice as provided in the Indenture, at a price equal to the principal amount to be redeemed, plus accrued but unpaid interest to the redemption date, without premium.

Mandatory Sinking Account Redemption. The 2026-B Bonds maturing on October 1, ____ are subject to redemption prior to maturity from mandatory sinking account installments due on October 1 of each of the years set forth in the following table in the respective redemption amounts set forth opposite such years in said table (together with accrued interest thereon), without premium:
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2026-B Bonds maturing October 1, ____
Redemption Date
(October 1)
Redemption
Amount
In connection with any optional redemption pursuant to the Indenture of any Bonds that are term Bonds subject to mandatory sinking fund redemption, the principal amount of such Bonds being redeemed shall be allocated against the scheduled Sinking Fund Installments in such manner as the City may direct and the scheduled Sinking Fund Installments payable after such redemption shall be modified as to such Term Bonds.

Selection of Bonds to be Redeemed. Whenever provision is made for the redemption of less than all of the 2026 Bonds, the 2026 Bonds to be redeemed shall be selected to correspond to the Principal Components of the 2026 Purchase Payments prepaid by the City in accordance with the Installment Purchase Agreement and by lot within a maturity; provided, that in the case of any redemption of any 2026 Bonds, or portion thereof, prior to its maturity, the Trustee shall first select those 2026 Bonds previously acquired by the City which the City has delivered to the Trustee and designated as satisfying 2026 Purchase Payments, in lieu of making such redemption, and then the Trustee shall select by lot within a maturity the other Bonds to be redeemed.

Any selection of the 2026 Bonds by the Trustee shall be binding upon the Owners. For purposes of such selection, the 2026 Bonds shall be deemed to be comprised of separate $5,000 portions and such portions shall be treated as separate 2026 Bonds which may be separately redeemed.

Redemption Procedures
Notice of Redemption. The Indenture requires the Trustee to give notice of any redemption of the 2026 Bonds to the Owners of such 2026 Bonds designated for redemption by mail at least 20 but not more than 60 days prior to the redemption date; provided, however, that neither failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such 2026 Bonds or the cessation of the accrual of interest thereon. Any such notice of redemption of the 2026 Bonds held under the book-entry only system will be given by the Trustee only to DTC, or its nominee, as the registered owner of such 2026 Bonds. If by the date of mailing of notice of any optional redemption the City has not deposited with the Trustee moneys sufficient to redeem all the 2026 Bonds called for redemption, such notice will state that it is subject to the availability of funds for such purpose and will be of no effect unless funds sufficient for such purpose are available on the applicable redemption date. Any such notice may be rescinded by the City, in which case the Trustee shall notify the Owners of the affected 2026 Bonds of such rescission.

Effect of Redemption. From and after the date fixed for redemption, if funds available for the payment of the principal of and interest (and premium, if any) on the 2026 Bonds so called for redemption shall have been duly provided, such 2026 Bonds so called shall cease to be entitled to any benefit under the Indenture other than the right to receive payment of the principal, interest accrued to the redemption date, and premium, if any, and no interest shall accrue thereon from and after the redemption date specified in such notice.
17 303814149.5
SECURITY AND SOURCES OF PAYMENT FOR THE 2026 BONDS
General; Background
As described herein, the Bonds are being issued pursuant to the Indenture, by and among the Authority, the City and the Trustee. The Bonds, when issued, will be special, limited obligations of the Authority, payable solely from Project Revenues which consist primarily of 2026 Purchase Payments to be made by the City pursuant to the Installment Purchase Agreement, and other sources described herein. The 2026 Purchase Payments will constitute Qualified Obligations (as defined herein) pursuant to the Installment Purchase Agreement and will be payable from certain amounts in the Qualified Obligations Account of the Water System Surplus Revenue Fund (a special fund of the City held by the Treasurer of the City and created pursuant to Ordinance No. 5376 of the City Council) as described herein. See “–2026 Purchase Payments” below.

The City has previously executed and delivered, and has outstanding, a number of other installment purchase agreements with the Authority (which installment purchase agreements are substantially similar to the Installment Purchase Agreement), the purchase payments under which constitute Qualified Obligations of the Water System payable on parity with the 2026 Purchase Payments and are referred to under “– Water System Surplus Revenues” below. See also “Indebtedness; Joint Powers Agency Obligations – Direct Obligations.”
Pledge Under the Indenture
Pursuant to the Indenture, the 2026 Bonds are secured by a pledge, charge and lien upon Project Revenues and a pledge of all of the moneys in the 2026 Purchase Payment Fund, including all amounts derived from the investment of such moneys. Project Revenues consist primarily of the 2026 Purchase Payments to be made by the City to the Authority under the Installment Purchase Agreement. The 2026 Bonds are also secured by (i) all moneys deposited and held from time to time by the Trustee in the funds and accounts established under the Indenture; and (ii) income and gains with respect to the investment of amounts on deposit in the funds and accounts established under the Indenture. Pursuant to the Indenture, the Authority transfers in trust and assigns for security purposes to the Trustee, for the benefit of the Owners from time to time of the 2026 Bonds, all of the Project Revenues and substantially all of its rights in and to the Installment Purchase Agreement, including the right to receive the 2026 Purchase Payments thereunder and any and all of the other rights of the Authority under the Installment Purchase Agreement as may be necessary to enforce the payment of such 2026 Purchase Payments pursuant to the Installment Purchase Agreement.

Limited Obligation of the Authority
None of the Authority, any Authority member or any person executing the 2026 Bonds is liable personally on the 2026 Bonds or subject to any personal liability or accountability by reason of their issuance. The 2026 Bonds are limited obligations of the Authority, payable solely from and secured by the pledge of Project Revenues under the Indenture. Neither the Authority, its members, the State, nor any of its political subdivisions shall be directly, indirectly, contingently or morally obligated to use any other moneys or assets to pay all or any portion of the debt service due on the 2026 Bonds, to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment. The 2026 Bonds are not a pledge of the faith and credit of the Authority, its members, the State or any of its political subdivisions nor do they constitute indebtedness within the meaning of any constitutional or statutory debt limitation. The Authority has no taxing power.
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2026 Purchase Payments
Pursuant to the Installment Purchase Agreement, the City is obligated to make 2026 Purchase Payments solely from Surplus Revenues in the Qualified Obligations Account (a special fund of the City held by the Treasurer of the City and created pursuant to Ordinance No. 5376 of the City Council). The 2026 Purchase Payments are payable from Surplus Revenues on parity with each other and with the payments relating to other Qualified Obligations (as hereinafter defined) that may be issued in the future.

See “– Water System Surplus Revenues; Surplus Revenues” below. The 2026 Purchase Payments are junior and subordinate in priority of payment to (i) any Senior Bonds (of which none are currently outstanding), and (ii) maintenance and operation expenses of the Water System (see “Indebtedness; Joint Powers Agency Obligations – Joint Powers Agency Obligations”), and on a parity with (a) existing Qualified Obligations and (b) any additional Qualified Obligations which may be issued in the future. Nothing in the Installment Purchase Agreement precludes the City from making 2026 Purchase Payments from other lawfully available moneys of the City.

Subject to the limitations set forth in the preceding paragraph, the obligation of the City to make the 2026 Purchase Payments required by the Installment Purchase Agreement is absolute and unconditional, and is not to be abated, rebated, set-off, reduced, terminated, diminished or otherwise modified in any manner or to any extent whatsoever while any 2026 Purchase Payments remain unpaid, regardless of any contingency, act of God, event or cause whatsoever, including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, the taking by eminent domain or destruction of or damage to the Water System, commercial frustration of purpose, any change in the laws of the United States or the State of California or any political subdivision of either or the rules or regulations of any governmental authority, or any failure of the Authority or the Trustee to perform and observe any agreement, duty, liability or obligation arising out of or connected with the Installment Purchase Agreement or the Indenture. The Installment Purchase Agreement is deemed to constitute a “net contract” pursuant to which the City will pay absolutely the full amount of the 2026 Purchase Payments and all other payments required thereunder, regardless of any rights of set off, recoupment, abatement or counterclaim the City might otherwise have against the Authority, the Trustee or any other party.

The City has covenanted in the Installment Purchase Agreement to take such action as may be necessary to include and maintain the 2026 Purchase Payments due thereunder in its budget for the appropriate Fiscal Year or pursuant to a separate resolution of the City Council and to make the appropriations necessary for the payment of all such 2026 Purchase Payments required under the Installment Purchase Agreement. The performance of this covenant by the City is to be deemed and understood under the Installment Purchase Agreement to be a ministerial duty.

THE OBLIGATION OF THE CITY TO MAKE 2026 PURCHASE PAYMENTS UNDER THE

INSTALLMENT PURCHASE AGREEMENT IS PAYABLE SOLELY FROM SURPLUS REVENUES IN THE QUALIFIED OBLIGATIONS ACCOUNT. THE 2026 BONDS SHALL NOT IN ANY WAY BE

CONSTRUED AS A DEBT OF THE CITY, THE STATE OF CALIFORNIA OR ANY POLITICAL

SUBDIVISION THEREOF IN CONTRAVENTION OF ANY APPLICABLE CONSTITUTIONAL OR

STATUTORY DEBT LIMITATION OR RESTRICTION, NOR SHALL ANYTHING CONTAINED IN

THE INSTALLMENT PURCHASE AGREEMENT OR THE INDENTURE BE CONSTRUED AS A

PLEDGE OF GENERAL REVENUES, FUNDS OR MONEYS OF THE CITY OR AN OBLIGATION

OF THE CITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. 19 303814149.5
Water System Flow of Funds
The City is required by the Installment Purchase Agreement to pay, on or before each Purchase Payment Date, from the Qualified Obligations Account of the Surplus Revenue Fund to the Trustee for deposit in the 2026 Purchase Payment Fund, the amount of the 2026 Purchase Payments due thereunder on the next succeeding Purchase Payment Date. For a description of the Surplus Revenue Fund and other funds and accounts relating to the City’s Water System, see “– Water System Surplus Revenues” below.

See also APPENDIX C – “SUMMARY OF PRINCIPAL LEGAL DOCUMENTS – Installment Purchase Agreement – Flow of Revenues” and “– Flow of Surplus Revenues.” Water System Funds and Accounts
Pursuant to the Installment Purchase Agreement, all rates, fees and charges for providing water service to persons and real property (including connection fees) and all other fees, rents and charges and other income derived by the City from the ownership, operation, use or services of the Water System (the “Revenues”) are to be deposited as received by the City Treasurer to the Revenue Account in the Water Enterprise Fund (also known as the Water Utility Fund) held by the City Treasurer.

On or before the 20th day of each calendar month, there shall be withdrawn from the Revenue Account the entire amount on deposit in the Revenue Account and there shall be allocated and deposited such amount in the funds and accounts, in the order of priority listed below.

First, to the Maintenance and Operating Account in the Water Enterprise Fund, amounts sufficient for the payment of the Operating Expenses of the Water System as they become due and payable. “Operating Expenses” means the reasonable and necessary current expenses of maintaining, repairing and operating the Water System, including City administrative expenses directly attributable to Water System functions, but excluding depreciation and amortization, transfers to the City’s general fund and debt service requirements of the City’s general obligation water bonds, all computed in accordance with sound accounting principles and consistent with existing accounting practices of the City.

Second, to the Bond Service Account in the Water Enterprise Fund, one-sixth of the interest which will become due and payable (less any interest which has already been provided for) on the outstanding Senior Bonds within the next six month period and one-twelfth of the principal amount which will mature and be payable on the outstanding Senior Bonds within the next twelve month period and, to the Bond Sinking Account in the Water Enterprise Fund, the amount required with respect to any term Senior Bonds to provide for mandatory sinking fund installments. As of [June 30, 2026], there are currently no Senior Bonds outstanding, and the City has no plans to issue any Senior Bonds. “Senior Bonds” means the City’s revenue bonds, revenue notes or other similar evidences of indebtedness hereafter issued in connection with the acquisition, construction or financing of additions to and improvements of the Water System, payable out of and secured by Net Revenues.

The City Charter requires majority voter approval to authorize the issuance of Senior Bonds. See “CONSTITUTIONAL AND CHARTER LIMITATIONS – City Charter Revenue Bond Limitations.”
Third, so long as any Senior Bonds are outstanding, to the Reserve Fund for the Senior Bonds, the amount required (when added to amounts on deposit therein), if any, for such Fund to equal the Maximum Annual Debt Service with respect to the Senior Bonds.
20 303814149.5
Fourth, so long as any Senior Bonds, Qualified Obligations or Second Lien Qualified Obligations are outstanding, to the Renewal and Replacement Account in the Water Enterprise Fund, an amount equal to two percent (2%) of the Revenues received in the preceding calendar month until a balance is established or reestablished therein equal to one percent (1%) of the depreciated book value of the land, general plant and equipment which constitute the net utility plant of the Water System, or such other balance as the consulting engineer may recommend. The moneys contained in such Account may be used for extraordinary maintenance and repairs, renewals and replacements to, but not for additions to or extensions of, the Water System and may be transferred to the Bond Service Account, the Sinking Account and other accounts established to pay debt service on Senior Bonds to prevent default in payment of the principal and interest on outstanding Senior Bonds. Since this Account may be depleted at any time for various purposes, no assurance can be given that moneys in such Account will be available at any particular time for transfer to the Bond Service Account. As of [June 30, 2025], the City had a balance of $8,016,000 in its Renewal and Replacement Account. [to be updated closer to posting]
Fifth, so long as any Senior Bonds are outstanding, for deposit in the Extension and Improvement Account in the Water Enterprise Fund, such amounts as shall be deemed desirable by the City Council or appropriate City staff by appointment of the City Council. The moneys contained in said Account may be used for extensions and improvements to the Water System and may be transferred to the Bond Service Account, the Sinking Account and other accounts established to pay debt service on Senior Bonds, and to prevent default in payment of the principal of and interest on outstanding Senior Bonds. Since this Account may be depleted at any time for various purposes, no assurance can be given that moneys in such Account will be available at any particular time for transfer to the Bond Service Account. As there are no Senior Bonds currently outstanding, the Extension and Improvement Account is not currently being maintained by the City.

Sixth, to the Water System Surplus Revenue Fund, all moneys in the Revenue Account remaining after the above transfers have been made and all covenants required by the resolutions relating to the Senior Bonds have been performed. The moneys in the Water System Surplus Revenue Fund constitute the Surplus Revenues.

Water System Surplus Revenues
So long as any Qualified Obligations or Second Lien Qualified Obligations are Outstanding, promptly after the deposit in any month to the Surplus Revenue Fund, the entire amount of the Surplus Revenues in the Surplus Revenue Fund shall be transferred to the following accounts in the order of priority listed below. Generally, the Surplus Revenues remaining after all required deposits to the Qualified Obligations Account have been made are Surplus Revenues.

First, to the Qualified Obligations Account, the amount of Qualified Obligation Service with respect to such calendar month (to the extent not already transferred to such Account in such month) or, if less, the entire amount of Surplus Revenues then available for transfer to such Account. “Qualified Obligation Service” means, with respect to any period, the amount of principal and interest or other payments accrued or to accrue in such period with respect to all outstanding Qualified Obligations (excluding the amount of proceeds of Qualified Obligations held in any fund or account for the payment of Qualified Obligation Service accrued or to accrue during such period). For purposes of accrual under this definition, all payments with respect to Qualified Obligations due in a calendar month are to be deemed due on the first day of such calendar month. “Qualified Obligations” means, without duplication, (i) the 2022 Purchase Payments relating to the Authority’s Revenue Bonds, Series 2022-A (Water System Project) in the outstanding principal amount of $44,295,000, the Authority’s Revenue Refunding Bonds, Series 2022-B (Water System 21 303814149.5
Refunding) (Taxable) in the outstanding principal amount of $78,705,000, and the Authority’s Revenue Refunding Bonds, Series 2022-C (Water System Refunding) in the outstanding principal amount of $30,765,000 (collectively, the “2022 Bonds”); (ii) the 2020 Purchase Payments relating to the Authority’s Revenue Bonds, Series 2020-A (Water System Project) in the outstanding principal amount of $1,405,000 and the Authority’s Revenue Refunding Bonds, Series 2020-B (Water System Refunding) in the outstanding principal amount of $27,840,000 (collectively, the “2020 Bonds”); (iii) the 2015-A Purchase Payments relating to the California Municipal Finance Authority Revenue Bonds, Series 2015-A (City of Anaheim Water System Project) in the outstanding principal amount of $39,385,000 (the “2015-A Bonds”); and (iv) additional bonds and obligations which at the time of initial delivery thereof satisfy the issuance test set forth in the Installment Purchase Agreement The aggregate principal amount of Qualified Obligations outstanding as of June 30, 2026 was $239,065,000. See “Indebtedness; Joint Powers Agency Obligations – Direct Obligations.”
Second, to the Second Lien Qualified Obligations Account the amount of Second Lien Qualified Obligation Service with respect to such calendar month (to the extent not already transferred to such Account in such month), or the entire amount of Surplus Revenues then available for transfer to the Second Lien Qualified Obligations Account, whichever is less.
“Second Lien Qualified Obligation Service” means, with respect to any period, the amount of principal and interest or other payments accrued or to accrue in such period with respect to all outstanding Second Lien Qualified Obligations (excluding the amount of proceeds of Second Lien Qualified Obligations held in any fund or account for the payment of Second Lien Qualified Obligation Service accrued or to accrue during such period). For purposes of accrual under this definition, all payments with respect to Second Lien Qualified Obligations due in a calendar month are to be deemed due on the first day of such calendar month. “Second Lien Qualified Obligations” shall mean, without duplication, (i) the 2026 Purchase Payments, (ii) additional obligations payable from Surplus Revenues on a parity with such payments which at the time of initial delivery thereof satisfy the requirements set forth in the Installment Purchase Agreement for the issuance of additional Second Lien Qualified Obligations, and (iii) unpaid Second Lien Reimbursement Obligations, excluding Second Lien Paired Obligations (see “– Additional Second Lien Qualified Obligations”). “Bonds” as used in clause (ii) above is defined to include any revenue bond, revenue note, warrant or other evidence of indebtedness issued, incurred or delivered for the financing, or refinancing of extensions of, additions to, repairs and replacements to, renewals of, and improvements of, the Water System, designated by the City at the initial delivery thereof as payable from Surplus Revenues in the Second Lien Qualified Obligations Account, to the extent so payable. “Bonds” does not include any Obligations. “Obligations” as used in clause (ii) above is defined to mean any contract, instrument or other agreement for the purchase, acquisition or lease of facilities, properties, structures or equipment for the Water System, designated by the City at the initial delivery thereof as payable from Surplus Revenues in the Second Lien Qualified Obligations Account, to the extent so payable, and the final payments under which are due more than one year following the incurrence thereof. “Obligations” does not include any Bonds. “Second Lien Reimbursement Obligations” shall mean any and all obligations of the City under a Second Lien Reimbursement Agreement to reimburse a Credit Facility Provider for any drawings under the related Credit Facility and all obligations to repay a Liquidity Facility Provider for any Liquidity Provider Bonds and the related liquidity advance, including in each instance all interest accrued thereon. “Second Lien Reimbursement Agreements” shall mean an agreement with a bank or other financial institution relating to an irrevocable letter of credit, guarantee or other enhancement device providing liquidity or irrevocable credit or security for the payment of Second Lien Qualified Obligations or the purchase price thereof upon tender for purchase. The Reimbursement Agreement is a Second Lien Reimbursement Agreement. See APPENDIX A – “THE CITY OF 22 303814149.5
ANAHEIM WATER SYSTEM – Indebtedness; Joint Powers Agency Obligations – Direct Obligations.”
Third, to the WRAN Account, the amount required to be transferred thereto in such month for the payment of the principal of and interest on the Water Revenue Anticipation Notes to the extent required by the resolution(s) or ordinance(s) pursuant to which the Water Revenue Anticipation Notes are issued (to the extent not already transferred to such Account in such month), or, if less, the entire amount of Surplus Revenues then available for transfer to such Account.

Pursuant to the City’s Ordinance No. 5376, the principal amount of Water Revenue Anticipation Notes which may be outstanding at any time shall not exceed 25% of the gross revenue earned by the Water System during the immediately preceding Fiscal Year as set forth in the audited financial statements of the Water System for such year or the maximum aggregate amount of the revolving Water System Credit available to the City as described in such a revolving credit agreement or other loan agreement, whichever is less. The City has entered into a revolving credit agreement under which it may borrow up to $100,000,000 for purposes of the Water System, the repayment obligation of the City under which is evidenced by Water Revenue Anticipation Notes.

As of May 1, 2026, the City has no outstanding obligations evidenced by Water Revenue Anticipation Notes under the revolving credit agreement. The City may incur additional obligations evidenced by Water Revenue Anticipation Notes in the future. See also, “THE WATER SYSTEM – Outstanding Water System Revenue Obligations.” Fourth, to the Remaining Surplus Account, all remaining Surplus Revenues, to be used for any lawful purpose of the City, provided, however, that in the event of any deficiency in the Qualified Obligations Account, the Second Lien Qualified Obligations Account or the WRAN Account, moneys in the Remaining Surplus Account shall be transferred to such Accounts in the order of priority indicated above to cover such deficiency.

Pursuant to the Installment Purchase Agreement, the City is obligated to make certain additional purchase payments (the “Additional Purchase Payments”) for the payment of any taxes or assessments charged to the Authority or to the Trustee affecting the amount available to the Authority or the Trustee from payments to be received under the Installment Purchase Agreement or arising due to the transactions contemplated thereby, any taxes which may be imposed on the sale, resale, use, possession or ownership of the Water System pursuant to the Installment Purchase Agreement, the reasonable fees, charges and expenses of the Trustee, the reasonable fees and expenses of such accountants, consultants, attorneys and other experts as may be engaged by the Authority or the Trustee to provide services required under the Installment Purchase Agreement or the Indenture, the reasonable costs and expenses of the Authority incurred in connection with the Installment Purchase Agreement, the Bonds and the Indenture or any other documents contemplated thereby and amounts required to be rebated to the United States Treasury Department pursuant to the Installment Purchase Agreement. Such Additional Purchase Payments are required to be made by the City from Surplus Revenues in the Remaining Surplus Account.

As described above, the payment of Senior Bonds, if any, ranks first in priority. The payment of Qualified Obligations, including the 2026 Purchase Payments, ranks junior to the payment of the Senior Bonds, if any. The payment of Second Lien Qualified Obligations ranks junior to the payment of Qualified Obligations. The payment of Water Revenue Anticipation Notes ranks junior to the payment of Second Lien Qualified Obligations. The payment of Additional Purchase Payments ranks junior to the payment of the Water Revenue Anticipation Notes.
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Rate Covenant
Pursuant to the Installment Purchase Agreement, the City has agreed to prescribe, revise and collect such charges for the services and facilities of the Water System so that, in each Fiscal Year, the Surplus Revenues shall at least equal the sum of (i) 1.10 times the amount of Qualified Obligation Service with respect to such Fiscal Year; (ii) 1.00 times the principal of and interest on the outstanding Water Revenue Anticipation Notes due and payable and to be paid from Surplus Revenues in such Fiscal Year; and (iii)

1.00 times all other payments required to be made from Surplus Revenues in such Fiscal Year.

No Reserve Account for the 2026 Bonds
The Authority is not funding a reserve account for the 2026 Bonds.

Insurance
The City agrees in the Installment Purchase Agreement to maintain at all times with responsible insurers all such insurance on the Water System as is customarily maintained by similar utilities systems with respect to works and properties of like character against accident to, loss of, or damage to, such works or properties.

The City further agrees that any useful parts of the Water System that are damaged or destroyed shall be restored to use. Proceeds of insurance against accident, loss or damage shall be used for repairing or rebuilding the lost, damaged or destroyed works and properties, and, to the extent not so used, shall be applied to the retirement of outstanding Senior Bonds, Qualified Obligations and Second Lien Qualified Obligations.

The City is permitted under the Installment Purchase Agreement to satisfy the foregoing covenant through a self-insurance program or to provide such insurance as part of any blanket coverages maintained by the City.

Additional Qualified Obligations
The City has agreed pursuant to the Installment Purchase Agreement, after the date on which the Bonds are delivered pursuant to the Indenture to the original purchasers thereof not to issue, incur or deliver any Bonds or Obligations payable from Surplus Revenues on a parity with the Purchase Payments unless, at the initial delivery thereof, the Surplus Revenues, calculated on sound accounting principles, as shown by the books of the City for any consecutive twelve-month period selected by the City during the 18 months prior to the adoption of the resolution approving the delivery of such Bonds or Obligations (as certified by the City), plus, at the option of the City, the allowance for earnings described in the following paragraph, shall have amounted to at least 1.10 times the Maximum Annual Qualified Obligation Service on all Qualified Obligations to be outstanding immediately subsequent to the initial delivery of such Bond or Obligation.

Notwithstanding the foregoing, the City may issue Bonds or Obligations to refund outstanding Qualified Obligations if, after giving effect to the application of the proceeds thereof, either (i) total Qualified Obligation Service will not be increased in any Fiscal Year in which Qualified Obligations (outstanding on the date of issuance or incurrence of such refunding Bonds or Obligations, but excluding such refunding Bonds or Obligations) not being refunded are outstanding, or (ii) the Surplus Revenues, calculated on sound accounting principles, as shown by the books of the City for each of the last two completed Fiscal Years prior to the adoption of the resolution approving the delivery of such Bonds or Obligations (as shown by an audit certificate or opinion of an independent certified public accountant or 24 303814149.5
firm of certified public accountants employed by the City), plus, at the option of the City, the allowance for earnings described in the following paragraph, shall have amounted to at least 1.10 times total Qualified Obligation Service in the Fiscal Year next succeeding the Fiscal Year in which such Bond or Obligation is initially delivered.

For the purpose of applying the restrictions set forth in the preceding paragraph, the following may be added to Surplus Revenues: an allowance for earnings arising from any increase in the charges made for service from the Water System which has become effective prior to the initial delivery of such Bonds or Obligations but which, during all or any part of said twelve-month period, was not in effect, in an amount equal to the amount by which the Surplus Revenues would have been increased if such increase in charges had been in effect during the whole of said twelve-month period, as certified by the City.

The City has also agreed pursuant to the Installment Purchase Agreement that the Surplus Revenues will not be mortgaged, encumbered, sold, leased, pledged, any charges placed thereon or disposed of or used except as authorized by the terms of the Installment Purchase Agreement.

THE CITY’S PUBLIC UTILITIES DEPARTMENT
Organization
The City is a chartered city of the State of California. Under the provisions of the California Constitution, the Charter and Title 10 of the Municipal Code of the City, the City owns and operates both the Water System and the Electric System for the citizens of the City. The City’s Public Utilities Department exercises jurisdiction over both the Water System and the Electric System and is under the supervision of the General Manager. The General Manager is responsible for the supervision of the planning, design, construction, maintenance and operation of both the Water System and the Electric System. The Finance Director/Treasurer of the City is charged with the accounting and the administration of the financial affairs of the City. The General Manager and Finance Director/Treasurer are under the direction of the City Manager who is appointed by the City Council.

The Water System and the Electric System provide services to virtually all residential, commercial, and industrial customers within the City limits. The funds and accounts of the Water System and the Electric System are held separately, and the funds and accounts of one system are not pledged to the other system’s obligations.

Management of the Public Utilities Department
The following are biographical summaries of the executive management team of the Public Utilities Department with responsibility for the Water System:
[UPDATE] Brian Beelner, Acting General Manager, has served Anaheim Public Utilities since 2005. He is responsible for multiple aspects of Anaheim Public Utilities including accounting, budget development, financial planning, rate design, long-term forecasting, debt administration, warehousing and supply chain, power supply, and information technology. Prior to joining the City, Mr. Beelner worked for Gursey, Schneider & Co., LLP as a municipal utility accounting and finance consultant. Mr. Beelner graduated from the University of California, Riverside with a Bachelor of Arts degree in Business Economics and currently holds an active Certified Public Accountant license in the State of California. He is a member of the SCPPA Finance Committee and an alternate member of SCPPA’s Board of Directors, a member of the Coordinating Committee for the Intermountain Power Project (“IPP”), and a member of the San Onofre Nuclear Generating Station Decommissioning Executive Committee. 25 303814149.5
Janet Lonneker, Assistant General Manager–Electric Services, joined Anaheim Public Utilities in May 2014, and is responsible for directing, managing, supervising, and coordinating the activities and operations of the Electric Services Division, including electrical engineering, electric operations, system planning, substations, and power generation. Ms. Lonneker has over 25 years of electric utility industry experience, most recently before joining Anaheim as a Customer Solutions Manager for San Diego Gas and Electric (“SDG&E”) where she worked within the Smart Grid Division. Prior to her employment at SDG&E, she was General Manager for the City of Forest Grove’s Department of Light and Power for six years, where she was responsible for leadership, management, and oversight of all divisions of the utility.

Ms. Lonneker holds a Bachelor of Science degree and a Master of Science degree in Electrical Engineering from the University of the Pacific and the University of Southern California, respectively.

Public Utilities Board
The City Council, by Ordinance No. 3557 approved July 6, 1976, established a Public Utilities Board (the “Public Utilities Board” or the “Board”) with the power and duty to make recommendations to the City Council for consideration by the City Council in its determinations concerning (i) the operation and conduct of the Water System and the Electric System, (ii) the establishment of rules and regulations and rates for the operation of the Water System and the Electric System, (iii) the duties and qualifications of the General Manager and other employees of the Department, (iv) the acquisition, construction, improvement, extension, enlargement, diminution or curtailment of all or any part of the Water System and the Electric System, (v) the annual budget of the Department, and (vi) financing, including the issuance of bonds for the Water System and the Electric System. On June 3, 2014, Anaheim voters approved Measure C which, among other things, adds Section 909 to the Charter specifying the powers and duties of the sevenmember Public Utilities Board. The Board may also exercise such other powers and duties as may be prescribed by ordinance not inconsistent with the Charter.

The Board consists of seven members, none of whom may hold any paid office or employment in the City government. The members of the Board are appointed by the City Council and may be removed by a majority vote of the City Council. Board members serve four-year overlapping terms and are limited to serving two consecutive four-year terms.

The present members of the Board and their terms of appointment are:

John Seymour, Chairperson, term expires December 31, 2026. Mr. Seymour joined the Board in April 2017, and was reappointed in January 2023. He is a retired telecommunications executive with a Bachelor’s degree from Whittier College in Economics and Business Administration with an emphasis in Accounting. Mr. Seymour previously served on the City’s Planning Commission (2010-2017), and is a former member and chair of the Public Utilities Board’s Underground Conversion Subcommittee. He served on the board for the Anaheim Regional Medical Center for over twenty years, and served as a board member for Memorial Health Services.

Anh Pham, M.Ed., Vice Chairperson. Mr. Pham joined the Board in February 2022. He is a civil rights administrator for the University of California, Irvine, and prior to that, spent a decade working for the University of California, Riverside. He earned a Bachelor of Arts degree in Public Policy as well as a Master of Education in Higher Education Administration and Policy from the University of California, Riverside. Mr. Pham’s term expired December 31, 2025. Although Mr. Pham has not been formally reappointed, he continues to serve on the Board.

Albert McMenamin, term expires December 31, 2026. Mr. McMenamin joined the Board in January 2023. He began his career with the City. During his 37-year career, he worked in the water services 26 303814149.5
division and held the positions of Equipment Operator, Maintenance Pipefitter and Senior Water Utility Inspector. Mr. McMenamin has also worked part time with the Los Angeles Angels since 2001.

Mitch Lee, term expires December 31, 2028. Mr. Lee joined the Board in August 2021. He retired from the Boeing Company after 20 years as a Deputy Project Manager. Previously, Mr. Lee worked at Northrop Grumman Corporation for 13 years as an engineer. Throughout his career, he worked on several U.S. Government, international and commercial programs. Currently, he is a consultant and an advisory board member for Theory Seventy Three Corp.

Talab Ibrahim, term expires December 31, 2028. Mr. Ibrahim joined the Board in February 2023.

He attended California State University, Fullerton where he earned his Bachelor of Science degree in Civil Engineering. In college, he joined the American Society of Civil Engineers and Institute of Transportation Engineers. Currently, he manages a family business in Anaheim and serves as a property manager at familyowned properties in Orange County.

Ivan Castillo, term expires in December 31, 2028. Mr. Castillo joined the Board in August 2025.

He earned his bachelor’s degree in Political Science from Loyola Marymount University in 2004. Mr.

Castillo spent 17 years with the Irvine Company. He currently serves as a Business Advisor at Insperity, supporting small and mid-sized businesses across Southern California.

Hon. Hemant (Shashi) H. Kewalramani (Ret.), term expires December 31, 2026. Mr.

Kewalramani joined the Board in November 2025. He currently serves as a mediator and arbitrator with JAMS, a national organization providing private dispute-resolution services, following a distinguished career on the federal bench and in public service. He previously served as a U.S. Magistrate Judge for the Central District of California and, before that, as an Assistant U.S. Attorney in both the Northern and Central Districts of California, where he handled complex cybersecurity, fraud, and intellectual-property matters. Mr. Kewalramani also possesses private-sector experience representing clients in intellectualproperty and commercial litigation. He earned his J.D. from Baylor University School of Law and a B.S. in Aerospace Engineering from the University of Texas at Austin.

THE WATER SYSTEM
History of the Water System
The Anaheim municipal water utility commenced operations in 1879 and metering of customers began in 1890. The early municipal Water System consisted of a single well, a pumping plant and a 20,000 gallon redwood storage tank. Groundwater from wells was the sole source of water for the City until the 1940s when MWD made supplemental water from the Colorado River available. MWD had been formed in 1928 as a regional agency to develop or contract for imported water and to provide the principal facilities for transmission, storage and treatment of such water. The City was one of the original member agencies to form MWD.

The Orange County Water District (“OCWD”) was formed in 1933 to protect the natural groundwater basin underlying much of the north-central portion of Orange County (the “Basin”). The Basin is the source of groundwater for the City, and based on an average over the last five fiscal years (i.e. Fiscal Years 2020-21 through 2024-25), it supplied an average of approximately 46% of the City’s water supply needs, with less than 1% coming from recycled water. The City obtained the remaining 54% through purchases from MWD. From Fiscal Year 2020-21 through Fiscal Year 2023-24, the City purchased an average of approximately 63% of its water supply needs from MWD. In Fiscal Year 2024-25, however, MWD purchases declined to approximately 18% of the City’s water supply needs, as all wells previously shut down due to elevated PFAS levels have returned to service following the completion of the first two 27 303814149.5
phases of the City’s groundwater treatment program. Based on current projections, MWD purchases are expected to remain at approximately 15% to 20 % of the City’s water supply needs. See “– Groundwater Sources and PFAS.”
The following table sets forth statistical information relating to the Water System during the five Fiscal Years shown.

TABLE 1

WATER SYSTEM STATISTICS
Fiscal Year Ended June 30
2025 2024 2023 2022 2021
Anaheim Population Served(1)............................... 341,773 340,160 328,580 341,245 353,468 Population Served Outside City (Est.)(2)................ 4,263 4,243 4,099 4,257 4,409 Total Population Served ........................... 346,036 344,403 332,679 345,502 357,877 Total Water Sales (Million Gallons)................... 17,148 15,738 16,046 17,968 17,733 Capacity (Million Gallons Per Day)
From MWD Connections................................... 110 110 110 110 110 From Water System Wells (Average)(3)............ 76 75 33 19 19 Total Supply Capacity ............................. 186 185 143 129 129 Treatment Plant Capacity.................................. 20 20 20 20 20 Peak Day Distribution (Million Gallons)............... 65.0 66.0 63.3 66.9 67.4 Average Daily Distribution (Million Gallons)....... 49.0 45.0 46.1 52.2 51.3 Average Daily Sales Per Capita (Gallons)............. 135.8 125.2 132.1 142.5 132.0 __________________
(1) Data from the State of California, Department of Finance. (2) Estimates from California State University, Fullerton, Center for Demographic Research and the Municipal Water District of Orange County. (3) Figures represent the average capacity of wells online as of June 30 for the respective fiscal year.

Source: Anaheim
Existing Facilities
The area served by the Water System encompasses approximately 50 square miles and includes a small portion that lies outside of the incorporated City boundary. Approximately 55,100 residential customer accounts (both within and outside of City limits) are presently served by the Water System. The Water System’s major facilities consist of eight connections to the MWD Water Distribution System (seven for treated water and one for untreated water); the Lenain Water Filtration Plant; the Walnut Canyon Reservoir, a 920-million-gallon storage facility for untreated water; 12 additional storage facilities providing approximately 36 million gallons of additional treated water storage capacity; groundwater extraction facilities consisting of 19 production wells; and approximately 758 miles of transmission and distribution pipelines and nine booster pump stations.

Groundwater Sources and PFAS
Anaheim has historically maximized the use of local groundwater as it is the lowest cost water supply source available to meet the demands of the Water System. This changed in recent years, however, when both state and federal agencies enacted regulations concerning perfluorooctanoic acid (“PFOA”) and perfluorooctane sulfonate (“PFOS”) in drinking water. These substances known collectively as per- and 28 303814149.5
polyfluoroalkyl substances (“PFAS”), are commonly used in various consumer and industrial products such as fabrics, carpets, firefighting foams, food packaging and nonstick cookware and are known for their nonstick, waterproof, and heat and stain-resistant properties.

In California, the Division of Drinking Water (“DDW”) of the State Water Resources Control Board (“SWRCB”) is responsible for establishing the Notification Level and the Response Level for PFAS in groundwater sources in the State. “Notification Levels” are non-regulatory, precautionary health-based measures for concentrations of chemicals in drinking water that warrant notification and further monitoring and assessment, with exceedances requiring reporting to relevant authorities and customers. In August 2019, the California Office of Environmental Health Hazard Assessment (“OEHHA”) recommended Notifications Levels for PFOA and PFOS be set at 5.1 and 6.5 parts per trillion (“ppt”) respectively, the lowest in the country. “Response Levels” are non-regulatory, precautionary health-based measures that are set at higher levels than Notification Levels and represent thresholds at which DDW recommends water systems remove a water source from use or treat it. In February 2020, DDW issued Response Levels at 10 ppt for PFOA and 40 ppt for PFOS, based on a running four-quarter average. On October 29, 2025, DDW issued new and revised notification levels for both PFOA and PFOS at 4 ppt, and retained response levels for PFOA and PFOS at 10 ppt and 40 ppt, respectively.

The SWRCB has also initiated steps to establish regulatory standards for PFAS, including requesting a public health goal from OEHHA. Governor Newsom signed Assembly Bill 756 (Garcia) (“AB 756”) into law in July 2019, empowering the SWRCB to order water systems to monitor and report PFAS detections. AB 756 outlines requirements for public notification in case of detections exceeding Notification or Response Levels and took effect on January 1, 2020. If the monitoring detects PFAS in excess of the Response Level, the public water system is also required to either take the water source out of use or provide public notification to its customers within 30 days of the confirmed detection. AB 756 establishes a variety of requirements for providing such public notice.

PFAS have been found in hundreds of groundwater wells in Southern California, including in Los Angeles, Orange, Riverside, and San Bernardino Counties. Anaheim detected PFOA and/or PFOS in several of its groundwater wells that exceeded the Response Levels established by DDW. In response to DDW’s PFAS regulations and PFAS detection in groundwater sources, the City had shut down 14 of its 19 groundwater wells. The following table shows the number of online (operating) wells and those offline (shut down) in response to PFAS detection and DDW regulations.

Fiscal Year Ended June 30(1)
2025 2024 2023 2022 2021 2020
Wells Online………… 16 15 8 4 4 8
Wells Offline(2) (3)…… 3 4 11 15 15 11
Total Wells…. 19 19 19 19 19 19
__________________
(1) Table represents total number of wells online (in operation) and offline as of June 30 of each fiscal year. (2) Wells offline include those wells exceeding PFAS response levels and one well which had been offline since 2007 due to elevated levels of Perchlorate.
(3) For Fiscal Year 2024-25, wells offline include those wells exceeding the Federal PFAS regulations and one well which had been offline since 2007 due to elevated levels of Perchlorate.

Source: Anaheim
Prior to the new notification levels, Anaheim historically pumped approximately 75 to 80% of their groundwater. As a result of the unavailability of wells due to PFAS, the production of groundwater pumped from the Basin decreased, resulting in a corresponding increase in imported water costs. Since late 2021, the Department began constructing PFAS groundwater treatment facilities that utilize ion exchange for the 29 303814149.5
fourteen wells taken offline. The Department partnered with OCWD in the financing of these PFAS treatment facilities. OCWD agreed to fund the majority of the capital cost and 50% of the operation and maintenance costs for the treatment facilities. By the fall of Fiscal Year 2024-25, all fourteen wells that had previously been shut down due to elevated PFAS levels had returned to service. The total capital cost of the groundwater treatment project, including construction of treatment facilities for eleven wells, was approximately $145 million, financed primarily through capital contributions and reimbursements from OCWD. As a result of the wells returning to service, over the last three fiscal years, the production of groundwater pumped form the Basin has increased to an average of approximately 58% of the City’s total water supply, with Fiscal Year 2024-25 reflecting 82% of the City’s total water supply. Such an increase in groundwater pumping has resulted in a corresponding decrease in imported water, which the Department estimates has resulted in a decrease in water supply costs of approximately 12%. See “ – Sources of Water” and “– Operating Expenses and Transfers” below.

After the construction of the PFAS treatment facilities, the Department estimates that its operating costs may increase by an additional 5% to 10% due to the ongoing costs related to operating and maintaining the new groundwater treatment facilities. The Department anticipates such treatment costs to rise gradually in connection with the amount of groundwater pumped. When groundwater – as a percentage of Anaheim’s total water supply mix – reaches 85%, such treatment costs may account for approximately 5% to 10% of the Department’s total costs related to purchasing, moving, and treating water, provided that a portion of such incremental treatment costs may be offset by a corresponding reduction in costs associated with imported water purchases from MWD. Early operational data suggests that actual cost impacts may trend below the 5% to 10% range set forth above; however, the Department does not yet have sufficient operational history to revise such estimates with certainty. See “– Groundwater Sources and PFAS” below.

In March 2023, the EPA announced the proposed PFAS National Primary Drinking Water Regulation (“NPDWR”) to establish legally enforceable levels, called Maximum Contaminant Levels (“MCLs”). In April 2024, the EPA published a final rule establishing national MCLs in drinking water for six types of PFAS and gave public water systems until 2029 to comply. In May 2025, the EPA announced plans to initiate a rulemaking to extend the compliance deadline to 2031, in order to afford drinking water systems additional time to develop and implement compliance measures for PFOA and PFOS. On May 18, 2026, the EPA announced a proposed rule to retain the existing federal MCLs for PFOA and PFOS established under the April 2024 final rule. Under the proposal, any extension of the compliance deadline would not be automatic; drinking water systems seeking additional time would be required to affirmatively apply for such extension and satisfy specific criteria that the EPA will set forth in the final rule.

The City’s newly constructed groundwater treatment facilities utilize ion exchange technology to remove PFAS to non-detect levels, meeting the new federal standards. Because this treatment process requires frequent replacement of filter media, the Department expects higher operating and maintenance costs to run such treatment facilities. As previously mentioned, OCWD has agreed to reimburse 50% of the operations and maintenance costs of these treatment facilities. In the event that such treatment processes ever become unavailable or no longer feasible, the City continues to have the option of purchasing treated water from MWD.

Notwithstanding the foregoing, early operational data indicates that the ion exchange resin utilized in the PFAS treatment facilities is achieving longer run times than originally projected, which may result in actual operation and maintenance cost impacts below the 5% to 10% range set forth above. The Department has determined, however, that it does not yet have sufficient operational history to revise its long-term cost projections with a reasonable degree of certainty, and accordingly the 5% to 10% estimate is retained herein as a conservative projection. The Department notes that OCWD’s agreement to reimburse 50% of the operation and maintenance costs of the treatment facilities provides an offset to such incremental costs.
30 303814149.5
As of April 2026, the City has five wells that exceed the federal MCLs for PFOA and PFOS established under the NPDWR, which are more stringent than California’s current PFAS response levels.

Although these wells remain below the State’s response levels, the City has taken these wells offline as part of the next phase of the City’s PFAS groundwater treatment program (one of the five wells has been offline since 2007 due to elevated levels of Perchlorate). The City is currently working with OCWD to install additional treatment facilities for four of these wells. One of the five wells that exceeds the federal MCLs will likely remain offline in the near-term due to space constraints at the well site that inhibit construction activities. The Department anticipates that the next phase of the groundwater treatment program will result in increased costs associated with additional treatment processes, capital expenditures, and ongoing operational costs; however, the Department expects OCWD to fund the majority of the capital costs related to constructing new treatment facilities for these four wells. Construction of groundwater treatment facilities at two of the four wells is anticipated to be completed by summer 2028, with construction for the remaining two wells expected to be completed by summer 2029.

See also “ADEQUACY OF WATER SUPPLIES” and “RISK FACTORS – Risks Relating to Water Supply and Drought.”
Sources of Water
Historical Water Supply Resources and Production. During Fiscal Year 2024-25, the Water System distributed an average of 49.0 million gallons of water per day with a peak day distribution of 65.0 million gallons. Total water sales of approximately 17.1 billion gallons were recorded. During that Fiscal Year, groundwater pumped from Anaheim’s wells in the Basin accounted for approximately 82% of total water production and imported water purchased from MWD accounted for the remaining 18% of total water production.

The following table shows the total amount of water pumped from Water System wells and the amount of water imported from MWD during the past five Fiscal Years shown. As described under “– Groundwater Sources and PFAS” above, the amount of imported water purchased from MWD has increased significantly in recent years.

TABLE 2

WATER PRODUCTION
(Millions of Gallons)
Fiscal Year Ended June 30
2025 2024 2023
(2) 2022 2021
From Water System Wells
Pumping from Groundwater Wells..................... 14,847 10,765 4,925 5,470 4,921 Percentage of Total Supply ................................ 82% 63% 29% 29% 26% From MWD
Total Purchases from MWD .............................. 3,290 6,349 11,916 13,715 13,673 Percentage of Total Supply ............................... 18% 37% 71% 71% 74% Total Water Production(1)......................................... 18,137 17,114 16,841 19,185 18,594 __________________
(1) Total Water Production represents water pumped from local wells and purchases from MWD. This differs from water sales which factors in water losses during distribution; sales also factors in timing differences between actual production and billing. (2)
The decline in water production from Fiscal Year 2021-22 to Fiscal Year 2022-23 is attributable to a decrease in customer 31 303814149.5
demand due to greater precipitation that year.

Source: Anaheim
The City and other water agencies within north-central Orange County obtain a significant portion of their total water supply needs from the Basin. OCWD is the agency responsible for managing the groundwater basin and for ensuring that adequate quantities of water are available for retail water agencies, including the City. For a more detailed discussion of OCWD’s Basin management policies and pricing, see “ADEQUACY OF WATER SUPPLIES – Orange County Water District – Groundwater Basin.” In addition to pumping groundwater from the Basin, the City purchases imported water from MWD. MWD supplies water to Southern California through two aqueduct systems. The older system, the Colorado River Aqueduct, was built to import water from the Colorado River, 260 miles to the east. This aqueduct began operation in June 1941 and was brought to full capacity in stages through 1960. The newer system is the California Aqueduct, a part of the State Water Project approved in 1960, which began delivering water to Southern California in 1973. During Fiscal Year 2024-25, the City purchased approximately 3.3 billion gallons of water from MWD or approximately 18% of the City’s total water supply.

Effective January 1, 2003, MWD implemented a two-tiered rate structure. Since that time, the City has purchased water from MWD pursuant to a purchase order for MWD system water. The City’s most recent purchase order with MWD took effect on January 1, 2015 and expired on December 31, 2024. MWD did not renew the purchase order and has indicated that it will revisit purchase order commitments and similar structures as needed during the business model review through MWD’s Climate Adaptation Master Plan for Water (CAMP4W) process. MWD’s calendar year 2025 and 2026 adopted water rates and charges no longer include a Tier 2 rate and instead consist of a single supply rate. As a result, following the expiration of the purchase order, water purchases, regardless of volume, are billed at the Tier 1 rate.

On April 9, 2024, MWD’s Board adopted rates effective January 1, 2025 and January 1, 2026. For calendar year 2025, MWD’s full-service rate is $1,395 per acre-foot for treated water and $912 per acrefoot for untreated water. For calendar year 2026, the full-service rate is $1,528 per acre-foot for treated water and $984 per acre-foot for untreated water. In July 2025, MWD’s Board approved a hybrid treatment cost recovery structure under which up to 30 percent of treatment revenue requirements would be recovered through Treatment Capacity Fixed Charges beginning in calendar year 2027, with the remaining treatment costs continuing to be recovered through the volumetric Treatment Surcharge. Under the Board-approved phase-in methodology, calendar year 2027 uses transitional billing determinants for the new Treatment Capacity Fixed Charges, while calendar year 2028 begins the transition to rolling historical demand calculations. As a result, year-over-year changes in the Treatment Surcharge and the individual Treatment Capacity Fixed Charges reflect the combined effect of the phased-in billing determinants, and the reallocation of a portion of treatment costs from volumetric to fixed charges. On April 14, 2026, MWD’s Board adopted rates effective January 1, 2027 and January 1, 2028. For calendar year 2027, MWD’s fullservice volumetric rate will be $1,420 per acre-foot for treated water and $1,030 per acre-foot for untreated water. The Treatment Capacity Fixed Charges for calendar year 2027 include $33,700 per cubic-foot-persecond of Treatment Peaking Capacity Charge, $15 per acre-foot of Treatment Used Standby Capacity Charge, and $72 per acre-foot of Treatment Remaining Standby Capacity Charge. For calendar year 2028, MWD’s full-service volumetric rate will be $1,514 per acre-foot for treated water and $1,106 per acre-foot for untreated water. The Treatment Capacity Fixed Charges for calendar year 2028 include $21,600 per cubic-foot-per-second of Treatment Peaking Capacity Charge, $120 per acre-foot of Treatment Used Standby Capacity Charge, and $64 per acre-foot of Treatment Remaining Standby Capacity Charge.

Overall MWD water purchase costs are projected to increase by approximately 5% in Fiscal Year 2026-27 due to the combination of new rates and changes to the treatment cost recovery structure; provided, 32 303814149.5
however, that a portion of such projected cost increase may be offset to the extent the Department continues to reduce its volume of imported water purchases from MWD as a result of increased groundwater pumping.

See also “ADEQUACY OF WATER SUPPLIES – Metropolitan Water District of Southern California – Imported Water” for a more detailed discussion of the City’s available imported water supplies from MWD water resources.

Water Treatment and Quality Control
The water delivered to Water System consumers meets or exceeds all State and federal drinking water standards.

Prior to Fiscal Year 2019-20, groundwater had been the principal source of the City’s total water supply. Water pumped from groundwater wells is naturally filtered by the underlying layers of sand, silt and clay. To ensure a reliable supply of potable water, the City constructed and placed into operation nine deep, high-production wells since 2001. Deeper wells generally produce higher-quality water than shallow wells. See “– Water System Capital Program” below.

Because of the high quality of the City’s groundwater supply, State and federal regulatory agencies did not require it to be treated before delivery to customers. To ensure the water’s quality as it travels through the Water System’s distribution system, the Department adds disinfectant, which is a standard water utility practice. As discussed above under the caption “ – Groundwater Sources and PFAS,” the City took the majority of its groundwater wells offline between Fiscal Years 2019-20 to 2022-23 in response to the SWRCB’s PFAS regulations. Most of these wells now have treatment measures in place. As of June 2025, all 14 wells that had been taken offline due to the presence of PFAS above the State’s response levels had been returned to service.

The Water System’s remaining supply is provided by MWD, which imports water from the Colorado River and Northern California. Untreated imported water purchased from MWD is received at the City’s Walnut Canyon Reservoir via MWD connection A-08 with MWD’s Santiago Lateral. The City’s Lenain Water Filtration Plant treats and disinfects the water prior to distribution. Treated water purchased from MWD is filtered and disinfected at MWD’s Diemer Treatment Plant in Yorba Linda and received by the City at MWD connections A-01 through A-07.

The City monitors all of its water for regulated substances in compliance with all State and federal regulations, and conducts over 44,000 analyses of its water each year. Since 1966, the City has operated its own testing laboratory to facilitate constant surveillance of water and to conduct State and federal prescribed tests. In 1967, the State Public Health Department certified the City’s water testing laboratory for complete bacteriological analysis. Four staff members are currently assigned to the Water Quality Laboratory, including the Water Quality Lab Supervisor.

A State-certified laboratory under contract with the City conducts chemical analyses of the Water System’s supply, or in the case of groundwater, such analyses are performed by OCWD. All water quality results are recorded and submitted to State and federal regulatory agencies as required. An annual water quality report is prepared and delivered to all City residents and available on the City’s website.

North Basin Project. The North Basin project is the proposed clean-up of groundwater in areas of north Anaheim, south Fullerton, and west Placentia led by the U.S. Environmental Protection Agency (“EPA”). This project is designed to address industrial contamination dating back from the 1950s to ensure continued safe drinking water in north Orange County. Between the 1950s and 1970s, manufacturing industries left a legacy of industrial pollutants at their former factories that have migrated through the soils 33 303814149.5
and are now leaching into the underlying groundwater. As a result, a plume of contamination has impacted some drinking water wells, and, if not addressed, may affect other wells too. For precautionary measures, four groundwater wells have been shut down in Fullerton and one in Anaheim. Such well in Anaheim has since been destroyed.

OCWD has been conducting a remedial investigation and feasibility study under EPA oversight.

The current scope of work for this multi-agency effort to restore the North Basin includes the investigation of subsurface conditions in the areas surrounding the many sources of industrial contamination. OCWD has installed 23 new monitoring wells at 13 locations and calibrated a computer model of groundwater flow that will be used to evaluate the feasibility of alternative remedies and to optimize a design once that remedy is selected for plume capture, control, and contaminant removal. Following the implementation of the interim remedy, these wells and the computer model will be used to verify cleanup effectiveness. In October 2023, a revised draft of the feasibility study was submitted to the EPA, State agencies, and the cities of Anaheim, Buena Park, and Fullerton for review. The final feasibility study was completed in August 2025.

Following completion of the feasibility study, the EPA will prepare a proposed remedial action plan for the interim remedy. In preparation for this plan, the EPA completed installation of 24 additional monitoring wells at seven locations by early 2024 to further investigate the extent and boundaries of contamination.

The financial responsibility for the final remedy has not yet been determined, and the EPA is actively engaged in identifying responsible parties for contamination and clean-up costs.

Consumers
During Fiscal Year 2024-25, the Water System delivered approximately 17 billion gallons of water, with approximately 57% used for residential purposes, 41% for commercial and industrial purposes, and 2% for other purposes such as temporary water and firelines. Billed water revenues for Fiscal Year 2024- 25 totaled approximately $102.5 million. Residential customers comprised approximately 58% of revenue, commercial and industrial customers comprised roughly 37% of revenue, and other customers (temporary water and firelines) comprised approximately 5% of revenue. The following table sets forth the volume of Water System sales by customer class and the corresponding revenues for the last five Fiscal Years.

TABLE 3

WATER SALES
Fiscal Year Ended June 30
2025 2024 2023 2022 2021
Water Sold (in millions of gallons)
Residential .......................................... 9,838 9,121 9,314 10,455 10,979 Commercial and Industrial.................. 7,056 6,372 6,465 7,267 6,487 Other................................................... 254 245 267 246 267 Total ................................................. 17,148 15,738 16,046 17,968 17,733 Billed Revenues (in thousands)
Residential........................................... 59,321 55,541 $55,221 $59,024 $57,753 Commercial and Industrial.................. 37,601 35,203 35,404 37,708 31,810 Other(1)................................................ 5,568 5,199 4,140 4,187 4,144 Total(2).............................................. $102,490 $95,943 $94,765 $100,919 $93,707 ____________________
(1)
“Other” category includes temporary water service and firelines. (2) Higher billed revenue in Fiscal Year 2021-22 reflects an increase to the water commodity adjustment and water system reliability adjustment rates. The decrease in billed revenue in Fiscal Year 2022-23 was attributable to reduced customer demand resulting from significantly higher rainfall during Fiscal Year 2022-23 and the return of additional groundwater wells to service following the installation of PFAS treatment measures. See “– Groundwater Sources and PFAS.” Higher billed revenue in Fiscal Year 2024-25 reflects an increase to the water commodity adjustment and water system reliability adjustment rates, as 34 303814149.5
well as increased customer demand associated with significantly lower rainfall during Fiscal Year 2024-25.

Source: Anaheim
The table below sets forth the ten largest commercial and industrial customers and the five largest public agency customers of the Water System in terms of total water sales for Fiscal Year 2024-25. The five largest public agencies accounted for approximately 11% of total water consumption and approximately 8% of total annual billings in the aggregate. The ten largest commercial and industrial customers accounted for approximately 17% of total water consumption and 8% of total annual billings of the Water System in the aggregate.

TABLE 4

LARGEST WATER CUSTOMERS
Fiscal Year Ended June 30, 2025
(in alphabetical order)
Commercial and Industrial Customers
Anaheim Hills Planned Community Association Homeowners Association Colony Park Condominium Association Homeowners Association Color Fashion Dye & Finishing LLC Textile Manufacturer
CSCDA Community Improvement Authority Management Company Disneyland Resort Recreation, Entertainment and Lodging Hilton Hotels & Resorts Lodging
Kaiser Foundation Healthcare
Manna Beverages & Ventures LLC Beverage Container Manufacturer Rondell Homes Inc Management Company
Summit Community HOA Homeowners Association
Public Agency Customers
Anaheim Elementary School District Education
Anaheim Union High School District Education
Caltrans (Anaheim) Municipal Government
City of Anaheim Municipal Government
County of Orange County Government
________________
Source: Anaheim.

Rates and Charges
The City is obligated by its charter and by the Installment Purchase Agreement to establish rates and collect charges in an amount sufficient to service the Water System’s indebtedness and to meet its expenses of operation and maintenance, with specified requirements as to priority and coverage. See “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Rate Covenant.” Water rates are established by City Council and are not subject to regulation by the California Public Utilities Commission or by any other state or federal agency. See also “CONSTITUTIONAL AND CHARTER LIMITATIONS” for a discussion of certain procedural requirements to which the City’s proposed rate increases are subject.

As provided in Section 909 of the Charter, the City’s Public Utilities Board has the power and duty to conduct all public hearings for the water utility, including those for the consideration of utility rates and to make recommendations to the City Council concerning water rates and charges adopted by the City Council. The Charter provides that water rates shall be based upon the cost of service to the various 35 303814149.5
customer classes. The rate structure consists of (i) a monthly customer charge, (ii) a base commodity charge, (iii) a water commodity adjustment charge, and (iv) a water system reliability adjustment.

On March 26, 2024, the City Council approved an increase to the monthly customer charge and a decrease to the base commodity charge components of the City’s water rates. The new monthly customer charge for a typical residential customer using a 3/4 x 5/8 inch meter is $15.00, with customer charges ranging from $15.00 to $460.50 for all customers depending on the size of their pipeline connection. The monthly customer charge provides a more reliable source of revenue since it does not fluctuate with customer demand, helping the Water Utility generate sufficient revenue to pay its obligations. The revised base commodity charge for all water customers within City limits is 15 cents per 100 cubic feet (“hcf”) of water usage. The base commodity charge covers the cost of labor and materials for operation and maintenance necessary to meet water system requirements.

The water commodity adjustment charge is an administrative adjustment made by the General Manager to cover increases or decreases to (i) the cost of producing and distributing water, which includes the cost of electricity for booster pumps needed for water distribution, (ii) the cost for water quality requirements, and (iii) the cost for compliance with water regulatory and/or legislative mandates on water use efficiency, drought resilience, and related measures. The water commodity adjustment charge was increased from $2.54 per hcf (effective February 1, 2025) to $2.71 per hcf (effective March 1, 2026).

The water system reliability adjustment is an administrative adjustment made by the General Manager to recover the Water System’s capital costs, including associated debt service costs. On March 26, 2024, the City Council approved the maximum allowable increase to the water system reliability adjustment during a 12-month period from 7.5 cents to 10 cents per hcf. The water system reliability adjustment charge was increased from $1.15 per hcf (effective April 3, 2025) to $1.25 per hcf (effective April 3, 2026).

The water commodity adjustment charge and water system reliability adjustment are determined in accordance with the applicable City rate schedules. Changes to the amount of the water commodity adjustment and water system reliability adjustment may be made at any time, without City Council action, following notice and a public hearing held by the Public Utilities Board determining that there have not been filed with the Public Utilities Board written protests of a majority of the property owners subject to such charges.

The Public Utilities Board held a public hearing regarding the most recent water rate adjustments on February 25, 2026, in compliance with applicable notice requirements. In the aggregate, the water rate changes authorized in Fiscal Year 2025-26 resulted in a bill increase of approximately $4.32 per month from $76.44 to $80.76 per month for a typical residential customer using 16 hcf of water. The adjustments reflect higher wholesale water supply costs, ongoing investment in customer efficiency programs consistent with California’s Making Conservation a California Way of Life framework, and continued capital investment in the City’s water infrastructure to maintain system reliability.

During Fiscal Year 2024-25, the Water System had an average of approximately 64,897 connected meters. The majority of the Water System’s residential customers are billed bi-monthly, and most commercial and industrial customers are billed monthly. Water bills are past due if not paid within 15 days of the billing date. When a bill becomes past due, a discontinuance of service notice for nonpayment is issued. Service may be discontinued if the bill is not paid within the time required by such notice.

The City’s water rates remain competitively priced compared to other water providers within Orange County. The table below compares the City’s rates to those of other representative water service providers in the region.
36 303814149.5
37 303814149.5
TABLE 5

WATER MONTHLY BILL COMPARISON
(as of June 30, 2026)
Agency
Average Residential Water Bill
(based on 16 hcf/month)
Laguna Beach(1) $160.82
San Clemente 118.06
Yorba Linda(1) 112.73
Newport Beach 106.35
Tustin 97.71
Garden Grove 89.89
Orange 81.72
Anaheim 80.76
Fullerton 78.87
________________
(1)
Estimated average residential water bill for these agencies exclude property tax allocations used to offset certain water district costs and subsidize their water rates.

Source: Anaheim
In addition to billed revenues from the sale of water, the Water System’s Rates, Rules and Regulations provide for a water regulatory credits account (the “Rate Stabilization Account”) to mitigate variations in the cost of water to the Water System and provide more stable retail water rates to Water System customers. Certain amounts collected such as water supply cost refunds received from MWD and OCWD and other miscellaneous credits and revenue are recorded to the Rate Stabilization Account and treated as deferred inflows for accounting purposes. At management’s discretion, amounts in the Rate Stabilization Account may be withdrawn and recognized as gross revenues of the Water System in order to maintain financial performance goals by mitigating material fluctuations in the cost of water, loss of revenues or unbudgeted costs, or disasters that could otherwise negatively affect the revenue stream. See Table 8 for information regarding such withdrawals in recent years. As of June 30, 2025, the balance of deferred inflows in the Rate Stabilization Account was approximately $2.573 million. See Note 12 to the City of Anaheim Water Utility Fund Financial Statements for the Fiscal Year ended June 30, 2025 in Appendix A hereto.

Operating Expenses and Transfers
During Fiscal Year 2024-25, the total operating expenses of the Water System were approximately $77.3 million, excluding depreciation and amortization. Total gross revenue of the Water System was approximately $108.7 million, resulting in net revenue of approximately $31.5 million. See Table 8 below.

The following table summarizes the Operating Expenses of the Water System (excluding depreciation and amortization) during the five Fiscal Years shown. [Remainder of page intentionally left blank.]
38 303814149.5
TABLE 6

OPERATING EXPENSES
(EXCLUDING DEPRECIATION AND AMORTIZATION)
(In Thousands)
Fiscal Year Ended June 30
2025 2024 2023 2022 2021
Purchased water......................... $43,951 $43,668 $49,776 $52,079 $50,358 Treatment and pumping............. 11,550 8,778 5,402 5,157 4,799 Operations, maintenance and
administration ...................... 21,817 18,356 16,025 16,141 21,779 Right of way fee 0 900 1,601 1,378 1,274
Total....................................... $77,318 $71,702 $72,804 $74,755 $78,210 __________________
Source: Anaheim
Notwithstanding the reduction in imported water purchases from MWD during Fiscal Year 2024- 25, total purchased water expenses remained relatively flat compared to Fiscal Year 2023-24. The “Purchased water” expense line item in Table 6 above includes both (i) payments for imported water purchased from MWD and (ii) replenishment assessment charges paid to OCWD for groundwater production. The overall increase in groundwater production during Fiscal Year 2024-25 significantly exceeded the reduction in MWD treated water purchases, resulting in a higher total volume of water subject to purchased water costs. In addition, the OCWD replenishment assessment rate increased from Fiscal Year 2023-24 to Fiscal Year 2024-25, such that the higher groundwater volume was subject to an increased per-unit cost. As a result, the expected cost savings from reduced MWD purchases were largely offset by the combination of increased groundwater production volume and the higher OCWD replenishment assessment rate. See “– Sources of Water” and “ADEQUACY OF WATER SUPPLIES – Orange County Water District – Groundwater Basin.”
The Water System’s accounting records, financial transactions and billing are computerized.

Annual audits of the Water System are made by the City’s independent auditors. The audits are made simultaneously with the audits of the non-utility financial activity of the City.

Since July 1971, funds of the Water System have been segregated from the City’s General Fund and the books and records are maintained separate and apart from all other accounts of the City.

For further information concerning the Water System’s financial position, see the audited financial statements of the Anaheim Water Utility Fund for the Fiscal Year ended June 30, 2025 attached hereto as Appendix A.

Outstanding Water System Revenue Obligations
As of June 30, 2025, the City had outstanding obligations under installment purchase agreements with the Authority and the California Municipal Finance Authority (“CMFA”) relating to Bonds issued by the Authority and CMFA, as applicable, for the benefit of the Water System in the aggregate principal amount of $280,125,000. All of these obligations, consisting of purchase payments payable under installment purchase agreements between the City and the CMFA and the Authority, as applicable, constitute Qualified Obligations payable from and secured by Surplus Revenues of the Water System. [Remainder of page intentionally left blank.]
39 303814149.5
The outstanding Qualified Obligations as of June 30, 2025 are summarized in the table below.

TABLE 7

OUTSTANDING QUALIFIED OBLIGATIONS AND

SECOND LIEN QUALIFIED OBLIGATIONS
Issue
Date of Installment
Purchase Agreement
or Other Instrument
Principal Amount
Outstanding
California Municipal Finance Authority
Revenue Bonds, Series 2015-A (City of
Anaheim Water System Project)
04/01/15 $36,510,000
Anaheim Housing and Public Improvements
Authority Revenue Bonds, Series 2020-A
(Water System Project)
03/01/20 720,000
Anaheim Housing and Public Improvements
Authority Refunding Revenue Bonds, Series
2020-B (Water System Refunding) (Taxable)
03/01/20 26,265,000
Anaheim Housing and Public Improvements
Authority Revenue Bonds, Series 2022-A
(Water System Project)
04/01/22 43,600,000
Anaheim Housing and Public Improvements
Authority Revenue Refunding Bonds, Series
2022-B (Water System Refunding) (Taxable)
04/01/22 78,135,000
Anaheim Housing and Public Improvements
Authority Revenue Refunding Bonds, Series
2022-C (Water System Refunding)
04/01/22 29,895,000
Anaheim Housing and Public Improvements
Authority Revenue Bonds, Series 2024-A
(Water System Project) (Variable Rate Demand
Bonds) (Second Lien Qualified Obligations) *
08/01/24 65,000,000
________________________
Source: Anaheim.
* Second Lien Qualified Obligations.
40 303814149.5
See also APPENDIX G – “DEBT SERVICE SCHEDULE” for a schedule of the debt service requirements on the City’s outstanding Water System Qualified Obligations.

The City has entered into an Amended and Restated Revolving Credit Agreement, dated as of December 7, 2023 (the “Revolving Credit Agreement”) with Wells Fargo Bank, National Association (the “Credit Bank”), under which the City may borrow up to $100,000,000 for purposes of the Water System.

The repayment obligation of the City for amounts borrowed under the Revolving Credit Agreement for the Water System is evidenced by Water Revenue Anticipation Notes of the City which are payable from and secured by surplus Water System revenues on a basis that is junior and subordinate to the payment of the Qualified Obligations and the Second Lien Qualified Obligations.

Any outstanding Water System borrowings of the City under the Revolving Credit Agreement which have not been paid (which borrowings may be paid from, among other sources, proceeds of future long-term financings of the City) on or prior to the facility maturity date of the Revolving Credit Agreement (i.e., currently December 6, 2028, unless extended) will be automatically converted to term loans on such date, so long as no default or event of default by the City shall have occurred and be continuing and all representations and warranties of the City under the Revolving Credit Agreement are true and correct in all material respects as of such date.

The Revolving Credit Agreement is also available for the City’s Electric System borrowings.

Borrowings for the City’s Electric System will reduce the commitment available under the Revolving Credit Agreement by an amount corresponding to the Electric System borrowing.

See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Water System Surplus Revenues.”
Historical Financial Results
The table on the following page summarizes results of the Water System, together with calculation of debt service coverage of outstanding Water System obligations for the five Fiscal Years shown. The information for the Fiscal Years ended June 30, 2021 through June 30, 2025 is based on the audited financial statements of the City’s Water Utility Fund for such periods. [Remainder of page intentionally left blank.]
41 303814149.5
TABLE 8

CITY OF ANAHEIM WATER UTILITY FUND

FINANCIAL RESULTS OF THE WATER SYSTEM
($ in Thousands)
Nine Months ended
March 31 Fiscal Year Ended June 30,
2026 2025 2025 2024 2023 2022 2021
Unaudited Unaudited
REVENUES:

Sale of water:

Residential $45,834 $44,977 $59,321 $55,541 $55,221 $59,024 $57,753 Commercial/Industrial 27,905 28,269 37,601 35,203 35,404 37,708 31,810 Other 4,364 4,307 5,568 5,199 4,140 4,187 4,144
Billed revenue from the sale of water 78,103 77,553 102,490 95,943 94,765 100,919 93,707 Change in unbilled water revenue -- -- -- -- -- -- --
Total revenue from the sale of water 78,103 77,553 102,490 95,943 94,765 100,919 93,707 Rate Stabilization Account revenues -- -- -- -- -- -- 1,670 Other revenue (including interest income) 4,176 3,900 6,293 4,183 3,207 272 1,719 Total gross revenues 82,279 81,453 108,783 100,126 97,972 101,191 97,096 EXPENSES (excluding depreciation and
amortization):

Purchased water 31,870 31,876 43,951 43,668 49,776 52,079 50,358 Treatment and pumping 8,719 8,548 11,550 8,778 5,402 5,157 4,799 Operations, maintenance and
administration
(including Right of Way fee) 16,240 15,125 21,817 19,256 17,626 17,519 23,053 Total expenses 56,829 55,549 77,318 71,702 72,804 74,755 78,210 NET REVENUES (a) 25,450 25,904 31,465 28,424 25,168 26,436 18,886 --
Deposits to Renewal and Replacement
Account
-- -- 32 1,748 151 457 (111)
SURPLUS REVENUES (b) 25,450 25,904 31,433 26,676 25,017 25,979 18,997 Qualified Obligations (c)
(1) 13,063 17,503 17,503 16,192 13,962 13,475 13,481

SURPLUS REVENUES AFTER

QUALIFIED OBLIGATIONS DEBT
SERVICE PAYMENTS 12,387 8,401 13,930 10,484 11,055 12,504 5,516 Transfers (to)/from Anaheim General Fund 8,376 12,025 800 820 603 613 600 Transfers (to)/from other City funds (7,776) (12,042) (968) (472) (201) (168) (1,770) BALANCE FOR OTHER PURPOSES $12,987 $8,384 $13,762 $10,832 $11,457 $12,949 $ 4,346 Qualified Obligation debt service
coverage (b/c)

1.9x 1.5x 1.8x 1.6x 1.8x 1.9x 1.4x
Total debt service coverage (a/c) 1.9x 1.5x 1.8x 1.8x 1.8x 2.0x 1.4x _______________________
(1) Refer to Table 7 herein for Qualified Obligations outstanding at June 30, 2025.

Source: Anaheim
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Water System Capital Program
The City has an on-going capital program (the “Water System Capital Program”) to construct new facilities and rehabilitate or replace existing facilities as needed to improve Water System capacity and reliability. The City’s Five-Year Water System Plan (the “Plan”) is designed to provide a coordinated approach for identifying and prioritizing projects and programs to ensure City water customers receive a reliable supply of high-quality water at an economic cost. Furthermore, the Plan includes projects and programs targeted at maintaining and improving the reliability of the Water System, as well as initiatives to meet future water demands and quality standards. The Plan is the foundation for planning efforts for water capital projects, and the first year serves as the basis for the City’s Water System capital improvement plan budget.

Planned projects in the Five-Year Water System Capital Program include the rehabilitation of existing wells and the construction of groundwater treatment facilities (being developed in partnership with OCWD) to improve local groundwater supply and treat all remaining wells that show elevated levels of PFOA and PFOS. See “– Groundwater Sources and PFAS” above.

Additionally, the Department will continue with the construction of pumping, storage and fireproofing improvements to enhance the Water System’s fire protection capabilities, boost short-term emergency supplies, and provide reliability to high water pressure zones. The Department will install flow measuring recording devices and SCADA equipment to each primary pumping regulating station, improving operational response capability based on the ability to remotely monitor and control station flows and pressures from the Water Distribution Control Center at Lenain. Equipment that has reached the end of its service life will also be replaced at multiple primary pumping regulating stations throughout Anaheim to maintain reliability.

The City’s Water System has 758 miles of pipeline, 7,950 fire hydrants, and 24,400 valves that deliver water for domestic and fire protection purposes throughout Anaheim. The Department has established programs to evaluate the condition of its assets and performs necessary maintenance that is vital for managing the operability of the water distribution system. At present, approximately 44% of the City’s pipelines are greater than sixty years old. The water main replacement program assesses the condition of system mains for strategic replacement to minimize water main breaks and service interruptions.

Approximately 10 miles of new transmission and distribution mains are planned for replacement in the next five years to improve existing service levels and fire flows.

To implement the proposed capital projects, the City projects investing $111.3 million over the next five years (from Fiscal Year 2026-27 through Fiscal Year 2030-31) as reflected in Table 9. The City intends to fund the Water System Capital Program through a combination of Water System revenues, developer contributions and existing bond proceeds. The City currently anticipates that approximately 25% of the capital costs identified in the five year Water System Capital Program (shown in Table 9) will be financed from bonds. These projections may change based on deferrals of Water System capital improvement projects or changes in the mix of financial resources used to fund capital projects. [Remainder of page intentionally left blank.]
43 303814149.5
TABLE 9
Water System Capital Program
Fiscal Years 2026-27 through 2030-31
Program/Project Category
Five-Year
Project Costs
(in $000s) Total(1)
Water Main Replacements $36,689 33%
Water Field (hydrants, valves, meters) 30,942 28
Pumping & Regulating Stations 16,810 15
Water Services Development 13,250 12
Water Treatment & Facilities 11,765 11
Water Storage 1,810 1
TOTAL $111,266 100%
_________________
(1) Percentages are rounded and may not sum to 100%.

Source: Anaheim.

Insurance
The Water System participates in the City’s self-insured workers’ compensation and general liability program. The liability for such claims, including claims incurred but not reported, is transferred to the City in consideration of self-insurance premiums paid by the Water System. Premiums for workers’ compensation and general liability programs are charged to the Water System by the City based on various allocation methods that include actual cost, claims experience, exposure base, and number of participants.

Premiums charged and paid totaled $1,313,000 and $1,210,000 for the years ended June 30, 2024 and June 30, 2025, respectively.

At June 30, 2025, the City was fully funded for self-insured workers’ compensation and general liability claims (self-insured retention levels of $2,000,000 per occurrence for workers’ compensation claims and $1,000,000 per occurrence for general liability claims). Above these self-insured retention levels, the City’s potential liability is covered through various commercial insurance and intergovernmental risk pooling programs. Settled claims have not exceeded total insurance coverage in any of the past three years, nor does management believe that there are any pending claims that will exceed total insurance coverage.

Labor Relations
As of May 1, 2026, APU has a total of 358 full-time and 52 part-time authorized positions. Of this total: the International Brotherhood of Electrical Workers (“IBEW”) Local 47 represents approximately 211 full-time and 26 part-time employees; the American Federation of State, County, and Municipal Employees District Council 36 (“AFSCME”) represents approximately 117 full-time and 12 part-time employees; and the Anaheim Municipal Employees Association (“AMEA”) represents 5 full-time employees. The City of Anaheim and IBEW, Local 47 established a memorandum of understanding for the general unit effective January 2, 2026 through December 31, 2028, for the part-time customer service unit effective January 17, 2026 through January 11, 2029, and for the professional management and parttime management units effective January 17, 2026 through January 11, 2029. The City of Anaheim and AMEA established a memorandum of understanding effective July 4, 2025 through June 30, 2027. The City also approved a memorandum of understanding with AFSCME effective July 1, 2023 through June 30, 2027. The City has not experienced any strike, work stoppage or other labor action by APU’s employees in the last five years.
44 303814149.5
Retirement Programs
Pension Plans. The City’s permanent employees, including Water System employees in the Anaheim Public Utilities Department, are covered by the California Public Employees Retirement System (“CalPERS”) through agent multiple-employer defined benefit plans administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State.

CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website at www.calpers ca.gov. The foregoing internet address is included for reference only, and the information on the internet site is not incorporated by reference herein.

The City’s defined benefit pension plans, the Miscellaneous Plan, Police Safety Plan and Fire Safety Plan, provide retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members (who must be public employees) and beneficiaries. No employees assigned to the Water System participate in the Police Safety Plan or Fire Safety Plan. Benefit provisions and all other requirements of the plans are established by State statute and City ordinance. California legislation, the Public Employee’s Pension Reform Act (“PEPRA”) of 2013, implemented certain limits on the amount and types of compensation that may be included in calculating pension benefits and new formulas for the calculation of pension benefits, as well as certain contribution requirements for the sharing of pension benefit costs, for new employees hired on or after January 1, 2013 who meet the definition of a new member under PEPRA.

The cost of the Miscellaneous Plan is funded through bi-weekly contributions from employees and from employer contributions by the City. Miscellaneous Plan employees hired prior to January 1, 2013 are generally required to contribute 8.00% of their annual covered salary. Miscellaneous Plan members hired on or after January 1, 2013 and who have no prior membership in any California public employee retirement system are required to contribute 6.75% of their annual covered salary. The member contribution can be paid by the employee or by the City on the employee’s behalf in accordance with applicable labor agreements. The majority of Miscellaneous Plan employees hired prior to January 1, 2013 contribute the full 8.00% employee contribution plus 4.00% of the employer contribution, for a total of 12.00%. For employees hired on and after January 1, 2013 that are required to contribute at an employee rate of 6.75% of annual covered salary, the entire 6.75% is paid by such employees. In accordance with applicable State law, the contribution rate for all public employers is determined annually by the actuary and is effective on the July 1 following notice of a change in rate. Funding contribution amounts are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate applied to annual payroll is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members, using the actuarial basis recommended by CalPERS actuaries and actuarial consultants and adopted by the CalPERS Board of Administration. CalPERS establishes and amends the employer contribution rates. Beginning with Fiscal Year 2017-18, CalPERS began collecting employer contributions toward the plan’s unfunded liability as dollar amounts rather than percentage of active payroll. Miscellaneous Plan provisions and benefits in effect at June 30, 2025 are as follows: the City’s required employer contribution rate for the normal cost component of required contributions for the Miscellaneous Plan was approximately 12.61% of annual covered payroll for employees hired prior to January 1, 2013, and 12.61% of annual covered payroll for employees hired after January 1, 2013; the City’s contribution to the unfunded accrued liability was approximately $44,046,000.
[Remainder of page intentionally left blank.]
45 303814149.5
The table below shows the recent history of the actuarial accrued liability, the market value of assets, the funded ratio and the annual covered payroll for the City’s Miscellaneous Plan.

Valuation
Date
Accrued
Liability
Market Value
of Assets
Unfunded
Liability
Funded
Ratio
Annual
Covered
Payroll
06/30/20 $1,543,927,000 $1,084,188,000 $459,739,000 70.2% $124,700,000 06/30/21 1,619,285,000 1,308,881,000 310,404,000 80.8 111,733,000 06/30/22 1,681,617,000 1,183,362,000 461,482,000 71.9 119,690,000 06/30/23 1,741,021,000 1,230,615,000 510,406,000 70.7 133,453,000 06/30/24 1,815,111,000 1,322,020,000 493,091,000 72.8 147,681,000 Beginning with the June 30, 2013 valuation, CalPERS no longer uses an actuarial value of assets and instead uses the market value of assets to determine contribution rates per CalPERS’ direct rate smoothing policy. Under its direct rate smoothing policy, CalPERS employs an amortization and smoothing policy that will pay for all gains and losses over a fixed 30-year period with the increases or decreases in the rate spread directly over a 5-year period.

The PERS Board adopted a new amortization policy effective with the June 30, 2019 actuarial valuation. Under the new policy, amortization payments are determined as a level dollar amount.

Investment gains or losses are amortized over a fixed 20-year period with a 5-year ramp up at the beginning of the amortization period. Non-investment gains or losses are amortized over a fixed 20-year period with no ramps. All changes in liability due to plan amendments (other than golden handshakes) are amortized over a 20-year period with no ramps. Changes in actuarial assumptions or changes in actuarial methodology are amortized over a 20-year period with no ramps. Changes in unfunded accrued liability due to a golden handshake are amortized over a period of five years. These changes will apply only to new unfunded accrued liability bases established on or after June 30, 2019.

The City’s required contributions to CalPERS fluctuate each year and include a normal cost component and a component equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. One of the most significant factors used in determining the liability and the funding requirements is the rate of return that investments will yield prior to making payments, known as the discount rate. CalPERS approved an incremental reduction in the discount rate to be used in its actuarial valuation from 7.5% to 7.0% over the three Fiscal Years 2018-19 to 2020-21. The discount rate was automatically lowered in July 2021, from 7.0% to 6.8%, due to the CalPERS investment return for Fiscal Year 2020-21. Lower discount rates result in a comparative increase in the unfunded liability and the contributions required to meet those obligations. The City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions. [Remainder of page intentionally left blank.]
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The table below sets forth certain information regarding the water utility’s portion of the City’s required contributions to its CalPERS Miscellaneous Plan for the Fiscal Years ended June 30, 2021 through June 30, 2025, which amounts were paid in full by the Water System in each of such fiscal years.

City of Anaheim
Schedule of Water Utility Pension Plan Contributions
Fiscal Year
Contribution Funded
by Water Utility
Actuarially
Determined
Contribution Amount
by Water Utility
Water Utility
Contribution
Deficiency (Excess) to
Actuarially Determined
Contribution
Water Utility
Contribution as
a % of Covered
Payroll
2020-21 $3,536,000 $3,536,000 -- 38.28%
2021-22 3,663,000 3,663,000 -- 44.95
2022-23 3,650,000 3,650,000 -- 45.21
2023-24 3,742,000 3,742,000 39.61
2024-25 4,016,000 4,016,000 40.43
Source: City of Anaheim.

Effective for the Fiscal Year ended June 30, 2015, Anaheim adopted Governmental Accounting Standards Board (“GASB”) Statement No. 68, affecting the reporting of pension liabilities for accounting purposes. Under GASB Statement No. 68, the City is required to report the Net Pension Liability (i.e., the difference between the Total Pension Liability and the Pension Plan’s Net Position or market value of assets) in its financial statements.

The table below summarizes certain information relating to the water utility fund’s proportionate share of the Net Pension Liability of Anaheim’s Miscellaneous Plan for the measurement periods ended June 30, 2020 through June 30, 2024 (as reported in Anaheim’s water utility fund audited financial statements as of the succeeding fiscal year). The water utility’s proportion of the Net Pension Liability was based on a projection of its long-term share of contributions to the pension plan relative to the projected contributions of all participating funds of the City. The amount budgeted for the water utility’s allocated portion of the City’s required contributions to its CalPERS Miscellaneous Plan for Fiscal Year 2025-26 is $4,465,200.
47 303814149.5
City of Anaheim Water Utility Fund
Proportionate Share of the Net Pension Liability – Miscellaneous Plan Measurement
Period(1)
Proportionate
Share of the Net
Pension Liability(2)
Water Utility Share of
the Net Pension
Liability(2)
Net Position as a % of
Share of Total Pension
Liability
Share of Net
Pension Liability
as a % of Its
Covered Payroll
2019-20 7.0486% $31,067,000 71.16% 344.92%
2020-21 7.2096 18,545,000 83.58 200.75
2021-22 7.0946 32,740,000 71.94 401.77
2022-23 6.5617 31,348,000 72.04 388.26
2023-24 6.5330 29,211,00 74.74 325.91
(1) Measured using prior fiscal year annual actuarial valuation rolled forward to measurement date. (2) Reflects the water utility’s share of the City’s Miscellaneous Plan Net Pension Liability of $440,748,000, $257,230,000, $461,482,000, $477,137,000 and $447,132,000 for the five Fiscal Year measurement periods of 2019-20, 2020-21, 2021-22, 2022- 23 and 2023-24, respectively.

Source: City of Anaheim.

Retiree Health Benefits. In addition to the defined benefit pension plan described above, the City also maintains a program providing “other post-employment benefits” (“OPEB”) to eligible retirees, including health care and disability coverage and death benefits. The City made significant changes to its OPEB program during Fiscal Year ended June 30, 2006. For City employees hired prior to January 1, 1996 (other than those represented by the Anaheim Police Association, the Anaheim Fire Association or the IBEW), the length of service credit was frozen for all employees eligible for the benefit. Length of service, a factor in determining the amount of the benefit earned, will not accrue beyond December 31, 2005.

Employees hired on or after January 1, 1996 (other than those represented by the Anaheim Police Association or the Anaheim Fire Association) are no longer eligible for City funding of all or a portion of post-employment medical benefits. For City employees represented by the IBEW who had not retired as of October 15, 2005, medical benefits only for future retirees are to be provided through a trust established by the IBEW. Benefits are determined by the trustees of the trust and the City’s liability is limited to specified percentages of employee pay.

City employees hired on or after January 1, 1996 and before January 1, 2002 (other than those represented by the Anaheim Police Association, the Anaheim Fire Association or the IBEW) were transitioned from the former defined benefit OPEB medical plan to a defined contribution OPEB medical plan. The City made a one-time contribution of $1,685,000 to a newly established retiree health savings account for those eligible employees. Participation in the retiree health savings account is mandatory for this transitional group of employees.

Based on eligibility status, retirees may participate in any health plan made available to active City employees. The City has several plans with different contribution levels and benefit provisions. The City’s contributions vary up to 100% of annual premium cost, depending on the employee’s Medicare eligibility, year of hire, age and employee group. At June 30, 2025, 1,337 retirees or surviving spouses met the various eligibility requirements and were receiving medical benefits.

The City’s contributions toward the cost of its OPEB program are generally advance funded on an actuarial basis to a dedicated reserve, but annual contributions are not required. To pre-fund OPEB liabilities, the City participates in the California Employers’ Retiree Benefit Trust, an agent multiple employer plan consisting of an aggregation of single-employer plans, with pooled administrative and investment functions that are administered by CalPERS. As of the actuarial valuation date of June 30, 48 303814149.5
2023, the unfunded liability for the City’s Post-Employment Medical Benefits Program was $101,950 or 50% funded.

For Fiscal Years prior to Fiscal Year 2017-18, the City’s reported annual OPEB cost (expense) was determined in accordance with the parameters of GASB Statement No. 45. The water utility paid its allocated share of the City’s annual full cost for current premiums.

Effective for Fiscal Year 2017-18, Anaheim follows the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions (“GASB No. 75”) affecting the reporting of OPEB liabilities for accounting purposes. GASB No. 75 replaces the requirements of GASB Statement No. 45. GASB No. 75 establishes standards for employers with other postemployment liabilities for recognizing and measuring net OPEB liabilities, along with deferred inflows and outflows of resources, and expenses/expenditures related to the other postemployment liability. GASB No. 75 does not establish requirements for funding.

City contributions to the OPEB Plan occur as benefits are paid to retirees or contributions to the OPEB Trust. The City contributes an amount not less than the annual actuarially determined contribution measured in accordance with the parameters of GASB No. 75. The table below sets forth certain information regarding the water utility’s allocated share of the City’s annual contributions to the OPEB Plan for the Fiscal Years ended June 30, 2021 through June 30, 2025, including the relation of such contributions to the actuarially determined contribution amount for such fiscal year.

City of Anaheim
Schedule of Water Utility OPEB Plan Contributions
Fiscal Year
Contribution Funded
by Water Utility
Actuarially
Determined
Contribution Amount
by Water Utility
Water Utility
Contribution
Deficiency (Excess) to
Actuarially Determined
Contribution
Water Utility
Contribution as
a % of Covered
Payroll
2020-21 $653,000 $755,000 $(102) 6.96%
2021-22 658,000 728,000 (70) 6.88
2022-23 623,000 623,000 -- 6.48
2023-24 659,000 659,000 -- 6.09
2024-25 580,000 580,000 -- 4.99
Source: City of Anaheim.
49 303814149.5
The table below summarizes certain information relating to the water utility fund’s proportionate share of the City Net OPEB Liability for the measurement periods ended June 30, 2021 and June 30, 2024 (as reported in Anaheim’s water utility fund audited financial statements as of the succeeding fiscal year).

City of Anaheim Water Utility Fund
Proportionate Share of the Net OPEB Liability
Measurement
Period(1)
Proportionate
Share of the Net
OPEB Liability(2)
Water Utility Share of
the Net OPEB
Liability(2)
Net Position as a % of
Share of Total OPEB
Liability
Share of Net
OPEB Liability as
a % of Its Covered
Payroll
2020-21 4.607% $4,937,000 53.77% 52.59%
2021-22 4.529 5,558,000 46.79 58.11
2022-23 4.216 4,843,000 50.04 50.41
2023-24 4.332 4,416,000 55.59 40.80
(1) Measured using actuarial valuation as of the measurement date. (2) Reflects the water utility’s share of the City’s Net OPEB Liability of $107,149,000, $122,722,000, $114,869,000 and $101,950,000 for the fiscal year measurement periods of 2020-21, 2021-22, 2022-23 and 2023-24, respectively.

Source: City of Anaheim.

Additional information regarding the City’s retirement plans and OPEB, including information regarding the assumptions used to determine the pension and OPEB liabilities and the funding requirements therefor, can be found in Notes 10 and 11 and the Required Supplementary Information to the City’s audited financial statements included in the City’s annual comprehensive financial report, which may be obtained on the City’s website at http://www.anaheim.net.

See also APPENDIX A – “AUDITED FINANCIAL STATEMENTS OF THE ANAHEIM WATER UTILITY FUND FOR THE FISCAL YEAR ENDED JUNE 30, 2025.”

ADEQUACY OF WATER SUPPLIES
Orange County Water District – Groundwater Basin
The following information regarding OCWD has been obtained from OCWD and sources that the Authority and the City believe to be reliable, but the Authority and the City take no responsibility for the accuracy or completeness hereof. Additional information about OCWD may be obtained from OCWD’s website at www.ocwd.com. No information contained on such website is incorporated herein by reference.

The Orange County Water District is the agency responsible for managing the Orange County groundwater Basin, which is Anaheim’s major source of water. OCWD is governed by a ten-member board of directors, which has the power to establish and adjust the annual Basin Production Percentage, the Basin Equity Assessment and the Replenishment Assessment by a vote of eight out of ten of its directors. Each of the cities of Anaheim, Fullerton and Santa Ana has the power to appoint one director; the remaining seven directors are elected by the residents in the geographic districts composing the balance of OCWD’s boundaries.

Prior to 1968, OCWD managed the Basin from the supply side. This approach did not limit the amount of water that could be taken from the Basin by any of the groundwater producers. OCWD’s philosophy was for the Basin to provide sufficient water supply to meet demand regardless of growth, development or drought.

In 1968, OCWD obtained authorization to implement the Basin Production Percentage (the “BPP”) as another tool to manage the Basin. The BPP is defined as the proportion of total water production that can 50 303814149.5
be produced from groundwater withdrawals without incurring an additional assessment, known as the Basin Equity Assessment (the “BEA”). The BPP and BEA do not result in a rigid cap on the quantity of groundwater that may be pumped, but instead create a financial disincentive to pump in excess of the BPP.

A groundwater producer may in fact pump as much groundwater from the Basin as its system capacity permits, although all water pumped above the BPP is charged the additional BEA, which effectively increases its cost to the MWD rate. Despite the financial disincentive of the BEA, the fact that the City has the ability to pump as much groundwater as the Water System can accommodate provides a reliable source of alternate water supply in the event that MWD water purchases are disrupted.

For many years prior to 2004, OCWD established the Basin Production Percentage at 75%, with a goal of replenishing the Basin with sufficient quantities of water to sustain that pumping level. Continued growth and several consecutive years of below normal precipitation, however, have decreased groundwater levels significantly. As a result, OCWD developed and implemented a new Basin management strategy that began in Fiscal Year 2003-04. The goal of this strategy was to reverse the declining trend in water levels and ultimately to refill the Basin.

Since Fiscal Year 2005-06, the BPP generally has averaged approximately 70%, excluding years where in-lieu water was delivered. OCWD will set each future BPP at a level that corresponds to the total amount of water that it estimates will be available for recharge that year, including replenishment water purchased from MWD. As part of this process, OCWD will take into account the level of water in the Basin, as well as hydrologic and replenishment conditions.

In addition to adjusting the BPP and the BEA annually, OCWD also annually increases the pump tax or Replenishment Assessments (the “RA”), which is the cost that groundwater producers must pay to pump water from the Basin. The RA provides OCWD with the necessary revenue to construct capital improvement projects to enhance Basin production, to protect the water quality of the Basin’s supply, and to purchase replenishment water from MWD when available. The total RA was set for $688 per acre-foot for Fiscal Year 2024-25. With the energy costs for pumping the groundwater added to the OCWD RA costs, the City paid approximately $776 for each acre-foot of groundwater produced in Fiscal Year 2024-25. The RA is updated annually; for Fiscal Year 2025-26, the RA was set at $711 per acre-foot.

OCWD’s Groundwater Replenishment System (“GWRS”), an indirect potable reuse (recycled water) project, became operational in January 2008. The GWRS constituted a “new” source of supply designed to increase the reliability of replenishment water for OCWD. As originally constructed, the GWRS produced nearly 70 million gallons per day, or a total of 72,000 acre-feet of water per year, to recharge the Basin and to support a seawater intrusion barrier in Fountain Valley. In June 2015, an expansion of the GWRS (the “Initial Expansion”) was completed. The Initial Expansion was designed to produce an additional 30 MGD, or a total of 31,000 acre-feet per year, of new water supplies, increasing the total production of the GWRS to 103,000 acre-feet per year. In April 2023, OCWD completed its final expansion of GWRS (the “GWRS Final Expansion”). The GWRS Final Expansion increases its full production capacity to 130 MGD. In the Fiscal Year ended June 30, 2025, the GWRS produced 113,106 acre feet of recycled water.

On September 16, 2014, the California Governor signed Assembly Bill No. 1739 and Senate Bill Nos. 1168 and 1319 (collectively, the Sustainable Groundwater Management Act, or “SGMA”) into law.

The SGMA constitutes a legislative effort to regulate groundwater on a Statewide basis. Under the SGMA, the California Department of Water Resources (“DWR”) was required to designate groundwater basins in the State as high, medium, low or very low priority for purposes of groundwater management by January 31, 2015. The Basin was initially designated as medium priority. By January 31, 2017, local groundwater producers were required to establish or designate an entity (referred to as a groundwater sustainability agency, or “GSA”), subject to DWR’s approval, to manage each high and medium priority groundwater basin. The SGMA specifically called for OCWD, which regulates the Basin, to serve as the GSA for such Basin. Each GSA was tasked with submitting a groundwater sustainability plan for DWR’s approval by 51 303814149.5
January 31, 2020. Groundwater sustainability plans must include sustainability goals and a plan to implement such goals within 20 years. Alternatively, groundwater producers can submit a groundwater management plan under Part 2.75 of the California Water Code or an analysis for DWR’s review demonstrating that a groundwater basin has operated within its sustainable yield for at least 10 years. Such alternative plan shall have been submitted by January 31, 2017 and updated every five years thereafter.

OCWD prepared and submitted the Basin 8-1 Alternative on January 1, 2017, which was approved by DWR. OCWD remains in compliance with all SGMA regulations, including the submission of the “Basin 8-1 Alternative 2022 Update” and the “Basin 8-1 Alternative Annual Report_Y2022”. Special Act Districts created by statute, such as OCWD, and other agencies, are permitted to prepare and submit an Alternative to a Groundwater Sustainability Plan per DWR regulations. The City does not currently expect its groundwater extraction rights or costs in the Basin to change significantly as a result of the enactment of the SGMA. [City to provide updates on 5-year timing, if available, for 2027] Metropolitan Water District of Southern California – Imported Water The following information regarding MWD has been obtained from publicly available information and other sources that the Authority and the City believe to be reliable, but the Authority and the City take no responsibility for the accuracy or completeness hereof. Additional information about MWD may be obtained from MWD’s website at www.mwdh2o.com and from filings by MWD on the Municipal Securities Rulemaking Board’s website through the Electronic Municipal Market Access system (“EMMA”). No information contained on such website or on EMMA is incorporated herein by reference.

MWD is a public agency organized in 1928 by vote of the electorates of several Southern California cities, including the City, following adoption of the original Metropolitan Water District Act (the “MWD Act”) by the California Legislature. MWD has historically provided between 40% and 60% of the water used annually in its service area, which consists of approximately 5,200 square miles in portions of Los Angeles, Orange, Riverside, San Bernardino, San Diego and Ventura Counties. MWD estimates that approximately 18.6 million people lived in its service area (as of July 2023).

MWD is governed by a 38-member Board of Directors consisting of at least one representative from each of the 26-member public agencies that comprise MWD. As a member agency, the City has direct representation on MWD’s Board of Directors. Each member agency is entitled to have at least one representative on the MWD Board, plus an additional representative for each full 5% of the total assessed valuation of property in MWD’s service area that is within the member agency. Changes in relative assessed valuation do not terminate any director’s term. In 2019, California Assembly Bill 1220 amended the MWD Act to provide that “A member public agency shall not have fewer than the number of representatives the member public agency had as of January 1, 2019.” Accordingly, from time to time, the MWD Board may have more than 38 members. Representation and voting rights are based upon the assessed valuation of property taxable for MWD purposes within each member agency.

MWD’s water rates are established by the MWD Board and are not subject to regulation or approval by the California Public Utilities Commission or by any other local, State or federal agency, although its enabling statute is subject to amendment by the California Legislature.

The MWD Act provides each of MWD’s member agencies a preferential entitlement to purchase a portion of the water provided by MWD. This preferential right is based on the ratio of all payments on tax assessments and otherwise, except purchases of water, made to MWD by each member agency compared to total payments made by all member agencies on tax assessments and otherwise, except purchases of water. Historically, these rights have not been used by MWD in allocating MWD’s water. In 2004, the California Court of Appeal upheld MWD’s methodology for calculation of the respective members’ preferential rights under the MWD Act. In litigation challenging MWD’s water rates, San Diego County Water Authority (“SDCWA”) also challenged MWD’s exclusion of payments for exchange water deliveries 52 303814149.5
to SDCWA from the calculation of SDCWA’s preferential right. In June 2017, the California Court of Appeal held that SDCWA’s payments for exchange water under its exchange agreement must be included in the preferential rights calculation. The Court of Appeal decision is final.

MWD Water Supply. MWD imports water from two principal sources: northern California via the Edmund G. Brown California Aqueduct (the “California Aqueduct”) of the State Water Project owned by the State and the Colorado River via the Colorado River Aqueduct owned by MWD. In Fiscal Year 2025, the latest period for which such information is available, MWD supplied the City with approximately 3.3 billion gallons of water. MWD member agencies, which use MWD water to supplement their own local water supplies, can be expected to increase their purchases of MWD water if their local water supplies are reduced.

The City currently has eight MWD connections with a combined capacity of 110 MGD.

MWD Scheduling and Operations. MWD member agencies request water from MWD at various delivery points within MWD’s system and pay for such water at uniform rates established by the MWD Board for each class of water service. No member is required to purchase water from MWD, but all member agencies are required to pay readiness-to-serve charges (as described below) whether or not they purchase water from MWD.

Water is delivered to the member agencies on demand and is metered at the point of delivery.

Member agencies are billed monthly and a late charge of 1% of the delinquent payment is assessed for delinquent payments not exceeding five business days. A late charge of 2% of the amount of the delinquent payment is charged for a payment that is delinquent for more than five business days for each month or portion of a month that the payment remains delinquent. MWD has the authority to suspend service to any agency delinquent for more than 30 days. Delinquencies have been rare; in such instances late charges have been collected. No service has been suspended because of delinquencies.

MWD Rates. MWD water rates are established by majority weighted vote of the MWD Board, after a public hearing. Rates are not subject to regulation by any local, State or federal agency. Under the MWD Act, water rates must be uniform for like classes of service. MWD must, so far as practicable, fix such rates for water as will result in revenue which, together with revenue from any water standby or availability of service charge or assessment, will pay the operating expenses of MWD, provide for repairs and maintenance, provide for payment of the purchase price or other charges for property or services or other rights acquired by MWD and provide for the payment of the interest and principal of the bonded debt of MWD, subject to the applicable provisions of the MWD Act authorizing the issuance and retirement of such bonds.

As previously described, effective January 1, 2003, MWD implemented a two-tiered rate structure.

The City purchased water from MWD pursuant to a purchase order for MWD system water that took effect on January 1, 2015 and had a ten-year term that expired on December 31, 2024. MWD did not renew the purchase orders and has indicated that it will revisit the purchase order commitments and similar structures as needed during the business model review through its CAMP4W process. On April 9, 2024, MWD’s Board adopted rates effective January 1, 2025 and January 1, 2026. For calendar year 2025, MWD’s fullservice rate is $1,395 per acre-foot for treated water and $912 per acre-foot for untreated water. For calendar year 2026, the full-service rate is $1,528 per acre-foot for treated water and $984 per acre-foot for untreated water. On April 14, 2026, MWD’s Board adopted rates effective January 1, 2027 and January 1, 2028. For calendar year 2027, MWD’s full-service volumetric rate is $1,420 per acre-foot for treated water and $1,030 per acre-foot for untreated water.
53 303814149.5
The following table summarizes approved water rates under MWD’s current rate structure. This table includes rates effective January 1, 2025, January 1, 2026, January 1, 2027 and January 1, 2028, each for the corresponding calendar years.

MWD WATER RATES(1)
(Dollars per Acre-Foot)
2025 Rates 2026 Rates 2027 Rates 2028 Rates
Supply Rate $ 290 $ 313 $ 413 $ 440
System Access Rate 463 492 472 525
System Power Rate 159 179 145 141
Untreated Full Service $ 912 $ 984 $1,030 $1,106
Treated Full Service $1,395 $1,528 $1,420 $1,514
_______________________
(1) MWD adopted rates for calendar years 2025 and 2026 on April 9, 2024. MWD adopted rates for calendar years 2027 and 2028 on April 14, 2026.

Source: MWD.

The System Access Rate is intended to recover the cost of the conveyance, distribution, and storage of water on an average annual basis through a uniform, volumetric rate. The System Access Rate is charged for each acre-foot of water transported by MWD, regardless of the ownership of the water being transported.

The System Access Rate is charged for each acre-foot of water transported by MWD to its member agencies and delivered as a full-service water transaction.

The System Power Rate is charged on a dollar per acre-foot basis to recover the cost of energy required to pump water to Southern California through the State Water Project and Colorado River Aqueduct. The System Power Rate is applied to all deliveries of MWD water to its member agencies.

MWD has been charging a treatment surcharge on a dollar per acre-foot basis for treated deliveries.

The treatment surcharge is set to recover all of the costs of providing treatment capacity and operations.

The Treatment Surcharge is charged for all treated water transactions. In July 2025, MWD’s Board approved a hybrid treatment cost recovery structure under which up to 30 percent of treatment revenue requirements would be recovered through Treatment Capacity Fixed Charges beginning in calendar year 2027, with the remaining treatment costs continuing to be recovered through the volumetric Treatment Surcharge. Under the Board-approved phase-in methodology, calendar year 2027 uses transitional billing determinants for the new Treatment Capacity Fixed Charges, while calendar year 2028 begins the transition to rolling historical demand calculations. As a result, year-over-year changes in the Treatment Surcharge and the individual Treatment Capacity Fixed Charges reflect the combined effect of the phased-in billing determinants, and the reallocation of a portion of treatment costs from volumetric to fixed charges. The Treatment Capacity Fixed Charges for calendar year 2027 include $33,700 per cubic-foot-per-second of Treatment Peaking Capacity Charge, $15 per acre-foot of Treatment Used Standby Capacity Charge, and $72 per acre-foot of Treatment Remaining Standby Capacity Charge. For calendar year 2028, MWD’s fullservice volumetric rate is $1,514 per acre-foot for treated water and $1,106 per acre-foot for untreated water. The Treatment Capacity Fixed Charges for calendar year 2028 include $21,600 per cubic-foot-persecond of Treatment Peaking Capacity Charge, $120 per acre-foot of Treatment Used Standby Capacity Charge, and $64 per acre-foot of Treatment Remaining Standby Capacity Charge.

Additional charges for the availability of MWD’s water are as follows: the Readiness-to-Serve Charge, the Water Standby Charge and the Capacity Charge. MWD adopted the Readiness-to-Serve Charge and the Capacity Charge fees for calendar years 2025 and 2026 on April 9, 2024 and for calendar years 2027 and 2028 on April 14, 2026.
54 303814149.5
The Readiness-to-Serve Charge is designed to recover the cost of the portion of the system that is available to provide emergency service and available capacity during outages and hydrologic variability.

The Readiness-to-Serve Charge is allocated to each member agency in proportion to the rolling ten-year share of firm deliveries through MWD’s system. The City’s share of MWD’s annual Readiness-to-Serve Charge is 1.84% from January to December 2026 and 1.87% from January to December 2027.

The MWD Board is authorized to impose water standby or availability of service charges. In May 1993, the MWD Board imposed a water standby charge for fiscal year 1993-94 ranging from $6.94 to $15 for each acre or parcel less than an acre within MWD’s service area, subject to specified exempt categories.

Water standby charges have not exceeded the rates set in fiscal year 1993-94. Standby charges are assessments under the terms of Proposition 218, a State constitutional ballot initiative approved by the voters on November 5, 1996, but MWD’s current standby charges are exempt from Proposition 218’s procedural requirements.

Member agencies have the option to utilize MWD’s existing standby charge authority as a means to collect all or a portion of their Readiness-to-Serve Charge. Standby charge collections are credited against the member agencies’ Readiness-to-Serve Charge.

The Capacity Charge is a fixed charge intended to recover the cost of providing peak capacity within MWD’s distribution system. It is levied on the maximum summer day demand placed on MWD’s system between May 1 and September 30 for the three-calendar-year period ended December 31 two years prior to the date of the capacity charge. Effective January 1, 2024, the Capacity Charge was $11,200 per cubic-feet per second (“cfs”) of maximum daily flow. The newly adopted Capacity Charges are $13,000 per cfs and $14,500 per cfs effective January 1, 2025 and January 1, 2026, respectively.

SDCWA has filed a number of lawsuits against MWD challenging MWD’s water rates that are in various stages of the judicial process. The City is unable to assess at this time the impact this litigation may have on future water rates charged by MWD to the City. Information regarding this litigation is available in the MWD Information (defined below) found on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the internet at http://emma.msrb.org/ (“EMMA”). The MWD Information is not incorporated herein by reference.

Reliability of MWD Water Supply to Meet City Requirements. MWD faces a number of challenges in providing adequate, reliable and high quality water supplies for southern California. These include, among others: (1) population growth within the service area; (2) increased competition for low-cost water supplies; (3) variable weather conditions, including extended drought periods; (4) increased environmental regulations; and (5) climate change. MWD’s resources and strategies for meeting these long-term challenges are set forth in the MWD 2020 Integrated Resources Plan.

Hydrologic conditions can have a significant impact on MWD’s imported water supply sources.

For MWD’s State Water Project supplies, precipitation in California’s northern Sierra Nevada during the fall and winter helps replenish storage levels in Lake Oroville, a key State Water Project facility. The subsequent runoff from the spring snowmelt helps satisfy regulatory requirements in the Bay-Delta, bolstering water supply reliability in the same year. The source of MWD’s Colorado River supplies is primarily the watersheds of the Upper Colorado River basin the states of Colorado, Utah and Wyoming.

Although precipitation is primarily observed in the winter and spring, summer storms are common and can affect water supply conditions.

Uncertainties from potential future temperature and precipitation changes in a climate driven by increased concentrations of atmospheric carbon dioxide also present challenges. Areas of concern to California water planners identified by researchers include: reduction in Sierra Nevada and Colorado basin snowpack; increased intensity and frequency of extreme weather events; shifting runoff patterns to earlier in the year when reservoir storage is more constrained due to flood protection; saltwater intrusion to 55 303814149.5
groundwater supplies; and rising sea levels resulting in increased risk of damage from storms, high-tide events, and the erosion of levees and potential cutbacks of deliveries of imported water. While potential impacts from climate change remain subject to study and debate, climate change is among the uncertainties MWD has indicated that it seeks to address through its planning processes.

In addition, MWD manages water supplies in response to the prevailing hydrological conditions by implementing its Water Surplus and Drought Management Plan (“WSDM Plan”), and in times of prolonged or severe shortages, the Water Supply Allocation Plan (the “MWD WSAP”). The WSDM Plan is a planning document that MWD uses to guide inter-year and intra-year storage operations, and splits resource actions into two major categories: surplus actions and shortage actions. The surplus actions emphasize storage of surplus water inside the region, followed by storage of surplus water outside the region. The shortage actions emphasize critical storage programs and facilities and conservation programs that make up part of MWD’s response to shortages. The MWD WSAP provides a formula for equitable distribution of available supplies in case of extreme water shortages within MWD’s service area.

A more detailed description of the challenges faced by MWD in its continued supply of imported water to the City, as well as a variety of other operating information with respect to MWD, is included in certain disclosure documents prepared by MWD. MWD periodically prepares official statements and other disclosure documents in connection with its bonds and other obligations. MWD has also entered into certain continuing disclosure agreements pursuant to which MWD is contractually obligated for the benefit of owners of certain of its outstanding obligations to file certain annual reports, notices of certain enumerated events as defined under Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”) and annual audited financial statements (together with MWD’s official statements and other disclosure documents, the “MWD Information”) with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at EMMA. The MWD Information is not incorporated herein by reference thereto, and the City makes no representation as to the accuracy or completeness of such information. MWD has not entered into any contractual commitment with the City, the Trustee or the Owners of the Bonds to provide MWD Information to the City, the Trustee or the Owners of the Bonds. MWD is not contractually obligated, and has not undertaken, to update such MWD Information, for the benefit of the City or the Owners of the Bonds under Rule 15c2-12.

As described herein, the Water System has been more reliant on purchased water from MWD while groundwater wells remain offline in response to PFAS regulations. The Department estimates that this greater reliance on imported water will continue until a permanent treatment solution can be implemented.

The Department has adequate water supplies from the remaining available groundwater sources and from imported water to meet expected customer demand during such period. See “THE WATER SYSTEM – Groundwater Sources and PFAS.”
Water Conservation Actions and Drought Response
Between late 2011 and late 2016, the State suffered the worst drought in recorded history. The hydrological conditions during that time necessitated, on January 17, 2014, Governor Brown to declare a statewide drought State of Emergency.

In response to Governor Brown’s declaration in 2014, the Department increased its messaging for voluntary water conservation, and asked citizens to voluntarily cut water usage by 20%. In August 2014, the Anaheim City Council adopted Resolution No. 2014-151 to implement a set of mandatory water use reduction measures focusing primarily on reducing wasteful outdoor watering practices (which resolution was subsequently rescinded and replaced by implementation of Water Reduction Plan III measures under the City’s Water Reduction Plan Ordinance (hereinafter defined) as described below). 56 303814149.5
On April 17, 2017, as a result of the record rainfall and snowfall that occurred between November 2016 and March 2017, Governor Brown declared an end to the State of Emergency for most of California, including the City. Although many of the mandatory conservation measures of the SWRCB were rescinded, some of the Governor’s conservation measures were continued and many cities and water agencies have made permanent many of the conservation measures first imposed during the drought.

Prior to such drought, the City already had measures in place to deal with water shortages. In April 2009, the City Council adopted Ordinance No. 6138, amending Anaheim Municipal Code Chapter 10.18 (the “Water Reduction Plan Ordinance”) to provide for the implementation of specified Water Reduction Plan provisions upon the adoption of a resolution of City Council ordering such implementation. In May 2015, the City Council approved amendments to the Water Reduction Plan Ordinance in response to statewide conservation mandates. The Water Reduction Plan Ordinance provides for four phases of Water Reduction Plans to respond to different degrees of water shortages: Plan 1 – Mild Water Shortage, Plan II – Elevated Water Shortage, Plan III – Severe Water Shortage, and Plan IV – Emergency Water Shortage.

Each plan is designed to help limit potable water usage for outdoor and landscaping watering and will range from voluntary to mandatory conservation. The Water Reduction Plan Ordinance provides that City Council may, by resolution, discontinue any Water Reduction Plan and may also implement another Water Reduction Plan adopted pursuant to the Water Reduction Plan Ordinance. The Water Reduction Plan Ordinance further allows that the City may adopt a rate structure designed to reduce water consumption in accordance with the requirements of State law.

In April 2021, Governor Newsom declared a drought state of emergency in 41 of the State’s 58 counties, primarily in the northern portion of the State and in the Central Valley. In July 2021, Governor Newsom issued an executive order expanding the drought state of emergency to 50 of the State’s 58 counties. In October 2021, the Governor expanded the declaration of a drought state of emergency to all counties in the State. In connection with the declaration, the Governor called for Californians to voluntarily reduce water use by 15%. The State Water Project, which is one of the primary sources of water imported by MWD, is a state water management project that collects water from rivers in the northern part of the State and through a network of aqueducts and pumping stations and redistributes it to the southern part of the State. Water allocation from the State Water Project varies according to factors including reservoir storage, weather projections, and projected runoff into streams, reservoirs, and aquifers. These factors are impacted by precipitation that usually occurs from December through April, when California historically receives more than 90% of its snow and rain.

In March 2021, due to ongoing dry conditions, the State Water Project allocation to MWD was reduced from 10% to 5%; it was reduced to 0% in December 2021. Following storms in December, the State Water Project allocation to MWD was increased in January 2022 to 15%. In its announcement of the increase, DWR noted that it continues to plan for a third consecutive dry year. On March 18, 2022, DWR announced a reduction to 5% of requested supplies for 2022. On March 28, 2022, the Governor issued an Executive Order to activate urban water suppliers’ Level II water shortage contingency plans in response to three consecutive dry years. In March 2023, the Governor issued an Executive Order to ease the drought restrictions following the improved conditions from extreme weather and a series of atmospheric rivers in California that occurred in late 2022 and early 2023. In April 2023, DWR announced that it expected to deliver 100% of requested water supplies. This made calendar year 2023 the first time since 2006 that DWR was able to allocate the full contracted amounts of the State Water Project.

According to its latest announcement on December 1, 2025, DWR initially expected to deliver 10% of requested supplies for 2026. On January 29, 2026, the allocation was raised to 30% due to a series of warm storms and below average snowpack accumulation. On May 14, 2026, DWR raised the allocation to 45% following well-above average precipitation in April. The final allocation for 2026 is expected to be determined in summer 2026 and will account for the full impact of winter and spring weather conditions. 57 303814149.5
The Colorado River is the other principal source of imported water from MWD. An extended drought period is ongoing in the Colorado River Basin. On August 16, 2021, the historic Colorado River Shortage Declaration was made, with the federal Bureau of Reclamation declaring an official shortage condition due to the lowering of Lake Mead’s water level behind Hoover dam to below 1,075 feet. [Under review for potential updates to MWD recent events re Lake Mead and the $65 million federal deal in July 2026 to leave up to 200,000 acre-feet of Colorado River water in Lake Mead].

On August 17, 2021, in response to the extreme drought conditions impacting Southern California, MWD declared a Water Supply Alert, signaling an urgent need throughout the region to do more to reduce water use, and asked water agencies to look within their respective water shortage contingency plans to implement appropriate local actions to achieve conservation.

Although Governor Newsom eased certain drought restrictions in 2023, due to improved hydrologic conditions, there can be no assurance that future federal or State actions will not impose mandatory water supply or use restrictions if dry conditions persist in future years.

Anaheim, along with neighboring water agencies, has prepared for statewide dry weather conditions through sound water management and planning as well as major sustainability investments in projects like the GWRS, which allows the region to recycle and provides a drought-proof water supply.

Since 1990, conservation has become Anaheim’s way of life resulting in a 40% reduction in water use per capita. Anaheim has expanded its outreach and rebate programs to help customers reduce water waste through education, fix broken sprinkler systems, and invest in water efficient appliances and landscaping.

Anaheim is closely monitoring drought conditions in California and is prepared to take appropriate actions as outlined in the City’s Water Shortage Contingency Plan (“WSCP”). The WSCP was last updated along with the City’s 2025 Urban Water Management Plan in May 2025. The WSCP outlines defined plans/stages to achieve different levels of water reduction.

Water Use Efficiency
Water conservation continues to be an important component of Anaheim’s overall water resources planning. Anaheim’s goal is to reduce its urban per capita water use to meet the requirements of Senate Bill X7-7, the Water Conservation Act of 2009 (“SBX7-7”). SBX7-7 established a goal of reducing statewide urban per capita water use by 20% by December 31, 2020. Anaheim’s per capita water demand for Fiscal Year 2019-20 was 139.8 gallons per day per capita (“gpcd”); this is in compliance with Anaheim’s 2020 SBX7-7 target of 162 gpcd.

To better prepare for future droughts and climate change, Governor Brown signed two long-term water-use efficiency bills (Assembly Bill 1668 and Senate Bill 606) on May 31, 2018. The State has developed “Making Conservation a California Way of Life” regulatory framework consisting of the longterm water-use efficiency standards for indoor residential water use, outdoor residential water use, water use for landscape areas served by dedicated irrigation meters, water loss, and commercial/industrial best management practices. On August 8, 2023, SWRCB initiated the formal rulemaking for the regulation and released the first draft regulatory text for public comments. On March 12, 2024, SWRCB released its revised regulatory text for public comments and the public hearing was held on March 27, 2024. The final regulation was adopted in July 2024, and effective on January 1, 2025. The Department is currently evaluating potential impacts to Anaheim.

Over the past decade, Anaheim’s overall water use has decreased by 12% and water use per person has decreased by 10%. These achievements have been a result of water conservation education and outreach efforts, and have benefitted customers through lower water bills. 58 303814149.5
Anaheim Public Utilities will continue to monitor the water supply situation and work with regional water supply agencies (i.e., MWD and OCWD) regarding overall supply reliability for Anaheim and the region. Anaheim Public Utilities also plans to continue public outreach on water conservation while offering rebates and incentives through its water conservation programs. These efforts are aimed at conserving dry year water supplies.

Anaheim Public Utilities believes there is an adequate water supply for Anaheim residents and businesses for the next 20 years based the current and expected amount of water that the City can produce from the Orange County groundwater basin, the projected availability of supplemental water from MWD, and the City’s water use efficiency programs currently in place.

CONSTITUTIONAL AND CHARTER LIMITATIONS
Constitutional Limitations on Governmental Spending
Article XIIIA of the California Constitution limits the taxing powers of California public agencies.

Article XIIIA provides that the maximum ad valorem tax on real property cannot exceed one percent of the “full cash value” of the property, and effectively prohibits the levying of any other ad valorem property tax except for taxes above that level required to pay debt service on voter-approved general obligation bonds. “Full cash value” is defined as “the County Assessor’s valuation of real property as shown on the 1975/76 tax bill under ‘full cash value’ or, thereafter, the appraisal value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” The “full cash value” is subject to annual adjustment to reflect inflation at a rate not to exceed two percent or a reduction in the consumer price index or comparable local data, or declining property value caused by damage, destruction or other factors.

The foregoing limitation does not apply to ad valorem taxes or special assessments to pay the interest and redemption charges on any indebtedness approved by the voters before July 1, 1978 or any bonded indebtedness for the acquisition or improvement of real property approved by two-thirds of the votes cast by the voters voting on the proposition.

Under Article XIIIB of the California Constitution, state and local government entities have an annual “appropriations limit” which limits their ability to spend certain moneys called “appropriations subject to limitation,” which consist of tax revenues, certain state subventions and certain other moneys, including user charges to the extent they exceed the costs reasonably borne by the entity in providing the service for which it is levying the charge. The City believes that the water service and use charges imposed by the City do not exceed the costs the City reasonably bears in providing water service. In general terms, the “appropriations limit” is to be based on certain 1978/79 expenditures, and is to be adjusted annually to reflect changes in the consumer price index, population, and services provided by these entities. Among other provisions of Article XIIIB, if an entity’s revenues in any year exceed the amount permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years.

Proposition 218
Proposition 218, a State ballot initiative known as the “Right to Vote on Taxes Act,” was approved by the voters of the State of California on November 5, 1996. Proposition 218 added Articles XIIIC and XIIID to the California Constitution, creating additional requirements for the imposition by most local governments of “general taxes,” “special taxes,” “assessments,” “fees,” and “charges.” Proposition 218 became effective, pursuant to its terms, as of November 6, 1996, although compliance with some of its provisions was deferred until July 1, 1997, and certain of its provisions purport to apply to any tax imposed for general governmental purposes (i.e., “general taxes”) imposed, extended or increased on or after January 1, 1995 and prior to November 6, 1996.
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Article XIIID imposes substantive and procedural requirements on the imposition, extension or increase of any “fee” or “charge” subject to its provisions. A “fee” or “charge” subject to Article XIIID includes any levy, other than an ad valorem tax, special tax or assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership. Section 6 of Article XIIID prohibits, among other things, the imposition of any proposed fee or charge, and, possibly, the increase of any existing fee or charge, in the event written protests against the proposed fee or charge are presented at a required public hearing on the fee or charge by a majority of owners of the parcels upon which the fee or charge is to be imposed. Except for fees and charges for water, sewer and refuse collection services, the approval of a majority of the property owners subject to the fee or charge, or at the option of the agency, by a two-thirds vote of the electorate residing in the affected area, is required within 45 days following the public hearing on any such proposed new or increased fee or charge.

The California Supreme Court’s decisions in Richmond v. Shasta Community Services District, 32 Cal.4th 409 (2004) (“Richmond”), and Bighorn-Desert View Water Agency v. Verjil, 39 Cal.4th 205 (2006) (“Bighorn”) have clarified some of the uncertainty surrounding the applicability of Section 6 of Article XIIID to service fees and charges. In Richmond, the Shasta Community Services District charged a water connection fee, which included a capacity charge for capital improvements to the water system and a fire suppression charge. The Court held that both the capacity charge and the fire suppression charge were not subject to Article XIIID because a water connection fee is not a property-related fee or charge because it results from the property owner’s voluntary decision to apply for the connection. In both Richmond and Bighorn, however, the Court stated that a fee for ongoing water service through an existing connection is imposed “as an incident of property ownership” within the meaning of Article XIIID, rejecting, in Bighorn, the water agency’s argument that consumption-based water charges are not imposed “as an incident of property ownership” but as a result of the voluntary decisions of customers as to how much water to use.

Article XIIID also provides that “standby charges” are considered “assessments” and must follow the procedures required for “assessments” under Section 4 of Article XIIID and imposes several procedural requirements for the imposition of any assessment, which may include (1) various notice requirements, including the requirement to mail a ballot to owners of the affected property; (2) the substitution of a property owner ballot procedure for the traditional written protest procedure, and providing that “majority protest” exists when ballots (weighted according to proportional financial obligation) submitted in opposition exceed ballots in favor of the assessments; and (3) the requirement that the levying entity “separate the general benefits from the special benefits conferred on a parcel” of land. Article XIIID also precludes standby charges for services that are not immediately available to the parcel being charged.

Article XIIID provides that all existing, new or increased assessments are to comply with its provisions beginning July 1, 1997. Existing assessments imposed on or before November 5, 1996, and “imposed exclusively to finance the capital costs or maintenance and operations expenses for [among other things] water” are exempted from some of the provisions of Article XIIID applicable to assessments.

Article XIIIC extends the people’s initiative power to reduce or repeal existing local taxes, assessments, fees and charges. This extension of the initiative power is not limited by the terms of Article XIIIC to fees, taxes, assessment fees and charges imposed after November 6, 1996 and absent other authority could result in retroactive reduction in any existing taxes, assessments, fees or charges. In Bighorn, the Court concluded that under Article XIIIC local voters by initiative may reduce a public agency’s water rates and delivery charges. The Court noted, however, that it was not holding that the authorized initiative power is free of all limitations, stating that it was not determining whether the electorate’s initiative power is subject to the public agency’s statutory obligation to set water service charges at a level that will “pay the operating expenses of the agency, . . . provide for repairs and depreciation of works, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due.”
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On March 3, 2020, the City was served with a class action lawsuit on behalf of a Water System customer and a class of others similarly situated alleging that the water rates and fees imposed and collected by the City in 2018 and 2019 and currently charged violate Proposition 218 because they exceed the costs to provide water service pursuant to Article XIIID of the California Constitution. The lawsuit alleges that this is a result of the City subsidizing water for government and governmental services, in particular, the provision of water for fire-fighting services. The litigation in which the City is a defendant also names approximately 80 other California water provider defendants and is being brought by their customers who have made similar allegations, with some exceptions. The Court ordered the dismissal of the City, without prejudice, on February 14, 2022.

A number of water rate challenges under Proposition 218 have been filed against public agencies in California in recent years. The interpretation and application of Proposition 218 will likely be subject to further judicial determinations. The City believes its established and proposed water rates and charges comply with Proposition 218.

Proposition 26
Proposition 26 was approved by the electorate at the November 2, 2010 election and amended California Constitution Articles XIIIA and XIIIC. Proposition 26 imposes a majority voter approval requirement on local governments with respect to certain fees and charges for general purposes, and a twothirds voter approval requirement with respect to certain fees and charges for special purposes, unless the fees and charges are expressly excluded. Proposition 26 was designed to supplement tax limitations imposed by the voters in California Constitution Articles XIIIA, XIIIC and XIIID pursuant to Proposition 13, approved in 1978, Proposition 218, approved in 1996, and other measures. Proposition 26 expressly excludes from its definition of tax, and therefore the scope of its applicability, any charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable cost to the local government of providing the service or product. Although the City believes that its fees and charges meet the criteria of the exclusion described above, it is possible that Proposition 26 could be interpreted, for example, to further limit fees and charges for utility services and/or to require stricter standards for the allocation of costs among customer classes.

The City is unable to predict how Proposition 26 will be interpreted by the courts or what its ultimate impact will be.

Future Initiatives
Article XIIIA, Article XIIIB and Articles XIIIC and XIIID were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time, other initiatives have been, and could be, proposed, and if qualified for the ballot, could be adopted affecting the City’s revenues or the City’s ability to expend revenues. The City is unable to predict either the likelihood of qualification for ballot or passage of these measures or the nature and impact of these measures on the finances or operations of the Water System.

City Charter Revenue Bond Limitations
Section 1210 of the Charter of the City of Anaheim provides that bonds of the City that are payable out of revenues specified in such bonds may be issued when the City has established by ordinance a procedure for the issuance of such bonds, provided that such bonds cannot be issued without the assent of a majority of the voters voting upon the proposition for the issuance of such bonds at an election at which such proposition has been submitted to the qualified voters. The Charter also provides for the issuance of certain revenue anticipation notes to be issued in anticipation of any water revenue bonds authorized by the voters.
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In addition, the Charter makes provision for the issuance of certain revenue anticipation notes in anticipation of the receipt of revenues of the Water System; provided that the aggregate principal amount of such revenue anticipation notes outstanding in accordance with their terms at any one time cannot exceed an amount equal to 25% of the gross revenue earned by the Water System during the immediately preceding Fiscal Year as set forth in the audited financial statements of the Water System for such year.

There are no authorized but unissued City voter-approved water revenue bonds (also defined herein as “Senior Bonds”).

RISK FACTORS
Payment of principal of and interest on the 2026 Bonds depends primarily upon the revenues derived from operation of the Water System. Some of the events which could affect the revenues received by the Water System, as well as issues that could affect the availability of moneys in any reserves, are set forth below. The following discussion of risks is not meant to be an exhaustive list of the risks associated with the purchase of the 2026 Bonds and the order in which the risks are discussed does not necessarily reflect the relative importance of the various risks.

Limited Obligations
The 2026 Bonds are limited obligations of the Authority and are not secured by a legal or equitable pledge of, or charge or lien upon, any property of the Authority or any of its income or receipts, except the Project Revenues. Neither the full faith and credit nor the taxing power of the City is pledged to the payment of the 2026 Purchase Payments or the principal of, premium, if any, or interest on the 2026 Bonds. No tax or other source of funds, other than the Project Revenues and such other amounts as described herein, is pledged to pay the principal of, premium, if any, or interest on the 2026 Bonds. Neither the payment of the principal of, nor the interest on, the 2026 Bonds constitutes a debt, liability or obligation of the City for which the City is obligated to levy or pledge any form of taxation or for which it has levied or pledged any form of taxation.

System Operation and Expenses
There can be no assurance that the City’s expenses for the Water System will be consistent with the descriptions in this Official Statement. Changes in technology, changes in quality standards, availability and cost of water, loss of large customers, increased or decreased development, increases in the cost of operation and/or other expenses could require increases in rates or charges in order to comply with the City’s rate covenant in the Installment Purchase Agreement. See “ – Regulatory Risk” below.

Limitations on Revenues
The ability of the City to comply with its covenants under the Installment Purchase Agreement and to generate Surplus Revenues sufficient to pay the required 2026 Purchase Payments (which are needed to pay principal of and interest on the 2026 Bonds) may be adversely affected by actions and events outside of the control of the City and may be adversely affected by actions taken (or not taken) by voters, property owners, taxpayers or persons obligated to pay assessments, fees and charges. See “CONSTITUTIONAL AND CHARTER LIMITATIONS.” Furthermore, the remedies available to the owners of the 2026 Bonds upon the occurrence of an event of default under the Indenture are in many respects dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain.
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No Debt Service Reserve Account
The Authority is not funding a debt service reserve account for the 2026 Bonds. The funds on deposit in the debt service reserve accounts for the Authority’s existing Qualified Obligations are not available to pay debt service on the 2026 Bonds.

Casualty Risk
Any natural disaster or other physical calamity, including earthquake, may have the effect of reducing Surplus Revenues through damage to the Water System or adversely affecting the economy of the surrounding area. The Installment Purchase Agreement requires the City to maintain such insurance as is customarily maintained by similar utilities systems with respect to works and properties of like character against accident to, loss of or damage to such works or properties, but there can be no assurance that losses in excess of the insured amount will not occur.

Risks Relating to Water Supply and Drought
There are a variety of factors, including weather conditions, which can adversely affect the supply of water available to the City. The State is situated in a semi-arid region and is subject to periodic drought.

While the severe drought conditions that occurred in the State from 2012 through 2015, and from 2020 to 2022, have ended, periodic drought conditions can be expected to occur in the future. If the water supply decreases significantly, whether by operation of mandatory supply restrictions, prohibitively high water costs or otherwise, Water System sales will diminish and Surplus Revenues available to pay the 2026 Purchase Payments securing the 2026 Bonds may be adversely affected. In addition, lower water usage by customers in response to drought measures adopted by the City could result in reduced water consumption and consequently lower Surplus Revenues. See “THE WATER SYSTEM – Sources of Water” and “ADEQUACY OF WATER SUPPLIES.”
As discussed under “THE WATER SYSTEM – Groundwater Sources and PFAS,” the EPA has identified PFAS as a potential risk in drinking water and advised municipalities to notify customers of their presence over prescribed levels and consider steps to reduce such levels. PFAS was detected in the groundwater supply in various parts of Orange County, including in certain of the City’s groundwater wells.

DDW is responsible for setting Response Levels for PFOA and PFOS. On February 6, 2020, DDW lowered the Response Level for PFOA to 10 parts per trillion and the Response Level for PFOS to 40 parts per trillion (based on a running four-quarter average). The change to the Response Levels resulted in a significant decrease to the City’s groundwater pumping, necessitating a corresponding increase in imported water. By the fall of Fiscal Year 2024-25, all fourteen wells that had previously been shut down due to elevated PFAS levels had returned to service following the completion of the first two phases of the City’s groundwater treatment program, which utilizes ion exchange technology. As of April 2026, the City has five wells that exceed the federal MCLs for PFOA and PFOS established under the NPDWR, which are more stringent than California’s current PFAS response levels, and the City has taken these wells offline as part of the next phase of its PFAS groundwater treatment program. Construction of PFAS groundwater treatment facilities for four additional wells is expected to be fully completed and operational by summer 2029. See “THE WATER SYSTEM – Groundwater Sources and PFAS.” Regulatory Risk
Laws and regulations governing the diversion and storage of surface waters and water treatment are enacted and promulgated by government agencies on the federal, State and local levels. Compliance with these laws and regulations may be costly. See, for example, “THE WATER SYSTEM – Groundwater Sources and PFAS.”
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As discussed under “THE WATER SYSTEM – Groundwater Sources and PFAS,” the EPA has identified PFAS as a potential risk in drinking water and advised municipalities to notify customers of their presence over prescribed levels and consider steps to reduce such levels. PFAS was detected in the groundwater supply in various parts of Orange County, including in certain of the City’s groundwater wells.

Cybersecurity; Other Safety and Security Risks
Cybersecurity breaches could damage the City’s information and security systems and cause material disruption to its operations. The occurrence of military conflicts and terrorist activities, including cyber terrorism, could also adversely impact the operations of the Water System or the finances of the City.

The City maintains active security (including information security) and emergency preparedness programs and has a number of security measures and safeguards in place. However, there can be no assurance that any existing or additional safety and security measures will prove adequate in the event that military conflicts or terrorist activities, including cyber terrorism, or acts of malfeasance are directed against the assets of the Water System or the information technology systems of the City. The costs of security measures or of remedying damage from security breaches could be greater than presently anticipated.

Climate Change
Numerous scientific studies on global climate change show that, among other effects on the global ecosystem, sea levels will rise, extreme temperatures will become more common, and extreme weather events will become more frequent as a result of increasing global temperatures attributable to atmospheric pollution. For example, the Fourth National Climate Assessment, published by the U.S. Global Change Research Program, in November 2018 (NCA4) finds that more frequent and intense extreme weather and climate-related events, as well as changes in average climate conditions, are expected to continue to damage infrastructure, ecosystems and social systems over the next 25 to 100 years. The City cannot predict what impact climate change will have on Surplus Revenues in the future.

Limited Recourse on Default
If the City defaults under the Installment Purchase Agreement, the Trustee, as assignee of the Authority pursuant to the Indenture, may exercise any right to enforce the Installment Purchase Agreement provided therein or by law. In the event of such default, the Trustee is not empowered to sell the Water System or any portion thereof and use the proceeds of such sale to prepay any obligations in respect of the 2026 Bonds. Any such suit for money damages would be subject to limitations on legal remedies against cities in California, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest.

THE AUTHORITY
The Authority was created pursuant to a Joint Exercise of Powers Agreement, dated as of July 1, 2014 (the “Joint Powers Agreement”), by and between the City and the Anaheim Housing Authority.

Pursuant to the Joint Powers Agreement, the Authority may exercise all powers granted or otherwise available to it as a separate public entity pursuant to the Joint Exercise of Powers Act, Section 6500-6599.3 of the California Government Code, as amended (the “Joint Powers Act”) or any other applicable law, including, without limitation, powers with respect to financing, refinancing, development, provision and support of infrastructure facilities and programs, facilities and services relating to any of the foregoing. The 64 303814149.5
Authority also has the power to acquire, construct, manage or operate any buildings, works or improvements, to issue bonds and to incur indebtedness.

The members of the City Council of the City serve as the members of the Board of Directors of the Authority. See APPENDIX B – “GENERAL INFORMATION REGARDING THE CITY OF ANAHEIM – City Council.” The City Manager serves as the Executive Director of the Authority and the City Clerk serves as Secretary of the Authority. The Anaheim City Attorney serves as Authority Counsel.

Under the Joint Powers Agreement, the Authority is a public entity, separate from the City and the Anaheim Housing Authority. The debts, liabilities and obligations of the Authority do not constitute debts, liabilities or obligations of the City or the Anaheim Housing Authority.

The Authority shall continue in effect so long as any bonds of the Authority remain outstanding or any material contracts to which the Authority is a party remain in effect.

LITIGATION
The Authority
There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the Authority, threatened, against the Authority (i) questioning the corporate existence of the Authority, or the title of the officers of the Authority to their respective offices, (ii) seeking to restrain or enjoin the issuance or delivery of any of the 2026 Bonds or the power and authority of the Authority to issue the 2026 Bonds, or (iii) contesting or adversely affecting the validity of the 2026 Bonds, the Indenture or the Installment Purchase Agreement.

The City
There is no action, suit, proceeding, inquiry or investigation at law or in equity or before or by any court, public board or body pending or, to the knowledge of the City, threatened, against the City (i) questioning the corporate existence of the City, or the title of the officers of the City to their respective offices, (ii) seeking to restrain or enjoin the issuance or delivery of any of the 2026 Bonds or the collection of Project Revenues pledged under the Indenture or the payment of the 2026 Purchase Payments by the City under the Installment Purchase Agreement, (iii) contesting or adversely affecting the validity of the 2026 Bonds, the Indenture, the Installment Purchase Agreement or the Continuing Disclosure Agreement, or (iv) challenging the authority of the City to fix, charge and collect rates as provided in the Installment Purchase Agreement.

The City has pending against it a number of claims and lawsuits arising out of matters usually incidental to the operation of a utility such as the Water System. The City is of the view that, if determined adversely to the City, the actual damage awards likely to be ultimately paid with respect to such claims and lawsuits would not, in the aggregate, materially impair the City’s ability to make 2026 Purchase Payments and Additional Purchase Payments when due.

CREDIT RATINGS
S&P Global Ratings (“S&P”), Fitch Ratings, Inc. (“Fitch”) and Kroll Bond Rating Agency, Inc. (“KBRA”) have assigned their respective municipal bond ratings of “___,” “___” and “___” to the 2026 Bonds. No application has been made to any other rating agency in order to obtain additional credit ratings on the 2026 Bonds. Any desired explanation as to the significance of the above ratings should be obtained from the applicable rating agency furnishing the same. Each such rating should be evaluated independently of any other rating. The above described ratings are not recommendations to buy, sell or hold the 2026 Bonds, and each such rating may be subject to revision or withdrawal at any time by the applicable 65 303814149.5
rating agency. Any downward revision or withdrawal of any of the ratings may have an adverse effect on the market price of the 2026 Bonds.

TAX MATTERS
The Internal Revenue Code of 1986 (the “Code”) imposes certain requirements that must be met subsequent to the issuance and delivery of the 2026 Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the 2026 Bonds to be included in the gross income of the owners thereof for federal income tax purposes retroactive to the date of issue of the 2026 Bonds. The Authority and the City have covenanted in the Indenture and the Installment Purchase Agreement not to take any action or omit to take any action which, if taken or omitted, respectively, would adversely affect the exclusion of the interest on the 2026 Bonds from the gross income of the owners thereof for federal income tax purposes.

In the opinion of Norton Rose Fulbright US LLP, Bond Counsel, under existing law interest on the 2026 Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the aforementioned covenants, interest on the 2026 Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Bond Counsel is of the further opinion that interest on the 2026 Bonds is not an item of tax preference for purposes of the federal alternative minimum tax on individuals. The Code contains other provisions that could result in tax consequences, upon which no opinion will be rendered by Bond Counsel, as a result of ownership of the 2026 Bonds or the inclusion in certain computations of interest that is excluded from gross income. In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the Authority and the City made in certificates, dated the date of delivery of the 2026 Bonds, pertaining to the use, expenditure, and investment of the proceeds of the 2026 Bonds.

The Code imposes a minimum tax of 15 percent on the adjusted financial statement income of certain large corporations, generally consisting of corporations (other than S corporations, regulated investment companies and real estate investment trusts) with more than $1 billion in average annual adjusted financial statement income, determined over a three-year period. For this purpose, adjusted financial statement income generally consists of the net income or loss of the taxpayer set forth on the taxpayer’s applicable financial statement for the taxable year, subject to various adjustments, but is not reduced for interest earned on tax-exempt obligations, such as the 2026 Bonds. Prospective purchasers that could be subject to this minimum tax should consult with their own tax advisors regarding the potential consequences of owning the 2026 Bonds.

Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the 2026 Bonds may affect the tax status of interest on the 2026 Bonds or the tax consequences of the ownership of the 2026 Bonds. No assurance can be given that pending or future legislation, or amendments to the Code, if enacted into law, or any proposed legislation or amendments to the Code, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of interest on the 2026 Bonds from personal income taxation by the State of California or of the exclusion of the interest on the 2026 Bonds from the gross income of the owners thereof for federal income tax purposes. Furthermore, Bond Counsel will express no opinion as to the effect on the exclusion from gross income of interest on the 2026 Bonds of any action taken or not taken after the date of such opinion without the approval of Bond Counsel.

Except as described above, Bond Counsel will express no opinion with respect to any federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the 2026 Bonds. Prospective purchasers of the 2026 Bonds should be aware that the ownership of tax-exempt obligations such as the 2026 Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, 66 303814149.5
property and casualty insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, owners of an interest in a financial asset securitization investment trust, corporations subject to the alternative minimum tax on adjusted financial statement income, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances.

Bond Counsel’s opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the covenants of the Authority and the City described above. No ruling has been sought from the Internal Revenue Service (the “Service”) with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel’s opinion is not binding on the Service. The Service has an ongoing program of auditing the tax-exempt status of the interest on municipal obligations. If an audit of the 2026 Bonds is commenced, under current procedures the Service is likely to treat the Authority as the “taxpayer,” and the owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the 2026 Bonds, the Authority may have different or conflicting interests from the owners of the 2026 Bonds. Public awareness of any future audit of the 2026 Bonds could adversely affect the value and liquidity of the 2026 Bonds during the pendency of the audit, regardless of the ultimate outcome.

Existing law may change so as to reduce or eliminate the benefit to holders of the 2026 Bonds of the exclusion of interest thereon from gross income for federal income tax purposes. Proposed legislative or administrative action, whether or not taken, could also affect the value and marketability of the 2026 Bonds. Prospective purchasers of the 2026 Bonds should consult with their own tax advisors with respect to any proposed changes in tax law.

Copies of the forms of opinion of Bond Counsel relating to the 2026 Bonds are included in Appendix F hereto.

CERTAIN LEGAL MATTERS
Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, will render opinions with respect to the validity and enforceability of the 2026 Bonds, the Indenture and the Installment Purchase Agreement, substantially in the forms set forth in Appendix F hereto. Norton Rose Fulbright US LLP is also serving as Disclosure Counsel in connection with the 2026 Bonds. Certain legal matters will be passed upon for the Authority and the City by the City Attorney of the City of Anaheim, for the Underwriter by Stradling Yocca Carlson & Rauth LLP, Sacramento, California, Underwriter’s Counsel. Bond Counsel, Disclosure Counsel and Underwriter’s Counsel will receive compensation contingent upon the sale and delivery of the 2026 Bonds.

MUNICIPAL ADVISOR
The City has retained PFM Financial Advisors LLC as municipal advisor (the “Municipal Advisor”) in connection with the preparation of this Official Statement and with respect to the issuance of the 2026 Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement. PFM Financial Advisors LLC is an independent municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The payment of the fees of the Municipal Advisor is contingent upon the issuance and delivery of the 2026 Bonds.
67 303814149.5

FINANCIAL STATEMENTS
The audited financial statements of the City of Anaheim Water Utility Fund for the Fiscal Year ended June 30, 2025, included in Appendix A to this Official Statement, have been audited by KPMG LLP, independent accountants (the “Auditor”), as stated in their report appearing in Appendix A. The City has not requested, nor has the Auditor given, the Auditor’s consent to the inclusion in Appendix A of its report on such financial statements. The Auditor’s review in connection with the audited financial statements included in Appendix A included events only as of June 30, 2025, and no review or investigation with respect to subsequent events has been undertaken in connection with such financial statements by the Auditor.

VERIFICATION OF MATHEMATICAL COMPUTATIONS
_______________________, Certified Public Accountants (the “Verification Agent”), will deliver to the Authority, the City and Bond Counsel, on or before the settlement date of the 2026 Bonds, its attestation report indicating that it has examined, in accordance with standards established by the American Institute of Certified Public Accountants, certain information and computations provided to it by the Representative (defined below). Included in the scope of its examination will be a verification of the mathematical accuracy of the mathematical computations by the Representative of the adequacy of (A) the cash and the maturing principal of and interest on the Defeasance Securities to be deposited into each Escrow Fund for the related Refunded Bonds to pay (i) interest coming due on such Refunded Bonds on or before October 1, 2027 and (ii) the redemption price of the Refunded Bonds on the related redemption date for such Refunded Bonds.

Such verification will be based solely upon assumptions and information supplied by the Representative on behalf of the Authority and the City. The Verification Agent will restrict its procedures to examining the arithmetical accuracy of those computations by the Representative and will not make any study or evaluation of the assumptions and information upon which those computations are based; accordingly, the Verification Agent will not express an opinion on the data used, the reasonableness of the assumptions, or the achievability of the forecasted outcome.

UNDERWRITING
The 2026 Bonds are being purchased for reoffering by RBC Capital Markets LLC (the “Underwriter”). The Underwriter has agreed to purchase the 2026-A Bonds at a purchase price of $_____________ (which represents the aggregate principal amount of the 2026-A Bonds, plus bond premium of $_______________, less an underwriter’s discount of $____________) and to purchase the 2026-B Bonds at a purchase price of $_______________ (which represents the aggregate principal amount of the 2026-B Bonds, plus bond premium of $_______________, less an underwriters’ discount of $_______________). The purchase contract pursuant to which the 2026 Bonds are being sold provides that the Underwriter will purchase all of such 2026 Bonds if any are purchased, and that the obligation of the Underwriter to purchase the 2026 Bonds is subject to certain terms and conditions, including the approval of certain legal matters by counsel.

RBC Capital Markets, LLC (“RBCCM”), an underwriter of the 2026 Bonds, has entered into a distribution arrangement with its affiliate RBC Securities, Inc. (“RBC Securities”) (formerly known as City National Securities, Inc.). As part of this arrangement, RBCCM may distribute municipal securities to investors through the financial advisor network of RBC Securities. As part of this arrangement, RBCCM may compensate RBC Securities for its selling efforts with respect to the 2026 Bonds. 68 303814149.5

CERTAIN RELATIONSHIPS
The Underwriter and its affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. The Underwriter and its affiliates have, from time to time, performed, and may in the future perform, various investment banking services for the Authority and/or the City for which they received or will receive customary fees and expenses.

In the ordinary course of their various business activities, the Underwriter and its affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (which may include bank loans and/or credit default swaps) for their own account and for the accounts of their customers and may at any time hold long and short positions in such securities and instruments. Such investment and securities activities may involve securities and instruments of the Authority and the City.

CONTINUING DISCLOSURE
Pursuant to a Continuing Disclosure Agreement, the City has covenanted for the benefit of the registered owner and the Beneficial Owners of the 2026 Bonds, to provide certain financial information and operating data relating to the City and the Water System by not later than six months after the end of each of the City’s Fiscal Years (presently, by each December 31), commencing with the respective report for the 2025-26 Fiscal Year (the “Annual Reports”), and to provide notices of the occurrences of certain enumerated events. The Annual Reports and notices of enumerated events will be filed by the Dissemination Agent on behalf of the City with the Municipal Securities Rulemaking Board. The Municipal Securities Rulemaking Board has made such information available to the public without charge through its EMMA system. The specific nature of information to be contained in each Annual Report or notice of enumerated event is set forth in APPENDIX D – “FORM OF CONTINUING DISCLOSURE AGREEMENT.” These covenants have been made by the City in order to assist the Underwriter in complying with Rule 15c2-12 promulgated by the Securities and Exchange Commission.

The audited financial statements of the City’s Electric Utility Fund for the Fiscal Year ending June 30, 2023 were timely filed but inadvertently were not linked to all relevant CUSIP numbers. The City has since caused such information to be linked to all relevant CUSIP numbers. The City has adopted disclosure policies and procedures in an effort to formalize its disclosure practices and implement additional procedures to timely file complete annual reports and event notices in the future.

The Authority has determined that no financial or operating data concerning the Authority is material to an evaluation of the offering of the Bonds or to any decision to purchase, hold or sell the Bonds, and the Authority will not provide any such information. The City has undertaken all responsibilities for any continuing disclosure to Owners as described above, and the Authority shall have no liability to the Owners of the Bonds or any other person with respect to the Rule. [Remainder of page intentionally left blank.]
69 303814149.5

MISCELLANEOUS
The execution and delivery of this Official Statement have been duly authorized by the City.

CITY OF ANAHEIM, CALIFORNIA
By
Acting General Manager
303814149.5

APPENDIX A

AUDITED FINANCIAL STATEMENTS OF THE

ANAHEIM WATER UTILITY FUND
FOR THE FISCAL YEAR ENDED JUNE 30, 2025
B-1

APPENDIX B

GENERAL INFORMATION REGARDING THE CITY OF ANAHEIM
The economic and demographic information provided in this Appendix B is presented as general background data and has been collected from sources which the City deems to be reliable. The General Fund of the City is not liable for the payment of the Bonds, any premium thereon upon redemption prior to maturity or their interest, nor is the credit or taxing power of the City pledged for the payment of the Bonds, any premium thereon upon redemption prior to maturity or their interest. The principal of and interest on any Bonds and any premiums upon redemption thereof prior to maturity are not a debt of the City nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts or revenues. The Bonds are payable from and secured by the 2026 Purchase Payments to be made by the City under the Installment Purchase Agreement solely from Surplus Revenues of the Water System of City and other funds which are pledged to the payment of the Bonds, interest thereon and any premiums upon redemption pursuant to the Indenture. See the section in the Official Statement entitled “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS.”
General Overview
The City of Anaheim (the “City”) was founded and incorporated in 1857, disincorporated in 1872, reincorporated in 1876, and reorganized in 1888. No change in organization took place until June 1964, when the local voters approved a City Charter. The City operates under the Charter and with a CouncilManager form of government.

The City covers 50 square miles and is located in the northern portion of Orange County, about 28 miles southeast of downtown Los Angeles and about 90 miles north of San Diego. The City lies on a coastal plain which is bordered by the Pacific Ocean on the west and the Santa Ana Mountains on the east.

Full-time employees of the City numbered 2,119 in 2025, of whom 616 were assigned to the Police Department and 355 to the Fire & Rescue Department. The latter has 12 stations. The City is assigned a Class I fire insurance rating, which is the highest rating possible for a municipality.

City Council
The City has a seven-member City Council (the “City Council”), comprised of a Mayor, elected at large, and six other City Council members elected by districts. Anaheim’s first district-based election occurred in 2016, electing four district City Council members (Districts 1, 3, 4 and 5); District 3 to serve a two-year term and Districts 1, 4 and 5 to serve a four-year term. In 2018, voters residing in Districts 2, 3 and 6 elected their City Council members. The current members of the City Council are set forth below.

Ashleigh Aitken, Mayor, was elected mayor of Anaheim in November 2022, representing the City at large. Mayor Aitken previously served two terms on the Anaheim Community Services Board including as chairwoman from 2011-2013. A trial lawyer for more than 20 years, Mayor Aitken is of counsel at Santa Ana-based Aitken Aitken Cohn, a boutique personal injury firm. She is a former federal prosecutor in the Central District of California. In 2015, she was elected president of the Orange County Bar Association, where she established a veterans committee to expand free legal support for veterans and military families.

From 2012 to January 2023, Mayor Aitken served on the board of directors of the OC Fair & Events Center, including as chairwoman in 2015. Mayor Aitken holds a bachelor’s in secondary education and history from Boston College. She has her law degree from the University of Southern California, Gould School of Law. Her current term expires in November 2026.

B-2
Carlos A. Leon, Mayor Pro Tem, was elected to the City Council in November 2022, representing District 2 in west Anaheim. Mr. Leon serves as a board member and vice president of community and youth engagement at Anaheim-based Youth Leadership America, a nonprofit focused on youth leadership and development. Mr. Leon holds a bachelor’s in public policy and political science from the University of California, San Diego, with a minor in business from the Rady School of Management at UC San Diego.

Mr. Leon’s current City Council term expires in November 2026.

Natalie Meeks, Council Member, was elected to the City Council in November 2022, representing District 6 in east Anaheim. Before joining the City Council, Ms. Meeks served on Anaheim’s Planning Commission from 2019 to late 2022, including as chair in 2021 and 2022. Ms. Meeks has dedicated her career to public service, most recently serving as Public Works director of the City from 2007 to 2016. In 2015, she was named a Top Ten Leader by the American Public Works Association. Ms. Meeks earned a bachelor’s in civil engineering from California State University, Fullerton, and a master’s in organizational leadership from Chapman University. Her current City Council term expires in November 2026.

Ryan Balius, Council Member, was elected to the City Council in November 2024, representing District 1 in west Anaheim. Prior to joining the City Council, Mr. Balius served on the Anaheim Parks and Recreation Commission, starting in 2016 and most recently as chair. He has also served as a member of the Anaheim Services Needs Assessment Youth and Family Advisory Committee in 2024. Earlier, Mr. Balius took part in the Beach Boulevard Specific Plan, a 2019 city plan with community input to bring homes, shopping, restaurants, other businesses and gathering places. He was active for more than 15 years with West Anaheim Neighborhood Development Council, a resident group that staged community events and worked to better west Anaheim. Now retired, Mr. Balius worked for 34 years at the nearby city of Cerritos, first in parks and recreation and later in information technology. Mr. Balius’s current City Council term expires in November 2028.

Natalie Rubalcava, Council Member, was elected to the City Council in November 2022, representing District 3 in central Anaheim. In 2023, Ms. Rubalcava served as mayor pro tem, representing the city at large at community and other events. Before joining the City Council, Ms. Rubalcava served on the Anaheim Housing and Community Development Commission from June to December 2022. Earlier, she served on the City’s Community Services Board from 2004 to 2014, including as chair in 2009. She currently serves on the OC Fair & Event Center board of directors and on the boards of OneOC, Concordia University Irvine’s Hispanic Leadership Advisory Board and the Chrysalis Orange County Advisory Council. Ms. Rubalcava earned her bachelor’s in political science from California State University, Fullerton, and her law degree from the University of La Verne College of Law. Ms. Rubalcava’s current City Council term expires in November 2026.

Norma Campos Kurtz, Council Member, was elected to the City Council in November 2024 representing District 4. Before joining the City Council, Ms. Campos Kurtz served on the Anaheim Public Utilities Board from 2021 to February 2023. Ms. Campos Kurtz also served for eight years as a commissioner on Housing and Community Development Commission, served as director of workforce and economic development for the Orange County Labor Federation from 2010 to 2014, served as vice president of the California Medical Association from 2007 to 2009 and served as district director for former California Senator Joe Dunn from 1998 to 2006. Most recently, Ms. Campos Kurtz served as district director for former California Assemblymember Tom Daly. She is currently a board member for nonprofit Anaheim Beautiful. Ms. Campos Kurtz’s current City Council term is through November 2028.

Kristen Maahs, Council Member, was elected to the City Council in November 2024, representing District 5 in east-central Anaheim. Since 2020, Ms. Maahs has served on the Anaheim Cultural and Heritage Commission, including as chair. She also has served as president of the Anaheim Historical Society, which helps preserve the city’s history and historic places. Ms. Maahs works as associate director B-3
of community outreach and advocacy at Alzheimer’s Orange County, an Irvine-based nonprofit that provides programs, support and information for caregivers and those impacted by Alzheimer’s and related dementias. She is also co-chair of the senior food security committee of the Orange County Aging Services Collaborative, which brings together agencies and nonprofits to support our county’s seniors. Ms. Maahs also is a member of the active older adult committee of the Anaheim Human Services Network, which connects the city, nonprofits, faith-based groups and others to support Anaheim seniors. Ms. Maahs’s current City Council term is through December 2028.

City Management
The City Council appoints the City Manager, who heads the executive branch of government, implements City Council directives and policies, and manages the administrative and operational functions through the various departmental heads, who are appointed by the City Manager. Key administrative personnel of the City are as follows:

Greg Garcia, Interim City Manager, was appointed Interim City Manager in February 2026. He has served the City since 2005. In his current role, Mr. Garcia is responsible for the daily operations of a full service city supporting the City’s residents, approximately 20,000 businesses, and over 25 million annual visitors. He also oversees 11 city departments, including Anaheim Public Utilities, the Anaheim Police Department, Anaheim Fire & Rescue and Convention, Sports & Entertainment, the operator of the Anaheim Convention Center. Prior to his current position, Garcia held the positions of Assistant City Manager and Government Affairs Manager and Budget Analyst. Mr. Garcia earned a bachelor’s degree in political science from the University of California, San Diego, and his Juris Doctorate from the University of Notre Dame Law School.

Deborah A. Moreno, Finance Director/City Treasurer, was appointed to her position as Finance Director in July 2012, and became the City Treasurer on December 22, 2016, after the duties of City Treasurer and Finance Director were consolidated. Ms. Moreno oversees the City department that is responsible for the City’s $2.0 billion budget, accounting, procurement, and technology services. As City Treasurer, Ms. Moreno is also responsible for central cashiering and management of the City’s cash and investments. Ms. Moreno previously served as the City’s Acting Finance Director, a position she held since November 2011. Ms. Moreno initially joined the City in February 2001 as Financial Accounting Manager.

In January 2006, Ms. Moreno briefly left the City to be the City of La Palma Director of Finance, but returned to Anaheim in August 2007 as Deputy Finance Director. Prior to her work in local government, Ms. Moreno was in public practice at Ernst and Young LLP and is a certified public accountant (inactive).

She earned a bachelor’s degree in administration from California State University, San Bernardino.

Ms. Moreno also lectures for the California State University, Fullerton Extended Education.

Robert Fabela, City Attorney, was appointed City Attorney in April 2018. Mr. Fabela’s previous positions during his 30-year career include General Counsel for the Santa Clara Valley Transportation Authority, Senior Deputy City Attorney for the City of San Jose and Associate for Wilson, Sonsini, Goodrich & Rosati. He leads the department providing legal advice and services to the City Council, City officials, staff, departments, boards, commissions and related City entities and enterprises. Mr. Fabela earned a bachelor’s degree in political science with an emphasis in international relations and obtained a law degree from the University of California, Los Angeles.

Theresa Bass, City Clerk, originally joined the City in December 2007 and served as Assistant City Clerk until her appointment as City Clerk in March 2019. As City Clerk, Ms. Bass leads a department that is responsible for administrating the democratic process by conducting local elections, developing and maintaining the City’s records management program, providing access to City records and all legislative actions, and ensuring transparency to the public. Ms. Bass earned a bachelor’s degree from the University B-4
of California, Los Angeles and attained her Certified Municipal Clerk designation from the International Institute of Municipal Clerks in 2009. Her professional memberships include the International Institute of Municipal Clerks, the City Clerk’s Association of California and the Southern California City Clerk’s Association.

Labor Relations
Various unions represent the majority of City employees, including the Anaheim Municipal Employees Association, the Anaheim Police Association, the Anaheim Firefighters Association, the International Brotherhood of Electrical Workers, Local 47 (“IBEW”), the Service Employees International Union, Local 1877; and the Teamsters, Local 952. The preceding are designated representatives under the Meyer-Milias-Brown Act (Section 3500 et seq. of the Government Code of California). The expiration dates of memoranda of understanding are as follows: IBEW (full-time employees), December 31, 2028; IBEW (part-time customer service employees), January 11, 2029; IBEW (professional management and part-time management units), January 11, 2029; Anaheim Municipal Employees Association General Employees, June 30, 2027; Anaheim Municipal Employees Association Clerical Employees, June 30, 2027; Anaheim Municipal Employees Association Part-Time Unit, June 30, 2027; Anaheim Police Association, June 30, 2026; Anaheim Firefighters Association, June 19, 2027; the Service Employees International Union, Local 1877, December 19, 2025; American Federation of State, County, and Municipal Employees, June 30, 2027; and the Teamsters, Local 952, March 1, 2026. The Service Employees International Union, Local 1877, expired December 19, 2025, the Teamsters, Local 952, expired March 1, 2026, and the Anaheim Police Association agreement expires June 30, 2026; in each case, the City is currently in negotiations, and the general terms and conditions of the expired or expiring agreement remain in effect until a successor agreement is reached.

Retirement Plans
Pensions. All full-time and certain part-time City personnel belong to the California Public Employees’ Retirement System (“CalPERS”). As of June 30, 2025, CalPERS has a total of 2,906 public agency contracts providing retirement, death, and survivor benefits for participants of county offices of education, school district offices, cities and towns, counties, the State of California, and other public agencies. A copy of CalPERS’ annual financial report may be obtained from its website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference into this Remarketing Statement. Neither the City nor the Authority can guarantee the accuracy of such information. Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

The City provides pension benefits to eligible full-time employees in three separate pension plans:
the Miscellaneous Plan, the Police Safety Plan, and the Fire Safety Plan. These plans are agent multipleemployer employee defined benefit plans and are administered through CalPERS, which acts as a common investment and administrative agent for participating public agencies within the State of California. State statues and City ordinances establish the benefits provisions of these plans and all other requirements. With respect to the City’s three pension plans administered through CalPERS, the net actuarial value of assets available for benefits, as of the most recent actuarial valuation date, June 30, 2024, was $2,482,777,000 with an unfunded accrued liability of $958,818,000.

The table below shows the funding progress of the three plans and is based on a June 30, 2024 actuarial valuation date ($ in thousands).

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Plan
Fair
Value of
Assets
(FVA)
Accrued
Liability
(AL)
Unfunded
Accrued
Liability
(UAL) Funded Ratio
Annual
Covered
Payroll
UAL as a %
of Payroll
Miscellaneous $1,322,020 $1,815,111 $493,091 72.8% $147,681 333.9% Police Safety 764,322 1,062,033 297,711 72.0 61,902 480.9 Fire Safety 396,435 564,451 168,016 70.2 32,937 510.1
Total $2,482,777 $3,441,595 $958,818 72.1 $242,520 395.4 __________________
Source: City of Anaheim Annual Comprehensive Financial Report for Year Ended June 30, 2025.

The table below shows the funding progress of the three plans and is based on a June 30, 2023 actuarial valuation date ($ in thousands).

Plan
Fair
Value of
Assets
(FVA)
Accrued
Liability
(AL)
Unfunded
Accrued
Liability
(UAL) Funded Ratio
Annual
Covered
Payroll
UAL as a %
of Payroll
Miscellaneous $1,230,615 $1,741,021 $510,406 70.7% $133,453 382.5% Police Safety 706,442 1,020,219 313,777 69.2 57,489 545.8 Fire Safety 369,700 553,163 183,463 66.8 31,239 587.3
Total $2,306,757 $3,314,403 $1,007,646 69.6 $222,181 453.5 __________________
Source: City of Anaheim Annual Comprehensive Financial Report for Year Ended June 30, 2025.

The table below shows the funding progress of the three plans and is based on a June 30, 2022 actuarial valuation date ($ in thousands).

Plan
Fair
Value of
Assets
(FVA)
Accrued
Liability
(AL)
Unfunded
Accrued
Liability
(UAL) Funded Ratio
Annual
Covered
Payroll
UAL as a %
of Payroll
Miscellaneous $1,183,362 $1,681,617 $498,255 70.4% $119,690 416.3% Police Safety 675,666 985,062 309,396 68.6 53,517 578.1 Fire Safety 356,612 529,357 172,745 67.4 28,129 614.1
Total $2,215,640 $3,196,036 $980,396 69.3 $201,336 486.9 __________________
Source: City of Anaheim Annual Comprehensive Financial Report for Year Ended June 30, 2025.

Annual actuarial valuations, based on the benefit formula and the number of employees and their respective salary schedules, determine the City’s contribution rate. For the Fiscal Year ended June 30, 2025, the City’s contribution rate as a percentage of covered payroll was 40.44% for miscellaneous employees, 61.71% for police safety employees, and 55.79% for fire safety employees. The City contributed approximately $112,276,000 million to its pension plans after CalPERS’ June 30, 2024 measurement date. These contributions are reported as deferred outflows of resources and will reduce the City’s net pension liability in the next fiscal year.

Effective January 1, 2013, the Public Employees’ Pension Reform Act of 2013 (“PEPRA”) established significant changes including mandatory costs sharing by employees, reducing the overall benefit level (e.g., percentage of pay), increasing the retirement age, and placing a cap on the salary used to determine retirement benefits. Employees hired on or after January 1, 2013 who were not already a member of a pension system are subject to PEPRA. PEPRA’s effect on the City’s rates and benefit B-6
provisions began with the June 30, 2013 valuation, which impacted the rates for the Fiscal Year ended June 30, 2016.

Effective for the Fiscal Year ended June 30, 2015, the City adopted Governmental Accounting Standards Board (“GASB”) Statement No. 68, affecting the reporting of pension liabilities for accounting purposes. Under GASB Statement No. 68, the City must report the Net Pension Liability (i.e., the difference between the Total Pension Liability and the Pension Plan’s Net Position or market value of assets) in its financial statements. As of an actuarial measurement date of June 30, 2024, the City’s aggregate Net Pension Liabilities of $893,308,000 (a decrease of $22,121 over the prior Fiscal Year) representing a Net Pension Liability of $447,132,000 for the Miscellaneous Plan (a decrease of $30,605,000 over the prior Fiscal Year), $279,437,000 for the Police Safety Plan (a decrease of $22,121,000 from the prior Fiscal Year) and $166,739,000 for the Fire Safety Plan (an decrease of $1,367,000 from the prior Fiscal Year), based on the results of the actuarial calculations performed as of June 30, 2023 and rolled forward to determine the June 30, 2024 total pension liability. The aggregate Plan Net Pension Liabilities as a percentage of covered-employee payroll was 391.11%. The aggregate Plan Net Positions as a percentage of the Total Pension Liabilities for the three plans was 73.55%.

Changes in Net Pension Liabilities are recorded as pension expenses or as deferred inflows of resources or deferred outflows of resources depending on the nature of the change. The changes in Net Pension Liability that are recorded as deferred inflows of resources or deferred outflows of resources that arise from changes in actuarial assumptions or other inputs and differences between expected or actual experience are amortized over the weighted average remaining service life of all participants in the respective pension plan and are recorded as a component of pension expense beginning with the period in which the difference occurred. Projected earnings on pension investments are recognized as a component of pension expense. Differences between projected and actual investment earnings are reported as deferred inflows of resources or deferred outflows of resources and are amortized as a component of pension expense on a closed basis over a five-year period beginning with the period in which the difference occurred.

For the Fiscal Year ended June 30, 2025, the City recognized pension expenses of $143,821,000 and reported pension-related deferred outflows of resources of $200,380,000, including $124,276,000 of pension contributions made subsequent to the measurement date, which will be recognized as a reduction of the Net Pension Liabilities in the Fiscal Year ending June 30, 2026. At June 30, 2025, the City reported deferred inflows of resources of $4,953,000, including $1,182,000 representing amounts related to differences between expected and actual experience and projected and actual earnings on plan investments, which will be recognized as a component of pension expense in each of the four Fiscal Years 2025-26 through 2028-29.

To estimate the liability of pensions and the contributions that will be required to meet those obligations, many assumptions are made, including the rate of return that investments will yield prior to making payments, known as the discount rate, which is used to compute actual contribution requirements for a given Fiscal Year as well as determining the unfunded pension liability. A determination to employ a lesser rate of return may result in a significant increase in the unfunded liability and contributions required to meet such obligations.

CalPERS approved an incremental reduction in the discount rate to be used in its actuarial valuation from 7.5% to 7.0% over the three Fiscal Years 2018-19 to 2020-21. The discount rate was automatically lowered in July 2021, from 7.0% to 6.8%, due to the CalPERS investment return for Fiscal Year 2020-21.

Post-Employment Medical Benefits. In addition to the contributions to CalPERS, the City provides post-employment medical benefits for certain of its retired employees (the “Post-Employment Benefits Program”). Active employees (hired prior to January 1, 1996, July 6, 2001 for the Anaheim Police Association employees and November 9, 2001 for Anaheim Fire Association employees) are eligible to receive post-retirement medical benefits from the City. The City’s contribution to post-employment health benefits for the Fiscal Year ended June 30, 2025 was $13,588,000. Additional information regarding the post-retirement benefits offered by the City to its employees and its obligations therefor may be found in the Annual Comprehensive Financial Report of the City for the Fiscal Year ended June 30, 2025, which is available on the City’s website at http://www.anaheim.net. Such information is not incorporated herein by reference.

On June 30, 2008, the City transferred $63,223,656 to an irrevocable trust with CalPERS to prefund the City’s Post-Employment Benefits Program obligation. As of the actuarial valuation date of June 30, 2023, the unfunded liability for the City’s Post-Employment Benefits Program was $107,826,000, or 53.1% funded.

Additional information regarding the City’s pension and Post-Employment Benefits Program obligations may be found in the Annual Comprehensive Financial Report of the City for the Fiscal Year ended June 30, 2025, which is available on the City’s website at http://www.anaheim.net. Such information is not incorporated herein by reference.

Area and Population
From 1900 through 1940, the City land area remained at 3.7 square miles. From 1940 to 2020, that area increased to 50.8 square miles. The City’s population has also grown from 14,556 in 1950 to 340,433 in 2026, making Anaheim California’s tenth most populous city. The following chart includes the growth in the population of the City since 2017 as well as the growth in the population of Orange County.

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CITY OF ANAHEIM AND ORANGE COUNTY
Population
Calendar Year
Year(1)
City
Population
Orange County
Population
2017 350,115 3,185,541
2018 349,647 3,192,479
2019 348,915 3,192,408
2020 348,118 3,188,326
2021 345,687 3,174,592
2022 341,567 3,159,797
2023 340,564 3,156,200
2024 342,054 3,170,070
2025 341,773 3,175,427
2026 340,433 3,163,696
__________________
(1) All data as of January 1 of indicated year.

Source: State of California Department of Finance.

Building Activity
The total valuation of all building permits issued by the City Building Division was approximately $461.181 million in 2025, representing a 46% decrease from the total valuation of $857.812 million in 2024. The total permits issued in 2025 were 2,287, representing a 1% decrease from the 2,308 permits issued in 2024. The following table presents building permit activity and valuation for the calendar years 2021-2025.
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CITY OF ANAHEIM

BUILDING ACTIVITIES
CALENDAR YEARS 2021-2025
2025 2024 2023 2022 2021
Total Valuation (thousands) $461,181 $857,812 $628,389 $410,387 $445,434 Total Permits Issued 2,287 2,308 2,122 2,096 2,061
New Construction
Residential (thousands) $61,987 $154,070 $191,618 $139,226 $173,546 Permits 125 148 155 84 149
Non-Residential (thousands) $51,158 $436,648 $90,541 $60,278 $134,045 Permits 29 39 28 27 24
Additions and Alterations:

Residential (thousands) $39,216 $69,928 $37,151 $34,812 $27,970 Permits 1,299 1,306 1,149 1,146 1,113
Other (thousands) $78,909 $197,166 $309,079 $176,071 $109,872 Permits 834 815 790 839 775
New Dwelling Units:

Total New Residential Units 254 661 850 672 905
____________________________
Source: City of Anaheim Planning Department, Building Division.

Employment
No annual information is regularly compiled on employment and unemployment for the City alone, though monthly estimates are made by the State of California Employment Development Department.

Employment in the Anaheim-Santa Ana-Irvine Metropolitan Division, a census-designated region, increased from approximately 1,464,000 in 2021 to approximately 1,540 in 2025. The unemployment rate in the Anaheim-Santa Ana-Irvine Metropolitan Division has been lower than that in the State in each of the past five years. For 2025, the unemployment rate in the Anaheim-Santa Ana-Irvine Metropolitan Division was 4.1%, while California’s unemployment rate was 5.5%. The mobile resident labor force of Orange County is employed not only in the County but also in adjacent counties, such as Los Angeles, San Bernardino and Riverside.

ORANGE COUNTY
(ANAHEIM-SANTA ANA-IRVINE METROPOLITAN DIVISION)
Employment, Unemployment and Labor Force(1)
Calendar Year Averages: 2021-2025
(000s except for Unemployment Rates)
2025 2024 2023 2022 2021
Employment............................... 1,540 1,559 1,532 1,529 1,464 Unemployment........................... 66 64 56 51 93
Civilian Labor Force .................. 1,606 1,623 1,589 1,579 1,557 Unemployment Rate .................. 4.1% 3.9% 3.6% 3.2% 6.0% State Unemployment Rate.......... 5.5% 5.3% 4.8% 4.3% 7.3% _______________________
(1) Data not seasonally adjusted
Source: State of California Employment Development Department.

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The table below lists the major manufacturing and non-manufacturing employers within the City for 2025.

CITY OF ANAHEIM

TOP TEN PRIVATE EMPLOYERS
Company
Approximate
Number of
Employees Products/Purpose
Disneyland Resort 35,900 Theme Park
Kaiser Permanente Anaheim Medical Center 4,050 Medical Facilities OC Sports & Entertainment 3,000 Sports and Entertainment Venues Northgate Market 1,000 Retail Grocery
Extron 950 Manufacturing and Engineering
Hilton Anaheim 900 Lodging
Anaheim Regional Medical Center 886 Medical Facilities
West Anaheim Medical Center 740 Medical Facilities
Angels Baseball LP 700 Sports and Entertainment Venue
Anaheim Global Medical Center 560 Medical Facilities
____________________
Source: City of Anaheim Annual Comprehensive Financial Report for year ended June 30, 2025; City of Anaheim. [Remainder of page intentionally left blank.]
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Income
The following table summarizes the most recent available data from the U.S. Census Bureau on median household income for the City and the State between 2020 to 2024.

CITY OF ANAHEIM

MEDIAN HOUSEHOLD INCOME
CALENDAR YEARS 2020 THROUGH 2024
Year and Area
Median
Household Income(1)
2020 City of Anaheim $76,723
California 78,672
2021 City of Anaheim $81,747
California 84,907
2022 City of Anaheim $85,133
California 91,551
2023 City of Anaheim $84,872
California 95,521
2024 City of Anaheim $95,227
California 99,122
____________________________
(1) All income amounts are in inflation adjusted dollars. Data for 2024 represents the most recent information available.

Source: U.S. Census Bureau, 2020-2024 American Community Survey (1-year estimates for years 2021, 2022, 2023 and 2024; 5-year estimates for year 2020).

Tourism and Community and Recreational Facilities
A major tourist center of Southern California, Orange County – with its forty-four miles of shorelines and more than 20 publicly maintained beach areas – provides year-round aquatic activities attracting over 50 million annual visitors. With an average annual temperature of approximately 68 degrees Fahrenheit, Orange County is the third most populous county in California and the sixth-most populous county in the country according to the 2020 census.

Tourism is a major industry in Anaheim, and a focal point of tourism in the City is the Anaheim Resort Area, 2.2 square miles of land that includes Disneyland Park, Disney’s California Adventure, the Anaheim Convention Center, and a majority of the City’s approximately 22,000 hotel and motel rooms.

Overall, the City boasts over 180 lodging establishments and 600 restaurants in a broad range of styles, flavors, and price ranges.

Recreational and amusement facilities in Anaheim include Disneyland, Disney’s California Adventure, Downtown Disney, Anaheim GardenWalk, House of Blues-Anaheim, the Anaheim Convention Center, Angel Stadium of Anaheim, the Honda Center, and the Anaheim Packing House. Within one hour’s drive from the City are Knott’s Berry Farm in the adjacent City of Buena Park, the Los Alamitos Race Course, the renowned Spanish Mission of San Juan Capistrano, and the Art Colony at Laguna Beach. The Newport Harbor area, a few miles south of the City, provides anchorage facilities for approximately 4,600 B-12
private boats; boat launching ramps, deep sea fishing, scuba diving, and other aquatic activities are readily accessible in this area. Within a two-hour drive are numerous summer and winter resort areas in the San Bernardino and San Jacinto mountains.

Recreational and amusement facilities in Anaheim include Disneyland, Disney’s California Adventure, Downtown Disney, Anaheim GardenWalk, House of Blues-Anaheim, the Anaheim Convention Center, Angel Stadium of Anaheim, the Honda Center, and the Anaheim Packing House. Within one hour’s drive from the City are Knott’s Berry Farm in the adjacent City of Buena Park, the Los Alamitos Race Course, the renowned Spanish Mission of San Juan Capistrano, and the Art Colony at Laguna Beach. The Newport Harbor area, a few miles south of the City, provides anchorage facilities for approximately 4,600 private boats; boat launching ramps, deep sea fishing, scuba diving, and other aquatic activities are readily accessible in this area. Within a two-hour drive are numerous summer and winter resort areas in the San Bernardino and San Jacinto mountains.

The Anaheim Convention Center provides over one million square feet of prime exhibit space and 130,000 square feet of meeting and ballroom space and continues to be a sought-after meeting, event and entertainment destination. Boasting a Gold LEED certification for its sustainable site design, water savings, energy efficiency, and environmentally friendly practices, this world-class venue hosts large annual events that have included NAMM, Natural Products, Medical Design Wondercon, D23, and Blizzcon, as well as a multitude of trade shows, educational events, consumer shows, and conventions. In January 2013, the Anaheim Convention Center dedicated the opening of the Grand Plaza, a 100,000-square-foot pedestrian plaza that includes a 45-foot lighted entry monument, more than 80,000 square feet of colored concrete and pavers, 153 palm trees, and 60 citrus trees. In September 2017, the Anaheim Convention Center’s largest and most significant expansion was unveiled to the public, a 200,000-square-foot expansion of flexible space for trade shows, conventions, meetings, galas, and more. The expansion solidified the Anaheim Convention Center as the largest convention center on the West Coast of the United States with 1.8 million square feet.

The City National Grove of Anaheim, an indoor, live music venue that was built in 1998, was purchased by the City of Anaheim in 2002, and is currently operated by Nederlander Concerts. The venue boasts a 1,700 seat capacity and is located adjacent to Angel Stadium of Anaheim. Annually, the venue hosts more than 250 events by world class music performers and legendary recording artists.

In Anaheim, there are two 18-hole golf courses, eleven community parks containing major athletic facilities, over 55 neighborhood parks and special-use facilities, three youth centers with gymnasiums, a nature center, and three community centers that include senior citizen centers or programming. Other Anaheim facilities include a main public library; six branch libraries and a bookmobile; the MUZEO museum and cultural arts center; and Anaheim Ice, the practice rink for National Hockey League’s Anaheim Ducks.

Increased development in the Anaheim Resort and Platinum Triangle areas, as well as innovative capital projects to link visitors to the entertainment centers, continue to keep tourism thriving in Anaheim.

OCVibe, a $4 billion, 100-acre mixed-use entertainment district being developed adjacent to the Honda Center and the Anaheim Regional Transportation Intermodal Center (“ARTIC”), is expected to feature shopping, dining, an approximately 5,000-seat concert venue, two hotels with approximately 550 rooms, up to 1,960 residential units, more than 564,000 square feet of office space, and over 80,000 square feet of retail, along with more than 20 acres of publicly accessible parks, plazas, and trails, nearly 11,000 parking spaces, and a riverfront park along the Santa Ana River. Initial phases, including new parking facilities, opened in 2025; additional venues, including a concert hall and public plaza, are scheduled to open beginning in early 2027, with full buildout continuing into the early 2030s. Much of the OCVibe development, along with a concurrent $1 billion renovation of the Honda Center, is being expedited ahead B-13
of the 2028 Summer Olympics and Paralympic Games (“LA28”), for which the Honda Center has been designated the venue for indoor volleyball.

DisneylandForward, approved by the Anaheim City Council in May 2024, represents a $1.9 billion plus investment in Anaheim over 10 years, updating land use approvals from the 1990s to allow Disneyland Resort to build attractions or hotels on land originally designated for parking or other purposes. Projects planned under DisneylandForward and other Disney expansion initiatives include a new Avatar-themed land at Disney California Adventure; an expansion of Avengers Campus with new attractions; and a new attraction based on Coco. These projects remain in development, and Disney has not announced specific opening dates.

Anaheim is also in the process of rebuilding Beach Boulevard, which runs 1.5 miles through Anaheim, to help address day-to-day public safety and quality of life issues. Project plans include new homes, stores, restaurants, and other businesses to create a walkable street for residents and visitors. The street is currently managed by the California Department of Transportation because it is a state route, Highway 39, spanning several cities before reaching the beach. Anaheim plans to assume management of the portion of Beach Boulevard that runs through Anaheim, simplifying oversight and permitting for businesses and developers.
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Retail Sales
The following table set forth the taxable transactions for the City for calendar years 2021 through 2025 by type of business.

CITY OF ANAHEIM

TAXABLE TRANSACTION BY TYPE OF BUSINESS
Calendar Years 2021-2025
($000)
2025
(Preliminary) 2024 2023 2022 2021
Motor Vehicle and Parts Dealers $894,506 $800,785 $843,588 $877,484 $830,272 Home Furnishings and Appliance Stores 168,794 175,795 197,169 213,529 203,663 Bldg. Materials/Garden Equip & Supply 563,001 611,546 596,884 647,530 586,106 Food and Beverage Stores 276,215 249,902 256,966 251,856 226,751 Gasoline Stations 496,890 533,547 566,795 624,328 463,574 Clothing/Clothing Accessories Stores 175,089 172,639 158,161 135,688 127,235 General Merchandise 242,935 248,839 249,495 252,654 235,564 Food Services and Drinking Places 1,249,002 1,214,529 1,196,342 1,118,518 856,924 Other Retail Stores 597,374 603,043 490,996 507,392 431,874 Total Retail and Food Services $4,663,806 $4,610,624 $4,556,396 $4,628,978 $3,961,962 All Other Outlets 4,790,966 4,608,522 4,265,313 4,433,589 3,285,879 Total All Outlets $9,454,772 $9,219,146 $8,821,709 $9,062,567 $7,247,841 _________________________
Sources: California Department of Tax and Fee Administration. Totals may not add due to rounding.

Assessed Valuation and Tax Collections
Taxes are levied each Fiscal Year on taxable real and personal property that is situated within the City as of the preceding January 1. For assessment and collection purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State assessed public utilities property and real property, the taxes on which a lien is deemed sufficient (in the opinion of the County Assessor) to secure payment of the taxes. Other property is assessed on the “unsecured roll.” Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each Fiscal Year. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty applies to any delinquent payment. Delinquent taxes must be paid by June 30 to avoid additional penalties, which are equal to 1.5% per month on the unpaid base tax amount for each June 30th delinquent amount, plus a redemption fee. Taxpayers may elect to pay delinquent taxes in installments of 1/5 (20%) of the redemption amount over a five-year period. In June of the fifth year anniversary of original delinquency, those parcels still unpaid are officially processed for Power to Sell (i.e., for Tax Action sale).

Consequently, sometime in the 6th year of delinquency, if still unpaid, the property is officially offered at tax sale by the Orange County Tax Collector’s office.

Property taxes on the unsecured roll are mailed between March and July of each Fiscal Year and are due upon receipt. If unpaid, such taxes become delinquent after August 31 and a 10% penalty plus a collection fee attaches to any delinquent payment. Delinquent taxes must be paid by October 31 to avoid the filing of a tax lien and additional penalties, which are equal to 1.5% per month until paid. The Orange County Tax Collector further has the right to enforce tax collection through seizure and sale or a suit in court.

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Assessed valuations include secured and unsecured properties assessed by the Orange County Assessor, and secured utility properties assessed by the State Board of Equalization. Such assessed valuations exclude business inventory exemptions and exclude veterans, religious, charitable, and other such non-recoverable exemptions.

The table below shows the total assessed valuations, total City tax levies, total current tax levy collections, collection percentage, and per capita assessed valuation for the most recent ten Fiscal Years ending with June 30, 2025. The assessed valuation for Fiscal Year 2024-25 is approximately $63.33 billion.

CITY OF ANAHEIM
ASSESSED VALUATION AND TAX COLLECTION RECORD ($000)
Fiscal Year
Ended
June 30
Assessed
Valuation
Total City
Tax Levy
Total
Current
Tax Levy
Collections
Percent of
Current Tax
Levy
Collected
Population
(000s)
Per Capita
Assessed
Valuation
2016 39,815,177 40,026 38,832 97.0 358 112
2017 41,363,369 40,787 39,710 97.4 359 116
2018 43,277,778 42,432 41,578 98.0 357 121
2019 45,731,391 44,588 43,630 97.9 357 127
2020 48,851,453 47,082 46,223 98.2 357 137
2021 51,098,596 49,162 48,306 98.3 345 144
2022 53,036,797 51,577 50,270 97.5 341 158
2023 56,535,417 55,336 54,065 97.7 329 172
2024 60,650,221 58,260 56,971 97.8 340 178
2025 63,328,820 60,395 59,009 97.7 342 185
___________________
Sources: City of Anaheim Annual Comprehensive Financial Report for year ended June 30, 2025; City of Anaheim. Per Capita Assessed Valuation calculated as Assessed Valuation divided by Population. [Remainder of page intentionally left blank.]
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Largest Property Taxpayers
The following table shows the ten largest secured property taxpayers in the City and their 2024-25 assessed valuations.

CITY OF ANAHEIM
2024-25 LARGEST LOCAL SECURED TAXPAYERS
(IN THOUSANDS)
Property Owner
Primary Land
Use
Assessed
Valuation
Percentage of
Total
Walt Disney World Company Theme Park $6,413,570 10.60%
Taylor Anaheim Partners Parking 391,165 0.65%
Waterford Property Company Apartments 316,583 0.52%
Bridge WF II CA Madison Park LLC Apartments 288,767 0.48% C3J LP Commercial 237,629 0.39%
HHC HA Investment II Inc. Commercial 236,198 0.39%
FJS Inc. Commercial 221,535 0.37%
Anaheim Concourse ILP LLC Commercial 214,161 0.35%
PR 1910 Union LLC Apartments 201,827 0.33%
PR 1921 Union LLC Apartments 193,514 0.32%
Total $8,714,949 14.4%
_______________________
Source: City of Anaheim Annual Comprehensive Financial Report for year ended June 30, 2025; City of Anaheim.

Education
Seventeen public high schools, eight public junior high schools, 54 public elementary schools and three elementary-high school combination schools serve the City of Anaheim. Almost all of the City lies within eight school districts: Anaheim Elementary School District, Anaheim Union High School District, Centralia Elementary School District, Magnolia School District, Orange Unified School District, the Placentia-Yorba Linda Unified School District, Savanna School District and the North Orange County Community College District.

There are more than 28 institutions of higher learning in Orange County including University of California, Irvine; California State University, Fullerton; and Chapman University.

Transportation
The City lies in the center of an area containing 20.5 million people who reside or work in Orange, San Diego, Los Angeles, Riverside and San Bernardino counties. Major freeways in and through the City provide convenient access for labor markets, recreation, and commerce to consumers of an even broader area. The Santa Ana Freeway (Interstate 5) connecting Los Angeles and San Diego, is the main artery traversing the City and connects, in or near the City, with the Artesia/Riverside (State Route 91), the Garden Grove (State Route 22), the Orange (State Route 57), and the Costa Mesa (State Route 55) freeways.

The Anaheim Regional Transportation Intermodal Center (“ARTIC”) opened in December 2014.

Situated along the LOSSAN corridor (Los Angeles-San Diego), which is the second most traveled rail corridor in the country, ARTIC is a central transportation hub within Orange County. ARTIC provides 10 modes of transportation for daily commuters, visitors and leisure travelers, including Amtrak, Metrolink, public and charter bus services, taxi service, carpooling and service for bicyclists utilizing the adjacent Santa Ana River Trail, and can accommodate future modes of transportation.

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The Orange County Transportation Authority, Metropolitan Transportation Authority, Greyhound Lines and Valen Transportation Services provide daily bus service for residents and the 20 million tourists and conventioneers who visit Orange County and Anaheim annually.

The major airports in the area include John Wayne (14 miles southwest), LA/Ontario International (20 miles northeast), Los Angeles International (30 miles northwest) and Long Beach (14 miles west).

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APPENDIX C

SUMMARY OF PRINCIPAL LEGAL DOCUMENTS
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APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT
This Continuing Disclosure Agreement (the “Disclosure Agreement”) is executed and delivered by the City of Anaheim, California (the “City”) and U.S. Bank Trust Company, National Association, as agent (“U.S. Bank”), in connection with the issuance of $__________ aggregate principal amount of Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2026-A (Water System Refunding) and Anaheim Housing and Public Improvements Authority Revenue Refunding Bonds, Series 2026-B (Water System Refunding) (Forward Delivery) (the “Bonds”). The Bonds are being issued pursuant to an Indenture of Trust, dated as of ________ 1, 2026 (the “Indenture”), by and among the Anaheim Housing and Public Improvements Authority, the City and U.S. Bank Trust Company, National Association, as Trustee. The City and U.S. Bank covenant and agree as follows:

SECTION 1. Purpose of the Disclosure Agreement. This Disclosure Agreement is being executed and delivered by the City and U.S. Bank for the benefit of the Holders and Beneficial Owners of the Bonds and in order to assist the Participating Underwriter in complying with SEC Rule 15c2-12.

SECTION 2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Agreement unless otherwise defined in this Section 2, 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.
“Beneficial Owner” shall mean any person that (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any Bonds for federal income tax purposes.
“Business Day” shall mean a day other than (a) Saturday or Sunday, (b) a day on which banking institutions in the city in which the Principal Corporate Trust Office is located are authorized or required by law to be closed, and (c) a day on which the New York Stock Exchange is authorized or obligated by law or executive order to be closed.
“Dissemination Agent” shall mean initially, the City, acting in its capacity as Dissemination Agent hereunder, or any successor Dissemination Agent designated in writing by the City, which may be U.S.

Bank, and which has filed with U.S. Bank a written acceptance of such designation. “EMMA” shall mean the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for Municipal Securities disclosures, maintained on the internet at http://emma.msrb.org. “Financial Obligation” shall mean a (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of a debt obligation or any such derivative instrument; provided that “financial obligation” shall not include municipal securities as to which a final official statement (as defined in the Rule) has been provided to the MSRB consistent with the Rule.
“Fiscal Year” shall mean the period beginning on July 1 of each year and ending on the next succeeding June 30, or any twelve-month or fifty-two week period hereafter selected by the City, with notice of such selection or change in fiscal year to be provided as set forth herein.

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“Holder” shall mean either the registered owners of the Bonds, or, if the Bonds are registered in the name of The Depository Trust Company or another recognized depository, any applicable participant in such depository system.
“Listed Events” shall mean any of the events listed in Section 5 of this Disclosure Agreement. “MSRB” shall mean the Municipal Securities Rulemaking Board established pursuant to Section 15B(b)(1) of the Securities Exchange Act of 1934 or any other entity designated or authorized by the SEC to receive reports pursuant to the Rule. Until otherwise designated by the MSRB or the SEC, filings with the MSRB are to be made through the EMMA website of the MSRB, currently located at http://emma.msrb.org.
“Official Statement” shall mean the Official Statement, dated _________, 2026, relating to the Bonds.
“Participating Underwriter” shall mean the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Repository” shall mean, until otherwise designated by the SEC, EMMA. “Rule” shall mean Rule 15c2-12 adopted by the SEC under the Securities Exchange Act of 1934, as the same may be amended from time to time.
“SEC” shall mean the U.S. Securities and Exchange Commission. “State” shall mean the State of California.

SECTION 3. Provision of Annual Report.
(a) So long as any Bonds remain outstanding pursuant to the Indenture, the City shall, or shall cause the Dissemination Agent to, not later than six months after the end of each Fiscal Year (presently by each December 31), commencing with the report for the 2023-24 Fiscal Year, provide to the MSRB, through EMMA, an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Agreement. The Annual Report must be submitted in electronic format, accompanied by such identifying information as provided by the MSRB. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Agreement; provided that the audited financial statements of the City Water Utility Fund 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 Fiscal Year changes for the City, the City shall give notice of such change in the manner provided under Section 5(e) hereof.
(b) Not later than five (5) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the MSRB, through EMMA, the City shall provide the Annual Report to the Dissemination Agent and U.S. Bank (if U.S. Bank is not the Dissemination Agent). If by such date, U.S. Bank has not received a copy of the Annual Report, U.S. Bank shall contact the City and the Dissemination Agent to determine if the City is in compliance with the first sentence of this subsection (b).

The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent (if the City is not the Dissemination Agent) and U.S. Bank to the effect that such Annual Report constitutes the Annual Report required to be furnished by it hereunder. The Dissemination Agent and U.S. Bank may conclusively rely upon such certification of the City and shall have no duty or obligation to review such Annual Report.

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(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), the Dissemination Agent shall send a notice to the MSRB in substantially the form attached as Exhibit A.
(d) The Dissemination Agent shall:
(i) determine the electronic filing address of, and then-current procedures for submitting Annual Reports to, the MSRB each year prior to the date for providing the Annual Report; and (ii) to the extent known to the Dissemination Agent file a report with the City (if the City is not the Dissemination Agent) and U.S. Bank (if U.S. Bank is not the Dissemination Agent) certifying that the Annual Report has been provided pursuant to this Disclosure Agreement, and stating the date it was provided.

SECTION 4. Content of Annual Reports.
(a) The City’s Annual Report shall contain or include by reference the-following:
(i) The audited financial statements of the City’s Water Utility Fund for the most recently completed Fiscal Year, prepared in accordance with generally accepted accounting principles for governmental enterprises as prescribed from time to time by any regulatory body with jurisdiction over the City and by the Governmental Accounting Standards Board; (ii) Updated information comparable to the information in Table 1 entitled “WATER SYSTEM STATISTICS” as it appears in the Official Statement; (iii) Updated information comparable to the information in Table 2 entitled “WATER PRODUCTION” as it appears in the Official Statement;
(iv) Updated information comparable to the information in Table 3 entitled “WATER SALES” as it appears in the Official Statement;
(v) Updated information comparable to the information in Table 4 entitled “LARGEST WATER CUSTOMERS” as it appears in the Official Statement; (vi) Updated information comparable to the information in Table 6 entitled “OPERATING EXPENSES” as it appears in the Official Statement; and (vii) Updated information comparable to the information in Table 8 entitled “CITY OF ANAHEIM WATER UTILITY FUND – FINANCIAL RESULTS OF THE WATER SYSTEM.” (b) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or public entities related thereto, available to the public on EMMA or filed with the SEC. The City shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Listed Events.
(a) Pursuant to the provisions of this Section 5, 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 more than ten (10) Business Days after the event:

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(1) principal and interest payment delinquencies;
(2) defeasances;
(3) tender offers;
(4) rating changes;
(5) adverse tax opinions or the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax- status of the Bonds;
(6) unscheduled draws on the debt service reserves reflecting financial difficulties;
(7) unscheduled draws on credit enhancements reflecting financial difficulties;
(8) substitution of credit or liquidity providers or their failure to perform; (9) bankruptcy, insolvency, receivership or similar proceedings; or (10) default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a Financial Obligation of the City, any of which reflect financial difficulties.
(b) Pursuant to the provisions of this Section 5, 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:
(1) mergers, consolidations, acquisitions, the sale of all or substantially all of the assets of the obligated persons or their termination; (2) appointment of a successor or additional trustee or the change of the name of a trustee;
(3) non-payment related defaults;
(4) modifications to the rights of Holders;
(5) a notices of prepayment;
(6) release, substitution or sale of property securing repayment of the Bonds; or
(7) incurrence of a Financial Obligation of the City relating to its Water Utility Fund, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a Financial Obligation of the City relating to its Water Utility Fund, any of which affect holders of the Bonds.
(c) For these purposes (i) an event described in item (9) of Section 5(a) is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City D-5
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in a proceeding under the United States 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 said party, or if such jurisdiction has been assumed by leaving the existing governing 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 said party; and (ii) the City intends to comply with the provisions hereof for the Listed Events described in item (10) of Section 5(a) and item (7) of Section 5(b) above, and the definition of “Financial Obligation” in Section 1, with reference to the Rule, any other applicable federal securities laws and the guidance provided by the SEC in its Release No. 34-83885 dated August 20, 2018 (the “2018 Release”), and any further amendments or written guidance provided by the SEC or its staff with respect to the amendments to the Rule effected by the 2018 Release.

Whenever the City obtains knowledge of the occurrence of a Listed Event described in subsection (b) of this Section 5, the City shall as soon as possible determine if such event would be material under applicable federal securities law.
(d) If the City determines that knowledge of the occurrence of a Listed Event described in subsection (b) of this Section 5 would be material under applicable federal securities law, the City shall promptly notify the Dissemination Agent in writing and instruct the Dissemination Agent to report the occurrence to the Repository in a timely manner not more than ten (10) Business Days after the event. (e) If the Dissemination Agent has been instructed by the City to report the occurrence of a Listed Event, the Dissemination Agent shall file a notice of such occurrence with the MSRB.

SECTION 6. Filings with the MSRB. All information, operating data, financial statements, notices and other documents provided to the MSRB in accordance with this Disclosure Agreement shall be provided in an electronic format prescribed by the MSRB and shall be accompanied by identifying information as prescribed by the MSRB.

SECTION 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Agreement with respect to the Bonds shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. In addition, in the event that the Rule shall be amended, modified or repealed such that compliance by the City with Section 3, 4, 5 and/or 6 hereof shall no longer be required in any or all respects, then the City’s obligations hereunder shall terminate to a like extent.

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 initial Dissemination Agent shall be the City.

SECTION 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Agreement, the City may amend this Disclosure Agreement, provided no amendment increasing or affecting the obligations or duties of the Dissemination Agent shall be made without the consent of such party, and any provision of this Disclosure Agreement may be waived if such amendment or waiver is supported by an opinion of counsel expert in federal securities laws acceptable to the City to the effect that such amendment or waiver would not, in and of itself, cause the undertakings herein to violate the Rule if such amendment or waiver had been effective on the date hereof but taking into account any subsequent change in or official interpretation of the Rule.

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 D-6
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this Disclosure Agreement or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Listed Event, 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 of occurrence of a Listed Event in addition to that which is specifically required by this Disclosure Agreement, the City shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice of occurrence of a Listed Event.

SECTION 11. Default. In the event of a failure of the City or the Dissemination Agent (if the Dissemination Agent is other than the City) to comply with any provision of this Disclosure Agreement, U.S. Bank Trust Company, National Association, as Trustee may (and, at the request of any Participating Underwriter or the Holders of at least 25% aggregate principal amount of outstanding Bonds with indemnification satisfactory to it, shall), or any Holder 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 or the Dissemination Agent (if the Dissemination Agent is other than the City), as the case may be, to comply with its obligations under this Disclosure Agreement. The sole remedy under this Disclosure Agreement in the event of any failure of the City or the Dissemination Agent (if the Dissemination Agent is other than the City) to comply with this Disclosure Agreement shall be an action to compel performance. U.S. Bank shall not owe any fiduciary duty to the Participating Underwriter nor shall its failure to comply with the request of any Participating Underwriter result in a breach of any of its fiduciary duties owed to the Holders.

SECTION 12. Duties, Immunities and Liabilities of U.S. Bank and Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Agreement, and 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 arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. If U.S. Bank performs the duties assigned to it hereunder, U.S. Bank shall not be responsible to any person for any failure by the City or the Dissemination Agent (if other than U.S. Bank) to perform duties or obligations imposed hereby.

SECTION 13. Beneficiaries. This Disclosure Agreement shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the Bonds, and shall create no rights in any other person or entity. No person shall have any right to commence any action against U.S. Bank or the Dissemination Agent seeking any remedy other than to compel specific performance of this Disclosure Agreement. Neither U.S. Bank nor the Dissemination Agent shall be liable under any circumstances for monetary damages to any person for any breach of this Disclosure Agreement.

SECTION 14. Notices. All written notices to be given hereunder shall be given in person or by mail to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

To the City: City of Anaheim
200 South Anaheim Boulevard
Anaheim, California 92805
Attention: City Clerk
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and: City of Anaheim
Public Utilities Department
201 South Anaheim Boulevard
Anaheim, California 92805
Attention: Public Utilities General Manager
To U.S. Bank: U.S. Bank Trust Company, National Association Corporate Trust Services
633 West Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
U.S. Bank and the City may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent. Unless specifically otherwise required by the context of this Disclosure Agreement, any notices required to be given hereunder to U.S.

Bank or the City may be given by any form of electronic transmission capable of producing a written record.

Each such party shall file with U.S. Bank information appropriate to receiving such form of electronic transmission.

SECTION 15. Counterparts. This Disclosure Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Dated: __________, 2026 CITY OF ANAHEIM
By
Public Utilities Acting General Manager
ATTEST:
___________________________________
City Clerk
U.S. BANK TRUST COMPANY,

NATIONAL ASSOCIATION,
as agent
By
Authorized Officer
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EXHIBIT A

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: ANAHEIM HOUSING AND PUBLIC IMPROVEMENTS AUTHORITY Name of Issue: REVENUE REFUNDING BONDS, SERIES 2026-A
(WATER SYSTEM REFUNDING)

REVENUE REFUNDING BONDS, SERIES 2026-B
(WATER SYSTEM REFUNDING) (FORWARD DELIVERY)
Date of Issuance: ____________, 2026
NOTICE IS HEREBY GIVEN that the City of Anaheim, California (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by the Continuing Disclosure Agreement, dated ___________, 2026, between the City and U.S. Bank Trust Company, National Association, as agent. The City anticipates that the Annual Report will be filed by ___________________________.

Dated: ________, ____
[_________________________, as Dissemination
Agent, on behalf of the City of Anaheim]
By:

Title:
[cc: City of Anaheim]
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APPENDIX E

BOOK-ENTRY ONLY SYSTEM
The information in this Appendix E under the caption “General” concerning The Depository Trust Company, New York, New York (“DTC”), and DTC’s book-entry system has been obtained from DTC and the Authority and the City take no responsibility for the completeness or accuracy thereof. The Authority and the City cannot and do not give any assurances that DTC, Direct Participants (as defined below) or Indirect Participants (as defined below) will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation of ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will do so on a timely basis, or that DTC, Direct Participants or Indirect Participants will act in the manner described in this Appendix E. The Authority and the City are not responsible or liable for the failure of DTC or any DTC Direct or Indirect Participant to make any payment or give any notice to a Beneficial Owner with respect to the Bonds or an error or delay relating thereto. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC’s Direct and Indirect Participants are on file with DTC.

General
DTC 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.

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 3.5 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 DTC’s Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information on such web site is not incorporated herein by reference.

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 (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

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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 certificates representing their ownership interests in 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 effect 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 the 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 Bond documents. For example, Beneficial Owners of the 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 registrar 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 within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 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 Authority 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of, premium, if any, and interest 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 funds and corresponding detail information from the Authority or the Trustee, on 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 nor its nominee, the Trustee or the Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of such principal, premium, if any, and interest to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority or Trustee, 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.

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A Beneficial Owner shall give notice to elect to have its Bonds purchased or tendered (if applicable) through its Direct Participant, to the Tender Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Direct Participant’s interest in the Bonds, on DTC’s records, to the Tender Agent. The requirement for physical delivery of Bonds in connection with an optional tender (if applicable) or a mandatory purchase will be deemed satisfied when the ownership rights in the affected Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Tender Agent’s DTC account.

DTC may discontinue providing its services as depository with respect to the Bonds at any time by giving reasonable notice to the Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, Bond certificates are required to be printed and delivered as described in the Indenture.

The Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, certificates will be printed and delivered.

Discontinuance of DTC Services
In the event that that DTC shall discontinue providing its services as depository with respect to the Bonds or the Authority shall discontinue the use of a book-entry system of transfers through DTC (or a successor securities depository), the following provisions would apply: (i) the principal of the Bonds will payable upon presentation of such Bonds by the registered owners thereof at the Corporate Trust Office of the Trustee; (ii) interest on the Bonds will be payable on each Interest Payment Date by check mailed by the Trustee on the date on which interest is due to the registered owners of the Bonds on the close of business on the fifteenth (15th) calendar day of the month preceding such Interest Payment Date (the “Record Date”) at the addresses of the registered owners as they appear on the registration books maintained by the Trustee, except that for registered owners of more than $1,000,000 in principal amount of Bonds who, prior to the Record Date preceding any Interest Payment Date, have provided the Trustee with wire transfer instructions, interest payable on such Bonds will be paid in accordance with the wire transfer instructions provided by such registered owners; (iii) Bonds may be exchanged for an equal aggregate principal amount of Bonds of other Authorized Denominations and of the same tenor and maturity upon surrender thereof at the Corporate Trust Office of the Trustee upon payment by the registered owner of any charges the Trustee may make; and (iv) any Bond may, in accordance with its terms, be transferred, upon the Registration Books under the Indenture, by the person in whose name it is registered, in person or by his attorney duly authorized in writing, upon surrender of such Bond for cancellation at the Corporate Trust Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee, duly executed by the registered owner or his duly authorized attorney and upon payment by the registered owner of any charges the Trustee may make under the Indenture; provided, that the Trustee will not be required to transfer any Bonds during the period established by the Trustee for the selection of such Bonds for redemption or any Bonds that have been selected for redemption pursuant to the Indenture.

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APPENDIX F

FORMS OF OPINION OF BOND COUNSEL
[Closing Date]
Anaheim Housing and Public Improvements Authority
200 South Anaheim Boulevard
Anaheim, California 92805
City of Anaheim
200 South Anaheim Boulevard
Anaheim, California 92805
$___________
Anaheim Housing and Public Improvements Authority
Revenue Refunding Bonds, Series 2026-A
(Water System Refunding)
Ladies and Gentlemen:

We have acted as bond counsel to the Anaheim Housing and Public Improvements Authority, a joint exercise of powers entity established under the Constitution and laws of the State of California (the “Authority”), in connection with the issuance by the Authority of $___________ aggregate principal amount of Anaheim Housing and Public Improvements Authority Revenue Bonds, Series 2026-A (Water System Refunding) (the “Bonds”).

The Bonds are being issued pursuant to Article 4 of Chapter 5 of Division 7 of Title 1 of the California Government Code and an Indenture of Trust, dated as of August 1, 2024 (the “Indenture”), by and among the Authority, the City of Anaheim, California (the “City”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). The Bonds are payable from Project Revenues, as defined in the Indenture, consisting primarily of 2026 Purchase Payments to be made by the City pursuant to an Installment Purchase Agreement, dated as of ________ 1, 2026 (the “Installment Purchase Agreement”), by and between the Authority and the City.

As bond counsel, we have examined copies certified to us as being true and complete copies of the proceedings of the Authority and the City in connection with the issuance of the Bonds. We have also examined such certificates of officers of the Authority and the City and others as we have considered necessary for the purposes of this opinion.

Based upon the foregoing, we are of the opinion that:

1. The Bonds constitute valid and binding limited obligations of the Authority as provided in the Indenture, and are entitled to the benefits of the Indenture. The Bonds are payable from Project Revenues (as such term is defined in the Indenture), which Project Revenues include 2026 Purchase Payments under the Installment Purchase Agreement.

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2. The Indenture has been duly and validly authorized, executed and delivered by the Authority and the City and, assuming the enforceability thereof against the Trustee, constitutes the legally valid and binding obligation of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. The Indenture creates a valid pledge, to secure the payment of principal of and interest on the Bonds, of the Project Revenues and other amounts held by the Trustee in the funds and accounts established pursuant to the Indenture, subject to the provisions of the Indenture permitting the application thereof for other purposes and on the terms and conditions set forth therein.

3. The Installment Purchase Agreement has been duly and validly authorized, executed and delivered by the Authority and the City, and constitutes the legally valid and binding obligation of the Authority and the City, enforceable against the Authority and the City in accordance with its terms. The Installment Purchase Agreement creates a valid pledge, to secure the payment of 2026 Purchase Payments by the City, of Surplus Revenues of the Water System, on the terms and conditions set forth therein.

4. Under existing law, interest on the Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the covenants described below, interest on the Bonds is excluded pursuant to section 103(a) of the Internal Revenue Code of 1986 (the “Code”) from the gross income of the owners thereof for federal income tax purposes. Interest on the Bonds is not an item of tax preference for purposes of the federal alternative minimum tax on individuals.

The Code contains other provisions that could result in tax consequences, upon which we render no opinion, as a result of ownership of the Bonds or the inclusion in certain computations (including, without limitation, those related to the alternative minimum tax on the adjusted financial statement income of certain corporations) of interest that is excluded from gross income.

The Code establishes certain requirements that must be met subsequent to the issuance and delivery of the Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the Bonds to fail to be excluded from the gross income of the owners thereof retroactive to the date of issuance of the Bonds. The Authority and the City have covenanted in the Indenture and the Installment Purchase Agreement not to take any action or omit to take any action which, if taken or omitted, respectively, would adversely affect the exclusion of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes. Except as stated in paragraph 4 above, we express no opinion as to any federal, state or local tax consequences of the ownership or disposition of the Bonds. Furthermore, we express no opinion as to the effect on the exclusion from gross income of interest on the Bonds of any action taken or not taken after the date of this opinion without our approval.

The opinions expressed in paragraphs 1 through 3 above are qualified to the extent the enforceability of the Bonds, the Indenture and the Installment Purchase Agreement may be limited by applicable bankruptcy, insolvency, debt adjustment, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally or as to the availability of any particular remedy. The enforceability of the Bonds, the Indenture and the Installment Purchase Agreement is subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing, to the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law, and to the limitations on legal remedies against municipal corporations and charter cities in the State of California.

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No opinion is expressed herein on the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds.

Our opinions are based on existing law, which is subject to change. Such opinions are further based on our knowledge of facts as of the date hereof. We assume no duty to update or supplement our opinions to reflect any fact or circumstance that may hereafter come to our attention or to reflect any change in any law that may hereafter occur or become effective. Moreover, our opinions are not a guarantee of result and are not binding on the Internal Revenue Service; rather, such opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations and covenants referenced above.

Respectfully submitted,
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Subject to satisfaction of certain conditions and to the occurrence of certain events described under the heading “FORWARD DELIVERY OF THE 2026-B BONDS,” Norton Rose Fulbright US LLP, Bond Counsel to the Authority, expects to be able to render on the Settlement Date its final approving opinion in substantially the following form:
[Settlement Date]
Anaheim Housing and Public Improvements Authority
200 South Anaheim Boulevard
Anaheim, California 92805
City of Anaheim
200 South Anaheim Boulevard
Anaheim, California 92805
$___________
Anaheim Housing and Public Improvements Authority
Revenue Bonds, Series 2026-B
(Water System Refunding) (Forward Delivery)
Ladies and Gentlemen:

Based upon the foregoing, we are of the opinion that:

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No opinion is expressed herein on the accuracy, completeness or sufficiency of the Official Statement or other offering material relating to the Bonds.

Respectfully submitted,
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APPENDIX G

DEBT SERVICE SCHEDULE
The following table indicates the debt service requirements on the outstanding Water System Qualified Obligations of the City and the debt service requirements on the Bonds through the Fiscal Year ending June 30, 2055. See also “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS” and “PLAN OF FINANCE.”
______________________________________
(1)
Totals may not add due to rounding.
(2)
Qualified Obligations debt service excludes the Target Bonds to be refunded with a portion of the proceeds of the 2026 Bonds.

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APPENDIX H

FORM OF DELAYED DELIVERY CONTRACT

Anaheim City CouncilSeptember 22, 2026

Anaheim City Council
September 22, 2026