Cities Index.
Agenda packet, regular meeting, third session

Banning City Council
June 25, 2024

Document
Agenda packet, regular meeting, third session
Meeting
June 25, 2024
Body
Banning City Council
Pages
10
Original file
201.1 MB
Text extracted from the city's file for reading and search. Open the original on d3n9y02raazwpg.cloudfront.net. That file is the official record.

RESOLUTION 2024-109

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING AND ADOPTING THE TWO-YEAR BUDGET FOR THE FISCAL PERIOD JULY 1, 2024 THROUGH JUNE 30, 2025 AND JULY 1, 2025 THROUGH JUNE 30, 2026, ADOPTING

THE FIVE-YEAR CAPITAL IMPROVEMENT PLAN, AND MAKING APPROPRIATIONS TO

MEET EXPENSES APPROVED THEREIN, APPROVING BUDGETARY POLICIES AND

RECOMMENDATIONS
WHEREAS, the Administrative Services Director prepared the two-year budget plan for Fiscal Year 2024-25 and 2025-26 which set forth all of the expected revenue of the City of Banning, and the recommended appropriations to meet the operating and capital expenses for all City of Banning funds; and
WHEREAS, the two-year budget for Fiscal Year 2024-25 and 2025-26 of the City of Banning has been submitted to this Council, and said budget has been considered and, is in form and substance satisfactory to this Council; and
WHEREAS, the City departments may not exceed their appropriations by character of expense, with character of expense being defined as personnel services, services and supplies, capital outlay, debt service and interfund transfers, without the consent of the City Manager; and WHEREAS, the City may transfer appropriations, between departments and within their respective funds, as long as those appropriations do not exceed their fund total unless approved by Council; and
WHEREAS, the City has presented the capital plan to the Planning Commission Committee and requires public improvements, and a capital improvement program (CIP) which allows for the planning, financing, and prioritizing of said improvements; and WHEREAS, the City departments may not hire in excess of the approved number of positions in the job classification as indicated by the budget detail without the consent of the City Council; and
WHEREAS, certain capital projects, programs and commitments have been approved for appropriation in Fiscal Year 2024-2025, the Administrative Services Director shall be authorized to carry over appropriation budgets for these items as approved by the City Manager; and WHEREAS, it is essential that the City of Banning adopt a budget plan establishing the revenues and expenditures for all of its governmental, proprietary and fiduciary funds in accordance with the adopted budget and fiscal policies.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. The Two-Year Budget for the City of Banning, for fiscal period July 1, 2022 through June 30, 2023 and July 1, 2023 through June 30, 2024, as summarized in the fund summary, is hereby approved and adopted in the form on file with the City Clerk City Council approves XYZ Agreement with ABC and authorizes the City Manager to sign said agreement. 1315
Resolution 2024-109

Page 2 of 4 ends

SECTION 2. The Capital Improvement Program (CIP) for the City of Banning for fiscal period July 1, 2024 through June 30, 2029, as summarized in the fund summary and CIP document.

SECTION 3. City Council authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution.

SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 25th day of June 2024.

Alberto Sanchez, Mayor
City of Banning
ATTEST:

Caroline Patton, Administrative City Clerk
City of Banning
APPROVED AS TO FORM:

Serita R. Young, City Attorney
Richards, Watson & Gershon
1316
Resolution 2024-109

Page 3 of 4 ends

CERTIFICATION:

I, Caroline Patton, Administrative City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2024-109, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 25th day of June 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Administrative City Clerk
City of Banning, California
1317
Resolution 2024-109

Page 4 of 4 ends

EXHIBIT A
Recommended Budget FYs 2024-25 and 2025-26
1318
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
001 - GENERAL FUND Revenue CHARGES FOR SERVICES 785,631.00 793,533.00 CONTRIBUTIONS 280,400.00 280,400.00
FINES AND FORFEITURES 261,830.00 261,830.00
INTERGOVERNMENTAL 1,151,924.00 638,668.00
LICENSES AND PERMITS 7,047,655.00 7,017,429.00
MISCELLANEOUS INCOME 2,430,315.00 2,435,315.00
OTHER INCOME 350,000.00 125,000.00
SALES AND SERVICE CHARGES 1,224,480.00 1,269,480.00
TAXES 17,645,492.00 18,592,744.00
TRANSFERS IN 4,029,280.00 4,050,280.00
USE OF MONEY AND PROPERTY 307,600.00 307,600.00
Revenue Total 35,514,607.00 35,772,279.00
Expense CAPITAL EXPENDITURES (1,646,373.00) (941,000.00) DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (541,319.00) (564,382.00)
SALARIES & BENEFITS (19,653,589.00) (20,255,880.00)
SUPPLIES & SERVICES (9,820,393.00) (10,155,885.00)
TRANSFERS OUT (3,776,516.00) (3,776,516.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (35,438,190.00) (35,693,663.00)
001 - GENERAL FUND Total 76,417.00 78,616.00
100 - SPECIAL REVENUE FUNDS Revenue CHARGES FOR SERVICES 4.00 4.00 CONTRIBUTIONS 12,050.00 12,050.00
INTERGOVERNMENTAL 8,854,913.00 23,316,676.00
MISCELLANEOUS INCOME 21,059.00 21,359.00
TAXES 1,123,543.00 1,143,023.00
TRANSFERS IN 947,500.00 947,500.00
USE OF MONEY AND PROPERTY 61,230.00 60,430.00
Revenue Total 11,020,299.00 25,501,042.00
Expense CAPITAL EXPENDITURES (7,511,692.00) (23,027,815.00) DEBT SERVICE 0.00 0.00
1319
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
100 - SPECIAL REVENUE FUNDS Expense REPAIRS & MAINTENANCE (73,168.00) (67,168.00) SALARIES & BENEFITS (756,599.00) (788,085.00)
STREET LIGHTING (400,000.00) (450,000.00)
SUPPLIES & SERVICES (539,178.00) (546,146.00)
TRANSFERS OUT (3,640,375.00) (1,813,990.00)
Expense Total (12,921,012.00) (26,693,204.00)
100 - SPECIAL REVENUE FUNDS Total (1,900,713.00) (1,192,162.00) 300 - FIDUCIARY FUNDS Revenue TAXES 199,367.00 199,367.00 USE OF MONEY AND PROPERTY 2,300.00 1,800.00
Revenue Total 201,667.00 201,167.00
Expense DEBT SERVICE (188,142.00) (188,142.00)
REPAIRS & MAINTENANCE 0.00 0.00
SUPPLIES & SERVICES (4,168.00) (4,168.00)
TRANSFERS OUT (2,150.00) (2,150.00)
Expense Total (194,460.00) (194,460.00)
300 - FIDUCIARY FUNDS Total 7,207.00 6,707.00
400 - CAPITAL IMPROVEMENT FUNDS Revenue INTERGOVERNMENTAL 196,926.00 0.00 MISCELLANEOUS INCOME 337,340.00 337,340.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 77,000.00 77,000.00
Revenue Total 611,266.00 414,340.00
Expense CAPITAL EXPENDITURES (972,777.00) (725,851.00)
SUPPLIES & SERVICES (85,926.00) (90,926.00)
TRANSFERS OUT (162,445.00) (262,445.00)
Expense Total (1,221,148.00) (1,079,222.00)
400 - CAPITAL IMPROVEMENT FUNDS Total (609,882.00) (664,882.00) 600 - AIRPORT FUND Revenue INTERGOVERNMENTAL 0.00 0.00
MISCELLANEOUS INCOME 0.00 0.00
SALES AND SERVICE CHARGES 155,600.00 155,600.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 155,600.00 155,600.00
1320
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
600 - AIRPORT FUND Expense REPAIRS & MAINTENANCE (18,215.00) (18,215.00) SALARIES & BENEFITS (115,001.00) (115,001.00)
SUPPLIES & SERVICES (90,647.00) (90,647.00)
TRANSFERS OUT (81,884.00) (81,884.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (305,747.00) (305,747.00)
600 - AIRPORT FUND Total (150,147.00) (150,147.00)
610 - TRANSIT FUND Revenue CHARGES FOR SERVICES 17,380.00 0.00 INTERGOVERNMENTAL 8,944,761.00 4,192,449.00
MISCELLANEOUS INCOME 835.00 21,026.00
OTHER INCOME 4,565,000.00 6,061,216.00
SALES AND SERVICE CHARGES 28,081.00 177,500.00
TRANSFERS IN 60,000.00 60,000.00
USE OF MONEY AND PROPERTY 8,000.00 8,000.00
Revenue Total 13,624,057.00 10,520,191.00
Expense CAPITAL EXPENDITURES (9,183,918.00) (1,768,918.00) REPAIRS & MAINTENANCE (15,000.00) (17,500.00)
SALARIES & BENEFITS (1,586,691.00) (1,593,402.00)
SUPPLIES & SERVICES (415,808.00) (215,721.00)
TRANSFERS OUT (1,924,101.00) (1,924,101.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (13,125,518.00) (5,519,642.00)
610 - TRANSIT FUND Total 498,539.00 5,000,549.00
660 - WATER ENTERPRISE Revenue INTERGOVERNMENTAL 125,000.00 125,000.00 MISCELLANEOUS INCOME 2,153,779.00 567,500.00
OTHER INCOME 0.00 0.00
SALES AND SERVICE CHARGES 13,092,500.00 13,592,500.00
TRANSFERS IN 3,529,136.00 1,991,263.00
USE OF MONEY AND PROPERTY 428,000.00 428,000.00
Revenue Total 19,328,415.00 16,704,263.00
1321
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
660 - WATER ENTERPRISE Expense CAPITAL EXPENDITURES (14,919,749.00) (6,306,294.00) DEBT SERVICE (1,912,282.00) (1,912,282.00)
PURCHASED POWER (1,250,000.00) (1,250,000.00)
REPAIRS & MAINTENANCE (114,271.00) (134,271.00)
SALARIES & BENEFITS (3,188,855.00) (3,375,085.00)
SUPPLIES & SERVICES (3,289,737.00) (3,257,923.00)
TRANSFERS OUT (5,172,773.00) (5,172,773.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (29,847,667.00) (21,408,628.00)
660 - WATER ENTERPRISE Total (10,519,252.00) (4,704,365.00) 670 - ELECTRIC ENTERPRISE Revenue INTERGOVERNMENTAL 13,515.00 13,515.00 MISCELLANEOUS INCOME 4,552,457.00 4,802,457.00
OTHER INCOME 0.00 0.00
SALES AND SERVICE CHARGES 33,331,577.00 33,401,577.00
TRANSFERS IN 2,776,619.00 2,776,619.00
USE OF MONEY AND PROPERTY 155,000.00 155,000.00
Revenue Total 40,829,168.00 41,149,168.00
Expense CAPITAL EXPENDITURES (1,140,072.00) (1,130,000.00) DEBT SERVICE (2,390,330.00) (2,390,330.00)
PURCHASED POWER (22,362,000.00) (23,214,250.00)
REPAIRS & MAINTENANCE (220,500.00) (487,334.00)
SALARIES & BENEFITS (7,276,376.00) (7,346,299.00)
STREET LIGHTING (194,287.00) (194,287.00)
SUPPLIES & SERVICES (2,435,910.00) (1,727,905.00)
TRANSFERS OUT (6,009,823.00) (6,009,823.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (42,029,298.00) (42,500,228.00)
670 - ELECTRIC ENTERPRISE Total (1,200,130.00) (1,351,060.00) 680 - WASTEWATER ENTERPRISE Revenue INTERGOVERNMENTAL 1,500,000.00 0.00 MISCELLANEOUS INCOME 2,654,457.00 226,650.00
1322
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
680 - WASTEWATER ENTERPRISE Revenue OTHER INCOME 0.00 0.00 SALES AND SERVICE CHARGES 8,350,000.00 8,680,000.00
TRANSFERS IN 290,920.00 290,920.00
USE OF MONEY AND PROPERTY 349,000.00 349,000.00
Revenue Total 13,144,377.00 9,546,570.00
Expense CAPITAL EXPENDITURES (9,610,000.00) (15,000.00) DEBT SERVICE (285,807.00) (285,807.00)
REPAIRS & MAINTENANCE (142,522.00) (145,022.00)
SALARIES & BENEFITS (1,484,779.00) (1,589,218.00)
SUPPLIES & SERVICES (1,851,423.00) (1,849,423.00)
TRANSFERS OUT (1,326,507.00) (1,326,507.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (14,701,038.00) (5,210,977.00)
680 - WASTEWATER ENTERPRISE Total (1,556,661.00) 4,335,593.00 700 - INTERNAL SERVICE FUNDS Revenue INTERGOVERNMENTAL 200,000.00 600,000.00 MISCELLANEOUS INCOME 103,943.00 13,985.00
SALES AND SERVICE CHARGES 10,929,067.00 10,819,067.00
TRANSFERS IN 2,637,078.00 2,427,566.00
USE OF MONEY AND PROPERTY 8,000.00 8,000.00
Revenue Total 13,878,088.00 13,868,618.00
Expense CAPITAL EXPENDITURES (2,579,519.00) (2,199,519.00) DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (881,178.00) (917,478.00)
SALARIES & BENEFITS (3,977,576.00) (4,099,292.00)
SUPPLIES & SERVICES (9,393,172.00) (9,331,341.00)
TRANSFERS OUT (1,824,588.00) (1,824,588.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (18,656,033.00) (18,372,218.00)
700 - INTERNAL SERVICE FUNDS Total (4,777,945.00) (4,503,600.00) 800 - SUCCESSOR AGENCY FUNDS Revenue CONTRIBUTIONS 2,191,282.00 2,191,282.00 1323
Fund Type Total
Fund Type Classification Account Category FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
800 - SUCCESSOR AGENCY FUNDS Revenue TAXES 2,838,275.00 2,968,802.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 5,029,557.00 5,160,084.00
Expense DEBT SERVICE (2,275,382.00) (2,275,382.00)
SUPPLIES & SERVICES (1,750.00) (1,750.00)
TRANSFERS OUT (2,550,842.00) (2,550,842.00)
OTHER 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (4,827,974.00) (4,827,974.00)
800 - SUCCESSOR AGENCY FUNDS Total 201,583.00 332,110.00 Grand Total (19,930,984.00) (2,812,641.00)
1324
Recommended Budget Net Income
Fund Type Funds Fund Description FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
001 - GENERAL FUND 001 GENERAL FUND (400,303.00) (598,104.00) 002 DEVELOPER DEPOSIT FUND 236,317.00 436,317.00
005 ADMIN ALLOWANCE FUND 240,303.00 240,303.00
300 CITY ADMINISTRATION DEBT SVC FUND 100.00 100.00
690 REFUSE FUND 0.00 0.00
001 - GENERAL FUND Total 76,417.00 78,616.00
100 - SPECIAL REVENUE FUNDS 100 GAS TAX STREET FUND (2,048,572.00) (3,240,506.00) 101 MEASURE A STREET FUND 759,088.00 768,568.00
102 RMRA (SB1) GAS TAX FUND (86,280.00) (102,024.00)
110 CDBG FUND (88,005.00) (3,005.00)
111 LANDSCAPE MAINTENANCE FUND (134,504.00) (143,254.00) 132 AIR QUALITY IMPROVEMENT FUND 45,655.00 45,655.00
140 ASSET FORFEIT-POLICE FUND 30.00 30.00
148 SUPPLEMENTAL LAW ENFORCEMENT FUND (14,884.00) (14,884.00) 150 STATE PARK BOND ACT FUND (29.00) (29.00)
200 SPECIAL DONATION FUND (16,777.00) (13,663.00)
201 SENIOR CENTER ACTIVITIES FUND 2,717.00 3,717.00
202 ANIMAL CONTROL RESERVE FUND (29.00) (29.00)
203 POLICE VOLUNTEER FUND 613.00 613.00
221 CSCDA-CFD 2020-02 ATWELL 0.00 0.00
222 ARPA-AMERICA RESCUE PLAN 396,695.00 2,223,080.00
810 SUCCESSOR AGENCY LOW/MOD FUND (HOUSING AGENCY) (716,431.00) (716,431.00) 100 - SPECIAL REVENUE FUNDS Total (1,900,713.00) (1,192,162.00) 300 - FIDUCIARY FUNDS 360 SUN LAKES CFD #86-1 FUND 600.00 600.00 365 WILSON ST #91-1 ASSMT DBT FUND 1,200.00 1,200.00
370 AREA POLICE OCMPUTER FUND 0.00 0.00
375 FAIR OAKS AD #2004-1 DEBT FUND 4,907.00 4,907.00
376 CAMEO HOMES FUND 500.00 0.00
300 - FIDUCIARY FUNDS Total 7,207.00 6,707.00
400 - CAPITAL IMPROVEMENT FUNDS 400 POLICE FACILITIES DVLP FUND 41,275.00 41,275.00 410 FIRE FACILITIES DEVELOPMENT FUND 95,794.00 95,794.00 420 TRAFFIC CONTROL FUND (368,694.00) (368,694.00)
1325
Recommended Budget Net Income
Fund Type Funds Fund Description FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
400 - CAPITAL IMPROVEMENT FUNDS 430 GENERAL FACILITIES FUND (139,700.00) (139,700.00) 444 WILSON MEDIAN FUND 5,863.00 5,863.00
451 PARK DEVELOPMENT FUND (200,940.00) (255,940.00)
470 CAPITAL IMPROVEMENT FUND (88.00) (88.00)
840 BEA CAPITAL PROJECTS FUND (43,346.00) (43,346.00)
841 BEA LOW/MOD CAPITAL PROJECTS FUND (46.00) (46.00)
400 - CAPITAL IMPROVEMENT FUNDS Total (609,882.00) (664,882.00) 600 - AIRPORT FUND 600 AIRPORT FUND (150,147.00) (150,147.00) 600 - AIRPORT FUND Total (150,147.00) (150,147.00)
610 - TRANSIT FUND 610 TRANSIT FUND 498,539.00 5,000,549.00 610 - TRANSIT FUND Total 498,539.00 5,000,549.00
660 - WATER ENTERPRISE 660 WATER FUND (5,519,657.00) (5,095,760.00) 661 WATER CAPITAL FACILITIES FUND (5,934,755.00) 295,014.00 662 IRRIGATION WATER FUND 20,000.00 20,000.00
663 BUA WATER CAPITAL PROJECT FUND 838,779.00 0.00
669 BUA WATER DEBT SERVICE FUND 76,381.00 76,381.00
660 - WATER ENTERPRISE Total (10,519,252.00) (4,704,365.00) 670 - ELECTRIC ENTERPRISE 670 ELECTRIC FUND (568,997.00) (1,434,749.00) 672 RATE STABILITY FUND 100,000.00 100,000.00
673 ELECTRIC IMPROVEMENT FUND (690,000.00) (30,000.00)
674 ELECTRIC REVENUE BOND PROJECT FUND (72.00) 0.00
675 PUBLIC BENEFIT FUND (76,250.00) (21,500.00)
678 ELECTRIC REVENUE BOND DEBT SERVICE FUND 35,189.00 35,189.00 670 - ELECTRIC ENTERPRISE Total (1,200,130.00) (1,351,060.00) 680 - WASTEWATER ENTERPRISE 680 WASTEWATER FUND 3,119,112.00 3,429,173.00 681 WASTEWATER CAPITAL FACILITY FUND (4,683,350.00) 391,650.00 682 WASTEWATER TERTIARY FUND (2,510,000.00) 500,000.00
683 BUA WASTEWATER CAPITAL PROJECT FUND 2,502,807.00 0.00 685 STATE REVOLVING LOAN FUND 8,000.00 8,000.00
689 BUA WASTEWATER DEBT SERVICE FUND 6,770.00 6,770.00
680 - WASTEWATER ENTERPRISE Total (1,556,661.00) 4,335,593.00 700 - INTERNAL SERVICE FUNDS 700 RISK MANAGEMENT FUND (2,297,339.00) (2,373,110.00) 1326
Recommended Budget Net Income
Fund Type Funds Fund Description FY 2024-25
Recommended
Budget
Net Income
FY 2025-26
Recommended
Budget
Net Income
700 - INTERNAL SERVICE FUNDS 702 FLEET MAINTENANCE FUND 179,213.00 113,409.00 703 INFORMATION SYSTEMS SERVICE FUND (875,667.00) (1,083,679.00) 704 BUILDING MAINTENANCE (1,857,935.00) (1,244,844.00)
705 SUPPORT SERVICES 152,716.00 171,094.00
761 UTILITY BILLING ADMINISTRATION FUND (78,933.00) (86,470.00) 700 - INTERNAL SERVICE FUNDS Total (4,777,945.00) (4,503,600.00) 800 - SUCCESSOR AGENCY FUNDS 805 REDEVELOPMENT OBLIGATION RETIREMENT FUND 292,962.00 423,489.00 830 SUCCESSOR AGENCY DEBT SERVICE FUND (86,247.00) (86,247.00) 850 SUCCESSOR AGENCY ADMIN FUND (5,132.00) (5,132.00)
800 - SUCCESSOR AGENCY FUNDS Total 201,583.00 332,110.00 Grand Total (19,930,984.00) (2,812,641.00)
1327
Fund Budgets
Sum of FY 2024-25 Recommended Budget Sum of FY 2025-26 Recommended Budget Total Sum of FY 2024-25
Recommended Budget
Total Sum of FY 2025-26
Recommended Budget
Fund Type Funds Fund Description Revenue Expense Revenue Expense 001 - GENERAL FUND 001 GENERAL FUND 34,958,643.00 (35,358,946.00) 35,016,315.00 (35,614,419.00) (400,303.00) (598,104.00) 002 DEVELOPER DEPOSIT FUND 305,864.00 (69,547.00) 505,864.00 (69,547.00) 236,317.00 436,317.00 005 ADMIN ALLOWANCE FUND 250,000.00 (9,697.00) 250,000.00 (9,697.00) 240,303.00 240,303.00 300 CITY ADMINISTRATION DEBT SVC FUND 100.00 100.00 100.00 100.00 690 REFUSE FUND 0.00 0.00 0.00 0.00 0.00 0.00
001 - GENERAL FUND Total 35,514,607.00 (35,438,190.00) 35,772,279.00 (35,693,663.00) 76,417.00 78,616.00 100 - SPECIAL REVENUE FUNDS 100 GAS TAX STREET FUND 5,916,577.00 (7,965,149.00) 20,671,101.00 (23,911,607.00) (2,048,572.00) (3,240,506.00) 101 MEASURE A STREET FUND 1,276,000.00 (516,912.00) 1,295,480.00 (526,912.00) 759,088.00 768,568.00 102 RMRA (SB1) GAS TAX FUND 799,761.00 (886,041.00) 840,000.00 (942,024.00) (86,280.00) (102,024.00) 110 CDBG FUND 539,000.00 (627,005.00) 206,000.00 (209,005.00) (88,005.00) (3,005.00) 111 LANDSCAPE MAINTENANCE FUND 150,843.00 (285,347.00) 150,843.00 (294,097.00) (134,504.00) (143,254.00) 132 AIR QUALITY IMPROVEMENT FUND 49,000.00 (3,345.00) 49,000.00 (3,345.00) 45,655.00 45,655.00 140 ASSET FORFEIT-POLICE FUND 30.00 0.00 30.00 0.00 30.00 30.00 148 SUPPLEMENTAL LAW ENFORCEMENT FUND 7,000.00 (21,884.00) 7,000.00 (21,884.00) (14,884.00) (14,884.00) 150 STATE PARK BOND ACT FUND (29.00) (29.00) (29.00) (29.00) 200 SPECIAL DONATION FUND 5,550.00 (22,327.00) 5,550.00 (19,213.00) (16,777.00) (13,663.00) 201 SENIOR CENTER ACTIVITIES FUND 14,954.00 (12,237.00) 14,454.00 (10,737.00) 2,717.00 3,717.00 202 ANIMAL CONTROL RESERVE FUND (29.00) (29.00) (29.00) (29.00) 203 POLICE VOLUNTEER FUND 1,600.00 (987.00) 1,600.00 (987.00) 613.00 613.00 221 CSCDA-CFD 2020-02 ATWELL 0.00 0.00 0.00 0.00
222 ARPA-AMERICA RESCUE PLAN 2,236,984.00 (1,840,289.00) 2,236,984.00 (13,904.00) 396,695.00 2,223,080.00 810 SUCCESSOR AGENCY LOW/MOD FUND (HOUSING AGENCY) 23,000.00 (739,431.00) 23,000.00 (739,431.00) (716,431.00) (716,431.00) 100 - SPECIAL REVENUE FUNDS Total 11,020,299.00 (12,921,012.00) 25,501,042.00 (26,693,204.00) (1,900,713.00) (1,192,162.00) 300 - FIDUCIARY FUNDS 360 SUN LAKES CFD #86-1 FUND 600.00 600.00 600.00 600.00 365 WILSON ST #91-1 ASSMT DBT FUND 1,200.00 1,200.00 1,200.00 1,200.00 370 AREA POLICE OCMPUTER FUND 0.00 0.00 0.00 0.00 0.00 0.00 375 FAIR OAKS AD #2004-1 DEBT FUND 199,367.00 (194,460.00) 199,367.00 (194,460.00) 4,907.00 4,907.00 376 CAMEO HOMES FUND 500.00 0.00 0.00 0.00 500.00 0.00
300 - FIDUCIARY FUNDS Total 201,667.00 (194,460.00) 201,167.00 (194,460.00) 7,207.00 6,707.00 400 - CAPITAL IMPROVEMENT FUNDS 400 POLICE FACILITIES DVLP FUND 41,469.00 (194.00) 41,469.00 (194.00) 41,275.00 41,275.00 410 FIRE FACILITIES DEVELOPMENT FUND 96,005.00 (211.00) 96,005.00 (211.00) 95,794.00 95,794.00 420 TRAFFIC CONTROL FUND 132,001.00 (500,695.00) 132,001.00 (500,695.00) (368,694.00) (368,694.00) 430 GENERAL FACILITIES FUND 28,000.00 (167,700.00) 28,000.00 (167,700.00) (139,700.00) (139,700.00) 444 WILSON MEDIAN FUND 6,000.00 (137.00) 6,000.00 (137.00) 5,863.00 5,863.00 451 PARK DEVELOPMENT FUND 307,791.00 (508,731.00) 110,865.00 (366,805.00) (200,940.00) (255,940.00) 470 CAPITAL IMPROVEMENT FUND 0.00 (88.00) 0.00 (88.00) (88.00) (88.00) 840 BEA CAPITAL PROJECTS FUND 0.00 (43,346.00) 0.00 (43,346.00) (43,346.00) (43,346.00) 841 BEA LOW/MOD CAPITAL PROJECTS FUND (46.00) (46.00) (46.00) (46.00) 400 - CAPITAL IMPROVEMENT FUNDS Total 611,266.00 (1,221,148.00) 414,340.00 (1,079,222.00) (609,882.00) (664,882.00) 600 - AIRPORT FUND 600 AIRPORT FUND 155,600.00 (305,747.00) 155,600.00 (305,747.00) (150,147.00) (150,147.00) 600 - AIRPORT FUND Total 155,600.00 (305,747.00) 155,600.00 (305,747.00) (150,147.00) (150,147.00) 610 - TRANSIT FUND 610 TRANSIT FUND 13,624,057.00 (13,125,518.00) 10,520,191.00 (5,519,642.00) 498,539.00 5,000,549.00 610 - TRANSIT FUND Total 13,624,057.00 (13,125,518.00) 10,520,191.00 (5,519,642.00) 498,539.00 5,000,549.00 1328
Fund Budgets
Sum of FY 2024-25 Recommended Budget Sum of FY 2025-26 Recommended Budget Total Sum of FY 2024-25
Recommended Budget
Total Sum of FY 2025-26
Recommended Budget
Fund Type Funds Fund Description Revenue Expense Revenue Expense 660 - WATER ENTERPRISE 660 WATER FUND 15,860,373.00 (21,380,030.00) 14,075,000.00 (19,170,760.00) (5,519,657.00) (5,095,760.00) 661 WATER CAPITAL FACILITIES FUND 618,000.00 (6,552,755.00) 618,000.00 (322,986.00) (5,934,755.00) 295,014.00 662 IRRIGATION WATER FUND 20,000.00 20,000.00 20,000.00 20,000.00 663 BUA WATER CAPITAL PROJECT FUND 838,779.00 0.00 0.00 0.00 838,779.00 0.00 669 BUA WATER DEBT SERVICE FUND 1,991,263.00 (1,914,882.00) 1,991,263.00 (1,914,882.00) 76,381.00 76,381.00 660 - WATER ENTERPRISE Total 19,328,415.00 (29,847,667.00) 16,704,263.00 (21,408,628.00) (10,519,252.00) (4,704,365.00) 670 - ELECTRIC ENTERPRISE 670 ELECTRIC FUND 36,777,549.00 (37,346,546.00) 36,827,549.00 (38,262,298.00) (568,997.00) (1,434,749.00) 672 RATE STABILITY FUND 100,000.00 100,000.00 100,000.00 100,000.00 673 ELECTRIC IMPROVEMENT FUND 750,000.00 (1,440,000.00) 1,000,000.00 (1,030,000.00) (690,000.00) (30,000.00) 674 ELECTRIC REVENUE BOND PROJECT FUND 0.00 (72.00) 0.00 0.00 (72.00) 0.00 675 PUBLIC BENEFIT FUND 775,000.00 (851,250.00) 795,000.00 (816,500.00) (76,250.00) (21,500.00) 678 ELECTRIC REVENUE BOND DEBT SERVICE FUND 2,426,619.00 (2,391,430.00) 2,426,619.00 (2,391,430.00) 35,189.00 35,189.00 670 - ELECTRIC ENTERPRISE Total 40,829,168.00 (42,029,298.00) 41,149,168.00 (42,500,228.00) (1,200,130.00) (1,351,060.00) 680 - WASTEWATER ENTERPRISE 680 WASTEWATER FUND 9,536,000.00 (6,416,888.00) 8,356,000.00 (4,926,827.00) 3,119,112.00 3,429,173.00 681 WASTEWATER CAPITAL FACILITY FUND 316,650.00 (5,000,000.00) 391,650.00 0.00 (4,683,350.00) 391,650.00 682 WASTEWATER TERTIARY FUND 490,000.00 (3,000,000.00) 500,000.00 0.00 (2,510,000.00) 500,000.00 683 BUA WASTEWATER CAPITAL PROJECT FUND 2,502,807.00 0.00 0.00 0.00 2,502,807.00 0.00 685 STATE REVOLVING LOAN FUND 8,000.00 8,000.00 8,000.00 8,000.00 689 BUA WASTEWATER DEBT SERVICE FUND 290,920.00 (284,150.00) 290,920.00 (284,150.00) 6,770.00 6,770.00 680 - WASTEWATER ENTERPRISE Total 13,144,377.00 (14,701,038.00) 9,546,570.00 (5,210,977.00) (1,556,661.00) 4,335,593.00 700 - INTERNAL SERVICE FUNDS 700 RISK MANAGEMENT FUND 4,088,365.00 (6,385,704.00) 4,088,365.00 (6,461,475.00) (2,297,339.00) (2,373,110.00) 702 FLEET MAINTENANCE FUND 2,553,290.00 (2,374,077.00) 2,353,332.00 (2,239,923.00) 179,213.00 113,409.00 703 INFORMATION SYSTEMS SERVICE FUND 1,665,714.00 (2,541,381.00) 1,456,202.00 (2,539,881.00) (875,667.00) (1,083,679.00) 704 BUILDING MAINTENANCE 1,073,482.00 (2,931,417.00) 1,473,482.00 (2,718,326.00) (1,857,935.00) (1,244,844.00) 705 SUPPORT SERVICES 1,554,084.00 (1,401,368.00) 1,554,084.00 (1,382,990.00) 152,716.00 171,094.00 761 UTILITY BILLING ADMINISTRATION FUND 2,943,153.00 (3,022,086.00) 2,943,153.00 (3,029,623.00) (78,933.00) (86,470.00) 700 - INTERNAL SERVICE FUNDS Total 13,878,088.00 (18,656,033.00) 13,868,618.00 (18,372,218.00) (4,777,945.00) (4,503,600.00) 800 - SUCCESSOR AGENCY FUNDS 805 REDEVELOPMENT OBLIGATION RETIREMENT FUND 2,838,275.00 (2,545,313.00) 2,968,802.00 (2,545,313.00) 292,962.00 423,489.00 830 SUCCESSOR AGENCY DEBT SERVICE FUND 2,191,282.00 (2,277,529.00) 2,191,282.00 (2,277,529.00) (86,247.00) (86,247.00) 850 SUCCESSOR AGENCY ADMIN FUND 0.00 (5,132.00) 0.00 (5,132.00) (5,132.00) (5,132.00) 800 - SUCCESSOR AGENCY FUNDS Total 5,029,557.00 (4,827,974.00) 5,160,084.00 (4,827,974.00) 201,583.00 332,110.00 Grand Total 153,337,101.00 (173,268,085.00) 158,993,322.00 (161,805,963.00) (19,930,984.00) (2,812,641.00) 1329
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
001 - GENERAL FUND 001 GENERAL FUND Revenue CHARGES FOR SERVICES 785,631.00 793,533.00 CONTRIBUTIONS 30,400.00 30,400.00
FINES AND FORFEITURES 261,830.00 261,830.00
INTERGOVERNMENTAL 1,151,924.00 638,668.00
LICENSES AND PERMITS 7,041,791.00 7,011,565.00
MISCELLANEOUS INCOME 2,130,315.00 1,935,315.00
OTHER INCOME 350,000.00 125,000.00
SALES AND SERVICE CHARGES 1,224,480.00 1,269,480.00
TAXES 17,645,492.00 18,592,744.00
TRANSFERS IN 4,029,280.00 4,050,280.00
USE OF MONEY AND PROPERTY 307,500.00 307,500.00
Revenue Total 34,958,643.00 35,016,315.00
Expense CAPITAL EXPENDITURES (1,646,373.00) (941,000.00) DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (541,319.00) (564,382.00)
SALARIES & BENEFITS (19,653,589.00) (20,255,880.00)
SUPPLIES & SERVICES (9,754,528.00) (10,090,020.00)
TRANSFERS OUT (3,763,137.00) (3,763,137.00)
Expense Total (35,358,946.00) (35,614,419.00)
001 Total (400,303.00) (598,104.00)
002 DEVELOPER DEPOSIT FUND Revenue CHARGES FOR SERVICES 0.00 0.00 LICENSES AND PERMITS 5,864.00 5,864.00
MISCELLANEOUS INCOME 300,000.00 500,000.00
Revenue Total 305,864.00 505,864.00
Expense SUPPLIES & SERVICES (56,930.00) (56,930.00)
TRANSFERS OUT (12,617.00) (12,617.00)
Expense Total (69,547.00) (69,547.00)
002 Total 236,317.00 436,317.00
005 ADMIN ALLOWANCE FUND Revenue CONTRIBUTIONS 250,000.00 250,000.00 Revenue Total 250,000.00 250,000.00
Expense SUPPLIES & SERVICES (8,935.00) (8,935.00)
TRANSFERS OUT (762.00) (762.00)
Expense Total (9,697.00) (9,697.00)
005 Total 240,303.00 240,303.00
300 CITY ADMINISTRATION DEBT SVC FUND Revenue USE OF MONEY AND PROPERTY 100.00 100.00 Revenue Total 100.00 100.00
300 Total 100.00 100.00
1330
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
001 - GENERAL FUND 690 REFUSE FUND Revenue INTERGOVERNMENTAL 0.00 0.00 MISCELLANEOUS INCOME 0.00 0.00
SALES AND SERVICE CHARGES 0.00 0.00
TAXES 0.00 0.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 0.00 0.00
Expense CAPITAL EXPENDITURES 0.00 0.00
REPAIRS & MAINTENANCE 0.00 0.00
SALARIES & BENEFITS 0.00 0.00
SUPPLIES & SERVICES 0.00 0.00
TRANSFERS OUT 0.00 0.00
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total 0.00 0.00
690 Total 0.00 0.00
001 - GENERAL FUND Total 76,417.00 78,616.00
100 - SPECIAL REVENUE FUNDS 100 GAS TAX STREET FUND Revenue INTERGOVERNMENTAL 4,957,168.00 19,711,692.00 MISCELLANEOUS INCOME 13,409.00 13,409.00
TRANSFERS IN 946,000.00 946,000.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 5,916,577.00 20,671,101.00
Expense CAPITAL EXPENDITURES (5,423,175.00) (21,291,315.00) DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (45,000.00) (36,500.00)
SALARIES & BENEFITS (731,159.00) (762,645.00)
STREET LIGHTING (400,000.00) (450,000.00)
SUPPLIES & SERVICES (245,770.00) (251,102.00)
TRANSFERS OUT (1,120,045.00) (1,120,045.00)
Expense Total (7,965,149.00) (23,911,607.00)
100 Total (2,048,572.00) (3,240,506.00)
101 MEASURE A STREET FUND Revenue INTERGOVERNMENTAL 280,000.00 280,000.00 TAXES 974,000.00 993,480.00
USE OF MONEY AND PROPERTY 22,000.00 22,000.00
Revenue Total 1,276,000.00 1,295,480.00
Expense CAPITAL EXPENDITURES (500,000.00) (510,000.00)
TRANSFERS OUT (16,912.00) (16,912.00)
1331
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
100 - SPECIAL REVENUE FUNDS 101 MEASURE A STREET FUND Expense Total (516,912.00) (526,912.00) 101 Total 759,088.00 768,568.00
102 RMRA (SB1) GAS TAX FUND Revenue INTERGOVERNMENTAL 799,761.00 840,000.00 Revenue Total 799,761.00 840,000.00
Expense CAPITAL EXPENDITURES (879,323.00) (935,306.00)
TRANSFERS OUT (6,718.00) (6,718.00)
Expense Total (886,041.00) (942,024.00)
102 Total (86,280.00) (102,024.00)
110 CDBG FUND Revenue INTERGOVERNMENTAL 539,000.00 206,000.00 MISCELLANEOUS INCOME 0.00 0.00
Revenue Total 539,000.00 206,000.00
Expense CAPITAL EXPENDITURES (624,000.00) (206,000.00)
SUPPLIES & SERVICES 0.00 0.00
TRANSFERS OUT (3,005.00) (3,005.00)
Expense Total (627,005.00) (209,005.00)
110 Total (88,005.00) (3,005.00)
111 LANDSCAPE MAINTENANCE FUND Revenue MISCELLANEOUS INCOME 0.00 0.00 TAXES 149,543.00 149,543.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 1,300.00 1,300.00
Revenue Total 150,843.00 150,843.00
Expense REPAIRS & MAINTENANCE (10,000.00) (12,500.00)
SALARIES & BENEFITS (25,440.00) (25,440.00)
SUPPLIES & SERVICES (225,287.00) (231,537.00)
TRANSFERS OUT (24,620.00) (24,620.00)
Expense Total (285,347.00) (294,097.00)
111 Total (134,504.00) (143,254.00)
132 AIR QUALITY IMPROVEMENT FUND Revenue INTERGOVERNMENTAL 42,000.00 42,000.00 MISCELLANEOUS INCOME 0.00 0.00
USE OF MONEY AND PROPERTY 7,000.00 7,000.00
Revenue Total 49,000.00 49,000.00
Expense CAPITAL EXPENDITURES 0.00 0.00
SUPPLIES & SERVICES (3,000.00) (3,000.00)
TRANSFERS OUT (345.00) (345.00)
Expense Total (3,345.00) (3,345.00)
132 Total 45,655.00 45,655.00
140 ASSET FORFEIT-POLICE FUND Revenue USE OF MONEY AND PROPERTY 30.00 30.00 1332
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
100 - SPECIAL REVENUE FUNDS 140 ASSET FORFEIT-POLICE FUND Revenue Total 30.00 30.00 Expense TRANSFERS OUT 0.00 0.00
Expense Total 0.00 0.00
140 Total 30.00 30.00
148 SUPPLEMENTAL LAW ENFORCEMENT FUND Revenue INTERGOVERNMENTAL 0.00 0.00 USE OF MONEY AND PROPERTY 7,000.00 7,000.00
Revenue Total 7,000.00 7,000.00
Expense CAPITAL EXPENDITURES 0.00 0.00
REPAIRS & MAINTENANCE (18,168.00) (18,168.00)
SUPPLIES & SERVICES (3,716.00) (3,716.00)
Expense Total (21,884.00) (21,884.00)
148 Total (14,884.00) (14,884.00)
150 STATE PARK BOND ACT FUND Expense TRANSFERS OUT (29.00) (29.00) Expense Total (29.00) (29.00)
150 Total (29.00) (29.00)
200 SPECIAL DONATION FUND Revenue CONTRIBUTIONS 5,550.00 5,550.00 MISCELLANEOUS INCOME 0.00 0.00
Revenue Total 5,550.00 5,550.00
Expense SUPPLIES & SERVICES (21,021.00) (17,907.00)
TRANSFERS OUT (1,306.00) (1,306.00)
Expense Total (22,327.00) (19,213.00)
200 Total (16,777.00) (13,663.00)
201 SENIOR CENTER ACTIVITIES FUND Revenue CHARGES FOR SERVICES 4.00 4.00 CONTRIBUTIONS 6,500.00 6,500.00
MISCELLANEOUS INCOME 7,650.00 7,950.00
USE OF MONEY AND PROPERTY 800.00 0.00
Revenue Total 14,954.00 14,454.00
Expense SUPPLIES & SERVICES (11,250.00) (9,750.00)
TRANSFERS OUT (987.00) (987.00)
Expense Total (12,237.00) (10,737.00)
201 Total 2,717.00 3,717.00
202 ANIMAL CONTROL RESERVE FUND Expense TRANSFERS OUT (29.00) (29.00) Expense Total (29.00) (29.00)
202 Total (29.00) (29.00)
203 POLICE VOLUNTEER FUND Revenue TRANSFERS IN 1,500.00 1,500.00 USE OF MONEY AND PROPERTY 100.00 100.00
Revenue Total 1,600.00 1,600.00
1333
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
100 - SPECIAL REVENUE FUNDS 203 POLICE VOLUNTEER FUND Expense SUPPLIES & SERVICES (787.00) (787.00) TRANSFERS OUT (200.00) (200.00)
Expense Total (987.00) (987.00)
203 Total 613.00 613.00
221 CSCDA-CFD 2020-02 ATWELL Revenue TAXES 0.00 0.00
Revenue Total 0.00 0.00
221 Total 0.00 0.00
222 ARPA-AMERICA RESCUE PLAN Revenue INTERGOVERNMENTAL 2,236,984.00 2,236,984.00 Revenue Total 2,236,984.00 2,236,984.00
Expense CAPITAL EXPENDITURES 0.00 0.00
SUPPLIES & SERVICES (13,904.00) (13,904.00)
TRANSFERS OUT (1,826,385.00) 0.00
Expense Total (1,840,289.00) (13,904.00)
222 Total 396,695.00 2,223,080.00
810 SUCCESSOR AGENCY LOW/MOD FUND (HOUSING AGENCY) Revenue INTERGOVERNMENTAL 0.00 0.00 TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 23,000.00 23,000.00
Revenue Total 23,000.00 23,000.00
Expense CAPITAL EXPENDITURES (85,194.00) (85,194.00)
SUPPLIES & SERVICES (14,443.00) (14,443.00)
TRANSFERS OUT (639,794.00) (639,794.00)
Expense Total (739,431.00) (739,431.00)
810 Total (716,431.00) (716,431.00)
100 - SPECIAL REVENUE FUNDS Total (1,900,713.00) (1,192,162.00) 300 - FIDUCIARY FUNDS 360 SUN LAKES CFD #86-1 FUND Revenue USE OF MONEY AND PROPERTY 600.00 600.00 Revenue Total 600.00 600.00
360 Total 600.00 600.00
365 WILSON ST #91-1 ASSMT DBT FUND Revenue USE OF MONEY AND PROPERTY 1,200.00 1,200.00 Revenue Total 1,200.00 1,200.00
365 Total 1,200.00 1,200.00
370 AREA POLICE OCMPUTER FUND Revenue USE OF MONEY AND PROPERTY 0.00 0.00 Revenue Total 0.00 0.00
Expense REPAIRS & MAINTENANCE 0.00 0.00
SUPPLIES & SERVICES 0.00 0.00
TRANSFERS OUT 0.00 0.00
Expense Total 0.00 0.00
370 Total 0.00 0.00
1334
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
300 - FIDUCIARY FUNDS 375 FAIR OAKS AD #2004-1 DEBT FUND Revenue TAXES 199,367.00 199,367.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 199,367.00 199,367.00
Expense DEBT SERVICE (188,142.00) (188,142.00)
SUPPLIES & SERVICES (4,168.00) (4,168.00)
TRANSFERS OUT (2,150.00) (2,150.00)
Expense Total (194,460.00) (194,460.00)
375 Total 4,907.00 4,907.00
376 CAMEO HOMES FUND Revenue USE OF MONEY AND PROPERTY 500.00 0.00 Revenue Total 500.00 0.00
Expense TRANSFERS OUT 0.00 0.00
Expense Total 0.00 0.00
376 Total 500.00 0.00
300 - FIDUCIARY FUNDS Total 7,207.00 6,707.00
400 - CAPITAL IMPROVEMENT FUNDS 400 POLICE FACILITIES DVLP FUND Revenue MISCELLANEOUS INCOME 37,469.00 37,469.00 USE OF MONEY AND PROPERTY 4,000.00 4,000.00
Revenue Total 41,469.00 41,469.00
Expense TRANSFERS OUT (194.00) (194.00)
Expense Total (194.00) (194.00)
400 Total 41,275.00 41,275.00
410 FIRE FACILITIES DEVELOPMENT FUND Revenue MISCELLANEOUS INCOME 74,005.00 74,005.00 USE OF MONEY AND PROPERTY 22,000.00 22,000.00
Revenue Total 96,005.00 96,005.00
Expense TRANSFERS OUT (211.00) (211.00)
Expense Total (211.00) (211.00)
410 Total 95,794.00 95,794.00
420 TRAFFIC CONTROL FUND Revenue MISCELLANEOUS INCOME 100,001.00 100,001.00 USE OF MONEY AND PROPERTY 32,000.00 32,000.00
Revenue Total 132,001.00 132,001.00
Expense CAPITAL EXPENDITURES (500,000.00) (500,000.00)
SUPPLIES & SERVICES 0.00 0.00
TRANSFERS OUT (695.00) (695.00)
Expense Total (500,695.00) (500,695.00)
420 Total (368,694.00) (368,694.00)
430 GENERAL FACILITIES FUND Revenue MISCELLANEOUS INCOME 20,000.00 20,000.00 TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 8,000.00 8,000.00
1335
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
400 - CAPITAL IMPROVEMENT FUNDS 430 GENERAL FACILITIES FUND Revenue Total 28,000.00 28,000.00 Expense CAPITAL EXPENDITURES (167,500.00) (167,500.00)
TRANSFERS OUT (200.00) (200.00)
Expense Total (167,700.00) (167,700.00)
430 Total (139,700.00) (139,700.00)
444 WILSON MEDIAN FUND Revenue USE OF MONEY AND PROPERTY 6,000.00 6,000.00 Revenue Total 6,000.00 6,000.00
Expense TRANSFERS OUT (137.00) (137.00)
Expense Total (137.00) (137.00)
444 Total 5,863.00 5,863.00
451 PARK DEVELOPMENT FUND Revenue INTERGOVERNMENTAL 196,926.00 0.00 MISCELLANEOUS INCOME 105,865.00 105,865.00
USE OF MONEY AND PROPERTY 5,000.00 5,000.00
Revenue Total 307,791.00 110,865.00
Expense CAPITAL EXPENDITURES (296,926.00) (50,000.00)
SUPPLIES & SERVICES (85,926.00) (90,926.00)
TRANSFERS OUT (125,879.00) (225,879.00)
Expense Total (508,731.00) (366,805.00)
451 Total (200,940.00) (255,940.00)
470 CAPITAL IMPROVEMENT FUND Revenue USE OF MONEY AND PROPERTY 0.00 0.00 Revenue Total 0.00 0.00
Expense TRANSFERS OUT (88.00) (88.00)
Expense Total (88.00) (88.00)
470 Total (88.00) (88.00)
840 BEA CAPITAL PROJECTS FUND Revenue USE OF MONEY AND PROPERTY 0.00 0.00 Revenue Total 0.00 0.00
Expense CAPITAL EXPENDITURES (8,351.00) (8,351.00)
TRANSFERS OUT (34,995.00) (34,995.00)
Expense Total (43,346.00) (43,346.00)
840 Total (43,346.00) (43,346.00)
841 BEA LOW/MOD CAPITAL PROJECTS FUND Expense TRANSFERS OUT (46.00) (46.00) Expense Total (46.00) (46.00)
841 Total (46.00) (46.00)
400 - CAPITAL IMPROVEMENT FUNDS Total (609,882.00) (664,882.00) 600 - AIRPORT FUND 600 AIRPORT FUND Revenue INTERGOVERNMENTAL 0.00 0.00 MISCELLANEOUS INCOME 0.00 0.00
SALES AND SERVICE CHARGES 155,600.00 155,600.00
1336
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
600 - AIRPORT FUND 600 AIRPORT FUND Revenue TRANSFERS IN 0.00 0.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 155,600.00 155,600.00
Expense REPAIRS & MAINTENANCE (18,215.00) (18,215.00)
SALARIES & BENEFITS (115,001.00) (115,001.00)
SUPPLIES & SERVICES (90,647.00) (90,647.00)
TRANSFERS OUT (81,884.00) (81,884.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (305,747.00) (305,747.00)
600 Total (150,147.00) (150,147.00)
600 - AIRPORT FUND Total (150,147.00) (150,147.00)
610 - TRANSIT FUND 610 TRANSIT FUND Revenue CHARGES FOR SERVICES 17,380.00 0.00 INTERGOVERNMENTAL 8,944,761.00 4,192,449.00
MISCELLANEOUS INCOME 835.00 21,026.00
OTHER INCOME 4,565,000.00 6,061,216.00
SALES AND SERVICE CHARGES 28,081.00 177,500.00
TRANSFERS IN 60,000.00 60,000.00
USE OF MONEY AND PROPERTY 8,000.00 8,000.00
Revenue Total 13,624,057.00 10,520,191.00
Expense CAPITAL EXPENDITURES (9,183,918.00) (1,768,918.00) REPAIRS & MAINTENANCE (15,000.00) (17,500.00)
SALARIES & BENEFITS (1,586,691.00) (1,593,402.00)
SUPPLIES & SERVICES (415,808.00) (215,721.00)
TRANSFERS OUT (1,924,101.00) (1,924,101.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (13,125,518.00) (5,519,642.00)
610 Total 498,539.00 5,000,549.00
610 - TRANSIT FUND Total 498,539.00 5,000,549.00
660 - WATER ENTERPRISE 660 WATER FUND Revenue INTERGOVERNMENTAL 125,000.00 125,000.00 MISCELLANEOUS INCOME 765,000.00 17,500.00
OTHER INCOME 0.00 0.00
SALES AND SERVICE CHARGES 13,092,500.00 13,592,500.00
TRANSFERS IN 1,537,873.00 0.00
USE OF MONEY AND PROPERTY 340,000.00 340,000.00
Revenue Total 15,860,373.00 14,075,000.00
1337
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
660 - WATER ENTERPRISE 660 WATER FUND Expense CAPITAL EXPENDITURES (8,366,994.00) (6,116,994.00) DEBT SERVICE 0.00 0.00
PURCHASED POWER (1,250,000.00) (1,250,000.00)
REPAIRS & MAINTENANCE (114,271.00) (134,271.00)
SALARIES & BENEFITS (3,188,855.00) (3,375,085.00)
SUPPLIES & SERVICES (3,287,137.00) (3,121,637.00)
TRANSFERS OUT (5,172,773.00) (5,172,773.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (21,380,030.00) (19,170,760.00)
660 Total (5,519,657.00) (5,095,760.00)
661 WATER CAPITAL FACILITIES FUND Revenue INTERGOVERNMENTAL 0.00 0.00 MISCELLANEOUS INCOME 550,000.00 550,000.00
USE OF MONEY AND PROPERTY 68,000.00 68,000.00
Revenue Total 618,000.00 618,000.00
Expense CAPITAL EXPENDITURES (6,552,755.00) (189,300.00) SUPPLIES & SERVICES 0.00 (133,686.00)
TRANSFERS OUT 0.00 0.00
Expense Total (6,552,755.00) (322,986.00)
661 Total (5,934,755.00) 295,014.00
662 IRRIGATION WATER FUND Revenue USE OF MONEY AND PROPERTY 20,000.00 20,000.00 Revenue Total 20,000.00 20,000.00
662 Total 20,000.00 20,000.00
663 BUA WATER CAPITAL PROJECT FUND Revenue MISCELLANEOUS INCOME 838,779.00 0.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 838,779.00 0.00
Expense CAPITAL EXPENDITURES 0.00 0.00
Expense Total 0.00 0.00
663 Total 838,779.00 0.00
669 BUA WATER DEBT SERVICE FUND Revenue TRANSFERS IN 1,991,263.00 1,991,263.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 1,991,263.00 1,991,263.00
Expense DEBT SERVICE (1,912,282.00) (1,912,282.00)
SUPPLIES & SERVICES (2,600.00) (2,600.00)
Expense Total (1,914,882.00) (1,914,882.00)
669 Total 76,381.00 76,381.00
660 - WATER ENTERPRISE Total (10,519,252.00) (4,704,365.00) 1338
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
670 - ELECTRIC ENTERPRISE 670 ELECTRIC FUND Revenue INTERGOVERNMENTAL 13,515.00 13,515.00 MISCELLANEOUS INCOME 3,802,457.00 3,802,457.00
OTHER INCOME 0.00 0.00
SALES AND SERVICE CHARGES 32,571,577.00 32,621,577.00
TRANSFERS IN 350,000.00 350,000.00
USE OF MONEY AND PROPERTY 40,000.00 40,000.00
Revenue Total 36,777,549.00 36,827,549.00
Expense CAPITAL EXPENDITURES (100,000.00) (125,000.00)
DEBT SERVICE 0.00 0.00
PURCHASED POWER (22,362,000.00) (23,214,250.00)
REPAIRS & MAINTENANCE (220,500.00) (487,334.00)
SALARIES & BENEFITS (7,276,376.00) (7,346,299.00)
STREET LIGHTING (194,287.00) (194,287.00)
SUPPLIES & SERVICES (1,183,560.00) (885,305.00)
TRANSFERS OUT (6,009,823.00) (6,009,823.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (37,346,546.00) (38,262,298.00)
670 Total (568,997.00) (1,434,749.00)
672 RATE STABILITY FUND Revenue USE OF MONEY AND PROPERTY 100,000.00 100,000.00 Revenue Total 100,000.00 100,000.00
672 Total 100,000.00 100,000.00
673 ELECTRIC IMPROVEMENT FUND Revenue MISCELLANEOUS INCOME 750,000.00 1,000,000.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 750,000.00 1,000,000.00
Expense CAPITAL EXPENDITURES (1,040,000.00) (1,005,000.00) SUPPLIES & SERVICES (400,000.00) (25,000.00)
TRANSFERS OUT 0.00 0.00
Expense Total (1,440,000.00) (1,030,000.00)
673 Total (690,000.00) (30,000.00)
674 ELECTRIC REVENUE BOND PROJECT FUND Revenue MISCELLANEOUS INCOME 0.00 0.00 TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 0.00 0.00
Expense CAPITAL EXPENDITURES (72.00) 0.00
TRANSFERS OUT 0.00 0.00
Expense Total (72.00) 0.00
1339
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
670 - ELECTRIC ENTERPRISE 674 Total (72.00) 0.00
675 PUBLIC BENEFIT FUND Revenue MISCELLANEOUS INCOME 0.00 0.00 SALES AND SERVICE CHARGES 760,000.00 780,000.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 15,000.00 15,000.00
Revenue Total 775,000.00 795,000.00
Expense DEBT SERVICE 0.00 0.00
SUPPLIES & SERVICES (851,250.00) (816,500.00)
TRANSFERS OUT 0.00 0.00
Expense Total (851,250.00) (816,500.00)
675 Total (76,250.00) (21,500.00)
678 ELECTRIC REVENUE BOND DEBT SERVICE FUND Revenue TRANSFERS IN 2,426,619.00 2,426,619.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 2,426,619.00 2,426,619.00
Expense DEBT SERVICE (2,390,330.00) (2,390,330.00)
SUPPLIES & SERVICES (1,100.00) (1,100.00)
Expense Total (2,391,430.00) (2,391,430.00)
678 Total 35,189.00 35,189.00
670 - ELECTRIC ENTERPRISE Total (1,200,130.00) (1,351,060.00) 680 - WASTEWATER ENTERPRISE 680 WASTEWATER FUND Revenue INTERGOVERNMENTAL 1,500,000.00 0.00 MISCELLANEOUS INCOME 0.00 0.00
OTHER INCOME 0.00 0.00
SALES AND SERVICE CHARGES 8,000,000.00 8,320,000.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 36,000.00 36,000.00
Revenue Total 9,536,000.00 8,356,000.00
Expense CAPITAL EXPENDITURES (1,610,000.00) (15,000.00) DEBT SERVICE (4,257.00) (4,257.00)
REPAIRS & MAINTENANCE (142,522.00) (145,022.00)
SALARIES & BENEFITS (1,484,779.00) (1,589,218.00)
SUPPLIES & SERVICES (1,848,823.00) (1,846,823.00)
TRANSFERS OUT (1,326,507.00) (1,326,507.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (6,416,888.00) (4,926,827.00)
680 Total 3,119,112.00 3,429,173.00
681 WASTEWATER CAPITAL FACILITY FUND Revenue MISCELLANEOUS INCOME 151,650.00 226,650.00 1340
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
680 - WASTEWATER ENTERPRISE 681 WASTEWATER CAPITAL FACILITY FUND Revenue USE OF MONEY AND PROPERTY 165,000.00 165,000.00 Revenue Total 316,650.00 391,650.00
Expense CAPITAL EXPENDITURES (5,000,000.00) 0.00
Expense Total (5,000,000.00) 0.00
681 Total (4,683,350.00) 391,650.00
682 WASTEWATER TERTIARY FUND Revenue SALES AND SERVICE CHARGES 350,000.00 360,000.00 USE OF MONEY AND PROPERTY 140,000.00 140,000.00
Revenue Total 490,000.00 500,000.00
Expense CAPITAL EXPENDITURES (3,000,000.00) 0.00
Expense Total (3,000,000.00) 0.00
682 Total (2,510,000.00) 500,000.00
683 BUA WASTEWATER CAPITAL PROJECT FUND Revenue MISCELLANEOUS INCOME 2,502,807.00 0.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 2,502,807.00 0.00
Expense CAPITAL EXPENDITURES 0.00 0.00
TRANSFERS OUT 0.00 0.00
Expense Total 0.00 0.00
683 Total 2,502,807.00 0.00
685 STATE REVOLVING LOAN FUND Revenue USE OF MONEY AND PROPERTY 8,000.00 8,000.00 Revenue Total 8,000.00 8,000.00
685 Total 8,000.00 8,000.00
689 BUA WASTEWATER DEBT SERVICE FUND Revenue TRANSFERS IN 290,920.00 290,920.00 USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 290,920.00 290,920.00
Expense DEBT SERVICE (281,550.00) (281,550.00)
SUPPLIES & SERVICES (2,600.00) (2,600.00)
Expense Total (284,150.00) (284,150.00)
689 Total 6,770.00 6,770.00
680 - WASTEWATER ENTERPRISE Total (1,556,661.00) 4,335,593.00 700 - INTERNAL SERVICE FUNDS 700 RISK MANAGEMENT FUND Revenue MISCELLANEOUS INCOME 0.00 0.00 SALES AND SERVICE CHARGES 4,088,365.00 4,088,365.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 4,088,365.00 4,088,365.00
Expense REPAIRS & MAINTENANCE (829.00) (829.00)
SALARIES & BENEFITS (325,725.00) (328,918.00)
SUPPLIES & SERVICES (5,882,722.00) (5,955,300.00)
1341
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
700 - INTERNAL SERVICE FUNDS 700 RISK MANAGEMENT FUND Expense TRANSFERS OUT (176,428.00) (176,428.00) CONTRA EXPENDITURE 0.00 0.00
Expense Total (6,385,704.00) (6,461,475.00)
700 Total (2,297,339.00) (2,373,110.00)
702 FLEET MAINTENANCE FUND Revenue MISCELLANEOUS INCOME 103,941.00 13,983.00 SALES AND SERVICE CHARGES 2,441,349.00 2,331,349.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 8,000.00 8,000.00
Revenue Total 2,553,290.00 2,353,332.00
Expense CAPITAL EXPENDITURES (100,000.00) 0.00
DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (377,500.00) (398,800.00)
SALARIES & BENEFITS (637,342.00) (750,197.00)
SUPPLIES & SERVICES (1,015,129.00) (846,820.00)
TRANSFERS OUT (244,106.00) (244,106.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (2,374,077.00) (2,239,923.00)
702 Total 179,213.00 113,409.00
703 INFORMATION SYSTEMS SERVICE FUND Revenue MISCELLANEOUS INCOME 0.00 0.00 SALES AND SERVICE CHARGES 1,456,202.00 1,456,202.00
TRANSFERS IN 209,512.00 0.00
Revenue Total 1,665,714.00 1,456,202.00
Expense CAPITAL EXPENDITURES (887,519.00) (887,519.00)
DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (273,332.00) (273,332.00)
SALARIES & BENEFITS (653,612.00) (653,612.00)
SUPPLIES & SERVICES (222,556.00) (221,056.00)
TRANSFERS OUT (504,362.00) (504,362.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (2,541,381.00) (2,539,881.00)
703 Total (875,667.00) (1,083,679.00)
704 BUILDING MAINTENANCE Revenue INTERGOVERNMENTAL 200,000.00 600,000.00 TRANSFERS IN 873,482.00 873,482.00
Revenue Total 1,073,482.00 1,473,482.00
Expense CAPITAL EXPENDITURES (1,580,000.00) (1,300,000.00) 1342
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
700 - INTERNAL SERVICE FUNDS 704 BUILDING MAINTENANCE Expense REPAIRS & MAINTENANCE (141,500.00) (156,500.00) SALARIES & BENEFITS (509,169.00) (514,837.00)
SUPPLIES & SERVICES (579,617.00) (625,858.00)
TRANSFERS OUT (121,131.00) (121,131.00)
Expense Total (2,931,417.00) (2,718,326.00)
704 Total (1,857,935.00) (1,244,844.00)
705 SUPPORT SERVICES Revenue TRANSFERS IN 1,554,084.00 1,554,084.00 Revenue Total 1,554,084.00 1,554,084.00
Expense CAPITAL EXPENDITURES (12,000.00) (12,000.00)
REPAIRS & MAINTENANCE (37,469.00) (37,469.00)
SUPPLIES & SERVICES (965,073.00) (946,695.00)
TRANSFERS OUT (386,826.00) (386,826.00)
Expense Total (1,401,368.00) (1,382,990.00)
705 Total 152,716.00 171,094.00
761 UTILITY BILLING ADMINISTRATION FUND Revenue MISCELLANEOUS INCOME 2.00 2.00 SALES AND SERVICE CHARGES 2,943,151.00 2,943,151.00
TRANSFERS IN 0.00 0.00
USE OF MONEY AND PROPERTY 0.00 0.00
Revenue Total 2,943,153.00 2,943,153.00
Expense DEBT SERVICE 0.00 0.00
REPAIRS & MAINTENANCE (50,548.00) (50,548.00)
SALARIES & BENEFITS (1,851,728.00) (1,851,728.00)
SUPPLIES & SERVICES (728,075.00) (735,612.00)
TRANSFERS OUT (391,735.00) (391,735.00)
CONTRA EXPENDITURE 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (3,022,086.00) (3,029,623.00)
761 Total (78,933.00) (86,470.00)
700 - INTERNAL SERVICE FUNDS Total (4,777,945.00) (4,503,600.00) 800 - SUCCESSOR AGENCY FUNDS 805 REDEVELOPMENT OBLIGATION RETIREMENT FUND Revenue TAXES 2,838,275.00 2,968,802.00 Revenue Total 2,838,275.00 2,968,802.00
Expense TRANSFERS OUT (2,545,313.00) (2,545,313.00)
Expense Total (2,545,313.00) (2,545,313.00)
805 Total 292,962.00 423,489.00
830 SUCCESSOR AGENCY DEBT SERVICE FUND Revenue CONTRIBUTIONS 2,191,282.00 2,191,282.00 Revenue Total 2,191,282.00 2,191,282.00
Expense DEBT SERVICE (2,275,382.00) (2,275,382.00)
1343
Account Group By Fund
Fund Type Funds Fund Description Classification Account Category Sum of FY 2024-25 Recommended
Budget
Sum of FY 2025-26
Recommended
Budget
800 - SUCCESSOR AGENCY FUNDS 830 SUCCESSOR AGENCY DEBT SERVICE FUND Expense SUPPLIES & SERVICES (1,750.00) (1,750.00) TRANSFERS OUT (397.00) (397.00)
Expense Total (2,277,529.00) (2,277,529.00)
830 Total (86,247.00) (86,247.00)
850 SUCCESSOR AGENCY ADMIN FUND Revenue USE OF MONEY AND PROPERTY 0.00 0.00 Revenue Total 0.00 0.00
Expense TRANSFERS OUT (5,132.00) (5,132.00)
OTHER 0.00 0.00
DEPRECIATION 0.00 0.00
Expense Total (5,132.00) (5,132.00)
850 Total (5,132.00) (5,132.00)
800 - SUCCESSOR AGENCY FUNDS Total 201,583.00 332,110.00 Grand Total (19,930,984.00) (2,812,641.00)
1344
Sum of FTE*
Class Job Title Position Name* Grade Total
1000-CITY ADMINISTRATION SERIES CITY ADMINISTRATION GROUP ADMINISTRATIVE CITY CLERK T79 1.00 ASSISTANT CITY MANAGER T90 1.00
CASE MANAGER SPECIALIST G54 4.00
CITY CLERK E02 1.00
CITY MANAGER D13 1.00
COMMUNICATIONS MANAGER T79 1.00
COUNCIL MEMBER C01 5.00
ECONOMIC DEVELOPMENT MANAGER T85 1.00
GRANTS PROGRAM MANAGER T73 1.00
HOMELESS SERVICES DIRECTOR T85 1.00
CITY ADMINISTRATION GROUP Total 17.00
FINANCIAL SERVICES GROUP ACCOUNTANT I G61 2.00
ACCOUNTING SPECIALIST G58 4.00
ADMINISTRATIVE SERVICES DIRECTOR D06 1.00
BUDGET AND FINANCIAL ANALYST T79 1.00
BUYER G66 2.00
CITY TREASURER C02 1.00
CONTRACT SPECIALIST G63 1.00
DEPUTY FINANCE DIRECTOR T90 1.00
FINANCE MANAGER T85 1.00
P.T. ACCOUNTING SPECIALIST G58 0.50
PURCHASING MANAGER T85 1.00
SENIOR ACCOUNTANT G68 1.00
FINANCIAL SERVICES GROUP Total 16.50
HUMAN RESOURCES GROUP HUMAN RESOURCES GENERALIST G58 1.00 HUMAN RESOURCES MANAGER T85 1.00
RISK & SAFETY ANALYST T73 1.00
SR HUMAN RESOURCES GENERALIST G61 1.00
HUMAN RESOURCES GROUP Total 4.00
INFORMATION/CABLE SYSTEMS GROUP INFORMATION TECH ANALYST I G63 2.00 INFORMATION TECH ANALYST II G70 1.00
INFORMATION TECHNOLOGY MANAGER T85 1.00
MULTIMEDIA SPECIALIST G70 1.00
INFORMATION/CABLE SYSTEMS GROUP Total 5.00
OFFICE SUPPORT GROUP COMMUNITY DEVELOPMENT OPERATIONS MANAGER T85 1.00 ENGINEERING SERVICES ASSISTANT G55 0.08
EXECUTIVE SECRETARY G53 1.00
OFFICE SPECIALIST G49 2.00
OFFICE SUPPORT GROUP Total 4.08
PUBLIC WORKS MANAGEMENT GROUP ENVIRONMENTAL PROGRAM COORDINATOR G61 1.00 PUBLIC WORKS DIRECTOR D12 0.08
PUBLIC WORKS PROGRAM MANAGER T85 0.50
PUBLIC WORKS MANAGEMENT GROUP Total 1.58
STREETS GROUPS PUBLIC WORKS SUPERINTENDENT T85 0.28

RECOMMENDED CLASSIFICATION LISTING FOR BIENNIAL BUDGET
1345
Sum of FTE*
Class Job Title Position Name* Grade Total

RECOMMENDED CLASSIFICATION LISTING FOR BIENNIAL BUDGET
1000-CITY ADMINISTRATION SERIES STREETS GROUPS Total 0.28 UTILITY BILLING GROUP CUSTOMER SERVICE SUPERVISOR T79 1.00 CUSTOMER SVC & BILLING MANAGER T85 1.00
CUSTOMER SVC REPRESENTATIVE G48 5.00
FIELD SERVICE REPRESENTATIVE U56 3.00
LEAD FIELD SERVICE REPRESENTATIVE U60 1.00
SR. UTILITY BILLING REPRESENTATIVE G55 3.00
UTILITY BILLING GROUP Total 14.00
1000-CITY ADMINISTRATION SERIES Total 62.43
2000-POLICE SERIES POLICE GROUP POLICE CADET G33 0.50
POLICE CAPTAIN P92 1.00
POLICE CHIEF CP03 1.00
POLICE CORPORAL P71 4.00
POLICE LIEUTENANT P87 4.00
POLICE OFFICER P67 24.00
POLICE SERGEANT P78 6.00
POLICE GROUP Total 40.50
POLICE SUPPORT GROUP ANIMAL CONTROL OFFICER G56 2.00
COMMUNITY SERVICES OFFICER G56 1.00
EXECUTIVE ASSISTANT/SUPPORT SERVICES MANAGER T85 1.00
POLICE RECORDS TECHNICIAN I G51 3.00
POLICE RECORDS TECHNICIAN II G55 1.00
PROPERTY & EVIDENCE SPECIALIST G63 1.00
PUBLIC SAFETY DISPATCH SUPERVISOR T79 1.00
PUBLIC SAFETY DISPATCHER G59 6.00
PUBLIC SAFETY DISPATCHER II G62 2.00
POLICE SUPPORT GROUP Total 18.00
2000-POLICE SERIES Total 58.50
3000-COMMUNITY DEVELOPMENT SERIES COMMUNITY DEVELOPMENT GROUP ASSISTANT PLANNER T63 1.00 ASSOCIATE PLANNER T68 1.00
COMMUNITY DEVELOPMENT DIRECTOR D01 1.00
DEVELOPMNT.PROJECT COORDINATOR G61 1.00
SENIOR PLANNER T81 1.00
COMMUNITY DEVELOPMENT GROUP Total 5.00
DEVELOPMENT SERVICES GROUP BUILDING INSPECTOR G62 1.00
BUILDING OFFICIAL T84 1.00
BUILDING PERMIT SPECIALIST G55 2.00
CODE COMPLIANCE OFFICER G58 2.00
CODE COMPLIANCE SUPERVISOR G70 1.00
SENIOR BUILDING INSPECTOR T79 1.00
DEVELOPMENT SERVICES GROUP Total 8.00
3000-COMMUNITY DEVELOPMENT SERIES Total 13.00
3300-PARKS AND RECREATION SERIES PARKS AND RECREATIONS GROUP ASSISTANT POOL MANAGER G44 0.47 CASHIERS - POOL G40 0.43
1346
Sum of FTE*
Class Job Title Position Name* Grade Total

RECOMMENDED CLASSIFICATION LISTING FOR BIENNIAL BUDGET
3300-PARKS AND RECREATION SERIES PARKS AND RECREATIONS GROUP LIFEGUARDS G42 3.21 MAINTENANCE WORKER I G49 3.00
OFFICE SPECIALIST G49 1.00
PARKS AND RECREATION DIRECTOR D01 1.00
POOL MANAGER G47 0.48
PROGRAM COORDINATOR G55 2.00
RECREATION LEADER G40 2.42
RECREATION MANAGER T81 1.00
SPORTS COORDINATOR G49 1.00
SR. RECREATION LEADER G42 1.54
PARKS SUPERVISOR G70 1.00
PARKS AND RECREATIONS GROUP Total 18.55
3300-PARKS AND RECREATION SERIES Total 18.55
4000-PUBLIC WORKS SERIES ENGINEERING GROUP ASSOCIATE ENGINEER T79 3.00 ASSOCIATE ENGINEER W/CERTIF. T79 0.75
PUBLIC WORKS INSPECTOR G64 1.00
SENIOR CIVIL ENGINEER T86 1.00
ENGINEERING GROUP Total 5.75
GENERAL MAINTENANCE AND SUPPORT GROUP BUILDING MAINTENANCE SPECIALIST I G53 1.00 FLEET MAINTENANCE MECHANIC II G55 3.00
FLEET MANAGER T85 1.00
SR BUILDING MAINTENANCE SPECIALIST G59 1.00
GENERAL MAINTENANCE AND SUPPORT GROUP Total 6.00
OFFICE SUPPORT GROUP ENGINEERING SERVICES ASSISTANT G55 0.93 MANAGEMENT ANALYST T73 1.00
OFFICE SPECIALIST G49 1.00
OFFICE SUPPORT GROUP Total 2.93
PUBLIC WORKS MANAGEMENT GROUP CIP MANAGER T85 1.00
DEPUTY PUBLIC WORKS DIRECTOR/CITY ENGINEER T104 1.00
PUBLIC WORKS DIRECTOR D12 0.73
PUBLIC WORKS PROGRAM MANAGER T85 0.50
PUBLIC WORKS MANAGEMENT GROUP Total 3.23
STREETS GROUPS AIRPORT ATTENDANT G30 0.75
MAINTENANCE WORKER II G51 3.00
PUBLIC WORKS SUPERINTENDENT T85 0.73
PUBLIC WORKS SUPERVISOR G70 1.00
SENIOR MAINTENANCE WORKER G55 1.00
WORK RELEASE CREW LEADER G55 2.00
STREETS GROUPS Total 8.48
TRANSIT OPERATIONS GROUP BUS DRIVER G48 9.00
P.T. BUS DRIVER G48 1.50
TRANSIT FIELD SUPERVISOR T79 1.00
TRANSIT MANAGER T85 1.00
TRANSIT OPERATIONS GROUP Total 12.50
1347
Sum of FTE*
Class Job Title Position Name* Grade Total

RECOMMENDED CLASSIFICATION LISTING FOR BIENNIAL BUDGET
4000-PUBLIC WORKS SERIES WATER/WASTEWATER GROUP ASSISTANT WATER/WASTEWATER SUPERINTENDENT U78 1.00 BACKFLOW/LOCATOR SPECIALIST U66 1.00
DEPUTY WATER/WASTEWATER DIRECTOR T104 1.00
WAREHOUSE SERVICES SPECIALIST U58 1.00
WASTEWATER COLL SYS SUPV U74 1.00
WASTEWATER COLL SYS TECH I U58 3.00
WATER CREW LEAD U70 4.00
WATER CREW SUPERVISOR U74 2.00
WATER PRODUCTION OPERATOR II U62 1.00
U63 1.00
WATER SERVICES WORKER I U58 4.00
WATER SERVICES WORKER III U66 2.00
WATER/WASTEWATER SUPERINTENDENT T90 1.00
WATER/WASTEWATER GROUP Total 23.00
4000-PUBLIC WORKS SERIES Total 61.88
5000-ELECTRIC UTILITIES SERIES ELECTRIC SERVICES & OPERATIONS GROUP APPRENTICE ELEC METER TEST TECH U82 1.00 ASSOCIATE ELECTRICAL ENGINEER T85 1.00
ASST ELECTRIC SERVICE PLANNER U74 1.00
AUTOCAD GIS TECHNICIAN U68 1.00
BUSINESS SUPPORT MANAGER T90 1.00
CORE MANAGER T85 1.00
DEPUTY ELECTRIC DIRECTOR T104 1.00
ELECTRIC METER TEST TECHNICIAN U82 1.00
ELECTRIC OPERATIONS MANAGER T100 1.00
ELECTRIC SERVICE PLANNER U84 2.00
ELECTRICAL ENGINEERING SPVSR T90 1.00
OPERATIONS SYSTEM TECHNICIAN U86 1.00
POWERLINE APPRENTICE 1 UMP 4.00
POWERLINE CREW SUPERINTENDENT U90 1.00
POWERLINE CREW SUPERVISOR U88 4.00
POWERLINE TECHNICIAN U84 5.00
PUBLIC BENEFITS ANALYST U72 1.00
PUBLIC WORKS DIRECTOR D12 0.20
PWR RESOURCES & REV ADMINISTRATOR T100 1.00
SERVICE PLANNING SUPERVISOR U90 1.00
UTILITY SERVICES ASSISTANT U54 2.00
WAREHOUSE SERVICES SPECIALIST U58 1.00
ELECTRIC SERVICES & OPERATIONS GROUP Total 33.20
5000-ELECTRIC UTILITIES SERIES Total 33.20
Grand Total 247.55
1348
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 1 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
GENERAL FUND (001)
Police Department
Electric Gate Security Access BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 12,000 $ 12,000 $ 12,000 $ 12,000 PD West HVAC Repair BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 25,000 $ 50,000 $ 75,000 $ 75,000 $ 75,000 PD West Interior Renovations BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 15,000 $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 115,000 $ 40,000 $ 40,000 PD West Roll Up Doors BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 30,000 $ 15,000 $ 45,000 $ 45,000 $ 45,000 PD West Security,
Communications

BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 20,000 $ 20,000 $ 40,000 $ 40,000 $ 40,000 PD West Roof Repair BUILDING

IMPROVEMENTS
001-2200-421.90-15 Reserves - - $ 150,000 $ 150,000 $ 150,000 $ 150,000 Site Wall Replacement FENCING IMPROVEMENTS 001-2200-421.90-16 Reserves - - $ 50,000 $ 150,000 $ 150,000 $ 350,000 $ 200,000 $ 200,000 Office Partitions OFFICE FURNITURE/
EQUIPMENT/FIXTURES 001-2200-421.90-46 Reserves - - $ 30,000 $ 30,000 $ 30,000 $ 30,000 Police Vehicles VEHICLES 001-2200-421.90-52 RESERVES (CAPITAL REPLACEMENT) 001-0000-285.07-00 - - $ 416,983 $ 416,983 $ 416,893 $ 416,983 $ 416,983 $ 2,084,825 $ 833,966 $ 833,966 Police Department Subtotal: $ - $ - $ 748,983 $ 676,983 $ 591,893 $ 441,983 $ 441,983 $ - $ 2,901,825 $ 1,425,966 $ 1,425,966 Animal Control
Animal Shelter Needs
Assessment

PLANNING/ ENGINEERING
SVC
001-2300.421.90-10 Reserves - - $ 150,000 $ 150,000 $ 150,000 $ 150,000 Animal Control Subtotal: $ - $ - $ 150,000 $ - $ - $ - $ - $ - $ 150,000 $ 150,000 $ 150,000 Fire Department
Station Roof Repair BUILDING

IMPROVEMENTS
001-2400-422.90-15 Reserves - - $ 20,000 $ 20,000 $ 20,000 $ 20,000 Station 89 Bay Door
Replacement

BUILDING

IMPROVEMENTS
001-2400-422.90-15 Reserves - - $ 55,000 $ 55,000 $ 55,000 $ 55,000 Station 89 Bathroom/Living
Quartes Update

BUILDING

IMPROVEMENTS
001-2400-422.90-15 Reserves - - $ 25,000 $ 100,000 $ 100,000 $ 225,000 $ 225,000 $ 25,000 $ 25,000 Wilson Station Bay Door
Replacement

BUILDING

IMPROVEMENTS
001-2400-422.90-15 Reserves - - $ 45,000 $ 45,000 $ - $ - Wilson Station Security
Upgrades

BUILDING

IMPROVEMENTS
001-2400-422.90-15 Reserves - - $ - $ - $ -
Station 89 Plymovent
Installation

BLDG FURNISHING/

FIXTURES
001-2400-422.90-45 Reserves - - $ 100,000 $ 100,000 $ 100,000 $ 100,000 Station 89 Carpet Replacement BLDG FURNISHING/

FIXTURES
001-2400-422.90-45 Reserves - - $ 10,000 $ 10,000 $ - $ - Station 89 Repaint BLDG FURNISHING/

FIXTURES
001-2400-422.90-45 Reserves - - $ 45,000 $ 45,000 $ - $ - Fire Department Subtotal: $ - $ - $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 225,000 $ 500,000 $ 200,000 $ 200,000 *General Fund Accounts with no projects proposed are hidden 1349
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 2 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
Parks
Purchase of up to 9 smart
irrigation controllers to allow
staff to monitor and control
irrigation and reduce
consumption.

IRRIGATION

IMPROVEMENTS
001-3600-461-90-05 RESERVES - CAPITAL $ 35,000 $ 35,000 $ 35,000 $ 35,000 Resurface of Basketball Court
Surfaces (vandalism & Wear)

ROOSEVELT WMS PARK

IMPROVMENTS
001-3600-461.90-30 Reserves $ 25,000 $ 25,000 $ 25,000 $ 25,000 Demolition of Boy Scout House
and Fence Extension

REPPLIER PARK

IMPROVEMENTS
001-3600-461.90-37 Reserves $ 110,000 $ 110,000 $ 110,000 $ 110,000 Replacement of Playground REPPLIER PARK

IMPROVEMENTS
001-3600-461.90-37 Reserves $ 125,000 $ 125,000 $ 125,000 $ 125,000 Playground Replacement SYLVAN PARK

IMPROVEMENTS
001-3600-461.90-38 Reserves $ 125,000 $ 125,000 $ 125,000 $ 125,000 Annual Request MACHINERY/ EQUIPMENT 001-3600-461.90-56 Reserves $ 52,117 $ 52,117 $ 52,117 $ 156,351 $ - $ - Purchase of used tractor and
water truck to better prepare
and maintain Dysart Park.

MACHINERY/ EQUIPMENT 001-3600-461.90-56 RESERVES (CAPITAL REPLACEMENT) 001-0000-285.07-00 $ 85,000 $ 85,000 $ 170,000 $ 170,000 $ 170,000 Purchase of seven
replacement drinking
fountains.

LIONS PARK

IMPROVEMENTS
001-3600-461-90.69 RESERVES - CAPITAL $ 35,000 $ 35,000 $ 35,000 $ 35,000 Non-Potable Irrigation
Conversion

LIONS PARK

IMPROVEMENTS
001-3600-461-90.69

WATER CONSERVATION
GRANT $ 499,256 $ 499,256 $ 499,256 $ 499,256 $ -
Parks Subtotal: $ 499,256 $ - $ 789,256 $ 335,000 $ 52,117 $ 52,117 $ 52,117 $ - $ 1,280,607 $ 1,124,256 $ 625,000 Recreation
Master Plan Update - 18 to 24
month completion estimate
Parks and Rec Master Plan
Update 001-4000-461.33-11

PARK DEVELOPMENT DIF
FUNDS 125,000 225,000 $ 125,000 $ 225,000 $ 350,000 $ 350,000 $ - Resurfacing and Coping
Improvments

SWIMMING POOL

IMPROVEMENT
001-4000-461.90-27 Reserves $ 100,000 $ 100,000 $ 100,000 $ 100,000 Recreation Subtotal: $ 125,000 $ 225,000 $ 125,000 $ 325,000 $ - $ - $ - $ - $ 450,000 $ 450,000 $ 100,000 Refuse Refuse
ACC/PCC Recycling COLLECTION SITE

IMPROVEMENTS
001-9600-453.90-10 Reserves $ 250,000 $ 250,000 $ 500,000 $ 500,000 $ 500,000 Downtown Trash Enclosure
Enhancements

COLLECTION SITE

IMPROVEMENTS
001-9600-453.90-22 Reserves $ 40,000 $ 45,000 $ 50,000 $ 55,000 $ 60,000 $ 250,000 $ 85,000 $ 85,000 Big Belly Containers MACHINERY/ EQUIPMENT 001-9600-453.90-56 STATE GRANT 15,000 16,000 $ 15,000 $ 16,000 $ 17,000 $ 18,000 $ 19,000 $ 85,000 $ 31,000 $ - Refuse Subtotals: $ 15,000 $ 16,000 $ 305,000 $ 311,000 $ 67,000 $ 73,000 $ 79,000 $ - $ 835,000 $ 616,000 $ 585,000 General Fund Subtotal: $ 639,256 $ 241,000 $ 2,218,239 $ 1,747,983 $ 811,010 $ 667,100 $ 673,100 $ 225,000 $ 6,117,432 $ 3,966,222 $ 3,085,966 *General Fund Accounts with no projects proposed are hidden 1350
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 3 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26

PUBLIC WORKS SPECIAL REVENUE
Fund 100 (Gas Tax Street Fund), Fund 101 (Measure A Sales Tax), Fund 102 (SB1/RMRA Gas Tax) FRA RCE Grant $ 700,000 $ 1,400,000 $ 700,000 $ 1,400,000 $ 300,000 $ 2,400,000 $ 2,100,000 $ - RCTC Grade Sep. Grant $ 800,000 $ 1,500,000 $ 800,000 $ 1,500,000 $ 1,700,000 $ 1,000,000 $ 5,000,000 $ 2,300,000 $ - Local DIF Fund 420-4900-431.90-10 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ 400,000 $ 200,000 $ -

PLANNING/

ENGINEERING SVC
IN PROGRESS HSIP Grant $ - $ - $ -
HSIP Grant 100-4900-341.31-64 $ 323,000 $ 323,000 $ 323,000 $ 323,000 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 217,000 $ 217,000 $ 217,000 $ 217,000 $ -

PLANNING/

ENGINEERING SVC
IN PROGRESS HSIP Grant $ - $ - $ -
HSIP Grant 100-4900-341.31-64 $ 185,000 $ 185,000 $ 185,000 $ 185,000 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 335,000 $ 335,000 $ 335,000 $ 335,000 $ -

PLANNING/

ENGINEERING SVC
IN PROGRESS CPUC Section 130 Project $ - $ - $ -
STREET IMPROVEMENTS 100-4901-431.93-15 CPUC Section 130 Project 100-4190-341.31-16 $ 400,000 $ 400,000 $ 400,000 $ 400,000 $ - HSIP Grant 100-4900-341.31-64 $ 72,000 $ 72,000 $ 72,000 $ 72,000 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 8,000 $ 8,000 $ 8,000 $ 8,000 $ - HSIP Grant 100-4900-341.31-64 $ 318,000 $ 318,000 $ 318,000 $ 318,000 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 35,900 $ 35,900 $ 35,900 $ 35,900 $ - HSIP Grant 100-4900-341.31-64 $ 68,850 $ 68,850 $ 68,850 $ 68,850 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 7,650 $ 7,650 $ 7,650 $ 7,650 $ - HSIP Grant 100-4900-341.31-64 $ 457,650 $ 457,650 $ 457,650 $ 457,650 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 50,850 $ 50,850 $ 50,850 $ 50,850 $ - HSIP Grant 100-4900-341.31-64 $ 40,014 $ 40,014 $ 40,014 $ 40,014 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 4,416 $ 4,416 $ 4,416 $ 4,416 $ - HSIP Grant 100-4900-341.31-64 $ 209,313 $ 209,313 $ 209,313 $ 209,313 $ - MEASURE A SALES TAX 101-4900-302.11-02 $ 23,257 $ 23,257 $ 23,257 $ 23,257 $ - WRCOG TUMF $ - $ - $ -
Local DIF Fund $ - $ - $ -
RCTC MARA Grant $ 500,000 $ 7,000,000 $ 500,000 $ 7,000,000 $ 6,000,000 $ 13,500,000 $ 7,500,000 $ - WRCOG TUMF 100-4900-366.44-21 $ 1,000,000 $ 8,000,000 $ 1,000,000 $ 8,000,000 $ 3,000,000 $ 12,000,000 $ 9,000,000 $ - Measue A 101-4900-302.11-02 $ 653,333 $ 833,333 $ 653,333 $ 833,333 $ 833,334 $ 2,320,000 $ 1,486,666 $ - Local DIF Fund 420-4900-431.90-10 $ 1,250,000 $ 1,250,000 $ 1,250,000 $ 2,500,000 $ 1,250,000 $ - Citywide Roadway Asset
Collection

PLANNING/

ENGINEERING SVC
100-4900-431.90-10 MEASURE A SALES TAX 101-4900-302.11-02 $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ - City Wide Slurry Seal STREET IMPROVEMENTS 101-4900-431.93-16 MEASURE A SALES TAX 101-4900-302.11-02 $ 500,000 $ 500,000 $ 650,000 $ 1,150,000 $ 500,000 $ - AC Overlay Projects STREET IMPROVEMENTS 101-4900-431.93-16 MEASURE A SALES TAX 101-4900-302.11-02 $ 510,000 $ 510,000 $ 750,000 $ 870,000 $ 450,000 $ 2,580,000 $ 510,000 $ - Roadway Rehabilitation STREET IMPROVEMENTS 102-4904-431.93-15 SB1 RMRA GAS TAX

REVENUE
102-0000-341.31-04 $ 799,761 $ 855,744 $ 799,761 $ 855,744 $ 915,600 $ 979,700 $ 1,048,300 $ 4,599,105 $ 1,655,505 $ - Additional Equipment
Allotment MACHINERY/ EQUIPMENT 100-4900-431.90-56 Reserves 100-0000-101.10-00 $ 20,000 $ 25,000 $ 30,000 $ 35,000 $ 40,000 $ 45,000 $ 150,000 $ 45,000 $ 45,000 $ 7,014,024 $ 22,544,047 $ 7,034,024 $ 22,569,047 $ 14,878,934 $ 2,984,700 $ 2,188,300 $ 45,000 $ 49,655,005 $ 29,603,071 $ 45,000

PLANNING/

ENGINEERING SVC

STREET IMPROVEMENTS
Pedestrian Crossing (HSIP)

PLANNING/

ENGINEERING SVC

STREET IMPROVEMENTS
Citywide Pedestrian Crosswalk
Upgrades (HSIP)
Wilson/12th Crosswalk
Upgrade (HSIP)

PLANNING/

ENGINEERING SVC

STREET IMPROVEMENTS
Citywide Traffic Signal
Upgrades (HSIP)
Omar/Ramsey Street (HSIP)
100-4900-431.90-10
San Gorgonio UP Pedestrian
Crossing
Hargrave Grade Separation

STREET IMPROVEMENTS

PLANNING/

ENGINEERING SVC
100-4901-431.93-15
100-4901-431.93-15
100-4901-431.93-15
100-4901-431.93-15
100-4900-431.90-10
100-4900-431.90-10
100-4900-431.90-10
100-4901-431.93-15

IN PROGRESS
100-4901-431.93-15

STREET IMPROVEMENTS

PLANNING/

ENGINEERING SVC
Westward Ave/Sun Lakes
Boulevard Extension Project STREET IMPROVEMENTS
*General Fund Accounts with no projects proposed are hidden 1351
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 4 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
CDBG FUND (110)
Park rehab project REPPLIER PARK

IMPROVEMENT
110-5500-461.90-37 FEDERAL C D B G 110-5500-347.34-02 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ -

PARK DEVELOPMENT DIF
FUNDS $ 164,000 $ 164,000
FEDERAL C D B G 110-5500-347.34-02 $ 80,000 $ 206,000 $ 286,000 $ 286,000 $ 286,000 $ - Permanent Bleacher,
restroom and meeting space
design

DYSART PARK

IMPROVEMENTS
110-5500-461.90-63 FEDERAL C D B G 110-5500-347.34-02 $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ - Park Improvement Project LIONS PARK

IMPROVEMENTS
110-5500-461.90-69 FEDERAL C D B G 110-5500-347.34-02 $ 159,000 $ 159,000 $ 159,000 $ 159,000 $ - $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ -
$ 75,000 $ 75,000 $ 75,000 $ 75,000 $ -
$ 703,000 $ 206,000 $ 909,000 $ - $ - $ - $ - $ - $ 745,000 $ 745,000 $ - AIR QUALITY IMPROVEMENT FUND (132)
Electric Vehicle VEHICLES 132-4900-446.90-52 Reserves $ 80,000 $ 80,000 $ 80,000 $ 80,000 Electric Charging Station ALT. FUELING SYSTEM 132-4900-446.90-77 Reserves $ 60,000 $ 60,000 $ 60,000 $ 60,000 Hybrid PW Vehicle VEHICLES 132-4900-446.90-52 Reserves $ 80,000 $ 80,000 $ 80,000 $ 80,000 $ - $ - $ 140,000 $ 80,000 $ - $ - $ 220,000 $ 220,000 $ 220,000 TRAFFIC CONTROL FACILITY FUND (420)
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

CAPITAL FACILITIES FUND
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ -
PARK DEVELOPMENT FUND (451)

STATE PARK CAPITAL
GRANT
451-0000-289.00-00 $ 196,926 $ - $ 196,926 $ 196,926 $ 196,926 $ - PUBLIC BENEFIT FUND 675-7020-473.90-52 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 250,000 $ 100,000 $ -

PARK DEVELOPMENT
FUNDS $ 50,000 $ - $ 50,000 $ 50,000 $ 50,000 $ -
$ 296,926 $ 50,000 $ 296,926 $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ - $ 496,926 $ 346,926 $ - CAPITAL IMPROVEMENT FUND (470)
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
AIRPORT FUND (600)
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
TRANSIT FUND - FIXED ROUTE (610)
Electric Charging
Infrastructure MACHINERY/ EQUIPMENT 610-5800-434.90-56 STA Funded $ 350,000 $ 350,000 $ 350,000 $ 350,000 $ - Heavy Duty Lift MACHINERY/ EQUIPMENT 610-5800-434.90-56 STA Funded $ 100,000 $ - $ - $ - New CNG Station
Construction MACHINERY/ EQUIPMENT 610-5800-434.90-56 STA Funded $ 5,215,000 $ 5,215,000 $ 5,215,000 $ 5,215,000 $ - Bus Shelter Improvement BUILDING

IMPROVEMENTS
610-5800-434.90-15 STA Funded $ 200,000 $ 200,000 $ 200,000 $ 400,000 $ 200,000 $ - Fleet Garage Improvements BUILDING

IMPROVEMENTS
610-5800-434.90-15 STA Funded $ 575,000 $ 2,554,413 $ 575,000 $ - $ - Relief Vehicles (2) AUTOMOTIVE

EQUIPMENT
610-5800-434.90-51 STA Funded $ 75,000 $ 75,000 $ - $ - Bus Purchase / Replacement AUTOMOTIVE

EQUIPMENT
610-5800-434.90-51 STA Funded $ 3,400,000 $ 1,000,000 $ 3,400,000 $ 1,000,000 $ 1,250,000 $ - $ 1,250,000 $ 6,900,000 $ 4,400,000 $ - $ 8,815,000 $ 1,350,000 $ 8,815,000 $ 1,350,000 $ 2,025,000 $ 75,000 $ 1,250,000 $ 2,654,413 $ 13,515,000 $ 10,165,000 $ -

FEDERAL C D B G
3 year funding cycle -
restroom & shelter
replacement

SYLVAN PARK

IMPROVEMENTS
110-5500-461.90-38

LIONS PARK

IMPROVEMENTS
451-3600-461.90-69
Nutrition Site restroom-ADA
compliant

BUILDING

IMPROVEMENTS
704-3200-412.90-15
Park Improvement Project
(Carryover from FY2022)
*General Fund Accounts with no projects proposed are hidden 1352
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 5 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
TRANSIT FUND - DIAL-A-RIDE (610)
Paratransit Scheduling
Software COMPUTER SOFTWARE 610-5850-434.90-49 STA Funded $ 30,000 $ 30,000 $ 30,000 $ 30,000 $ - $ 30,000 $ - $ 30,000 $ - $ - $ - $ 30,000 $ 30,000 $ - WATER FUND (660)
Sunset Reservoir entrance
fencing, M-Wells, new and
additional fencing
FENCING IMPROVEMENTS 660-6300-471.90-22 Reserves $ 35,000 $ 35,000 $ 35,000 $ 35,000 $ 140,000 $ 70,000 $ 70,000 Valve Turning Equipment AUTOMOTIVE

EQUIPMENT
660-6300-471.90-51 Reserves $ 150,000 $ 150,000 $ 150,000 $ 150,000 Water Truck VEHICLES 660-6300-471.90-52 Reserves $ 150,000 $ 150,000 $ 150,000 $ 150,000 Work Trucks VEHICLES 660-6300-471.90-52 Reserves $ 75,000 $ 75,000 $ 150,000 $ - $ - Dump Truck VEHICLES 660-6300-471.90-52 Reserves $ - $ - $ - Backhoe FY23 MACHINERY/ EQUIPMENT 660-6300-471.90-56 Reserves $ 275,000 $ 275,000 $ - $ - Waterline Replacement
Design
PLANNING/DESIGNCAPITAL
660-6300-471.90-78 Reserves $ 200,000 $ 250,000 $ 450,000 $ 200,000 $ 200,000 Environmental & Legal
Support (Flume), USGS Flow
Monitoring, Design of Pipeline
Replacements
PLANNING/DESIGNCAPITAL
660-6300-471.90-78 Reserves $ 300,000 $ 300,000 $ 300,000 $ 300,000 $ 1,200,000 $ 600,000 $ 600,000 Chromium 6 Owner Advisor PLANNING/DESIGNCAPITAL
660-6300-471.90-78 Reserves $ 500,000 $ 500,000 $ 500,000 $ 500,000 Well M-12A(Phase 2: Well
Equipping and Site
Improvements)

WELLS/PUMPING

EQUIPMENT
660-6300-471.95-08 Reserves $ 3,500,000 $ 3,500,000 $ 3,500,000 $ 3,500,000 Well C8 (Phase 2: Well
Equipping and Site
Improvements)

WELLS/PUMPING

EQUIPMENT
660-6300-471.95-08 Reserves $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 New regs for Main Zone
Separation and udpates to old
regs.

WATER REG. VALVES, ETC 660-6300-471.95-11 Reserves $ 50,000 $ 50,000 $ 100,000 $ 100,000 $ 100,000 Ramsey St. waterline west of
Sunset Ave (C) WATER MAINS 660-6300-471.95-10 ARPA FUNDING 660-6300-381.56-22 $ 900,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 1,100,000 Barbour Street Water Line (C) WATER MAINS 660-6300-471.95-10 ARPA FUNDING 660-6300-381.56-22 $ 475,000 $ 575,000 $ 575,000 $ 575,000 $ 100,000 WA2002_Loc #3 Waterline
Replacement
(22nd/Roberge/Sunrise)
WATER MAINS 660-6300-471.95-10 Reserves $ 2,100,000 $ 2,100,000 $ 2,100,000 $ 2,100,000 Annual Water Main
Replacement WATER MAINS 660-6300-471.95-10 Reserves $ 1,000,000 $ 1,000,000 $ - $ - Hydrants for underserved
areas HYDRANTS 660-6300-471.95-18 Reserves $ 50,000 $ 50,000 $ 50,000 $ 150,000 $ 50,000 $ 50,000 New SCADA sites and
upgrades SCADDA/TELEMETRY 660-6300-471.95-27 Reserves $ 100,000 $ 75,000 $ 75,000 $ 75,000 $ 325,000 $ 175,000 $ 175,000 Water Canyon Perc Pond
Dredging and Repairs RESERVOIRS 660-6300-471.95-09 Reserves $ 750,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 250,000 $ 2,125,000 $ - $ 9,210,000 $ 2,960,000 $ 1,535,000 $ 1,060,000 $ - $ - $ 14,765,000 $ 12,170,000 $ 10,045,000 *General Fund Accounts with no projects proposed are hidden 1353
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 6 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
WATER CAPITAL FACILITIES FUND (661)
Water/Wastewater Admin
Building (D)

BUILDING

CONSTRUCTION
661-6300-471.90-12 Reserves $ 250,000 $ 250,000 $ 250,000 $ 250,000 Water/Wastewater Admin
Building (C)
PLANNING/DESIGNCAPITAL
661-6300-471.90-78 Reserves $ 50,000 $ 50,000 $ 50,000 $ 50,000 Well C8 (Phase 2: Well
Equipping and Site
Improvements)

WELLS/PUMPING

EQUIPMENT
661-6300-471.95-08 Reserves $ 2,500,000 $ 2,500,000 $ 2,500,000 $ 2,500,000 $ - $ - $ 2,800,000 $ - $ - $ - $ - $ - $ 2,800,000 $ 2,800,000 $ 2,800,000 IRRIGATION WATER FUND (662)
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

BUA WATER CAPITAL
No Proposed Capital Projects $ - $ - $ -
$ - $ - $ - $ - $ - $ - $ - $ - $ -
ELECTRIC FUND (670)
Ergonomics, Office Furniture OFF FURN/EQUIP/

FIXTURES
670-7000-473.90-46 Reserves $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 60,000 $ 20,000 $ 10,000 $ 10,000 Machinery Equipment MACHINERY/ EQUIPMENT 670-7000-473.90-56 Reserves $ 20,000 $ 20,000 $ 20,000 $ 20,000 $ 80,000 $ 40,000 $ 40,000 LINE TRANSFORMERS 670-7000-473.95-05 Reserves $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 200,000 $ 200,000 $ 100,000 $ 100,000 PQM expense METERS 670-7000-473.95-17 Reserves $ 25,000 $ 25,000 $ 25,000 $ 25,000 $ 100,000 $ 50,000 $ 50,000 STREET LIGHTS 670-7000-473.95-19 Reserves $ 5,000 $ 5,000 $ 5,000 $ 5,000 $ 20,000 $ 10,000 $ 10,000 Electric Building
Improvements

BUILDING

IMPROVEMENTS
670-7000-473.90-15 Unfunded $ 310,000 $ - $ - $ -
Easment & right-of-way
aquisitions

MISC ELECTRIC

IMPROVEMENT
670-7000-473.90-17 Unfunded $ 100,000 $ - $ - $ -
SYSTEM IMPROVEMENTSLAB
670-7000-473.95-23 Unfunded $ 60,000 $ - $ - $ -
$ - $ - $ 105,000 $ 105,000 $ 105,000 $ 105,000 $ - $ 730,000 $ 420,000 $ 210,000 $ 210,000 *General Fund Accounts with no projects proposed are hidden 1354
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 7 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
ELECTRIC IMPROVEMENT FUND (673)
4 potential properties,
easements, ROW LAND ACQUISITION 673-7000-473.90-01
Contribution in Aid of
Construction (CAIC) $ 10,000 $ 10,000 $ 10,000 $ 10,000 $ 40,000 $ 20,000 $ 20,000 Electric Admin Building BUILDING

IMPROVEMENTS
673-7000-473.90-15 Unfunded $ 540,000 $ - $ - $ -
Fiber Ring, Sub Video & Sub
alarms SECURITY SYSTEMS 673-7000-473.90-47 Unfunded $ 25,000 $ 50,000 $ 1,035,000 $ 75,000 $ 75,000 $ 75,000 Vehicles VEHICLES 673-7000-473.90-52 Reserves $ - $ 200,000 $ 200,000 $ 200,000 $ 500,000 $ 600,000 $ 200,000 $ 200,000 Electronic Sign MACHINERY/ EQUIPMENT 673-7000-473.90-56 Reserves $ - $ - $ - $ - $ - $ - $ - EVs, CNG

ALTERNATE FUELING
SYSTEM
673-7000-473.90-77 Undfunded $ 70,000 $ - $ - $ -
Permanent Engineered poles SUNSET GRADE

SEPARATION
673-7000-473.93-02
Contribution in Aid of
Construction (CAIC) $ - $ - $ 250,000 $ 250,000 $ 500,000 $ - $ - Engineering, inspection and
construction activities

PARDEE-ATWELL

IMPROVEMENT
673-7000-473.93-77
Contribution in Aid of
Construction (CAIC) $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 60,000 $ 30,000 $ - Engineering /Inspection
Support

RANCHO SAN GORGONIO
IMPR
673-7000-473.93-78
Contribution in Aid of
Construction (CAIC) $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 60,000 $ 30,000 $ - SMART METER PROJECT 673-7000-473.95-31 Reserves $ - $ - $ - $ - $ - $ - $ - MAPPING 673-7000-473.95-32 Unfunded $ 100,000 $ - $ - $ - Smith Creek Substation MIDWAY SUBSTATION 673-7000-473.96-12 Reserves $ 25,000 $ 50,000 $ 50,000 $ 3,500,000 $ 1,000,000 $ 4,625,000 $ 75,000 $ 75,000 Sunset Distribution Circuits -
75 Ext & Highland Home Rd
Double Circuit
SUNSET SUBSTATION 673-7000-473.96-18 Reserves $ 15,000 $ 50,000 $ - $ - $ 65,000 $ 65,000 $ 65,000 ASPEN Study, equipment and
procurement
TRANS VOLTAGE STUDY 673-7000-473.96-19 Reserves $ 25,000 $ 75,000 $ 75,000 $ 125,000 $ 300,000 $ 100,000 $ 100,000 Major maint. SUBSTATION

MODIFICATION
673-7000-473.96-20 Reserves $ 10,000 $ 10,000 $ 50,000 $ 50,000 $ 50,000 $ 170,000 $ 20,000 $ 20,000 Dist. Automation SYSTEM IMPROVEMENTS/
SCADA
673-7000-473.96-22 Reserves $ 10,000 $ 10,000 $ 75,000 $ 75,000 $ 75,000 $ 245,000 $ 20,000 $ 20,000

SAN GORGONIO

SUBSTATION
673-7000-473.96-25 Reserves $ - $ - $ - $ - $ - $ -
Line capacitors CAPACITOR BANKS 673-7000-473.96-26 Reserves $ 30,000 $ 100,000 $ 100,000 $ 100,000 $ 330,000 $ 30,000 $ 30,000 Ramsey & Hargrave
improvements ; DT
underground improvements
D.T. UG CONV/DEC

LIGHTING
673-7000-473.96-29
Contribution in Aid of
Construction (CAIC) $ - $ - $ 50,000 $ 50,000 $ 50,000 $ 150,000 $ - $ - New to replace old UG UNDGRND UTILITY

REPLCMN
673-7000-473.96-36 Reserves $ 100,000 $ 100,000 $ 250,000 $ 500,000 $ 500,000 $ 1,450,000 $ 200,000 $ 200,000 Ramsey/Apex to Hampton Inn
line extention

JOSHUA PALMER

RELOCATION
673-7000-473.96-38
Contribution in Aid of
Construction (CAIC) $ - $ 350,000 $ 250,000 $ 250,000 $ 850,000 $ - $ - Trans. pole replacements TRANS POLE

REPLACEMENTS
673-7000-473.96-39 Reserves $ 200,000 $ 100,000 $ 50,000 $ 50,000 $ 50,000 $ 450,000 $ 300,000 $ 300,000 Dist. pole replacements DIST POLE

REPLACEMENTS
673-7000-473.96-40 Reserves $ 100,000 $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ 700,000 $ 250,000 $ 250,000 *General Fund Accounts with no projects proposed are hidden 1355
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 8 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
Sub transmission 34.5/69kV
improvements; Replace 12kV
SF6 circuit swiches
4-12K DISTRIBUTION
CNVR
673-7000-473.96-41 Reserves $ 50,000 $ - $ 125,000 $ 125,000 $ 125,000 $ 425,000 $ 50,000 $ 50,000 Grid hardening for fire
mitigation

FIRE MITIGATION PLAN
DV
673-7000-473.96-42 Reserves $ 30,000 $ 20,000 $ 100,000 $ 100,000 $ 100,000 $ 350,000 $ 50,000 $ 50,000 SCADA control at substation SCADA SUBSTATION

UPGRADE
673-7000-473.96-43 Reserves $ 280,000 $ - $ 50,000 $ 50,000 $ 50,000 $ 430,000 $ 280,000 $ 280,000 Design , site improvements,

34.5kV 4th circuit connect

STAGECOACH

SUBSTATION
673-7000-473.96-45 Reserves $ - $ - $ -
EV charging stations
replacements, infrastructure
for new stations
EV CHARGING STATIONS 673-7000-473.96-46 Reserves $ 10,000 $ 15,000 $ 75,000 $ 75,000 $ 75,000 $ 250,000 $ 25,000 $ 25,000 Feasibility study, engineering
& environmental
FEASIBILITY STUDY/230KV
SUB
673-7000-473.96-47 Reserves $ 50,000 $ - $ - $ 50,000 $ 50,000 $ 50,000 1150 E Lincoln St Project 1150 E LINCOLN SRVC
CONTR
673-7000-473.96-48
Contribution in Aid of
Construction (CAIC) $ - $ - $ - $ -
Lawrence Equipment LAWRENCE EQUIP-SRVC
CONTR
673-7000-473.96-49
Contribution in Aid of
Construction (CAIC) $ - $ - $ - $ -
John St/2600 E John 2600 E JOHN/MATERIAL 673-7000-473.96-50 Contribution in Aid of
Construction (CAIC) $ - $ - $ - $ -
Material 6"line extension on
Scott ESTES PRO/MATERIAL 673-7000-473.96-51
Contribution in Aid of
Construction (CAIC) $ - $ - $ - $ -
Design and material
procurement

FIRST HATHAWAY

LOGISTICS
673-7000-473.96-52
Contribution in Aid of
Construction (CAIC) $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 30,000 $ 30,000 $ - Design and material
procurement
10 E COMMERCE CENTER 673-7000-473.96-53
Contribution in Aid of
Construction (CAIC) $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 30,000 $ 30,000 $ - Design and material
procurement

SUN LAKES BLVD

EXTENSION
673-7000-473.96-54
Contribution in Aid of
Construction (CAIC) $ 15,000 $ 25,000 $ 15,000 $ 25,000 $ 100,000 $ 100,000 $ 240,000 $ 40,000 $ - Preliminary Engineering HARGRAVE ST FRADE SEP 673-7000-473.96-55 Contribution in Aid of
Construction (CAIC) $ 25,000 $ - $ 25,000 $ 150,000 $ 150,000 $ 325,000 $ 25,000 $ -

34.5KV/12.4KV I-10 FWY
crossing
I-10 CROSSING AT

HATHAWAY
673-7000-473.96-56
Contribution in Aid of
Construction (CAIC) $ - $ 150,000 $ 1,250,000 $ 250,000 $ 1,650,000 $ - $ - Design and Service Support SOCAL GAS LINE EXT 673-7000-473.96-57 Contribution in Aid of
Construction (CAIC) $ - $ - $ - $ - $ -
Design and Service Support INDIAN HEALTH CLINICMORONGO 673-7000-473.96-58
Contribution in Aid of
Construction (CAIC) $ 25,000 $ - $ 25,000 $ 25,000 $ 25,000 $ - Design and Service Support HECATE GRID BATT

STORAGE
673-7000-473.96-59
Contribution in Aid of
Construction (CAIC) $ 25,000 $ 25,000 $ - $ 25,000 $ 25,000 $ - $ 100,000 $ 135,000 $ 1,040,000 $ 1,005,000 $ 2,440,000 $ 7,190,000 $ 14,500,000 $ 2,045,000 $ 1,810,000 PUBLIC BENEFIT (675)
No Proposed Capital Projects
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
WASTEWATER FUND (680)
New fencing for Westward Lift
Station
FENCING IMPROVEMENTS 680-8000-454.90-22 Reserves $ 20,000 $ 20,000 $ 20,000 $ 20,000 New PLCs (SCADA Servers
Hardware) COMPUTER HARDWARE 680-8000-454.90-48 Reserves $ 15,000 $ 15,000 $ 15,000 $ 15,000 $ 60,000 $ 30,000 $ 30,000 Westward Liftstation
(Discharge Piping and
Replacement Pump)
MACHINERY/ EQUIPMENT 680-8000-454.90-56 Reserves $ 75,000 $ 75,000 $ 75,000 $ 75,000 *General Fund Accounts with no projects proposed are hidden 1356
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 9 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
Equalization Basin TREATMENT PLANT
IMPROV
680-8000-454.95-12 Federal Assistance $ 1,500,000 $ 1,500,000 $ 1,500,000 $ 1,500,000 $ - $ 1,500,000 $ - $ 1,610,000 $ 15,000 $ 15,000 $ 15,000 $ - $ - $ 1,655,000 $ 1,625,000 $ 125,000 *General Fund Accounts with no projects proposed are hidden 1357
For Planning Commission Review and Discussion
Last Update: 5/22/24

CITY OF BANNING
DRAFT Capital Improvement Program 5-Year Fiscal Years 2025 - 29 10 of 10
Project Description Expenditure Account
Description Expenditure Account No. Funding Source Account Description Funding Source Account
Number
Amount of
Funding (Not
Reserves) FY25
Amount of
Funding (Not
Reserves) FY26
FY 2025
(Capital
Projects)
FY 2026
(Capital
Projects)
FY 2027
(Capital
Projects)
FY 2028
(Capital
Projects)
FY 2029
(Capital
Projects)
Unfunded 5 Year Project
Total
FY25 & FY26
Project Totals
Amount of
Reserves Used
FY25 & F26
WASTEWATER CAPITAL FACILITY FUND (681)
WWTP Treatment Upgrades3.6 MGD (PDB Phase 1) TREATMENT PLANT

IMPROVMENTS
681-8000-454.95-12 Reserves $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000 Equalization Basin TREATMENT PLANT

IMPROVMENTS
681-8000-454.95-12 Reserves $ 2,000,000 $ 2,000,000 $ 2,000,000 $ 2,000,000 Water &Wastewater Admin
Building © SEWER MAINS & COLL SYS 681-8000-454.95-14 Reserves $ 150,000 $ 150,000 $ 150,000 $ 150,000 $ - $ - $ 5,150,000 $ - $ - $ - $ - $ - $ 5,150,000 $ 5,150,000 $ 5,150,000 WASTEWATER TERTIARY FUND (682)
WWTP Treatment Upgrades3.6 MGD (PDB Phase 1) WATER MAINS 682-8050-454.95-10 Reserves $ 3,000,000 $ 3,000,000 $ 3,000,000 $ 3,000,000 $ - $ - $ 3,000,000 $ - $ - $ - $ - $ - $ 3,000,000 $ 3,000,000 $ 3,000,000 BUA WASTEWATER CAPITAL PROJECT FUND (683)
No Proposed Capital Projects 683-8000-454.95-12 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

FLEET MAINTENANCE FUND
Light Duty Lift MACHINERY/

EQUIPMENT
702-3800-480.90-56 Reserves $ 100,000 $ 100,000 $ 100,000 $ 100,000 $ - $ - $ 100,000 $ - $ - $ - $ 100,000 $ 100,000 $ 100,000

INFORMATION SYSTEMS
Misc. Computer Hardware COMPUTER HARDWARE 703-3700-480.90-48 Reserves $ 335,000 $ 335,000 $ 335,000 $ 335,000 $ 335,000 $ 1,675,000 $ 670,000 $ 670,000 $ - $ - $ 335,000 $ 335,000 $ 335,000 $ 335,000 $ 335,000 $ - $ 1,675,000 $ 670,000 $ 670,000

BUILDING FAINTENANCE
Corporate Yard Slurry Seal PARKING LOT

IMPROVEMENTS
704-3200-412.90-07 RESERVES (CAPITAL
REPLACEMENT) $ 175,000 $ 175,000 $ 175,000 $ 175,000
City Hall Roof project BUILDING

IMPROVEMENTS
704-3200-412.90-15 RESERVES (CAPITAL
REPLACEMENT) $ 450,000 $ 450,000 $ 450,000 $ 450,000
City Hall West Side
Workstation Project

BUILDING

IMPROVEMENTS
704-3200-412.90-15 RESERVES (CAPITAL
REPLACEMENT) $ 300,000 $ 300,000 $ 300,000 $ 300,000
Senior Center Roof Project BUILDING

IMPROVEMENTS
704-3200-412.90-15 RESERVES (CAPITAL
REPLACEMENT) $ 150,000 $ 150,000 $ - $ -
PW/Electric Roof Project BUILDING

IMPROVEMENTS
704-3200-412.90-15 RESERVES (CAPITAL
REPLACEMENT) $ 250,000 $ 250,000 $ 250,000 $ 250,000
HVAC Unit Replacement City
Wide

BUILDING

IMPROVEMENTS
704-3200-412.90-15 RESERVES (CAPITAL
REPLACEMENT) $ 130,000 $ 100,000 $ 100,000 $ 200,000 $ 100,000 $ 630,000 $ 230,000 $ 230,000 Citywide Facility Need
Assessment
BUILDING PLANNING 704-3200-412.90-?? RESERVES $ 350,000 $ 350,000 $ 350,000 $ 350,000 Citywide Facility Condition
Assessment
BUILDING PLANNING 704-3200-412.90-?? RESERVES $ 350,000 $ 350,000 $ 350,000 $ 350,000 Armory EOC Improvements

BUILDING

IMPROVEMENTS
704-3200-412.90-15 STATE EOC GRANT 200,000 600,000 $ 200,000 $ 600,000 $ 800,000 $ 800,000 $ - 200,000 600,000 $ 1,605,000 $ 1,300,000 $ 250,000 $ 200,000 $ 100,000 $ - $ 3,455,000 $ 2,905,000 $ 2,105,000 21,423,206 25,126,047 $ 44,398,189 $ 31,517,030 $ 22,444,944 $ 12,681,800 $ 4,596,400 $ 3,654,413 $ 118,299,363 $ 75,751,219 $ 29,365,966 *General Fund Accounts with no projects proposed are hidden 1358
Resolution 2024-110

Page 1 of 4 ends

RESOLUTION 2024-110

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BANNING, CALIFORNIA,

APPROVING AND ESTABLISHING AN APPROPRIATIONS LIMIT FOR THE FISCAL YEAR 2024-25, PURSUANT TO ARTICLE XIIIB OF THE CALIFORNIA CONSTITUTION WHEREAS, Article XIIIB of the California Constitution provides that the total annual appropriations subject to limitation of each governmental entity, including this City, shall not exceed the appropriation limit of such entity of government for the prior year adjusted for changes in the cost of living or personal income and population, except as otherwise provided for in said Article XIIIB and implementing State statutes; and
WHEREAS, pursuant to said Article XIIIB of said California Constitution, and Section 7900 et seq. of the California Government Code, the City is required to set its appropriation limit for each fiscal year; and
WHEREAS, the Finance Department of the City of Banning has interpreted the technical provisions of said Article XIIIB and Section 7900 et seq., performed computations and a technical review of the documentation for the City's said appropriation limitation, and has caused the numbers upon which the City's appropriation limit was and is based; and WHEREAS, based on such calculations the Finance Department has determined the said appropriation limit and, pursuant to Section 7910 of said California Government Code, has made available to the public the documentation used in the determination of said appropriation limit.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Banning as follows:

SECTION 1. that said appropriation limit for Fiscal Year 2024-25 is set in the amount of $64,087,512 for said fiscal year as incorporated in the budget document.

SECTION 2. City Council authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution.

SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 25th day of June 2024.

Alberto Sanchez, Mayor
City of Banning
1359
Resolution 2024-110

Page 2 of 4 ends

ATTEST:

Caroline Patton, Administrative City Clerk
City of Banning
APPROVED AS TO FORM:

Serita R. Young, City Attorney
Richards, Watson & Gershon
1360
Resolution 2024-110

Page 3 of 4 ends

CERTIFICATION:

I, Caroline Patton, Administrative City Clerk of the City of Banning, California, do hereby certify that the foregoing Resolution 2024-110, was duly adopted by the City Council of the City of Banning, California, at a regular meeting thereof held on the 25th day of June 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Administrative City Clerk
City of Banning, California
1361
Resolution 2024-110

Page 4 of 4 ends

EXHIBIT A
GANN Limit Calculation
1362
In November 1979 voters passed Proposition 4, also known as the Gann Initiative. Proposition 4 Article XIII (B) of the California Constitution provides that the City’s annual appropriations be subject to certain State limitations. This appropriation limit is referred to as the Gann Spending Limitation. The calculation limits the increase in annual appropriations to a factor which is based on a combination of population growth, State per capita income change, and the change in assessment value for non-residential property. Appropriations for proprietary related activities such as water, wastewater, airport, etc., and Redevelopment functions are not subject to the limit. When the limit is exceeded, Proposition 4 requires the surplus to be returned to the taxpayers within two years. Appropriations in the two-year period can be averaged before becoming subject to the excess revenue provisions of the Gann limit.

The City of Banning calculated the Gann Limit of $64,087,512 for Fiscal Year 2024-25 using the prior year’s limitation of $61,510,286 multiplied by the 3.62% (1.0362) increase in per capita income multiplied by the 0.55% (1.0055) increased population growth in the City of Banning. This calculation maintains a safe cushion for the City’s financial health. -
10,000,000
20,000,000
30,000,000
40,000,000
50,000,000
60,000,000
19-20 20-21 21-22 22-23 23-24 24-25
GANN LIMIT 46,748,491 48,875,298 53,634,367 58,151,000 61,510,286 64,087,512 Dollars

GANN LIMIT
Proposition 4 - Government
Spending Limits
1363
City of Banning
FY 2024-25 Budget

GANN LIMIT CALCULATION
Article XIIIB of the California State Constitution was adopted by California voters in November 1979, and is more commonly referred to as the Gann Limit. The Article places limits on the amount ofrevenue which can be appropriated (spent) each fiscal year. Only revenues which are considered proceeds of taxes are subject to the limit.

The limit is different for each agency and changes each year, modified for changes in inflation and population. (1) (2) (3) (4) * (5) * (6)
City County %Change
Fiscal Prior Year Previous Year's Current Year's Population Population In Per Year Gann Limit Population Population Change% Change% Capita Income 15-16 35,822,527 30,325 30,491 0.61% 1.29% 3.82%
16-17 37 ,67 0,7 11 30,491 30,834 0.57% 1.26% 5.37%
17 -18 40,193,7 68 30,834 31,068 0.7 5% 1.56% 3.69%
18-19 42,327 ,07 8 31,068 31,282 0.36% 1.40% 3.67%1
19-20 44,494,809 31,282 31,142 0.30% 1.17% 3.85%
20-21 46,7 48,491 31,142 31,125 -0.05% 0.7 9% 3.7 3%
21-22 48,87 5,298 31,125 32,233 3.7 9% 0.67% 5.7 3%
22-23 53,634,367 32,233 30,87 7 0.81% 0.42% 7.55%1
23-24 58,151,000 30,87 7 31,250 1.28% 0.34% 4.44%
24-25 61,510,286 31,046 31,213 0.54% 0.55% 3.62%
The Gann Limit is adjusted annually by multiplying the "Prior Year Gann Limit" (column 1) by the greater of the "City or County % Change in Population" ( column 4 or 5) and then by the "% Change in Per Capita Income" ( column 6) This annual Gann adjustment figure is then added to the Prior Year's limit amount to obtain the Current Year Gann Limit amount in column 7. The shaded boxes indicate the calculation factors that were used in determining the adjustment to the Gann Limit.
(7 )
Current Year
Gann Limit
37,670,711
40,193,768
42,327,078
44,494,809 1
46,748,491
48,875,298
53,634,367
ss,1s1,ooo 1
61,510,286
64,087,512
*City and County population change% figures are provided by the Department of Finance Demographic Research Unit in their annual Price Factor and Population Information.
1364

CITY OF BANNING, CA GANN APPROPRIATIONS LIMIT
GANN FY 24-25 FOR 2024-26
6/30/2024
Applicable Taxes per Auditor Determination May 27, 2022 6/30/2023 Total 2024-26 Proceeds
Fund Division Activity Account Descrig!ion Budget of Taxes 001 0001 301 1001 Property Taxes-Cur 3,976,528 3,976,528 001 0001 301 1003 Prop Tx- Suppl Roll 250,000 250,000
001 0001 301 1007 Prop Tx-Admin Chg (22,680) (22,680)
001 0001 301 1009 Prop Tx-Cur Unsee 267,011 267,011
001 0001 301 1010 Prop Tx-Backfill 4,150,349 4,150,349
001 0001 301 1015 State ERAF Shift 0 0
001 0001 302 1101 Sales & Use Tax 3,831,466 3,831,466
001 0001 302 1103 Sales Tax Sharing (325,000) (325,000) 001 0001 302 1109 Cannabis 1,640,000 1,640,000
001 0001 302 1106 10% Cabazon OuUet 720,000 720,000
001 0001 302 1108 Sales Tax Backfill 0
001 0001 306 1203 Bed Tax- Total Tax 1,250,000 1,250,000 001 0001 306 1208 Property Trans Tax 300,000 300,000
001 0001 341 3101 St Mtr Veh Lie-Reg 40,000 40,000
001 0001 341 3103 Off Hwy Mtr Veh Lie 0 0
001 0001 341 3110 St Hmown Prop Rel 26,976 26,976
001 2200 302 1104 Pub Safety Sales Tax 257,935 257,935
001 2400 302 1104 Pub Safety Sales Tax 257,935 257,935
SUB-TOTAL 16,620,620 16,620,620
TOTAL REVENUE BUDGET- 6/16/2024 121,029,694 16,620,620
Review each year for New Tax Items
Appropriation Limit Calculation for the Year Ended June 30, 2024 Appropriation Limit June 30, 2023
Per Capita Personal Income Change per State
Population Change-Use the Larger of City's or County's
Annual Percentage Change in Population Increase.

Banning January 1, 2023 to January 1, 2024
Riverside County January 1, 2023 to January 1, 2024
Calculation Factor For June 30, 2024
Per Capita Percentage Increase
Population Percentage Increase
iGross Appropriation Limit June 30, 2024
Proceeds of Taxes Subject to Appropriation
Amount Limit Exceeds Taxes Subject to Limit
Use Greater of the Two
TOTAL (Per Capita X Population)

3.62%

0.54%

0.55%

0.66%

1.0362

1.0055
iCONCLUSION: The City Has Not Exceeded its Appropriation Limit for the 2024-26 Year.

NonTaxes
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 104,409,174
61,610,286

1.0418991
64,087,612 i
16,620,620
47,466,992
1365
Resolution 2024-05 UA

Page 1 of 4 ends

RESOLUTION 2024-05 UA

A RESOLUTION OF THE BANNING UTILITY AUTHORITY ADOPTING THE TWO-YEAR BUDGET PLAN FOR THE FISCAL PERIOD JULY 1, 2024 THROUGH JUNE 30, 2025 AND JULY 1, 2025 THROUGH JUNE 30, 2026, ADOPTING THE FIVE-YEAR CAPITAL

IMPROVEMENT PROGRAM, AND MAKING APPROPRIATIONS TO MEET EXPENSES

APPROVED THEREIN
WHEREAS, the Administrative Service Director prepared the budget plan for Fiscal Year 2024-25 and 2025-26 which sets forth all of the expected revenues of the City of Banning Utility Authority (Authority), and the recommended appropriations to meet the operating and capital expenses for all Authority funds; and
WHEREAS, the Authority has considered the recommendations and approved or modified them so as to best serve the interest of the citizens of the City of Banning; and WHEREAS, the two-year budget for Fiscal Year 2024-25 and 2025-26 of the City of Banning Utility Authority has been submitted to this Board, and said budget has been considered and, is in form and substance satisfactory to this Board; and WHEREAS, the Authority departments may not exceed their appropriations by character of expense, with character of expense being defined as personnel services, services and supplies, capital outlay, debt service and interfund transfers, without the consent of the City Manager; and
WHEREAS, the Authority may transfer appropriations, between departments and within their respective funds, as long as those appropriations do not exceed their fund total unless approved by this Board; and
WHEREAS, certain capital projects, programs and commitments have been approved for appropriation in Fiscal Year 2024-25, the Administrative Services Director shall be authorized to carry over appropriation budgets for these items as approved by the City Manager; and WHEREAS, the Authority departments may not hire in excess of the approved number of positions in the job classification as indicated by the budget detail without the consent of this Board; and
WHEREAS, it is essential that the City’s Utility Authority adopt a budget plan establishing the revenues and expenditures for all of its funds.

NOW, THEREFORE, BE IT RESOLVED by the Banning Utility Authority of the City of Banning as follows:

SECTION 1. The City Manager (“Authorized Representative”) or his designee is hereby authorized and directed to sign and file the Two-Year Budget for the Banning Utility Authority for fiscal period July 1, 2024 through June 30, 2025 and July 1, 2025 through June 30, 2026, as summarized in the fund summary and CIP documents.
1366
Resolution 2024-05 UA

Page 2 of 4 ends

SECTION 2. The Utility Authority authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution.

SECTION 3. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 25th day of June 2024.

Alberto Sanchez, Chairperson
Banning Utility Authority
ATTEST:

Caroline Patton, Secretary
Banning Utility Authority
APPROVED AS TO FORM:

Serita R. Young, Authority Counsel
Richards, Watson & Gershon
1367
Resolution 2024-05 UA

Page 3 of 4 ends

CERTIFICATION:

I, Caroline Patton, Secretary of the Banning Utility Authority, do hereby certify that the foregoing Resolution 2024-05 UA, was duly adopted by the Utility Authority of the City of Banning, California, at a regular meeting thereof held on the 25th day of June 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Secretary
Banning Utility Authority
1368
Resolution 2024-05 UA

Page 4 of 4 ends

Exhibit A
Recommended Budget for FYs 2024-25 and 2025-26
1369
Resolution 2024-04 SA

Page 1 of 5 ends

RESOLUTION 2024-04 SA

A RESOLUTION OF THE SUCCESSOR AGENCY OF THE CITY OF BANNING, CALIFORNIA

AUTHORIZING THE TO THE FORMER BANNING COMMUNITY REDEVELOPMENT AGENCY ADOPTING THE TWO-YEAR BUDGET PLAN FOR JULY 1, 2024 THROUGH JUNE 30, 2026,

ADOPTING THE FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM, AND MAKING

APPROPRIATIONS TO MEET EXPENSES APPROVED THEREIN
WHEREAS, the Community Redevelopment Agency of the City of Banning is a public body, corporate and politic, organized and existing under the California Community Redevelopment laws (Health & Safety Code § 33000, et seq.; hereinafter, the “CCRL”); and WHEREAS, as a result of Assembly Bill X1 26 (AB26), which was signed by the Governor on June 28, 2011 and confirmed by the Supreme Court (California Redevelopment Association, et al. v. Matosantos, et al. (Case No. S194861) on December 29, 2011, all California redevelopment agencies were dissolved as of February 1, 2012, and successor entities became responsible for winding down the affairs of the former redevelopment agencies; and WHEREAS, the City is, by operation of law, the Successor Agency to the Redevelopment Agency for purposes of winding-down the Redevelopment Agency under ABX126; and WHEREAS, the Administrative Service Director prepared the two-year budget plan for Fiscal Year 2024-25 & 2025-26 which set forth all of the expected revenues of the City of Banning Successor Agency (Agency), and the recommended appropriations to meet the operating and capital expenses for all Agency funds; and
WHEREAS, the two-year budget for Fiscal Year 2024-25 & 2025-26 of the Successor Agency has been submitted to this Agency, and said budget has been considered and, is in form and substance satisfactory to the Agency Board; and
WHEREAS, the Agency departments may not exceed their appropriations by character of expense, with character of expense being defined as personnel services, services and supplies, capital outlay, debt service and interfund transfers, without the consent of the Administrative Service Director; and
WHEREAS, the Agency may transfer appropriations, between departments and within their respective funds, with approval of the Administrative Service Director, as long as those appropriations do not exceed their fund total unless approved by this Board; and WHEREAS, the Agency requires public improvements, and a capital improvement program (CIP) which allows for the planning, financing, and prioritizing of said improvements; and WHEREAS, the Agency departments may not hire in excess of the approved number of positions in the job classification as indicated by the budget detail without the consent of this Board; and
WHEREAS, certain capital projects, programs and commitments have been approved for appropriation in Fiscal Year 2024-25, the Administrative Service Director shall be authorized to carry over appropriation budgets for these items as approved by the City Manager; and 1370
Resolution 2024-04 SA

Page 2 of 5 ends

WHEREAS, it is essential that the Agency adopt a budget plan establishing the revenues and expenditures for all of its funds; and
WHEREAS, the Banning Oversight Board and California Department of Finance approve the Recognized Obligation Payment Schedule (ROPS) every six months which incorporate expenditures identified in the budget; and
WHEREAS, the Budgetary and Fiscal Policies that are incorporated into the budget document provide some policies applicable to the Agency.

NOW, THEREFORE, BE IT RESOLVED by the Banning Successor Agency of the City of Banning as follows:

SECTION 1. The City Manager (“Authorized Representative”) or his designee is hereby authorized and directed to sign and file The Annual Budget for the Successor Agency for fiscal period July 1, 2024 through June 30, 2025 and July 1, 2025 through June 30, 2026, as summarized in the fund summary (funds 805 to 850), is hereby approved and adopted in the form on file with the City Clerk.

SECTION 2. The Capital Improvement Program (CIP) for the Successor Agency for fiscal period July 1, 2024 through June 30, 2029, as summarized in the fund summary and CIP documents, is hereby approved and adopted in the form on file with the City Clerk.

SECTION 3. Successor Agency authorizes the City Manager, or designee, to make necessary budget adjustments, appropriations, and transfers related to this resolution.

SECTION 4. The City Clerk shall certify to the adoption of this resolution and shall cause a certified resolution to be filed in the book of original resolutions.

PASSED, APPROVED AND ADOPTED this 25th day of June 2024.

Alberto Sanchez, Chairperson
Banning Successor Agency
ATTEST:

Caroline Patton, Secretary
Banning Successor Agency
1371
Resolution 2024-04 SA

Page 3 of 5 ends

APPROVED AS TO FORM:

Serita Young, Agency Counsel
Richards, Watson & Gershon
1372
Resolution 2024-04 SA

Page 4 of 5 ends

CERTIFICATION:

I, Caroline Patton, Secretary of the Banning Successor Agency, do hereby certify that the foregoing Resolution 2024-04 SA, was duly adopted by the Successor Agency of the City of Banning, California, at a regular meeting thereof held on the 25th day of June 2024 by the following vote, to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

Caroline Patton, Secretary
Banning Successor Agency
1373
Resolution 2024-04 SA

Page 5 of 5 ends

Exhibit A
Recommended Budget for FYs 2024-25 and 2025-26
1374

CITY OF BANNING

STAFF REPORT
TO: CITY COUNCIL
FROM: Douglas Schulze, City Manager
PREPARED BY: Art Vela, Public Works Director
Art Vela, Public Works Director
MEETING DATE: June 25, 2024
SUBJECT: Discussion Regarding the Lowering of the Banning Financing Authority’s Outstanding Electric System Revenue Bond Rating and Consideration of an Interim Electric Rate Adjustment
RECOMMENDATION:

Discussion and direction regarding an interim electric rate adjustment.

BACKGROUND:

Electric System Revenue Bonds
In 2007 the Banning Finance Authority, through the City of Banning, issued a series of electric system revenue bonds (“Electric System Series 2007 Bonds”) to assist in the financing of improvements including new substations, circuit breakers, underground feeders, land and other improvements. The amount of the Electric System Series 2007 Bonds was $45,790,000.

In 2015, City Council (acting as the Banning Finance Authority) adopted Resolution 2015-02FA authorizing the refunding of the revenue bonds (“Electric System 2015 Refunding Revenue Bonds”) with the intent to take advantage of historic low interest rates which were to save the City approximately $1,050,000. At the time of the refunding, the Electric System Series 2007 Bonds had an outstanding aggregate principal amount of $40,045,000. The Electric System 2015 Refunding Revenue Bonds were authorized in an amount of not-to-exceed $45,000,000.

For clarity purpose, a revenue bond is a type of municipal bond. Municipal bonds act like loans, with bondholders becoming creditors. In exchange for borrowed funds (i.e. funds invested by bondholders) the bondholders/investors are promised interest on their invested amount. Revenue bonds are secured by revenues generated by the issuer which, in the City’s case, is the City’s Electric Utility.

Electric System 2015 Refunding Revenue Bonds Ratings
Credit ratings are provided by credit rating agencies, such as S&P Global, that specialize in evaluating credit risk. Credit ratings are forward looking and provide investors with independent opinions about an issuer’s, such as a corporation or state/city government, to meet its financial obligation. Typically, ratings are expressed as letter grades that range from ‘AAA’ to ‘D’ to communicate the agency’s opinion of relative level of credit risk.

From the S&P Global’s website: “Our studies have shown that the higher the ratings, the lower the default rates, and vice versa. For example, our historical statistics show a 3-year cumulative default rate for a ‘BBB’ rated company of 0.91%, vs. 4.17% for a ‘BB’ rated one, 12.41% for a ‘B’ rate one and

45.67% for a ‘CCC/CC’ rate one.”
1375
On March 20, 2024 the City of Banning received notice from S&P Global that they had lowered the underlying rating from ‘A-’ to ‘BBB’ and put on Credit Watch, see attached correspondence and back up analysis.

On May 2, 2024, the City of Banning received notice from S&P Global that they had again lowered the underlying rating from ‘BBB’ to ‘BB’ with an “outlook for this rating as negative”, see attached correspondence and back up analysis (“May 2024 S&P Analysis”).

In summary, according to the May 2024 S&P Analysis the recent downgrading of the Electric System 2015 Refunding Revenue Bonds was a result of the following:

The use of interfund borrowings to meet financial obligations.

Lack of proactive rate setting.

May 2024 S&P Analysis also describes that the outlook is negative which “reflects our view that rates are not anticipated to be raised before fiscal-year end 2025.

Fiscal Year 2024/2025 Budget
In an effort to improve the Banning Electric Utility's financial position the City has taken to following approach reflective in the planned Fiscal Year (FY) 2024/2025 budget:

Continued implementation of the Power Cost Adjustment Factor (PCAF; Estimated at $1.1M). The PCAF began on January 1, 2022.

Continued to sell Renewable Energy Credits (RECs; Estimated at $2.48M) Reduced the utility’s Capital Improvement Plan from $16.4M to $1.1M Collection of delinquencies ($1.9M). Shutoff notices resumed in April, 2024.

With the above changes the Electric Utility is projected to have a FY 2024/2025 budget shortfall of $1,200,130.

It is also projected that the Electric Utility will have a FY 2025/2026 budget shortfall of $1,135,060.

For reference, the Electric Utility will have a budget shortfall of approximately $4.7M at the end of FY 2023/2024. Although the utility is expecting a $2.5 million Aid In Construction payment to be recorded before June 30, 2024, which will reduce that expected net loss to approximately $2.2 million.

One option for City Council’s consideration would be an interim rate adjustment in order to avoid further deterioration of the Banning Electric Utility’s cash position, which is projected to be negative $8.8M at the end of FY 2023/2024. If City Council provides direction to staff to proceed with this option, staff will present an analysis and recommendation to City Council at the August 27, 2024 City Council meeting.

The rate adjustment would be considered “interim” while staff hires a consultant to develop a complete Cost of Service (COS)/Rate Study, which would likely be completed during the fourth quarter of FY 2024/2025.

JUSTIFICATION:

According to the May 2, 2024 S&P Analysis, the Electric System 2015 Refunding Revenue Bonds rating could be further downgraded if the Banning Electric Utility is not able to rebuild and maintain a sustained track level of positive reserves and improve its structural balance.

The May 2024 S&P Analysis indicates that the “negative outlook” is a result of rates likely not being raised prior to fiscal year end 2025.
1376
FISCAL IMPACT:

The projected budgetary shortfalls for FY 2024/2025 and FY 2025/2026 will continue to negatively impact the utility’s cash balance, which may result in a higher rate increase in the future.

ALTERNATIVES:

Do not proceed with Interim Electric Rate Adjustment.

ATTACHMENTS:

1. Resolution No. 2015-02 FA Electric Refunding Bonds.pdf

2. March 2024 S&P Rating Downgrade.pdf

3. May 2024 S&P Rating Downgrade.pdf

4. S&P Rating Scale.pdf

5. FY25 and FY26 Electric Budgets,pdf.pdf
1377
RESOLUTION NO. 2015- 02 FA

RESOLUTION OF THE FINANCING AUTHORITY OF THE CITY OF

BANNING AUTHORIZING THE ISSUANCE OF NOT TO EXCEED
45, 000,00 PRINCIPAL AMOUNT OF ITS REFUNDING REVENUE
BONDS ( ELECTRIC SYSTEM PROJECT) SERIES 2015; APPROVING

AN INDENTURE OF TRUST, AN INSTALLMENT SALE AGREEMENT,
A BOND PURCHASE AGREEMENT; AN ESCROW AGREEMENT AND
A PRELIMINARY OFFICIAL STATEMENT RELATED THERETO; AND

APPROVING THE TAKING OF CERTAIN OTHER ACTIONS IN

CONNECTION THEREWITH
WHEREAS, the City of Banning Financing Authority ( the " Authority"), is a Joint Powers Authority ( a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Joint Exercise of Powers Act ( Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California Government Code) (the " Act") and the powers of such Authority include the power to issue bonds for any of its corporate purposes; and
WHEREAS, the City of Banning ( the " City") owns and operates that certain electric system referred to herein as the " Electric System"; and WHEREAS, the Authority previously issued its $ 45, 790, 000 Revenue Bonds Electric System Project), Series 2007 ( the " 2007 Bonds"), currently outstanding in the aggregate principal amount of $40, 045,00; and
WHEREAS, the Authority desires to issue its Refunding Revenue Bonds Electric System Project), Series 2015 ( the " 2015 Bonds") to refund the 2007 Bonds currently outstanding and finance certain capital improvements to the Electric System; and WHEREAS, the Authority has reviewed the documentation related to the issuance of the 2015 Bonds.

NOW, THEREFORE, THE CITY OF BANNING FINANCING
AUTHORITY DOES RESOLVE AS FOLLOWS:

SECTION 1. Pursuant to the Act, the Authority hereby approves the issuance of the 2015 Bonds in an amount not to exceed $45, 000,00in accordance with the terms and conditions of the Indenture of Trust relating to the 2015 Bonds, substantially in the foam annexed hereto, with such revisions, amendments and completions as shall be approved by the President, the Executive Director, the Treasurer or any member of the Commission ( each, a " Responsible Officer"), with the advice of bond counsel to the Authority, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 2. The Authority hereby approves the Installment Sale Agreement relating to the 2015 Bonds in substantially the form annexed hereto, with such revisions, amendments and completions as shall be approved by a Responsible Officer with the advice of bond counsel to the Authority, such approval to be conclusively evidenced by the execution and delivery thereof.

Reso. No. 2015- 02 FA
1378
SECTION 3. The Authority hereby approves the Bond Purchase Agreement relating to the 2015 Bonds, substantially in the form annexed hereto, with such revisions, amendments and completions as shall be approved by a Responsible Officer with the advice of bond counsel to the Authority, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, the true interest cost rate on the 2015 Bonds shall not exceed 4.7% per annum and the underwriter' sdiscount shall not exceed 0.6%.

SECTION 4. The Authority hereby approves the Escrow Agreement relating to the 2007 Bonds in substantially the form annexed hereto, with such revisions, amendments and completions as shall be approved by a Responsible Officer with the advice of bond counsel to the Authority, such approval to be conclusively evidenced by the execution and delivery thereof.

SECTION 5. The Authority hereby approves the Preliminary Official Statement prepared in connection with the issuance of the 2015 Bonds ( the " Preliminary Official Statement"), substantially in the form annexed hereto, with such revisions, amendments and completions as shall be approved by a Responsible Officer with the advice of disclosure counsel to the Authority. Each of the Responsible Officers is hereby authorized to execute and deliver a certificate deeming the Preliminary Official Statement final for purposes of SEC Rule 15c2-.

Upon the pricing of the 2015 Bonds, each of the Responsible Officers is hereby authorized to prepare and execute a final Official Statement ( the " Official Statement"), substantially the form of the Preliminary Official Statement, with such additions thereto and changes therein as approved by any Responsible Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authority hereby authorizes the distribution of the Preliminary Official Statement and the Official Statement by the underwriter in connection with the offering and sale of the 2015 Bonds.

SECTION 6. Any Responsible Officer is hereby authorized and directed to execute and deliver any and all documents and instruments and to do and cause to be done any and all acts and things necessary or proper for carrying out the transactions contemplated by this resolution.

SECTION 7. The Secretary of the Authority shall certify to the adoption of this resolution, and thenceforth and thereafter the same shall be in full force and effect.

Notwithstanding the foregoing, such certification and any of the other duties and responsibilities assigned to the Secretary pursuant to this resolution may be performed by an Assistant Secretary with the same force and effect as if performed by the Secretary hereunder.

PASSED, APPROVED, AND ADOPTED this 14th day of July, 2015.

Jig)( A6(
Deborah Franklin, Chairperson
City of Banning Financing Authority
Reso. No. 2015- 02 FA
2 1379
ATTEST:
2°% Lr /,./ Z'//
Marie A. Calderon, Secretary
Banning Financing Authority
APPROVED AS TO FORM:

Donald L. Hunt, Bond Counsel
Norton Rose Fulbright
CERTIFICATION:

I, Marie A. Calderon, Secretary of the City of Banning Financing Authority do hereby certify that the foregoing Resolution No. 2015- 02 FA was duly adopted by the City of Banning Financing Authority at ajoint meeting thereof held on the 14th day of July, 2015, by the following vote:

AYES: Boardmembers Miller, Moyer, Peterson, Welch, Chairperson Franklin NOES: None
ABSENT: None
ABSTAIN: None
Es (
41"fCtt r __
Marie A. Calderon, Secretary
City of Banning Financing Authority
City of Banning, California
Reso. No. 2015- 02 FA
3 1380
Norton Rose Fulbright - Draft of 07/8/ 15

INDENTURE OF TRUST
by and among the

CITY OF BANNING FINANCING AUTHORITY
and

CITY OF BANNING
and
U. S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of August 1, 2015
Relating to:

City of Banning Financing Authority
Refunding Revenue Bonds ( Electric System Project) Series 2015 35268406. 4
1381

TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS; EQUAL SECURITY 2
SECTION 1. DEFINITIONS 2
SECTION 1. 2 RULES OF CONSTRUCTION 10
SECTION 1. 3 EQUAL SECURITY 11
ARTICLE II AUTHORIZATION AND ISSUANCE OF BONDS 11
SECTION 2. 1 AUTHORIZATION OF BONDS 11
SECTION 2. TERMS OF BONDS 11
SECTION 2. 3 REDEMPTION OF BONDS 12
SECTION 2. 4 FORM OF BONDS 14
SECTION 2. 5 EXECUTION OF BONDS 14
SECTION 2. 6 TRANSFER AND EXCHANGE OF BONDS 14
SECTION 2. 7 REGISTRATION BOOKS 15
SECTION 2. 8 ISSUANCE IN TEMPORARY FORM 15
SECTION 2. 9 BONDS MUTILATED, LOST, DESTROYED OR STOLEN 15 SECTION 2. 10 BOOK -ENTRY SYSTEM; LIMITED OBLIGATION 16 SECTION 2. 11 REPRESENTATION LETTER 16
SECTION 2. 12 TRANSFERS OUTSIDE BOOK -ENTRY SYSTEM 17
SECTION 2. 13 PAYMENTS AND NOTICES TO THE NOMINEE 17
SECTION 2. 14 INITIAL DEPOSITORY AND NOMINEE 17
ARTICLE III ISSUANCE OF BONDS AND APPLICATION OF PROCEEDS 17 SECTION 3. 1 ISSUANCE OF BONDS 17
SECTION 3. 2 APPLICATION OF PROCEEDS AND OTHER MONEYS 18 SECTION 3. RESERVE FUND 18
SECTION 3. 4 COSTS OF ISSUANCE FUND 19
SECTION 3. 5 ACQUISITION AND CONSTRUCTION FUND 19
SECTION 3. 6 VALIDITY OF BONDS 20
ARTICLE IV REVENUES; FLOW OF FUNDS 20
SECTION 4. 1 ASSIGNMENT OF REVENUES 20
SECTION 4. 2 RECEIPT, DEPOSIT AND APPLICATION OF REVENUES 20 SECTION 4. 3 INVESTMENTS 21
SECTION 4. ACQUISITION, DISPOSITION AND VALUATION OF
INVESTMENTS 21
ARTICLE V COVENANTS OF THE AUTHORITY; SPECIAL TAX COVENANTS 22 SECTION 5. 1 PUNCTUAL PAYMENT; COMPLIANCE WITH DOCUMENTS 22 SECTION 5. 2 EXTENSION OF PAYMENT OF BONDS 22
SECTION 5. 3 AGAINST ENCUMBRANCES 22
SECTION 5. 4 POWER ' TO ISSUE BONDS AND MAKE PLEDGE AND ASSIGNMENT 22
SECTION 5. ACCOUNTING RECORDS AND FINANCIAL STATEMENTS 23 SECTION 5. 6 NO ADDITIONAL OBLIGATIONS 23
SECTION 5. 7 TAX COVENANTS RELATING TO THE BONDS 23
SECTION 5. 8 INSTALLMENT SALE AGREEMENT 27
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TABLE OF CONTENTS
continued)
Page
SECTION 5. 9 WAIVER OF LAWS 27
SECTION 5. 10 FURTHER ASSURANCES 27
SECTION 5. 11 CONTINUING DISCLOSURE 27
ARTICLE VI THE TRUSTEE 28
SECTION 6. 1 APPOINTMENT OF TRUSTEE 28
SECTION 6. 2 PAYMENT OF BONDS; REGISTRATION BOOKS 28
SECTION 6. 3 ACCEPTANCE OF TRUSTS 28
SECTION 6. 4 FEES, CHARGES AND EXPENSES OF TRUSTEE 31
SECTION 6. 5 NOTICE TO BOND OWNERS OF DEFAULT 31
SECTION 6. INTERVENTION BY TRUSTEE 31
SECTION 6. 7 REMOVAL OF TRUSTEE 31
SECTION 6. 8 RESIGNATION BY TRUSTEE 31
SECTION 6. 9 APPOINTMENT OF SUCCESSOR TRUSTEE 31
SECTION 6. 10 MERGER OR CONSOLIDATION 32
SECTION 6. 11 CONCERNING ANY SUCCESSOR TRUSTEE 32
SECTION 6. 12 APPOINTMENT OF CO -TRUSTEE 32
SECTION 6. 13 INDEMNIFICATION; LIMITED LIABILITY OF TRUSTEE 33 ARTICLE VII MODIFICATION AND AMENDMENT OF THIS INDENTURE 33 SECTION 7. 1 AMENDMENT BY CONSENT OF BOND OWNERS 33
SECTION 7. 2 DISQUALIFIED BONDS 34
SECTION 7. 3 ENDORSEMENT OR REPLACEMENT OF BONDS AFTER
AMENDMENT 34
SECTION 7. 4 AMENDMENT BY MUTUAL CONSENT 34
ARTICLE VIII EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS 35 SECTION 8. 1 EVENTS OF DEFAULT AND ACCELERATION OF
MATURITIES 35
SECTION 8. 2 APPLICATION OF FUNDS UPON ACCELERATION 36
SECTION 8. 3 OTHER REMEDIES: RIGHTS OF BOND OWNERS 36
SECTION 8. 4 POWER OF TRUSTEE TO CONTROL PROCEEDING 36
SECTION 8. 5 APPOINTMENT OF RECEIVERS 37
SECTION 8. 6 NON -WAIVER 37
SECTION 8. 7 RIGHTS AND REMEDIES OF BOND OWNERS 37
SECTION 8. TERMINATION OF PROCEEDINGS 38
ARTICLE IX [ BOND INSURANCE] 38
SECTION 9. 1 INSURER' SREQUIREMENTS TO GOVERN 38
SECTION 9. 2 REQUIREMENTS OF THE INSURER 38
SECTION 9. 3 PAYMENTS UNDER THE POLICY 39
ARTICLE X MISCELLANEOUS 40
SECTION 10. LIMITED LIABILITY OF AUTHORITY 40
SECTION 10. 2 BENEFITS OF INDENTURE LIMITED TO PARTIES 40 SECTION 10. 3 DISCHARGE OF INDENTURE 40
SECTION 10. 4 SUCCESSOR IS DEEMED INCLUDED IN ALL REFERENCES TO PREDECESSOR 41
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TABLE OF CONTENTS
continued)
Page
SECTION 10. 5 EXECUTION OF DOCUMENTS BY BOND OWNERS 41
SECTION 10. 6 WAIVER OF PERSONAL LIABILITY 42
SECTION 10. 7 PARTIAL INVALIDITY 42
SECTION 10. 8 DESTRUCTION OF CANCELED BONDS 42
SECTION 10. 9 FUNDS AND ACCOUNTS 42
SECTION 10.0 NOTICES 42
SECTION 10.1 UNCLAIMED MONEYS 43
SECTION 10.2 EXECUTION IN SEVERAL COUNTERPARTS 43
SECTION 10.3 GOVERNING LAW 43
EXI- IEBIT A [FORM OF BOND] 1

EXHIBIT B CITY OF BANNING FINANCING AUTHORITY REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT), SERIES 2015 1
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INDENTURE OF TRUST
THIS INDENTURE OF TRUST, is dated as of August 1, 2015, by and among the CITY OF BANNING FINANCING AUTHORITY, a
joint powers authority organized and existing under the laws of the State of California ( the " Authority"), the CITY OF BANNING, a municipal corporation, duly organized and existing under the laws of the State of California ( the " City"), and U. S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States ofAmerica, and being qualified to accept and administer the trusts hereby created ( the Trustee").

WITNESSETH:

WHEREAS, the City owns and operates that certain electric system referred to herein as the Electric System"; and
WHEREAS, under Article 4 ( commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code ( the " Bond Law"), the Authority is authorized to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of, or for the purpose of making loans to, public entities including the City, and to provide financing for public capital improvements of public entities including the City; and WHEREAS, the Authority previously issued its $ 45, 790, 000 Revenue Bonds ( Electric System Project), Series 2007 ( the " 2007 Bonds"), currently outstanding in the aggregate principal amount of 40, 045,00; and
WHEREAS, the City desires to finance certain improvements ( the " Improvements") to the Electric System; and
WHEREAS, for the purpose of providing funds to refund the 2007 Bonds and to finance the Improvements, the Authority has determined to issue its City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015, in the aggregate principal amount of 1 ( the " Bonds"), all pursuant to and secured by this Indenture in the manner provided herein; and
WHEREAS, the City and the Authority have determined that it is necessary and desirable to enter into an Installment Sale Agreement, dated the date hereof ( the " Instalhment Sale Agreement"), pursuant to which the Authority will sell the Improvements to the City in consideration for Installment Payments equal in time and amount to the debt service on the Bonds; and WHEREAS, in order to further enhance the payments of principal of and interest on the Bonds the Authority has obtained a municipal bond insurance policy from [ BOND INSURER] (the " Insurer"); and]
WHEREAS, the Authority has determined that in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and interest and premium ( if any) thereon, the Authority has authorized the execution and delivery of this Indenture; and WHEREAS, the City and the Authority have determined that all acts and proceedings required by law necessary to make the' Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute 35268406. 4
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this Indenture a valid and binding agreement for the uses and purposes herein set forth, in accordance with its terms, have been done and taken; and the execution and delivery of this Indenture have been in all respects duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that in order to secure the payment of the principal of and the interest and premium ( if any) on all Bonds at any time issued and Outstanding under this Indenture, according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the owners thereof, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Authority does hereby covenant and agree with the Trustee, for the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLE I
DEFINITIONS; AUTHORIZATION AND PURPOSE OF BONDS;

EQUAL SECURITY
SECTION 1. Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes of this Indenture and of any Supplemental Indenture and of the Bonds and of any certificate, opinion, request or other documents herein mentioned have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terns herein defined.

In addition, all capitalized terms used herein and not otherwise defined in this Section 1. shall have the respective meanings given such terms in the Installment Sale Agreement.

Acquisition and Construction Fund" means the fund by that name established and held by the Trustee pursuant to Section 3. 5.

Additional Payments" means the payments so designated and required to be paid by the City pursuant to Section 4. 10 of the Installment Sale Agreement.

Agency" means the Community Redevelopment Agency of the City ofBanning.

Annual Debt Service" means, for each Bond Year with respect to each of the Bonds, the sum of a) the interest payable on the Outstanding Bonds in such Bond Year, and ( b) the principal amount of the Outstanding Bonds scheduled to be paid in such Bond Year, including from mandatory sinking fund payments.

Authority" means the City of Banning Financing Authority, a public body corporate and politic duly organized and existing pursuant to a Joint Exercise of Powers Agreement, dated November 12, 2003, between the City and the Agency.

Authorized Investments" means any securities in which the City may legally invest funds subject to its control.

Authorized Representative" means: ( a) with respect to the Authority, its President, Vice President, Treasurer, Executive Director, Secretary or any other person designated as an Authorized Representative of the Authority by a Written Certificate of the Authority signed by its President, Vice President, Treasurer, Executive Director or Secretary and filed with the City and the Trustee; and ( b) with respect to the City, its Mayor, Mayor Pro Tem, City Manager, Finance Director, City Clerk or any other 35268406. 4 2
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person designated as an Authorized Representative of the City by a Written Certificate of the City signed by its Mayor, Mayor Pro Tem, City Manager, Finance Director or City Clerk and filed with the Trustee.

Bond Counsel" means ( a) Norton Rose Fulbright US LLP, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Tax Code.

Bond Law" means the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State, as in existence on the Closing Date or as thereafter amended from time to time.

Bond Service Fund" means the fund by that name established and held by the Trustee pursuant to Section 4.2(a).

Bond Year" means any twelve- month period commencing on June 2 in a year and ending on the
next succeeding June 1, both dates inclusive; except that the first Bond Year shall commence on the Closing Date and end on June 1, 2016.

Bonds" means the City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015, issued and at any time Outstanding pursuant to the Bond Law and this Indenture.

Business Day" means a day ( other than a Saturday or a Sunday) on which banks are not required or authorized to remain closed in the city in which the Office of the Trustee is located.

City" means the City of Banning, a general law city duly organized and existing under the laws of the State of California.

Closing Date" means August , 2015, being the date of delivery of the Bonds to the 0 Purchasers.
g
nal
Costs of Issuance" means all items of expense directly or indirectly relating to the authorization, issuance, sale and delivery of the Bonds, including but not limited to printing expenses, rating agency fees, filing and recording fees, fees, expenses and charges of the City, the Authority, the Trustee, and their respective counsel, including the Trustee' sfirst annual administrative fee, costs of obtaining bond insurance, a Qualified Reserve Fund Credit Instrument or Permitted Investment for monies held in the funds and accounts created and held hereunder, fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds and the execution and delivery of the Installment Sale Agreement.

Costs of Issuance Fund" means the fund by that name established and held by the Trustee pursuant to Section 3. 4.

Depository" means DTC and its successors and assigns or if (a) the then Depository resigns from its functions as securities depository of the Bonds, or (b) the Authority discontinues use of the Depository pursuant to Section 2. 12 hereof, any other securities depository which agrees to follow the procedures requested to be followed by a securities depository in connection with the Bonds and which is selected by the Authority with the consent of the Trustee. 35268406. 4 3
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Depository Participant" means a member of, or participant in, the Depository.

DTC" means The Depository Trust Company, New York, New York, and its successors and assigns.

Escrow Agent" means U. S. Bank National Association, acting as escrow agent under the Escrow Agreement.

Escrow Agreement" means the Escrow Agreement, dated as of August 1, 2015, by and between the Escrow Agent and the Authority relating to the defeasance of the currently outstanding 2007 Bonds.

Escrow Fund" means the Escrow Fund established under the Escrow Agreement and held by the Escrow Agent.

Event of Default" means any of the events described in Section 8. 1.

Fair Market Value" means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm' s length transaction ( determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market ( within the meaning of section 1273 of the Tax Code) and, otherwise, the term " fair market value" means the acquisition price in a bona fide arm' s length transaction ( as referenced above) if (i) the investment is a certificate of deposit the value of which is determined in accordance with applicable regulations under the Tax Code, ( ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate ( for example, a guaranteed investment contract, a forward supply contract or other investment agreement) the value of which is determined in accordance with applicable regulations under the Tax Code, (iii) the investment is a United States Treasury Security -State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or ( iv) the investment is the Local Agency Investment Fund of the State of California, but only if at all times during which the investment is held its yield is reasonably expected to be equal to or greater than the yield on a reasonably comparable
direct obligation of the United States.

Federal Securities" means any of the following ( which solely for purposes of Section 10. 3(c) hereof are noncallable and nonprepayable) and which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein: cash, direct non - callable obligations ofthe United States ofAmerica and securities fully and unconditionally guaranteed as to the timely payment of principal and interest by the United States of America, to which direct obligation or guarantee the full faith and credit of the United States of America has been pledged, Refcorp interest strips, CATS, TIGRS, STRPS, or defeased municipal bonds rated AAA by S&P or Moody' s (or any combination of the foregoing) shall be used to effect defeasance of the Bonds [ unless the Insurer otherwise approves].

Indenture" means this Indenture, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof.

Independent Accountant" means any accountant or firm of such accountants appointed and paid by the City or the Authority, and who, or each of whom ( a) is in fact independent and not under domination of the City or the Authority; (b) does not have any substantial interest, direct or indirect, with the City or the Authority; and ( c) is not connected with the City or the Authority as an officer or employee of the City or the Authority, but who may be regularly retained to make annual or other audits of the books of or reports to the City or the Authority.
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Information Services" means the Electronic Municipal Market Access System ( referred to as EMMA"), a
facility of the Municipal Securities Rulemaking Board, at www. emma. msrb. org; provided, however, in accordance with the then current guidelines of the Securities and Exchange Commission, such other addresses and/ or such other services providing information with respect to called Bonds as the Authority may designate in writing to the Trustee.

Installment Payments" means the payments required to be paid by the City pursuant to Section 4. of the installment Sale Agreement, including all prepayments thereof.

Installment Sale Agreement" means that certain Installment Sale Agreement by and between the Authority and the City, with respect to the sale of the Improvements, dated as of August 1, 2015, as originally executed and as it may from time to time be supplemented, modified or amended in accordance with the terms thereof and of this Indenture.

Insurer" means [ BOND INSURER], or any successor thereto or assignee thereof, as issuer of the Policy.]
Interest Payment Date" means June 1 and December 1 in each year, beginning December 1, 2015, and continuing so long as any Bonds remain Outstanding.

Maximum Annual Debt Service" means the largest of the sums obtained for any Bond Year after totaling the following for each such Bond Year:

A. The principal amount of all Outstanding Bonds maturing or required to be redeemed by mandatory sinking account redemption in such year; and B. The interest which would be due during such year on the aggregate principal amount of Bonds which would be Outstanding in such year if the Bonds Outstanding on the date of such computation were to mature or be redeemed in accordance with the applicable maturity or mandatory sinking account redemption schedule. At the time and for the purpose of making such computation, the amount of Bonds already retired in advance of the above mentioned schedule or schedules shall be deducted pro rata from the remaining amounts thereon.

Moody' s" means Moody' sInvestors Service, its successors and assigns or, if such entity shall be dissolved, liquidated, or shall no longer perform the functions of a statistical rating organization, any other nationally recognized securities rating agency designated by the City, with the approval of the Authority, by notice to the Trustee.

Nominee" means the nominee of the Depository, which may be the Depository, as determined from time to time pursuant hereto.

Office" means the corporate trust office of the Trustee in Los Angeles, California, or at such other or additional offices as may be specified in writing to the Authority and the City.

Original Purchasers" means Stifel, Nicolaus & Company, Inc. and Williams Capital Group, as the original purchasers of the Bonds upon their delivery by the Trustee on the Closing Date.

Outstanding", except as provided for in Section 7.2, when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; ( b) Bonds with respect to which all liability of the Authority shall have been 35268406. 4 5
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discharged in accordance with Section 10. 3; and ( c) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.

Owner", when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Registration Books.

Permitted Investments" means [ CONFIRM]
A. Direct obligations of the United States of America ( including obligations issued or held in book -entry form on the books of the Department of the Treasury, and CATS and TIGRS) or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America.

B. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following federal agencies and provided such obligations are backed by the full faith and credit of the United States of America ( stripped securities are only permitted if they have been stripped by the agency itself):

1. U. S. Export -Import Bank (Eximbank)
Direct obligations or fully guaranteed certificates of beneficial ownership

2. Farmers Home Administration ( FnHA)
Certificates of beneficial ownership

3. Federal Financing Bank

4. Federal Housing Administration Debentures ( FHA)

5. General Services Administration
Participation certificates

6. Government National Mortgage Association ( GNMA or " Ginnie Mae") GNMA - guaranteed mortgage -backed bonds
GNMA - guaranteed pass -through obligations

7. U. S. Maritime Administration
Guaranteed Title XI financing

8. U. S. Department of Housing and Urban Development ( HUD) Project Notes
Local Authority Bonds
New Communities Debentures - U. S. government guaranteed debentures U. S. Public Housing Notes and Bonds - U. S. government guaranteed public housing notes and bonds
C. Bonds, debentures, notes or other evidence of indebtedness issued or guaranteed by any of the following non -full faith and credit U. S. government agencies ( stripped securities are only permitted if they have been stripped by the agency itself):
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1. Federal Horne Loan Bank System
Senior debt obligations
Federal Home Loan Mortgage Corporation ( FHLMC or "Freddie Mac") Participation Certificates
Senior debt obligations

3. Federal National Mortgage Association ( FNMA or " Fannie Mae") Mortgage -backed securities and senior debt obligations

4. Student Loan Marketing Association ( SLMA or " Sallie Mae") Senior debt obligations

5. Resolution Funding Corp. (REFCORP) obligations

6. Faun Credit System
Consolidated systemwide bonds and notes
D. Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating
by S&P of AAAm- G; AAA -m; or AA -m and if rated by Moody' s rated Aaa, Aal or Aa2,
including funds for which the Trustee, its parent holding company, if any, or any affiliates or subsidiaries of the Trustee or such holding company provides investment advisory or other management services.

E. Certificates of deposit secured at all times by collateral described in ( A) and/ or (B) above. Such certificates must be issued by commercial banks, savings and loan associations or mutual savings banks including the Trustee, its parent holding company and their affiliates. The collateral must be held by a third party and the bondholders must have a perfected first security interest in the collateral.

F. Certificates of deposit, savings accounts, deposit accounts or money market deposits which are fully insured by FDIC, including BIF and SAIF, which may be from or with the Trustee, its parent holding company and their affiliates.

G. Investment Agreements, including GIC' s, Forward Purchase Agreements and Reserve Fund Put Agreements, with providers rated, or guaranteed by guarantors rated, at the time of investment, in the top three categories ( without regard to modifiers) by any two or more Rating Agencies.

H. Commercial paper rated, at the time of purchase, " Prime - 1" by Moody' s and " A- 1" or better by S&P.

1. Bonds or notes issued by any state or municipality which are rated by Moody' sand S&P in one of the two highest rating categories (without regard to modifiers) assigned by such agencies.

J. Federal funds or bankers acceptances with a maximum term of one year of any bank which has an unsecured, uninsured and unguaranteed obligation rating of "Prime - 1" or A3" or better by Moody' s and " A- 1" or " A" or better by S&P including the Trustee, its parent holding company and their affiliates.
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K. Repurchase Agreements which satisfy the following criteria:

Repurchase Agreements provide for the transfer of securities from a dealer bank, financial entity or securities firm ( seller/ borrower) to the City ( buyer/ lender) or the Trustee or a third party custodial agent, and the transfer of cash from the City to the dealer bank, financial entity or securities firm with an agreement that the dealer bank, financial entity or securities firm will repay the cash plus a yield to the City in exchange for the securities at a
specified date.

1. Repos must be between the municipal entity and a dealer bank or securities firm or other fmancial entity
a. Primary dealers on the Federal Reserve reporting dealer list which are rated at the time of investment in the top three rating categories ( without regard to modifiers) by two or more Rating Agencies, or Banks rated at the time of investment in the top three rating categories without regard to modifiers) by two or more Rating Agencies, or c. Financial Entities rated at the time of investment in the top three rating categories ( without regard to modifiers) by two or more Rating Agencies.

2. The written repo contract must include the following:
a. Securities which are acceptable for transfer are those securities listed in A), (B) and ( C) above.
b. The term of the repo may be up to 30 days, or greater than 30 days if subject to put or redemption at par to pay project/ construction costs and/ or debt service on the Bonds.
c. The collateral must be delivered to the municipal entity, trustee or third party acting as agent for the trustee before/ simultaneous with payment perfection by possession of certificated securities).
d. Valuation of Collateral
1) The securities must be valued weekly, marked -to -market at current market price plus accrued interest
a) The value of collateral must be equal to at least 104% of the amount of cash transferred by the municipal entity to the dealer bank or security firm or financial entity under the repo plus accrued interest. If the value of securities held as collateral slips below 1.04% of the value of the cash transferred by municipality, then additional cash
and/ or acceptable securities must be transferred. If,
however, the securities used as collateral are any of
those listed in ( C) above, then the value of collateral must equal 105%.
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L. U. S. dollar denominated deposit accounts, federal funds and banker' s acceptances with
domestic commercial banks ( including the Trustee and its affiliates) which have a rating on their shortterm certificates of deposit on the date of purchase of " P- 1" by Moody' s and " A- 1+" by S&P and maturing no more than 360 days after the date of purchase, provided that ratings on holding companies are not considered as the rating of the bank.

M. Local Agency Investment Fund of the State of California (" LAIF"), created pursuant to Section 16429. of the California Government Code.

N. The County Treasurer' sInvestment Pool so long as such Pool is rated AA- or better by S&Por Fitch or Aa3 or better by Moody' s.
f"Policy" means the policy of municipal bond insurance policy securing the payment of the principal of and interest on the Bonds, when due for payment.] Prior Trustee" means U. S. Bank National Association, as trustee under the Indenture of Trust, dated as of June 1, 2007, as amended by Amendment No. 1 to Indenture of Trust, dated June 8, 2010 pertaining to the 2007 Bonds.

Qualified Reserve Fund Credit histrument" means an irrevocable standby or direct -pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to Section 3.3(d) provided that all of the following requirements are met: (i) the long- term credit rating of such bank or insurance company at the time of delivery of such letter of credit or surety bond is rated in one of the two highest rating categories by Moody' s or S&P; (ii) such letter of credit or surety bond has a term of at least twelve ( 12) months; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released pursuant to Section 3.3(d); and ( iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the amounts available to repay the principal of and interest on the Bonds.

Record Date" means, with respect to any Interest Payment Date, the fifteenth ( 15th) calendar day of the month preceding such Interest Payment Date.

Redemption Fund" means the fund by that name established and held by the Trustee pursuant to Section 4.2(c).

Registration Books" means the books maintained by the Trustee pursuant to Section 2. 7 for the registration and transfer of ownership of the Bonds.

Reserve Fund" means the fund by that name established and held by the Trustee pursuant to Section 3.

Reserve Requirement" means, as of any date of calculation by the City, the least of ( i) ten percent ( 10%) of the proceeds ( within the meaning of section 148 of the Tax Code) of the Bonds; (ii) 125% of average Annual Debt Service as of the date of issuance of the Bonds; or ( iii) the Maximum Annual Debt Service for that and any subsequent year.

Responsible Officer" means any Vice President, Assistant Vice President or Trust Officer or any other officer of the Trustee having regular responsibility for corporate trust matters related to this Indenture.
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Revenue Fund" means the fund by that name established and held by the Trustee pursuant to Section 4. 2.

Revenues" means ( a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments ( including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments, insurance proceeds, and condemnation proceeds, but excluding any Additional Payments; ( b) all moneys and amounts held in the funds and accounts established hereunder; and ( c) investment income with respect to any moneys held by the Trustee hereunder.

S&P" means Standard & Poor' sRating Services, a Standard & Poor' sFinancial Services LLC business, its successors and assigns or, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a statistical rating organization, any other nationally recognized securities rating agency designated by the Authority.

Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, N. Y. 10041- 099 Attn. Call Notification Depatinent, Fax ( 212) 855- 7232; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/ or such other securities depositories as the Authority may designate in a Written Request of the Authority delivered to the Trustee.

State" means the State of California.

Supplemental Indenture" means any indenture, agreement, resolution or other instrument hereafter duly adopted or executed in accordance with the provisions of Section 7. 1 of this Indenture.

Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or ( except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bond, together with applicable proposed, temporary and fmal regulations promulgated, and applicable official public guidance published, under the Tax Code.

Tax Regulations" means temporary and permanent regulations promulgated under or with respect to Section 103 of the Tax Code.

Trustee" means U. S. Bank National Association, appointed by the Authority to act as trustee hereunder pursuant to Section 6.1, and its assigns or any other corporation or association which may at any time be substituted in its place, as provided in Section 6. 1.

Written Certificate", " Written Request" and " Written Requisition" of the Authority or the City mean, respectively, a written certificate, request or requisition signed in the name of the Authority or the City by its Authorized Representative. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument.

SECTION 1. 2 Rules of Construction. All references in this Indenture to " Articles," Sections," and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; and the words " herein," "hereof," "hereunder," and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof. 35268406. 4 10 1394
SECTION 1. 3 Equal Security. In consideration of the acceptance of the Bonds by the Owners thereof, this Indenture shall be deemed to be and shall constitute a contract among the Authority, the City, the Trustee and the Owners from time to time of the Bonds; and the covenants and agreements herein set forth to be performed on behalf of the Authority shall be for the equal and proportionate benefit, security and protection of all Owners of the Bonds without preference, priority or distinction as to security or otherwise of any of the Bonds over any of the others by reason of the number or date thereof or the time of sale, execution or delivery thereof, or otherwise for any cause whatsoever, except as expressly provided therein or herein.

ARTICLE II

AUTHORIZATION AND ISSUANCE OF BONDS
SECTION 2. 1 Authorization of Bonds. The Authority has reviewed all proceedings heretofore taken relative to the authorization of the Bonds and has found, as a result of such review, and hereby finds and determines that, as of the date of issuance of the Bonds, all things, conditions, and acts required by law to exist, happen and be performed precedent to and in the issuance of the Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the Authority is now authorized, pursuant to the Bond Law and each and every requirement of law, to issue the Bonds in the manner and form provided in this Indenture. Accordingly, the Authority hereby authorizes the issuance of the Bonds pursuant to the Bond Law and this Indenture.

SECTION 2. Terms of Bonds. The Bonds authorized to be issued by the Authority under and subject to the Bond Law and the terms of this Indenture shall be designated the " City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015", and shall be issued in the original principal amount of Dollars ($[ 1).

The Bonds shall be issued in fully registered form without coupons in denominations of $5, 000 or any integral multiple thereof, so long as no Bond shall have more than one maturity date. The Bonds shall be dated the Closing Date, shall mature on June 1 in each of the years and in the amounts, and shall bear interest at the rates, as follows:

Maturity Date Principal Interest Rate
June 1) Amount Per Annum
35268406. 4 11 1395
Interest on the Bonds shall be payable semiannually calculated based on a 360 -day year of twelve 12) thirty -day months on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed on the Interest Payment Date by first class mail to the Owner at the address of such Owner as its appears on the Registration Books; provided however, that payment of interest will be made by wire transfer in immediately available funds to an account at a financial institution in the United States of America to any Owner of Bonds in the aggregate principal amount of $1, 000,00 or more who shall furnish written wire instructions to the Trustee before the applicable Record Date. Any such written request shall remain in effect until rescinded in writing by the Owner. Principal of any Bond and any premium upon redemption shall be paid by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee.

Principal of and interest and premium ( if any) on the Bonds shall be payable in lawful money of the United States of America.

Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless ( a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) unless it is authenticated on or before the first Record Date, in which event it shall bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

SECTION 2. 3 Redemption of Bonds.
a) Special Mandatory ;Redemption. The Bonds shall be subject to special mandatory redemption as a whole or in part, on any date, from proceeds of an eminent domain award or proceeds of casualty insurance not used to repair or rebuild the Electric System, which proceeds may be used for such purpose pursuant to Sections 5. 4 or 5. 6 of the Installment Sale Agreement, at aredemption price equal to the principal amount of the Bonds to be redeemed plus interest accrued thereon to the date fixed for redemption, without premium.
b) Redemption from Prepayments of Installment Payments. The Bonds maturing on or before June 1, 2025 shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after June 1, 2026 shall be subject to redemption prior to their respective maturity dates, at the option of the Authority, by lot within a maturity on any date on or after June 1, 2025, from prepayment of Installment Payments made at the option of the City at the redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium. c) Mandatory Sinking Fund Redemption. The Bonds maturing on June 1, 20 and June 1, 20 are also subject to redemption prior to their respective stated maturities, on any June 1 on or after June 1, 20 and June 1, 20 , respectively, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that if some but not all of such Bonds have been redeemed pursuant to optional or special mandatory redemption provisions of the Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis in integral multiples of $5, 000. The City shall provide the Trustee with a revised sinking fund schedule.
35268406. 4 12 1396
Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20
Redemption Date
June 1)
maturity)
Principal
Amount
Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20
Redemption Date
June 1)
maturity)
Principal
Amount
d) Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail ( by first- class mail, postage prepaid) notice of any redemption to: (i) the respective Owners of any Bonds designated for redemption, at least twenty ( 20) but not more than sixty ( 60) days prior to the redemption date, at their respective addresses appearing on the Registration Books, and ( ii) the Securities Depositories and to one or more Information Services, at least thirty ( 20) but not more than sixty ( 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 Bonds or the cessation of the accrual of interest thereon. In addition to mailed notice, the notice to the Securities Depositories and Information Services shall be given by telephonically confirmed facsimile transmission or overnight delivery service or by such other means approved by such institutions. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the bond numbers and the maturity or maturities ( in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Any notice given pursuant to this paragraph may be rescinded by Written Certificates given to the Trustee by the Authority and the Trustee shall provide notice of such rescission as soon thereafter as practicable in the same manner, and to the same recipients, as notice of such redemption was given pursuant to this Section, but in no event later than the date set for redemption. e) Selection of Bonds for Redemption. Whenever provision is made in the foregoing subsection ( a) or (b) of this Section for the redemption of Bonds of more than one maturity, the Bonds to be redeemed shall be selected in inverse order of maturity or, at the election of the Authority evidenced by a Written Request of the Authority filed with the Trustee at least sixty ( 60) days prior to the date of redemption, on a
pro rata basis among maturities ( provided that, in any event, the principal and interest due on the Bonds Outstanding following such redemption shall be equal in time and amount to the unpaid 35268406. 4 13 1397
payments due under the Installment Sale Agreement); and in each case, the Trustee shall select the Bonds to be redeemed within any maturity by lot in any manner which the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised of separate 5, 000 portions and such portions shall be treated as separate Bonds which may be separately redeemed. f) Partial Redemption of Bonds. In the event only a portion of any Bond is called for redemption, then upon surrender of such Bond the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of' the Authority, a new Bond or Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond to be redeemed.
g) 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 Bonds so called for redemption shall have been duly provided, such Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. All Bonds redeemed pursuant to this Section shall be canceled and shall be destroyed by the Trustee.

SECTION 2. 4 Form of Bonds. The Bonds, the form of Trustee' s certificate of authentication, and the form of assignment to appear thereon, shall be substantially in the respective forms set forth in Exhibit A attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this hndenture.

SECTION 2. 5 Execution of Bonds. The Bonds shall be signed in the name and on behalf of the Authority with the manual or facsimile signature of its President and attested by the manual or facsimile signature of its Secretary. The Bonds shall then be delivered to the Trustee for authentication by it. In case any officer who shall have signed any of the Bonds shall cease to be such officer before the Bonds so signed shall have been authenticated or delivered by the Trustee or issued by the Authority, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Authority as though the individual who signed the same had continued to be such officer of the Authority. Also, any Bond may be signed on behalf of the Authority by any individual who on the actual date of the execution of such Bond shall be the proper officer although on the nominal date of such Bond such individual shall not have been such officer.

Only those Bonds that bear thereon a certificate of authentication in substantially the form set forth in Exhibit A, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly authenticated and delivered hereunder and are entitled to the benefits ofthis Indenture.

SECTION 2. 6 Transfer and Exchange of Bonds.
a) Transfer of Bonds. The registration of any Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Whenever any Bond or Bonds shall be surrendered for registration of transfer, the Trustee shall execute and deliver a new Bond or Bonds of the same maturity, interest rate and aggregate principal amount, in any authorized denominations. The Authority shall pay all costs of the Trustee incurred in connection with any such transfer, except that the Trustee may require the payment by the Bond Owner of any tax or other governmental charge required to be paid with respect to such transfer. 35268406. 4 14 1398
b) Exchange of Bonds. Bonds may be exchanged at the Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same interest rate and maturity. The Authority shall pay all costs of the Trustee incurred in connection with any such exchange, except that the Trustee may require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. c) Limitations on Transfer or Exchange. The Trustee may refuse to transfer or exchange either ( i) any Bond during the period established by the Trustee for the selection of Bonds for redemption pursuant to Section 2.3, or ( ii) the portion of any Bond which the Trustee has selected for redemption pursuant to the provisions of Section 2. 3.

SECTION 2. 7 Registration Books. The Trustee will keep or cause to be kept, at its Office, sufficient records for the registration and transfer of the Bonds, which shall at all times during normal business hours, and upon reasonable notice, be open to inspection by the City and the Authority; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Registration Books, Bonds as hereinbefore provided.

SECTION 2. 8 Issuance in Temporary Form. The Bonds may be issued initially in temporary form exchangeable for definitive Bonds when ready for delivery. The temporary Bonds may be printed, lithographed or typewritten, shall be of such denominations as may be determined by the Authority and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Authority and be registered and authenticated by the Trustee upon the same conditions and in substantially the same manner as the definitive Bonds. If the Authority issues temporary Bonds, it will execute and furnish definitive Bonds without delay, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Office of the Trustee, and the Trustee shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations.

Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.

SECTION 2. 9 Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Authority, at the expense of the Owner of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like series, tenor and authorized denomination in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Authority. If any Bond issued hereunder shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence be satisfactory to the Trustee and indemnity for the Authority and the Trustee satisfactory to the Trustee shall be given, the Authority, at the expense of the Bond Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like series and tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen ( or if any such Bond shall have matured or shall have been called for redemption, instead of issuing a substitute Bond the Trustee may pay the same without surrender thereof upon receipt of indemnity for the Authority and the Trustee satisfactory to the Trustee). The Authority may require payment of a reasonable fee for each new Bond issued under this Section and of the expenses which may be incurred by the Authority and the Trustee. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original contractual obligation on the part of the Authority whether or not the Bond alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture wish all other Bonds secured by this Indenture.
35268406. 4 15 1399
SECTION 2. 19 Book -Entry System; Limited Obligation. The Bonds shall be initially executed, authenticated and delivered in the form of a
separate single fully registered Bond ( which may
be typewritten) for each of the maturities of the Bonds. Upon initial execution, authentication and delivery, the ownership of each such global Bond shall be registered in the Bond Register in the name of the Nominee as nominee of the Depository. Except as provided in Section 2. 12 hereof, all of the Outstanding Bonds shall be registered in the Bond Register kept by the Trustee in the name of the Nominee and the Bonds may be transferred, in whole but not in part, only to the Depository, to a successor Depository or to another nominee of the Depository or of a successor Depository. Each global Bond shall bear a
legend substantially to the following effect: " UNLESS THIS BOND IS PRESENTED

BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY ( AS DEFINED IN THE

INDENTURE OF TRUST) TO THE TRUSTEE FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR

IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY ( AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY

AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY

TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTIIERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."
With respect to Bonds registered in the Bond Register in the name of the Nominee, the Authority and the Trustee shall have no responsibility or obligation to any Depository Participant or to any person on behalf of which such a Depository Participant holds a beneficial interest in the Bonds. Without limiting the immediately preceding sentence, the Authority and the Trustee shall have no responsibility or obligation with respect to ( a) the accuracy of the records of the Depository, the Nominee or any Depository Participant with respect to any beneficial ownership interest in the Bonds, (b) the delivery to any Depository Participant, beneficial owner or any other person, other than the Depository, of any notice with respect to the Bonds, including any Redemption Notice, (c) the selection by the Depository and the Depository Participants of the beneficial interests in the Bonds to be redeemed in part, or (d) the payment to any Depository Participant, beneficial owner or any other person, other than the Depository, of any amount with respect to principal of, interest on, or premium, if any, of the ',Bonds. The Authority and the Trustee may treat and consider the person in whose name each Bond is registered in the Bond Register as the holder and absolute Owner of such Bond for the purpose of payment of principal o1 premium, if any, and interest on, the Bond, for the purpose of giving Redemption Notices with respect to the Bonds and other notices with respect to the Bonds, and for all other purposes whatsoever, including, without limitation, registering transfers with respect to the Bonds.

The Trustee shall pay all principal of, premium, if any, and interest on, the Bonds only to or upon the order of the respective Bond Owners, as shown in the Bond Register kept by the Trustee, or their respective attorneys duly authorized in writing, and all such payments shall be valid hereunder with respect to payment of principal of, premium, if any, and interest on, the Bonds to the extent of the sum or sums so paid. No person other than a Bond Owner, as shown in the Bond Register, shall receive a Bond evidencing the obligation to make payments of principal o1 premium, if any, and interest on, such Bond pursuant to this Indenture. Upon delivery by the Depository to the Trustee and the Authority of written notice to the effect that the Depository has determined to substitute a new nominee in place of the Nominee, and subject to the provisions herein with respect to Record Dates, the word Nominee in this Indenture shall refer to such new nominee of the Depository.

SECTION 2. 11 Representation Letter. In order to qualify book -entry system, the Authorized Representative is hereby authorized the
to
Bonds
execute,
for the
countersign
Depository' s
and
deliver on behalf of the Authority to such Depository a letter from the Authority representing such matters as shall be necessary to so qualify the Bonds ( the " Representation Letter"). The execution and delivery of 35268406. 4 16 1400
the Representation Letter shall not in any way limit the provisions of Section 2. 10 hereof or in any other way impose upon the Authority or the City any obligation whatsoever with respect to persons having beneficial interests in the Bonds other than the Owners, as shown in the Bond Register kept by the Trustee. In the written acceptance by the Trustee of the Representation Letter, the Trustee shall agree, and hereby agrees, to take all actions necessary for all representations of the Trustee in the Representation Letter with respect to the Trustee to at all times be complied with. In addition to the execution and delivery of the Representation Letter, the Authority Representative and all other officers of the Authority, and their respective deputies and designees, each is hereby authorized to take any other actions, not inconsistent with this Indenture, to qualify the Bonds for the Depository' sbook -entry program.

SECTION 2. 12 Transfers Outside Book -Entry System. If at any time the Depository notifies the Authority that it is unwilling or unable to continue as Depository with respect to the Bonds or if at any time the Depository shall no longer be registered or in good standing under the Securities Exchange Act or other applicable statute or regulation and a successor Depository is not appointed by the Authority within 90 days after the Authority receives notice or becomes aware of such condition, as the case may be, Section 2. 10 hereof shall no longer be applicable and the Authority shall execute and the Trustee shall authenticate and deliver bonds representing the Bonds as provided below. In addition, the Authority may determine at any time that the Bonds shall no longer be represented by global bonds and that the provisions of Section 2. 10 hereof shall no longer apply to the Bonds. In any such event the Authority shall execute and the Trustee shall authenticate and deliver bonds representing the Bonds as provided below. Bonds executed, authenticated and delivered in exchange for global bonds pursuant to this Section 2. 12 shall be registered in such names and delivered in such Authorized Denominations as the Depository, pursuant to instructions from the Depository Participants or otherwise, shall instruct the Authority and the Trustee. The Trustee shall deliver such bonds representing the Bonds to the persons in whose names such Bonds are so registered.

If the Authority determines to replace the Depository with another qualified securities depository, the Authority shall prepare or cause to be prepared a new fully -registered global bond for each of the maturities of the Bonds, registered in the name of such successor or substitute securities depository or its nominee, or make such other arrangements as are acceptable to the Authority, the Trustee and such securities depository and not inconsistent with the terms of this Indenture.

SECTION 2. 13 Payments and Notices to the Nominee. Notwithstanding any other provision of this Indenture to the contrary, so long as any Bond is registered in the name of the Nominee, all payments of principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond shall be made and given, respectively, as provided in the Representation Letter or as otherwise instructed by the Depository.

SECTION 2. 14 Initial Depository and Nominee. The initial Depository under this Indenture shall be DTC. The initial Nominee shall be Cede & Co., as nominee of DTC.

ARTICLE HI

ISSUANCE OF BONDS AND APPLICATION OF PROCEEDS
SECTION 3. 1 Issuance of Bonds. Upon the execution and delivery of this Indenture, the Authority shall execute and deliver Bonds in the aggregate principal amount of Dollars ($[ 1), and shall deliver the Bonds to the Trustee for authentication and delivery to the Original Purchasers upon the Written Request of the Authority. 35268406. 4 17 1401
SECTION 3. 2 Application of Proceeds and Other Moneys. Upon the receipt of payment for the Bonds on the Closing Date, the Trustee shall deposit the full amount thereof as follows:
a) The Trustee shall deposit into the Costs of Issuance Fund the amount of $[ ]. b) The Trustee shall deposit into the Acquisition and Construction Fund the amount of c) The Trustee shall transfer to the Escrow Agent for deposit into Escrow Fund the amount of $ , representing the amount, together with the amount deposited therein from certain other funds and accounts held by the Prior Trustee, necessary to refund the 2007 Bonds. d) The Trustee shall deposit into the Reserve Fund the amount of $[ ] equaling the Reserve Requirement.
e) [ The Trustee shall deposit into the Bond Service Fund the amount of $[ representing capitalized interest on the Bonds.]
The Trustee may, in its discretion, establish a
temporary fund or account in its books and records
to facilitate such deposits.

SECTION 3. Reserve Fund. ( a) There is hereby created a separate fund to be known as the " Reserve Fund", which shall be held in trust by the Trustee. An amount equal to the Reserve Requirement shall be maintained in the Reserve Fund at all times, subject to the provisions of Section 4.2(b), and any deficiency therein shall be replenished from the first available Revenues pursuant to Section 4.2(b).
b) Moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the Bonds, including the redemption price of the Bonds coming due and payable by operation of mandatory sinking fund redemption pursuant to Section 2.3(c), in the event that the moneys in the Bond Service Fund are insufficient therefor. In the event that the amount on deposit in the Bond Service Fund on any date is insufficient to enable the Trustee to pay in full the aggregate amount of principal of and interest on the Bonds coming due and payable, including the redemption price of the Bonds corning due and payable by operation of mandatory sinking fund redemption pursuant to Section 2.3(c), the Trustee shall withdraw the amount of such insufficiency from the Reserve Fund and transfer such amount to the Bond Service Fund.
c) In the event that the amount on deposit in the Reserve Fund exceeds the Reserve Requirement on the fifteenth ( 15th) calendar day of the month preceding any Interest Payment Date, the amount of such excess shall be withdrawn therefrom by the Trustee and transferred to the Bond Service Fund and credited against the Installment Payment or Installment Payments next due from the City. d) The Authority may fund all or a portion of the Reserve Requirement with one or more Qualified Reserve Fund Credit Instruments. Upon deposit of any Qualified Reserve Fund Credit Instrument with the Trustee, the Trustee shall transfer any excess amounts then on deposit in the Reserve Fund into a segregated account of the Bond Service Fund, which monies shall be applied at the written direction of the Authority either ( i) to the payment within one year of the date of transfer of capital expenditures of the Authority permitted by law, or ( ii) to the redemption of Bonds on the earliest succeeding date on which such redemption is permitted hereby, and pending such application shall be held either not invested in investment property ( as defined in section 148( b) of the Tax Code), or invested in such property to produce a yield that is not in excess of the yield on the Bonds; provided, however, that 35268406. 4 18 1402
the Authority may by written direction to the Trustee cause an alternative use of such amounts if the Authority shall first have obtained a written opinion of nationally recognized bond counsel substantially to the effect that such alternative use will not adversely affect the exclusion pursuant to section 103 ofthe Tax Code of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes.

In any case where the Reserve Fund is funded with a combination of cash and a Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any available moneys provided by the Authority shall be used first to reinstate the Qualified Reserve Fund Credit Instrument and second, to replenish the cash in the Reserve Fund. In the event the Qualified Reserve Fund Credit Instrument is drawn upon, the Authority shall make payment of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making any payments pursuant to subsection ( a) of Section 4. 2.

SECTION 3. 4 Costs of Issuance Fund. The Trustee shall establish, maintain and hold in trust a
separate fund to be known as the " Costs of Issuance Fund". Except as otherwise provided herein, moneys in the Costs of Issuance Fund shall be used solely for the payment of the Costs of Issuance. The Trustee shall disburse moneys in the Costs of Issuance Fund from time to time to pay Costs of Issuance or to reimburse the Authority for payment of Costs of Issuance) upon receipt by the Trustee of a Written Request of the Authority, substantially in the form of the first such request delivered by the Authority to the Trustee on the Closing Date, which: (a) states with respect to each disbursement to be made ( i) the requisition number, (ii) the name and address of the person, firm or corporation to whom payment will be made, ( iii) the amount to be disbursed, (iv) that each obligation mentioned therein is a proper charge against the Costs of Issuance Fund and has not previously been disbursed by the Trustee from amounts in the Costs of Issuance Fund, and ( v) that the amount of such disbursement is for payment of Costs of Issuance incurred and payable by the Authority; ( b) specifies in reasonable detail the nature of the obligation; and (c) is accompanied by a bill or statement of account ( if any) for each obligation. Upon the earlier of 180 days from the Closing Date or the filing with the Trustee of a Written Certificate of the Authority stating that all Costs of Issuance have been paid, the Trustee shall withdraw all amounts then on deposit in the Costs of Issuance Fund and transfer such amounts to the Bond Service Fund.

SECTION 3. 5 Acquisition and Construction Fund. The Trustee shall establish, maintain and hold in trust a separate fund to be known as the " Acquisition and Construction Fund." Except as otherwise provided herein, moneys in the Acquisition and Construction Fund shall be used solely for the payment of Acquisition and Construction Costs, as defined in the Installment Sale Agreement. Before any payment from the Acquisition and Construction Fund shall be made, the City shall file or cause to be filed with the Trustee, a Requisition of the City which shall be substantially in the form attached hereto as Exhibit B. The Trustee shall be entitled to rely on the representations of the City contained in such Requisition and shall not be required to independently verify the contents of such Requisition.

Within five ( 5) Business Days following receipt of each such Requisition, the Trustee shall pay the amount set forth in such Requisition as directed by the terms thereof out of the Acquisition and Construction Fund. Upon the Written Request of the City accompanied by a Written Certificate of the City stating that all Acquisition and Construction Costs have been paid or provision made for their payment, any unexpended moneys in the Acquisition and Construction Fund may be used to pay the costs associated with any other improvements to the Electric System, provided that in the opinion of Bond Counsel such use of the proceeds of the Bonds shall not adversely affect the exclusion of interest on the Bonds from gross income of the owners thereof. Any unexpended moneys in the Acquisition and Construction Fund subsequent to the payment of all Acquisition and Construction Cost which are not used to pay the cost of other improvements to the Electric System shall be transferred to the Bond Service Fund upon receipt by the Trustee of a Written Request of the City accompanied by a Written Certificate 35268406. 4 19 1403
of the City stating that all Acquisition and Construction Costs have been paid or provision made for their payment.

SECTION 3. 6 Validity of Bonds. The validity of the authorization and issuance of the Bonds shall not be affected in any way by any proceedings taken by the Authority or the Trustee with respect to or in connection with the Installment Sale Agreement and the recital contained in the Bonds that the same are issued pursuant to the Bond Law shall be conclusive evidence of their validity and of the regularity of their issuance.

ARTICLE IV
REVENUES; FLOW OF FUNDS
SECTION 4. 1 Assignment of Revenues. The Authority hereby assigns to the Trustee, on behalf of the Owners, all of the Authority' sright, title and interest to and in the Revenues and all of the right, title and interest of the Authority in the Installment Sale Agreement ( other than the rights of the Authority under Sections 4. 10, 6. 3 and 8. 4 thereof). Subject to Section 4.3, all Revenues the Trustee collects and receives shall be applied to the payment of principal of and interest and premium ( if any) on the Bonds equally, without priority for series, issue, number or date, in accordance with the terns hereof.

So long as any of the Bonds are Outstanding, the Revenues and such moneys shall not be used for any other purpose; except that a portion of the Revenues may be used for purposes as expressly permitted by Section 4. 2 hereof.

The assignment under this section to the Trustee is solely in the Trustee' s capacity as Trustee
under this Indenture and the duties, powers and liabilities of the Trustee in acting pursuant to such assignment shall be subject to the provisions of this Indenture, including, without limitation, the provisions of Article VI hereof. The Trustee shall not be responsible for any representations, warranties, covenants or obligations of the Authority.

SECTION 4. 2 Receipt, Deposit and Application of Revenues. Except as provided in Section 4. 3 hereof with regard to the deposit of earnings on investments, all of the Revenues shall be deposited by the Trustee immediately upon receipt in the Revenue Fund ( which the Trustee shall establish and hold in trust hereunder) or as otherwise instructed by the City. Amounts in the Revenue Fund shall be applied solely for the uses and purposes set forth herein. The Trustee shall withdraw amounts on deposit in the Revenue Fund and apply such amounts at the times and for the purposes, and in the priority, as follows:
a) Bond Service Fund. On or before the fifteenth ( 15th) calendar day of the month preceding each Interest Payment Date, so long as any Bonds remain Outstanding hereunder, the Trustee shall withdraw from the Revenue Fund and deposit into the Bond Service Fund ( which the Trustee shall establish and hold in trust hereunder) an amount which, together with other available amounts then on deposit in the Bond Service Fund, is at least equal to the sum of (i) the aggregate amount of principal of and interest coming due and payable on the Bonds on such Interest Payment Date, and ( ii) the redemption price of the Term Bonds coming due and payable on such Interest Payment Date by operation of mandatory sinking fund redemption pursuant to Section 2.3(c).

Amounts in the Bond Service Fund shall be applied by the Trustee solely for the purpose of paying the principal of and interest on the Outstanding Bonds when and as such principal and interest becomes due and payable ( including accrued interest on any Bonds purchased or redeemed pursuant hereto), and for the purpose of paying the principal of the Term Bonds at the maturity thereof or upon the mandatory sinking fund redemption thereof pursuant to Section 2.3(e). 35268406. 4 20 1404
If after all of the Bonds have been paid or deemed to have been paid, there are moneys remaining in the Bond Service Fund, such moneys shall be transferred by the Trustee to the City, after the payment of any outstanding fees and expenses of the Trustee.
b) Reserve Fund. In the event that the amount on deposit in the Reserve Fund at any time falls below the Reserve Requirement, the Trustee shall promptly notify the City and the Authority of such fact and the Trustee shall promptly ( 1) withdraw the amount of such insufficiency from available Revenues on deposit in the Revenue Fund, and ( ii) transfer such amount to the Reserve Fund. No deposit need be made in the Reserve Fund so long as the balance therein at least equals the Reserve Requirement. c) Redemption Fund. The Trustee shall deposit into the Redemption Fund all amounts required to redeem any Bonds which are subject to redemption pursuant to Sections 2.3(a) and ( b) when and as such amounts become available. Amounts in the Redemption Fund shall be applied by the Trustee solely for the purpose of paying the redemption price of Bonds to be redeemed pursuant to Sections 2.3(a) and ( b). Following any redemption of all of the Bonds, any moneys remaining in the Redemption Fund shall be transferred by the Trustee to the City.

SECTION 4. 3 Investments. All moneys in any of the funds or accounts established with the Trustee pursuant to this Indenture shall be invested by the Trustee solely in Permitted Investments, as directed pursuant to the Written Request of the City filed with the Trustee at least two ( 2) Business Days in advance of the making of such investments. In the absence of any such directions from the City, the Trustee shall invest any such moneys in Permitted Investments described in paragraph [( D) or paragraph F)] of the definition thereof. Obligations purchased as an investment of moneys in any fund shall be deemed to be part of such fund or account. All interest or gain derived from the investment of amounts in any of the funds or accounts established hereunder shall be deposited in the fund or account from which such investment was made; except that all interest or gain derived from the investment of amounts in the Reserve Fund shall be deposited in the Bond Service Fund to the extent not required to maintain the Reserve Requirement on deposit in the Reserve Fund. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder. The Trustee may act as sponsor, principal or agent in the acquisition or disposition of any investment. The Trustee shall incur no liability for losses arising from any investments made pursuant to this Section.

The Trustee may sell, or present for prepayment, any Permitted Investment so purchased by the Trustee whenever it shall be necessary in order to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee shall not be liable or responsible for any loss resulting from any such Permitted Investment.

The Authority ( and the City by its execution of the Installment Sale Agreement) acknowledge that to the extent regulations of the Comptroller of the Currency or other applicable regulatory entity grant the Authority or the City the right to receive brokerage confirmations of security transactions as they occur, the Authority and the City specifically waive receipt of such confirmations to the extent permitted by law. The Trustee will furnish the Authority and the City periodic cash transaction statements which include detail for all investment transactions made by the Trustee hereunder.

SECTION 4. Acquisition, Disposition and Valuation of Investments. a) Except as otherwise provided in subsection ( b) of this Section, all investments of amounts deposited in any fund or account created by or pursuant to this Indenture, or otherwise containing gross proceeds of the Bonds ( within the meaning of section 148 of the Tax Code) shall be acquired and disposed of (as of the date that valuation is required by this Indenture or the Tax Code) at Fair Market Value, provided the Trustee is not responsible to determine Fair Market Value. 35268406. 4 21 1405
b) Except as required pursuant to Section 5. 7 hereof, the value of the investments held pursuant to this Indenture shall be determined as follows: " Value", which shall be determined as of the end of each month, means that the value of any investments shall be calculated as follows: ( a) as to investments the bid and asked prices of which are published on a regular basis in The Wall Street Journal
or, if not there, then in The New York Times); the average of the bid and asked prices for such investments so published on or most recently prior to such time of determination; (b) as to investments the bid and asked prices of which are not published on a regular basis in The Wall Street Journal or The
New York Times; the average bid price at such time of determination for such investments by any two nationally recognized government securities dealers ( selected by the Trustee in its absolute discretion) at the time making a market in such investments or the bid price published by a nationally recognized pricing service; (c) as to certificates of deposit and bankers acceptances; the face amount thereof, plus accrued interest; and ( d) as to any investment not specified above; the value thereof established by prior agreement between the Authority and the Trustee.

Notwithstanding anything to the contrary herein, in making any valuations of investments hereunder, the Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system and rely thereon.

ARTICLE V
COVENANTS OF THE AUTHORITY; SPECIAL TAX COVENANTS
SECTION 5. 1 Punctual Payment; Compliance With Documents. The Authority shall punctually pay or cause to be paid the interest and principal to become due with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this Indenture, and will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture and all Supplemental Indentures.

SECTION 5. 2 Extension of Payment of Bonds. The Authority shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase of such Bonds or by any other arrangement, and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section 5. 2 shall be deemed to limit the right of the Authority to issue bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of the Bonds.

SECTION 5. 3 Against Encumbrances. The Authority shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture. Subject to this limitation, the Authority expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, and reserves the right to issue other obligations for such purposes.

SECTION 5. 4 Power to Issue Bonds and Make Pledge and Assignment. The Authority is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets purported to be pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding special obligations of the Authority in 35268406. 4 22 1406
accordance with their terms, and the Authority and the Trustee shall at all times, subject to the provisions of Article VI and to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bond Owners under this Indenture against all claims and demands of all persons whomsoever.

SECTION 5. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of Bonds, the Revenues, the Installment Sale Agreement, and all funds and accounts held by the Trustee under this Indenture. Such books of record and account shall be available for inspection by the Authority and the City, during business hours and under reasonable circumstances.

SECTION 5. 6 No Additional Obligations. The Authority covenants that no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part.

SECTION 5. 7 Tax Covenants Relating to the Bonds.
a) Special Definitions. When used in this Section, the following terms have the following meanings:

Computation Date" has the meaning set forth in section 1.48-(b) of the Tax Regulations.

Facilities" means any property the acquisition, construction or improvement of which was financed directly or indirectly with Gross Proceeds of the Bonds.

Gross Proceeds" means any proceeds as defined in section 1.48-(b) of the Tax Regulations ( referring to sales, investment and transferred proceeds), and any replacement proceeds as defined in section 1.48-(c) of the Tax Regulations, of the Bonds.

Investment" has the meaning set forth in section 1.48-(b) ofthe Tax Regulations.

Nongovernmental Output Property" means any property ( or interest therein) that prior to its acquisition by the City was used by ( or manufactured for or to the order of or held for the use by) any Nongovernmental Person ( whether actually so used or not) in connection with any electric and gas generation, transmission, distribution, or related facilities.

Nongovernmental Person" refers to any person or entity (including the United States or any agency, department and instrumentality thereof) other than a state or local government, or an agency or instrumentality acting solely on behalf thereof.

Nonpurpose Investment" means any investment property, as defined in section 148( b) of the Tax Code, in which Gross Proceeds of the Bonds are invested and that is not acquired to carry out the governmental purposes of the Bonds.

Prior Issue" refers to the 2007 Bonds.

Rebate Amount" has the meaning set forth in section 1.48-(b) of the Tax Regulations. 35268406. 4 23 1407
Tax Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Tax Code.

Yield" of
1) any Investment has the meaning set forth in section 1.48- 5 of the Tax Regulations; and
2) the Bonds has the meaning set forth in section 1.48- 4 of the Tax Regulations.
b) Not to Cause Interest to Become Taxable. The Authority and the City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts ( or any property the acquisition, construction or improvement of which is to be financed directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, would cause the interest on any of the Bonds to fail to be excluded pursuant to section 103( a) of the Tax Code from the gross income of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Authority or the City receives a written opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the Authority or the City, as the case may be, shall comply with each of the specific covenants in this Section. c) No Private Use or Private Payments. Except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall at all times prior to the payment and cancellation of the last Bond to be paid and canceled:
1) use their best efforts to ensure that the City exclusively own, operate and possess all of the Facilities that are to be refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds ( including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity ( including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and 2) not directly or indirectly impose or accept any charge or other payment by any person or entity in respect of the use by any Nongovernmental Person of Gross Proceeds of the Bonds or the Prior Issue, or any of the Facilities, other than taxes of general application within the jurisdiction of the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes.

Without limiting the foregoing, except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, neither of the City nor the Authority will: (i) permit any Nongoverrunental Person to hold any ownership, proprietary or possessory interest in the financed property; (ii) contract with any Nongovernmental Person for the provision of operating or other services with respect to any function of the financed property unless either ( A) such arrangement requires no payment of fees to such Nongovernmental Person other than as direct reimbursement of third party costs or reasonable administrative overhead, or ( B) such arrangement conforms to administrative guidance of the Internal Revenue Service in order to assure that such arrangement does not create a private business use relationship of the Nongovernmental Person to 35268406. 4 24 1408
the financed property); or ( iii) contract with any Nongovernmental Person for the sale of output or capacity of the financed property unless such contract is described either in section L141 - 7(c) of the Treasury Regulations ( describing certain types of output contracts that do not have the effect of transferring the benefits of owning the property and the burdens of paying debt service on the financing of the property) or in section 1.41- 7(0of the Treasury Regulations ( describing certain types of output contracts that while having the effect of transferring such benefits and burdens but nevertheless may be disregarded in evaluating private business use). As set forth above, for purposes of the preceding sentence, the Authority will treat proceeds of the Bonds as used ratably for the same purposes as were the proceeds of the Prior Issues and the Original Issue.

Except as would not cause any Bond to be a " private activity bond", no portion of the Gross Proceeds will be used ( directly or indirectly) for the acquisition of any interest in any Nongovernmental Output Property. As set forth above, for purposes of the preceding sentence, the City and the Authority will treat proceeds of the Bonds as used ratably for the same purposes as were the proceeds of the Prior Issue.
d) No Private Loan. Except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not use Gross Proceeds of any Bond to make or finance loans to any Nongovernmental Person. For purposes of the foregoing covenant, such Gross Proceeds are considered to be " loaned" to a person or entity if: (a) property acquired, constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; ( b) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or ( c) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or Unproved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. e) Not to hnvest at Higher Yield. Except as would not cause any Bond to become an arbitrage bond" within the meaning of section 148 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not at any time prior to the final maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment, if as a result of such investment the Yield of any Investment acquired with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield of such Bond within the meaning of said section 148.
f) Not Federally Guaranteed. Except to the extent permitted by section 149( b) of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not take or omit to take any action that would cause any Bond to be " federally guaranteed" within the meaning of section 149( b) of the Tax Code and the Tax Regulations and rulings thereunder. g) Information Report. The Authority shall timely file any information required by section 149( e) of the Tax Code with respect to the Bonds with the Secretary of the Treasury on Form 8038- G or such other form and in such place as the Secretary may prescribe. h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder:
1) The Authority and the City shall account for all Gross Proceeds including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds ( and receipts, expenditures and investments 352684064 25 1409
thereof) and shall retain all records of accounting for at least six years after the day on which the last Bond is discharged. However, to the extent permitted by law, the Authority or the City may commingle Gross Proceeds of the Bonds with its other money, provided that the Authority or the City, as the case may be, separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. 2) Not less frequently than each Computation Date, the Authority and the City shall calculate the Rebate Amount in accordance with rules set forth in section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder. The Authority and the City shall maintain a
copy of the calculation with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date.
3) In order to assure the excludability of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes, the Authority and the City, jointly and severally but without duplication, shall pay to the United States the amount that when added to the future value of previous rebate payments made for the Bonds equals ( A) in the case of a Final Computation Date as defined in section 1.48- 3(e)( 2) of the Tax Regulations, one hundred percent ( 100%) of the Rebate Amount on such date; and ( B) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, such rebate payments shall be made by the Authority or the City at the times and in the amounts as are or may be required by section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder, and shall be accompanied by Form 8038- T or such other forms and information as is or may be required by section 148( f) of the Tax Code and the Tax Regulations and rulings thereunder for execution and filing by the Authority or the City. 4) The Authority and the City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs ( i) and ii) above, and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter ( and in all events within one hundred eighty ( 180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under section 1.48- 3(h) or other provision of the Tax Regulations. i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority shall not, at any time prior to the final maturity of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to paragraph ( h) of this Section because such transaction results in a smaller profit or a larger loss than would have resulted if the transaction had been at arm' slength and had the Yield on the Bonds not been relevant to either party. j) Bonds Not Hedge Bonds.
1) The Authority and the City each represents that neither the Refunded Bonds nor any Bonds are or will become " hedge bonds" within the meaning of section 149( g) of the Tax Code.
2) Without limitation of paragraph ( i) above, with respect to the Bonds ( or to that portion of the Bonds that is to be applied to the refunding of the Refunded Bonds), either: (A) (I) on the date of issuance of the Refunded Bonds, the Authority or the City 35268406. 4 26 1410
reasonably expected that at least 85% of the spendable proceeds of the Refunded Bonds would be expended within the three- year period commencing on such date of issuance, and ( II) no more than 50% of the proceeds of the Refunded Bonds were invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more; or (B) (I) the provisions of section 149( g) of the Tax Code did not apply to the Refunded Bonds, (II) the average maturity of the refunding bonds is not later than that of the Refunded Bonds, and ( HII) the amount of the refunding bonds is not in excess of the amount of the Refunded Bonds.
3) For purposes of this paragraph ( j), (A) "Refunded Bonds" shall refer to the bonds of any issue refunded or re -refunded ( immediately or through multiple generations of prior issues) by the Bonds, ( B) in applying paragraph ( ii) above, Refunded Bonds" shall refer only to bonds that are not refunding bonds, and ( C) in applying clause ( ii)( B) above, " refunding bonds" refers to, and said clause ( ii)( B) has been applied separately to, each issue being refunded or re -refunded by the Bonds ( and to the portion of each issue ( treating such portion as a separate issue) to the extent such issue is being refunded or re -refunded by the Bonds) that was itself a refunding issue.
k) Elections. The Authority hereby directs and authorizes any Authorized Representative of the Authority and the City hereby directs and authorizes any Authorized Representative of the City to make elections permitted or required pursuant to the provisions of the Tax Code or the Tax Regulations, as such Authorized Representative of the Authority or Authorized Representative of the City (after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Tax Certificate relating to the Bonds or similar or other appropriate certificate, form or document.

SECTION 5. 8 Installment Sale Agreement. The Trustee shall promptly collect all amounts due from the City pursuant to the Installment Sale Agreement. Subject to the provisions of Article VI, the Trustee shall enforce, and take all steps, actions and proceedings which the Trustee determines to be reasonably necessary for the enforcement of all of its rights thereunder as assignee of the Authority and for the enforcement of all of the obligations of the City under the Installment Sale Agreement.

SECTION 5. 9 Waiver of Laws. The Authority shall not at any time insist upon or plead in any manner whatsoever, or claim or take the benefit or advantage of, any stay or extension law now or at any time hereafter in force that may affect the covenants and agreements contained in this Indenture or in the Bonds, and all benefit or advantage of any such law or laws is hereby expressly waived by the Authority to the extent permitted by law.

SECTION 5. 10 Further Assurances. The Authority will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Trustee and Owners of the Bonds the rights and benefits provided in this Indenture.

SECTION 5. 11 Continuing Disclosure. The City covenants and agrees that it will comply with the continuing disclosure requirements with respect to the Bonds promulgated under Securities and Exchange Commission Rule 15e2 -12( b)( 5) as it may from time to time hereafter be amended or supplemented. The Authority shall have no liability to the Bondholders or to any other person with respect to such disclosure matters. Notwithstanding any other provisions of this Indenture, failure of the City to comply with the Continuing Disclosure Agreement shall not be considered an Event of Default; however, any Bondholder or Beneficial Owner may take, and the Trustee shall take, at the request of the Holders of at least 25% aggregate principal amount of Outstanding Bonds, and upon receipt of 35268406. 4 27 1411
satisfactory indemnification, such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Agreement.

ARTICLE VI

THE TRUSTEE
SECTION 6. 1 Appointment of Trustee. U. S. Bank National Association in Los Angeles, California, a national banking association organized and existing under and by virtue of the laws of the United States of America, is hereby appointed Trustee by the Authority for the purpose of receiving all moneys required to be deposited with the Trustee hereunder and to allocate, use and apply the same as provided in this Indenture. The Authority agrees that it will maintain a Trustee having a combined capital and surplus of at least One Hundred Million Dollars ($ 100, 00,00), and subject to supervision or examination by federal or State authority, so long as any Bonds are Outstanding. If such bank or trust company publishes areport of condition at least annually pursuant to law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this Section 5. 1 the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

SECTION 6. 2 Payment of Bonds; Registration Books. The Trustee is hereby authorized to pay the Bonds when duly presented for payment at maturity, or on redemption or purchase prior to maturity, and to cancel all Bonds upon payment thereof. The Trustee shall keep accurate records of all funds administered by it and of all Bonds paid and discharged. The Trustee will keep or cause to be kept at its Office sufficient books for the registration and transfer of the Bonds, which shall at all times during regular business hours be open to inspection by the City and the Authority. Upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, as provided in this Indenture with respect to the Bonds.

SECTION 6. 3 Acceptance of Trusts. The Trustee hereby accepts the trusts imposed upon it by this Indenture, and agrees to perform said trusts, but only upon and subject to the following express terms and conditions:
a) The Trustee undertakes to perform such duties and only such duties as are specifically set forth in this Indenture. In case an Event of Default hereunder has occurred ( which has not been cured or waived) the Trustee may exercise such of the rights and powers vested in it by this Indenture, and shall use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his own affairs.
b) The Trustee may execute any of the trusts or powers hereof and perform the duties required of it hereunder by or through attorneys, agents, or receivers, and shall have no liability for the actions of any such attorney, agent or receiver chosen with reasonable care, and the Trustee shall be entitled to advice of counsel concerning all matters of trust and its duty hereunder. The Trustee shall not be liable for any action taken or not taken in reliance upon advice or opinion of such counsel. c) The Trustee shall not be responsible for any recital herein, or in the Bonds, or for any of the supplements thereto or instruments of further assurance, or for the sufficiency of the security for the Bonds issued hereunder or intended to be secured hereby and the Trustee shall not be bound to ascertain or inquire as to the observance or performance of any covenants, conditions or agreements on the part of 35268406. 4 28 1412
the Authority hereunder. The Trustee shall not be responsible or liable for any loss suffered in connection with any investment of funds made by it in accordance with Section 4. 3 of this Indenture. d) The Trustee shall not be accountable for the use of any proceeds of sale of the Bonds delivered hereunder. The Trustee may become the Owner of Bonds secured hereby with the same rights which it would have if not the Trustee; may acquire and dispose of other bonds or evidence of indebtedness of the Authority with the same rights it would have if it were not the Trustee; and may act as a depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Owners of Bonds, whether or not such committee shall represent the Owners of the majority in principal amount of the Bonds then Outstanding. e) In the absence of bad faith on its part, the Trustee shall be protected in acting upon any notice, request, consent, certificate, order, affidavit, letter, telegram, requisition, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and correct and to have been signed or sent by the proper person or persons. Any action taken or omitted to be taken by the Trustee in good faith and without negligence pursuant to this Indenture upon the request or authority or consent of any person who at the time of making such request or giving such authority or consent is the Owner of any Bond, shall be conclusive and binding upon all future Owners of the same Bond and upon Bonds issued in exchange therefor or in place thereof. The Trustee shall not be bound to recognize any person as an Owner of any Bond or to take any action at his request unless the ownership of such Bond by such person shall be reflected on the Registration Books.
f) As to the existence or non- existence of any fact or as to the sufficiency or validity of any instrument, paper or proceeding, the Trustee shall be entitled to rely upon a Written Certificate of the City or a Written Certificate of the Authority as sufficient evidence of the facts therein contained and prior to the occurrence of an Event of Default hereunder of which the Trustee has been given notice or is deemed to have notice, as provided in Section 6.3(h) hereof, shall also be at liberty to accept a similar certificate to the effect that any particular dealing, transaction or action is necessary or expedient, but may at its discretion secure such further evidence deemed by it to be necessary or advisable, but shall in no case be bound to secure the same. The Trustee may accept a Written Certificate of the Authority to the effect that an authorization in the form therein set forth has been adopted by the Authority, as conclusive evidence that such authorization has been duly adopted and is in full force and effect. g) The permissive right of the Trustee to do things enumerated in this Indenture shall not be construed as a duty and it shall not be answerable for other than its negligence or willful misconduct. The immunities and exceptions from liability of the Trustee shall extend to its officers, directors, employees and agents.
h) The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder or under the Installment Sale Agreement, except failure by the City to make any of the payments to the Trustee required to be made by the City pursuant to the Installment Sale Agreement, or failure by the Authority to file with the Trustee any document required by this Indenture to be so filed subsequent to the issuance of the Bonds, unless a Responsible Officer the Trustee shall be specifically notified in writing of such default by the Owners of at least twenty- five percent ( 25%) in aggregate principal amount of the Bonds then Outstanding and all notices or other instruments required by this Indenture or under the Installment Sale Agreement to be delivered to the Trustee must, in order to be effective, be delivered at the Office of the Trustee, and in the absence of such notice so delivered the Trustee may conclusively assume there is no Event of Default hereunder or thereunder except as aforesaid.
35268406. 4 29 1413
i) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, shall have the right ( but not the duty) fully to inspect the Electric System, all books, papers and records of the City or the Authority pertaining to the Electric System and the Bonds, and to take such memoranda from and with regard thereto as may be desired but which is not privileged by statute or by law.
j) The Trustee shall not be required to give any bond or surety in respect of the execution of the said trusts and powers or otherwise in respect of the premises. k) Notwithstanding anything elsewhere in this Indenture with respect to the execution of any Bonds, the withdrawal of any cash, the release of any property, or any action whatsoever within the purview of this Indenture, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or corporate action or evidence thereof, as may be deemed desirable for the purpose of establishing the right of the Authority to the execution of any Bonds, or the right of the City or the Authority to the withdrawal of any cash, or the taking of any other action by the Trustee.
1) Before taking the action referred to in Section 8. 3 the Trustee may require that a satisfactory indemnity bond be furnished for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful default in connection with any such action. m) All moneys received by the Trustee shall, until used or applied or invested as herein provided, be held in trust for the purposes for which they were received but need not be segregated from other funds except to the extent required by law. The Trustee shall not be under any liability for interest on any moneys received hereunder except such as may be agreed upon. n) No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder. The Trustee shall provide the Authority and the City with seven days' notice prior to making any advance of its own funds hereunder, and, if the City or the Authority does not provide moneys in the amount needed, the Trustee shall be entitled to interest on the amounts advanced at a rate equal to the then 3 -month certificates of deposit rate ( by reference to the Wall Street Journal); provided that no such prior notice shall need be given and such interest on amounts advanced shall accrue from the date of any such advance following the occurrence of an Event of Default hereunder.
o) The Trustee shall have no responsibility with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds.
p) The Trustee shall not be liable for any action taken or not taken by it in accordance with the direction of a majority ( or other percentage provided for herein) in aggregate principal amount of the Bonds outstanding relating to the exercise of any right, power or remedy available to the Trustee. q) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay (" unavoidable delay") in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floods, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a 35268406. 4 30 1414
party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to such causes or any similar event and/ or occurrences beyond the control of the Trustee. r) The Trustee agrees to accept and act upon facsimile transmission of written instructions and/ or directions pursuant to this Indenture provided, however, that: (1) subsequent to such facsimile transmission of written instructions and/ or directions the Trustee shall forthwith receive the originally executed instructions and/ or directions, (ii) such originally executed instructions and/ or directions shall be signed by a
person as may be designated and authorized to sign for the party signing such instructions and/ or directions, and ( iii) the Trustee shall have received a current incumbency certificate containing the spechnen signature of such designated person.

SECTION 6. 4 Fees, Charges and Expenses of Trustee. The Trustee shall be entitled to payment and reimbursement for reasonable fees for its services rendered hereunder and all reasonable advances, reasonable counsel fees ( including expenses) and other expenses reasonably and necessarily made or incurred by the Trustee in connection with such services, but solely from Additional Payments made by the City under the Installment Sale Agreement. Upon the occurrence of an Event of Default, the Trustee shall have a first lien with right of payment prior to payment of any Bond upon the amounts held hereunder for the foregoing fees, charges and expenses incurred by it respectively.

SECTION 6. 5 Notice to Bond Owners of Default. If an Event of Default hereunder occurs with respect to any Bonds, of which the Trustee has been given or is deemed to have notice, as provided in Section 6.3(h), then the Trustee shall promptly give written notice thereof by first- class mail to the Owner of each such Bond, unless such Event of Default shall have been cured before the giving of such notice.

SECTION 6. Intervention by Trustee. In any judicial proceeding to which the Authority is a party which, in the opinion of the Trustee and its counsel, has a substantial bearing on the interests of Owners of any of the Bonds, the Trustee may intervene on behalf of such Bond Owners, and subject to Section 6.3(1), shall do so if requested in writing by the Owners of a majority in aggregate principal amount of such Bonds then Outstanding.

SECTION 6. 7 Removal of Trustee. The Owners of a majority in aggregate principal amount of the Outstanding Bonds, or the Authority ( so long as no Event of Default has occurred or is continuing), may at any time remove the Trustee initially appointed, and any successor thereto, by an instrument or concurrent instruments in writing delivered to the Trustee.

SECTION 6. 8 Resignation by Trustee. The Trustee and any successor Trustee may at any time resign by giving written notice by registered or certified mail to the City and the Authority. Upon receiving such notice of resignation, the Authority shall promptly appoint a successor Trustee in accordance with Section 6. 9. Any resignation or removal of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee. Upon such acceptance, the successor Trustee shall mail notice thereof to the Bond Owners at their respective addresses set forth on the Registration Books.

SECTION 6. 9 Appointment of Successor Trustee. In the event of the removal or resignation of the Trustee pursuant to Sections 6. or 6.7, respectively, the Authority shall promptly appoint a successor Trustee; provided that any such successor shall be a bank or trust company meeting the requirements of Section 6. 1. In the event the Authority shall for any reason whatsoever fail to appoint a successor Trustee within sixty ( 60) days following the delivery to the Trustee of the instrument described in Section 6. or within sixty ( 60) days following the receipt of notice by the Authority 35268406. 4 31 1415
pursuant to Section 6.7, the Trustee may apply to a court of competent jurisdiction for the appointment of a successor Trustee meeting the requirements of Section 6. 1. Any such successor Trustee appointed by such court shall become the successor Trustee hereunder notwithstanding any action by the Authority purporting to appoint a successor Trustee following the expiration of such sixty ( 60) day period. Upon the acceptance by any successor Trustee of appointment as such, the successor Trustee shall cause notice thereof to be given by first class mail to the Bond Owners at their respective addresses set forth on the Registration Books.

SECTION 6. 10 Merger or Consolidation. Any company into which the Trustee may be merged or converted or which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided that such company shall be eligible under Section 6.1, shall be the successor to the Trustee and vested with all of the title to the trust estate and all of the trusts, powers, discretions, immunities, privileges and all other matters as was its predecessor, without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

SECTION 6. 11 Concerning any Successor Trustee. Every successor Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to the Authority an instrument in writing accepting such appointment hereunder and thereupon such successor, without any further act, deed or conveyance, shall become fully vested with all the estates, properties, rights, powers, trusts, duties and obligations of its predecessors; but such predecessor shall, nevertheless, on the Written Request of the Authority, or of its successor, execute and deliver an instrument transferring to such successor all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Trustee shall deliver all securities and moneys held by it as the Trustee hereunder to its successor. Should any instrument in writing from the Authority be required by any successor Trustee for more fully and certainly vesting in such successor the estate, rights, powers and duties hereby vested or intended to be vested in the predecessor, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority.

SECTION 6. 12 Appointment of Co -Trustee. It is the purpose of this Indenture that there shall be no violation of any law of any jurisdiction ( including particularly the law of the State) denying or restricting the right of banking corporations or associations to transact business as Trustee in such jurisdiction. It is recognized that in the case of litigation under this Indenture, and in particular in case of the enforcement of the rights of the Trustee on default, or in the case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise any of the powers, rights or remedies herein granted to the Trustee or hold title to the properties, in trust, as herein granted, or take any other action which may be desirable or necessary in connection therewith, it may be necessary that the Trustee appoint an additional individual or institution as a separate or co -trustee. The following provisions of this Section 6. 12 are adopted to these ends.

In the event that the Trustee appoints an additional individual or institution as a separate or co -
trustee, each and every remedy, power, right, claim, demand, cause of action, immunity, estate, title, interest and lien expressed or intended by this Indenture to be exercised by or vested in or conveyed to the Trustee with respect thereto shall be exercisable by and vest in such separate or co -trustee but only to the extent necessary to enable such separate or co -trustee to exercise such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by such separate or co -trustee shall run to and be enforceable by either ofthem.

Should any instrument in writing from the Authority be required by the separate trustee or co - trustee so appointed by the Trustee for more fully and certainly vesting in and confirming to it such 35268406. 4 32 1416
properties, rights, powers, trusts, duties and obligations, any and all such instruments in writing shall, on request, be executed, acknowledged and delivered by the Authority. In case any separate trustee or co - trustee, or a successor to either, shall become incapable of acting, resign or be removed, all the estates, properties, rights, powers, trusts, duties and obligations of such separate trustee or co -trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a new trustee or successor to such separate trustee or co -trustee.

SECTION 6. 13 Indemnification; Limited Liability of Trustee. The Authority further covenants and agrees to indemnify and save the Trustee and its officers, directors, agents and employees, harmless against any loss, costs, claims, expense and liabilities which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability, but excluding any and all losses, costs, claims, expenses and liabilities which are due to the negligence or willful misconduct of the Trustee, its officers, directors or employees. No provision in this Indenture shall require the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder or pursuant to the Installment Sale Agreement. The Trustee shall not be liable for any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of Bonds Outstanding relating to the time, method and place of conducting any proceeding or remedy available to the Trustee under this Indenture. The obligations of the Authority under this paragraph shall be payable solely from Additional Payments made by the City under the Installment Sale Agreement and shall survive the resignation or removal of the Trustee under this Indenture or any defeasance of the Bonds. The Trustee' srights to immunities and protection from liability hereunder and its rights to payment of its fees and expenses shall survive its resignation or removal and final payment or defeasance of the Bonds. All indemnifications and releases from liability granted herein to the Trustee shall extend to the directors, officers, employees and agents of the Trustee.

The Trustee shall have no responsibility or liability with respect to any information, statements or recital in any offering memorandum or other disclosure material prepared or distributed with respect to the issuance of these Bonds. Before taking any action under Article VIII or this Article at the request of the Owners, the Trustee may require that a satisfactory indemnity bond be furnished by the Owners for the reimbursement of all expenses to which it may be put and to protect it against all liability, except liability which is adjudicated to have resulted from its negligence or willful misconduct in connection with any action so taken.

ARTICLE VH

MODIFICATION AND AMENDMENT OF THIS INDENTURE
SECTION 7. 1 Amendment by Consent of Bond Owners. This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may be modified or amended at any time by a Supplemental Indenture which shall become binding when the written consents of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, exclusive of Bonds disqualified as provided in Section 7. 2 hereof, are filed with the Trustee. No such modification or amendment shall (a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation of the Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the Owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or ( c) without its written consent thereto, modify any of the rights or obligations of the Trustee.
35268406. 4 33 1417
This Indenture and the rights and obligations of the Authority and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Indenture which shall become binding upon adoption, without the consent of any Bond Owners, but only to the extent permitted by law and only for any one or more of the following purposes:
a) to add to the covenants and agreements of the Authority in this Indenture contained, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the Authority; or
b) to make such provisions for the purpose of curing any ambiguity, or of curing, eon- ecting or supplementing any defective provision contained in this Indenture, or in any other respect whatsoever as the Authority may deem necessary or desirable, provided under any circumstances that such modifications or amendments shall not materially adversely affect the interests of the Owners of the Bonds, in the opinion of Bond Counsel; or
c) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds.

The Trustee shall not be required to enter into or consent to any amendment or modification which, in the sole judgment of the Trustee, might adversely affect the rights, obligations, powers, privileges, indemnities, immunities or other security provided the Trustee herein.

SECTION 7. 2 Disqualified Bonds. Bonds owned or held by or for the account of the City or the Authority ( but excluding Bonds held in any employees' retirement fund) shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Bonds in this article provided for, and shall not be entitled to consent to, or take any other action in this article provided for, unless all of the Outstanding Bonds shall be owned or held by or for the account of the City or the Authority, provided however, that the Trustee shall not be deemed to have knowledge that any Bond is owned by the Authority or the City or for the account of the Authority or the City unless the Authority or the City is a Registered Owner or the Trustee has received written notice that any other Registered Owner is the Owner of a Bond for the account of the City or Authority.

SECTION 7. 3 Endorsement or Replacement of Bonds After Amendment. After the effective date of any action taken as hereinabove provided, the Authority may determine that the Bonds shall bear a notation, by endorsement in form approved by the Authority, as to such action, and in that case upon demand of the Owner of any Bond Outstanding at such effective date and presentation of his Bond for that purpose at the Office of the Trustee, a suitable notation as to such action shall be made on such Bond. If the Authority shall so determine, new Bonds so modified as, in the opinion of the Authority, shall be necessary to conform to such Bond Owners' action shall be prepared and executed, and in that case upon demand of the Owner of any Bond Outstanding at such effective date such new Bonds shall be exchanged at the Office of the Trustee, without cost to each Bond Owner, for Bonds then Outstanding, upon surrender of such Outstanding Bonds.

SECTION 7. 4 Amendment by Mutual Consent. The provisions of this Article VII shall not prevent any Bond Owner from accepting any amendment as to the particular Bond held by such Owner, provided that due notation thereof is made on such Bond. 35268406. 4 34 1418

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
SECTION 8. 1 Events of Default and Acceleration of Maturities. The following events shall be Events of Default hereunder:
a) Default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for mandatory sinking fund redemption, by declaration or otherwise. b) Default in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable. c) Default by the Authority in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds contained, if such default shall have continued for a period of sixty ( 60) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the City and the Authority by the Trustee; provided, however, that if in the reasonable opinion of the Authority the default stated in the notice ( other than a default in the payment of any fees and expenses owing to the Trustee) can be corrected, but not within such sixty ( 60) day period, such default shall not constitute an Event of Default hereunder if the Authority shall commence to cure such default within such sixty ( 60) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time. d) The filing by the Authority of a petition or answer seeking reorganization or arrangement under the Federal bankruptcy laws or any other applicable law of the United States of America, or if a court of competent jurisdiction shall approve a petition, filed with or without the consent of the Authority, seeking reorganization under the Federal bankruptcy laws or any other applicable law of the United States of America, or if, under the provisions of any other law for the relief or aid of debtors, any court of competent jurisdiction shall assume custody or control of the Authority or of the whole or any substantial part of its property.
e) The occurrence and continuation of an Event of Default under and as defined in the Installment Sale Agreement.

Upon the occurrence and during the continuance of any Event of Default the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding, the Trustee shall, declare the principal of all of the Bonds then Outstanding, and the interest accrued thereon, to be due and payable immediately, and upon any such declaration the same shall become and shall be immediately due and payable, anything in this Indenture or in the Bonds contained to the contrary notwithstanding. This provision, however, is subject to the condition that if, at any time after the principal of the Bonds shall have been so declared due and payable and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Authority shall deposit with the Trustee a sum sufficient to pay all of the principal of and interest on the Bonds having come due prior to such declaration, with interest on such overdue principal and interest calculated at the net effective rate of interest per annum then borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee, together with interest thereon at the prime rate of the Trustee then in effect, and any and all other defaults known to the Trustee ( other than in the payment of the principal of and interest on the Bonds having come due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Trustee or the Owners of a majority in aggregate principal 35268406. 4 35 1419
amount of the Bonds at the time Outstanding may, by written notice to the Authority and to the Trustee, on behalf of the Owners of all of the Outstanding Bonds, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

SECTION 8. 2 Application of Funds Upon Acceleration. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture shall be applied by the Trustee in the following order upon presentation of the several Bonds, and the stamping thereon of the amount of the payment if only partially paid, or upon the sun -ender thereof if fully paid:

First, to the payment of reasonable fees, charges and expenses of the Trustee ( including reasonable fees and disbursements of its counsel) incurred in and about the performance of its powers and duties under this Indenture; and
Second, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and principal, with interest on such overdue amounts to the extent permitted by law at the net effective rate of interest then borne by the Outstanding Bonds, and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue amounts without preference or priority among such interest, principal and interest on overdue amounts ratably to the aggregate of such interest, principal and interest on overdue amounts.

SECTION 8. 3 Other Remedies: Rights of Bond Owners. Upon the occurrence of an Event of Default, the Trustee may pursue any available remedy, in addition to the remedy specified in Section 8.1, at law or in equity to enforce the payment of the principal of, premium, if any, and interest on the Outstanding Bonds, and to enforce any rights of the Trustee under or with respect to this Indenture.

If an Event of Default shall have occurred and be continuing and if requested so to do by the Owners of a majority in aggregate principal amount of Outstanding Bonds and indemnified as provided in Section 6.3(1), the Trustee shall be obligated to exercise such one or more of the rights and powers conferred by this Article VIII, as the Trustee, being advised by counsel, shall deem most expedient in the interests of the Bond Owners.

No remedy by the terms of this Indenture conferred upon or reserved to the Trustee ( or to the Bond Owners) is intended to be exclusive of any other remedy, but each and every such remedy shall be cumulative and shall be in addition to any other remedy given to the Trustee or to the Bond Owners hereunder or now or hereafter existing at law or in equity.

No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power or shall be construed to be a waiver of any such Event of Default or acquiescence therein; such right or power may be exercised from time to time as often as nay be deemed expedient.

SECTION 8. 4 Power of Trustee to Control Proceeding. In the event that the Trustee, upon the happening of an Event of ,Default, shall have taken any action, by judicial proceedings or otherwise, pursuant to its duties hereunder, whether upon its own discretion or upon the request of the Owners of a majority in principal amount of the Bonds then Outstanding, it shall have full power, in the exercise of its discretion for the best interests ofthe Owners of the Bonds, with respect to the continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action; provided, however, that the Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, 35268406. 4 3 6
1420
compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount ofthe Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation. Any suit, action or proceeding which any Owner of Bonds shall have the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners of Bonds similarly situated and the Trustee is hereby appointed ( and the successive respective Owners of the Bonds issued hereunder, by taking and holding the same, shall be conclusively deemed so to have appointed it) the true and lawful attorney -in -fact ofthe respective Owners of the Bonds for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners of the Bonds as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney -in -fact.

SECTION 8. 5 Appointment of Receivers. Upon the occurrence of an Event of Default hereunder, and upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and of the Bond Owners under this Indenture, the Trustee shall be entitled, as a matter of right, to the appointment of a receiver or receivers of the Revenues and other amounts pledged hereunder, pending such proceedings, with such powers as the court making such appointment shall confer.

SECTION 8. 6 Non -Waiver. Nothing in this Article VIII or in any other provision of this Indenture, or in the Bonds, shall affect or impair the obligation of the Authority, which is absolute and unconditional, to pay the interest on and principal of the Bonds to the respective Owners of the Bonds at the respective dates of maturity, as herein provided, out of the Revenues and other moneys herein pledged for such payment.

A waiver of any default or breach of duty or contract by the Trustee or any Bond Owners shall not affect any subsequent default or breach of duty or contract, or impair any rights or remedies on any such subsequent default or breach. No delay or omission of the Trustee or any Owner of any of the Bonds to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver of any such default or an acquiescence therein; and every power and remedy conferred upon the Trustee or Bond Owners by the Bond Law or by this Article VIII may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee or the Bond Owners, as the case may be.

SECTION 8. 7 Rights and Remedies of Bond Owners. No Owner of any Bond issued hereunder shall have the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, or the Installment Sale Agreement, unless ( a) such Owner shall have previously given to the Trustee written notice of the occurrence of an Event of Default; (b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name; ( c) said Owners shall have tendered to the Trustee indemnity reasonably acceptable to the Trustee against the costs, expenses and liabilities to be incurred in compliance with such request; (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty 60) days after such written request shall have been received by, and said tender of indemnity shall have been made to, the Trustee; and ( e) the Trustee has not received any inconsistent direction during such 60 - day period from the Owners of a majority in aggregate principal amount of the Outstanding Bonds.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner ofBonds of any remedy hereunder; it being understood and intended that no one or more Owners of Bonds shall have any right in any manner whatever by his or their action to enforce any right under this Indenture, or the Installment Sale 35268406. 4 37 1421
Agreement, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.

The right of any Owner of any Bond to receive payment of the principal of and interest and premium ( if any) on such Bond as herein provided or to institute suit for the enforcement of any such payment, shall not be impaired or affected without the written consent of such Owner, notwithstanding the foregoing provisions of this Section or any other provision of this Indenture.

SECTION 8. Termination of Proceedings. In case the Trustee shall have proceeded to enforce any right under this Indenture by the appointment of a receiver or otherwise, and such proceedings shall have been discontinued or abandoned for any reason, or shall have been determined adversely, then and in every such case, the Authority, the Trustee and the Bond Owners shall be restored to their former positions and rights hereunder, respectively, with regard to the property subject to this Indenture, and all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.

ARTICLE IX
BOND INSURANCE]
SECTION 9. 1 Insurer' s Requirements to Govern. The provisions of this Article shall govern the terms and conditions of this Indenture, notwithstanding anything to the contrary set forth herein.

SECTION 9. 2 Requirements of the Insurer. The Insurer has provided the following requirements for inclusion in this Indenture, and the Authority and the Trustee hereby agree to observe and uphold each and every such requirement applicable to each of them, respectively:
a) The Insurer' sconsent is required for all amendments to this Indenture and the Installment Sale Agreement. The Insurer must be given prior notice of any such amendment. Copies of any such amendment consented to by the Insurer shall be provided to S&P. b) For any Supplemental Indenture executed for reasons other than ( 1) a refunding to obtain
debt service savings, or (2) the issuance of additional bonds pursuant to this Indenture, the consent of the Insurer must be obtained by the Authority prior to the issuance of any additional bonds and/ or the execution of any such Supplemental Indenture.
c) The Insurer shall be deemed to be the sole Owner of the Bonds for the purpose of exercising any voting right or privilege or giving any consent or direction or taking any other action that the Owners of the Bonds are entitled to take pursuant to Article VII and Article VIII hereof. d) Other than in connection with mandatory sinking fund redemptions, any acceleration of principal payments shall be subject to the prior written consent of the Insurer. e) The Insurer is a third -party beneficiary to this Indenture, with the power to enforce any right, remedy or claim conferred, given or granted hereunder. f) If the Insurer makes any payment of principal and/ or interest due on the Bonds, the Bonds shall remain Outstanding for all purposes, and shall not be deemed defeased or otherwise satisfied, or paid by the Authority, and the assignment and pledge of the Revenues andall covenants, agreements 35268406. 4 38 1422
and other obligations of the Authority to the Owners hereunder shall continue to exist and shall run to the benefit of the Insurer, and the Insurer shall be subrogated to the rights of such Owners.

SECTION 9. 3 Payments Under the Policy. If, on the third Business Day prior to the related scheduled interest payment date or principal payment date (" Payment Date"), there is not on deposit with the Trustee under the Indenture, after making all transfers and deposits required under the Indenture, moneys sufficient to pay the principal of, and interest on, the Bonds due on such Payment Date, the Trustee shall give notice to the Insurer and to its designated agent ( if any) (the " Insurer' sFiscal Agent"), by telephone or telecopy, of the amount of such deficiency by 10: 00 a. m., New York City time, on such Business Day. If, on the Business Day prior to the related Payment Date, there is not on deposit with the Trustee moneys sufficient to pay the principal of, and interest on, the Bonds due on such Payment Date, the Trustee shall make a claim under the Policy and give notice to the Insurer and the Insurer' s Fiscal Agent (if any) by telephone of the amount of any deficiency in the amount available to pay principal and interest, and the allocation of such deficiency between the amount required to pay interest on the Bonds and the amount required to pay principal of the Bonds, confirmed in writing to the related Insurer and the Insurer' s Fiscal Agent by 10: 00 a. m., New York City time, on such Business Day, by delivering the Notice of Nonpayment and Certificate.

For the purposes of the preceding paragraph, " Notice" means telephonic or telecopied notice, subsequently confirmed in a signed writing, or written notice by registered or certified mail, from the Trustee to the Insurer, which notice shall specify ( a) the name of the entity making the claim, (b) the policy number, ( c) the claimed amount and ( d) the date such claimed amount will become Due for Payment. " Nonpayment" means the failure of the Authority to have provided sufficient funds to the Trustee for payment in full of all principal of, and interest on, the Bonds that are Due for Payment. "Due for Payment", when referring to the principal of Bonds, means when the stated maturity date or mandatory redemption date for the application of a
required sinking fund installment has been reached
and does not refer to any earlier date on which payment is due by reason of call for redemption ( other than by application of required sinking fund installments, acceleration or other advancement of maturity, unless the Insurer shall elect, in its sole discretion, to pay such principal due upon such acceleration; and when referring to interest on Bonds, means when the stated date for payment of interest has been reached.

Certificate" means a certificate in form and substance satisfactory to the Insurer as to the Trustee' sright to receive payment under the Policy.

The Trustee shall designate any portion of payment of principal on Bonds paid by the Insurer at maturity on its books as a reduction in the principal amount of Bonds registered to the then current Bondholder, whether DTC or its nominee or otherwise, and shall issue a replacement Bond to the Insurer,
registered in the name of the Insurer, as the case may be, in a principal amount equal to the amount of principal so paid ( without regard to authorized denominations); provided that the Trustee' sfailure to so designate any payment or issue any replacement Bond shall have no effect on the amount of principal or interest payable by the Authority on any Bond or the subrogation rights of the Insurer.

The Trustee shall keep a complete and accurate record of all funds deposited by the Insurer into the Policy Payments Account ( as hereinafter defined) and the allocation of such funds to payment of interest on and principal paid with respect to any Bond. The Insurer shall have the right to inspect such records at reasonable times upon reasonable notice to the Trustee.

Upon payment of a claim under the Policy, the Trustee shall establish aseparate special purpose trust account for the benefit of holders of Bonds referred to herein as the " Policy Payments Account" and over which the Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall receive any amount paid under the Policy in trust on behalf of holders of Bonds and shall deposit any such amount in the Policy Payments Account and distribute such amount only for purposes of making the 35268406. 4 39 1423
payments for which a claim was made. Such amounts shall be disbursed by the Trustee to holders of Bonds in the same manner as principal and interest payments are to be made with respect to the Bonds under the sections hereof regarding payment of Bonds. It shall not be necessary for such payments to be made by checks or wire transfers separate from the check or wire transfer used to pay debt service with other funds available to make such payments.

Funds held in the Policy Payments Account shall not be invested by the Trustee and may not be applied to satisfy any costs, expenses or liabilities of the Trustee.

Any funds remaining in the Policy Payments Account following a Bond payment date shall promptly be remitted to the Insurer.

ARTICLE X

MISCELLANEOUS
SECTION 10. Limited Liability of Authority. Notwithstanding anything in this Indenture contained, the Authority shall not be required to advance any moneys derived from any source of income other than the Revenues for the payment of the principal of or interest on the Bonds, or any premiums upon the redemption thereof, or for the performance of any covenants herein contained ( except to the extent any such covenants are expressly payable hereunder from the Revenues or any Additional Revenues). The Authority may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the Authority for such purpose without incurring indebtedness.

The Bonds shall be revenue bonds, payable exclusively from the Revenues and other funds pledged hereunder as in this Indenture provided. The general fund of the Authority is not liable, and the credit of the Authority is not pledged, for the payment of the interest on or principal of the Bonds. The Owners of the Bonds shall never have the right to compel the forfeiture of any property of the Authority.

The principal of and interest on the Bonds, and any premiums upon the redemption of any thereof, shall not be a debt of the Authority, or a
legal or equitable pledge, charge, lien or encumbrance upon any property of the Authority or upon any of its income, receipts or revenues except the Revenues and other funds pledged to the payment thereof as in this Indenture provided.

SECTION 10. 2 Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implied, is intended to give to any person other than the City, the Authority, the Trustee and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the Authority shall be for the sole and exclusive benefit ofthe Trustee and the Owners of the Bonds.

SECTION 10. 3 Discharge of Indenture. If the Authority shall pay and discharge each Outstanding Bond in any one or more ofthe following ways - a) by well and truly paying or causing to be paid the principal of and interest and premium if any) on such Bonds, as and when the same become due and payable; b) by irrevocably depositing with the Trustee, in trust, at or before maturity, money which, together with the available amounts then on deposit in the funds and accounts established pursuant to this Indenture, is fully sufficient to pay such Bonds, including all principal, interest and redemption premiums;
35268406 4 40 1424
c) by irrevocably depositing with the Trustee, in trust, Federal Securities in such amount as Bond Counsel or an Independent Accountant shall determine will, together with the interest to accrue thereon and available moneys then on deposit in the funds and accounts established pursuant to this Indenture, be fully sufficient to pay and discharge the indebtedness on such Bonds ( including all principal, interest and redemption premiums) at or before their respective maturity dates; and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been mailed pursuant to Section 2.3(d) or provision satisfactory to the Trustee shall have been made for the mailing of such notice; or
d) by delivering such Bonds to the Trustee for cancellation - then, at the election of the Authority, and notwithstanding that any of such Bonds shall not have been surrendered for payment, the pledge of the Revenues and other funds provided for in this hndenture with respect to such Bonds, and all other pecuniary obligations of the Authority under this Indenture with respect to all such Bonds, shall cease and terminate, except only the obligation of the Authority to pay or cause to be paid to the Owners of such Bonds not so surrendered and paid all sums due thereon from amounts set aside for such purpose as aforesaid, and all expenses and costs of the Trustee. Notice of such election shall be filed with the Trustee. Any funds thereafter held by the Trustee, which are not required for said purposes, shall be paid over to the City.

SECTION 10. 4 Successor Is Deemed Included in All References to Predecessor.

Whenever in this Indenture or any Supplemental Indenture either the Authority is named or referred to, such reference shall be deemed to include the successor to the powers, duties and functions, with respect to the management, administration and control of the affairs of the Authority, that are presently vested in the Authority, and all the covenants, agreements and provisions contained in this Indenture by or on behalf of the Authority shall bind and inure to the benefit of its successors whether so expressed or not.

SECTION 10. 5 Execution of Documents by Bond Owners. Any request, consent or other instrument required by this Indenture to be signed and executed by Bond Owners may be in any number of concurrent writings of substantially similar tenor and may be signed or executed by such Bond Owners in person or by agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Authority if made in the manner provided in this Section 10. 5.

The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument or writing acknowledged to him the execution thereof.

The ownership of Bonds shall be provided by the Registration Books. Any request, consent, direction or vote of the Owner of any Bond shall bind every future Owner of the same Bond and the Owner of any Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Authority in pursuance of such request, consent, direction or vote.

In determining whether the Owners of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Authority ( but excluding Bonds held in any employees' retirement fund) shall be disregarded and deemed not to be Outstanding for the purpose of any such determination, provided, however, that for the purpose of determining whether the Trustee shall be 35268406. 4 41 1425
protected in relying on any such demand, request, direction, consent or waiver, only Bonds which are registered in the name of the Authority or for which the Trustee has received written notice that any other Owner is holding Bonds for the account of the Authority shall be disregarded. 1n lieu of obtaining any demand, request, direction, consent or waiver in writing, the Trustee may call and hold a meeting of the Bond Owners upon such notice and in accordance with such rules and obligations as the Trustee considers fair and reasonable for the purpose of obtaining any such action.

SECTION 10. 6 Waiver of Personal Liability. No member of the Authority' s Board of
Directors or, officer, agent or employee of the Authority shall be individually or personally liable for the payment of the interest on or principal of the Bonds; but nothing herein contained shall relieve any such officer, agent or employee from the performance of any official duty provided by law.

SECTION 10. 7 Partial Invalidity. If any one or more of the covenants or agreements, or portions thereof, provided in this Indenture on the part of the Authority ( or of the Trustee) to be performed should be contrary to law, then such covenant or covenants, such agreement or agreements, or such portions thereof, shall be null and void and shall be deemed separable from the remaining covenants and agreements or portions thereof and shall in no way affect the validity of this Indenture or of the Bonds; but the Bond Owners shall retain all rights and benefits accorded to them under the Bond Law or any other applicable provisions of law. The Authority hereby declares that it would have entered into this Indenture and each and every other section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized the issuance of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, subdivisions, sentences, clauses or phrases of this Indenture or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.

SECTION 10. 8 Destruction of Canceled Bonds. Whenever in this Indenture provision is made for the surrender to the Authority of any Bonds which have been paid or canceled pursuant to the provisions of this Indenture, Trustee shall destroy such Bonds and furnish to the Authority upon the Authority' sWritten Request a certificate of such destruction.

SECTION 10. 9 Funds and Accounts. Any fund or account required by this Indenture to be established and maintained by the Authority or the Trustee may be established and maintained in the accounting records of the Authority or the Trustee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the Authority shall at all times be maintained in accordance with generally accepted accounting principles and all such records with respect to all such funds and accounts held by the Trustee shall be at all times maintained in accordance with corporate trust industry practices; in each case with due regard for the protection of the security of the Bonds and the rights of every Owner thereof SECTION 10.0 Notices. All written notices to be given under this indenture shall be given by first class mail or personal delivery to the party entitled thereto [( except that any notice required to be given by any party shall also be given to the Insurer)] at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either ( a) upon transmission by facsimile transmission or other form of telecommunication, ( b) upon receipt after deposit in the United States mail, postage prepaid, or ( c) in the case of personal delivery to any person, upon actual receipt. The City, the Authority or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder. 35268406. 4 42 1426
If to the City:

If to the Authority:

If to the Trustee:

City of Banning
99 E. Ramsey Street
Banning, California 92220
Attention: City Manager
Telephone: ( 951) 922- 3101
Facsimile: ( 951) 922- 3112
City of Banning Financing Autho
99 E. Ramsey Street
Banning, California 92220
Attention: Executive Director
Telephone: ( 951) 922- 3101
Facsimile: ( 951) 922- 3112
ty
U. S. Bank National Association
633 W. Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
Telephone: ( 213) 615-002
Facsimile: ( 213) 615 6199
If to the Insurer: [ BOND INSURER]
New York, New York
Attention:

Fax: ( ) 1
SECTION 10.1 Unclaimed Moneys. Anything in this Indenture to the contrary notwithstanding, any moneys held by the Trustee in trust for the payment and discharge of any of the Bonds which remain unclaimed for two ( 2) years after the date when such Bonds or interest thereon have become due and payable, either at their stated maturity dates or by call for earlier redemption, if such moneys were held by the Trustee at such date, or for two ( 2) years after the date of deposit of such moneys if deposited with the Trustee after said date when such Bonds become due and payable, shall be repaid by the Trustee to the Authority, as its absolute property and free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Bond Owners shall look only to the Authority for the payment of such Bonds; provided, however, that before being required to make any such payment to the Authority, the Trustee shall, at the Written Request of the Authority ( and of its expense), cause to be mailed to the Owners of all such Bonds, at their respective addresses appearing on the Registration Books, a notice that said moneys remain unclaimed and that, after a date named in said notice, which date shall not be less than thirty ( 30) days after the date of mailing of such notice, the balance of such moneys then unclaimed will be returned to the Authority.

SECTION 10.2 Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Authority and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

SECTION 10.3 Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State.
35268406. 4 43 1427
IN WITNESS WHEREOF, the CITY OF BANNING FINANCING AUTHORITY and the CITY OF BANNING have caused this Indenture to be signed in their names by their respective authorized officers, and U. S. BANK NATIONAL ASSOCIATION, in token of its acceptance of the trust created hereunder, has caused this indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.

CITY OF BANNING FINANCING AUTHORITY
By:

Title: Executive Director

CITY OF BANNING
By:

Title: City Manager
U. S. BANK NATIONAL ASSOCIATION,
as Trustee
By:

Authorized Officer
35268406. 4
1428

EXHIBIT A
FORM OF BOND]

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE

DEPOSITORY ( AS DEFINED IN THE INDENTURE OF TRUST) TO THE TRUSTEE FOR

REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS

REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY ( AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED

BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER,

PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY

PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

NEITHER THE PAYMENT OF THE PRINCIPAL OR ANY PART THEREOF NOR ANY

INTEREST THEREON CONSTITUTES A DEBT, LIABILITY OR OBLIGATION OF THE CITY OF BANNING.

No.

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BOND
ELECTRIC SYSTEM PROJECT), SERIES 2015
INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:

June 1, 20 August , 2015
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: DOLLARS
The CITY OF BANNING FINANCING AUTHORITY, a
joint powers authority organized and
existing under the laws of the State of California (the "Authority") for value received, hereby promises to pay ( but only out of the Revenues and other assets pledged therefor as hereinafter mentioned) to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above ( subject to any right of prior redemption hereinafter mentioned), the Principal Amount stated above, in lawful money of the United States of America; and to pay interest thereon in like lawful money from the Interest Payment Date next preceding the date of authentication of this Bond ( unless this Bond is authenticated as of a day during the period commencing after the fifteenth day of the month preceding an Interest Payment Date and ending on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or before November 15, 2015, in which event it shall bear interest from the Issue Date stated above) until payment of such principal sum shall be discharged as provided in the Indenture hereinafter mentioned, at the Interest Rate per annum stated above, payable semiammally on each June 1 and December 1, commencing December 1, 2015 ( each, an Interest Payment Date").
35268406. 4 A- 1
1429
The principal ( or redemption price) hereof is payable at the Office ( as defined in the Indenture referred to below) of U. S. Bank National Association, Los Angeles, California ( together with any successor trustee under the Indenture, the " Trustee"). Interest hereon is payable by check of the Trustee mailed on each Interest Payment Date to the Registered Owner as of the fifteenth ( 15th) day of the month preceding each Interest Payment Date at the address shown on the registration books maintained by the Trustee; provided however, that payment of interest will be made by wire transfer in immediately available funds to an account in the United States of America to any Owner of Bonds in the aggregate principal amount of $1, 000,00 or more who shall furnish written wire instructions to the Trustee before the fifteenth day of the month preceding the applicable Interest Payment Date.

It is hereby certified and recited that any and all things, conditions and acts required to exist, to have happened and to have been performed precedent to and in the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by the Bond Law and by the laws of the State of California, and that the amount of this Bond, together with all other indebtedness of the Authority, does not exceed any limit prescribed by the Bond Law or by the Constitution and laws of the State of California, and is not in excess of the amount of Bonds permitted to be issued under the Indenture.

This Bond shall not be entitled to any benefit under the Indenture, or become valid or obligatory for any purpose, until the certificate of authentication hereon endorsed shall have been manually signed by the Trustee.

This Bond is one of a duly authorized issue of bonds of the Authority designated as its " City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015" (the Bonds"), in the aggregate principal amount of Dollars
authorized pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 commencing with Section 6584) of the California Government Code ( the " Bond Law"), and issued pursuant to an Indenture of Trust, dated as of August 1, 20b ( the " Indenture"), by and among the Authority, the City of Banning ( the " City"), and the Trustee.

Reference is hereby made to the Indenture ( a
copy of which is on file at said Office of the
Trustee) and all indentures supplemental thereto and to the Bond Law for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the Authority thereunder. The Registered Owner of this Bond, by acceptance hereof, assents and agrees to all the provisions of the Indenture.

The Bonds have been issued by the Authority to assist the City in financing and refinancing certain improvements to the Electric System. Pursuant to an Installment Sale Agreement, dated as of August 1, 2015, by and between the City and the Authority, the Authority will sell to the City such improvements and the City will pay, in consideration therefor, Installment Payments, secured by the Net Revenues of the Electric System, as defined in the Indenture. The scheduled Installment Payments are equal to the debt service payments on the Bonds.

The Bonds and the interest thereon are payable from Revenues ( as such term is defined in the Indenture), consisting primarily of Installment Payments to be made by the City under the Installment Sale Agreement as consideration for the purchase of certain improvements to the Electric System, and are secured by a pledge and assignment of Revenues, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. The Bonds are special obligations of the Authority and are not a lien or charge upon the funds or property of the Authority, except to the extent of the aforesaid pledge and assignment. 35268406. 4 A- 2
1430
The Bonds shall be subject to special mandatory redemption as a whole or in part, on any date, from proceeds of an eminent domain award or proceeds of casualty insurance not used to repair or rebuild the Electric System, which proceeds may be used for such purpose pursuant to the Installment Sale Agreement, at aredemption price equal to the principal amount of the Bonds to be redeemed plus interest accrued thereon to the date fixed for redemption, without premium.

The Bonds maturing on or before June 1, 2025 shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after June 1, 2026 shall be subject to redemption prior to their respective maturity dates, at the option of the Authority, by lot within a maturity on any date on or after June 1, 2025, from prepayment of Installment Payments made at the option of the City at the redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date ofredemption, without premium.

The Bonds maturing on June I, 20 and June 1, 20 are also subject to redemption prior to their respective stated maturities, on any June 1 on or after June 1, 20 and June 1, 20 , respectively, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount
thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that if some but not all of such Bonds have been redeemed pursuant to optional or special mandatory redemption provisions of the Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Bonds so redeemed, to be allocated among such sinking fund payments on apro rata basis in integral multiples of $5, 000.

Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20
Redemption Date
June 1)
maturity)
Principal
Amount
Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20_
Redemption Date
June 1)
maturity)
Principal
Amount
35268406. 4 A- 3
1431
The Trustee on behalf and at the expense of the Authority shall mail ( by first class mail) notice of any redemption to: (i) the respective Owners of any Bonds designated for redemption, at least twenty (20) but not more than sixty ( 60) days prior to the redemption date, at their respective addresses appearing on the Registration Books, and ( ii) the Securities Depositories and to one or more Information Services ( as such terms are defined in the Indenture), at least twenty ( 20) but not more than sixty ( 60) days prior to the redemption; 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 Bonds or the cessation of the accrual of interest thereon. Interest on the Bonds called for redemption will not accrue from and after the redemption date.

The Bonds are issuable as fully registered Bonds in denominations of $5, 000 and any integral multiple thereof. Subject to the limitations provided in the Indenture, Bonds may be exchanged, at said Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity.

The Trustee has no obligation or liability to the Registered Owners to make payments of principal of or interest on the Bonds, except from amounts on deposit for such purposes with the Trustee. The Trustee' ssole obligations are to administer for the benefit of the Registered Owners the various funds and accounts established under the Indenture and, to the extent provided in the Indenture, to enforce the rights of the Authority under the Installment Sale Agreement.

This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at said Office of the Trustee, but only in the manner, subject to the limitations provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds, of authorized denomination or denominations, of the same maturity and for the same aggregate principal amount, will be issued to the transferee in exchange herefor.

If an Event of Default, as defined in the Indenture, shall occur, the principal of all outstanding Bonds may be declared due and payable upon the conditions, in the manner and with the effect provided in the Indenture, but such declaration and its consequences may be rescinded and annulled as further provided in the Indenture.

The Indenture and the rights and obligations of the Authority and ofthe owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall ( a) extend the maturity of or reduce the interest rate on any Bond or otherwise alter or impair the obligation ofthe Authority to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond without the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or ( c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.

The Authority and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes and the Authority and the Trustee shall not be affected by any notice to the contrary.
35268406. 4 A- 4
1432

STATEMENT OF INSURANCE
TO COME, IF APPLICABLE].
35268406. 4 A- 5
1433
IN WITNESS WHEREOF, the City of Banning Financing Authority has caused this Bond to be executed in its name and on its behalf by the manual signature of its President and attested to by the manual signature of its Secretary, all as ofthe Issue Date stated above.

CITY OF BANNING FINANCING AUTHORITY
By
President
Attest:

Secretary

TRUSTEE' S CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within -mentioned Indenture.

Dated: August , 2015
U. S. BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Officer
35268406. 4 A- 6
1434

ASSIGNMENT
For value received the undersigned hereby sells, assigns and transfers unto Name. Address and it Identification or Social Security Number) the within -mentioned Bond and hereby irrevocably constitute( s) and appoint( s) attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

Signature Guaranteed:

Signature( s) must be guaranteed by a qualified
guarantor.

Note: The signature( s) on this Assignment must
correspond with the name( s) as written on the face
of the within Bond in every particular without
alteration or enlargement or any change whatsoever.
35268406. 4 A- 7
1435

EXHIBIT B

CITY OF BANNING FINANCING AUTHORITY
REFUNDING REVENUE BONDS (ELECTRIC SYSTEM PROJECT), SERIES 2015 Issue Dated Date: August , 2015)
Requisition of the City
Acquisition and Construction Fund)
Section 3. 5 of the Indenture)
Attention: Corporate Trust Department
Request No.: P- ( to be sequentially numbered)
Project Component
Amount of
This Draw
Continue on Additional Sheet if Necessary)
Aggregate Amount
Draws Including
This Draw
35268406. 4
1-
1436
Name and Address of party to whom payment is to be made:

Purpose for which the obligation was incurred:

The undersigned ( the " City") hereby certifies that ( i) each such cost or expense constitutes a proper
charge against the Acquisition and Construction Fund for services rendered, and has not been the subject of any other payment request filed with you; and ( ii) if the payment is to be made to the City for amounts that it has paid or will pay to third parties, then the City has either made payment or will make payment within three business days of receipt of moneys requisitioned hereunder and that the aggregate number of business days during this calendar year during which it has held such amounts before making payment does not exceed twenty.

Date:

CITY OF BANNING
By:

Title:
35268406. 4
2-
1437
1438
Norton Rose Fulbright — Draft 07/8/ 15

INSTALLMENT SALE AGREEMENT
by and between

CITY OF BANNING FINANCING AUTHORITY,
as Seller
and the

CITY OF BANNING,
as Purchaser
Dated as of August 1, 2015
Relating to:

City of Banning Financing Authority
Refunding Revenue Bonds (Electric System Project) Series 2015 35268407. 4
1439

TABLE OF CONTENTS
Page

ARTICLE I DEFINITIONS
SECTION 1. Definitions 1

ARTICLE II COVENANTS AND REPRESENTATIONS
SECTION 2. 1 Covenants and Representations of the City 4 SECTION 2. Covenants and Representations of the Authority 6 ARTICLE III ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION OF

IMPROVEMENTS
SECTION 3. 1 The Bonds 6
SECTION 3. 2 Documentation Required for the Improvements 6 SECTION 3. Acquisition and Construction of the Improvements 6 SECTION 3. 4 Grant of Easements 7
SECTION 3. 5 Appointment of City as Agent of Authority 7

ARTICLE IV

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

ARTICLE V

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION

SECTION
SALE OF IMPROVEMENTS; INSTALLMENT PAYMENTS

4. 1 Sale 7

4. 2 Tenn 7

4. 3 Title 8

4. Installment Payments 8

4. 5 Pledge and Application of Net Revenues 8

4. 6 Special Obligation of the City; Obligations Absolute 9

4. 7 Rates and Charges 10

4. 8 Superior and Subordinate Obligations 11

4. 9 Issuance of Parity Obligations 11

4. 10 Additional Payments 11
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS

5. 1 Maintenance, Utilities, Taxes and Assessments 12

5. 2 Operation of Electric System 12

5. 3 Public Liability and Property Damage Insurance 12

5. 4 Casualty Insurance 13

5. Insurance Net Proceeds: Form of Policies 13

5. 6 Eminent Domain 13

5. 7 Records and Accounts 13

5. 8 Tax Covenants 13

5. 9 Further Assurances 18

5. 10 Continuing Disclosure 18
ARTICLE VI DISCLAIMER OF WARRANTIES; ACCESS
1440

TABLE OF CONTENTS
continued)
Page
SECTION 6. 1 Disclaimer of Warranties 18
SECTION 6. 2 Access to the Electric System 18
SECTION 6. 3 Release and Indemnification Covenants 18
SECTION 6. 4 Non -Liability of Authority for Electric System Obligations 19

ARTICLE VII ASSIGNMENT, SALE AND AMENDMENT
SECTION 7. 1
SECTION 7. 2
SECTION 7. 3
SECTION 7. 4
Assignment by the Authority 19
Assignment by the City 19
Sale of Electric System Property 19
Amendment Hereof 19
ARTICLE V1II EVENTS OF DEFAULT
SECTION 8. 1
SECTION 8. 2
SECTION 8. 3
SECTION 8. 4
SECTION 8. 5
SECTION 8. 6
SECTION 8. 7
Events of Default Defined 20
Remedies on Default 20
No Remedy Exclusive 21
Agreement to Pay Attorneys' Fees and Expenses 21
No Additional Waiver Implied by One Waiver 21
Trustee and Bond Owners to Exercise Rights 21
Rights of the Owners ofParity Obligations 21

ARTICLE IX PREPAYMENT OF INSTALLMENT PAYMENTS
SECTION 9. 1
SECTION 9. 2
SECTION 9. 3
Special Mandatory Prepayment
Credit for Amounts on Deposit
Optional Prepayment

ARTICLE X MISCELLANEOUS
SECTION 10.

SECTION 10. 2
SECTION 10. 3
SECTION 10. 4
SECTION 10. 5
SECTION 10. 6
SECTION 10. 7
SECTION 10. 8
SECTION 10. 9
SECTION 10.0
SECTION 10.1
22 22
22 Further Assurances 22
Amendment of Indenture 22
Notices 22
Third Party Beneficiary 23
Payment on Non -Business Day 23
Governing Law 23
Binding Effect 23
Severability of Invalid Provisions 23
Article and Section Headings and References 24
Execution of Counterparts 24
Waiver of Personal Liability 24
EXHIBIT A — Schedule of Installment Payments
EXHIBIT B — Description ofthe Improvements
ii
1441

LNSTALLMENT SALE AGREEMENT
THIS INSTALLMENT SALE AGREEMENT, dated as of August 1, 2015, by and between the CITY OF BANNING FINANCING AUTHORITY, a
joint powers authority duly organized and
existing under the laws of the State of California ( the " Authority"), and the CITY OF BANNING, a general law city duly organized and existing under the laws of the State of California ( the " City"), WITNESSETH:

WHEREAS, the City owns and operates that certain electric system referred to herein as the Electric System"; and
WHEREAS, the Authority is a Joint Powers Authority ( a public body, corporate and politic) duly created, established and authorized to transact business and exercise its powers, all under and pursuant to the Joint Exercise of Powers Act (Articles 1 through 4 of Chapter 5, Division 7, Title 1 of the California Government Code) (the " Act") and the powers of such Authority include the power to issue bonds for any of its corporate purposes; and
WHEREAS, the Authority previously issued its $ 45, 790, 000 Revenue Bonds ( Electric System Project), Series 2007 ( the " 2007 Bonds"), which are currently outstanding in the aggregate principal amount of $40, 045,00; and
WHEREAS, the City desires to finance certain improvements ( the " Improvements") to the Electric System; and
WHEREAS, the Authority has approved the issuance of its Refunding Revenue Bonds ( Electric System Project) Series 2015 ( the "Bonds") to assist the City in providing funds to refund the 2007 Bonds currently outstanding and fmance the Improvements; and
WHEREAS, the City has determined that it is necessary and desirable to enter into this Installment Sale Agreement pursuant to which the City is to purchase the Improvements and to make Installment Payments equal in time and amount to the debt service on the Bonds allocable to the Installment Sale Agreement; and
WHEREAS, the City has approved the purchase of the hnprovements from the Authority as provided in this Agreement; and
WHEREAS, the Authority and the City have duly authorized the execution and delivery of this Agreement;
NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby covenant, agree and bind themselves as follows:

ARTICLE I

DEFINITIONS
SECTION 1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Agreement shall have the respective meanings specified in the Indenture. In addition, the following terms defined in this Section 1. shall, for all purposes of this Agreement, have the respective meanings herein specified. 35268407. 4
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Acquisition and Construction" means, with respect to any of the Improvements, the acquisition, construction, improvement, equipping, renovation, remodeling or reconstruction thereof.

Acquisition and Construction Costs" means, with respect to any of the Improvements, all costs of the Acquisition and Construction thereof which are paid from moneys on deposit in the Acquisition and Construction Fund, including but not limited to:
a) all costs required to be paid to any person under the terms of any agreement for or relating to the Acquisition and Construction of the Improvements; b) obligations incurred for labor and materials in connection with the Acquisition and Construction of the Improvements;
e) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the Acquisition and Construction of the Improvements;
d) all costs of engineering and architectural services, including the actual out-fpocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper Acquisition and Construction of the Improvements;
e) any sums required to reimburse the Authority or the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the Acquisition and Construction of the Improvements; f) all financing costs incurred in connection with the Acquisition and Construction of the Improvements, including but not limited to Costs of Issuance and other costs incurred in connection with this Agreement and the financing of the Improvements; and g) the interest components of the Installment Payments during the period of Acquisition and Construction of the Improvements, to the extent not paid from the proceeds of the Bonds deposited in the Interest Account pursuant to the Indenture.

Additional Payments" means the amounts payable by the City pursuant to Section 4. 10.

Additional Revenues" means, with respect to the issuance of any Parity Obligations, any or all of the following amounts:
i) An allowance for Net Revenues from any additions or improvements to or extensions of the Electric System to be financed from the proceeds of such Parity Obligations or from any other source, all in an amount equal to seventy- five percent 75%) of the estimated additional Net Revenues to be derived from such additions, improvements and extensions for the first twelve ( 12) month period in which each addition, improvement or extension is respectively to be in operation, all as shown by the certificate or opinion of a qualified independent engineer employed by the City. ii) An allowance for Net Revenues arising from any increase in the charges made for service from the Electric System which has become effective prior to the incurring of such Parity Obligations, in an amount equal to the total amount by which the 35268407. 4 2
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Net Revenues would have been increased if such increase in charges had been in effect during the whole of the most recent completed Fiscal Year or during any more recent twelve ( 12) month period selected by the City, all as shown by the certificate or opinion of an Independent Accountant.

Adjusted Annual Debt Service" means, for any Fiscal Year or any designated twelve ( 12) month period in question, the Annual Debt Service for such Fiscal Year or twelve month period minus the sum of the amount of the Annual Debt Service with respect to Outstanding Parity Obligations to be paid during such Fiscal Year or twelve month period, from the proceeds of Parity Obligations or interest earned thereon, all as set forth in a Written Certificate of the City.

Agreement" means this Installment Sale Agreement, together with any duly authorized and executed amendments hereto.

Annual Debt Service" means, for any Fiscal Year or any designated twelve ( 12) month period in question, (1) with respect to the Installment Payments, the required payments scheduled to be made with respect to all Outstanding Installment Payments in such Fiscal Year or twelve ( 12) month period, or ( ii) with respect to Parity Obligations, the required payments scheduled to be made with respect to all Outstanding Parity Obligations in such Fiscal Year or twelve ( 12) month period provided, that for the purposes of determining compliance with Section 4. 7 and conditions for the issuance of Parity Obligations pursuant to Section 4. 9:

A) Generally. Except as otherwise provided by subparagraph ( B) with respect to Variable Interest Rate Parity Obligations and by subparagraph ( C) with respect to Parity Obligations as to which a Payment Agreement is in force, and by subparagraph ( D) with respect to certain Parity Payment Agreements, interest on any Parity Obligation shall be calculated based on the actual amount of interest that is payable under that Parity Obligation;
B) Interest on Variable Interest Rate Parity Obligations. The amount of interest deemed to be payable on any Variable Interest Rate Parity Obligation shall be calculated on the assumption that the interest rate on that Parity Obligation would be equal to the SIFMA Index Rate; C) Interest on Payments or Parity Obligations with respect to which a Payment Agreement is in force. The amount of interest deemed to be payable on any Parity Obligations with respect to which a Payment Agreement is in force shall, so long as the Qualified Counterparty thereto is not in default thereunder, be based on the net economic effect on the City expected to be produced by the terms of such Parity Obligation and such Payment Agreement, including but not limited to the effects that ( i) such Parity Obligation would, but for such Payment Agreement, be treated as an obligation bearing interest at a Variable Interest Rate instead shall be treated as an obligation bearing interest at a fixed interest rate, and ( ii) such Parity Obligation would, but for such Payment Agreement, be treated as an obligation bearing interest at a fixed interest rate instead shall be treated as an obligation bearing interest at a Variable Interest Rate; and accordingly, the amount of interest deemed to be payable on any Parity Obligation with respect to which a Payment Agreement is in force shall, so long as the Qualified Counterparty thereto is not in default thereunder, be an amount equal to the amount of interest that would be payable at the rate or rates stated in such Parity Obligation plus the Payment Agreement Payments minus the Payment Agreement Receipts, and for the purpose of calculating Payment Agreement Receipts and Payment Agreement Payments under such Payment Agreement, the following assumptions shall be made:
1) Counterparty Obligated to Pay Actual Variable Interest Rate on Variable Interest Rate Parity Obligations. If the Payment Agreement obligates a Qualified. Counterparty to make 35268407. 4 3
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payments to the City based on the actual Variable Interest Rate on a Parity Obligation that would, but for the Payment Agreement, be treated as a Variable Interest Rate Parity Obligation and obligates the City to make payments to the Qualified Counterparty based on a fixed rate, payments by the City to the Qualified Counterparty shall be assumed to be made at the fixed rate specified by the Payment Agreement and payments by the Qualified Counterparty to the City shall be assumed to be made at the actual Variable Interest Rate on such Parity Obligation, without regard to the occurrence of any event that, under the provisions of the Payment Agreement, would permit the Qualified Counterparty to make payments on any basis other than the actual Variable Interest Rate on such Parity Obligation, and such Parity Obligation shall set forth a debt service schedule based on that assumption; 2) Variable Interest Rate Parity Obligations and Payment Agreements Having the Same Variable Interest Rate Component. If both a Payment Agreement and the related Parity Obligation that would, but for the Payment Agreement, be treated as a Variable Interest Rate Parity Obligation include a variable interest rate payment component that is required to be calculated on the same basis ( including, without limitation, on the basis of the same variable interest rate index), it shall be assumed that the variable interest rate payment component payable pursuant to the Payment Agreement is equal in amount to the variable interest rate component payable on such Parity Obligation; 3) Variable Interest Rate Parity Obligations and Payment Agreements Having Different Variable Interest Rate Components. If a Payment Agreement obligates either the City or the Qualified Counterparty to make payments of a variable interest rate component on a basis that is different ( including, without limitation, on a different variable interest rate index) from the basis that is required to be used to calculate interest on the Parity Obligation that would, but for the Payment Agreement, be treated as a Variable Interest Rate Parity Obligation it shall be assumed:
a) City Obligated to Make Payments Based on Variable Interest Rate Index. If payments by the City under the Payment Agreement are based on a variable interest rate index and payments by the Qualified Counterparty are based on a fixed interest rate, payments by the City to the Qualified Counterparty will be based upon an interest rate equal to the SIFMA Index Rate, and payments by the Qualified Counterparty to the City will be based on the fixed rate specified by the Payment Agreement; and
b) City Obligated to Make Payments Based on Fixed Interest Rate. If payments by the City under the Payment Agreement are based on a fixed interest rate and payments by the Qualified Counterparty are based on a variable interest rate index, payments by the City to the Qualified Counterparty will be based on an interest rate equal to the rate that is one hundred and five percent 105%) of the fixed interest rate specified by the Payment Agreement to be paid by the City, and payments by the Qualified Counterparty to the City will be based on a rate equal to the SIFMA Index Rate as the variable interest rate deemed to apply to the Variable Interest Rate Parity Obligation. 4) Certain Payment Agreements May be Disregarded.

Notwithstanding the provisions of subparagraphs ( C)( 1), ( 2) and ( 3) of this definition, the City shall not be required to ( but may at its option) take into account as set forth in subparagraph ( C) of this definition ( for the purpose of determining Annual Debt Service) the effects of any Payment Agreement that has a
remaining term of ten ( 10) years or less;
D) Debt Service on Parity Payment Agreements. No interest shall be taken into account with respect to a Parity Payment Agreement for any period during which Payment Agreement Payments on that Parity Payment Agreement are taken into account in determining Annual Debt Service on a related Parity Obligation under subparagraph ( C) of this definition; provided, that for any period 35268407. 4
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during which Payment Agreement Payments are not taken into account in calculating Annual Debt Service on any Parity Obligation because the Parity Payment Agreement is not then related to any other Parity Obligation, interest on that Parity Payment
1) City Obligated to Make Payments Based on Fixed Interest Rate. If the City is obligated to make Payment Agreement Payments based on a fixed interest rate and the Qualified Counterparty is obligated to make payments based on a variable interest rate index, payments by the City will be based on the specified fixed rate, and payments by the Qualified Counterparty will be based on a rate equal to the average rate determined by the variable interest rate index specified by the Payment Agreement during the calendar quarter preceding the calendar quarter in which the calculation is made; and
2) City Obligated to Make Payments Based on Variable Interest Rate Index.

Ifthe City is obligated to make Payment Agreement Payments based on a variable interest rate index and the Qualified Counterparty is obligated to make payments based on a fixed interest rate, payments by the City will be based on an interest rate equal to the average rate determined by the variable interest rate index specified by the Payment Agreement during the calendar quarter preceding the calendar quarter in which the calculation is made, and the Qualified Counterparty will make payments based on the fixed rate specified by the Parity Payment Agreement; and
3) Certain Payment Agreements May be Disregarded.

Notwithstanding the provisions of subparagraphs ( D)( 1) and ( 2) of this definition, the City shall not be required to (but may at its option) take into account ( for the purpose of determining Annual Debt Service) the effects of any Payment Agreement that has a remaining term often ( 10) years or less;
E) Balloon Parity Obligations. For purposes of calculating Annual Debt - Service on any Balloon Parity Obligations, it shall be assumed that the principal of those Balloon Parity Obligations, together with interest thereon at a rate equal to the SIFMA Index Rate, will be amortized in equal annual installments over a term of thirty (30) years from the date of issuance.

Balloon Parity Obligation" means any Parity Obligation described as such in such Parity Obligation.

Electric System" means the entire electric system of the City, including all facilities, properties and improvements at any time owned, controlled or operated by the City for the provision of electricity, and any necessary lands, rights, entitlements and other property useful in connection therewith, together with all extensions thereof and improvements thereto at any time acquired, constructed or installed by the City, including the Improvements.

Electric Utility Fund" means the fund by that name established and held by the City hereunder.

Event of Default" means any of the events described in Section 8. 1.

Gross Revenues" means all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the Electric System, including, without limiting the generality of the foregoing, (1) all income, rents, rates, fees, charges, business interruption insurance proceeds or other moneys derived by the City from the sale, furnishing and supplying of electric or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Electric System ( other than the non -by -passable usage based charge supporting the City' s public benefit program), plus ( 2) the earnings on and income derived from the investment of such income, 35268407. 4 5
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rents, rates, fees, charges, or other moneys, including City reserves and the Reserve Fund established under Section 5. 4 of the Indenture, but excluding in all cases customer deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City and excluding any proceeds of taxes required by law to be used by the City to pay bonds hereafter issued.

Improvements" means the Electric System financed with the proceeds of the 2007 Bonds and the proceeds of the Bonds as described in Exhibit B attached hereto, as such description may be amended by the City from time to time pursuant to and in accordance with Section 3. 2 hereof.

Indenture" means the Indenture of Trust relating to the Bonds.

Installment Payment Date" means the fifteenth ( 15th) day of each May and November during the Term of this Agreement, commencing November 15, 2015.

Installment Payments" means the amounts payable by the City pursuant to Section 4., including any prepayments thereof pursuant to Article DC hereof.

Maximum Annual Debt Service" means, with respect to any period of time, the greatest Annual Debt Service payable during such period of time on the Outstanding Installment Payments and any Outstanding Parity Obligations or Parity Obligations then being issued.

Net Revenues" means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Operation and Maintenance Costs becoming payable during such period.

Operation and Maintenance Costs" means the reasonable and necessary costs and expenses paid by the City for maintaining and operating the Electric System, including but not limited to ( a) the cost of utilities, including electricity and other forms of energy supplied to the Electric System, (b) the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the Electric System in good repair and working order and ( c) the reasonable administrative costs of the City attributable to the operation and maintenance of the Electric System, including insurance and other costs described in Article V hereof, but in all cases excluding ( i) debt service payable on obligations incurred by the City with respect to the Electric System, including but not limited to the Installment Payments and debt service payments on any Parity Obligations, (ii) depreciation, replacement and obsolescence charges or reserves therefor, (iii) amortization of intangibles or other bookkeeping entries of a similar nature, (iv) City' s public benefit program expenditures, and ( v) periodic administrative transfers to the City' s general fund.

Outstanding," when used as of any particular time with reference to Installment Payments, means all Installment Payments which have not been paid or otherwise satisfied as provided in Article D. and when used as of any particular time with reference to Parity Obligations means all Parity Obligations which have not been paid or otherwise satisfied as provided in the proceedings and instruments pursuant to which such Parity Obligations have been issued or incurred. For purposes of Section 4. 7 and Section

4. 9 hereof only, (i) Parity Payment Agreements related to other Parity Obligations which are included in determining Annual Debt Service on such other Parity Obligations, and ( ii) Parity Bank Agreements as to which no amounts have been drawn under any such Parity Bank Agreements which have not been reimbursed by the City shall not be considered Outstanding for purposes of this Agreement.

Parity Bank Agreement" means an agreement with a bank or other financial institution relating to an irrevocable letter of credit, guarantee or other credit enhancement device providing liquidity or irrevocable credit or security for the payment ofParity Obligations. 35268407. 4 6
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Parity Obligations" means any leases, loan agreements, installment sale agreements, bonds, notes or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues on a parity with the Installment Payments, entered into or issued pursuant to and in accordance with Section 4. 9 hereof.

Parity Payment Agreement" means a Payment Agreement which is a Parity Obligation.

Payment Agreement" means a written agreement for the pin -pose of managing or reducing the City' s exposure to fluctuations in interest rates or for any other interest rate, investrnent, cash flow, asset or liability managing purposes, entered into either on a current or forward basis by the City and a Qualified Counterparty in connection with, or incidental to, the entering into of any Parity Obligation, that provides for an exchange of payments based on interest rates, ceilings or floors on such payments, options on such payments, or any combination thereof or any similar device.

Payment Agreement Payments" mean the amounts required to be paid periodically by the City to the Qualified Counterparty pursuant to a Payment Agreement.

Payment Agreement Receipts" mean the amounts required to be paid periodically by the Qualified Counterparty to the City pursuant to aPayment Agreement.

Purchase Price" means the amount to be paid by the City hereunder as the purchase price of the Improvements, being equal to the aggregate principal amount of the Bonds.

Qualified Counterparty" means a party ( other than the City) who is the other party to a Payment Agreement and ( 1) (a) whose senior debt obligations are rated in one of the three ( 3) highest rating categories of each of the Rating Agencies then rating the Bonds or any Parity Obligations ( without regard to any gradations within a
rating category), or ( b) whose obligations under the Payment Agreement are guaranteed for the entire term of the Payment Agreement by a bond insurer or other institution which has been or whose debt service obligations have been assigned a credit rating in one of the three highest rating categories of each of the Rating Agencies then rating the Bonds or any Parity Obligations ( without regard to any gradations within a
rating category), and ( 2) who is otherwise qualified to act as the other party to a Payment Agreement with the City under any applicable laws.

SIFMA Index Rate" means the Securities Industly and Financial Markets Association Municipal Swap Index ( formerly The Bond Market Association Municipal Swap Index), a seven- day high- grade market index composed of selected tax- exempt variable - rate demand obligations meeting specific criteria. The SIFMA Index Rate is calculated weekly and released each Wednesday afternoon. If at any time the SIFMA Index Rate is not available, there shall be used in its place such index as the Trustee, following consultation with the City, from time to time determines most closely approximates the SIFMA Index Rate.

Tax Code" means the Internal Revenue Code of 1986 as in effect on the date of issuance of the Bonds or ( except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the Bond, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Tax Code.

Term of this Agreement" means the time during which this Agreement is in effect, as provided in Section 4. 2 hereof.

Variable Interest Rate" means any variable interest rate or rates to be paid under any Parity Obligations, the method of computing which variable interest rate shall be as specified in the applicable 35268407. 4 7
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Parity Obligation, which Parity Obligation shall also specify either ( i) the payment period or periods or time or manner of determining such period or periods or time for which each value of such variable interest rate shall remain in effect, and ( ii) the time or times based upon which any change in such variable interest rate shall become effective, and which variable interest rate may, without limitation, be based on the interest rate on certain bonds or may be based on interest rate, currency, commodity or other indices.

Variable Interest Rate Parity Obligations" mean, for any -period of time, all in accordance with the definition of "Annual Debt Service" set forth in this Section 1.1, any Parity Obligations that bear a Variable Interest Rate during such period, except that ( i) Parity Obligations shall not be treated as Variable Interest Rate Parity Obligations if the net economic effect of interest rates on particular payments of the Parity Obligations and interest rates on other payments of the same Parity Obligations, as set forth in such Parity Obligations, or the net economic effect of a Payment Agreement with respect to particular Parity Obligations, in either case, is to produce obligations that bear interest at a fixed interest rate, and ( ii) Payments and Parity Obligations with respect to which a Payment Agreement is in force shall be treated as Variable Interest Rate Parity Obligations if the net economic effect of the Payment Agreement is to produce obligations that bear interest at a Variable Interest Rate.

ARTICLE II

COVENANTS AND REPRESENTATIONS
SECTION 2. 1 Covenants and Representations of the City. The City makes the following covenants and representations to the Authority that as of the Closing Date:
a) The City is a general law city duly organized and validly existing under the laws of the State, has full legal right, power and authority to enter into this Agreement and to carry out and consummate all transactions on its part contemplated hereby, by proper action has duly authorized the execution and delivery of this Agreement. b) The representatives of the City executing this Agreement are fully authorized to execute the same.
c) This Agreement has been duly authorized, executed and delivered by the City, and constitutes the legal, valid and binding agreement of the City, enforceable against the City in accordance with its terms.
d) The execution and delivery of this Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, will not conflict with or constitute a violation or breach of or default ( with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its facilities are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Agreement or the financial condition, assets, facilities or operations of the Electric System.
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e) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of this Agreement or the consummation of any transaction herein and therein contemplated, except as have been obtained or made and as are in full force and effect. f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or threatened against or affecting the City or the Electric System which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Agreement or upon the financial condition or operation of the Electric System, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Agreement, or the financial condition or operations ofthe Electric System.
g) The City has heretofore established the Electric Utility Fund into which the City deposits and will continue to deposit all Gross Revenues, and which the City will maintain throughout the Term of this Agreement.
h) There are no outstanding bonds, notes, loans, leases, installment sale agreements or other obligations which have any security interest in the Net Revenues, which security interest or claim is superior to or on a parity with the Installment Payments. i) The City has determined that it is necessary and proper for City uses and purposes that the City acquire the Electric System in the manner provided for in this Agreement, in order to provide essential services and facilities to persons residing in the City.

SECTION 2. Covenants and Representations of the Authority. The Authority makes the following covenants and representations as the basis for its undertakings herein contained:
a) The Authority is a
joint powers authority, duly organized and existing under the laws of the State. The Authority has the power to enter into the transactions contemplated by this Agreement and to carry out its obligations hereunder. By proper action of its governing body, the Authority has been duly authorized to execute, deliver and duly perform this Agreement and the Indenture.
b) To finance the Authority' s purchase of the Electric System, the Reserve Fund deposit required by Section 3 . 2(b) of the Indenture and the Costs of Issuance, the Authority will issue its Bonds, which will mature, bear interest and be subject to redemption as set forth in the Indenture.
c) The Bonds will be issued under and secured by the Indenture, and pursuant thereto, certain of the Authority' s
interests in this Agreement have been assigned to the Trustee as security for payment of the principal of, premium, if any, and interest on the Bonds. d) The Authority is not in default under any of the provisions of the laws of the State, which default would affect its existence or its powers referred to in subsection ( a) of this Section 2.
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ARTICLE i1I
ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION

OF IMPROVEMENTS
SECTION 3. 1 The Bonds. The Authority has authorized the issuance of the Bonds pursuant to the Indenture in the aggregate principal amount of Dollars F ]). The Authority and the City agree that the proceeds of sale of the Bonds shall be paid to the Trustee on the Closing Date for deposit pursuant to the terms and conditions of the Indenture. The City hereby approves the Indenture, the assignment to the Trustee of the rights of the Authority assigned under and pursuant to the Indenture, and the issuance of the Bonds by the Authority under and pursuant to the Indenture.

SECTION 3. 2 Documentation Required for the Improvements. Before any payment is made for the Improvements or any component thereof to be constructed by the City from amounts on deposit in the Acquisition and Construction Fund, the City shall have made available to the Authority detailed plans and specifications relating thereto. The City may from time to time make amendments to such plans and specifications, and may thereby change or modify the description of such Improvements or component thereof.

SECTION 3. Acquisition and Construction of the Improvements. The Authority hereby agrees with due diligence to supervise and provide for, or cause to be supervised and provided, for the Acquisition and Construction of the Improvements in accordance with plans and specifications, construction contracts and other documents relating thereto and approved by the City pursuant to all applicable requirements of law. Direct payment of the Acquisition and Construction Costs shall be made from amounts on deposit in the Acquisition and Construction Fund, pursuant to Section 3. 5 of the Indenture. All contracts for, and all work relating to, the Acquisition and Construction of the Improvements shall be subject to all applicable provisions of law relating to the acquisition and construction of public works by the City. The Authority expects that the Acquisition and Construction of the Improvements will be completed on or before three years from the date of issuance of the Bonds; provided, however, that the failure to complete the Acquisition and Construction of the Improvements by the estimated completion date thereof shall not constitute an Event of Default hereunder or a grounds for termination hereof, nor shall such failure result in the diminution, abatement or extinguishment of the obligations of the City hereunder to pay the Installment Payments.

The City shall have the right from time to time in its sole discretion to amend the description of the Improvements to be financed and improved hereunder. In order to exercise such right, the City shall file with the Authority an amended Exhibit B hereto.

Upon the completion of the Acquisition and Construction of the hnprovements, but in any event not later than thirty ( 30) days following such completion, the City Representative shall execute and deliver to the Authority and the Trustee a Written Certificate which ( a) states that the Acquisition and Construction of such hnprovements have been substantially completed, (b) identifies the total Acquisition and Construction Costs thereof, and ( c) identifies ( i) the amounts, if any, to remain on deposit in the Acquisition and Construction Fund for payment of Acquisition and Construction Costs thereafter intended to be requisitioned by the Authority and ( ii) the amounts to be transferred to the Bond Service Fund.

SECTION 3. 4 Grant of Easements. The City hereby grants to the Authority all necessary easements, rights of way and rights of access in and to all real property or interests therein now or hereafter acquired and owned by the City, as may be necessary or convenient to enable the Authority to 35268407. 4 10 1451
acquire, construct and install the Improvements thereon or thereabouts. The City covenants that it will execute, deliver and record any and all additional documents as may be required to be executed, delivered and recorded to establish such easements, rights of way and rights of access.

SECTION 3. 5 Appointment of City as Agent of Authority. The Authority hereby appoints the City as its agent to carry out all phases of the Acquisition and Construction of the Improvements pursuant to and in accordance with the provisions hereof and the Indenture. The City hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Authority regarding the Acquisition and Construction of the Improvements. The Authority, or the City as agent of the Authority hereunder, shall enter into, administer and enforce all purchase orders or other contracts relating to the Acquisition and Construction of the Improvements. All contracts for, and all work relating to, the Acquisition and Construction of the Improvements shall be subject to all applicable provisions of law relating to the acquisition, construction, improvement, and equipping of like facilities and property by the City.

ARTICLE IV
SALE OF IMPROVEMENTS; INSTALLMENT PAYMENTS
SECTION 4. 1 Sale. In consideration for the Installment Payments and other consideration set forth in this Agreement, the Authority hereby agrees to sell, transfer and convey to the City all of the Authority' sright title and interest in and to the Improvements, and the City hereby agrees to purchase the Improvements from the Authority, upon the terms and conditions set forth in this Agreement.

SECTION 4. 2 Term. The Term of this Agreement shall commence on the Closing Date, and shall end on the date on which the City shall have paid all of the Installment Payments and all other amounts due and payable hereunder. The provisions of this Section 4. 2 are subject in all respects to any other provisions of this Agreement relating to the termination hereof with respect to the Electric System or any portion thereof.

SECTION 4. 3 Title. On the Closing Date, title to the Improvements shall be deemed conveyed to and vested in the City. The Authority and the City shall execute, deliver and cause to be recorded any and all documents necessary to convey such title to the City.

SECTION 4. Installment Payments.
a) Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, but solely from the Net Revenues and other funds pledged hereunder, the Purchase Price, together with interest on the unpaid principal balance, payable in Installment Payments coming due and payable in the respective amounts and on the respective Installment Payment Dates specified in Exhibit A hereto. The Installment Payments shall be paid by the City to the Trustee, as assignee of the Authority pursuant to the Indenture, in the amounts and at the times as set forth in Section 4.5(b). The City shall receive a credit against any Installment Payment due hereunder to the extent of any monies on deposit in the Bond Service Fund on the applicable Installment Payment Date.
b) Effect of Prepayment. In the event that the City prepays all remaining Installment Payments in full pursuant to Article IX, the City' s obligations under this Agreement shall thereupon cease and terminate, including but not limited to the City' s obligation to pay Installment Payments therefor under this Section 4.; provided, however, that the City' s obligations to compensate and indemnify the Trustee pursuant to Sections 4. 10 and 6. 3 shall 35268407. 4 11
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survive such prepayment. In the event that the City prepays the Installment Payments in part but not in whole pursuant to Section 9A, the principal component of each succeeding Installment Payment shall be reduced in inverse order of Installment Payment Date or pro rata among such dates, as determined by the City, and the interest component of each remaining Installment Payment shall be reduced by the aggregate corresponding amount of interest which would otherwise be payable on the Bonds thereby redeemed pursuant to Section 4. 1 of the Indenture. In any event, the remaining Installment Payments shall equal in time and amount the remaining debt service on the Bonds.
c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4. and Section 4. 10, the payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at a rate of interest per annum equal to the rate borne by the Outstanding Bonds. d) Assignment. The City understands and agrees that all Installment Payments have been assigned by the Authority to the Trustee in trust, pursuant to the Indenture, for the benefit of the Owners of the Bonds, and the City hereby assents to such assignment. The Authority hereby directs the City, and the City hereby agrees, to pay to the Trustee at its Office, all amounts payable by the City pursuant to this Section 4. and all amounts payable by the City pursuant to Article IX.

SECTION 4. 5 Pledge and Application of Net Revenues.
a) Pledge of Net Revenues. All of the Net Revenues are hereby irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments and any Parity Obligations, and except as otherwise provided herein the Net Revenues shall not be used for any other purpose so long as any of the Installment Payments remain unpaid. Such pledge, charge and assignment shall constitute a first lien on the Net Revenues and such other moneys for the payment of the Installment Payments and any Parity Obligations in accordance with the terms hereof.
b) Deposits Into Funds; Transfers to Make Installment Payments. All of the Gross Revenues shall be deposited by the City inunediately upon receipt in the Electric Utility Fund, which fund is hereby established and held by the City. The City shall use funds in the Electric Utility Fund to pay Operation and Maintenance Costs as such payments become due and payable.

The City covenants and agrees that all Net Revenues will be held by the City in the Electric Utility Fund in trust for the benefit of the Trustee ( as assignee of the rights of the Authority hereunder) and the Bond Owners, and for the benefit of the owners of any Parity Obligations. On or before each Installment Payment Date, the City shall withdraw from the Electric Utility Fund, and transfer to the Trustee for deposit in the Revenue Fund, and to the trustee for any Parity Obligations, as applicable, an amount of Net Revenues which, together with the balance then on deposit in the Bond Service Fund ( other than amounts resulting from the prepayment of the Installment Payments pursuant to Article IX and other than amounts required for payment of principal of or interest on any Bonds and Parity Obligations which have matured or been called for redemption but which have not been presented for payment), is equal to the aggregate amount of the Installment Payments coining due and payable on the next succeeding Interest Payment Date, together with any amounts required to restore the balance in the Reserve Fund to the Reserve Requirement. In support of the foregoing, the City shall set aside each month equal amounts necessary to make such transfers on or before each Installment Payment Date. 35268407. 4 12 1453
The City shall manage, conserve and apply the Gross Revenues on deposit in the Electric Utility Fund in such a manner that all deposits required to be made pursuant to this subsection ( b) will be made at the times and in the amounts so required. Subject to the foregoing sentence, so long as no Event of Default shall have occurred and be continuing hereunder, the City may use and apply Net Revenues in the Electric Utility Fund for ( i) the payment of Additional Payments, ( ii) the payment of any subordinate obligations or any unsecured obligations, ( iii) the acquisition and construction of extensions and betterments to the Electric System, ( iv) the prepayment of any obligations of the City relating to the Electric System, (v) transfers from the Electric Utility Fund to the General Fund of the City for in -lieu fees and administrative costs, or (vi) any other lawful purposes of the Electric Utility Fund. All monies in the Electric Utility Fund may be invested by the City from time to time in any Authorized Investment.

SECTION 4. 6 Special Obligation of the City; Obligations Absolute. The City' s obligation to pay the Installment Payments, the Additional Payments and any other amounts coming due and payable hereunder shall be a special obligation of the City limited solely to the Net Revenues. Under no circumstances shall the City be required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Installment Payments and the Additional Payments, nor shall any other funds or property of the City be liable for the payment of the Installment Payments and the Additional Payments and any other amounts coming due and payable hereunder.

The obligations of the City to make the Installment Payments and the Additional Payments from the Net Revenues and to perform and observe the other agreements contained herein shall be absolute and unconditional and shall not be subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trustee of any obligation to the City or otherwise with respect to the Electric System, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until such time as all of the Installment Payments, all of the Additional Payments and all other amounts coming due and payable hereunder shall have been fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Installment Payments, Additional Payments or such other amounts, ( b) will perform and observe all other agreements contained in this Agreement, and ( c) will not terminate this Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Electric System, failure to complete the Acquisition and Construction of any Improvements by the estimated Completion Date thereof, the taking by eminent domain of title to or temporary use of any component of the Electric System, commercial frustration of purpose, any change in the tax or law other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture or this Agreement.

Nothing contained in this Section 4. 6 shall be construed to release the Authority or the Trustee from the performance of any of the agreements on its part contained herein or in the Indenture, and in the event the Authority or the Trustee shall fail to perform any such agreements, the City may institute such action against the Authority or the Trustee as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in the preceding paragraph.

The City may, however, at the City' sown cost and expense and in the City' s own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City' s rights hereunder, and in such event the Authority hereby agrees to cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request.
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SECTION 4. 7 Rates and Charges. The City shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Electric System during each Fiscal Year, which are at least sufficient, after making allowances for contingencies and error in the estimates, to yield Gross Revenues sufficient to pay the following amounts in the following order of priority:
a) All Operation and Maintenance Costs estimated by the City to become due and payable in such Fiscal Year;
b) Adjusted Annual Debt Service;
e) All amounts, if any, required to restore the balance in the Reserve Fund and any reserve fund securing any Parity Obligations to the full amount of the Reserve Requirement and the reserve requirement with respect to any Parity Obligations; and d) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable from, the Gross Revenues or the Net Revenues during such Fiscal Year.

In addition, the City shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Electric System during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to one hundred twenty percent ( 120%) of the amount described in the preceding clause ( b) for such Fiscal Year.

SECTION 4. 8 Superior and Subordinate Obligations. The City shall not issue or incur any additional bonds or other obligations during the Term of this Agreement having any priority in payment of principal or interest out of the Net Revenues over the Installment Payments. Nothing herein is intended or shall be construed to limit or affect the ability of the City to issue or incur ( a) Parity Obligations pursuant to Section 4.9, or (b) obligations which are either unsecured or which are secured by an interest in the Net Revenues which is junior and subordinate to the pledge of and lien upon the Net Revenues established hereunder.

SECTION 4. 9 Issuance of Parity Obligations. In addition to the Installment Payments, the City may issue or incur other bonds, notes, loans, advances or indebtedness payable from Net Revenues on a parity with the Instalhnent Payments to provide financing for the Electric System in such principal amount as shall be determined by the City. The City may issue or incur any such Parity Obligations subject to the following specific conditions which are hereby made conditions precedent to the issuance and delivery of such Parity Obligations:
a) No Event of Default shall have occurred and be continuing, and the City shall deliver a certificate to that effect to the Trustee;
b) The Net Revenues, calculated in accordance with accounting principles consistently applied, as shown by the books of the City for the latest Fiscal Year or as shown by the books of the City for any more recent twelve ( 12) month period selected by the City, in either case verified by a certificate or opinion of an Independent Accountant employed by the City, plus at the option of the City) the Additional Revenues, shall be at least equal to one hundred twenty percent (120%) of the amount ofAdjusted Annual Debt Service; c) There shall be established upon the issuance of such Parity Obligations a reserve fund for such Parity Obligations in an amount equal to the lesser of (i) the maximum amount of 35268407. 4 14
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debt service required to be paid by the City with respect to such Parity Obligations during any Fiscal Year, or ( ii) the maximum amount then permitted under the Tax Code; and d) The trustee or fiscal agent for such Parity Obligations shall be the same entity performing the functions of Trustee under the Indenture.

The provisions of subsection ( b) of this Section shall not apply to any Parity Obligations if all of the proceeds of which ( other than proceeds applied to pay costs of issuing such Parity Obligations and to make a reserve fund deposit required pursuant to subsection ( c) of this Section) shall be deposited in an irrevocable escrow for the purpose of paying the principal of and interest and premium ( if any) on any Installment Payments or on any outstanding Parity Obligations.

SECTION 4. 10 Additional Payments. In addition to the Installment Payments, the City shall pay when due all costs and expenses incurred by the Authority to comply with the provisions of the Indenture, including without limitation all Costs of Issuance ( to the extent not paid from amounts on deposit in the Costs of Issuance Fund or the Acquisition and Construction Fund), and shall pay to the Trustee upon request therefor all compensation for fees due to the Trustee and all of its costs and expenses payable as a result of the performance of and compliance with its duties hereunder or under the Indenture or any related documents, together with all amounts required to indemnify the Trustee pursuant to Section 6. 3 hereof or Section 6. 13 of the hndenture, and all costs and expenses of attorneys, auditors, engineers and accountants. The rights of the Trustee and the obligations of the City under this Section

4. 10 shall survive the termination of this Agreement and the resignation or removal of the Trustee.

ARTICLE V
IVIAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
SECTION 5. 1 Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Agreement, all improvement, repair and maintenance of the Electric System shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Electric System, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Electric System resulting from ordinary wear and tear.

The City shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting any Electric System or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Term of this Agreement as and when the same become due.

The City may, at the City' s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its opinion, by nonpayment of any such items, the interest of the Authority hereunder or under the Indenture will be materially adversely affected, in which event the City shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.
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SECTION 5. 2 Operation of Electric System. The City covenants and agrees to operate the Electric System in an efficient and economical manner and to operate, maintain and preserve the Electric System in good repair and working order. The City covenants that, in order to fully preserve and protect the priority and security of the Bonds, the City shall pay from the Gross Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Electric System which, if unpaid, may become a lien or charge upon the Gross , Revenues or the Net Revenues prior or superior to the lien granted hereunder, or which may otherwise impair the ability of the City to pay the Installment Payments in accordance herewith.

SECTION 5. 3 Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained, throughout the Tenn of this Agreement, but only if and to the extent available at reasonable cost from reputable insurers, a standard comprehensive general insurance policy or policies in protection of the Authority, the City and their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Electric System. Said policy or policies shall provide coverage in such liability limits and shall be subject to such deductibles as shall be customary with respect to works and property of a like character. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in whole or in part in the form of selfinsurance by the City, subject to the provisions of Section 5., or in the form of the participation by the City in a
joint powers agency or other program providing pooled insurance. The proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such proceeds shall have been paid.

SECTION 5. 4 Casualty Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the Term of this Agreement, but only in the event and to the extent available from reputable insurers at reasonable cost, casualty insurance against loss or damage to any improvements constituting any part of the Electric System, covering such hazards as are customarily covered with respect to works and property of like character. Such insurance may be subject to deductible clauses which are customary for works and property of a like character. Such insurance may be maintained as part of or in conjunction with any other casualty insurance carried by the City and may be maintained in whole or in part in the form of self- insurance by the City, subject to the provisions of Section 5., or in the form of the participation by the City in a joint powers agency or other program
providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Electric System shall be used to repair, rebuild or replace such damaged or destroyed portion of the Electric System, and to the extent not so applied, shall be paid to the Trustee to be applied to pay or prepay the Installment Payments ( and the Bonds, under Section 2.3(a) of the Indenture) or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.

SECTION 5. Insurance Net Proceeds: Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by this Agreement. The Trustee shall not be responsible for the sufficiency of any insurance herein required and shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss.

In the event that any insurance required pursuant to Sections 5. 3 or 5. 4 shall be provided in the form of self- insurance, the City shall file with the Trustee annually, within ninety ( 90) days following the close of each fiscal year, a statement of an independent actuarial consultant identifying the extent of such selfinsurance and stating that such consultant has determined that the City maintains sufficient reserves with respect thereto. On or before July 1 of each year, the City shall certify to the Trustee that all policies of insurance are in conformance with the requirements of this Installment Sale Agreement and the Trustee shall be entitled to rely on such certification without independent investigation. 35268407. 4 16
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SECTION 5. 6 Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Electric System by the lawful exercise of eminent domain, at the election of the City evidenced by a Written Certificate of the City filed with the Trustee and the Authority) shall either ( a) be used for the acquisition or construction of improvements and extension of the Electric System, or (b) be paid to the Trustee to be applied to pay or prepay the Installment Payments ( and the Bonds, under Section

2.3(a) of the indenture) or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.

SECTION 5. 7 Records and Accounts. The City shall keep proper books of record and accounts of the Electric System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Electric System. Said books shall, upon prior request, be subject to the reasonable inspection by the Owners of not less than ten percent ( 10%) in aggregate principal amount of the Outstanding Bonds, or their representatives authorized in writing. The City shall cause the books and accounts of the Electric System to be audited annually by an Independent Accountant, not more than two hundred seventy ( 270) days after the close of each Fiscal Year, and shall make a copy of such report available for inspection by the Bond Owners at the office of the City.

SECTION 5. 8 Tax Covenants.
a) Special Definitions. When used in this Section, the following terms have the following meanings:

Computation Date" has the meaning set forth in section 1.48-(b) of the Tax Regulations.

Facilities" means any property the acquisition, construction or improvement of which was financed directly or indirectly with Gross Proceeds of the Bonds.

Gross Proceeds" means any proceeds as defined in section 1.48-(b) of the Tax Regulations ( referring to sales, investment and transferred proceeds), and any replacement proceeds as defined in section 1.48-(c) of the Tax Regulations, of the Bonds.

Investment" has the meaning set forth in section 1.48-(b) of the Tax Regulations.

Nongovernmental Output Property" means any property (or interest therein) that prior to its acquisition by the City was used by ( or manufactured for or to the order of or held for the use by) any Nongovernmental Person ( whether actually so used or not) in connection with any electric and gas generation, transmission, distribution, or related facilities.

Nongovernmental Person" refers to any person or entity ( including the United States or any agency, department and instrumentality thereof) other than a state or local government, or an agency or instrumentality acting solely on behalf thereof.

Nonpurpose Investment" means any investment property, as defined in section 148( b) of the Tax Code, in which Gross Proceeds of the Bonds are invested and that is not acquired to carry out the governmental purposes of the Bonds. 35268407. 4 17
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Prior Issue" refers to the 2007 Bonds.

Rebate Amount" has the meaning set forth in section 1.48-(b) of the Tax Regulations.

Tax Regulations" means the United States Treasury Regulations promulgated pursuant to sections 103 and 141 through 150 of the Tax Code.

Yield" of
1) any Investment has the meaning set forth in section 1.48- 5 of the Tax Regulations; and
2) the Bonds has the meaning set forth in section 1.48- 4 of the Tax Regulations.
b) Not to Cause Interest to Become Taxable. The Authority and the City shall not use, permit the use of, or omit to use Gross Proceeds or any other amounts ( or any property the acquisition, construction or improvement of which is to be fmanced directly or indirectly with Gross Proceeds) in a manner that if made or omitted, respectively, would cause the interest on any of the Bonds to fail to be excluded pursuant to section 103( a) of the Tax Code from the gross income of the owner thereof for federal income tax purposes. Without limiting the generality of the foregoing, unless and until the Authority or the City receives a written opinion of Bond Counsel to the effect that failure to comply with such covenant will not adversely affect the exemption from federal income tax of the interest on any Bond, the Authority or the City, as the case may be, shall comply with each of the specific covenants in this Section. c) No Private Use or Private Payments. Except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall at all times prior to the payment and cancellation of the last Bond to be paid and canceled:
i) use their best efforts to ensure that the City exclusively own, operate and possess all of the Facilities that are to be refinanced directly or indirectly with Gross Proceeds of the Bonds, and not use or permit the use of such Gross Proceeds ( including all contractual arrangements with terms different than those applicable to the general public) or any property acquired, constructed or improved with such Gross Proceeds in any activity carried on by any person or entity ( including the United States or any agency, department and instrumentality thereof) other than a state or local government, unless such use is solely as a member of the general public; and ii) not directly or indirectly impose or accept any charge or other payment by any person or entity in respect of the use by any Nongovernmental Person of Gross Proceeds of the Bonds or the Prior Issue, or any of the Facilities, other than taxes of general application within the jurisdiction of the City or interest earned on investments acquired with such Gross Proceeds pending application for their intended purposes.

Without limiting the foregoing, except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, neither of the City nor the Authority will: (i) permit any Nongovernmental Person to hold any ownership, proprietary or possessory interest in the financed property; (ii) contract with any Nongovernmental Person 35268407. 4 18
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for the provision of operating or other services with respect to any function of the financed property unless either ( A) such arrangement requires no payment of fees to such Nongovernmental Person other than as direct reimbursement of third party costs or reasonable administrative overhead, or ( B) such arrangement conforms to administrative guidance of the Internal Revenue Service in order to assure that such arrangement does not create a private business use relationship of the Nongovernmental Person to the financed property); or ( iii) contract with any Nongovernmental Person for the sale of output or capacity of the financed property unless such contract is described either in section 1.41- 7(c) of the Treasury Regulations ( describing certain types of output contracts that do not have the effect of transferring the benefits of owning the property and the burdens of paying debt service on the financing of the property) or in section 1.41- 7( f) of the Treasury Regulations ( describing certain types of output contracts that while having the effect of transferring such benefits and burdens but nevertheless may be disregarded in evaluating private business use). As set forth above, for purposes of the preceding sentence, the Authority will treat proceeds of the Bonds as used ratably for the same purposes as were the proceeds of the Prior Issues and the Original Issue.

Except as would not cause any Bond to be a " private activity bond", no portion of the Gross Proceeds will be used ( directly or indirectly) for the acquisition of any interest in any Nongovernmental Output Property. As set forth above, for purposes of the preceding sentence, the City and the Authority will treat proceeds of the Bonds as used ratably for the same purposes as were the proceeds of the Prior Issue.
d) No Private Loan. Except as would not cause any Bond to become a " private activity bond" within the meaning of section 141 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not use Gross Proceeds of any Bond to make or finance loans to any Nongovernmental Person. For purposes of the foregoing covenant, such Gross Proceeds are considered to be " loaned" to a
person or entity if: (a) property acquired,
constructed or improved with such Gross Proceeds is sold or leased to such person or entity in a transaction that creates a debt for federal income tax purposes; ( b) capacity in or service from such property is committed to such person or entity under a take -or -pay, output or similar contract or arrangement; or ( c) indirect benefits of such Gross Proceeds, or burdens and benefits of ownership of any property acquired, constructed or improved with such Gross Proceeds, are otherwise transferred in a transaction that is the economic equivalent of a loan. e) Not to Invest at Higher Yield. Except as would not cause any Bond to become an " arbitrage bond" within the meaning of section 148 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not at any time prior to the final maturity of the Bonds directly or indirectly invest Gross Proceeds in any Investment, if as a result of such investment the Yield of any Investment acquired with Gross Proceeds, whether then held or previously disposed of, would materially exceed the Yield of such Bond within the meaning of said section 148.
f) Not Federally Guaranteed. Except to the extent permitted by section 149( b) of the Tax Code and the Tax Regulations and rulings thereunder, the Authority and the City shall not take or omit to take any action that would cause any Bond to be " federally guaranteed" within the meaning of section 149( b) of the Tax Code and the Tax Regulations and rulings thereunder. g) Information Report. The Authority shall timely file any information required by section 149( e) of the Tax Code with respect to the Bonds with the Secretary of the Treasury on Form 8038- G or such other form and in such place as the Secretary may prescribe. 35268407. 4 19
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h) Rebate of Arbitrage Profits. Except to the extent otherwise provided in section 148( f) ofthe Tax Code and the Tax Regulations and rulings thereunder:
i) The Authority and the City shall account for all Gross Proceeds including all receipts, expenditures and investments thereof) on its books of account separately and apart from all other funds ( and receipts, expenditures and investments thereof) and shall retain all records of accounting for at least six years after the day on which the Last Bond is discharged. However, to the extent permitted by law, the Authority or the City may connningle Gross Proceeds of the Bonds with its other money, provided that the Authority or the City, as the case may be, separately accounts for each receipt and expenditure of Gross Proceeds and the obligations acquired therewith. ii) Not less frequently than each Computation Date, the Authority and the City shall calculate the Rebate Amount in accordance with rules set forth in section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder. The Authority and the City shall maintain a
copy of the calculation with its official transcript of proceedings relating to the issuance of the Bonds until six years after the final Computation Date.
iii) In order to assure the excludability of the interest on the Bonds from the gross income of the owners thereof for federal income tax purposes, the Authority and the City, jointly and severally but without duplication, shall pay to the United States the amount that when added to the future value of previous rebate payments made for the Bonds equals ( A) in the case of a Final Computation Date as defined in section 1.48- 3(e)( 2) of the Tax Regulations, one hundred percent (100%) of the Rebate Amount on such date; and (B) in the case of any other Computation Date, ninety percent (90%) of the Rebate Amount on such date. In all cases, such rebate payments shall be made by the Authority or the City at the times and in the amounts as are or may be required by section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder, and shall be accompanied by Form 8038- Tor such other forms and information as is or may be required by section 148( 0of the Tax Code and the Tax Regulations and rulings thereunder for execution and filing by the Authority or the City. iv) The Authority and the City shall exercise reasonable diligence to assure that no errors are made in the calculations and payments required by paragraphs ( i) and ii) above, and if an error is made, to discover and promptly correct such error within a reasonable amount of time thereafter ( and in all events within one hundred eighty ( 180) days after discovery of the error), including payment to the United States of any additional Rebate Amount owed to it, interest thereon, and any penalty imposed under section 1.48- 3(h) or other provision of the Tax Regulations. i) Not to Divert Arbitrage Profits. Except to the extent permitted by section 148 of the Tax Code and the Tax Regulations and rulings thereunder, the Authority shall not, at any time prior to the final maturity of the Bonds, enter into any transaction that reduces the amount required to be paid to the United States pursuant to paragraph ( h) of this Section because such transaction results in a smaller profit or a
larger loss than would have resulted if the transaction had been at arm' s length and had the Yield on the Bonds not been relevant to either party. 0) Bonds Not Hedge Bonds.
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i) The Authority and the City each represents that neither the Refunded Bonds nor any Bonds are or will become " hedge bonds" within the meaning of section 149( g) of the Tax Code.
ii) Without limitation of paragraph ( i) above, with respect to the Bonds ( or to that portion of the Bonds that is to be applied to the refunding of the Refunded Bonds), either: ( A) (I) on the date of issuance of the Refunded Bonds, the Authority or the City reasonably expected that at least 85% of the spendable proceeds of the Refunded Bonds would be expended within the three- year period commencing on such date of issuance, and ( II) no more than 50% of the proceeds of the Refunded Bonds were invested in Nonpurpose Investments having a substantially guaranteed yield for a period of four years or more; or (B) (I) the provisions of section 149( g) of the Tax Code did not apply to the Refunded Bonds, (11) the average maturity of the refunding bonds is not later than that of the Refunded Bonds, and ( III) the amount of the refunding bonds is not in excess of the amount of the Refunded Bonds.
iii) For purposes of this paragraph ( j), ( A) "Refunded Bonds" shall refer to the bonds of any issue refunded or re -refunded ( immediately or through multiple generations of prior issues) by the Bonds, (B) in applying paragraph ( ii) above, Refunded Bonds" shall refer only to bonds that are not refunding bonds, and ( C) in applying clause ( ii)( B) above, "refunding bonds" refers to, and said clause ( ii)( B) has been applied separately to, each issue being refunded or re -refunded by the Bonds ( and to the portion of each issue ( treating such portion as a
separate issue) to the extent such
issue is being refunded or re -refunded by the Bonds) that was itself a refunding issue.
k) Elections. The Authority hereby directs and authorizes any Authorized Authority Representative and the City hereby directs and authorizes any Authorized City Representative to make elections permitted or required pursuant to the provisions of the Tax Code or the Tax Regulations, as such Authorized Authority Representative or Authorized City Representative after consultation with Bond Counsel) deems necessary or appropriate in connection with the Bonds, in the Tax Certificate relating to the Bonds or similar or other appropriate certificate, form or document.

SECTION 5. 9 Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Agreement and the Indenture, and for the better assuring and confirming unto the Trustee and Owners of the Bonds the rights and benefits provided herein and in the Indenture.

SECTION 5. 10 Continuing Disclosure. The City will comply with the continuing disclosure requirements promulgated under Securities and Exchange Commission Rule 15c2 -12( b)( 5).

ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
SECTION 6. 1 Disclaimer of Warranties. The Authority and the Trustee make no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Electric System, or any other representation or warranty with respect to the Electric System. In no event shall the Authority or the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising 35268407. 4 21
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out of this Agreement or the Indenture for the existence, furnishing, functioning or City' s use of the Electric System.

SECTION 6. 2 Access to the Electric System. The City agrees that the Authority, the Trustee and the Bond Insurer,] and any duly authorized representative thereof, shall have the right at all reasonable times to enter upon and to examine and inspect the Electric System. The City further agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have such rights of access to the Electric System as may be reasonably necessary to cause the proper maintenance of the Electric System in the event of failure by the City to perform its obligations hereunder.

SECTION 6. 3 Release and Indemnification Covenants. The City to the extent permitted by law shall and hereby agrees to indemnify and save the Authority and the Trustee and their respective officers, agents, successors and assigns harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Electric System by the City, (b) any breach or default on the part of the City in the performance of any of its obligations under this Agreement, ( c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Electric System, (d) any act or negligence of any sublessee of the City with respect to the Electric System, (e) the Acquisition and Construction of the Electric System or the authorization of payment of the Acquisition and Construction Costs, (f) the performance by the Trustee of its duties and obligations under the Indenture, including any duties referred to in Section 8. 4 of the Indenture, or ( g) the offer, sale and issuance of the Bonds. No indemnification is made under this Section or elsewhere in this Agreement for willful misconduct or negligence by the Authority or the Trustee, or their respective officers, employees, successors or assigns. The rights of the Trustee and the obligations of the City under this Section 6. 3 shall survive the termination of this Agreement and the resignation or removal of the Trustee.

SECTION 6. 4 Non -Liability of Authority for Electric System Obligations. The Authority and its successor and assigns shall have no obligation and shall incur no liabilities or debts whatsoever for the obligations, liabilities and debts of the City incurred in connection with the Electric System.

ARTICLE VII

ASSIGNMENT, SALE AND AMENDMENT
SECTION 7. 1 Assignment by the Authority. The Authority' srights under this Agreement, including the right to receive and enforce payment of the Installment Payments to be made by the City under this Agreement have been pledged and assigned to the Trustee pursuant to the Indenture, to which pledge and assignment the City hereby consents.

SECTION 7. 2 Assignment by the City. This Agreement may not be assigned by the City.

SECTION 7. 3 Sale of Electric System Property. Except as provided herein, the City covenants that the Electric System shall not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole unless such sale is to a public entity. Neither the Net Revenues nor any other funds pledged or otherwise made available to secure payment of the Installment Payments shall be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed or used except as authorized by the terms of this Agreement. The City shall not enter into any agreement which impairs the operation of the Electric System or any part of it necessary to secure adequate Net Revenues to pay the Installment Payments, or which otherwise would impair the rights of the Bond Owners and the owners of any Parity Obligations with respect to the Net Revenues. If any substantial part of the Electric System shall be sold, the payment therefor shall either ( a) 35268407. 4 22
1463
be used for the acquisition or construction of improvements, extensions or replacements of facilities constituting part of the Electric System, or (b) to the extent not so used, be paid to the Trustee to be applied to pay or prepay the Installment Payments or any Parity Obligations, hi accordance with written instructions of the City filed with the Trustee.

SECTION 7. 4 Amendment Hereof. The City and the Authority shall have the right to modify or amend this Agreement, without the consent of the Trustee or any of the Bond Owners or any of the owners of Parity Obligations, but only if such amendment or modification ( a) does not cause interest represented by the Bonds to be includable in gross income for federal income tax purposes in the opinion of Bond Counsel, (b) does not materially adversely affect the interests of the Owners of the Bonds or the owners of any Parity Obligations in the opinion of Bond Counsel, (c) does not modify any of the rights or obligations of the Trustee without the Trustee' swritten consent, and ( d) only is for any one or more of the following purposes:
i) to provide for the issuance of Parity Obligations pursuant to Section 4.9; ii) to add to the covenants and agreements of the City contained in this Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; iii) to cure any ambiguity, or to cure, correct or supplement any defective provision contained herein, or in any other respect whatsoever as the Authority and the City may deem necessary or desirable; or
iv) to amend any provision thereof for the purpose of complying with the applicable requirements of the Tax Code; provided[, however, that provisions hereof expressly recognizing or granting rights in the Bond Insurer shall not be amended in any manner which affects the rights of the Bond Insurer hereunder without the prior written consent of the Bond Insurer].

ARTICLE VIII

EVENTS OF DEFAULT
SECTION 8. 1 Events of Default Defined. The following events shall be Events of Default hereunder:
a) Failure by the City to pay any Installment Payment when and as the same become due and payable hereunder.
b) Failure by the City to pay any Additional Payment when due and payable hereunder, and the continuation of such failure for a period of thirty (30) days. c) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in the preceding causes ( a) or b), for a period of sixty ( 60) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if the City shall notify the Authority and the Trustee that in its reasonable opinion the failure stated in the notice can be corrected, but not within such 60 -day period, such failure shall not constitute an event of default hereunder if the City shall commence to cure such failure within 35268407. 4 23
1464
such sixy ( 960) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time.
d) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachrnent, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted. e) The occurrence and continuation of any event of default under and as defined in the instruments authorizing the issuance of any Parity Obligations.

SECTION 8. 2 Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Trustee as assignee of the Authority shall have the right, at its option and without any further demand or notice, but subject in all respects to the provisions of Article VIII of the Indenture, to:
a) declare all principal components of the unpaid Installment Payments and the principal amount of the unpaid Parity Obligations, together with accrued interest on the Installment Payments and interest then due and payable on the entire principal amount of the unpaid Parity Obligations at the net effective rate of interest per annum then borne by the Outstanding Bonds or the rate or rates of interest then applicable to such Parity Obligations from the immediately preceding Interest Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall immediately become due and payable; b) take whatever action at law or in equity may appear necessary or desirable to collect the Installment Payments then due or thereafter to become due during the Term of this Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Agreement; and
c) as a matter of right, in connection with the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and the Bond Owners hereunder, cause the appointment of a receiver or receivers of the Gross Revenues and other amounts pledged hereunder, with such powers as the court making such appointment shall confer.

The provisions of the preceding clause ( a), however, are subject to the condition that if, at any time after the principal components of the unpaid Installment Payments shall have been so declared due and payable pursuant to the preceding clause ( a), and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all principal components of the Installment Payments coming due prior to such declaration and all matured interest components ( if any) of the Installment Payments, with interest on such overdue principal and interest components calculated at the net effective rate of interest per annum then borne by the Outstanding Bonds, and the reasonable fees and expenses of the Trustee ( including any fees and expenses of its attorneys), and any and all other defaults known to the Trustee ( other than in the payment of the principal and interest components of the Installment Payments due and payable solely by reason of such declaration) shall have been made good, then, and in every such case, with the written consent of the Trustee, shall rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. As provided in Section 8.6, the Trustee shall be required to exercise the remedies provided herein in accordance with the Indenture. 35268407. 4 24 1465
SECTION 8. 3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law.

SECTION 8. 4 Agreement to Pay Attorneys' Fees and Expenses. In the event either party to this Agreement should default under any of the provisions hereof and the nondefaulting party, the Trustee or the Owner of any Bonds should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party, the Trustee or such Owner, as the case may be, the reasonable fees of such attorneys and such other expenses so incurred.

SECTION 8. 5 No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

SECTION 8. 6 Trustee and Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article Vlll have been assigned by the Authority to the Trustee under the Indenture, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners of the Bonds as provided in the Indenture.

SECTION 8. 7 Rights of the Owners of Parity Obligations. Notwithstanding anything in this Article VIII to the contrary, it is hereby acknowledged and agreed that the rights of the Trustee and the Bond Owners hereunder in and to the Net Revenues and the Electric System shall be exercised on a parity and proportionate basis with the rights of the owners of any Parity Obligations and any fiduciary acting for the benefit of such owners. The provisions of this Article VIII, including but limited to Section 8.2(a) and the provisions of any instruments authorizing the issuance of any Parity Obligations, shall be construed in accordance with the foregoing sentence.

ARTICLE IX

PREPAYMENT OF INSTALLMENT PAYMENTS
SECTION 9. 1 Special Mandatory Prepayment. The principal component of the Installment Payments shall be prepaid in whole or in part on any date, in inverse order of Installment Payment Dates or pro rata among Installment Payment Dates as determined by the City, in integral multiples of $5, 000, by paying a prepayment price equal to the aggregate principal components of the Installment Payments to be prepaid, together with the interest component of the Installment Payment required to be prepaid on or accrued to such date, as required by Sections 5. 4 and 5. 6 hereof, and pursuant to Section 2.3(a) of the indenture. Any such prepayment price shall be deposited by the Trustee in the Redemption Fund to be applied to the redemption of Bonds pursuant to Section 2.3(a) of the Indenture. The City shall give the Trustee and the Authority written notice of its intention to exercise its option under the second preceding sentence not less than sixty ( 60) days in advance of the date of exercise ( or such lesser period of time as shall be consented to by the Trustee and the Authority). 35268407. 4 25
1466
SECTION 9. 2 Credit for Amounts on Deposit. In the event of' prepayment of the principal components of the Installment Payments in full under this Article IX, such that the Indenture shall be discharged by its terms as a result of such prepayment, and upon payment in full of all Additional Payments and other amounts then due and payable hereunder, all available amounts then on deposit in the funds and accounts established under the Indenture shall be credited towards the amounts then required to be so prepaid.

SECTION 9. 3 Optional Prepayment. The City may exercise its option to prepay the principal components of the Installment Payments in whole or in part (in integral multiples of $5, 000) to the extent the Authority has the ability to effect an optional redemption of the Bonds under the Indenture. The City shall give the Trustee and the Authority written notice of its intention to exercise its option under this Section not less than sixty ( 60) days in advance of the date of exercise ( or such lesser period of time as shall be consented to by the Trustee and the Authority).

ARTICLE X

MISCELLANEOUS
SECTION 10. Further Assurances. The City agrees that it will execute and deliver any and all such further agreements, instruments, financing statements or other assurances as may be reasonably necessary or requested by the Authority or the Trustee to carry out the intention or to facilitate the performance of this Agreement, including, without limitation, to perfect and continue the security interests herein intended to be created.

SECTION 10. 2 Amendment of Indenture. The Authority covenants that it shall take no action to amend or supplement the Indenture in any manner without obtaining the prior written consent of the City to such amendment or supplement.

SECTION 10. 3 Notices. Any notice, request, demand or other communication under this Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its number set forth below.

Notice shall be effective either ( a) upon transmission by telecopy, telex or other form of telecommunication, ( b) upon receipt after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

Ifto the City:
if to the Authority:

City of Banning
99 E. Ramsey Street
Banning, California 92220
Attention: City Manager
Telephone: ( 951) 922- 3101
Facsimile: ( 951) 922- 3112
City ofBanning Financing Authority
99 E. Ramsey Street
Banning, California 92220
Attention: Executive Director
Telephone: ( 951) 922- 3101
Facsimile: ( 951) 922- 3112
35268407. 4 26
1467
If to the Trustee: U. S. Banlc National Association
633 W. Fifth Street, 24th Floor
Los Angeles, California 90071
Attention: Corporate Trust Services
Telephone: ( 213) 615-002
Facsimile: ( 213) 615-119
SECTION 10. 4 Third Party Beneficiary. The Trustee shall be and is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary. [ To the extent that this Agreement confers upon or gives or grants to the Bond Insurer any right, remedy or claim under or by reason of this Agreement the Bond Insurer shall be and is hereby made a third -party beneficiary hereunder and may enforce any such right remedy or claim conferred, given or granted hereunder.] SECTION 10. 5 Payment on Non -Business Day. Whenever in this Agreement any payment is required to be made on a day which is not a Business Day, such payment shall be made on the first Business Day following such day.

SECTION 10. 6 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State.

SECTION 10. 7 Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon the Authority and the City, and their respective successors and assigns, subject, however, to the limitations contained herein.

SECTION 10. 8 Severability of Invalid Provisions. If any one or more of the provisions contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Agreement and such invalidity, illegality or unenforceability shall not affect any other provision of this Agreement, and this Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Agreement may be held illegal, invalid or unenforceable.

SECTION 10. 9 Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Agreement.

All references herein to " Articles," " Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Agreement; the words " herein," " hereof," " hereby," " hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders.

SECTION 10.0 Execution of Counterparts. This Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument.

SECTION 10.1 Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City shall be individually or personally liable for the payment of Installment Payments or Additional Payments or be subject to any personal liability or accountability by reason of this 35268407. 4 27 1468
Agreement; but nothing herein contained shall relieve any such member of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Agreement. 35268407. 4 28 1469
IN WITNESS WHEREOF, the Authority and the City have caused this Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

CITY OF BANNING,
as purchaser
By:

Title: City Manager

CITY OF BANNING FINANCING AUTHORITY,
as seller
By:

Title: Executive Director
35268407. 4 29 1470

EXHIBIT A

SCHEDULE OF INSTALLMENT PAYMENTS
Installment Principal Interest
Payment Date Component Component Total
45326074. 2 A- 1
1471

EXHIBIT B

DESCRIPTION OF IMPROVEMENTS

TO BE UPDATED'
Project
Description Budgeted Cost ( r) (2)
Install new 34. 5 kV circuit breaker in an
existing spare position at the Southern
Califomia Edison Company (" SCE")
Substation 550, 00
Construct a new North Substation which
will include a 115 kV Edison
switchyard and a 68 kV switchyard 5, 106, 000
Construct the first of three 15 MVA
69/ 12. 47 kV transformers, and

12. 47 V switchgear at North Substation 2, 442, 000
Install 12. 4kV underground feeders 1, 2, 3
and 4 at North Substation and pick up load
formerly served from San Gorgonio and
Midway Substations 1, 820, 000
Construct a new 34. 5 kV breaker and a half
switchyard in the southwest comer of San
Gorgonio Substation and connect to
existing 34. 5/ 12. 47 kV Bank 1 and Bank 2 4,40, 000
Construct a new 69 kV overhead circuit
30, 000 ft.) on wood poles with underbuild
from San Gorgonio Substation to the new
North Substation 3, 230, 000
Construct a new 69 kV switchyard and
install two new 56 MVA, 34. 5/ 69 kV
transformers in the northwest comer of San
Gorgonio Substation 7,70, 000
Install a 12. 47 kV underground feeder
number 5 at San Gorgonio Substation 455, 000
Install Bank 2 at North Substation 2, 442, 000
Construct a new 69 kV switchyard and
install the first of two 10 MVA, 69/ 12. 47
kV transformers in Midway Substation 3,30, 000
Install Bank 2 at Midway Substation 2, 442, 000
Purchase one- half acre of land for East End
Substation 1,10, 000
Construct a new 69 kV underground circuit
12, 000 ft.) from Midway Substation to the
new North Substation 2, 997, 000
Construct a new 69 kV overhead circuit
22, 500 ft.) on wood poles with underbuild
from San Gorgonio Substation to the
Midway Substation 2, 442, 000
1) Preliminary, subject to change.
2) Budgeted costs are based on projected increases in the Producer Price Index for construction materials and components. 35268407. 4 B- 1
1472
1473
Stradling Yocca Carlson & Rauth
Draft of 7/ 1/5

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015

BOND PURCHASE CONTRACT
2015
City of Banning Financing Authority
99 East Ramsey Street
Banning, California 92220
Attention: Executive Director
City of Banning
99 East Ramsey Street
Banning, California 92220
Attention: City Manager
Ladies and Gentlemen:

Stifel, Nicolaus & Company, Incorporated ( the " Representative"), as representative of itself and The Williams Capital Group, L.P. (together with the Representative, the " Underwriters"), offers to enter into this Bond Purchase Contract ( this " Purchase Contract") with the City of Banning Financing Authority ( the " Authority") and the City of Banning ( the " City"). This offer is made subject to the Authority' s
and the City' s acceptance by execution of this Purchase Contract and delivery of the same to the Underwriters on or before 11: 59 p. m. on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriters upon notice delivered to the Authority and the City at any time prior to such acceptance. Upon the Authority' s and the City' s acceptance hereof, the Purchase Contract will be binding upon the Authority, the City and the Underwriters.

Capitalized terms used in this Purchase Contract and not otherwise defined herein shall have the respective meanings set forth for such terms in the Trust Indenture ( defined below).

Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations set forth in this Purchase Contract, the Underwriters agree to purchase from the Authority, and the Authority agrees to sell and deliver to the Underwriters, all ( but not less than all) of the $ City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015 ( the " Bonds") at a purchase price of $ ( being an amount equal to the principal amount of the Bonds, plus/ les a net original issue premium/ discount of $ and less an Underwriters' discount of $ ). The obligations of the Underwriters to purchase, accept delivery of and pay for the Bonds shall be conditioned on the sale and delivery of all of the Bonds by the Authority to the Underwriters at Closing ( as such teen is defined herein).

Section 2. Bond Terms; Authorizing Instruments. ( a) The Bonds shall be dated their date of delivery and shall mature and bear interest as shown on Exhibit A attached hereto. The Bonds shall be as described in, and shall be issued and secured under, an Indenture of Trust, dated as 1474
of August 1, 2015 ( the " Trust Indenture"), by and among the Authority, the City and U. S. Bank National Association, as trustee ( the " Trustee"). The Bonds are payable and subject to redemption as provided in the Trust Indenture and as described in the Official Statement. b) The Bonds will be issued pursuant to Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, commencing with Section 6584, and are payable from and secured by the Authority' spledge of "Revenues" under and as defined in the Trust Indenture, consisting primarily of Installment Payments to be made by the City to the Authority pursuant to an Installment Sale Agreement, dated as of August 1, 2015 ( the " Installment Sale Agreement"), by and between the Authority and the City.
c) The net proceeds of the sale of the Bonds will be used: ( i) to finance certain capital improvements to the City' s
electric system ( the " Enterprise"); (ii) to refund the Authority' s Revenue
Bonds ( Electric System Project), Series 2007 ( the " 2007 Bonds"); and ( iii) to pay the costs of issuing the Bonds. [ UPDATE TO REFLECT INSURANCE, RESERVE FUND AND CAPITALIZED INTEREST AS NECESSARY]
Section 3. Public Offering. The Underwriters agree to make an initial bona fide public offering of all of the Bonds, at not in excess of the initial public offering yields or prices set forth on Exhibit A attached hereto. Following the initial public offering of the Bonds, the offering prices may be changed from time to time by the Underwriters. The City and the Authority acknowledge and agree that: ( i) the purchase and sale of the Bonds pursuant to this Purchase Contract is an arm' s -length commercial transaction among the City, Authority and the Underwriters; ( ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriters are and have been acting solely as principal and are not acting as Municipal Advisors ( as such term is defined in Section 15B of The Securities Exchange Act of 1934, as amended) to the City or the Authority; (iii) the Underwriters have not assumed an advisory or fiduciary responsibility in favor of the City or the Authority with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto irrespective of whether the Underwriters have provided other services or is currently providing other services to the City or the Authority on other matters); (iv) the Underwriters have financial interests that may differ from and be adverse to those of the City or the Authority; and ( v) the City and Authority have consulted their own legal, financial and other advisors to the extent that they have deemed appropriate.

Section 4. Official Statement; Continuing Disclosure. ( a) The Authority has delivered to the Underwriters the Preliminary Official Statement dated , 2015 ( the " Preliminary Official Statement") and will deliver to the Underwriters the final Official Statement dated the date of this Purchase Contract ( as amended and supplemented from time to time pursuant to Section 5( i) of this Purchase Contract, the " Official Statement").
b) The Authority hereby authorizes the use of the Official Statement and the information contained therein by the Underwriters in connection with the public offering and the sale of the Bonds. The Authority consents to the use by the Underwriters prior to the date hereof of the Preliminary Official Statement in connection with the public offering of the Bonds. The Underwriters hereby agree that they will not send any confirmation requesting payment for the purchase of any Bonds unless the confirmation is accompanied by or preceded by the delivery of a copy of the Official Statement. The Underwriters agree: ( 1) to provide the Authority with final pricing information on the Bonds on atimely basis prior to the Closing; and ( 2) to take any and all 2 1475
other actions necessary to comply with applicable Securities and Exchange Commission rules and Municipal Securities Rulemaking Board ( the " MSRB") rules governing the offering, sale and delivery of the Bonds to ultimate purchasers.
c) In connection with the issuance of the Bonds, and in order to assist the Underwriters in complying with the provisions of Securities and Exchange Commission Rule 15c2- Rule 15c2-"), the City will execute a Continuing Disclosure Agreement, dated as of August 1, 2015 ( the " Continuing Disclosure Undertaking"), with Willdan Financial Services, as dissemination agent (the " Dissemination Agent"), under which the City will undertake to provide certain financial and operating data as required by Rule 15c2-. The form of the Continuing Disclosure Undertaking is attached as an appendix to the Preliminary Official Statement.

Section 5. Representations, Warranties and Covenants of the Authority. The Authority hereby represents, warrants and agrees with the Underwriters that:
a) The Commission of the Authority has taken official action by resolution ( the Authority Resolution") adopted by a majority of the members of the Commission of the Authority at a
regular meeting duly called, noticed and conducted, at which a quorum was present and acting
throughout, authorizing the execution, delivery and due performance of the Trust Indenture, the Installment Sale Agreement, the Escrow Agreement, dated as of August 1, 2015 ( the " Escrow Agreement"), by and between the Authority and U. S. Bank National Association, as escrow agent the " Escrow Agent"), this Purchase Contract ( together with the Trust Indenture, the Installment Sale Agreement and the Escrow Agreement, the " Authority Agreements") and the Official Statement, and the taking of any and all such action as may be required on the part of the Authority to carry out, give effect to and consummate the transactions contemplated hereby. b) The Authority is a
joint exercise of powers authority duly organized and existing under the laws of the State of California ( the " State") and has all necessary power and authority to adopt the Authority Resolution and to enter into and perform its duties under the Authority Agreements.
c) By all necessary official action, the Authority has duly authorized the preparation and delivery of the Preliminary Official Statement and the preparation, execution and delivery of the Official Statement, has duly authorized and approved the execution and delivery of, and the performance of its obligations under, the Bonds and the Authority Agreements, and the consummation by it of all other transactions contemplated by the Authority Resolution, the Authority Agreements, the Preliminary Official Statement and the Official Statement. When executed and delivered, the Authority Agreements ( assuming due authorization, execution and delivery by and enforceability against the other parties thereto) will be in full force and effect and each will constitute legal, valid and binding agreements or obligations of the Authority, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally, the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State. d) At the time of the Authority' s acceptance hereof and at all times subsequent thereto up to and including the time of the Closing, the information and statements in the Official Statement under the caption " THE AUTHORITY" and the information and statements in the Official Statement relating to the Authority under the caption " LITIGATION" do not and will not contain any untrue 3 1476
statement of a material fact or omit 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.
e) As of the date hereof, except as described in the Preliminary Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending against, and notice of which has been served on and received by, the Authority or, to the best knowledge of the Authority, threatened, wherein an unfavorable decision, ruling or finding would:
i) affect the creation, organization, existence or powers of the Authority, or the titles of its members or officers; (ii) in any way question or affect the validity or enforceability of Authority Agreements or the Bonds, or ( iii) in any way question or affect the Purchase Contract or the transactions contemplated by the Purchase Contract, the Official Statement, or any other agreement or instrument to which the Authority is a party relating to the Bonds. f) There is no consent, approval, authorization or other order of, or filing or registration with, or certification by, any regulatory authority having jurisdiction over the Authority required for the execution and delivery of this Purchase Contract and the other Authority Agreements or the consummation by the Authority of the transactions contemplated by the Official Statement or the Authority Agreements.
g) Any certificate signed by any official of the Authority authorized to do so shall be deemed a
representation and warranty by the Authority to the Underwriters as to the statements made therein.
h) The Authority is not in default, and at no time has the Authority defaulted in any material respect, on any bond, note or other obligation for borrowed money or any agreement under which any such obligation is or was outstanding.
i) If any event occurs of which the Authority has knowledge between the date of this Purchase Contract and the date of the Closing that might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit 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, the Authority shall notify the Representative and if, in the opinion of the Representative, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the Authority will cooperate with the Underwriters in causing the Official Statement to be amended or supplemented in a form and in a manner approved by the Representative. All expenses thereby incurred will be paid by the Authority, and the Underwriters will file, or cause to be filed, the amended or supplemented Official Statement with the MSRB' sElectronic Municipal Market Access database (" EMMA"). j) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Representative may reasonably request in order: ( i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Representative may designate; and ( ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions. The Authority will not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction.
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k) The Authority is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Authority is a
party, which breach or default has or may have an adverse effect on the ability of the Authority to perform its obligations under the Authority Agreements, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the Authority Agreements, if applicable, and compliance with the provisions on the Authority' spart contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the Authority is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the Authority or under the terms of any such law, regulation or instrument, except as may be provided by the Authority Agreements.
1) Except as set forth in the Official Statement under the caption " CONTINUING DISCLOSURE," the Authority has complied in all material respects with its continuing disclosure undertakings in the past five years.

Section 6. Representations, Warranties and Covenants of the City. The City hereby represents, warrants and agrees with the Underwriters that:
a) The City Council ( the " City Council") of the City has taken official action by Resolution ( the " City Resolution") adopted by a majority of the members of the City Council at a meeting duly called, noticed and conducted, at which aquorum was present and acting throughout, authorizing the execution, delivery and due performance of the Indenture, the Installment Sale Agreement, the Continuing Disclosure Undertaking, this Purchase Contract ( together with the Indenture, the Installment Sale Agreement and the Continuing Disclosure Agreement, the " City Agreements") and the Official Statement and the taking of any and all such action as may be required on the part of the City and carry out, give effect to and consummate the transactions contemplated hereby.
b) The City is a municipal corporation and general law city duly organized and existing under the laws of the State and has all necessary power and authority to adopt the City Resolution and to enter into and perform its duties under the City Agreements. c) By all necessary official action, the City has duly adopted the City Resolution, has duly authorized the preparation and delivery of the Preliminary Official Statement and the preparation, execution and delivery of the Official Statement, has duly authorized and approved the execution and delivery of, and the performance of its obligations under, the City Agreements, and the consummation by it of all other transactions contemplated by the City Resolution, the City Agreements, the Preliminary Official Statement and the Official Statement. When executed and delivered, the City Agreements ( assuming due authorization, execution and delivery by and enforceability against the other parties thereto, as applicable) will be in full force and effect and each will constitute legal, valid and binding agreements or obligations of the City, enforceable in accordance with their respective terms, except as enforcement thereof may be limited by bankruptcy, 5 1478
insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors' rights generally, the application of equitable principles, the exercise of judicial discretion and the limitations on legal remedies against public entities in the State. d) At the time of the City' s acceptance hereof and at all times subsequent thereto up to and including the time of the Closing, the information and statements in the Official Statement ( other than under the caption " THE AUTHORITY" and statements relating to the Authority under the caption " LITIGATION") do not and will not contain any untrue statement of a material fact or omit 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 ( except that no representation is made with respect to information relating to DTC ( as such term is defined herein) or DTC' s book -entry system).
e) As of the date hereof, except as described in the Preliminary Official Statement, there is no action, suit, proceeding or investigation before or by any court, public board or body pending against, and notice of which has been served on and received by, the City or, to the best knowledge of the City, threatened, wherein an unfavorable decision, ruling or finding would: ( i) affect the creation, organization, existence or powers of the City, or the titles of its members or officers; (ii) in any way question or affect the validity or enforceability of City Agreements or the Bonds; or ( iii) in any way question or affect the Purchase Contract or the transactions contemplated by the Purchase Contract, the Official Statement, or any other agreement or instrument to which the City is a party relating to the Bonds.
f) There is no consent, approval, authorization or other order of, or filing or registration with, or certification by, any regulatory authority having jurisdiction over the City required for the execution and delivery of this Purchase Contract and the City Agreements or the consummation by the City of the transactions contemplated by the Official Statement or the City Agreements. g) Any certificate signed by any official of the City authorized to do so shall be deemed a
representation and warranty by the City to the Underwriters as to the statements made therein. h) The City is not in default, and at no time has the City defaulted in any material respect, on any bond, note or other obligation for borrowed money or any agreement under which any such obligation is or was outstanding.
i) If any event occurs of which the City has knowledge between the date of this Purchase Contract and the date of the Closing that might or would cause the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit 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, the City shall notify the Representative and, if in the opinion of the Representative, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriters in causing the Official Statement to be amended or supplemented in a form and in a manner approved by the Representative. All expenses thereby incurred will be paid by the City, and the Underwriters will file, or cause to be filed, the amended or supplemented Official Statement with EMMA.
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j) Except as set forth in the Official Statement under the caption " CONTINUING DISCLOSURE," the City has complied in all material respects with its continuing disclosure undertakings in the past five years.
k) The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriters as the Representative may reasonably request in order:
i) to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and other jurisdictions of the United States as the Representative may designate; and ii) to determine the eligibility of the Bonds for investment under the laws of such states and other jurisdictions. The City will not be required to execute a general or special consent to service of process or qualify to do business in connection with any such qualification or determination in any jurisdiction.
1) The City is not in any material respect in breach of or default under any applicable constitutional provision, law or administrative regulation of any state or of the United States, or any agency or instrumentality of either, or any applicable judgment or decree, or any loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a
party, which breach or default has or may have an adverse effect on the ability of the City to perform its obligations under the City Agreements, and no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute such a default or event of default under any such instrument; and the adoption, execution and delivery of the City Agreements, if applicable, and compliance with the provisions on the City' s part contained therein, will not conflict in any material way with or constitute a material breach of or a material default under any constitutional provision, law, administrative regulation, judgment, decree, loan agreement, indenture, trust agreement, bond, note, resolution, agreement or other instrument to which the City is a party, nor will any such execution, delivery, adoption or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of the property or assets of the City or under the terms of any such law, regulation or instrument, except as may be provided by the City Agreements. m) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2014 attached as an appendix to the Official Statement fairly represent the receipts, expenditures and cash balances of the City as of such date. Except as disclosed in the Official Statement or otherwise disclosed in writing to the Representative, there has not been any materially adverse change in the financial condition of the City or the Enterprise or in the City' s operations or the operations of the Enterprise since June 30, 2014, and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.

Section 7. The Closing. (a) At 8: 00 A. M., Pacific Time, on , 2015, or on such earlier or later time or date as may be agreed upon by the Representative, the Authority and the City the " Closing"), the Authority shall deliver or cause to be delivered to the Trustee, the Bonds in definitive form, registered in the name of Cede & Co., as the nominee of The Depository Trust Company, New York, New York ("DTC") (so that the Bonds may be authenticated by the Trustee and credited to the account specified by the Representative under DTC' s FAST procedures). Prior to the Closing, the Authority shall deliver, at the offices of Norton Rose Fulbright US LLP (" Bond Counsel") in Los Angeles, California, or such other place as is mutually agreed upon by the Representative, the City and the Authority, the other documents described in this Purchase Contract. 7 1480
On the date of the Closing, the Underwriters shall pay the purchase price of the Bonds as set forth in Section 1 of this Purchase Contract in immediately available funds to the order of the Trustee. b) The Bonds shall be issued in fully registered form and shall be prepared and delivered as one Bond for each maturity registered in the name of a nominee of DTC. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriters to accept delivery of the Bonds in accordance with the terms of this Purchase Contract.

Section 8. Conditions to Underwriters' Obligations. The Underwriters have entered into this Purchase Contract in reliance upon the representations and warranties of the Authority and the City contained herein and to be contained in the documents and instruments to be delivered on the date of the Closing, and upon the performance by the Authority and the City of their respective obligations to be perfonmed hereunder and under such documents and instruments to be delivered at or prior to the date of the Closing. The Underwriters' obligations under this Purchase Contract are and shall also be subject to the following conditions:
a) The representations and warranties of the Authority and the City contained in this Agreement shall be true and correct in all material respects on the date of this Purchase Contract and on and as of the date of the Closing as if made on the date of the Closing. b) As of the date of the Closing, the Official Statement shall not have been amended, modified or supplemented, except in any case as may have been agreed to by the Representative. c) ( i) As of the date of the Closing, the Authority Resolution, the City Resolution, the Authority Agreements and the City Agreements shall be in full force and effect, and shall not have been amended, modified or supplemented, except as may have been agreed to by the Authority, the City and the Representative; ( ii) the Authority shall perform or have performed all of its obligations required under or specified in the Authority Resolution, the Authority Agreements and this Purchase Contract to be performed at or prior to the date of the Closing; and ( iii) the City shall perform or have performed all of its obligations required under or specified in the City Resolution, the City Agreements and this Purchase Contract to be performed at or prior to the date of the Closing. d) As of the date of the Closing, all necessary official action of the Authority relating to the Authority Agreements, the Authority Resolution and the Official Statement, and all necessary official action of the City relating to the City Agreements, the City Resolution, and the Official Statement, shall have been taken and shall be in full force and effect and shall not have been amended, modified or supplemented in any material respect. e) Subsequent to the date of this Purchase Contract, up to and including the date of the Closing, there shall not have occurred any change in the financial affairs of the Authority or the City, or in the operations of the Enterprise, as described in the Official Statement, which in the reasonable professional judgment of the Representative materially impairs the investment quality of the Bonds. 0 As of or prior to the date of the Closing, the Underwriters shall have received each of the following documents:

A) Certified copies of the Authority Resolution and the City Resolution. 8 1481
B) Duly executed copies of the Authority Agreements and the City Agreements.

C) The Preliminary Official Statement and the Official Statement, with the Official Statement duly executed on behalf of the Authority and the City.

D) An approving opinion of Bond Counsel, dated as of the Closing, as to the validity of the Bonds and the exclusion of interest on the Bonds from federal and State income taxation, addressed to the Authority and the City substantially in the form attached as an appendix to the Official Statement, and a reliance letter with respect thereto addressed to the Underwriters and the Trustee.

E) A supplemental opinion of Bond Counsel, addressed to the Underwriters, to the effect that:
1) The Purchase Contract has been duly executed and delivered by the Authority and the City and is valid and binding upon the Authority and the City, subject to laws relating to bankruptcy, insolvency, reorganization or creditors' rights generally and to the application of equitable principles;
2) The Bonds are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Trust Indenture is exempt from qualification pursuant to the Trust Indenture Act of 1939, as amended; and
3) The statements contained in the Official Statement on the cover and under the captions " INTRODUCTION," " THE BONDS" (other than statements relating to DTC or its book -entry system), " SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" and TAX MATTERS," and in Appendices C and D, insofar as such statements purport to describe certain provisions of the Bonds, or to state legal conclusions and the opinion of Bond Counsel regarding the tax exempt nature of the Bonds for federal and State income tax purposes, present a fair and accurate summary of the provisions thereof.

F) A defeasance opinion of Bond Counsel relating to the 2007 Bonds, in form and substance satisfactory to Bond Counsel, the Trustee and the Underwriters.

G) A letter, dated the Closing Date and addressed to the Underwriters, of Norton Rose Fulbright US LLP, Disclosure Counsel, to the effect that Disclosure Counsel is not passing upon and has not undertaken to determine independently or to verify the accuracy or completeness of the statements contained in the Official Statement, and is, therefore, unable to make any representation to the Underwriters in that regard, but on the basis of its participation in conferences with representatives of the City, the City Attorney, the Authority, Bond Counsel, the City' s Financial Advisor, representatives of the Underwriters and others, during which conferences the content of the Official Statement and related matters were discussed, and its examination of certain documents, and, in reliance thereon and based on the information made available to it in its role as Disclosure Counsel and its understanding of applicable law, Disclosure Counsel advises the Underwriters as a matter of fact, but not opinion, that no information has come to the attention of the attorneys in the firm working on such matter which has led them to believe that the Official Statement ( excluding therefrom the financial and statistical data, forecasts, charts, numbers, estimates, projections, assumptions and expressions of opinion included in the Official Statement, information regarding DTC and its book entry system and the information set forth in Appendices A, F and G, as to all of 9 1482
which no opinion is expressed) as of its date and as of the Closing contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and advising the Underwriters that, other than reviewing the various certificates and opinions required by this Purchase Contract regarding the Official Statement, Disclosure Counsel has not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Official Statement.

H) An opinion of the City Attorney, dated as of the Closing addressed to the Authority, the City and the Underwriters, substantially in the form attached hereto as Exhibit E.

I) An executed Rule 15c2- certificate of the Authority and the City, dated as of the date of the Preliminary Official Statement, in the form attached hereto as Exhibit B.

J) An executed closing certificate of the Authority, dated as of the Closing, in the form attached hereto as Exhibit C.

K) An executed closing certificate of the City, dated as of the Closing, in the form attached hereto as Exhibit D.

L) The opinion or opinions of counsel of the Trustee and the Escrow Agent, dated as of the Closing, addressed to the Authority, the City and the Underwriters, in form and substance satisfactory to Bond Counsel and the Representative.

M) A certificate or certificates, dated as of the Closing, in foam and substance acceptable to the Representative, of an authorized officer of officers of the Trustee to the effect that the Trustee has accepted the duties imposed by the Trust Indenture and is authorized to carry out such duties.

N) A certificate or certificates, dated as of the Closing, in form and substance acceptable to the Representative, of an authorized officer of officers of the Escrow Agent to the effect that the Escrow Agent has accepted the duties imposed by the Escrow Agreement and is authorized to carry out such duties.
0) Evidence of required filings with the California Debt and Investment Advisory Commission.

P) A copy of the executed Blanket Issuer Letter of Representations by and between the Authority and DTC relating to the book entry system.

Q) Evidence that the rating or ratings assigned to the Bonds as of the date of the Closing are as set forth in the Official Statement.

R) A certified copy of the general resolution of the Trustee and the Escrow Agent authorizing the execution and delivery of certain documents by certain officers of the Trustee and the Escrow Agent, which resolution authorizes the execution and delivery of the Trust Indenture and the Escrow Agreement and the authentication and delivery of the Bonds by the Trustee. 10 1483
S) An opinion of Stradling Yocca Carlson & Rauth, a Professional Corporation, counsel to the Underwriters, addressed to the Underwriters and in form and substance satisfactory to the Representative.

T) A report of [Digital Assurance Certification LLC] as to compliance by the City and related entities with their respective continuing disclosure undertakings.

U) A tax arbitrage certificate with respect to the Bonds, in form and substance satisfactory to Bond Counsel and the Representative.

V) A certificate of the Dissemination Agent to the effect that the Continuing Disclosure Undertaking has been duly executed and delivered by the Dissemination Agent and, subject to due authorization and delivery by the City, is valid and binding upon the Dissemination Agent, subject to laws relating to bankruptcy, insolvency, reorganization or creditors' rights generally and to the application of equitable principles.

W) Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriters or Bond Counsel may reasonably request to evidence compliance by the Authority and the City with legal requirements, the truth and accuracy, as of the date of the Closing, of the representations of the Authority and the City herein contained and of the Official Statement and the due performance or satisfaction by the Authority and the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Authority and the City.

All of the opinions, letters, certificates, instruments and other documents mentioned in this Purchase Contract shall be deemed to be in compliance with the provisions of this Purchase Contract if, but only if, they are in form and substance satisfactory to the Representative. If the Authority and the City are unable to satisfy the conditions to the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds contained in this Purchase Contract, or if the obligations of the Underwriters to purchase, to accept delivery of and to pay for the Bonds shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract shall terminate and neither the Underwriters, the Authority nor the City shall be under further obligations hereunder, except that the respective obligations of the Authority, the City and the Underwriters set forth in Section 12 of this Purchase Contract shall continue in full force and effect.

Section 9. Conditions to Authority' sand City' sObligations. The performance by the Authority and the City of their respective obligations under this Purchase Contract are conditioned upon: (i) the performance by the Underwriters of their obligations hereunder; and ( ii) receipt by the Authority and the City of opinions addressed to the Authority and the City, receipt by the Underwriters of opinions addressed to the Underwriters, and the delivery of certificates being delivered on the date of the Closing by persons and entities other than the Authority and the City.

Section 10. Termination Events. The Underwriters shall have the right to terminate the Underwriters' obligations under this Purchase Contract to purchase, to accept delivery of and to pay for the Bonds by notifying the Authority and the City of its election to do so if, after the execution hereof and prior to the Closing, any of the following events occurs:

A) the marketability of the Bonds or the market price thereof, in the reasonable opinion of the Representative, has been materially and adversely affected by any decision issued by a 11 1484
court of the United States ( including the United States Tax Court) or of the State, by any ruling or regulation ( final, temporary or proposed) issued by or on behalf of the Department of the Treasury of the United States, the Internal Revenue Service, or other governmental agency of the United States, or any governmental agency of the State, or by a tentative decision or announcement by any member of the House Ways and Means Committee, the Senate Finance Committee, or the Conference Committee with respect to contemplated legislation or by legislation enacted by, pending in, or favorably reported to either the House of Representatives or either House of the Legislature of the State, or formally proposed to the Congress of the United States by the President of the United States or to the Legislature of the State by the Governor of the State in an executive communication, affecting the tax status of the Authority or the City, their property or income, their debt or contractual obligations ( including the Bonds) or the interest thereon or any tax exemption granted or authorized by the Internal Revenue Code of 1986, as amended;
B) the United States becomes engaged in hostilities that result in a declaration of war or a national emergency, or any other outbreak of hostilities occurs, or a local, national or international calamity or crisis occurs, financial or otherwise, the effect of such outbreak, calamity or crisis being such as, in the reasonable opinion of the Representative, would affect materially and adversely the ability of the Underwriters to market the Bonds; C) there occurs a general suspension of trading on the New York Stock Exchange or the declaration of a general banking moratorium by the United States, New York or State authorities;
D) astop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission is issued or made to the effect that the issuance, offering or sale of the Bonds is or would be in violation of any provision of the Securities Act of 1933, as then in effect, or of the Securities Exchange Act of 1934, as then in effect, or of the Trust Indenture Act of 1939, as then in effect;
E) legislation is enacted by the House of Representatives or the Senate of the Congress of the United States of America, or a decision by a court of the United States of America is rendered, or a
ruling or regulation by or on behalf of the Securities and Exchange Commission or other governmental agency havingjurisdiction of the subject matter is made or proposed to the effect that the Bonds are not exempt from registration, qualification or other similar requirements of the Securities Act of 1933, as then in effect, or of the Trust Indenture Act of 1939, as then in effect; F) in the reasonable judgment of the Representative, the market price of the Bonds, or the market price generally of obligations of the general character of the Bonds, might be materially and adversely affected because additional material restrictions not in force as of the date hereof are imposed upon trading in securities generally by any governmental authority or by any national securities exchange;
G) the Office of the Comptroller of the Currency, The New York Stock Exchange or other national securities exchange, or any governmental authority, imposes, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increases materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of, or financial responsibility requirements of the Underwriters; 12 1485
1-1) a general banking moratorium is established by federal, New York or State authorities;
I) any legislation, ordinance, rule or regulation is introduced in or enacted by any governmental body, department or agency in the State or a decision of a court of competent jurisdiction within the State is rendered, which, in the reasonable opinion of the Representative, after consultation with the Authority and the City, materially adversely affects the market price of the Bonds;
J) any federal or State court, authority or regulatory body takes action materially and adversely affecting the collection of Revenues under the Trust Indenture or Gross Revenues under the Installment Sale Agreement; or
K) any rating of the Bonds is downgraded, suspended or withdrawn by a national rating service, which, in the reasonable opinion of the Representative, materially adversely affects the marketability or market price of the Bonds;
L) an event occurs which in the reasonable opinion of the Representative requires a supplement or amendment to the Official Statement and: (i) the Authority or the City refuses to prepare and furnish such supplement or amendment; or (ii) in the reasonable judgment of the Representative, the occurrence of such event materially and adversely affects the marketability of the Bonds or renders the enforcement of the sale contracts of the Bonds impracticable; M) an order, decree or injunction issued by any court of competent jurisdiction, or order, ruling, regulation ( final, temporary or proposed), official statement or other form of notice or communication issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental authority having jurisdiction of the subject matter, to the effect that: ( i) obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Trust Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; or (ii) the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect;
N) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any domestic governmental authority or by any domestic national securities exchange, which are material to the marketability of the Bonds; or 0) the commencement of any action, suit or proceeding described in Section 5(e) or Section 6(e).

Section 11.. Changes in Official Statement. After the Closing, neither the Authority nor the City will adopt any amendment of or supplement to the Official Statement to which the Representative shall reasonably object in writing unless the Authority or its counsel deteunines that such amendment or supplement is required under applicable law. Within 90 days after the Closing or within 25 days following the " end of the underwriting period" (as such term is defined below), whichever occurs first, if any event relating to or affecting the Bonds, the Enterprise, the Trustee, the City or the Authority shall occur as a result of which it is necessary, in the opinion of the 13 1486
Representative, to amend or supplement the Official Statement in order to make the Official Statement not misleading in any material respect in the light of the circumstances existing at the time it is delivered to a purchaser, the Authority will forthwith prepare and furnish to the Underwriters an amendment or supplement that will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to purchaser, not misleading. The City and the Authority shall cooperate with the Underwriters in the filing by the Underwriters of such amendment or supplement to the Official Statement with the MSRB. As used herein, the term " end of the underwriting period" means the later of such time as: (i) the Authority delivers the Bonds to the Underwriters; or ( ii) the Underwriters do not retain, directly or as members of an underwriting syndicate, an unsold balance of the Bonds for sale to the public. Notwithstanding the foregoing, unless the Representative gives notice to the contrary, the " end of the underwriting period" shall be the date of the Closing. Any notice delivered pursuant to this provision shall be written notice delivered to the Authority and the City at or prior to the date of the Closing and shall specify a date ( other than the date of the Closing) to be deemed the end of the underwriting period."
Section 12. Payment of Expenses. ( a) The Underwriters shall be under no obligation to pay, and the City shall pay the following expenses incident to the performance of the Authority' s and the City' sobligations hereunder:
i) the fees and disbursements of Bond Counsel and Disclosure Counsel; ii) the cost of printing and delivering the Bonds, the Preliminary Official Statement and the Official Statement ( and any amendment or supplement prepared pursuant to Section 11 of this Purchase Contract);
iii) the fees and disbursements of accountants, advisers and of any other experts or consultants retained by the Authority or the City, including the City Attorney; and iv) any other expenses and costs of the Authority and the City incident to the performance of their respective obligations in connection with the authorization, issuance and sale of the Bonds, including out of pocket expenses and regulatory expenses, and any other expenses agreed to by the parties.
b) The Underwriters shall pay all expenses incurred by it in connection with the public offering and distribution of the Bonds including, but not limited to:
i) all advertising expenses in connection with the offering ofthe Bonds; and ii) all out-f- pocket disbursements and expenses incurred by the Underwriters in connection with the offering and distribution of the Bonds ( including without limitation the fees and expenses of its counsel and the MSRB, CUSIP Bureau, California Debt and Investment Advisory Commission and California Public Securities Association fees, if any), except as provided in clause a) above.

Section 13. Notices. Any notice or other communication to be given to the Authority or the City under this Purchase Contract may be given by delivering the same in writing to the Authority and the City at the addresses set forth on the first page of this Purchase Contract, and any 14 1487
notice or other communication to be given to the Underwriters under this Purchase Contract may be given by delivering the same in writing to
Stifel, Nicolaus & Company Incorporated, as Representative One Montgomery Street, 35th Floor
San Francisco. California 94104
Attention: Guillermo Garcia
Section 14. Survival of Representations, Warranties, Agreements. All of the Authority' s and the City' srepresentations, warranties and agreements contained in this Purchase Contract shall remain operative and in full force and effect regardless of: (a) any investigations made by or on behalf of the Underwriters; or ( b) delivery of and payment for the Bonds pursuant to this Purchase Contract. The agreements contained in this Section and in Section 12 shall survive any termination of this Purchase Contract.

Section 15. Benefit; No Assignment. This Purchase Contract is made solely for the benefit of the Authority, the City and the Underwriters ( including their successors and assigns), and no other person shall acquire or have any right hereunder or by virtue hereof. The rights and obligations created by this Purchase Contract are not subject to assignment by the Underwriters, the Authority or the City without the prior written consent of the other parties hereto.

Section 16. Severability. In the event that any provision of this Purchase Contract is held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this Purchase Contract.

Section 17. Counterparts. This Purchase Contract may be executed in any number of counterparts, all of which taken together shall constitute one agreement, and any of the parties hereto may execute the Purchase Contract by signing any such counterpart.

Section 18. Governing Law. This Purchase Contract shall be governed by the laws of the State.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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Section 19. Effectiveness. This Purchase Contract shall become effective upon the execution of the acceptance hereof by an authorized officer of the Authority and the City, and shall be valid and enforceable as of the time of such acceptance.

Very truly yours,

STIFEL, NICOLAUS & COMPANY
INCORPORATED, as Representative
By:

Title: Authorized Officer
Accepted:

CITY OF BANNING
By:

City Manager
Time of Execution: Pacific Time

CITY OF BANNING FINANCING AUTHORITY
By:

Executive Director
Time of Execution: Pacific Time
16 1489

EXHIBIT A

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015

MATURITY SCHEDULE
Principal
Payment Date
June 1) Principal Coupon Yield Price
c) Priced to first optional redemption date of June 1, 20 at par.

A- 1
1490
EXHIBIT 13

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015
15c2- CERTIFICATE
The undersigned hereby certifies and represents that he or she is the duly appointed and acting representative of the City of Banning ( the " City") and the City of Banning Financing Authority ( the " Authority"), and is duly authorized to execute and deliver this Certificate on behalf of the City and the Authority, and further hereby certifies and reconfirms on behalf of the City and the Authority as follows:
1) This Certificate is delivered in connection with the offering and sale of the above captioned bonds ( the " Bonds") in order to enable the underwriter of the Bonds to comply with Securities and Exchange Commission Rule 15c2- promulgated under the Securities Exchange Act of 1934 ( the " Rule").
2) In connection with the offering and sale of the Bonds, there has been prepared a Preliminary Official Statement, setting forth information concerning the Bonds, the Authority and the City (the ` Preliminary Official Statement").
3) As used herein, " Permitted Omissions" means the offering price( s), interest rate( s), selling compensation, aggregate principal amount, principal amount per maturity, delivery dates, ratings and other terms of the Bonds depending on such matters, all with respect to the Bonds. 4) The Preliminary Official Statement is, except for the Permitted Omissions, deemed final within the meaning of Rule 15c2-, and the information therein is accurate and complete except for the Permitted Omissions.

Dated: , 2015

CITY OF BANNING
By:

City Manager
Preliminary, subject to change.

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CITY OF BANNING FINANCING AUTHORITY
By:

Executive Director
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EXHIBIT C

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015

CLOSING CERTIFICATE OF THE AUTHORITY
The undersigned hereby certifies and represents that he is the duly appointed and acting representative of the City of Banning Financing Authority ( the " Authority"), and is duly authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on behalf of the Authority as follows:
1) The representations, warranties and covenants of the Authority contained in the Bond Purchase Contract, dated , 2015 ( the " Purchase Contract"), by and among the Authority, the City of Banning and Stifel, Nicolaus & Company, Incorporated, as representative of the underwriters, are true and correct and in all material respects on and as of the date of the Closing, with the same effect as if made on the date of the Closing. ii) The Authority Resolution is in full force and effect at the date of the Closing and has not been amended, modified or supplemented, except as agreed to by the Authority and the underwriters.
iii) The Authority has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or prior to the date of the Closing. iv) The statements and descriptions in the Official Statement pertaining to the Authority do not contain any untrue or misleading statement of a material fact and do not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

Capitalized terms used but not defined herein have the meanings given to such terms in the Purchase Contract.

Dated: , 2015

CITY OF BANNING FINANCING AUTHORITY
By:

Executive Director
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EXHIBIT D

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015

CLOSING CERTIFICATE OF THE CITY
The undersigned hereby certifies and represents that he or she is the duly appointed and acting representative of the City of Banning ( the " City"), and is duly authorized to execute and deliver this Certificate and further hereby certifies and reconfirms on behalf of the City as follows:
i) The representations, warranties and covenants of the City contained in the Bond Purchase Contract, dated as of , 2015 ( the " Purchase Contract"), by and among the City, the City of Banning Financing Authority, and Stifel, Nicolaus & Company, Incorporated, as representative of the underwriters, are true and correct and in all material respects on and as of the date of the Closing, with the same effect as ifmade on the date of the Closing. ii) The City Resolution is in full force and effect at the date of the Closing and has not been amended, modified or supplemented, except as agreed to by the City and the Underwriters.
iii) The City has complied with all of the agreements and satisfied all of the conditions on its part to be performed or satisfied on or prior to the date of the Closing. iv) Subsequent to the date of the Official Statement and on or prior to the date of this certificate, there has been no adverse change in the condition ( financial or otherwise) of the City, whether or not arising in the ordinary course of operations, as described in the Official Statement that would materially and adversely affect the Bonds or the City' s performance under the City Agreements.
v) The Official Statement ( other than under the caption " THE AUTHORITY," information pertaining to the Authority under the caption " LITIGATION" and information relating to DTC and its book -entry system) does not contain any untrue or misleading statement of a material fact and does not omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they are made, not misleading.

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Capitalized terms used but not defined herein have the meanings given to such terms in the Purchase Contract.

Dated: , 2015

CITY OF BANNING
By:

City Manager
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EXHIBIT E
2015
City of Banning Financing Authority
99 East Ramsey Street
Banning, California 92220
City of Banning
99 East Ramsey Street
Banning, California 92220
Stifel, Nicolaus & Company, Incorporated,
as Representative
One Montgomery Street, 35th Floor
San Francisco, California 94104
Opinion of City Attorney and Authority Counsel
with reference to

CITY OF BANNING FINANCING AUTHORITY

REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT)
SERIES 2015
Ladies and Gentlemen:

In my capacity as the General Counsel to the City of Banning Financing Authority ( the Authority") and the City Attorney of the City of Banning ( the " City"), in connection with the issuance by the Authority of the above -referenced bonds ( the " Bonds"), 1 have examined such documents, certificates and records as I have deemed relevant and necessary as the basis for the opinion set forth herein. Capitalized teens used and not otherwise defined herein shall have the same meanings as assigned to them in the Bond Purchase Contract, dated , 2015 ( the " Purchase Contract"), by and among Stifel, Nicolaus & Company, Incorporated, as representative of the underwriters, the City and the Authority.

Relying on my examination described above and pertinent law and subject to the limitations and qualifications set forth hereinafter, I am of the following opinion:

1. The City is a municipal corporation and general law city organized and validly existing under the laws of the State of California.

2. Resolution No. of the City Council of the City (the " City Resolution") has been duly adopted at a meeting of such City Council that was duly called and held on July , 2015 pursuant to law, with all required public notice and at which a quorum was present and acting
throughout. The City Resolution is in full force and effect and has not been amended or repealed.

3. The City has duly authorized, executed and delivered the City Agreements.

Assuming due authorization, execution and delivery by the other parties thereto, as necessary, the E- 1
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City Agreements constitute legal, valid and binding agreements of the City enforceable against the City in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting the enforcement of creditors' rights generally and equitable remedies if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and limitations on remedies against public agencies.

4. Except as disclosed in the Official Statement, there is no action, suit or proceeding before or by any court, public board or body pending ( with service of process having been accomplished on the City) or, to the best of my knowledge, threatened wherein an unfavorable decision, ruling or finding would: (a) affect the creation, organization, existence or powers of the City or the titles of its officers to their respective offices; (b) in any way question or affect the validity or enforceability of the City Agreements or the Bonds; ( c) find illegal, invalid or unenforceable the City Agreements or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the City is a party; or (d) have a material adverse effect on the ability of the City to make Installment Payments when due.

5. The execution and delivery of the City Agreements and compliance with the provisions of each thereof will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the City is a party or is otherwise subject or bound in a manner which would materially adversely affect the City' s performance under the City Agreements.

6. The Authority is a
joint exercise of powers authority organized and validly existing under the laws of the State of California.

7. Resolution No. of the Authority ( the " Authority Resolution") has been duly adopted at a regular meeting of the Commission of the Authority that was duly called and held on July , 2015 pursuant to law, with all required public notice and at which a quorum was present and
acting throughout. The Authority Resolution is in full force and effect and has not been amended or repealed.

8. The Authority has duly authorized, executed and delivered the Official Statement, and the Authority Agreements. Assuming due authorization, execution and delivery by the other parties thereto, as necessary, the Authority Agreements constitute legal, valid and binding agreements of the Authority enforceable against the Authority in accordance with their terms, except as the enforceability thereof may be limited by applicable bankruptcy, insolvency, debt adjustment, fraudulent conveyance or transfer, moratorium, reorganization or other laws affecting the enforcement of creditors' rights generally and equitable remedies if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and limitations on remedies against public agencies.

9. The execution and delivery by the Authority of the Authority Agreements, the Official Statement and the other instruments contemplated by any of such documents to which the E- 2
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Authority is a party, and compliance with the provisions of each thereof, will not conflict with or constitute a breach of or default under any applicable law or administrative rule or regulation of the State of California, the United States or any department, division, agency or instrumentality of either thereof, or any applicable court or administrative decree or order or any loan agreement, note, resolution, indenture, trust agreement, contract, agreement or other instrument to which the Authority is a party or is otherwise subject or bound in a manner which would materially adversely affect the Authority' sperformance under the Authority Agreements.

10. There is no action, suit or proceeding before or by any court, public board or body pending ( with service of process having been accomplished on the Authority) or, to the best of my knowledge, threatened wherein an unfavorable decision, ruling or finding would: ( a) affect the creation, organization, existence or powers of the Authority or the titles of its officers to their respective offices; (b) in any way question or affect the validity or enforceability of the Authority Agreements or the Bonds; or ( c) find illegal, invalid or unenforceable the Authority Agreements or the transactions contemplated thereby, or any other agreement or instrument related to the issuance of the Bonds to which the Authority is a party.

The opinion is based on such examination of the laws of the State of California as 1 deemed relevant for the purposes of this opinion. I have not considered the effect, if any, of the laws of any other jurisdiction upon matters covered by this opinion. I have assumed the genuineness of all documents and signatures, presented to me. I have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in such documents. I express no opinion as to the status of the Bonds or the interest thereon, the Authority Agreements or the City Agreements under any federal securities laws or any state securities or " Blue Sky" law or any federal, state or local tax law. Further, I express no opinion with respect to any indemnification, contribution, choice of law, choice of forum or waiver provisions contained in the Authority Agreements and the City Agreements. Without limiting any of the foregoing, I express no opinion as to any matter other than as expressly set forth above.

I am furnishing this opinion as General Counsel to the Authority and City Attorney to the City. Except for the Authority and the City, no attorney -client relationship has existed or exists between me and the addressees hereof in connection with the Bonds or by virtue of this opinion.

This opinion is rendered solely in connection with the financing described herein, and may not be relied upon by you for any other purpose. I disclaim any obligation to update this opinion. This opinion shall not extend to, and may not be used, quoted, referred to, or relied upon by any other person, firm, corporation or other entity without my prior written consent.

Respectfully submitted,
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Norton Rose Fulbrigbt— Draft 07/8/ 15

ESCROW AGREEMENT
by and between the

CITY OF BANNING FINANCING AUTHORITY
and
U. S. BANK NATIONAL ASSOCIATION
as Escrow Agent
Dated as of August 1, 2015
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ESCROW AGREEMENT
This ESCROW AGREEMENT, dated as of August 1, 2015, by and between the CITY OF BANNING FINANCING AUTHORITY ( the " Authority"), a joint powers authority
organized and existing under the laws of the State of California, and U. S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, as Escrow Agent and as Prior Trustee ( the " Escrow Agent" and the Prior Trustee");
WITNESSETH:

WHEREAS, the Authority has previously issued its $ 45, 790, 000 Revenue Bonds Electric System Project), Series 2007 ( the " 2007 Bonds"), of which $ 40, 045,00 remain outstanding, pursuant to an Indenture of Trust, dated as of June 1, 2007, as amended by Amendment No. 1 to Indenture of Trust, dated June 8, 2010 ( the " Prior Indenture"), by and among the Authority, the City of Banning, California and the Prior Trustee; and WHEREAS, the Authority desires to refund the 2007 Bonds; and WHEREAS, the Authority has approved the issuance of its Refunding Revenue Bonds ( Electric System Project) Series 2015 ( the " Bonds"), the proceeds of which are to be used in part to effect the refunding of the 2007 Bonds;
NOW, THEREFORE, in consideration of the mutual premises contained herein and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

SECTION 1. As used herein, the following terms shall have the following meanings:

Authority" means the City of Banning Financing Authority.

City" means the City of Banning.

Code" means the Internal Revenue Code of 1986.

Escrow Agent" means U. S. Bank National Association and its successors and assigns, and any other corporation or institution that may at any time be substituted in its place as provided in Section 14 hereof.

Escrow Fund" means the Escrow Fund established and held by the Escrow Agent pursuant to Section 3 hereof.

Escrow Requirements" means the amount sufficient to pay the principal and interest with respect to the 2007 Bonds becoming due prior to the Redemption Date and the redemption price on the Redemption Date.
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Escrow Securities" means the Federal Securities ( as defined in the Prior Indenture) deposited in the Escrow Fund pursuant to Section 5 hereof. 2007 Bonds" means the $ 45, 790, 000 City of Banning Financing Authority Revenue Bonds ( Electric System Project), Series 2007.

Prior Indenture" means the Indenture of Trust , dated as of June 1, 2007, by and among the Authority, the City, and the Prior Trustee, as amended by Amendment No. 1 to Indenture of Trust, dated June 8, 2010, relating to the 2007 Bonds.

Prior Trustee" means U. S. Bank National Association, and its successors and assigns, as trustee for the 2007 Bonds.

Redemption Date" means June 1, 2017, the date on which the 2007 Bonds are to be redeemed.

Refunding Bonds" means the Authority' s Refunding Revenue Bonds ( Electric System Project) Series 2015.

Refunding Bonds Indenture" means the Indenture of Trust, dated as of August 1, 2015, by and among the Authority, the City, and the Refunding Bonds Trustee.

Refunding Bonds Trustee" means U. S. Bank National Association, and its successors and assigns, as trustee for the Refunding Bonds.

SECTION 2. The Authority hereby appoints U. S. Bank National Association as Escrow Agent under this Escrow Agreement for the benefit of the holders of the 2007 Bonds.

The Escrow Agent hereby accepts the duties and obligations of Escrow Agent under this Escrow Agreement and agrees that the irrevocable instructions to the Escrow Agent herein provided are in a form satisfactory to it. The applicable and necessary provisions of the Prior Indenture, including particularly the redemption provisions thereof, are incorporated herein by reference.

Reference herein to, or citation herein of, any provisions of the Prior Indenture shall be deemed to incorporate the same as a part hereof in the same manner and with the same effect as if the same were fully set forth herein.

SECTION 3. There is created and established with the Escrow Agent a special and irrevocable trust fund designated the " 2007 Bonds Escrow Fund" (the " Escrow Fund"), to be held by the Escrow Agent separate and apart from all other funds and accounts, and used only for the purposes and in the manner provided in this Escrow Agreement.

SECTION 4. The Authority herewith deposits, or causes to be deposited, with the Escrow Agent into the Escrow Fund, to be held in irrevocable trust by the Escrow Agent and to be applied solely as provided in this Escrow Agreement, the sum of $ , as follows:
i) from the proceeds of the Refunding Bonds, the sum of $ ; and 35270160. 2
2 1502
ii) from the Reserve Account created under the Prior Indenture, the sum of The Authority hereby instructs the Prior Trustee that any moneys or investments remaining in the funds and accounts of the Prior Indenture which are not required to make the foregoing deposits or rebated to the U. S. Treasury are to be transferred on the Redemption Date, or as soon as practicable thereafter, to the Refunding Bonds Trustee for deposit into the Bond Service Fund under the Refunding Bonds Indenture.

SECTION 5. The Escrow Agent acknowledges receipt of the moneys described in Section 4 above. The Escrow Agent agrees immediately to invest $ of such amounts in the Escrow Securities set forth in Exhibit A hereto, to deposit such Escrow Securities in the Escrow Fund, and to retain the amount of $ in cash in the Escrow Fund.

The Escrow Agent shall not have the power to sell, transfer, request the redemption of or otherwise dispose of any of the Escrow Securities or to substitute other securities therefor.

SECTION 6. As the principal of the Escrow Securities shall mature and be paid, and the investment income and earnings thereon are paid, the Escrow Agent shall not reinvest such moneys, except as may be provided in Exhibit A hereto. Such amounts shall be applied by the Escrow Agent to the payment of the Escrow Requirements for the equal and ratable benefit of the holders of the 2007 Bonds.

SECTION 7. The Authority has caused schedules to be prepared relating to the sufficiency of the anticipated receipts from the Escrow Securities listed in Exhibit A to pay the Escrow Requirements.

SECTION 8. The Authority hereby directs and the Escrow Agent hereby agrees that the Escrow Agent will take all the actions required to be taken by it hereunder, in order to effectuate this Escrow Agreement. The liability of the Escrow Agent for the payment of the Escrow Requirements shall be limited to the application, in accordance with this Escrow Agreement, of the principal amount of the Escrow Securities and the interest earnings thereon available for such purposes in the Escrow Fund.

SECTION 9. (a) The Escrow Agent is hereby instructed to mail, by firstclass mail, notice of defeasance to the owners of the 2007 Bonds substantially in the form of Exhibit B attached hereto.
b) The Escrow Agent is hereby instructed to mail, by first- class mail, notice of redemption to the owners of the 2007 Bonds containing the information prescribed in Section 2. 3 of the Prior Indenture, substantially in the form of Exhibit C attached hereto.
c) The Escrow Agent is hereby further instructed to post a copy of
such notices, when mailed, to ( A) the Securities Depositories ( as hereinafter defined) and ( B) the Information Services ( as hereinafter defined). 35270160. 2
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Securities Depositories" means The Depository Trust Company, 55 Water Street, 50th Floor, New York, New York 10041- 0099, Attn. Call Notification Department, Fax ( 212) 855- 7232, or, in accordance with then -current guidelines of the Securities and Exchange Commission, such other addresses and/ or such other securities depositories as the City may designate in a Certificate of the City delivered to the Escrow Agent.

Information Services" means the Electronic Municipal Market Access system referred to as " EMMA"), a
facility of the Municipal Securities Rulemaking Board, at www. emma. msrb. org; or, in accordance with then -current guidelines of the Securities and Exchange Commission, to such other addresses and/ or such other services providing information with respect to called bonds as the Authority may designate in a certificate of the Authority delivered to the Escrow Agent.

SECTION 10. The Authority irrevocably instructs the Escrow Agent and the Prior Trustee to pay to the respective owners of the 2007 Bonds presented for payment, through and including the Redemption Date, from amounts held in the Escrow Fund, the principal of the 2007 Bonds maturing prior to and on the Redemption Date plus in each case unpaid interest accrued thereon to the Redemption Date.

After such payment has been made on the Redemption Date, all moneys remaining in the Escrow Fund shall be transferred to the Trustee for deposit in the Bond Service Fund.

SECTION 11. The trust hereby created shall be irrevocable and the holders of the 2007 Bonds shall have an express lien limited to all moneys and Escrow Securities in the Escrow Fund, including the interest earnings thereon, until paid out, used and applied in accordance with this Escrow Agreement.

SECTION 12. This Escrow Agreement is made pursuant to and in furtherance of the Prior Indenture and for the benefit of the holders from time to time of the 2007 Bonds and it shall not be repealed, revoked, altered, amended or supplemented without the written consent of all such holders and the written consent of the Escrow Agent and the Authority; provided, however, that the Authority and the Escrow Agent may, without the consent of, or notice to, such holders enter into such amendments or supplements as shall not be inconsistent with the terms and provisions of this Escrow Agreement, for any one or more of the following purposes:
a) to cure an ambiguity or formal defect or omission in this Escrow Agreement;
b) to grant to, or confer upon, the Escrow Agent for the benefit of the holders of the 2007 Bonds, any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Agent; and
c) to transfer to the Escrow Agent and make subject to this Escrow Agreement additional funds, securities or properties.
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The Escrow Agent shall be entitled to conclusively rely upon an opinion of nationally recognized bond counsel with respect to compliance with this Section, including the extent, if any, to which any change, modification or addition affects the rights of the holders of the 2007 Bonds, or that any instrument executed hereunder complies with the conditions and provisions of this Section.

SECTION 13. In consideration of the services rendered by the Escrow Agent under this Escrow Agreement, the Authority agrees to and shall pay to the Escrow Agent its fees, plus expenses, including all reasonable expenses, charges, counsel fees and other disbursements incurred by it or by its attorneys, agents and employees in and about the performance of their powers and duties hereunder. Notwithstanding the foregoing, the Escrow Agent shall have no lien whatsoever upon any of the moneys or Escrow Securities in the Escrow Fund for the payment of such proper fees and expenses.

SECTION 14. The Escrow Agent at the time acting hereunder may at any time resign and be discharged from the trusts hereby created by giving not less than 60 days' written notice to the Authority and the Prior Trustee, specifying the date when such resignation will take effect in the same manner as a notice is to be mailed pursuant to Section 9 hereof, but no such resignation shall take effect unless a successor Escrow Agent shall have been appointed by the holders of the 2007 Bonds or by the Authority as hereinafter provided and such successor Escrow Agent shall have accepted such appointment, in which event such resignation shall take effect immediately upon the appointment and acceptance of a successor Escrow Agent.

The Escrow Agent may be removed at any time by an instrument or concurrent instruments in writing, delivered to the Escrow Agent and to the Authority and the Prior Trustee and signed by the holders of a majority in principal amount of the 2007 Bonds.

In the event the Escrow Agent hereunder shall resign or be removed, or be dissolved, or shall be in the course of dissolution or liquidation, or otherwise become incapable of acting hereunder, or in the case the Escrow Agent shall be taken under the control of any public officer or officers, or of a receiver appointed by a court, a successor Escrow Agent may be appointed by the holders of a majority in principal amount of the 2007 Bonds, by an instrument or concurrent instruments in writing, signed by such holders, or by their attorneys in fact, duly authorized in writing; provided, nevertheless, that in any such event, the Authority shall appoint a
temporary Escrow Agent to fill such vacancy until a successor Escrow Agent shall be appointed by the holders of a majority in principal amount of the 2007 Bonds, and any such temporary Escrow Agent so appointed by the Authority shall immediately and without further act be superseded by the Escrow Agent so appointed by such holders.

In the event that no appointment of a successor Escrow Agent or a temporary
successor Escrow Agent shall have been made by such holders or the Authority pursuant to the foregoing provisions of this Section within 60 days after written notice of the removal or resignation of the Escrow Agent has been given to the Authority, the holder of any of the 2007 Bonds or any retiring Escrow Agent may apply to any court of competent jurisdiction for the appointment of a successor Escrow Agent, and such court may thereupon, after such notice, if any, as it shall deem proper, appoint a successor Escrow Agent. 35270160. 2
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No successor Escrow Agent shall be appointed unless such successor Escrow Agent shall be a corporation or institution with trust powers organized under the financial institution laws of the United States or any state, and shall have at the time of appointment capital and surplus of not less than $ 100, 00,00. For purpose of this Section 14, a corporation or institution with trust powers organized under the financial institution laws of the United States or any state shall be deemed to have combined capital and surplus of at least $ 100, 00,00if it has a combined capital surplus of at least $ 20, 000,00 and is a wholly -owned subsidiary of a corporation having a combined capital and surplus of at least $ 100, 00,00.

Every successor Escrow Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Authority, an instrument in writing accepting such appointment hereunder and thereupon such successor Escrow Agent without any further act, deed or conveyance, shall become fully vested with all the rights, immunities, powers, trust, duties and obligations of its predecessor; but such predecessor shall, nevertheless, on the written request of such successor Escrow Agent or the Authority execute and deliver an instrument transferring to such successor Escrow Agent all the estates, properties, rights, powers and trusts of such predecessor hereunder; and every predecessor Escrow Agent shall deliver all securities and moneys held by it to its successor. Should any transfer, assignment or instrument in writing from the Authority be required by any successor Escrow Agent for more fully and certainly vesting in such successor Escrow Agent the estates, rights, powers and duties hereby vested or intended to be vested in the predecessor Escrow Agent, any such transfer, assignment and instrument in writing shall, on request, be executed, acknowledged and delivered by the Authority.

Any corporation or association into which the Escrow Agent, or any successor to it in the trusts created by this Escrow Agreement, may be merged or converted or with which it or any successor to it may be consolidated, or any corporation resulting from any merger, conversion, consolidation or reorganization to which the Escrow Agent or any successor to it shall be a party or any successor to a substantial portion of the Escrow Agent' scorporate trust business, shall, ifit meets the qualifications set forth in the fifth paragraph of this Section and if it is otherwise satisfactory to the Authority, be the successor Escrow Agent under this Escrow Agreement without the execution or filing of any paper or any other act on the part of any of the parties hereto, anything herein to the contrary notwithstanding.

SECTION 15. The Escrow Agent shall have no power or duty to invest any funds held under this Escrow Agreement except as provided in Section 5 hereof. The Escrow Agent shall have no power or duty to transfer or otherwise dispose of the moneys held hereunder except as provided in this Escrow Agreement.

SECTION 16. To the extent permitted by law, the Authority hereby assumes liability for, and hereby agrees ( whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Agent and its successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Agent at any time ( whether or not also indemnified against the same by the Authority or any other person under any other agreement or 35270160. 2
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instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Escrow Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein, the purchase of any securities to be purchased pursuant thereto, the retention of such securities or the proceeds thereof and any payment, transfer or other application of moneys or securities by the Escrow Agent in accordance with the provisions of this Escrow Agreement. The Authority shall not be required to indemnify the Escrow Agent against the Escrow Agent' s own negligence or willful misconduct or the negligence or willful misconduct of the Escrow Agent' ssuccessors, assigns, agents and employees or the material breach by the Escrow Agent of the terms of this Escrow Agreement. In no event shall the Authority or the Escrow Agent be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this Section. The indemnities contained in this Section shall survive the termination of this Escrow Agreement.

SECTION 17. The recitals of fact contained in the " Whereas" clauses herein shall be taken as the statements of the Authority, and the Escrow Agent assumes no responsibility for the correctness thereof. The Escrow Agent makes no representation as to the sufficiency of the securities to be purchased pursuant hereto and any uninvested moneys to accomplish the defeasance of the 2007 Bonds pursuant to the Prior Indenture or to the validity of this Escrow Agreement as to the Authority and, except as otherwise provided herein, the Escrow Agent shall incur no liability in respect thereof. The Escrow Agent shall not be liable in connection with the performance of its duties under this Escrow Agreement except for its own negligence or willful misconduct, and the duties and obligations of the Escrow Agent shall be determined by the express provisions of this Escrow Agreement. The Escrow Agent may consult with counsel, who may or may not be counsel to the Authority, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection in respect of any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Agent shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Escrow Agreement, such matter ( except the matters set forth herein as specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel) may be deemed to be conclusively established by a written certification of the Authority.

Whenever the Escrow Agent shall deem it necessary or desirable that a matter specifically requiring a certificate of a nationally recognized firm of independent certified public accountants or an opinion of nationally recognized bond counsel be proved or established prior to taking, suffering, or omitting any such action, such matter may be established only by such a certificate or such an opinion. The Escrow Agent shall incur no liability for losses arising from any investment made pursuant to this Escrow Agreement.

No provision of this Escrow Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.

Any company into which the Escrow Agent may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Agent may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Escrow 35270160. 2
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Agent without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

SECTION 18. This Escrow Agreement shall terminate upon payment of all 2007 Bonds on the Redemption Date, or upon such later date on which all amounts held in the Escrow Fund have been disbursed as provided herein.

SECTION 19. THIS ESCROW AGREEMENT SHALL BE CONSTRUED
UNDER THE LAWS OF THE STATE OF CALIFORNIA.

SECTION 20. If any one or more of the covenants or agreements provided in this Escrow Agreement on the part of the Authority or the Escrow Agent to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenant or agreement shall be deemed and construed to be severable from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Escrow Agreement.

All the covenants, promises and agreements in this Escrow Agreement contained by or on behalf of the Authority or by or on behalf of the Escrow Agent shall bind and inure to the benefit of their respective successors and assigns, whether so expressed or not.

SECTION 21. This Escrow Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument.
35270160. 2
8 1508
IN WITNESS WHEREOF, the parties hereto have caused this Escrow Agreement to be executed by their duly authorized officers as of the date first -above written.

CITY OF BANNING FINANCING

AUTHORITY
By
Executive Director
U. S. BANK NATIONAL ASSOCIATION,
as Escrow Agent and as Prior Trustee
By
Authorized Officer
ACKNOWLEDGED:

CITY OF BANNING,
By:

Title: City Manager
352701602 9
1509
Exhibit A
Schedule of Escrow Securities
Principal Amount Security Maturity Date Coupon Purchase Price 35270160. 2
A- 1
1510
Exhibit B

NOTICE OF DEFEASANCE TO THE OWNERS OF
45, 790, 000
City of Banning Financing Authority
Revenue Bonds ( Electric System Project), Series 2007
NOTICE IS HEREBY GIVEN to the applicable owners of the outstanding City of Banning Financing Authority, $ 45, 790, 000 Revenue Bonds ( Electric System Project), Series 2007, as listed below ( the Bonds"), that in connection with the Bonds maturing in the years 2016 through 2038, inclusive, and bearing the CUSIP numbers set forth below ( the " Defeased Bonds"), there has been deposited with U. S.

Bank National Association ( the " Trustee"), moneys which will be sufficient to pay the redemption price of and interest on the Defeased Bonds through and including the redemption date of June 1, 2017. The redemption price of, and interest on, such Defeased Bonds shall be paid only from moneys deposited with the Trustee as aforesaid. As a result of such deposit, such Defeased Bonds are deemed to have been paid in accordance with the applicable provisions of the Indenture of Trust, dated as of June 1, 2007, as amended by Amendment No. 1 to Indenture of Trust, dated June 8, 2010, by and among the City of Banning Financing Authority, the City of Banning and the Trustee, pursuant to which the Bonds were issued.

Maturity Date Principal Interest
June 1) Amount Rate
CUSIP
066614)
2016 $ 970, 00 5. 00% AH1
2017 1, 020,00 5. 00 AJ7
2018 1, 070,00 5. 00 AK4
2019 1,25, 000 5. 00 AL2
2020 1,80, 000 5. 00 AMO
2021 1, 240, 000 5. 00 AN8
2022 1, 305, 000 5. 00 AP3
2025 4, 315, 000 5. 00 AT5
2027 3, 240, 000 4. 50 AQ1
2028 1, 730, 000 5. 00 AU2
2029 1, 815, 000 5. 00 AVO
2032 6, 010,00 5. 00 AR9
2038 15, 025,00 5. 00 AS7
The undersigned shall not be held responsible for the selection or use of CUSIP numbers, nor is any representation made as to their correctness indicated in the Redemption Notice. They are included solely for the convenience of the Owners.

Dated: [ 1, 2015
By: U. S. Bank National Association, as Trustee
35270160. 2
B- 1
1511
Exhibit C

NOTICE OF REDEMPTION TO THE OWNERS OF
45, 790, 000
City of Banning Financing Authority
Revenue Bonds ( Electric System Project), Series 2007
NOTICE IS HEREBY GIVEN pursuant to the terms of the Indenture of Trust, dated as of June 1, 2007, as amended by Amendment No. l to Indenture of Trust, dated June 8, 2010, by and among the City of Banning Financing Authority ( the " Authority"), the City of Banning, and U. S. Bank National Association, as trustee, that all of the $ 45, 790, 000 City of Banning Financing Authority Revenue Bonds Electric System Project), Series 2007, as listed below ( the ` Bonds"), initially issued on June 21, 2007, have been selected for redemption on June 1, 2017 ( the " Redemption Date") at a redemption price equal
to the principal amount of the Bonds to be redeemed ( the " Redemption Price") together with interest accrued to the Redemption Date.

Maturity Date Principal Interest CUSIP
June 1) Amount Rate ( 066614)
2017 $ 1, 020,00 5. 00% AJ7
2018 1, 070,00 5. 00 AK4
2019 1,25, 000 5. 00 AL2
2020 1,80, 000 5. 00 AMO
2021 1, 240, 000 5. 00 AN8
2022 1, 305, 000 5. 00 AP3
2025 4, 315, 000 5. 00 AT5
2027 3, 240, 000 4. 50 AQ1
2028 1, 730, 000 5. 00 AU2
2029 1, 815, 000 5. 00 AVO
2032 6, 010,00 5. 00 AR9
2038 15, 025,00 5. 00 AS7
Pursuant to the governing documents, payment of the Redemption Price on the Bonds called for redemption will be paid upon presentation of the Bonds in the following manner:

If by First Class/ Registered/ Certified Mail: Express Delivery Only: By Hand Only:

Interest with respect to the principal amount of the Bonds designated to be redeemed shall cease to accrue on and after the Redemption Date.
35270160. 2
C- 1
1512

IMPORTANT NOTICE
Under the Jobs and Growth Tax Relief Reconciliation Act of 2003 ( the " Act"), 28% will be withheld if tax identification number is not properly certified.

The undersigned shall not he held responsible for the selection or use of CUSIP numbers, nor is any representation made as to their correctness indicated in the Redemption Notice. They are included solely for the convenience ofthe Owners.

Dated: F 1, 2017
By: U. S. Bank National Association, as Trustee
35270160. 2
C- 2
1513
1514
1515
Norton Rose Fulbright — Draft of 07/8/ 15
PRELIMINARY OFFICIAL STATEMENT DATED KINI., Y , 2015

NEW ISSUE - BOOK -ENTRY ONLY RATINGS
Insured: Standard & Poor' s: " "]
Underlying: Standard & Poor' s: " "
See " RATINGS" herein)
In the opinion ofNorton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel, under existing statutes, regulations, rulings and court decisions, and assuming compliance with the tax covenants described herein, interest on the Bonds is excluded pursuant to section 103( a) of the Internal Revenue Code of 1986 fronz the gross income ofthe owners thereof for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax. It is also the opinion of Bond Counsel that under existing law interest on the Bonds is exennptfrom personal income taxes ofthe State of California. See " TAXMATTERS." 1'

CITY OF BANNING FINANCING AUTHORITY
REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT) SERIES 2015 Dated: Date of Delivery Due: June 1, as shown on the inside cover hereof The City of Banning Financing Authority Refunding Revenue Bonds ( Electric System Project) Series 2015 ( the " Bonds") are being issued by the City of Banning Financing Authority ( the " Authority") to ( i) refund the Authority' s $45, 790, 000 Revenue Bonds (Electric System Project) Series 2007, currently outstanding in the amount of $40, 045,00, (ii) finance certain improvements ( the " Facilities") to the electric system ( the " Electric System") of the City of Banning ( the " City"), (iii) [pay the insurance premium for the Bonds,] (iv) [fund a Reserve Fund for the Bonds], and ( v) pay costs of issuance of the Bonds.

The Bonds are being issued as fully registered bonds, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (" DTC"), and will be available to ultimate purchasers in the denomination of $5, 000 or any integral multiple thereof, under the book -entry system maintained by DTC. Ultimate purchasers ofBonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the owners shall mean Cede & Co., and shall not mean the ultimate purchasers of the Bonds. Interest on the Bonds will be payable on December I and June 1 of each year, commencing December 1, 2015. Payments of the principal of and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by U. S. Bank National Association, Los Angeles, California ( the " Tmstee"), so long as DTC or Cede & Co. is the registered owner ofthe Bonds. Disbursements of such payments to DTC' sParticipants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC' s Participants and Indirect Participants, as more fully described herein. See THE BONDS — Book -Entry System" and " APPENDIX G — BOOK -ENTRY ONLY SYSTEM" herein.

The Bonds are issued pursuant to that certain Indenture of Trust, dated as of August 1, 2015 ( the " Indenture"), among the Authority, the City and the Trustee. The Bonds are special obligations of the Authority secured by and payable solely from Revenues as defined in the Indenture, consisting primarily of Installment Payments to be paid by the City under the Installment Sale Agreement, dated as of August 1, 2015 ( the " Installment Sale Agreement"), by and between the City and the Authority.

The Bonds are subject to special mandatory redemption, mandatory sinking fund redemption and redemption from optional prepayment of Installment Payments prior to maturity as more fully described herein.' See " THE BONDS — Redemption" herein.

The City' s obligation to make payments under the Installment Sale Agreement is secured by and payable from all Net Revenues, being Gross Revenues derived by the City from the ownership and operation of the Electric System ( as described herein), excluding Operation and Maintenance Costs of the Electric System. See " SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein.

Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy to be issued by to be issued simultaneously with the delivery of the Bonds. See " BOND INSURANCE" herein.] The 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 Revenues. The full faith and credit of the Authority, the Successor Agency to the Community Redevelopment Agency of the City of Banning ( the " Agency") and the City ( the Agency and the City being the parties to the agreement creating the Authority) is not pledged for the payment of the principal of or interest on the Bonds and no tax or other source of funds, other than the Revenues, is pledged to pay the principal of or interest on the Bonds. The payment of the principal of or interest on the Bonds does not constitute a debt, liability or obligation of the Authority, the City or the Agency for which any such entity is obligated to levy or pledge any form of taxation or for which any such entity has levied or pledged any form of taxation. The Authority has no taxing power.

For a discussion of some of the risks associated with the purchase of the Bonds, see " RISK FACTORS" herein.

This cover page contains information for quick reference only. It is not intended to be a summary of all factors relating to an investment in the Bonds. Investors must read the entire Official Statement before making any investment decision.

The Bonds are offered when, as and if issued by the Underwriters, subject to approval of legality by Norton Rose Fulbright US LIP, Los Angeles, California, Bond Counsel, and subject to certain other conditions. Certain legal matters will be passed on for the Authority by Norton Rose Fulbright US LLP as Disclosure Counsel, for the Underwriters by Stradling Yocca Carlson & Rauth, a Professional Corporation, andfor the Authority and the City by Aleshire & Wynder, LLP. It is anticipated that the Bonds will be available for delivery through the book- endy facilities ofDTC on or about August , 2015.

STIFEL LOGO] [ WILLIAMS CAPITAL LOGO]
Dated: , 2015
Preliminary; subject to change.
35251146. 5
1516

MATURITY SCI- IEDULE
1 City of Banning Financing Authority
Refunding Revenue Bonds ( Electric System Project) Series 2015 Base CUSIPt 066614)
Maturity Principal
June 1) Amount Interest Rate Yield CUS1Pt
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
Term Bonds maturing June 1, 20 Yield %; CUSIPt
Preliminary; subject to change,
CUSIP is a
registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor' sFinancial Services LLC on behalf of The American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. CUSIP numbers have been assigned by an independent company not affiliated with the Authority and are included solely for the convenience of investors. None of the Authority, the City, the Underwriters, or the Financial Advisor, are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the Bonds or as included herein. The CUSIP number for a specific maturity 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 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 certain maturities of the Bond.
35251146. 5
1517
No dealer, broker, salesperson or other person has been authorized by the Authority, the City or the City' s Public Works 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 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 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 Depaltment, 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 submitted with respect to the sale of the Bonds referred to herein 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 Underwriters have provided the following two paragraphs for inclusion in this Official Statement:

The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their responsibilities to investors under the federal securities laws as applied to the facts and circumstances ofthis transaction, but the Underwriters do not guarantee the accuracy or completeness of such information.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER -ALLOT

OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICES OF THE

BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

THE UNDERWRITERS MAY OFFER AND SELL THE BONDS TO CERTAIN DEALERS,

INSTITUTIONAL INVESTORS AND OTHERS AT PRICES LOWER THAN THE PUBLIC

OFFERING PRICES STATED ABOVE, AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITERS.

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 Bonds.

References to web site addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader' sconvenience. Unless specified otherwise, such web sites 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-. 35251146. 5
1518

FORWARD - LOOKING STATEMENTS
Certain statements included or incorporated by reference in this Official Statement constitute " forward - looking 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. 35251146. 5
111
1519

CITY OF BANNING
AND

CITY OF BANNING FINANCING AUTHORITY
CITY COUNCIL/ AUTHOR1TY COMMISSION MEMBERS
Debbie Franklin, Mayor/ President
Art Welch, Mayor Pro Tem/ Vice President
Edward Miller, Council Member/ Commission Member
George Moyer, Council Member/ Commission Member
Don M. Peterson, Council Member/ Commission Member

CITY STAFF
Dean Martin, City Manager/ Inteim Executive Director
Marie A. Calderon, City Clerk/ Authority Secretary
Fred Mason, Electric Utility Director
Art Vela, Acting Public Works Director
Aleshire & Wynder, LLP, City Attorney/ Authority Counsel

SPECIAL SERVICES

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

FINANCIAL ADVISOR
Urban Futures, Inc.

Orange, California

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

DISSEMINATION AGENT
Willdan Financial Services
Temecula, California

VERIFICATION AGENT
TBD]
35251146. 5
iv
1520

TABLE OF CONTENTS
Page

INTRODUCTION
General
Authority for Issuance 1
The Authority 1
Security for the Bonds 2
Bond Insurance 2
Description of the Bonds 2
Bond Owners' Risks 3
Changes Affecting the Electric Utility Industry 3
Professionals Involved in the Offering 3
Offering and Delivery of the Bonds 4
Continuing Disclosure 4
Other Matters 4
THE BONDS 4
General 4
Redemption 5
Transfer and Exchange of Bonds 6
Book -Entry System 7
Bond Debt Service 7
ESTIMATED SOURCES AND USES OF FUNDS 8
PLAN OF FINANCE 8
General 8
Refunding of 2007 Bonds 8
Financing of Capital Improvements 9
SECURITY AND SOURCES OF PAYMENT FOR THE BONDS 10
Assignment of Revenues and Installment Sale Agreement 10 Reserve Fund 10
Qualified Reserve Fund Credit Instrument 11
Issuance ofAdditional Debt; Parity Obligations 11
Installment Payments 12
Rate Covenant; Collection of Rates and Charges 14
Covenants of the City 15
Special Obligation 17
BOND INSURANCE 18
THE ELECTRIC SYSTEM 18
General 18
Management and Employees 18
Electric System Facilities 19
Power Supply Resources 20
35251146. 5
1521

TABLE OF CONTENTS
continued)
Page
Forward Market Power Purchases 23
Future Power Resources 24
Transmission Resources 24
Wholesale Transactions 26
Historical and Projected Customers, Retail Energy Sales, Revenues and Demand 27 Largest Customers 28
Capital Requirements 29
Insurance 29
Indebtedness 30
Rates and Charges; Recent Rate Increase 31
Summary of Historical Operating Results 32
Projected Operating Results, Cash Flows and Coverage Ratio 33 RISK FACTORS 35
The Bonds are Limited Obligations 35
Electric System Expenses And Collections 35
No Liability of the Authority to the Owners 35
Limitations on Remedies 35
Limited Recourse on Default 36
Loss of Tax Exemption 36
Secondary Market 36
Forecasts and Forward -Looking Statements 36
Rate Regulation 37
Certain Factors Affecting the Electric Utility Industry 37 Articles XIIIC and XIIID of the State Constitution 37
Proposition 26 38
Future Initiatives 38
Casualty Risk; Earthquakes 39
DEVELOPMENTS IN THE CALIFORNIA ENERGY MARKETS 39
State Legislation 39
Future Regulation 44
Impact of Developments on the City 44
OTHER FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY 45 Federal Energy Legislation 45
Environmental Issues 46
Other Factors 50
THE AUTHORITY 51
CONTINUING DISCLOSURE 51
TAX MATTERS 52
Tax Exemption 52
Tax Accounting Treatment of Bond Premium and Original Issue Discount on Bonds 53 35251146. 5
11-
1522

TABLE OF CONTENTS
continued)
Page
Other Tax Consequences

CERTAIN LEGAL MAT I ERS

VERIFICATION OF MATHEMATICAL COMPUTATIONS

LITIGATION

PROFESSIONAL FEES

UNDERWRITING

RATINGS

FINANCIAL STATEMENTS

MISCELLANEOUS
54 54
54 55
55 55
55 55
56 APPENDIX a —
JUNE 30, 2014 A- 1
APPENDIX B — GENERAL INFORMATION ABOUT THE CITY OF BANNING

APPENDIX C

APPENDIX D

APPENDIX E

APPENDIX F

APPENDIX G
35251146. 5

CITY AUDITED FINANCIAL STATEMENTS FISCAL YEAR ENDING
B- 1

SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL

DOCUMENTS

FORM OF OPINION OF BOND COUNSEL

FORM OF CONTINUING DISCLOSURE AGREEMENT

SPECIMEN MUNICIPAL BOND INSURANCE POLICY

BOOK -ENTRY ONLY SYSTEM
C- 1
D- 1
E -I
F- 1
G- 1
111-
1523

VICINITY MAP
To Be Inserted]
35251146. 5
1524

OFFICIAL STATEMENT

CITY OF BANNING FINANCING AUTHORITY
REFUNDING REVENUE BONDS ( ELECTRIC SYSTEM PROJECT) SERIES 2015

INTRODUCTION
This Introduction is not a
summary ofthis Official Statement. It is only a briefdescription of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement, including the cover page and appendices hereto, and the documents summarized or described herein. Afull review should be made ofthe entire Official Statement. The sale and delivery ofthe Bonds to potential investors are made only by means of the entire Official Statement General
The purpose of this Official Statement ( which includes the cover page and the appendices attached hereto) is to provide information concerning the issuance, sale and delivery by the City of Banning Financing Authority ( the " Authority") of its Refunding Revenue Bonds ( Electric System Project) Series 2015 ( the ` Bonds"), in the aggregate principal amount of $[ ]`. The proceeds of the sale of the Bonds will be used to ( i) refund the Authority' s $45, 790, 000 Revenue Bonds ( Electric System Project) Series 2007, currently outstanding in the amount of $40, 045,00, (ii) finance certain improvements ( the " Facilities") to the electric system (the " Electric System") of the City of Banning ( the City"), (iii) [pay the insurance premium for the Bonds,] ( iv) [fund a Reserve Fund for the Bonds], and v) pay costs of issuance of the Bonds. See " THE BONDS — Estimated Sources and Uses of Funds" and PLAN OF FINANCE" herein. The Authority and the City will enter into an Installment Sale Agreement, dated as of August 1, 2015 ( the " Installment Sale Agreement"), pursuant to which the Authority will sell the Improvements to the City in consideration for Installment Payments sufficient in amount to pay the principal of and interest on the Bonds.

Authority for Issuance
The Bonds are being issued pursuant to the Marks -Roos Local Bond Pooling Act of 1985, constituting Article 4 of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California ( the " Act"), and an Indenture of Trust, dated as ofAugust 1, 2015 ( the " Indenture"), among the Authority, the City, and U. S. Bank National Association, as trustee ( the " Trustee").

The Authority
The Authority is a
joint exercise of powers authority organized under the laws of the State of California whose members are the City and the Successor Agency to Community Redevelopment Agency of the City of Banning ( the " Agency"). The Authority was formed, among other things, to finance and refinance, through the issuance of bonds or other instruments of indebtedness, capital improvements and working capital and other costs as permitted by the Act.

Preliminary; subject to change.
35251146. 5
1525
Security for the Bonds
The Bonds are special obligations of the Authority secured by and payable solely from the Revenues, consisting of (a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments ( including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments, insurance proceeds, and condemnation proceeds, but excluding any Additional Payments; ( b) all moneys and amounts held in the funds and accounts established under the 11 Indenture; and ( c) investment income with respect to any moneys held by the Trustee pursuant to the Indenture.

The City' s obligation to make payments under the Installment Sale Agreement is secured by and payable from Net Revenues, being Gross Revenues derived by the City from the ownership and operation of the Electric System ( as described herein), less Operation and Maintenance Costs of the Electric System. See " SECURITY AND SOURCES OF PAYMENT FOR THE BONDS" herein. Also, see THE ELECTRIC SYSTEM - Rates and Charges; Recent Rate Increase" herein for a discussion of Electric System rate increases approved by the City Council of the City in March 2013.

The Bonds are limited obligations of the Authority and are nut 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 Revenues. The full faith and credit of the Authority, the Agency and the City, which are parties to the agreement creating the Authority, are not pledged for the payment of the principal of or interest on the Bonds and no tax or other source of funds, other than the Revenues, is pledged to pay the principal of or interest on the Bonds. The payment of the principal of or interest on the Bonds does not constitute a debt, liability or obligation of the Authority, the Agency or the City for which any such entity is obligated to levy or pledge any form of taxation or for which any such entity has levied or pledged any form of taxation. The Authority has no taxing power.

Bond Insurance
Payment of the principal of and interest on the Bonds when due will be insured by a municipal bond insurance policy ( the " Policy") to be issued by ( the " Bond Insurer") simultaneously with the delivery ofthe Bonds. See " BOND INSURANCE" herein.] Description of the Bonds
For a more complete description of the Bonds and the Indenture pursuant to which they are being issued, see " THE BONDS" and " APPENDIX C — SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS" herein.

General. The Bonds will be dated as of and bear interest from their Delivery Date, at the rates set forth on the inside cover page hereof. See " THE BONDS." The Bonds, when issued, will be 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 of the Bonds. Individual purchases of the Bonds will be made in book -entry form only. Principal of and interest on the Bonds will be payable by DTC through the DTC participants. See " THE BONDS — Book -Entry System" and APPENDIX G — BOOK -ENTRY ONLY SYSTEM" herein. Purchasers of the Bonds will not receive physical delivery of the Bonds purchased by them.
35251146. 5 2
1526
Redemption*. The Bonds are subject to special mandatory redemption, mandatory sinking fund redemption and redemption from optional prepayment of Installment Payments prior to maturity as more fully described herein. See " THE BONDS - Redemption" herein.

Denomination. The Bonds are being delivered in the minimum denominations of $5, 000 or any integral multiple thereof within a single maturity.

Registration, Transfers and Exchanges. The Bonds will be issued and delivered as fully registered Bonds and will be subject to transfer, exchange and replacement as described herein. See THE BONDS" and " APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS" herein.

Payments. Interest on the Bonds will be payable semiannually on December 1 and June 1 of each year ( each an " Interest Payment Date") commencing December 1, 2015. Principal of the Bonds will be payable upon the presentation and surrender thereof at the corporate trust office of the Trustee, in Los Angeles, California when due. Interest on the Bonds is payable by check of the Trustee mailed on or before each Interest Payment Date to the persons in whose names such Bonds are registered at the close of business on the Record Date, which is the fifteenth ( 15th) calendar day of the month immediately preceding any Interest Payment Date, or by wire transfer pursuant to the procedure described herein.

Bond Owners' Risks
Certain events could affect the ability of the Authority to make the payments of the principal of and interest on the Bonds when due. See " RISK FACTORS" herein for a discussion of certain factors which should be considered, in addition to other matters set forth herein, in evaluating an investment in the Bonds.

Changes Affecting the Electric Utility Industry
The electric utility industry has faced unprecedented changes in recent years, especially in California. See " DEVELOPMENTS IN THE CALIFORNIA ENERGY MARKETS" and " OTHER FACTORS AFFECTING THE ELECTRIC UTILITY INDUSTRY" herein.

Professionals Involved in the Offering
U. S. Bank National Association, Los Angeles, California, will act as Trustee with respect to the Bonds pursuant to the Indenture.

All proceedings in connection with the issuance of the Bonds are subject to the approval of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed upon for the Underwriters by Stradling Yocca Carlson & Rauth, a Professional Corporation, and for the City and the Authority by Aleshire & Wynder, LLP, in its capacity as City Attorney and Authority Counsel.

Preliminary; subject to change.
35251146. 5 3
1527
Offering and Delivery of the Bonds
The Bonds are offered when, as and if issued and received by the Underwriters, subject to approval as to their legality by Bond Counsel and the satisfaction of certain other conditions. It is anticipated that the Bonds will be available for delivery through the book -entry facilities of DTC, on or about August , 2015.

Continuing Disclosure
The City has covenanted for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City, including the Electric System, and to provide notices of the occurrence of certain listed events. See " CONTINUING DISCLOSURE" and " APPENDIX E — FORM OF CONTINUING DISCLOSURE AGREEMENT" herein.

Other Matters
The summaries of and references to documents, statutes, reports and other instruments referred to herein do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by reference to each document, statute, report, or instrument. The capitalization of any word not conventionally capitalized or otherwise defined herein, indicates that such word is defined in a particular agreement or other document and, as used herein, has the meaning given it in such agreement or document. See " APPENDIX C — SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS" for summaries of certain of such definitions.

THE BONDS
General
The Bonds will be dated the date of their initial delivery and will bear interest at the rates and mature on the dates and in the amounts set forth on the inside cover page of this Official Statement, payable semiannually on each June 1 and December 1 of each year commencing on December 1, 2015 each, an " Interest Payment Date") to the maturity of the Bonds. The Bonds are subject to redemption as provided herein. Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof, unless ( a) it is authenticated after a Record Date and 011 or before the following Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or ( b) unless it is authenticated on or before the first Record Date, in which event it shall bear interest from the Closing Date; provided, however, that if as of the date of authentication of any Bond, interest thereon is in default, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Interest on the Bonds shall be payable semiannually calculated based on a 360 -day year of twelve 12) thirty -day months on each Interest Payment Date to the person whose name appears on the Registration Books as the Owner thereof as of the Record Date immediately preceding each such Interest Payment Date, such interest to be paid by check of the Trustee mailed on the Interest Payment Date by first class mail to the Owner at the address of such Owner as its appears on the Registration Books; provided however, that payment of interest will be made by wire transfer in immediately available funds to an account at a financial institution in the United States of America to any Owner of Bonds in the aggregate principal amount of $ 1, 000,00 or more who shall furnish written wire instructions to the Trustee before the applicable Record Date. Any such written request shall remain in effect until rescinded in writing by the Owner. Principal of any Bond and any premium upon redemption shall be paid by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee. 35251146. 5 4
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Principal of and interest and premium ( if any) on the Bonds shall be payable in lawful money of the United States of America. So long as Cede & Co. is the registered owner of the Bonds, payments of principal and interest on the Bonds will be paid to DTC as registered owner of the Bonds. See " THE BONDS — Book -Entry System" and " APPENDIX G — BOOK -ENTRY ONLY SYSTEM" herein.

Redemption'
Redemption from Prepayments ofInstallment Payments. The Bonds maturing on or before June 1, 20 shall not be subject to optional redemption prior to maturity. The Bonds maturing on or after June 1, 20 shall be subject to redemption prior to their respective maturity dates, at the option of the Authority, by lot within a maturity on any date on or after June 1, 20 , from prepayment of Installment Payments made at the option of the City at the redemption price equal to the principal amount of the Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Mandatory Sinking Fund Redemption. The Bonds maturing on June 1, 20 and June 1, 20 are also subject to redemption prior to their respective stated maturities, on any June 1 on or after June 1, 20 and June 1, 20 , respectively, in part by lot, from mandatory sinking account payments at a redemption price equal to the principal amount thereof, plus accrued interest, if any, to the redemption date, without premium, as set forth below in the aggregate respective principal amounts and on the respective dates as set forth in the following tables; provided, however, that if some but not all of such Bonds have been redeemed pursuant to optional or special mandatory redemption provisions of the Indenture, the total amount of all future sinking fund payments shall be reduced by the aggregate principal amount of such Bonds so redeemed, to be allocated among such sinking fund payments on a pro
rata basis in integral multiples of $5, 000.

Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20
Redemption Date
June l.)
maturity)
Principal
Amount
Schedule of Mandatory Sinking Fund Redemptions
Term Bonds Maturing June 1, 20_
Redemption Date
June 1)
Principal
Amount
maturity)
Notice ofRedemption. The Trustee on behalf and at the expense of the Authority shall mail ( by first- class mail, postage prepaid) notice of any redemption to: (i) the respective Owners of any Bonds designated for redemption, at least twenty ( 20) but not more than sixty (60) days prior to the redemption date, at their respective addresses appearing on the Registration Books, and ( ii) the Securities Depositories and to one or more Information Services, at least twenty (20) but not more than sixty ( 60) days prior to the redemption date; provided, however, that neither failure to receive any such notice so Preliminary; subject to change.
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mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon. In addition to mailed notice, the notice to the Securities Depositories and Information Services shall be given by telephonically confirmed facsimile transmission or ovemight delivery service or by such other means approved by such institutions. Such notice shall state the date of the notice, the redemption date, the redemption place and the redemption price and shall designate the CUSIP numbers, the bond numbers and the maturity or maturities ( in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date. Any notice given pursuant to this paragraph may be rescinded by a written certificate given to the Trustee by the Authority and the Trustee shall provide notice of such rescission as soon thereafter as practicable in the same manner, and to the same recipients, as notice of such redemption was given pursuant to this paragraph, but in no event later than the date set for redemption.

Selection of Bonds for Redemption. Whenever provision is made in the optional or special mandatory redemption of Bonds of more than one maturity, the Bonds to be redeemed shall be selected in inverse order of maturity or, at the election of the Authority evidenced by a Written Request of the Authority filed with the Trustee at least thirty ( 30) days prior to the date of redemption, on a pro rata basis
among maturities ( provided that, in any event, the principal and interest due on the Bonds Outstanding following such redemption shall be equal in time and amount to the unpaid payments due under the Installment Sale Agreement); and in each case, the Trustee shall select the Bonds to be redeemed within any maturity by lot in any manner which the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $ 5, 000 portions and such portions shall be treated as separate Bonds which may be separately redeemed.

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 Bonds so called for redemption shall have been duly provided, such Bonds so calledshall cease to be entitled to any benefit under the Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. All Bonds redeemed pursuant to the Indenture shall be canceled and shall be destroyed by the Trustee.

Transfer and Exchange of Bonds
The registration of any Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form acceptable to the Trustee, duly executed. Bonds may be exchanged at the Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same interest rate and maturity. The Authority shall pay all costs of the Trustee incurred in connection with any such exchange, except that the Trustee may require the payment by the Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. The Trustee may refuse to transfer or exchange either ( i) any Bond during the period established by the Trustee for the selection of Bonds for redemption pursuant to the Indenture, or ( ii) the portion of any Bond which the Trustee has selected for redemption pursuant to the provisions of the Indenture.
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Book -Entry System
The Depository Trust Company, New York, New York (" DTC"), will act as securities depository for the Bonds. The Bonds will be registered in the name of Cede & Co. (DTC' s partnership nominee),
and will be available to ultimate purchasers in the denomination of $5, 000 or any integral multiple thereof, under the book -entry system maintained by DTC. Ultimate purchasers of Bonds will not receive physical certificates representing their interest in the Bonds. So long as the Bonds are registered in the name of Cede & Co., as nominee of DTC, references herein to the Owners shall mean Cede & Co., and shall not mean the ultimate purchasers of the Bonds. Payments of the principal of and interest on the Bonds will be made directly to DTC, or its nominee, Cede & Co., by the Trustee, so long as DTC or Cede Co. is the registered owner of the Bonds. Disbursements of such payments to DTC' s Participants is the responsibility of DTC and disbursements of such payments to the Beneficial Owners is the responsibility of DTC' s Participants and Indirect Participants. See " APPENDIX G - BOOK -ENTRY ONLY SYSTEM."
Bond Debt Service
The following table sets forth the annual debt service schedule for the Bonds.

Bond Year Ending
June 1) Principal Interest Total
Total
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ESTIMATED SOURCES AND USES OF FUNDS
The following sets forth the estimated sources and uses of funds related to the issuance of the Bonds.

Sources of Funds
Principal Amount of Bonds
Amounts Held Under 2007 Indenture
Less: Underwriters' Discount
Net] Original Issue Premium ( Discount)
Total Sources of Funds $
Uses of Funds:

Deposit to Acquisition and Construction Fund $
Deposit to Costs of Issuance Fundt 1
Deposit to Escrow Fund
Deposit to Reserve Fund
Total Uses of Funds $
1) Costs of issuance include fees and expenses of Bond Counsel, Disclosure Counsel and the Trustee, verification agent, the premium for the bond insurance policy ( if any), rating agency fees, printing expenses and other costs of issuance of the Bonds.

PLAN OF FINANCE
General
The Bonds are being issued to ( i) refund the Authority' s $45, 790, 000 Revenue Bonds ( Electric System Project) Series 2007 ( the " 2007 Bonds"), currently outstanding in the amount of $40, 045,00, (ii) finance certain improvements ( the " Facilities") to the electric system (the " Electric System") of the City of Banning ( the " City"), (iii) [pay the insurance premium for the Bonds,] (iv) [fund a Reserve Fund for the Bonds], and ( v) pay costs of issuance of the Bonds.

Refunding of 2007 Bonds
A portion of the proceeds of the Bonds, together with other available funds, will be deposited into an escrow fund ( the " Escrow Fund") held under an Escrow Agreement, dated as of August 1, 2015 ( the Escrow Agreement"), by and between the Authority and U. S. Bank National Association, as escrow agent (the " Escrow Agent"), and applied to pay the principal and interest with respect to the 2007 Bonds becoming due prior to June 1, 2017 ( the " Redemption Date") and on the Redemption Date for the purpose of refunding all of the outstanding 2007 Bonds. The 2007 Bonds were issued pursuant to an Indenture of Trust, dated as of June 1, 2007, by and between the Authority and U. S. Bank National Association as Trustee thereunder, as amended by Amendment No. 1 to Indenture of Trust, dated June 8, 2010 ( the " 2007 Indenture").

The amounts deposited in the Escrow Fund will be held solely for the 2007 Bonds and will not be available to pay the principal of or interest on the Bonds or any obligations other than the 2007 Bonds. the " Verification Agent"), upon delivery of the Bonds, will deliver a report on
the mathematical accuracy of certain computations, contained in schedules provided to it, relating to the sufficiency of moneys deposited into the Escrow Fund to pay the principal, interest and redemption premium of the 2007 Bonds. See " VERIFICATION OF MATHEMATICAL COMPUTATIONS." 35251146. 5 8
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Financing of Capital Improvements
Approximately $ 11, 000,00 of the net proceeds of the Bonds will be used to finance various rehabilitation and replacement projects to improve the Electric System. These existing and new developments will place increased demands on the City' s Electric System and will require the upgrading
of existing Electric System facilities and the construction of new facilities.

A portion of the proceeds of the Bonds will be deposited into the Acquisition and Construction Fund for the purpose of financing the Facilities. The following table sets forth a general description of the Facilities, the Fiscal Year in which they are expected to be undertaken and the expected budget for the Facilities.

Fiscal Year Project Description Budget( r)( 2)
2016 Construct new Electric Warehouse at City Yard $ 2, 700, 000 2016 Upgrade Alola Substation from 4kV to 12kV, complete 4kV to 3, 450, 000 12kV conversion of distribution system
2016 Upgrade Airport Substation from 4kV to 12kV 2, 100, 090 2017 Replace two old wooden poles at Midway Substation freeway 500, 00 crossing with new engineered steel poles
2017 Extend Sunset Substation distribution circuits to interconnect with 1, 900, 000 the Wilson Street circuit
1)
2)
Preliminary, subject to change.

Budgeted costs are based on projected increases in the Producer Price Index for construction materials and components.

SECURITY AND SOURCES OF PAYMENT FOR TIIE BONDS
Assignment of Revenues and Installment Sale Agreement
Under the Indenture, the Authority assigns to the Trustee, on behalf of the Owners, all of the Authority' sright, title and interest to and in the Revenues and all of the right, title and interest of the Authority in the Installment Sale Agreement ( other than the rights of the Authority under the Installment Sale Agreement to Additional Payments, indemnification and attorneys' fees). Subject to the terms of the Indenture, all Revenues the Trustee collects and receives shall be applied to the payment of principal of and interest and premium ( if any) on the Bonds equally, without priority for series, issue, number or date, in accordance with the terms hereof. So long as any of the Bonds are Outstanding, the Revenues and such moneys shall not be used for any other purpose; except that a portion of the Revenues may be used for purposes as expressly permitted by the Indenture.

Revenues" are defined in the Indenture as ( a) all amounts received by the Authority or the Trustee pursuant or with respect to the Installment Sale Agreement, including, without limiting the generality of the foregoing, all of the Installment Payments ( including both timely and delinquent payments, any late charges, and whether paid from any source), prepayments, insurance proceeds, condenmation proceeds, but excluding any Additional Payments; (b) all moneys and amounts held in the funds and accounts established under the Indenture; and ( c) investment income with respect to any moneys held by the Trustee under the Indenture.
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Reserve Fund
Under the Indenture, a Reserve Fund is created for the Bonds ( the " Reserve Fund") which shall be held in trust by the Trustee. An amount equal to the Reserve Requirement ( as defined below) shall be maintained in the Reserve Fund at all times, subject to the provisions of the Indenture, and any deficiency therein shall be replenished from the first available Revenues pursuant to the Indenture. Under the Indenture, the " Reserve Requirement" means, as of any date of calculation by the City, the least of (i) ten percent (10%) of the proceeds ( within the meaning of section 148 of the Code) of the Bonds; (ii) 125% of average Annual Debt Service as of the date issuance of the Bonds: or ( iii) the Maximum Annual Debt Service for that and any subsequent year.

Under the Indenture, moneys in the Reserve Fund shall be used solely for the purpose of paying the principal of and interest on the Bonds, including the redemption price of the Bonds coming due and payable by operation of mandatory sinking fund redemption pursuant to the Indenture, in the event that the moneys in the Bond Service Fund are insufficient therefor. In the event that the amount on deposit in the Bond Service Fund on any date is insufficient to enable the Trustee to pay in full the aggregate amount of principal of and interest on the Bonds coming due and payable, including the redemption price of the Bonds coming due and payable by operation of mandatory sinking fund redemption, the Trustee shall withdraw the amount of such insufficiency from the Reserve Fund and transfer such amount to the Bond Service Fund.

In the event that the amount on deposit in the Reserve Fund exceeds the Reserve Requirement on the fifteenth calendar day of the month preceding any Interest Payment Date, the amount of such excess shall be withdrawn therefrom by the Trustee and transferred to the Bond Service Fund and credited against the Installment Payment or Installment Payments next due from the City.

Qualified Reserve Fund Credit Instrument
The Authority may fund all or a portion of the Reserve Requirement with one or more Qualified Reserve Fund Credit Instruments, which is defined in the Indenture as an irrevocable standby or direct - pay letter of credit or surety bond issued by a commercial bank or insurance company and deposited with the Trustee pursuant to the teens of the Indenture provided that all of the following requirements are met:
i) the long -teen credit rating of such bank or insurance company at the time of delivery of such letter of credit or surety bond is rated in one of the two highest rating categories by Moody' s or S&P; (ii) such letter of credit or surety bond has a term of at least twelve ( 12) months; (iii) such letter of credit or surety bond has a stated amount at least equal to the portion of the Reserve Requirement with respect to which funds are proposed to be released pursuant to the terms of the Indenture; and ( iv) the Trustee is authorized pursuant to the terms of such letter of credit or surety bond to draw thereunder an amount equal to any deficiencies which may exist from time to time in the amounts available to repay the principal of and interest on the Bonds.

Upon deposit of any Qualified Reserve Fund Credit Instrument with the Trustee, the Trustee shall transfer any excess amounts then on deposit in the Reserve Fund into a segregated account of the Bond Service Fund, which monies shall be applied at the written direction of the Authority either ( i) to the payment within one year of the date of transfer of capital expenditures of the Authority permitted by law, or ( ii) to the redemption of Bonds on the earliest succeeding date on which such redemption is permitted hereby, and pending such application shall be held either not invested in investment property ( as defined in section 148( b) of the Code), or invested in such property to produce a yield that is not in excess of the yield on the Bonds; provided, however, that the Authority may by written direction to the Trustee cause an alternative use of such amounts ifthe Authority shall first have obtained a written opinion of nationally recognized bond counsel substantially to the effect that such alternative use will not adversely affect the 35251146. 5 10
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exclusion pursuant to section 103 of the Internal Revenue Code of 1986 ( the " Code") of interest on the Bonds from the gross income of the owners thereof for federal income tax purposes.

In any case where the Reserve Fund is funded with a combination of cash and a Qualified Reserve Fund Credit Instrument, the Trustee shall deplete all cash balances before drawing on the Qualified Reserve Fund Credit Instrument. With regard to replenishment, any available moneys provided by the Authority shall be used first to reinstate the Qualified. Reserve Fund Credit Instrument and second, to replenish the cash in the Reserve Fund. hi the event the Qualified Reserve Fund Credit Instrument is drawn upon, the Authority shall make payment of interest on amounts advanced under the Qualified Reserve Fund Credit Instrument after making any payments to the Bond Service Fund pursuant to the terms of the Indenture.

In the event the Qualified Reserve Fund Credit Instrument will lapse or expire, the Trustee shall draw upon such Qualified Reserve Fund Credit Instrument prior to its lapsing or expiring in the full amount of such Qualified Reserve Fund Credit Instrument, make deposits from available Revenues to the Reserve Fund to increase the amount on deposit therein to the Reserve Requirement or substitute such Qualified Reserve Fund Credit Instrument with a Qualified Reserve Fund Credit Instrument that satisfies the requirements described above.

Issuance of Additional Debt; Parity Obligations
The Authority has covenanted in the Indenture that except for the Bonds, no additional bonds, notes or other indebtedness shall be issued or incurred which are payable out of the Revenues in whole or in part.

Pursuant to the terms of the Installment Sale Agreement, in addition to the Installment Payments, the City may issue or incur other bonds, notes, loans, advances or indebtedness payable from Net Revenues on a parity with the Installment Payments to provide financing for the Electric System in such principal amount as shall be determined by the City. The City may issue or incur any such Parity Obligations subject to the following specific conditions which are made conditions precedent to the issuance and delivery of such Parity Obligations:
a) No Event of Default shall have occurred and be continuing, and the City shall deliver a certificate to that effect to the Trustee;
b) The Net Revenues, calculated in accordance with accounting principles consistently applied, as shown by the books of the City for the latest Fiscal Year or as shown by the books of the City for any more recent twelve ( 12) month period selected by the City, in either case verified by a certificate or opinion of an Independent Accountant employed by the City, plus at the option of the City) the Additional Revenues, shall be at least equal to one hundred twenty percent ([ 120%]) of the amount of Maximum Annual Debt Service; [ DISCUSS] c) There shall be established upon the issuance of such Parity Obligations a reserve fund for such Parity Obligations in an amount equal to the lesser of (i) the maximum amount of debt service required to be paid by the City with respect to such Parity Obligations during any Fiscal Year, or (ii) the maximum amount then permitted under the Tax Code; and d) The trustee or fiscal agent for such Parity Obligations shall be the same entity performing the functions of Trustee under the Indenture. 35251146. 5 11
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The provisions of subsection ( b) above shall not apply to any Parity Obligations if all of the proceeds of which ( other than proceeds applied to pay costs of issuing such Parity Obligations and to make a reserve fund deposit required pursuant to subsection ( c) above) shall be deposited in an irrevocable escrow for the purpose of paying the principal of and interest and premium ( if any) on any Installment Payments or on any outstanding Parity Obligations.

Under the terns of the Installment Sale Agreement, the City may not issue or incur any additional bonds or other obligations during the term of the Installment Sale Agreement having any priority in payment of principal or interest out of the Net Revenues over the Installment Payments. However, nothing in the Installment Sale Agreement is intended or shall be construed to limit or affect the ability of the City to issue or incur Parity Obligations or obligations which are either unsecured or which are secured by an interest in the Net Revenues which is junior and subordinate to the pledge of and lien upon the Net Revenues established under the Installment Sale Agreement.

Installment Payments
Under the Installment Sale Agreement, the City agrees to pay to the Authority, its successors and assigns, but solely from the " Net Revenues" ( consisting of " Gross Revenues" less " Operation and Maintenance Costs") and other funds pledged under the Installment Sale Agreement, the " Purchase Price," together with interest on the unpaid principal balance payable in Installment Payments coming due and payable in the respective amounts and on the respective Installment Payment Dates specified in the Installment Sale Agreement. These terns are defined in the Installment Sale Agreement as follows:

Net Revenues" is defined as meaning, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Operation and Maintenance Costs becoming payable during such period.

Gross Revenues" is defined as meaning all income, rents, rates, fees, charges and other moneys derived from the ownership or operation of the Electric System, including, without limiting the generality of the foregoing, ( 1) all income, rents, rates, fees, charges, business interruption insurance proceeds or other moneys derived by the City from the sale, furnishing and supplying of electric or other services, facilities, and commodities sold, furnished or supplied through the facilities of or in the conduct or operation of the business of the Electric System other than the non -by -passable usage based charge supporting the City' s public benefit program), plus ( 2) the earnings on and income derived from the investment of such income, rents, rates, fees, charges, or other moneys, including City reserves and the Reserve Fund established under the Indenture, but excluding in all cases customer deposits or any other deposits or advances subject to refund until such deposits or advances have become the property of the City and excluding any proceeds of taxes required by law to be used by the City to pay bonds hereafter issued.

Electric System" is defined as meaning the entire electric system of the City, including all facilities, properties and improvements at any time owned, controlled or operated by the City for the provision of electricity, and any necessary lands, rights, entitlements and other property useful in connection therewith, together with all extensions thereof and improvements thereto at any time acquired, constructed or installed by the City, including the Improvements.

Operation and Maintenance Costs" is defined as meaning the reasonable and necessary costs and expenses paid by the City for maintaining and operating the Electric System, including but not limited to ( a) the cost of utilities, including electricity and other forms of energy supplied to the Electric System, (b) the reasonable expenses of management and repair and other costs and 35251146. 5 12
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expenses necessary to maintain and preserve the Electric System in good repair and working order and ( c) the reasonable administrative costs of the City attributable to the operation and maintenance of the Electric System, including insurance and other costs described in the Installment Sale Agreement, but in all cases excluding ( i) debt service payable on obligations incurred by the. City with respect to the Electric System, including but not limited to the Installment Payments and debt service payments on any Parity Obligations, (ii) depreciation, replacement and obsolescence charges or reserves therefor, ( iii) amortization of intangibles or other bookkeeping entries of a similar nature, ( iv) City' s public benefit program expenditures, and (v) periodic administrative transfers to the City' s general fund.

Purchase Price" is defined as meaning the amount to be paid by the City under the Installment Sale Agreement as the purchase price of the Improvements, being equal to the aggregate principal amount of the Bonds.

Under the Installment Sale Agreement, all of the Net Revenues are irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments and any Parity Obligations ( described above) and except as otherwise provided in the Installment Sale Agreement the Net Revenues shall not be used for any other purpose so long as any of the Installment Payments remain unpaid. Such pledge, charge and assignment shall constitute a first lien on the Net Revenues and such other moneys for the payment of the Installment Payments and any Parity Obligations in accordance with the terms of the Installment Sale Agreement.

The obligations of the City to make the Installment Payments from the Net Revenues and to perform and observe the other agreements contained in the Installment Sale Agreement shall be absolute and unconditional and until such time as all of the Installment Payments and all other amounts coming due and payable under the Installment Sale Agreement shall have been fully paid or prepaid, the City may not suspend or discontinue payment of any Installment Payments or such other amounts, will perform and observe all other agreement contained in the Installment Sale Agreement, and will not terminate the Installment Sale Agreement for any cause. See " SECURITY AND SOURCES OF PAYMENT FOR THE BONDS — Special Obligation" herein.

Under the Installment Sale Agreement, all of the Gross Revenues shall be deposited by the City immediately upon receipt in the Electric Utility Fund, which fund is established by the Installment Sale Agreement and held by the City. The City shall use funds in the Electric Utility Fund to pay Operation and Maintenance Costs as such payments become due and payable. The City covenants and agrees that all Net Revenues will be held by the City in the Electric Utility Fund in trust for the benefit of the Trustee as assignee of the rights of the Authority under the Installment Sale Agreement) and the Bond Owners, and for the benefit of the owners of any Parity Obligations. On or before each Installment Payment Date, the City shall withdraw from the Electric Utility Fund, and transfer to the Trustee for deposit in the Revenue Fund, and to the trustee for any Parity Obligations, as applicable, an amount of Net Revenues which, together with the balance then on deposit in the Bond Service Fund ( other than amounts resulting from the prepayment of the Installment Payments pursuant to the Installment Sale Agreement and other than amounts required for payment of principal of or interest on any Bonds and Parity Obligations which have matured or been called for redemption but which have not been presented for payment), is equal to the aggregate amount of the Installment Payments coming due and payable on the next succeeding Interest Payment Date, together with any amounts required to restore the balance in the Reserve Fund to the Reserve Requirement. In support of the foregoing, the City shall set aside each month equal amounts necessary to make such transfers on or before each Installment Payment Date.

The City is required under the Installment Sale Agreement to manage, conserve and apply the Gross Revenues on deposit in the Electric System Fund in such a manner that all deposits required to be 35251146. 5 13
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made will be made at the times and in the amounts so required. Subject to the foregoing sentence, so long as no Event of Default shall have occurred and be continuing under the Installment Sale Agreement, the City may use and apply Net Revenues in the Electric Utility Fund for ( i) the payment of Additional Payments ( as defined in the Installment Sale Agreement), (ii) the payment of any subordinate obligations or any unsecured obligations, (iii) the acquisition and construction of extensions and betterments to the Electric System, (iv) the prepayment of any obligations of the City relating to the Electric System, ( v) transfers from the Electric Utility Fund to the General Fund of the City for administrative costs, or (vi) any other lawful purposes of the Electric Utility Fund. All monies in the Electric System Fund may be invested by the City from time to time in any Authorized Investment.

Rate Covenant; Collection of Rates and Charges
Under the Installment Sale Agreement, the City agrees that it shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Electric System during each Fiscal Year, which are at least sufficient, after making allowances for contingencies and error in the estimates, to yield Gross Revenues sufficient to pay the following amounts in the following order of priority:
a) All Operation and Maintenance Costs estimated by the City to become due and payable in such Fiscal Year;
b) Adjustable Annual Debt Service ( as defined in the Installment Sale Agreement); c) All amounts, if any, required to restore the balance in the Reserve Fund and any reserve fund securing any Parity Obligations to the full amount of the Reserve Requirement and the reserve requirement with respect to any Parity Obligations; and d) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable from, the Gross Revenues or the Net Revenues during such Fiscal Year.

In addition, the City shall fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Electric System during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to one hundred twenty percent ( 120%) of the amount described in the preceding clause (b) for such Fiscal Year.

See " THE ELECTRIC SYSTEM — Rates and Charges; Recent Rate Increase" herein for a discussion of Electric System rate increases approved by the City Council of the City in March 2013.

Covenants of the City
In addition to the covenant described above under the caption " Rate Covenant; Collection of Rates and Charges," the City makes certain other covenants in the Installment Sale Agreement which are summarized below. See " APPENDIX C — SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS — The Installment Sale Agreement" herein.

Maintenance, Utilities, Taxes and Assessments. Throughout the term of the Installment Sale Agreement, all improvement, repair and maintenance of the Electric System shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Electric System, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the 35251146. 5 14
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payment of the cost of the repair and replacement of the Electric System resulting from ordinary wear and tear.

The City shall also pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Electric System or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the Tenn of the Installment Sale Agreement as and when the same become due.

Operation ofthe Electric System. The City covenants and agrees to operate the Electric System in an efficient and economical manner and to operate, maintain and preserve the Electric System in good repair and working order. The City covenants that, in order to fully preserve and protect the priority and security of the Bonds, the City shall pay from the Gross Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Electric System which, if unpaid, may become a lien or charge upon the Gross Revenues or the Net Revenues prior or superior to the lien granted under the Installment Sale Agreement, or which may otherwise impair the ability of the City to pay the Installment Payments in accordance therewith.

Public Liability and Property Damage Insurance. The City shall maintain or cause to be maintained, throughout the term of the Installment Sale Agreement, but only if and to the extent available at reasonable cost from reputable insurers, a standard comprehensive general insurance policy or policies in protection of the Authority, the City and their respective members, officers, agents and employees.

Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Electric System. Said policy or policies shall provide coverage in such liability limits and shall be subject to such deductibles as shall be customary with respect to works and property of a like character. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the City, and may be maintained in whole or in part in the form of selfinsurance by the City, subject to the provisions of the Installment Sale Agreement, or in the form of the participation by the City in ajoint powers agency or other program providing pooled insurance. The proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which such proceeds shall have been paid.

Casualty Insurance. The City shall procure and maintain, or cause to be procured and maintained, throughout the term of the Installment Sale Agreement, but only in the event and to the extent available from reputable insurers at reasonable cost, casualty insurance against loss or damage to any improvements constituting any part of the Electric System, covering such hazards as are customarily covered with respect to works and property of like character. Such insurance may be subject to deductible clauses which are customary for works and property of a like character. Such insurance may be maintained as part of or in conjunction with any other casualty insurance carried by the City and may be maintained in whole or in part in the form of self- insurance by the City, subject to the provisions of the Installment Sale Agreement, or in the form of the participation by the City in a joint powers agency or
other program providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Electric System shall be used to repair, rebuild or replace such damaged or destroyed portion of the Electric System, and to the extent not so applied, shall be paid to the Trustee to be applied to pay or prepay the Installment Payments ( and the Bonds, under the special mandatory redemption provisions of the Indenture) or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.
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Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Electric System by the lawful exercise of eminent domain, at the election of the City ( evidenced by a Written Certificate of the City filed with the Trustee and the Authority) shall either ( a) be used for the acquisition or construction of improvements and extension of the Electric System, or ( b) be paid to the Trustee to be applied to pay or prepay the Installment Payments ( and the Bonds, under the special mandatory redemption provisions of the Indenture) or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.

Records and Accounts. The City shall keep proper books of record and accounts of the Electric System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Electric System. Said books shall, upon prior request, be subject to the reasonable inspection by the Owners of not less than ten percent (10%) in aggregate principal amount of the Outstanding Bonds, or their representatives authorized in writing. The City shall cause the books and accounts of the Electric System to be audited annually by an Independent Accountant, not more than two hundred seventy ( 270) days after the close of each Fiscal Year, and shall make a copy of such report available for inspection by the Bond Owners at the office of the City.

Covenants Related to Tax -Exempt Status of the Bonds. The City make certain covenants relating to the tax- exempt status of the Bond, including that it will take such actions as are necessary to insure: ( i) that the interest on the Bonds will not become includable in the gross income of the owners thereof for federal income tax purposes; ( ii) that no Bond will become a " private activity bond" within the meaning of section 141 of the Code; (iii) that the Bonds will not become " arbitrage bonds" within the meaning of section 148 of the Code; (iv) that the Bonds will not be treated as " federally guaranteed" within the meaning of section 149( 6) of the Code and the Tax Regulations and rulings thereunder; and v) take certain other actions relating to certain reports and to amounts rebatable to the United States under the Code.

Sale ofthe Electric System Property. Except as provided in the Installment Sale Agreement, the City covenants that the Electric System shall not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole unless such sale is to a public entity. Neither the Net Revenues nor any other funds pledged or otherwise made available to secure payment of the Installment Payments shall be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed or used except as authorized by the terms of the Installment Sale Agreement.

The City shall not enter into any agreement which impairs the operation of the Electric System or any part of it necessary to secure adequate Net Revenues to pay the Installment Payments, or which otherwise would impair the rights of the Bond Owners and the owners of any Parity Obligations with respect to the Net Revenues. If any substantial part of the Electric System shall be sold, the payment therefor shall either ( a) be used for the acquisition or construction of improvements, extensions or replacements of facilities constituting part of the Electric System, or (b) to the extent not so used, be paid to the Trustee to be applied to pay or prepay the Installment Payments or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.

Special Obligation
The City' s obligation to pay the Installment Payments, the Additional Payments and any other amounts coming due and payable under the Installment Sale Agreement shall be a special obligation of the City limited solely to the Net Revenues. Under no circumstances shall the City be required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified in the Installment Sale Agreement for the payment of the Installment Payments and the Additional Payments, nor shall any other funds or property of the City be liable for the payment of the 35251146. 5 16
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Installment Payments and the Additional Payments and any other amounts coming due and payable under the Installment Sale Agreement.

The obligations of the City to make the Installment Payments and the Additional Payments from the Net Revenues and to perform and observe the other agreements contained in the Installment Sale Agreement shall be absolute and unconditional and shall not be subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trustee of any obligation to the City or otherwise with respect to the Electric System, whether under the Installment Sale Agreement or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until such time as all of the Installment Payments, all of the Additional Payments and all other amounts coming due and payable under the Installment Sale Agreement shall have been fully paid or prepaid, the City ( a) will not suspend or discontinue payment of any Installment Payments, Additional Payments or such other amounts, (b) will perform and observe all other agreements contained in the Installment Sale Agreement, and ( c) will not terminate the Installment Sale Agreement for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Electric System, failure to complete the Acquisition and Construction of any Improvements by the estimated Completion Date thereof, the taking by eminent domain of title to or temporary use of any component of the Electric System, commercial frustration of purpose, any change in the tax or law other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture or the Installment Sale Agreement.
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BOND INSURANCE
TO COME, IF APPLICABLE]

THE ELECTRIC SYSTEM
General
Pursuant to resolution of the City Council of the City, the City established the Electric System in 1922 through the purchase of all of the property and facilities of the privately owned Light and Power Utility, which prior to its purchase by the City provided electric service to the City. The Electric System currently serves 10, 836 residential, 1, 005 commercial, 6 industrial and 123 other customers in an approximately 22 square mile service area. Service is provided over a 34. 4kV subtransmission system to six distribution substations and is delivered to end users over City owned distribution lines. For Fiscal Year 2014, total energy generated equaled 145, 203 MWh and total energy purchases equaled 43, 118 MWh. Peak demand in Fiscal Year 2014 was 40. 5 MW. The City' s all- time peak demand was 47. 6 MW in Fiscal Year 2006.

The City Council of the City is the governing body for the Electric System and approves all major operational decisions, including rate setting, operating budgets, power resource acquisitions, enhancement of distribution facilities and capital projects. Day- to- day operation of the Electric System is managed by the Electric Utility Director.

Management and Employees
The following are biographical summaries of the Electric Utility Director and the Power Resource and Revenue Administrator.

Frederick 11 Mason — Mr. Mason has served as the City' s Electric Utility Director since July
2009. In that capacity, Mr. Mason oversees the day- to- day planning and administration of all activities and programs of the Electric System, as well as the development, interpretation and enforcement of Electric System policies and procedures. Previously, Mr. Mason was the City' s Electric Utility Power
Resource and Revenue Administrator. Prior to joining the City, Mr. Mason was the Power Resource - Energy Transaction Analyst and Field Services Manager for Riverside Public Utilities for a period of seven years. Mr. Mason holds a Bachelor of Science degree and a Masters in Business Administration from the University of Redlands.

James Steffens — Mr. Steffens is the Utility Financial Analyst for the City, a position he has held since September 2011. Mr. Steffens responsibilities include analysis of financial and market data and representation of the City in communications with other utilities, energy suppliers, the California Independent System Operator Corporation and the Federal Energy Regulatory Commission. He also manages the City' s
Public Benefit Programs. Prior to joining the City, Mr. Steffens was a financial consultant to government agencies through Willdan Financial Services. Mr. Steffens holds a Bachelor of Arts degree in Economics from California State University, Fullerton and a Masters in Business Administration from the University of Arizona.

As of June 30, 2014, the Electric System directly employed 22 employees. 18 of these employees are represented by the International Brotherhood of Electrical Workers (" EBBW") in all matters pertaining to wages, benefits and working conditions, while the three mid -manager level employees are represented 35251146. 5 18
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by the Teamsters Local 1932. The Electric Utility Director is an " At Will" employee with a separate Employment Agreement. The current memorandum of understanding with the IBEW expires on June 30, 2016. In addition, 12 employees provided customer service support such as meter reading, field services and billing, while also providing support for the City' s water utility. These 12 employees report to the City' s
Finance Department. 11 of these employees are represented by the IBEW, while the remaining mid -manager level employee is represented by Teamsters Local 1932. All employees are members of the California Public Employees Retirement System. See " THE ELECTRIC SYSTEM — Retirement Program."
Electric System Facilities
Through agreement with Southern California Edison Company (" Edison"), the Electric System utilizes Edison' ssubtransmission system in bringing power from the California Independent System Operator (" CAISO") controlled high voltage transmission grid to the Electric System' s distribution
system at Banning Substation. The City owns two 34. 4kV subtransmission circuits totaling approximately ten miles which feed each of the Electric System' ssix substations. These six substations have 27 circuits feeding approximately 145 miles of overhead and underground lines of 2, 400/160Y volts and 7, 200/ 12, 470Yvolts. Underground lines total approximately 22 miles or 15% of the total.

The Electric System also has three small hydroelectric generating units located in San Gorgonio Wash. The two lower generating units were rebuilt in 2015 with a combined capacity of .48 MW and started regular operations in June. The two units are projected to produce a total of approximately 4, 000 MWh' s of electricity each year. The upper generating unit is currently being evaluated to determine whether there is a cost benefit for rebuilding it. If rebuilt, the upper unit would have a capacity of . 15
MW.

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