Deferred outflows of resources - pension 4,625,126
Deferred outflows of resources - OPEB 373,041
Deferred inflows of resources - pension (1,283,718)
Deferred inflows of resources - OPEB (5,550,196) (1,835,747) Long-term liabilities are not due and payable in the current period and therefore they are not reported in the funds:
Net OPEB liability (1,368,199)
Net pension liability (7,029,400) (8,397,599)
Net Position of Governmental Activities $ (10,702,587)
See Notes to Financial Statements.
10 17.a
Packet Pg. 333 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Statement of Revenues,
Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2025
General
Revenues:
Taxes $ 6,585,046
Licenses and permits 6,853
Intergovernmental 395,561
Contributions from City of Barstow 3,982,223
Use of money and property 17,899
Total Revenues 10,987,582
Expenditures:
Current - public safety
General government Salaries and benefits 6,884,705
Public safety Services and supplies 2,093,459
Capital outlay 198,916
Total Expenditures 9,177,080
Net Change in Fund Balances 1,810,502
Fund Balances
Beginning of year (2,511,336)
End of Year $ (700,834)
See Notes to Financial Statements.
11 17.a
Packet Pg. 334 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30, 2025
Net change in fund balances - total governmental funds $ 1,810,502 Amounts reported for governmental activities in the statement of activities are different because:
Governmental funds report capital outlays as expenditures. However, in the statement of activities, the costs of those assets is allocated over their estimated useful lives as depreciation expense. The activity is reconciled as follows:
Capital outlay $ 40,000
Depreciation/amortization (47,638) (7,638)
Compensated absences expenses reported in the statement of activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. 11,089
Employer contributions for pension were recorded as expenditures in the governmental funds. However, in the Government-Wide Financial Statements, these contributions are deferred. (419,346)
Employer contributions for OPEB were recorded as expenditures in the governmental funds. However, in the Government-Wide Financial Statements, these contributions are deferred. (1,627,179)
Change in Net Position of Governmental Activities $ (232,572) See Notes to Financial Statements.
12 17.a
Packet Pg. 335 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
NOTES TO BASIC FINANCIAL STATEMENTS
13 17.a
Packet Pg. 336 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
I SIGNIFICANT ACCOUNT POLICIES
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Barstow Fire Protection District (District) have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard – setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below:
A. Description of Reporting Entity
Barstow Fire Protection District (the District) was organized on May 24, 1926. On November 17, 2010, Resolution No. 23-10 was passed by the City of Barstow Council establishing the District as a component unit of the City.
Previously the District was an independent district. Barstow Fire Protection District continues to be operated according to the applicable state fire protection district laws and the property taxes collected within the District will be used exclusively for the administration and operational costs of the District. The City Council acts as the District's governing board and exerts significant influence over its operations.
The District is an integral part of the City of Barstow (City) and the Accompanying Basic Financial Statements are included as a component unit of the basic financial statements prepared by the City.
B. Basis of Accounting/Measurement Focus
The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Government - Wide Financial Statements - The District’s government-wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the District.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the District’s assets and liabilities, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
Governmental Fund Financial Statements - Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The District has one major fund.
The following is the District’s major fund:
General Fund - This fund is the District’s primary operating fund. It accounts for all financial resources of the District. 14 17.a
Packet Pg. 337 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except revenues subject to accrual (generally received within 90 days after year-end). The primary revenue sources, which have been treated as susceptible to accrual by the District, are property taxes, intergovernmental revenues, and other taxes and investment income. Expenditures are recorded in the accounting period in which the related fund liability is incurred except for claims, judgments, compensated absence, interest on long-term debt which is recognized when paid.
Unavailable revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Unavailable revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unavailable revenue is removed from the combined balance sheet and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.
C. Cash and Cash Equivalents
The District considers cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition to be cash and cash equivalents.
D. Investments
The District has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 31 “Accounting and Financial Reporting for Certain Investments and External Pools”, which require governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred. In accordance with GASB Statement No. 31, the District has adjusted certain investments to fair value (when material).
Investments, if any, are reported in the financial statements at fair value, unless fair value reasonably approximates cost, in which case cost is used.
E. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates. 15 17.a
Packet Pg. 338 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Accounts Receivable and Allowance for Bad Debts
During the course of normal operations, the District carries various receivable balances for taxes and interest.
Receivables are shown net of an allowance for doubtful accounts. As of June 30, 2025, no allowance was required to be recorded.
G. Capital Assets
The District’s buildings, machinery, equipment, infrastructure, and lease assets with useful lives of more than two years are stated at historical cost or estimated historical cost and reported in the government-wide financial statements. Donated assets are stated at fair value on the date donated. The District updated its Capital Asset Policy on June 16, 2014, per Board approval. The District capitalizes its assets as follows:
Buildings and Building Improvement Costs of $50,000 or more Furniture Costs of $20,000 or more
Equipment Costs of $20,000 or more
Infrastructure Costs of $100,000 or more
The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets are depreciated using the straight-line method. When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.
Amortization of assets acquired under capital leases is based on the shorter of the lease term or the estimated useful life of the asset and is included in depreciation and amortization. Water rights, which are intangible assets, are not amortized. Estimated useful lives, in years, for depreciable assets are as follows:
Buildings 50 years
Infrastructure and improvements other than buildings 10-100 years Machinery and equipment 3-15 years
Lease assets Shorter of the leased
asset’s useful life or
the lease term
H. Liability for Compensated Absences
The District is required to recognize a liability for compensated absences when future payments for such absences have been earned by employees based on pay and salary rated in effect at the balance sheet date. For the District, this consists of accumulated sick leave, vacation and compensation time.
I. Property Taxes
The County of San Bernardino collects property taxes for the District. Tax liens attach annually as of 12:01 A.M. on the first day in March preceding the fiscal year for which the taxes are levied. The tax levy covers the fiscal period July 1 to June 30. All secured personal property taxes and one-half of the taxes on real property are due November 1, the second installment is due February 1. All taxes are delinquent, if unpaid, on December 10 and April 10 respectively. Unsecured personal property taxes become due on the first of March each year and are delinquent, if unpaid, on August 31.
16 17.a
Packet Pg. 339 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Fund Balances
In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. Fund balances for governmental funds are made up of the following:
Nonspendable Fund Balance – includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term loans receivable.
Restricted Fund Balance – includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. The District does not have any restricted fund balances.
Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the District’s highest level of decision-making authority, the Board of Directors by passage of an ordinance or resolution. Commitments may be changed or lifted only by the District taking the same formal action that imposed the constraint originally. The District does not have any committed fund balances.
Assigned Fund Balance – comprises amounts intended to be used by the District for specific purposes that are neither restricted nor committed. The District has not designated any level of authority for assigning fund balance; therefore, the Board of Directors can assign fund balance. The District does not have any assigned fund balances.
Unassigned Fund Balance – is the residual classification for the general fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In other governmental funds, if expenditures exceed amounts restricted, committed, or assigned, the negative amount is reflected as negative unassigned fund balance.
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned.
K. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position will sometimes report a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/ expenditure) until then.
In addition to liabilities, the statement of net position or balance sheet will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time.
17 17.a
Packet Pg. 340 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) L. Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the District’s San Bernardino County Employees’ Retirement Association (SBCERA) plan (Plan) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by SBCERA. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
M. Net Positions
In the government-wide financial statements, net position is classified in the following categories:
Net Investment in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets.
Restricted Net Position – This amount is restricted by external creditors, grantors, contributors, or laws or regulations of other governments.
Unrestricted Net Position – This amount is the remaining net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” NOTE 2: CASH AND INVESTMENTS
The City’s treasurer maintains a cash and investment pool used by all funds of the City and by certain component units of the City, including the District. The District does not own specifically identifiable securities of the City’s pool.
The District’s portion of this pool is reported on the financial statements as “cash and investments.” Investment policies and associated risk factors applicable to the District’s funds are those of the City of Barstow and are included in the City’s Annual Comprehensive Financial Report.
At June 30, 2025, the portion of the District’s cash and investments pooled with the City is $2,968,944.
The following disclosures are based upon the City of Barstow’s investment policy which the District is subject to.
A. Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits, or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g. broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits. 18 17.a
Packet Pg. 341 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits.
As of June 30, 2025, none of the District’s deposits with financial institutions in excess of federal depository insurance limits were held in uncollateralized accounts. As of June 30, 2025, no District investments were held by the same broker-dealer (counterparty) that was used by the District to buy the securities.
B. Investments authorized by the California Government Code and the City of Barstow adopted investment policy
The table below identifies the investment types that are authorized for the District (City of Barstow) by the California Government Code and by the City’s adopted investment policy. The table also identifies certain provisions of the California Government Code or the City’s adopted investment policy, where more restrictive, that address interest rate risk, credit risk, and concentration of credit risk.
Authorized Investment Type
Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in
One Issuer
U.S. Treasury Bills, Notes, or Bonds 5 years None None
U.S. Agencies 5 years None None
Time Certificates of Deposit 5 years None 50%
Negotiable Certificates of Deposit N/A 30% 50%
Bankers' Acceptance 180 days 40% 30%
Prime Commercial Paper 270 days 25% None
Repurchase Agreements 1 year None None
Reverse Repurchase Agreements 92 days 20% None
Mutual Funds investing in eligible securities N/A 20% 10% Medium Term Notes 5 years 30% None
County Pooled Funds N/A None None
Local Agency Investment Fund (LAIF) N/A 100% $75 million* *Limit set by LAIF Governing Board, not Government Code C. Disclosures Related to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.
Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the District manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer tem investments, and by timing cash flows from maturities so that a portion of the portfolio is maturing, or coming close to maturity, evenly over time as necessary to provide the cash flow and liquidity needed for operations.
19 17.a
Packet Pg. 342 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
Barstow Fire Protection District’s cash is pooled with the City of Barstow’s cash to maximize investments.
Information about the sensitivity of the fair values of the City’s investments to market interest rate fluctuations is provided in the City of Barstow’s Comprehensive Annual Financial Report for fiscal year ended June 30, 2025.
D. Disclosure Related to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization.
The District’s investment in the City’s investment pool is not rated by a nationally recognized rating organization.
NOTE 3: ACCOUNTS RECEIVABLE
Receivables at June 30, 2025 consisted of property taxes and other local sources. All receivables are considered collectible in full.
General Fund
Accounts Receivable $ 58,762
NOTE 4: LEASES
Leases are financings of the right to use an underlying asset. A lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
Leases Receivable and Deferred Inflows of Resources
The District leases land to various companies. As of June 30, 2025, the value of the lease receivable was $235,920.
The value of the deferred inflow of resources as of June 30, 2025, was $225,886.
The principal and interest payments that are expected to maturity are as follows:
Fiscal Year Principal Interest Total
2026 $ 3,277 $ 6,425 $ 9,702
2027 3,317 6,335 9,652
2028 3,392 6,260 9,652
2029 3,503 6,149 9,652
2030 3,600 6,052 9,652
2031-2035 19,539 28,719 48,258
2036-2040 22,394 25,862 48,256
2041-2045 25,697 22,556 48,253
2046-2050 29,469 18,781 48,250
2051-2055 33,795 14,452 48,247
2055-2060 38,752 9,492 48,244
2061-2065 44,447 3,792 48,239
2066 4,738 35 4,773
Totals $ 235,920 $ 154,910 $ 390,830
20 17.a
Packet Pg. 343 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 5: CAPITAL ASSETS
Balance Balance
June 30, 2024 Additions Deletions June 30, 2025
Capital assets, not being depreciated/amortized
Land $ 45,129 $ - $ - $ 45,129
Total capital assets, not being depreciated/amortized 45,129 - - 45,129 Capital assets, being depreciated/amortized
Buildings 2,087,512 - 2,087,512 -
Machinery, equipment, and vehicles 1,333,860 40,000 1,373,860 - Total capital assets, being depreciated/amortized 3,421,372 40,000 3,461,372 - Less accumulated depreciation/amortization
Buildings (1,834,526) (19,010) (1,853,536) -
Machinery, equipment, and vehicles (1,101,764) (28,628) (1,130,392) - Total accumulated depreciation/amortization (2,936,290) (47,638) (2,983,928) - Total capital assets, being depreciated/amortized, net 485,082 (7,638) 477,444 - Total governmental activities capital assets $ 530,211 $ (7,638) $ 522,573 - $ NOTE 6: ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities at June 30, 2025, consisted of the following:
General Fund
Salaries and Benefits 183,426 $
Accounts Payable 237,756
Total 421,182 $
NOTE 7: LONG-TERM LIABILITIES
Long-term liabilities consisted of the following:
Restated
Balance
June 30, 2024 Net Change
Balance
June 30, 2025
Due Within One
Year
Due in More
Than One Year
Compensated absences 302,069 $ (11, $ 089) $ 290,980 $ 116,392 $ 174,588 Total long-term liabilities $ 302,069 $ (11,089) $ 290,980 $ 116,392 $ 174,588 Compensated Absences
The District’s policy relating to compensated absences is described in Note 1. The total amount outstanding at June 30, 2025, was $290,980.
21 17.a
Packet Pg. 344 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN
The District became a component of the City from November 17, 2010, and effective on that date all of the employees of the District became employees of the City. The District employees were covered under the pension plan of the San Bernardino County Employees’ Retirement Association (SBCERA). Subsequent to the merger, the members of Barstow Professional Firefighters Association are enrolled in the City’s retirement program through the SBCERA.
Plan Description
The SBCERA is a cost-sharing multiple- employer defined benefit pension plan (the Plan) operating under the California County Employees' Retirement Act of 1937 (1937 Act). It provides retirement, death and disability benefits to members. Although legally established as a single employer plan, the City of Big Bear Lake, Department of Water and Power-City of Big Bear Lake, Crestline Sanitation District, California State Association of Counties, South Coast Air Quality Management District (SCAQMD), San Bernardino Associated Governments (SANBAG), Local Agency Formation Commission (LAFCO), San Bernardino County Law Library, Barstow Fire Protection District, Hesperia Recreation and Parks District, SBCERA, City of Chino Hills, Mojave Desert Air Quality Management District (MDAQMD), California Electronic Recording Transaction Network Authority (CERTNA), along with the County, and are collectively referred to as the “Participating Members.” The plan is governed by the SBCERA Board of Retirement under the 1937 Act. Employees become eligible for membership on their first day of regular employment and become fully vested after 5 years. SBCERA issues a stand-alone financial report, which may be obtained by contacting the Board of Retirement, 348 W Hospitality Lane - 3rd Floor, San Bernardino, California 92415-0014.
Benefits Provided
SBCERA provides service retirement, disability, death and survivor benefits to eligible employees. Generally, any employee of the County of San Bernardino or participating employers who is appointed to a regular position whose service is greater than fifty percent of the full standard of hours required by a participating SBCERA employer (e.g. 20 hours per week or more) must become a member of SBCERA effective on the first day of employment. There are separate retirement benefits for General and Safety member employees. Safety membership is extended to those involved in active law enforcement and fire suppression. All other members are classified as General Members.
There are currently two tiers applicable to both General and Safety members. Members with membership dates before January 1, 2013 are included in General Tier 1 or Safety Tier 1. Any new member who becomes a member on or after January 1, 2013 is designated as General Tier 2 or Safety Tier 2 and is subject to the provisions of California Public Employees’ Pension Reform Act of 2013 (CalPEPRA), California Government Code 7522 et seq. and Assembly Bill (AB) 197.
General members prior to January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired 10 or more years of retirement service credit. A member with 30 years of service is eligible to retire regardless of age. General members who are first hired on or after January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 52 and have acquired five or more years of retirement service credit. 22 17.a
Packet Pg. 345 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN (CONTINUED)
Safety members prior to January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired 10 or more years of retirement service credit. A member with 20 years of service is eligible to retire regardless of age. Safety members who are first hired on or after January 1, 2013, are eligible to retire once they attain the age of 70 regardless of service or at age 50 and have acquired five or more years of retirement service credit.
The retirement benefit the member will receive is based upon age at retirement, final average compensation, years of retirement service credit and retirement plan and tier.
General Tier 1 benefit is calculated pursuant to the provisions of California Government Code of Section 31676.15. The monthly allowance is equal to 2% of final compensation times years of accrued retirement service credit times age factor from Section 31676.15. General Tier 2 benefit is calculated pursuant to the provisions found in California Government Code Section 7522.20(a). The monthly allowance is equal to the final compensation multiplied by years of accrued retirement credit multiplied by the age factor from Section 7522.20(a).
Safety Tier 1 benefit is calculated pursuant to the provisions of California Government Code Section 31664.1.
The monthly allowance is equal to 3% of final compensation times years of accrued retirement service credit times age factor from Section 31664.1. Safety Tier 2 benefit is calculated pursuant to the provisions found in California Government Code Section 7522.25(d). The monthly allowance is equal to the final compensation multiplied by years of accrued retirement credit multiplied by the age factor from Section 7522.25(d).
For Tier 1 members, the maximum monthly retirement allowance is 100% of final compensation. There is no final compensation limit on the maximum retirement benefit for Tier 2 members. However, the maximum amount of compensation earnable that can be taken into account for 2025 for Tier 1 members with membership dates on or after July 1, 1996 is $350,000. The maximum amount of pensionable compensation for Tier 2 members that can be taken into account for 2025 is equal to $180,096. These limits are adjusted on an annual basis. Members are exempt from paying member contributions and employers are exempt from paying employer contributions on compensation in excess of the annual cap.
Final average compensation consists of the highest 12 consecutive months for Tier 1 members and the highest 36 consecutive months for Tier 2 members.
The member may elect an unmodified retirement allowance or choose an optional retirement allowance. The unmodified retirement allowance provides the highest monthly benefit and a 60% continuance to an eligible surviving spouse or domestic partner. An eligible surviving spouse or domestic partner is one married to or registered with the member one year prior to the effective retirement date or at least two years prior to the date of death and has attained age 55 on or prior to the date of death. There are four optional retirement allowances the member may choose. Each of the optional retirement allowances requires a reduction in the unmodified retirement allowance in order to allow the member the ability to provide certain benefits to a surviving spouse, domestic partner, or named beneficiary having an insurable interest in the life of the member.
SBCERA provides an annual cost-of-living benefit to all retirees. The cost-of-living adjustment, based upon the Consumer Price Index for All Urban Consumers for the Los Angeles-Riverside-Orange County Area, is capped at
2.0%.
The County of San Bernardino and participating employers contribute to the retirement plan based upon actuarially determined contribution rates adopted by the Board of Retirement. 23 17.a
Packet Pg. 346 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN (CONTINUED)
Employer contribution rates are adopted annually based upon recommendations received from SBCERA’s actuary after the completion of the annual actuarial valuation.
All members are required to make contributions to SBCERA regardless of the retirement plan or tier in which they are included.
Fire safety members contribute the required employee share of their pension. The percentage of pay varies between 12.30%-17.74%.
The District pays a capped percentage of the employer’s pension cost per the Barstow Professional Fire Fighters Association Memorandum of Understanding. Employer pension costs have two tiers. The employer’s costs are capped at 46% with the employee paying the difference.
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by SBCERA. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
The District’s contributions to the Plan for the fiscal year ended June 30, 2025, were $1,456,246.
In fiscal year 2017-2018, the District transferred from the “Other Safety” cost group within SBCERA to the “County Safety” cost group to achieve future savings in the cost of the District’s contributions to SBCERA. Such transfer must be made in a manner that does not shift the present unfunded liability burden associated with the District, or a portion thereof, to the County. The Parties have agreed that the amount that must be contributed to SBCERA to effectuate the inclusion of the District into the present County Safety cost group, and avoid negatively impacting the County as a result thereof, is $8,485,000 calculated as of June 30, 2018. The Parties have further agreed that this amount may be amortized over twenty years at SBCERA's assumed rate of return for investments, which is 7.5%, resulting in twenty annual payments of $832,312 beginning on or before July 1, 2017, and continuing on or before each successive July 1 thereafter, through and including July 1, 2036. The payments are considered supplemental contributions in addition to the regular employer contribution rates annually set by the SBSERA Board of Retirement and approved by the County Board of Supervisors.
Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2025, the District reported a net pension liability for its proportionate share of the net pension liability of the Plan of $7,029,400.
The District’s net pension liability for the Plan is measured as the proportionate share of the total net pension liability of Plan. The net pension liability of the Plan is measured as of June 30, 2024, and the total pension liability for the Plans used to calculate the net pension liability was determined by actuarial valuations as of June 30, 2024. The District’s proportionate of the net pension liability was based on the District’s share of all actual contributions, actuarially determined.
24 17.a
Packet Pg. 347 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN (CONTINUED)
The District’s proportionate share of the net pension liability for the Plan as of the measurement dates June 30, 2023 and 2024, were as follows:
Proportion - June 30, 2023 0.307%
Proportion - June 30, 2024 0.331%
Change - Increase (Decrease) 0.024%
For the year ended June 30, 2025, the District recognized pension expense/revenue of $7,521,996. At June 30, 2025, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 1,456,246 $ - $
Changes of assumptions 147,795 246,982
Differences between expected and
actual experience 892,034 92,190
Net excess of actual over projected
earnings - 179,479
Changes in proportion and differences
between employer's contributions
and proportionate share of contributions 2,129,051 765,067 Total 4,625,126 $ 1,283,718 $
The $1,456,246 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2026.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Deferred
Fiscal year Outflows/(Inflows)
ended June 30, of Resources
2026 $ 311,376
2027 1,536,448
2028 46,468
2029 (9,130)
Total $ 1,885,162
25 17.a
Packet Pg. 348 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN (CONTINUED)
Actuarial Assumptions – The total pension liabilities in the June 30, 2024 actuarial valuations were determined using the following actuarial assumptions:
June 30, 2024
June 30, 2024
Entry - Age Actuarial Cost Method
7.25%
2.50%
General: 4.30% to 9.50% and Safety: 4.75% to 10.00%
Retiree COLA increases of 2.00% per year
7.25%
Mortality rates are based on the Pub-2010 AmountWeighted Above-Median Mortality Table projected generationally with the two-dimensional MP-2021
projection scale. For healthy General members, the
General Healthy Retiree rates (increased by 10%) were
used. For healthy Safety members, the Safety Healthy
Retiree rates (decreased by 5% for females) were used.
For disabled General members, the Non Safety Disabled
Retiree rates (decreased by 5% for females) were used.
For disabled Safety members, the Safety Disabled
Retiree rates were used. For beneficiaries not currently in Pay Status, the General Healthy Retiree rates (increased by 10%) were used. For beneficiaries currently in Pay
Status, the General Contingent Survivor rates (increased by 5% for males and 15% for females) were used.
2 Varying by service, including inflation 2.75%, and "across the board" salary increases of 0.50%.
Mortality
Measurement Date
Valuation Date
Cost of Living Adjustments
Investment Rate of Return 1
1 Net of pension plan investment expenses, including inflation.
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Projected Salary Increase 2
Inflation
Discount Rate – The discount rates used to measure the Total Pension Liability was 7.25% as of June 30, 2024. The projection of cash flows used to determine the discount rate assumed employer and member contributions will be made at rates equal to the actuarially determined contribution rates. For this purpose, only employee and employer contributions that are intended to fund benefits for current plan members and their beneficiaries are included. Projected employer contributions that are intended to fund the service costs for future plan members and their beneficiaries, as well as projected contributions from future plan members, are not included. Based on those assumptions, the Pension Plan's Fiduciary Net Position was projected to be available to make all projected future benefit payments for current plan members. Therefore, the long-term expected rate of return on pension plan investments of 7.25% was applied to all periods of projected benefit payments to determine the Total Pension Liability as of June 30, 2024.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of inflation) are developed for each major asset class. These returns are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage, adding expected inflation and subtracting expected investment expenses and a risk margin. 26 17.a
Packet Pg. 349 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 8: RETIREMENT PLAN (CONTINUED)
The June 30, 2024 target allocations (approved by the Board) and projected arithmetic real rates of return for each major asset class, after deducting inflation but before deducting investment expenses, used in the derivation of the long-term expected investment rate of return assumption is summarized in the table below.
Asset Class Total Allocation
Long-Term
Expected Real Rate
of Return (Arithmetic)
Large Cap U.S. Equity 14.50% 6.00%
Small Cap U.S. Equity 2.50% 6.65%
Developed International Equity 7.00% 7.01%
Emerging Market Equity 6.00% 8.80%
U.S. Core Fixed Income 2.00% 1.97%
High Yield/ Credit Strategies 13.00% 6.48%
Emerging Market Debt 6.00% 4.76%
Real Estate Core 2.50% 3.86%
Real Estate Non-Core 2.50% 5.40%
Cash & Equivalents 2.00% 0.63%
International Credit 11.00% 7.10%
Absolute Return 7.00% 7.10%
Real Assets 6.00% 10.10%
Private Equity 18.00% 9.84%
Total 100.00%
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the District’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
(6.25%) (7.25%) (8.25%)
Proportionate share of net pension liability/(asset) 12,046,230 $ 7,029,400 $ 2,929,645 $ Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued SBCERA financial reports.
Plan Description
The Barstow Fire Protection District became part of the City of Barstow in November 2010 as a special revenue fund. The Barstow Fire Professional Fire Fighters Association maintains health coverage through CalPERS, the same coverage offered to City employees. The City provides retiree medical benefits to eligible retirees and their spouses in accordance with their labor agreements. The health insurance plan is a single employer defined benefit plan.
27 17.a
Packet Pg. 350 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS
Employees Covered
Contributions
The contribution requirements of plan members and the District are established and may be amended by the Board of Directors. The District must agree to make a defined monthly payment towards the cost of each retiree’s coverage. The required contribution is based on projected prefunding financing requirements. For the fiscal year 2024-2025, the District contributed $103,912, which were in the form of benefit payments during the period.
The City did not make additional contributions to the CERBT trust (CERBT).
CERBT is a tax qualified irrevocable trust, organized under Internal Revenue Code (IRC) Section 115, established to prefund OPEB as described in GASB Statement 45. The CERBT issues a publicly available financial report that included financial statements and required supplementary information for the City, not individualizing, but in aggregate with the other CERBT participants. That report may be obtained by contacting CalPERS.
Inactive members currently receiving benefits 8
Inactive members entitled to but not yet receiving benefits 0 Active members 25
Total 33
28 17.a
Packet Pg. 351 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) Net OPEB Liability
The District’s net OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to the calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023, based on the following actuarial methods and assumptions.
June 30, 2023
June 30, 2024
Entry - Age Normal Cost Method
4.12%
2.50%
Contributes full ADC
Varies by Entry Age and Service
3.00%
5.10%
The MacLeod Watts Scale 2022 was developed from a blending of data and methodologies found in two published sources: (1) the Society of Actuaries Mortality Improvement Scale MP-2021 Report, published in October 2021 and (2) the demographic assumptions used in the 2021 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, published August 2021.
MacLeod Watts Scale 2022 is a two-dimensional mortality improvement scale reflecting both age and year of mortality improvement. The underlying base scale is Scale MP-2021 which has two segments (1) historical improvement rates for the period 1951-2017 and (2) an estimate of future mortality improvement for years 2018-2020 using the Scale MP-2021 methodology but utilizing the assumptions obtained from Scale MP-2015.
The MacLeod Watts scale then transitions from the 2020 improvement rate to the Social Security Administration (SSA) Intermediate Scale linearly over the 10-year period 2021-2030. After this transition period, the MacLeod Watts Scale uses the constant mortality improvement rate from the SSA Intermediate Scale from 2030-2044. The SSAs Intermediate Scale has a final step down in 2045 which is reflected in the MacLeod Watts scale for years 2045 and thereafter. Over the ages 95 to 118, the SSA improvement rate is graded to zero.
Post-retirement mortality projected fully generational with Scale MP-2017
7.40%, trending down to 4.14%
Valuation Date
Investment Rate of Return
Actuarial Cost Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
Projected Salary Increases
Healthcare Trend
Post Retirement Benefit Increase
Contribution Policy
Mortality
Measurement Date
29 17.a
Packet Pg. 352 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) The long-term expected rate of return on OPEB plan investments was determined using a building- block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation. The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the table below.
Asset Class
Target
Allocation
Expected Real
Return Year 1-5
Expected Real
Return Years 6+
Global Equity 49.00% 3.90% 4.70%
Fixed Income 23.00% 2.70% 2.60%
Global Real Estate (REITs) 20.00% 3.70% 4.00%
Treasury Inflation Protected Securities 5.00% 1.70% 1.40% Commodities 3.00% 2.90% 2.00%
100.00%
Assumed Long-Term Rate of Inflation 2.50%
Assumed Long-Term Investment Expenses N/A
Expected Long-Term Net Rate of Return, Rounded 6.55%
Discount Rate 4.41%
*Real rates of return come from a geometric representation of returns that assume a general inflation rate of 2.5%.
Discount Rate
The discount rate used to measure the total OPEB liability was 4.41 percent. The discount rate used reflects the results of a crossover test. In years where the trust is expected to have sufficient assets to pay the current year’s retiree benefits, the assumed trust rate of return is applied; once the trust is no longer expected to be able to pay plan benefits, a municipal bond rate is applied for the remainder of the projects. The S&P General Obligation Municipal Bond 20 Year High Grade Index was used for the purpose of the municipal bond rate.
30 17.a
Packet Pg. 353 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) Changes in the net OPEB Liability
The changes in the net OPEB liability for the OPEB Plan are as follows:
The following presents the net OPEB liability of the District if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:
Discount Rate Current Discount Rate
-1 Percent Discount Rate +1 Percent
(3.41%) (4.41%) (5.41%)
Plan's net OPEB liability/(asset) 1,581,923 $ 1,368,199 $ 1,192,140 $ Sensitivity of the Net OPEB Liability to Changes in the Health Care Cost Trend Rates The following presents the net OPEB liability of the District if it were calculated using a healthcare trend rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:
Current
1 Percent Heathcare 1 Percent
Decrease Trend Rate Increase
Plan's net OPEB liability/(asset) 1,304,919 $ 1,368,199 $ 1,437,560 $ Total OPEB Plan Fiduciary Net OPEB
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2024 1,693,276 $ $ 1,347,906 345,370 $ Changes recognized for the
measurement period:
Service cost 125,234 125,234 -
Interest on total OPEB liability 73,222 - 73,222
Changes of assumptions (57,724) - (57,724)
Contributions-employer - 82,543 (82,543)
Net investment income - 38,009 (38,009)
Benefit payments, including refunds of
employee contributions (82,543) (82,543) -
Administrative expense - (113) 113
Net changes 58,189 37,896 20,293
Balance at June 30, 2025 $ 1,751,465 $ 383,266 $ 1,368,199 31 17.a
Packet Pg. 354 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 9: POST-EMPLOYMENT HEALTH CARE BENEFITS (CONTINUED) Recognition of Deferred Outflow and Deferred Inflows of Resources Gains and losses related to changes in total OPEB liability and fiduciary net position are recognized in OPEB expense systematically over time. Amounts are first recognized in OPEB expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The recognition period differs depending on the source of the gain or loss:
OPEB Expense and Deferred Outflows/(Inflows) of Resources Related to OPEB For the measurement period ended June 30, 2024, the District recognized OPEB expense of $565,956. For the fiscal year ended June 30, 2025, the District reported deferred outflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date 103,912 $ - $
Changes of assumptions 188,525 5,107,701
Differences between expected and
actual experience 77,568 442,495
Net difference between projected
and actual earnings on OPEB
plan investments 3,036 -
Total 373,041 $ 5,550,196 $
The $103,912 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2026.
Other amounts reported as deferred outflows of resources related to OPEB will be recognized as expense as follows:
Deferred
Outflows/(Inflows)
of Resources
2026 (725,518) $
2027 (713,488)
2028 (725,645)
2029 (732,553)
2030 (743,157)
Thereafter (1,640,706)
Total $ (5,281,067)
Fiscal year
ended June 30,
Net differences between projected and actual
earnings on OPEB plan investments
5 years straight line
All Other Amounts Expected average remaining service lifetime (EARSL) (9.1 years at June 30, 2024)
32 17.a
Packet Pg. 355 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to the Financial Statements
For the Year Ended June 30, 2025
NOTE 10: RISK MANAGEMENT
The government is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, and natural disasters for which the government carried commercial insurance.
The District was a defendant in personal injury lawsuits of a nature common to many similar jurisdictions. The District’s management believes that any potential claims against the District, not covered by insurance, resulting from such litigation will not materially affect the financial statements of the District.
NOTE 11: NEGATIVE FUND BALANCE AND EXCESS EXPENDITURES OVER APPROPRIATIONS The Barstow Fire Protection District (BFPD) had a deficit fund balance of $700,834 and a deficit net position on the government-wide statements of $10,702,587 as of June 30, 2025.
In fiscal year 2025, the negative fund balance was actually reduced due to a positive net change of $1,810,502.
The Fire District has had on-going losses carried over from previous fiscal years. The Board and Administration will continue to monitor the Barstow Fire Protection District financial situation. Management will keep the Board informed of developing highlights, and concerns regarding the District.
Revenues
Actual property tax revenues came in at $6,585,046 as opposed to a budget estimate of $5,785,000, or $710,046 higher. Contribution from the City’s Measure Q and Debt Service fund to the District amounted to $3,982,223.
Expenditures
Salary and benefit projections were under budgeted expenditures by $206,043 with total salary and benefit expenditures of $6,884,705. Services and supplies expenditures were under budget by $17,223, mainly due to the deferral of equipment purchases.
NOTE 12: RESTATEMENT
Changes in Accounting Principle
For fiscal year ended June 30, 2025, the District implemented GASB Statement No. 101, Compensated Absences, which updated the recognition and measurement guidance for compensated absences, to align recognition and measurement under a single unified model to better meet the needs of financial statement users; refer to note 1.
June 30, 2024 Changes in
As Previously Accounting June 30, 2024
Reported Principle As Restated
Government-wide
Governmental activities (10,411,596) $ (58,419) $ (10,470,015) $ Total government-wide (10,411,596) $ (58,419) $ (10,470,015) $ 33 17.a
Packet Pg. 356 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
REQUIRED SUPPLEMENTARY INFORMATION
34 17.a
Packet Pg. 357 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Notes to Required Supplementary Information
For the Year Ended June 30, 2025
NOTE 1: BUDGETARY INFORMATION
A. Budgets and Budgetary Accounting
The District follows these procedures in establishing the budgets.
1. The annual budget is adopted by the City of Barstow City Council acting as the District’s Board of Directors after the holding of a hearing and provides for the general operation of the District. The operating budget includes proposed expenditures and the means of financing them.
2. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.
The City manager is authorized to transfer budgeted amounts between departments. Actual expenditures may not exceed budgeted appropriations at the fund level.
3. Formal budgetary integration is employed as a management control devise during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Capital projects appropriations are an automatic supplemental appropriation for next year. All others lapse unless they are encumbered at year end or re-appropriated through the formal budget process.
4. Annual budgets are adopted for the General Fund on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items.
B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of moneys are recorded in order to reserve that portion of the applicable appropriation is employed as an extension of formal budgetary integration. Encumbrances outstanding at year-end are reported as restricted or committed fund balance since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations.
35 17.a
Packet Pg. 358 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Budgetary Comparison Schedule
Barstow Fire Protection District General Fund
For the Year Ended June 30, 2025
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
Resources (Inflows):
Taxes $ 5,875,000 $ 5,875,000 $ 6,585,046 $ 710,046
Licenses and permits - 5,000 6,853 1,853
Intergovernmental 100 311,300 395,561 84,261
Use of money and property 11,000 11,000 17,899 6,899
Contributions from City of Barstow 3,459,851 3,459,851 3,982,223 522,372 Amounts Available for Appropriations 9,345,951 9,662,151 10,987,582 1,325,431 Charges to Appropriation (Outflow):
Public safety
Salaries and benefits 7,090,748 7,090,748 6,884,705 206,043 Services and supplies 2,150,682 2,110,682 2,093,459 17,223 Capital outlay 222,000 262,000 198,916 63,084
Debt service:
Lease principal 500,000 500,000 - 500,000
Total Charges to Appropriations 9,963,430 9,963,430 9,177,080 786,350 Net Change in Fund Balance $ (617,479) $ (301,279) 1,810,502 $ 2,111,781 FUND BALANCE:
Beginning of year (2,511,336)
End of year $ (700,834)
36 17.a
Packet Pg. 359 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
San Bernardino County Employees' Retirement Association (SBCERA) Schedule of Proportionate Share of the Net Pension Liability As of June 30, For the Last Ten Fiscal Years
2025 2024 2023 2022 2021
Measurement Date 6/30/2024 6/30/2023 6/30/2022 6/30/2021 6/30/2020 Proportion of the Net Pension Liability 0.331% 0.307% 0.338% 0.640% 0.421% Proportionate Share of the Net Pension Liability $ 7,029,400 $ 7,278,342 $ 7,854,204 $ 8,433,660 $ 16,891,227 Covered Payroll $ 2,759,103 $ 2,605,075 $ 2,550,102 $ 2,430,284 $ 2,045,831 Proportionate Share of the Net Pension Liability as
Percentage of Covered Payroll 254.77% 279.39% 308.00% 347.02% 825.64% Plan Fiduciary Net Position $ 30,627,947 $ 26,805,659 $ 29,379,425 $ 45,633,022 $ 33,270,269 Plan Fiduciary Net Position as a Percentage of the Total Pension Liability 56.65% 49.58% 54.34% 84.40% 66.33%
Notes to Schedule:
Changes of Assumptions:
Benefit Changes: None
6/30/2024 Inflation of 2.50% per year plus “across-the-board” salary increased by 0.50% per year, used to amortize the UAAL as a level percentage of payroll.
37 17.a
Packet Pg. 360 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the 2020 2019 2018 2017 2016
6/30/2019 6/30/2018 6/30/2017 6/30/2016 6/30/2015
0.457% 0.498% 0.378% 0.518% 0.638%
$ 12,382,040 $ 12,626,176 $ 9,958,070 $ 12,781,554 $ 12,395,608 $ 1,890,826 $ 1,816,148 $ 1,776,774 $ 2,518,304 $ 2,036,785 654.85% 695.22% 560.46% 507.55% 608.59%
$ 33,532,575 $ 34,034,011 $ 24,486,977 $ 18,856,232 $ 20,207,792
73.03% 72.94% 71.09% 76.86% 80.98%
38 17.a
Packet Pg. 361 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
San Bernardino County Employees' Retirement Association (SBCERA) Schedule of Plan Contributions
As of June 30, For the Last Ten Fiscal Years
2025 2024 2023 2022 2021
Actuarially Determined Contribution $ 1,571,187 $ 1,363,210 $ 1,321,109 $ 2,141,231 $ 2,029,361 Contribution in Relation to the Actuarially Determined
Contribution (1,456,246) (1,363,210) (1,321,109) (2,141,231) (2,009,357) Contribution Deficiency (Excess) $ 114,941 $ - $ - $ - $ 20,004 Covered-Employee Payroll 2,780,665 2,759,103 2,605,075 2,550,102 2,430,284 Contributions as a Percentage of Covered-Employee Payroll 52.37% 49.41% 50.71% 83.97% 82.68% Note to Schedule:
Valuation Date: June 30, 2024
Methods and assumptions used to determine contribution rates:
Actuarial Cost Method Entry age normal cost method
Amortization method Level percent of payroll
Remaining amortization period 20 years
Assets valuation method
Inflation 2.50% per year
Salary Increases
Investment rate of return 7.25%
Retirement age 53 years
Mortality Pub-2010 Amount-Weighted Above-Median Mortality Table
4.75% to 10.00%
Market value of assets less unrecognized returns from each of the last five years.
39 17.a
Packet Pg. 362 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the 2020 2019 2018 2017 2016
$ 1,760,542 $ 1,625,725 $ 1,704,307 $ 1,258,947 $ 1,407,336 (1,760,542) (1,625,725) (1,704,307) (1,258,947) (1,407,336) $ - $ - $ - $ - $ -
2,045,831 1,890,826 1,816,148 1,776,774 2,518,304
86.06% 85.98% 93.84% 70.86% 55.88%
40 17.a
Packet Pg. 363 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Schedule of Changes in the Net OPEB Liability and Related Ratios As of June 30, for the Last Ten Fiscal Years (1)
2025 2024 2023 2022
Measurement Date 6/30/2023 6/30/2023 6/30/2022 6/30/2021 Changes in Total OPEB Liability
Service cost $ 125,234 $ 525,547 $ 633,234 $ 573,551
Interest on the total OPEB liability 73,222 168,356 109,198 127,973 Plan experience - 20,115 - (705,883)
Changes in assumptions (57,724) (2,569,363) (1,437,109) 208,292 Changes in benefit terms - - - -
Benefit payments (82,543) (38,524) (45,608) (33,966)
Implicit subsidy credit - (25,693) - -
Net change in total OPEB liability 58,189 (1,919,562) (740,285) 169,967 Total OPEB liability - beginning 1,693,276 3,612,838 4,353,123 4,183,156 Total OPEB liability - ending (a) 1,751,465 1,693,276 3,612,838 4,353,123 Plan Fiduciary Net Position
Contribution - employer 82,543 64,217 45,608 33,966
Net investment income 38,009 20,854 (50,191) 80,880
Benefit payments (82,543) (38,524) (45,608) (33,966)
Implicit subsidy credit - (25,693) - -
Administrative expense (113) (162) (95) (111)
Other miscellaneous income/(expense) - 120 - -
Net change in plan fiduciary net position 37,896 20,812 (50,286) 80,769 Plan fiduciary net position - beginning 345,370 324,558 374,844 294,075 Plan fiduciary net position - ending (b) 383,266 345,370 324,558 374,844 Net OPEB Liability/(Assets) - ending (a) - (b) $ 1,368,199 $ 1,347,906 $ 3,288,280 $ 3,978,279 Plan fiduciary net position as a percentage of the total OPEB liability 21.88% 20.40% 8.98% 8.61% Covered-employee payroll $ 4,400,295 $ 4,272,131 $ 4,005,521 $ 3,624,974 Net OPEB liability as a percentage of covered-employee payroll 31.09% 31.55% 82.09% 109.75% Notes to Schedule:
Changes of Assumptions: The discount rate decreased from 4.10% to 4.12% in measurement period 2022-23. (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation.
Future years' information will be displayed up to 10 years as information becomes available. 41 17.a
Packet Pg. 364 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the 2021 2020 2019 2018
6/30/2020 6/30/2019 6/30/2018 6/30/2017
$ 544,393 $ 90,956 $ 86,320 $ 90,934
111,849 29,157 26,317 21,440
- 124,887 - -
72,167 52,128 13,302 (50,934)
- 2,355,457 - -
(19,568) (14,200) (12,072) (12,099)
- - - -
708,841 2,638,385 113,867 49,341
3,474,315 835,930 722,063 672,722
4,183,156 3,474,315 835,930 722,063
19,568 14,200 12,072 12,099
10,045 16,415 19,778 23,752
(19,568) (14,200) (12,072) (12,099)
- - - -
(139) 57 (461) (121)
- - - -
9,906 16,472 19,317 23,631
284,169 267,697 248,380 224,749
294,075 284,169 267,697 248,380
$ 3,889,081 $ 3,190,146 $ 568,233 $ 473,683
7.03% 8.18% 32.02% 34.40%
$ 2,045,831 $ 2,758,300 $ 2,611,101 $ 2,537,528
190.10% 115.66% 21.76% 18.67%
42 17.a
Packet Pg. 365 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
BARSTOW FIRE PROTECTION DISTRICT
Schedule of Contributions - OPEB
As of June 30, For the Last Ten Fiscal Years(1)
2025 2024 2023 2022
$ 217,472 $ 208,181 $ 408,795 $ 376,137
103,912 90,199 64,217 45,608
$ 113,560 $ 117,982 $ 344,578 $ 330,529
$ 4,650,100 $ 4,400,295 $ 4,272,131 $ 4,005,521
2.23% 2.05% 1.50% 1.14%
Notes to Schedule:
Methods and assumptions used to determine contributions:
Valuation Date 6/30/2023
Actuarial Cost Method
Amortization Valuation Method/Period
Asset Valuation Method Market value
Inflation 2.50%
Payroll Growth
Investment Rate of Return 5.10%
Healthcare cost-trend rates
Retirement Age
Mortality
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. *Actuarial methods and assumptions used to set the actuarially determined contribution for Fiscal Year 2025 were from the June 30, 2023 actuarial valuation.
MacLeod Watts Scale 2022 applied generationally
Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contributions Contribution Deficiency (Excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll Entry Age Normal
Level percent of pay
7.40% in 2025, fluctuating to 4.14% by 2076
45 to 65 years
3.00% per annum, in aggregate
43 17.a
Packet Pg. 366 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the 2021 2020 2019 2018
$ 366,074 $ 335,358 $ 64,738 $ 62,732
33,966 19,568 14,200 12,072
$ 332,108 $ 315,790 $ 50,538 $ 50,660
$ 3,624,974 $ 2,045,831 $ 2,758,300 $ 2,611,101
0.94% 0.96% 0.51% 0.46%
44 17.a
Packet Pg. 367 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Barstow Fire Protection District
City of Barstow, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and the general fund information of the Barstow Fire Protection District (hereafter, the “District”), a component unit of the City of Barstow, California (hereafter, the “City”), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated January 22, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the City’s internal control over the District’s financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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Packet Pg. 368 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the To the Board of Directors
Barstow Fire Protection District
City of Barstow, California
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
January 22, 2026
46 17.a
Packet Pg. 369 Attachment: City of Barstow Fire Protection District FS Final 1.28.26 (6294 : Barstow Fire Protection District Basic Financial Statements for the Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Audit
Doc ID: 6293
AGENDA ITEM
AGENDA MATTER:
ODESSA WATER DISTRICT BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2025
EXECUTIVE SUMMARY:
The Odessa Water District's Basic Financial Statements for the year ended June 30, 2025 will be presented to the City Council for the recommended action to receive and file the report.
DISCUSSION:
The Odessa Water District Basic Financial Statements for the year ended June 30, 2025, is herewith presented for the Board's review, discussion, and consideration to receive and file. These financial statements have been audited by the independent public accounting firm of Lance, Soll and Lunghard, LLP.
FISCAL IMPACT:
There is no financial impact for this agenda item.
RECOMMENDED ACTION:
Staff recommends the following action:
1. Receive and file the Odessa Water District’s Basic Financial Statements for the year ended June 30, 2025.
18 Packet Pg. 370
ODESSA WATER DISTRICT
A COMPONENT UNIT OF THE CITY OF BARSTOW, CALIFORNIA
FOR THE YEAR ENDED JUNE 30, 2025 BASIC FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’ REPORT
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Packet Pg. 371 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
A COMPONENT UNIT OF THE
CITY OF BARSTOW, CALIFORNIA
Basic Financial Statements and
Independent Auditors’ Report
For the Year Ended June 30, 2025
18.a
Packet Pg. 372 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Basic Financial Statements and
Independent Auditors’ Report
For the Year Ended June 30, 2025
Table of Contents
Page
Number
FINANCIAL SECTION
INDEPENDENT AUDITORS’ REPORT ................................................................................................................ 1 BASIC FINANCIAL STATEMENTS:
Government-Wide Financial Statements:
Statement of Net Position ......................................................................................................................... 6 Statement of Activities .............................................................................................................................. 7 Fund Financial Statements:
Balance Sheet .......................................................................................................................................... 9 Reconciliation of the Governmental Funds Balance Sheet
to the Government-Wide Statement of Net Position ........................................................................ 10 Statement of Revenues, Expenditures and Changes in Fund Balances .......................................................................................................................................... 11 Reconciliation of the Government Funds Statement of Revenues, Expenditures and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................................................... 12 Notes to Basic Financial Statements ............................................................................................................ 14
REQUIRED SUPPLEMENTARY INFORMATION
Budgetary Basis of Accounting ..................................................................................................................... 18 Schedule of Revenues, Expenditures and Changes in Fund Balances – Budget and Actual – General Fund..................................................................................................... 18 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards.................................................................. 20
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Packet Pg. 373 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June LSLCPAS.COM
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Odessa Water District
City of Barstow, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the governmental activities and the general fund information of the Odessa Water District, California (the “District”), a component unit of the City of Barstow, California (the “City”) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities and general fund information of the District as of June 30, 2025, and the respective changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the State Controller’s Minimum Audit Standards for California Special Districts.
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the District and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter
As discussed in Note 1, the financial statements of the Odessa Water District are intended to present the financial position, the changes in financial position, and, where applicable, cash flows of only that portion of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City that is attributable to the transactions of the District. They do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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Packet Pg. 374 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June To the Board of Directors
Odessa Water District
City of Barstow, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.
Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards, Government Auditing Standards, and the State Controller’s Minimum Audit Standards for California Special Districts will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the State Controller’s Minimum Audit Standards for California Special Districts, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements. x Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the District’s ability to continue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the budgetary comparison schedule for the General Fund presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2 18.a
Packet Pg. 375 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June To the Board of Directors
Odessa Water District
City of Barstow, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 22, 2026, on our consideration of the District’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering District’s internal control over financial reporting and compliance.
Irvine, California
January 22, 2026
3 18.a
Packet Pg. 376 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
BASIC FINANCIAL STATEMENTS
4 18.a
Packet Pg. 377 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
GOVERNMENT-WIDE FINANCIAL STATEMENTS
5 18.a
Packet Pg. 378 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Statement of Net Position
Governmental
Activities
Assets:
Capital assets not being depreciated $ 85,000
Total Assets 85,000
Liabilities:
Due to Barstow Successor Agency-
Total Liabilities-
Net Position:
Invested in capital assets 85,000
Unrestricted (105,143)
Total Net Position $ (20,143)
June 30, 2025
See Notes to Financial Statements.
6 18.a
Packet Pg. 379 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Statement of Activities
For the Year Ended June 30, 2025
Net (Expense)
Revenue and
Changes in Net
Position
Operating Capital
Charges for Contributions Contributions Governmental
Expenses Services and Grants and Grants Activities
Functions/Programs
Primary Government:
Governmental Activities:
Public works $ 4,330 $ - $ - $ - $ (4,330)
Total Governmental Activities 4,330 - - - (4,330)
Total Primary Government $ 4,330 $ - $ - $ - (4,330)
General Revenues:
Other 4,000
Total General Revenues, Contributions,
Extraordinary Items and Transfers 4,000
Change in Net Position (330)
Net Position at Beginning of Year (19,813)
Net Position at End of Year $ (20,143)
Program Revenues
See Notes to Financial Statements.
7 18.a
Packet Pg. 380 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
FUND FINANCIAL STATEMENTS
8 18.a
Packet Pg. 381 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Balance Sheet
Governmental Funds
General Fund
Liabilities and Fund Balances
Liabilities:
Due to Successor Agency$-
Total Liabilities-
Fund Balances:
Unassigned (105,143)
Total Fund Balances (105,143)
Total Liabilities and Fund Balances $ (105,143)
June 30, 2025
See Notes to Financial Statements.
9 18.a
Packet Pg. 382 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position
June 30, 2025
Fund balances of governmental funds $ (105,143)
Amounts reported for governmental activities in the statement of net position are different because:
Capital assets net of depreciation have not been included as financial resources in governmental fund activity. 85,000
Net Position of Governmental Activities $ (20,143)
See Notes to Financial Statements.
10 18.a
Packet Pg. 383 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Statement of Revenues,
Expenditures and Changes in Fund Balances
Governmental Funds
For the Year Ended June 30, 2025
General Fund
Revenues:
Miscellaneous 4,000
Total Revenues 4,000
Expenditures:
Public Works
Fees and Services $ 4,330
Total Expenditures 4,330
Net Change in Fund Balances (330)
Fund Balances
Beginning of year (104,813)
End of Year $ (105,143)
See Notes to Financial Statements.
11 18.a
Packet Pg. 384 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Reconciliation of the Statement of Revenues, Expenditures, And Changes in Fund Balances of Governmental Funds
to the Statement of Activities
For the Year Ended June 30, 2025
Net change in fund balances - total governmental funds (330) $ Change in Net Position of Governmental Activities $ (330) See Notes to Financial Statements.
12 18.a
Packet Pg. 385 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
NOTES TO BASIC FINANCIAL STATEMENTS
13 18.a
Packet Pg. 386 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The basic financial statements of the Odessa Water District (District) have been prepared in conformity with generally accepted accounting principles (GAAP) in the United States as applied to governmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant of the District’s accounting policies are described below:
A. Description of Reporting Entity
The Odessa Water District (District) was established on July 5, 1993, pursuant to legislation approved by the State in 1991 to provide water resources to the City. The City Council acts as the District’s governing board and exerts significant influence over its operations. The City is responsible for the District’s obligations.
The District is an integral part of the City of Barstow (City), and the accompanying basic financial statements are included as a component unit of the basic financial statements prepared by the City.
B. Basis of Accounting/Measurement Focus
The accounts of the District are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled.
Government - Wide Financial Statements - The District’s government-wide financial statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the District.
These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the District’s assets and liabilities, including capital assets and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.
Certain eliminations have been made as prescribed by GASB Statement No. 34 in regard to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities, which are presented as internal balances and eliminated in the total primary government column. The District had no interfund activities for the fiscal year ended June 30, 2025.
Governmental Fund Financial Statements - Governmental fund financial statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds. An accompanying schedule is presented to reconcile and explain the differences in net position as presented in these statements to the net position presented in the government-wide financial statements. The District has one major fund.
The following is the District’s major fund:
General Fund - This fund is the District’s primary operating fund. It accounts for all financial resources of the District. 14 18.a
Packet Pg. 387 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) All governmental funds are accounted for on a spending, or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances present increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period.
Revenues are recorded when received in cash, except that revenues subject to accrual (generally received within 90 days after year-end). The primary revenue sources, which have been treated as susceptible to accrual by the District, are property taxes, intergovernmental revenues, and other taxes and investment income. Expenditures are recorded in the accounting period in which the related fund liability is incurred except for claims, judgments, compensated absence, interest on long-term debt, which is recognized when paid.
Unavailable revenues arise when potential revenues do not meet both the “measurable” and “available” criteria for recognition in the current period. Unavailable revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods when both revenue recognition criteria are met or when the government has a legal claim to the resources, the unavailable revenue is removed from the combined balance sheet and revenue is recognized.
The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.
C. Cash and Cash Equivalents
The District considers cash on hand, demand deposits, and short-term investments with original maturities of three months or less from the date of acquisition to be cash and cash equivalents.
D. Investments
The District has adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 31 “Accounting and Financial Reporting for Certain Investments and External Pools”, which require governmental entities to report certain investments at fair value in the balance sheet and recognize the corresponding change in the fair value of investments in the year in which the change occurred. In accordance with GASB Statement No. 31, the District has adjusted certain investments to fair value (when material).
Investments, if any, are reported in the financial statements at fair value, unless fair value reasonably approximates cost, in which case cost is used.
E. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results could differ from those estimates. 15 18.a
Packet Pg. 388 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) F. Capital Assets
The District’s buildings, machinery, equipment, infrastructure and intangible assets with useful lives of more than two years are stated at historical cost or estimated historical cost and reported in the government-wide financial statements. Donated assets are stated at fair value on the date donated. The District updated its Capital Asset Policy on June 16, 2014 per Board approval. The District capitalizes its assets as follows:
Buildings and Building Improvement Costs of $50,000 or more Furniture Costs of $20,000 or more
Equipment Costs of $20,000 or more
Infrastructure Costs of $100,000 or more
The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets are depreciated using the straight-line method. When capital assets are disposed, the cost and applicable accumulated depreciation are removed from the respective accounts, and the resulting gain or loss is recorded in operations.
Amortization of assets acquired under capital leases is based on the shorter of the lease term or the estimated useful life of the asset and is included in depreciation and amortization. Water rights, which are intangible assets, are not amortized. Estimated useful lives, in years, for depreciable assets are as follows:
Buildings 50 years
Infrastructure and improvements other than buildings 10-100 years Machinery and equipment 3-15 years
G. Fund Balances
In the fund financial statements, fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
As prescribed by GASB Statement No. 54, governmental funds report fund balance in classifications based primarily on the extent to which the District is bound to honor constraints on the specific purposes for which amounts in the funds can be spent. As of June 30, 2025, fund balances for governmental funds are made up of the following:
Nonspendable Fund Balance includes amounts that are (a) not in spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash, for example: inventories, prepaid amounts, and long-term loans receivable. The District does not have any nonspendable fund balances.
Restricted Fund Balance includes amounts that can be spent only for the specific purposes stipulated by external resource providers, constitutionally or through enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers. The District does not have any restricted fund balances.
Committed Fund Balance includes amounts that can only be used for the specific purposes determined by a formal action of the District’s highest level of decision-making authority, the Board of Directors, by passage of an ordinance or resolution. Commitments may be changed or lifted only by the District taking the same formal action that imposed the constraint originally. The District does not have any committed fund balances.
Assigned Fund Balance comprises amounts intended to be used by the District for specific purposes that are neither restricted nor committed. The District has not designated any level of authority for assigning fund balance; therefore, the Board of Directors can assign fund balance. The District does not have any assigned fund balances. 16 18.a
Packet Pg. 389 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Notes to Financial Statements
For the Year Ended June 30, 2025
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Unassigned Fund Balance is the residual classification for the general fund and includes all amounts not contained in the other classifications. Unassigned amounts are technically available for any purpose. In other governmental funds, if expenditures exceed amounts restricted, committed, or assigned, the negative amount is reflected as negative unassigned fund balance.
In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance classifications, fund balance is generally depleted in the order of restricted, committed, assigned, and unassigned.
The District is required to recognize a liability for compensated absences when future payments for such absences have been earned by employees based on pay and salary rated in effect at the balance sheet date. For the District, this consists of accumulated sick leave, vacation and compensation time.
H. Net Position
In the government-wide financial statements, net position is classified in the following categories:
Invested in Capital Assets – This amount consists of capital assets net of accumulated depreciation and reduced by outstanding debt that attributed to the acquisition, construction, or improvement of the assets.
Unrestricted Net Position – This amount is the remaining net position that does not meet the definition of “net investment in capital assets” or “restricted net position.” NOTE 2: CAPITAL ASSETS
NOTE 3: AMOUNTS DUE TO BARSTOW SUCCESSOR AGENCY
In fiscal year 2001-2002, the Redevelopment Agency advanced funds to the Odessa Water District for the purchase of water rights in the amount of $85,000. The District leased the water rights in fiscal years 2004 and 2005 for $40,455. The District also incurred expenditures for $916 since fiscal year 2001-2002. As of June 30, 2025, the balance of $105,143 is the remaining amount due to the Redevelopment Agency.
The advances from the City and the Redevelopment Agency will ultimately be resolved with the leasing of the water rights, which will occur with future development.
NOTE 4: NEGATIVE FUND BALANCE AND NET POSITION
The District has an intangible asset, Water Rights of $85,000, but this is offset by amounts due to the RDA Successor Agency, in excess of the District’s assets.
Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Non-depreciable Assets:
Water rights $ 85,000 $ - $ - $ 85,000 - $
Total non-depreciable assets 85,000 - - - 85,000
Total capital assets, net $ 85,000 $ - $ - $ 85,000 - $ 17 18.a
Packet Pg. 390 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
REQUIRED SUPPLEMENTARY INFORMATION
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Packet Pg. 391 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
ODESSA WATER DISTRICT
Notes to Required Supplementary Information
For the Year Ended June 30, 2025
NOTE 1: BUDGETARY INFORMATION
A. Budgets and Budgetary Accounting
The District follows these procedures in establishing the budgets.
1. The annual budget is adopted by the City of Barstow City Council acting as the District’s Board of Directors after the holding of a hearing and provides for the general operation of the District. The operating budget includes proposed expenditures and the means of financing them.
2. The City Council approves total budgeted appropriations and any amendments to appropriations throughout the year.
The City manager is authorized to transfer budgeted amounts between departments. Actual expenditures may not exceed budgeted appropriations at the fund level.
3. Formal budgetary integration is employed as a management control devise during the year. Commitments for materials and services, such as purchase orders and contracts, are recorded as encumbrances to assist in controlling expenditures. Capital projects appropriations are an automatic supplemental appropriation for next year. All others lapse unless they are encumbered at year end or re-appropriated through the formal budget process.
4. Annual budgets are adopted for the General Fund on a basis substantially consistent with accounting principles generally accepted in the United States of America. Accordingly, actual revenues and expenditures can be compared with related budgeted amounts without any significant reconciling items.
B. Encumbrances
Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of moneys are recorded in order to reserve that portion of the applicable appropriation is employed as an extension of formal budgetary integration. Encumbrances outstanding at year-end are reported as restricted or committed fund balance since they do not constitute expenditures or liabilities and are added to the subsequent year’s adopted appropriations.
C. Budgetary Comparison Schedules
Budgetary Comparison Schedule, General Fund
Variance with
Final Budget
Actual Positive
Original Final Amounts (Negative)
REVEUES:
Miscellaneous $ - $ 4,000 $ 4,000 $ -
Total revenue - 4,000 4,000 -
EXPENDITURES:
General Government-public works 4,655 4,655 4,330 325
Total expenditures 4,655 4,655 4,330 325
Net change in fund balance $ (4,655) $ (655) (330) $ (325) FUND BALANCE:
Beginning of year (104,813)
End of year $ (105,143)
Budget Amounts
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Packet Pg. 392 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June
LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON
COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Odessa Water District
City of Barstow, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the governmental activities and general fund information of the Odessa Water District (the District), a component unit of the City of Barstow, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the District’s basic financial statements, and have issued our report thereon dated January 22, 2026.
Report on Internal Control over Financial Reporting
In planning and performing our audit of the financial statements, we considered the District’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the District’s internal control. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the District’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether District’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.
However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.
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Packet Pg. 393 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June To the Board of Directors
Odessa Water District
City of Barstow, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the District’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the District’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Irvine, California
January 22, 2026
21 18.a
Packet Pg. 394 Attachment: Odessa Water District FS Final 1-28-26 (6293 : Odessa Water District Basic Financial Statements for the Fiscal Year Ending June Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Administrative Services
Kimberlie A. Turner
Amendment
Doc ID: 6287
COUNCIL AGENDA ITEM
AGENDA MATTER:
AMENDMENT TO AGREEMENT WITH ROBERT HALF INC., FOR TEMPORARY IT STAFFING
SUPPORT
EXECUTIVE SUMMARY:
Staff is requesting approval to amend its existing agreement with Robert Half Inc., to increase the contract authority from $75,000 to $150,000. This increase is necessary to continue temporary staffing support for two (2) IT Technicians assisting with critical citywide IT projects. This action will ensure continuity of operations, timely project completion and adequate technical support during ongoing system implementations, the City wide Camera Project, expansion of wireless services, upgrades to Microsoft platforms, phone upgrades and the Tyler Munis Finance, HR and Planning conversions etc.
DISCUSSION:
FISCAL IMPACT:
Funding for this item will be supported through cost savings in the Fees and Services account resulting from recent changes in program management and project priorities. Adequate appropriations are available within the IT Fees and Services budget to cover the anticipated costs, and no additional appropriation is required at this time.
RECOMMENDED ACTION:
1. Staff recommends that the City Council authorizing the City Manager to amend the agreement with Robert Half Inc., to increase a not-to-exceed contract amount from $75,000 to $150,000 for temporary information technology staffing t services to support Barstow's citywide IT Projects; and
2. Authorize the City Manager to execute all necessary documents. 19 Packet Pg. 395
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Packet Pg. 396 Attachment: Robert Half Contract- F. Mendoza (6287 : Amendment to Robert Half Inc.,IT Support)
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Packet Pg. 397 Attachment: Robert Half Contract- F. Mendoza (6287 : Amendment to Robert Half Inc.,IT Support)
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Packet Pg. 398 Attachment: Robert Half Contract- F. Mendoza (6287 : Amendment to Robert Half Inc.,IT Support)
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Packet Pg. 399 Attachment: Robert Half Contract- F. Mendoza (6287 : Amendment to Robert Half Inc.,IT Support)
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Packet Pg. 400 Attachment: Robert Half Contract- F. Mendoza (6287 : Amendment to Robert Half Inc.,IT Support) IT Project Summary – February 2, 2026
1. Phone System Migration (Frontier → RingCentral)
Port date scheduled 2/26/26.
Frontier billing audit in progress (17–20 statements). Phase 1 device deployment underway; Parks & Rec sites pending. Estimated 60–80% cost savings upon completion.
2. Microsoft Enterprise Platform
EA Renewal: Awaiting Microsoft ROC response; may require reapplication. M365 AD/Exchange Migration: Budget completed; pending EA activation. OneDrive/SharePoint: Analysis pending until M365 migration is underway.
3. Police Department Technology Initiatives
MDC/MDT Replacement: Try-and-Buy rugged laptops in testing; long-term lease program under development (20-unit minimum).
Dispatch Call Recording: New CaptureTech server shipping; deployment expected March–April. Drone Program: Vendor demos completed; cost analysis pending. In-Car Cameras: Axon demos completed; cost analysis pending; current WatchGuard system is legacy/out-of-support.
Cellular Modems/Routers: Vendor demos in progress (T-Mobile, Verizon, Peplink, Digi, Cradlepoint). Homeland Security Grant ($17k): Eligibility review underway; quotes pending.
4. PD & FD Wireless Upgrade
All access points staged and tested.
Final testing and 30-day validation phase pending.
5. Tyler Technologies – EERP & ELP
Supporting contractors with secure VPN access.
On-site ELP implementation scheduled Feb 3–6.
Ongoing system updates, backups, and staff access coordination.
6. ESRI GIS Implementation
ITD access established; discovery phase ongoing.
Coordination with FD, Planning, Engineering.
Meeting scheduled with Town of Apple Valley GIS expert.
7. Granicus Platform Modernization
Peak & Swagit: Final testing underway; hybrid go-live targeted for early March 2026. GoDelivery: Implementation complete; awaiting City Manager approval for categories. Website Upgrade: Current site outdated; requirements delivered to Granicus. Awaiting sandbox demo and cost proposal.
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Packet Pg. 401 Attachment: IT Project Summary 2.2.25 (6287 : Amendment to Robert Half Inc.,IT Support)
8. Frontier Fiber Expansion
Site surveys completed for City Hall, PD, Harvey House. Reviewing franchise agreement and potential Frontier-funded buildout. All city sites submitted for fiber feasibility review. Critical for RingCentral redundancy; evaluating T-Mobile and Starlink as backup options.
9. Citywide Camera System Upgrade
Phase 1 (Feb–June 2026): 12-site upgrade, mobile units, 5-year maintenance plan. Phase 2 (FY27): Enterprise software + 19 servers.
Phase 1 within $750k budget; Phase 2 requires new appropriation. Meeting with Executive Admin pending for Council presentation.
10. Desktop/Laptop Replacement Program
Ongoing Windows 10 → 11 upgrades; some devices require full replacement. Reviewing updated Dell configurations and costs.
Developing long-term leasing strategy for predictable refresh cycles.
11. Cora Harper Community Center – IT Rebuild
Cooling system renovation must finish before IT can deploy new network, IDF, cameras, and infrastructure. Cost analysis pending.
12. Infrastructure & Security
Continuous wireless, firewall, and switch upgrades.
Staff training and cross-training ongoing.
Secureworks Red Team Test scheduled FY26 Q3–Q4 (first internal penetration test).
13. .GOV Domain Transition (AB 1637 Compliance)
Registration completed; domain added to Cloudflare.
Full transition planned during M365 phases (ETA FY26 Q4–FY27 Q2). Compliance deadline: January 1, 2029.
14. Website Optimization (Ongoing)
Fixing links, UI issues, and content across departments.
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Packet Pg. 402 Attachment: IT Project Summary 2.2.25 (6287 : Amendment to Robert Half Inc.,IT Support) © Robert Half Inc., 2025. All rights reserved. Robert Half Inc. is an Equal Opportunity Employer M/F/D/V
ROBERT HALF STATEMENT OF WORK
This Robert Half Statement of Work RH (“SOW”), effective as of October 31, 2025, is entered into by and between City of Barstow (“Client”) and Robert Half Inc., through its technology practice group (“RH”).
1. Scope of Engagement. RH will assign one or more individual(s) to Client to assist Client with its completion of the following:
Organizes, supervises, coordinates, and performs technical work in the maintenance of computer hardware and software. This position leads a team of technical staff and is responsible for the entire city, including wastewater, fire, police, and information technology infrastructure. This position oversees complex projects and implementations.
2. Professionals. RH will assign the following individual(s) (each a “Professional”) to Client for this engagement:
Name of Professional Hourly Bill Rate Estimated Start Date Estimated End Date Ruven Garcia $90 11/19/2025 01/23/2026
In no event shall the total compensation and costs payable to Consultant under this Agreement exceed the sum of Seventy-Five Thousand Dollars ($75,000) (the “Not-to-Exceed Amount”) unless specifically approved in advance and in writing by City. Notwithstanding anything to the contrary in this Agreement, RH may at any time, in its sole discretion, discontinue performance of the services once the Not-to-Exceed Amount has been attained (even if RH continued to provide services after the Not-to-Exceed Amount was reached)
3. Contact Information.
Client Representative RH Representative
Name: Kimberlie Turner Name: Louis Sibille
E-mail:[email protected] E-Mail: [email protected] Phone: (760) 255-5115 Phone: (909) 566-0828
Address: 220 E. Mountain View St., Barstow, CA 92311 Address: 3633 Inland Empire Blvd #525, Ontario, CA 91764
4. Termination. Either party may terminate this SOW at any time upon thirty (30) days’ prior written notice to the other party.
5. General Conditions of Engagement. RH assigns the Professional(s) to Client pursuant to the General Conditions of Engagement attached hereto as Exhibit A and incorporated herein by reference.
Agreed to:
City of Barstow
Agreed to:
Robert Half Inc.
By
Authorized signature
By
Authorized signature
Name (type or print): Name (type or print): Jon Swift
Date: Date: 2/4/2026
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Packet Pg. 403 Attachment: City of Barstow - SOW - Ruven Garcia - 11.10.2025 - RH Signed (6287 : Amendment to Robert Half Inc.,IT Support) © Robert Half Inc., 2025. All rights reserved. Robert Half Inc. is an Equal Opportunity Employer M/F/D/V
Exhibit A
General Conditions of Engagement
Required Screenings.
If Client requires RH to perform background checks or other placement screenings of the Professionals, Client agrees to notify RH prior to the start of Services under this SOW. RH will conduct such checks or screenings only if they are described in a signed, written amendment to this SOW. If Client requests a copy of the results of any checks conducted on RH’s Professionals, Client agrees to keep such results strictly confidential and to use such results in accordance with applicable laws and solely for employment purposes.
Scope of Assignment.
Client shall supervise the Professionals. Client will not permit or require a Professional (i) to perform services outside of the scope of the Professional’s assignment; (ii) to sign contracts or statements; (iii) to make any final decisions regarding system design, software development or the acquisition of hardware or software; (iv) to make any management decisions; or (v) to use computers or other electronic devices, software, services, tools, e-mail accounts or network equipment owned or licensed by the Professional.
Cash Handling and Other Financial Transactions and Activities.
If Client permits or allows a Professional to sign, endorse, wire, transport or otherwise convey cash, securities, checks, or any negotiable instruments or valuables, or conduct financial transactions or other related activities, Client accepts sole responsibility for all claims, demands and liability that may arise from permitting these activities. Client represents and warrants that to the extent Client permits or allows a Professional to engage in the activities described in this paragraph, Client will not permit or allow a Professional to handle more than (i) $1,000 per day if Client is a non-profit entity, or (ii) $25,000 per day if Client is a for-profit entity.
Workplace Safety.
Client agrees that Client has full responsibility for: (i) providing safe working conditions as required by law, including compliance with all public health and occupational safety regulations and guidelines applicable to Client’s business, and (ii) ensuring that safety plans exist for, and safety related training is provided to, Professionals working on Client’s premises. To ensure the safety of potentially vulnerable individuals on Client’s premises, Client agrees not to permit Professionals to have unsupervised or unmonitored contact with (1) minors or (2) adults who are under Client’s care, custody or supervision because of mental health impairments. If any assignment under this SOW is for work to be performed under a government contract or subcontract, Client will notify RH immediately of any obligations in the government contract or subcontract relating to wages.
Operation of Vehicles and Equipment.
RH does not authorize a Professional to operate machinery (other than office machines) or vehicles. If Client wishes to permit a Professional to drive for business purposes, Client accepts sole responsibility for all liability, damages, injuries or other claims that may arise or be incurred as a result of such driving. If Client requires a Professional to drive a vehicle owned by Client or by a Client employee, Client agrees to maintain such vehicle in good working condition and maintain all necessary and appropriate insurance for the operation of such vehicle. Under no circumstances will Client permit a Professional to: make bank deposits; carry cash in excess of $100, negotiable instruments or other valuables while driving; or have passengers in the vehicle. It is agreed that Client accepts full responsibility for, and that RH does not maintain insurance to cover any injury, damage, or loss that may result from Client’s failure to comply with the foregoing.
Remote Work.
Client may request that a Professional provide services remotely (i.e., from a location other than Client’s or Client’s customer’s premises) using a laptop and/or other computer or telecommunications equipment provided by Client or RH (collectively, the “Equipment”). In such case, Client acknowledges and agrees that RH shall have no control over, and Client shall be solely responsible for, (i) the logical and physical performance, reliability and security of the Equipment and related devices, network accessibility and availability, software, services, tools and e-mail accounts (collectively, “Computer Systems”) used by the Professional, and (ii) the security or integrity of the data and other information stored therein or transmitted thereby. Moreover, Client must not permit a Professional to save or store any Client files or other data on the Computer Systems provided by RH (including, but not limited to, any virtual desktop infrastructure solution). Client agrees that RH shall not be liable for any loss, damage, expense, harm, business interruption or inconvenience resulting from the use of such Computer Systems.
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Packet Pg. 404 Attachment: City of Barstow - SOW - Ruven Garcia - 11.10.2025 - RH Signed (6287 : Amendment to Robert Half Inc.,IT Support) © Robert Half Inc., 2025. All rights reserved. Robert Half Inc. is an Equal Opportunity Employer M/F/D/V
Claims.
Each party (the “Indemnitor”) hereby agrees to waive all claims against the other party and its subsidiaries, divisions and affiliates, including their respective employees, officers and directors (individually and together, the “Indemnitee”) and to defend and indemnify the Indemnitee against any claim, demand or liability arising from the Indemnitor’s failure to comply with the terms of this Agreement, including, but not limited to, claims arising from any damage to goods, materials or other items. the Indemnitee agrees that it is responsible for reporting any claim to Indemnitor in writing during or within ninety (90) days after the termination of the applicable assignment. RH will not be responsible for any claim related to the engagement, including, but not limited to, any Services performed during such engagement, unless the Indemnitee has reported such claim in writing to the Indemnitor within ninety (90) days after termination of the applicable assignment.
Co-employment.
Robert Half shall be providing staffing services to Client and remains the employer of all Robert Half employees, including the Professional and shall perform or be responsible for the following: a) Recruiting, screening, interviewing and hiring employees in accordance with all applicable state and federal laws; b) Establishing, calculating, paying wages and overtime, and providing any benefits to employees that Robert Half offers to them; c) Paying or withholding all required payroll taxes and insurance premiums for programs that Robert Half is required by law to provide to its employees; d) Providing workers’ compensation benefits or coverage for its employees in amounts at least equal to what is required by law; e) Fulfilling the employer’s obligations for unemployment compensation; f) Making legally required employment law disclosures (wage-hour posters, etc.) to its employees; g) Exercising human resources (i.e., non-operational) supervision of its employees (i.e., orienting, reassigning, counseling, disciplining, and discharging employees in accordance with the law); h) Maintaining personnel and payroll records; and i) Requiring its employees to acknowledge that they will have no right to participate in any employee benefit plans of Client. Under no circumstances shall the Professional look to the City as its employer. The Professional shall not be entitled to any benefits from City. City makes no representation as to the effect of this independent contractor relationship on Professional’s previously earned California Public Employees Retirement System (“CalPERS”) retirement benefits.
Confidentiality.
Professionals will execute any confidentiality agreement that Client may require. Client is responsible for obtaining the Professional’s signature. Client agrees to hold in confidence the identity of any Professional and the Professional’s resume, social security number and other legally protected personal information, and Client agrees to implement and maintain reasonable security procedures and practices to protect such information from unauthorized access, use, modification or disclosure.
Limitation on Liability.
Circumstances may arise where, because of a default on RH’s part or other liability, Client is entitled to recover damages from RH.
Regardless of the basis on which Client is entitled to claim damages from RH (including fundamental breach, negligence, misrepresentation or other contract or tort claim), RH’s liability, if any, will, in the aggregate for all claims, causes of action or damages, be limited to any actual direct damages up to an amount equal to the fees actually paid to RH for the services that are the subject of the claim. Under no circumstances is RH liable for any special, incidental, exemplary, indirect, lost profits, or consequential damages (including, but not limited to, lost business, revenue, goodwill, or anticipated savings), even if informed of the possibility. It is understood that Client is responsible for implementing and maintaining usual, customary and appropriate internal accounting procedures and controls, internal controls and other appropriate procedures and controls (including information technology, proprietary information, creative designs and trade secret safeguards) for Client, and RH shall not be responsible for any losses, liabilities or claims arising from the lack of such controls or procedures.
Employment Taxes, Withholdings and Insurance.
Each party will maintain workers' compensation insurance and commercial liability insurance. RH will be responsible, to the extent applicable, for any workers' compensation insurance, federal, state and local withholding and unemployment taxes, social security, state disability insurance or other payroll charges for the Professionals. RH reserves the right to re-assign any Professional.
Guarantee.
RH guarantees Client’s satisfaction with the services of each Professional by extending to Client a five (5) day (40 hours) guarantee period. If, for any reason, Client is dissatisfied with a Professional, RH will not charge for the first forty (40) hours worked during the applicable guarantee period, provided that Client allows RH to replace the Professional and Client contacts RH regarding its dissatisfaction before the end of the applicable guarantee period. Unless Client contacts RH before the end of the applicable guarantee period, Client agrees that the Professional is satisfactory. RH MAKES NO OTHER EXPRESS OR IMPLIED WARRANTIES
REGARDING THE SERVICES, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTY OF QUALITY, PERFORMANCE,
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Packet Pg. 405 Attachment: City of Barstow - SOW - Ruven Garcia - 11.10.2025 - RH Signed (6287 : Amendment to Robert Half Inc.,IT Support) © Robert Half Inc., 2025. All rights reserved. Robert Half Inc. is an Equal Opportunity Employer M/F/D/V
MERCHANTABILITY OR FITNESS FOR ANY PURPOSE.
Services Provided on a Time and Materials Basis.
Notwithstanding any language to the contrary in this SOW with regard to fixed-price, deliverables or acceptance of deliverables, RH shall be compensated on an hourly basis only. RH is not providing deliverables under this SOW.
If, for any reason, any Professional is unable to complete the Professional’s assignment, RH will endeavor to provide a suitable replacement, subject to Client’s approval. If RH is unable to identify a replacement acceptable to Client, this SOW will be deemed to have automatically ended with respect to such Professional, except that Client shall remain liable to RH for services provided by such Professional prior to the Professional’s termination.
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Packet Pg. 406 Attachment: City of Barstow - SOW - Ruven Garcia - 11.10.2025 - RH Signed (6287 : Amendment to Robert Half Inc.,IT Support) © Robert Half Inc., 2025. All rights reserved. Robert Half Inc. is an Equal Opportunity Employer M/F/D/V
Payment Terms.
Each Professional will present a time sheet or an electronic time record to Client’s or Client’s representative for verification and approval at the end of each week. RH will bill Client weekly for the total hours worked. RH’s invoices are due upon receipt, including applicable sales and service taxes all of which are payable by Client. In the event that Client fails to pay the invoices when due, Client agrees to pay all of RH’s costs of collection, including reasonable attorneys' fees, whether or not legal action is initiated. Additionally, RH may, at its option, charge interest on any overdue amounts at a rate of the lesser of 1½% per month or the highest rate allowed by applicable law from the date the amount first became due. RH may charge Client a technology fee for the provision of equipment or technology, if Client requests that our professional use equipment or technology provided by us. RH may also increase its rates forthe services provided underthis SOW to reflectincreases in RH’s own costs of doing business, including costs associated with higher wages for workers and/or related tax, benefit and other costs. RH will provide written or verbal notice of the technology fees and/or increase in rates for the services, and such increase will be prospective, starting as of the effective date RH specifies.
Overtime.
If applicable, overtime will be billed at 1.50 times the normal billing rate. Federal law defines overtime as hours in excess of 40 hours per week, state laws vary. If state law requires double time pay,the double time hours will be billed at 2.00 times the normal billing rate.
Expenses.
Travel and/or out-of-pocket expenses incurred by a Professional shall be reimbursed by Client immediately upon Client’s receipt of invoice.
Hiring the Professional.
After Client evaluates the performance and potential of a Professional on the job, Client may wish to employ this person directly.
In such event, Client agrees to pay a conversion fee. The conversion fee is payable if Client hires the Professional, regardless of the employment classification, on either a full-time, temporary (including temporary assignments through another agency) or consulting basis within twelve months after the last day of the Professional’s assignment. Client also agrees to pay a conversion fee if a Professional is hired by (i) a subsidiary or other related company or business as a result of Client’s referral of the Professional to that company or (ii) one of Client’s customers as a result of the Professional providing services to that customer.
The conversion fee will be owed and invoiced upon Client’s hiring of the Professional, and payment is due upon receipt of the invoice. The same calculation will be used if Client converts the Professional on a part-time basis using the full-time equivalent salary.
The conversion fee will equal a percentage ofthe Professional’s aggregate annual compensation in accordance with the conversion schedule below:
Hours Billed and Paid Conversion Rate
0-172 hours 25 percent
173-350 hours 22 percent
351-520 hours 20 percent
521-690 hours 15 percent
690-850 hours 10 percent
861-1040 hours 8 percent
1041 hours or more 5 percent
Miscellaneous.
For a change to be valid, both parties must sign it. Additional or different terms in any written communication from Client (such as a purchase order) are void. Any terms ofthis SOW which by their nature extend beyond the termination ofthis SOW willremain in effect untilfulfilled, including any payment obligations, and apply to each party’s respective successors and assignees. This SOW is the complete agreement regarding the engagement(s) identified on the first page of this SOW and replaces any prior oral or written communications between RH and Client regarding such engagement(s). Any additional or different terms proposed by Client, including terms within a purchase order, shall not be binding to modify this SOW.
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Packet Pg. 407 Attachment: City of Barstow - SOW - Ruven Garcia - 11.10.2025 - RH Signed (6287 : Amendment to Robert Half Inc.,IT Support) IT Project Summary – February 12, 2026
1. Phone System Migration (Frontier → RingCentral)
Port date scheduled for 2/26/26.
Frontier billing audit in progress (17–20 statements). Phase 1 device deployment underway; Parks & Rec sites pending. Estimated 60–80% cost savings upon completion.
2. Microsoft Enterprise Platform
EA Renewal: Awaiting Microsoft ROC response; may require reapplication. M365 AD/Exchange Migration: Budget completed; pending EA activation. OneDrive/SharePoint: Analysis pending until M365 migration is underway.
3. Police Department Technology Initiatives
MDC/MDT Replacement: Try-and-Buy rugged laptops in testing; long-term lease program under development (20-unit minimum).
Dispatch Call Recording: New CaptureTech server shipping; deployment expected March–April. Drone Program: Vendor demos completed; cost analysis pending. In-Car Cameras: Axon demos completed; cost analysis pending; current WatchGuard system is legacy/out-of-support.
Cellular Modems/Routers: Vendor demos in progress (T-Mobile, Verizon, Peplink, Digi, Cradlepoint). Homeland Security Grant ($17k): Eligibility review underway; quotes pending.
4. PD & FD Wireless Upgrade
All access points staged and tested.
Final testing and 30-day validation phase pending.
5. Tyler Technologies – EERP & ELP
Supporting contractors with secure VPN access.
On-site ELP implementation scheduled ongoing
Ongoing system updates, backups, and staff access coordination.
6. ESRI GIS Implementation
ITD access established; discovery phase ongoing.
Coordination with FD, Planning, Engineering.
7. Granicus Platform Modernization
Peak & Swagit: Final testing underway; hybrid go-live targeted for early March 2026. GoDelivery: Implementation complete; awaiting City Manager approval for categories. Website Upgrade: Current site outdated; requirements delivered to Granicus.
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Packet Pg. 408 Attachment: IT Project Summary 2.12.26 (6287 : Amendment to Robert Half Inc.,IT Support)
8. Frontier Fiber Expansion
Site surveys completed for City Hall, PD, Harvey House. Reviewing franchise agreement and potential Frontier-funded buildout. All city sites submitted for fiber feasibility review.
9. Citywide Camera System Upgrade
Phase 1 (Feb–June 2026): 12-site upgrade, mobile units, 5-year maintenance plan. Phase 2 (FY27): Enterprise software + 19 servers.
Phase 1 within $750k budget; Phase 2 requires new appropriation. Meeting with Executive Admin pending for Council presentation.
10. Desktop/Laptop Replacement Program
Ongoing Windows 10 → 11 upgrades; some devices require full replacement. Reviewing updated Dell configurations and costs.
Developing long-term leasing strategy for predictable refresh cycles.
11. Cora Harper Community Center – IT Rebuild
Cooling system renovation must finish before IT can deploy new network, IDF, cameras, and infrastructure.
12. Infrastructure & Security
Continuous wireless, firewall, and switch upgrades.
Staff training and cross-training ongoing.
Secureworks Red Team Test scheduled FY26 Q3–Q4 (first internal penetration test).
13. .GOV Domain Transition (AB 1637 Compliance)
Registration completed; domain added to Cloudflare.
Full transition planned during M365 phases (ETA FY26 Q4–FY27 Q2). Compliance deadline: January 1, 2029.
14. Website Optimization (Ongoing)
Fixing links, UI issues, and content across departments.
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Packet Pg. 409 Attachment: IT Project Summary 2.12.26 (6287 : Amendment to Robert Half Inc.,IT Support) Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
AGENDA MATTER:
CITY OF BARSTOW LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2026 (“2026 COPS”) EXECUTIVE SUMMARY:
On January 20, 2026, the City Council held a workshop to discuss the conditions of the City’s streets and roads as well as priority projects. The City Council considered Local Measure I Transportation Sales Tax financing options regarding implementation, structure, and potential impacts on future Measure I funds available for maintenance. Ultimately, the City Council gave direction to staff to proceed with pursuing a financing secured by Local Measure I funds that would maximize proceeds for the FY25-26 Street Rehabilitation Project (“Project”).
On February 3, 2026, the City Council awarded the Project to Sully Miller Contracting, approved an overall Project budget of $16,323,788, and approved a Task Order with Merrell Johnson Engineering for construction management, surveying, and inspection services in the amount of $1,598,2920.
Given the size and scope of the Project, funding it on a pay-go basis (i.e., waiting to construct the Project until enough Measure I funds-which currently sunset in 2040-are accumulated) would severely delay the Project and likely result in much higher construction costs due to inflation.
Staff and the financing team are now ready to present, for consideration by the City Council, the execution and delivery of City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026 (“2026 COPS”) to generate approximately $12.5 million in proceeds to fund a portion of the Project. Fiscal Year 2025-26 Measure I receipts will not be leveraged for the financing, and the City can use these receipts toward the Project or keep them in the Measure I fund balance for future uses. Moneys advanced from the General Fund, if any, between now and the delivery of the 2026 COPS will be reimbursed from 2026 COP proceeds.
Staff recommends that the City Council adopt the proposed resolution of the City Council of the City of Barstow approving the execution and delivery of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates Of Participation, Series 2026 in an aggregate principal amount of not to exceed $13,000,000 authorizing the execution and delivery of a Trust Agreement, an Installment Sale Agreement, and a Certificate Purchase Agreement and authorizing necessary actions and execution of other necessary documents in connection therewith.
Council Members will receive a presentation on debt issuance disclosure training.
DISCUSSION:
Staff and consultants have had an initial discussion with the San Bernardino County Transportation 20 Packet Pg. 410
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02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
Authority (“SBCTA”) and expects to receive a letter from SBCTA acknowledging that each of the projects in Exhibit A of the proposed resolution is eligible to be funded with the City’s local share of Measure I funds. The projects described in Exhibit A of the resolution include projects in addition to the FY25-26 Street Rehabilitation Project in order to obtain broader project approval from SBCTA and to provide flexibility to the City. Barring unforeseen circumstances or unless otherwise directed by City Council, 2026 COP proceeds will be directed to the FY25-26 Street Rehabilitation Project.
If approved by the City Council, the City of Barstow would authorize the preparation, sale and delivery of the 2026 COPS in an aggregate principal amount not to exceed $13,000,000. Debt service on the 2026 COPS would be repaid with Installment Sale Payments made by the City (to purchase the Project over time) to the Public Property Financing Corporation of California (“PPFCC”), a nonprofit public benefit corporation serving as the counterparty to the Installment Sale Agreement. Measure I receipts, as and when received by the City, will be applied to make the Installment Sale Payments. The PPFCC would assign its right to receive the Instalment Sale Payments to U.S. Bank Trust Company, National Association, (the “Trustee”) under the Trust Agreement.
Not all the projected local share of Measure I funds would be consumed by debt service. For the 2026 COPS to be marketable to investors, the financing would be structured with 1.5x debt service coverage.
For example, the City received $1,712,469 in local share of Measure I funds in Fiscal Year 2024-25.
Assuming no growth or decline in revenues, the maximum annual debt service, through a final maturity of 2040, would be approximately $1.14 million to achieve 1.5x debt service coverage ($1.71 million/$1.14 million). Therefore, an estimated $570,000 of local share Measure I funds would remain available each year for other qualified Measure I expenditures, including maintenance. In the current market, leveraging Measure I receipts from Fiscal Year 2026-27 through Fiscal Year 2039-40, approximately $12.5 million in project proceeds could be generated with this type of financing structure.
The proposed resolution approves the financing plan outlined above, appoints professionals to assist with the financing, authorizes reimbursement of funds spent on the Project with 2026 COP proceeds, and approves all documents and actions needed to authorize the execution and delivery of the 2026 COPs, including the following substantially final form financing documents together with any changes or additions deemed advisable and approved by an Authorized City Representative:
Installment Sale Agreement: The Installment Sale Agreement between the City and the PPFCC provides for the PPFCC to finance the costs of and transfer the completed financed portion of the Project to the City, in consideration of which the City will obligate itself to make Installment Sale Payments for the Project to the PPFCC in the amounts and on the dates set forth in the Installment Sale Agreement. The Installment Sale Payments will be due on dates and in amounts sufficient to pay scheduled debt service on the 2026 COPS. Trust Agreement: The City, the PPFCC, and the Trustee will enter into the Trust Agreement, pursuant to which the PPFCC will assign to the Trustee its right to receive the Installment Sale Payments and pursuant to which the Trustee will execute and deliver the 2026 COPS, evidencing fractional interests in the Installment Sale Payments. The Trust Agreement defines the terms and 20 Packet Pg. 411
Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
conditions of the 2026 COPS, including collection and application of the Installment Sale Payments under the Installment Sale Agreement, prepayment provisions, investment and management of funds and accounts, and the rights and obligations of the City, the PPFCC, the municipal bond insurer, if any, the Trustee, and the Certificate holders. Certificate Purchase Agreement: The Certificate Purchase Agreement between the City and the Underwriter (Stifel, Nicolaus & Company, Incorporated), defines the terms and conditions under which the 2026 COPs will be purchased by the underwriter.
The proposed resolution also sets forth certain not-to-exceed parameters for the 2026 COPS, including a principal amount not exceeding $13 million, a true interest cost not exceeding 4.0%, and an underwriter’s discount not exceeding 0.8% of the principal amount of the 2026 COPS. The 2026 COP proceeds in excess of estimated project proceeds cover costs of issuance, including but not limited to consultant fees, underwriter’s discount, counterparty’s fee, trustee’s fee, credit rating, bond insurance, reserve surety policy, and printing. The table below summarizes the finance charge, project proceeds, average annual debt service, and total debt service amount assuming the 2026 COPS were delivered at a true interest cost of 4.00% (instead of current market rates as described in the Good Faith Estimates see both in the Fiscal Impact section).
If the City Council adopts the proposed resolution authorizing the Trustee to execute and deliver the 2026 COPS, the financing team would proceed with developing the Preliminary Official Statement (the offering document for the marketing and sale of the 2026 COPS) and the Continuing Disclosure Certificate (an agreement that would obligate the City to continue providing certain information to certificate holders) as well as seeking a credit rating and bond insurance/surety policy. Staff would then bring the Preliminary Official Statement and Continuing Disclosure Certificate for approval by the City Council on April 7, 2026.
The 2026 COPS are anticipated to be sold and delivered in May 2026, at which time the City would receive the project proceeds.
Council Members will receive a presentation on debt issuance disclosure training.
FISCAL IMPACT:
Pursuant to Government Code Section 5852.1, good faith estimates (obtained from the underwriter or the municipal advisor) must be disclosed at a public meeting before the authorization of the 2026 COPS.
Required good faith estimates are provided in the resolution; the table below summarizes those estimates and includes additional information.
20 Packet Pg. 412
Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
Finance
Sydnie Harris
Bond
Doc ID: 6299
AGENDA ITEM
* These are good faith estimates only and are based on market rates as of February 4, 2026. Final results will likely differ based on market conditions as of the actual sale date and other factors. However, for the financing to proceed, the not-to-exceed parameters described in the previous section must be met.
RECOMMENDED ACTION:
Adopt Resolution No. 5272-2026 of the City Council of the City of Barstow approving the execution and delivery of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates Of Participation, Series 2026 in an aggregate principal amount of not to exceed $13,000,000 authorizing the execution and delivery of a Trust Agreement, an Installment Sale Agreement, and a Certificate Purchase Agreement and authorizing necessary actions and execution of other necessary documents in connection therewith.
ATTACHMENTS:
1. City Resolution No. 5272-2026
2. Form of Installment Sale Agreement
3. Form of Trust Agreement
4. Form of Certificate Purchase Agreement
20 Packet Pg. 413
Stradling
Draft of 2/9/2026
4917-0149-8253v3/022217-0004
TRUST AGREEMENT
among
PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA,
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
and
CITY OF BARSTOW
Dated as of May 1, 2026
CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE
CERTIFICATES OF PARTICIPATION, SERIES 2026
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Packet Pg. 414 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue
TABLE OF CONTENTS
Page
i
4917-0149-8253v3/022217-0004
ARTICLE I DEFINITIONS; EQUAL SECURITY..................................................................... 2 Section 1.01 Definitions................................................................................................................ 2 Section 1.02 Equal Security........................................................................................................ 11 ARTICLE II THE CERTIFICATES ........................................................................................... 11 Section 2.01 Preparation and Purpose of Certificates................................................................. 11 Section 2.02 Terms of the Certificates........................................................................................ 12 Section 2.03 Form of Certificates............................................................................................... 13 Section 2.04 Execution of Certificates........................................................................................ 13 Section 2.05 Registration Books................................................................................................. 13 Section 2.06 Transfer and Exchange of Certificates................................................................... 13 Section 2.07 Book-Entry System................................................................................................ 14 Section 2.08 Certificates Mutilated, Lost, Destroyed or Stolen.................................................. 16 Section 2.09 Temporary Certificates .......................................................................................... 16 Section 2.10 Prepayment of Certificates..................................................................................... 17 Section 2.11 Establishment of Funds and Accounts; Deposit of Proceeds................................. 19 Section 2.12 Validity of Certificates........................................................................................... 20 ARTICLE III REVENUES........................................................................................................... 20 Section 3.01 Pledge of Revenues; Assignment........................................................................... 20 Section 3.02 Receipt and Deposit of Revenues in the Revenue Fund ........................................ 21 Section 3.03 Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund ....................................................................................................................... 21 Section 3.04 Deposit and Investments of Money in Accounts and Funds.................................. 23 Section 3.05 [Reserve Policy Payment and Reimbursement Provisions .................................... 24 ARTICLE IV COVENANTS........................................................................................................ 25 Section 4.01 Compliance with Agreement ................................................................................. 25 Section 4.02 Amendment of Agreement..................................................................................... 25 Section 4.03 Against Encumbrances........................................................................................... 26 Section 4.04 Punctual Payment................................................................................................... 26 Section 4.05 Extension of Payment of Certificates..................................................................... 26 Section 4.06 Rebate Fund ........................................................................................................... 26 Section 4.07 Accounting Records and Reports........................................................................... 28 Section 4.08 Observance of Laws and Regulations.................................................................... 28 Section 4.09 Further Assurances................................................................................................. 28 Section 4.10 Recordation and Filing........................................................................................... 28 Section 4.11 Acquisition of the Projects..................................................................................... 29 ARTICLE V THE TRUSTEE...................................................................................................... 29 Section 5.01 The Trustee ............................................................................................................ 29 Section 5.02 Liability of Trustee ................................................................................................ 30 ARTICLE VI AMENDMENT OF THE TRUST AGREEMENT................................................ 33 Section 6.01 Amendment of the Trust Agreement ..................................................................... 33 Section 6.02 Disqualified Certificates ........................................................................................ 34 Section 6.03 Endorsement or Replacement of Certificates After Amendment .......................... 34 Section 6.04 Amendment by Mutual Consent ............................................................................ 34 Section 6.05 Information to Rating Agency ............................................................................... 34 ARTICLE VII EVENTS OF DEFAULT AND REMEDIES OF OWNERS................................. 34 Section 7.01 Events of Default ................................................................................................... 34
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Packet Pg. 415 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue
TABLE OF CONTENTS
(Continued)
Page
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4917-0149-8253v3/022217-0004
Section 7.02 Application of Funds Upon Acceleration of Agreement ....................................... 35 Section 7.03 Other Remedies of the Trustee............................................................................... 35 Section 7.04 Non-Waiver............................................................................................................ 35 Section 7.05 Actions by Trustee as Attorney-in-Fact................................................................. 36 Section 7.06 Remedies Not Exclusive ........................................................................................ 36 Section 7.07 Limitation on Owners’ Right to Sue...................................................................... 36 Section 7.08 Limited Liability of the City .................................................................................. 37 Section 7.09 Limited Liability of the Corporation...................................................................... 37 ARTICLE VIII DEFEASANCE...................................................................................................... 37 Section 8.01 Discharge of Certificates........................................................................................ 37 Section 8.02 Unclaimed Money.................................................................................................. 38 ARTICLE IX [PROVISIONS RELATED TO THE INSURER AND THE INSURANCE POLICY]................................................................................................................ 38 Section 9.01 [General Provisions................................................................................................ 38 Section 9.02 [Claims Upon the Insurance Policy and Payments by and to the Insurer.............. 38 ARTICLE X MISCELLANEOUS............................................................................................... 39 Section 10.01 Limited Liability of Corporation and City............................................................. 39 Section 10.02 Benefits of the Trust Agreement Limited to Parties.............................................. 39 Section 10.03 Successor Is Deemed Included In All References To Predecessor........................ 39 Section 10.04 Execution of Documents by Owners ..................................................................... 39 Section 10.05 Acquisition of Certificates by Corporation............................................................ 40 Section 10.06 Destruction of Canceled Certificates ..................................................................... 40 Section 10.07 Content of Statements; Post-Issuance Legal Opinions.......................................... 40 Section 10.08 Accounts and Funds; Business Days ..................................................................... 40 Section 10.09 Article and Section Headings and References....................................................... 40 Section 10.10 Partial Invalidity..................................................................................................... 41 Section 10.11 Execution in Several Counterparts......................................................................... 41 Section 10.12 Notices ................................................................................................................... 41 Section 10.13 Governing Law ...................................................................................................... 42 EXHIBIT A FORM OF CERTIFICATE...........................................................................................A-1 EXHIBIT B FORM REQUISITION FROM THE ACQUISITION FUND.....................................B-1
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Packet Pg. 416 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue 4917-0149-8253v3/022217-0004
TRUST AGREEMENT
THIS TRUST AGREEMENT, made and entered into and dated as of May 1, 2026 (the “Trust Agreement”) among the PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California (the “Corporation”), U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States of America (the “Trustee”), and the CITY OF BARSTOW, a municipal corporation organized and existing under the Constitution of the State of California (the “City”); W I T N E S S E T H:
WHEREAS, the City has determined as provided in that certain Installment Sale Agreement, dated as of the date hereof (the “Agreement”), by and between the City and the Corporation, that the design, acquisition, installation, and construction of certain public capital improvements located in various sites in the City, including the projects described in Exhibit B attached to the Agreement (collectively, the “Projects”) is necessary and proper for City purposes and uses, and under the terms of applicable law;
WHEREAS, the Corporation has agreed to assist the City to finance the Projects; WHEREAS, to assist the City with the design, acquisition, installation, and construction of the Projects, the Corporation has determined to acquire and construct the Projects for, and sell the Projects to, the City;
WHEREAS, in order to provide funds to finance the Projects, the City desires to cause the execution and delivery by the Trustee of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026 (the “Certificates”); WHEREAS, the principal and interest represented and evidenced by the Certificates will be payable from and secured by 2026 Installment Sale Payments made by the City to the Corporation pursuant to the Agreement;
WHEREAS, in order to provide for the execution and delivery of the Certificates, to establish and declare the terms and conditions upon which the Certificates are to be secured and paid, the City and the Corporation have authorized the execution and delivery of this Trust Agreement; WHEREAS, the Corporation and the City have executed a Certificate Purchase Agreement, in connection with the sale to Stifel, Nicolaus & Company, Incorporated (the “Purchaser”) of the Certificates;
WHEREAS, the Trustee has accepted the trust created by this Trust Agreement and in evidence thereof has joined in the execution hereof; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Trust Agreement and the execution and delivery of the Certificates do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Trust Agreement;
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Packet Pg. 417 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue 2 4917-0149-8253v3/022217-0004
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER
VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this section shall for all purposes hereof and of any Supplemental Trust Agreement and of any certificate, opinion, request or other document herein or therein mentioned have the meanings herein specified:
“Acquisition Fund” means the fund by that name established and maintained pursuant to Section 2.11.
“Administration Fee” means an amount equal to the sum of the Trustee’s fees, the Rebate Analyst Fee and any other similar fee payable in connection with the administration of the Agreement and this Trust Agreement, payable by the City, in accordance with the Agreement, on the 15th day of the month preceding each Interest Payment Date.
“Administration Account” means the account by that name established and maintained pursuant to Section 3.03.
“Agreement” means the Installment Sale Agreement, dated as of May 1, 2026, between the Corporation and the City as originally executed and as it may from time to time be amended or supplemented pursuant to the provisions hereof and thereof. “Authorized City Representative” means the Mayor of the City, the Mayor Pro Tem of the City, the City Manager of the City, the Assistant City Manager of the City, the Finance Director of the City, or the City Clerk, or any other person at the time designated to act on behalf of such City by written certificate furnished to the Trustee, containing the specimen signature of such person and signed on behalf of such City by an Authorized City Representative. “Authorized Corporation Representative” means the Chairman, Treasurer and Secretary of the Corporation, or any other person authorized by the Board of Directors of the Corporation pursuant to a resolution adopted thereby.
“Authorized Denominations” means $5,000 and any integral multiple thereof. “Business Day” means any day of the year, other than (i) a Saturday, (ii) a Sunday, (iii) a day on which banks located in the city in which either the designated corporate trust office of the Trustee is located is required or authorized by law to be closed or (iv) a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is not operational. “Cash Flow Consultant” means Stifel, Nicolaus & Company, Incorporated or any successor thereto appointed by the City.
“Cash Flow Report” means a report prepared by the Cash Flow Consultant identifying Certificates to be prepaid as a result of any prepayment pursuant to Section 2.10 hereof. In the case of
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Packet Pg. 418 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue 3 4917-0149-8253v3/022217-0004
any optional prepayment pursuant to section 2.10(a) hereof, such report shall demonstrate that Revenues expected to be received following such prepayment shall be sufficient to pay the regularly scheduled principal of, and interest represented by the Certificates as such amounts become due and payable. In the case of a mandatory prepayment pursuant to section 2.10(b) hereof, such report shall identify maturities of principal evidence by the Certificates to be prepaid in a manner consistent with Section 7.02 hereof and Section 6.02 of the Agreement relating to the application of Revenues upon acceleration.
“Certificate Payment Date” means a date on which principal evidenced and represented by the Certificates is due and payable, being June 1 of each year commencing June 1, 202_. “Certificates” means the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026.
“City” means the City of Barstow, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means May __, 2026.
“Code” means the Internal Revenue Code of 1986, as amended and the regulations issued thereunder.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Closing Date, executed by the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Corporation” means the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California, and its successors and assigns as provided in this Trust Agreement. “Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City or the Corporation and related to the authorization, execution and delivery of Certificates, including, but not limited to costs of preparation and reproduction and delivery of documents, filing and recording fees, fees and charges of the Trustee and its counsel, legal fees and charges, fees and disbursements of consultants and professionals, fees of rating agencies, fees and charges for preparation, execution and safekeeping of the Certificates and any other costs, charges or fees in connection with the original execution, issuance, delivery, marketing and sale of the Certificates.
“Costs of Issuance Fund” means the fund by that name established and maintained pursuant to Section 2.11.
“Defeasance Obligations” means the following: (1) cash, (2) non callable direct obligations of the United States of America (“Treasuries”), (3) evidences of ownership of proportionate interests in future interest and principal payments on Treasuries held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying Treasuries are not available to any person claiming through the custodian or to whom the custodian may be obligated, (4) subject to the prior written consent of the Insurer, pre refunded municipal obligations rated “AAA” and “Aaa” by S&P
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and Moody’s, respectively, or (5) subject to the prior written consent of the Insurer, securities eligible for “AAA” defeasance under then existing criteria of S&P or any combination thereof, which shall be used to effect defeasance of the Certificates.
“Electronic Means” shall mean the following communications methods: e-mail, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system specified by the Trustee as available for use in connection with its services hereunder.
“Independent Certified Public Accountant” means any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State or a comparable successor, appointed and paid by the City, and who, or each of whom - (1) is in fact independent according to the Statement of Auditing Standards No. 1 and not under the domination of the City;
(2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as a member, officer or employee of the City, but who may be regularly retained to audit the accounting records of and make reports thereon to the City. [“Insurance Policy” means the insurance policy issued by the Insurer guaranteeing the scheduled payment of principal of and interest represented and evidenced by the Certificates when due.]
[“Insured Certificates” means the Certificates maturing on June 1 of the years 20__ through 20__, inclusive.
[“Insurer” means _________, or any successor thereto or assignee thereof.] “Interest Account” means the account by that name established pursuant to Section 3.03. “Interest Payment Date” means a date on which interest represented and evidenced by the Certificates is due and payable, being June 1 and December 1 of each year, commencing [December 1, 2026].
[“Late Payment Rate” means the lesser of (x) the greater of (i) the per annum rate of interest, publicly announced from time to time by JPMorgan Chase Bank at its principal office in the City of New York, as its prime or base lending rate (“Prime Rate”) (any change in such Prime Rate to be effective on the date such change is announced by JPMorgan Chase Bank) plus 3% (with respect to the Insurance Policy) or 5% (with respect to the Reserve Policy), and (ii) the then-applicable highest rate of interest on the Certificates and (y) the maximum rate permissible under applicable usury or similar laws limiting interest rates. The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days. In the event JPMorgan Chase Bank ceases to announce its Prime Rate publicly, Prime Rate shall be the publicly announced prime or base lending rate of such national bank as the Insurer shall specify. If the interest provisions of shall result in an effective rate of interest which, for any period, exceeds the limit of the usury or any other laws applicable to the indebtedness created herein, then all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice between or by any party hereto, be applied
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as additional interest for any later periods of time when amounts are outstanding hereunder to the extent that interest otherwise due hereunder for such periods plus such additional interest would not exceed the limit of the usury or such other laws, and any excess shall be applied upon principal immediately upon receipt of such moneys by the Insurer, with the same force and effect as if the Corporation or the City had specifically designated such extra sums payable from Measure I Receipts as 2026 Installment Sale Payments to be so applied and the Insurer had agreed to accept such extra payment(s) as additional interest for such later periods. In no event shall any agreed-to or actual exaction as consideration for the indebtedness created herein exceed the limits imposed or provided by the law applicable to this transaction for the use or detention of money or for forbearance in seeking its collection.] “Measure I Ordinance” means Ordinance No. 04-01, titled “An Ordinance Providing for the Continuation of a One-Half of One Percent Retail Transactions and Use Tax by the San Bernardino County Transportation Authority for Local Transportation Purposes and the Transportation Expenditure Plan” passed on June 2, 2004 including any extensions of the transportation transaction and use tax previously extended by Ordinance No. 04-01. “Measure I Receipts” means Measure I Revenues allocated by the San Bernardino County Transportation Authority to the City as the City’s share of local program funding pursuant to the Transportation Expenditure Plan attached to the Measure I Ordinance. “Moody’s” means Moody’s Investor Services, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “Moody’s” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City pursuant to the Agreement.
“Office of the Trustee” means the principal corporate trust office of the Trustee in Los Angeles, California, or such other office as may be specified to the Corporation and the City by the Trustee in writing, except that with respect to presentation of Certificatesfor payment or for registration of transfer and exchange such term shall mean the office or the agency of the Trustee at which, at any particular time, its corporate trust agency shall be conducted as specified to the Corporation and the City by the Trustee in writing.
“Opinion of Counsel” means a written opinion of counsel of recognized national standing in the field of law relating to municipal obligations, appointed and paid by the City and satisfactory to and approved by the Trustee (who shall be under no liability by reason of such approval). “Outstanding,” when used as of any particular time with reference to Certificates, means (subject to the provisions of Section 6.02) all Certificates except (1) Certificates theretofore canceled by the Trustee or surrendered to the Trustee for cancellation;
(2) Certificates paid or deemed to have been paid within the meaning of Section 8.01; and (3) Certificates in lieu of or in substitution for which other Certificates shall have been executed and delivered by the Trustee pursuant hereto.
“Owner” means any person who shall be the registered owner of any Outstanding Certificate.
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“Permitted Investments” means any of the following to the extent then permitted by the general laws of the State of California:
(1) (a) Direct obligations (other than an obligation subject to—variation in principal repayment) of the United States of America (“United States Treasury Obligations”), (b) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by the United States of America, (c) obligations fully and unconditionally guaranteed as to timely payment of principal and interest by any agency or instrumentality of the United States of America when such obligations are backed by the full faith and credit of the United States of America, or (d) evidences of ownership of proportionate interests in future interest and principal payments on obligations described above held by a bank or trust company as custodian, under which the owner of the investment is the real party in interest and has the right to proceed directly and individually against the obligor and the underlying government obligations are not available to any person claiming through the custodian or to whom the custodian may be obligated (collectively “United States Obligations”). These include, but are not necessarily limited to:
-U.S. Treasury obligations
All direct or fully guaranteed obligations
-General Services Administration
Participation certificates
-U.S. Maritime Administration
Guaranteed Title XI financing
-Small Business Administration
Guaranteed participation certificates
Guaranteed pool certificates
-Government National Mortgage Association (GNMA)
GNMA-guaranteed mortgage-backed securities
GNMA-guaranteed participation certificates
-U.S. Department of Housing & Urban Development
Local authority bonds
-Washington Metropolitan Area Transit Authority
Guaranteed transit bonds
(2) Federal Housing Administration debentures.
(3) The listed obligations of government-sponsored agencies which are not backed by the full faith and credit of the United States of America:
-Federal Home Loan Mortgage Corporation (FHLMC)
Participation certificates (excluded are stripped mortgage securities which are purchased at prices exceeding their principal amounts) Senior debt obligations
-Farm Credit Banks (formerly: Federal Land Banks, Federal intermediate Credit Banks and Banks for Cooperatives)
Consolidated systemwide bonds and notes
-Federal Home Loan Banks (FHL Banks)
Consolidated debt obligations
-Federal National Mortgage Association (FNMA)
Senior debt obligations
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Mortgage-backed securities (excluded are stripped mortgages securities which are purchased at prices exceeding their principal amounts) -Financing Corporation (FICO)
Debt obligations
-Resolution Funding Corporation (REFCORP)
Debt obligations
(4) Bank deposit products, unsecured certificates of deposit (including those placed by a third party pursuant to an agreement between the City and the Trustee), trust funds, trust accounts, overnight banking deposits, interest bearing deposits, interest bearing money market accounts, time deposits, demand deposits, other deposit products, and bankers’ acceptances (having maturities of not more than 30 days) of any bank (including the Trustee and any affiliate) the short-term obligations of which are rated “A-1” or “A-2” without regard to qualifier by S&P. (5) Deposits the aggregate amount of which are fully insured by the Federal Deposit Insurance Corporation (FDIC), in banks, including the Trustee and its affiliates, which have capital and surplus of at least $5 million.
(6) Commercial paper (having original maturities of not more than 270 days) rated, at the time of purchase, “A-1” or better by S&P and “Prime-1” by Moody’s. (7) Money market mutual funds rated in the highest investment category granted thereby from S&P and Moody’s, including those for which the Trustee or its affiliates receives and retains a fee for services provided to the fund, whether as a custodian, transfer agent, investment advisor or otherwise, but excluding such funds with a floating net asset value. (8) Repurchase agreements:
With (1) any domestic bank, or domestic branch of a foreign bank or any non-bank financial institution or primary dealer as designated by the Federal Reserve the long term debt of which is rated at least “BBB+” by Standard & Poor’s or Moody’s (including the Trustee or any of its affiliates); or (2) any broker-dealer with “retail customers” or a related affiliate thereof which broker-dealer has, or the parent company (which guarantees the provider) of which has, long-term debt rated at least “BBB+” by Standard & Poor’s or Moody’s, which broker-dealer falls under the jurisdiction of the Securities Investors Protection Corporation; or (3) any other entity rated “BBB+” or better by Standard & Poor’s or Moody’s, provided that:
(a) The collateral shall be securities described in clause 1(a), (b) or (c) of this subsection, and the market value of the collateral is maintained at levels equal to 104% of the amount of cash transferred by the Trustee or the City to the provider of the repurchase agreement plus accrued interest with the collateral being valued weekly and marked-to-market at current market price plus accrued interest;
(b) The Trustee or a third party acting solely as agent therefor or for the City (the “Holder of the Collateral”) has possession of the collateral or the collateral has been transferred to the Holder of the Collateral in accordance with applicable state and federal laws (other than by means of entries on the transferor’s books);
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(c) The repurchase or reverse repurchase agreement shall state and an opinion of counsel shall be rendered at the time such collateral is delivered that the Holder of the Collateral has a first priority security interest in the collateral, any substituted collateral and all proceeds thereof (in the case of bearer securities, this means the Holder of the Collateral is in possession); (d) The repurchase or reverse repurchase agreement shall provide that if during its term the provider’s rating by either Moody’s or Standard & Poor’s is withdrawn or suspended or falls below “BBB” by Standard & Poor’s or “Baa2” by Moody’s, as appropriate, the provider must, at the direction of Trustee, within 10 days of receipt of such direction, repurchase all collateral and terminate the agreement, with no penalty or premium to the Trustee or the City.
Notwithstanding the above, if a repurchase agreement has a term of 270 days or less (with no evergreen provision), collateral levels need not be as specified in (a) above, so long as such collateral levels are 103% or better and the provider is rated at least “A” by Standard & Poor’s or Moody’s, respectively.
(9) State Obligations
(a) Direct general obligations of any state of the United States or any subdivision or agency thereof to which is pledged the full faith and credit of a state the unsecured general obligation debt of which is rated “A2” by Moody’s and “A” by S&P, or better, or any obligation fully and unconditionally guaranteed by any state, subdivision or agency whose unsecured general obligation debt is so rated.
(b) Direct, general short-term obligations of any state agency or subdivision described in (a) above and rated “A-1+” by S&P and “Prime-1” by Moody’s. (c) Special Revenue Bonds (as defined in the United States Bankruptcy Code) of any state, state agency or subdivision described in (a) above and rated “AA” or better by S&P and “Aa” or better by Moody’s.
(10) Local Agency Investment Fund of the State of California. (11) Investment agreements including guaranteed investment contracts, repurchase agreements and forward delivery agreements, that are obligations of an entity rated, or whose obligations are rated, or guaranteed by an entity which is rated or whose obligations are rated, (at the time the investment is entered into) not lower than “A-” by S&P or Fitch, or “A3” by Moody’s. (12) Pre-refunded municipal obligations rated “AAA” by S&P and “Aaa” by Moody’s meeting the following requirements:
(a) the municipal obligations are (1) not subject to redemption prior to maturity or (2) the trustee for the municipal obligations has been given irrevocable instructions concerning their call and redemption and the issuer of the municipal obligations has covenanted not to redeem such municipal obligations other than as set forth in such instructions; (b) the municipal obligations are secured by cash or United States Treasury Obligations which may be applied only to payment of the principal of, interest and premium on such municipal obligations;
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(c) the principal of and interest on the United States Treasury Obligations (plus any cash in the escrow) has been verified by the report of independent certified public accountants to be sufficient to pay in full all principal of, interest, and premium, if any, due and to become due on the municipal obligations (“Verification”);
(d) the cash or United States Treasury Obligations serving as security for the municipal obligations are held by an escrow agent or trustee in trust for owners of the municipal obligations;
(e) no substitution of a United States Treasury Obligation shall be permitted except with another United States Treasury Obligation and upon delivery of a new Verification; and (f) the cash or United States Treasury Obligations are not available to satisfy any other claims, including those by or against the trustee or escrow agent.
The Trustee shall have no responsibility to monitor the ratings of Permitted Investments after the initial purchase of or investment in such Permitted Investments. “Prepayment Price” means, with respect to any Certificate (or portion thereof) the principal amount with respect to such Certificate (or portion), plus the applicable premium, if any, payable upon prepayment thereof pursuant to the provisions of such Certificate and the Trust Agreement. “Principal Account” means the account by that name established and maintained pursuant to Section 3.03.
“Project” or “Projects” has, as the context suggests, the meaning ascribed to such term in the Agreement.
“Project Costs” means all costs of payment of, or reimbursement for, the engineering, design, acquisition, installation, provision and financing of the Projects, including but not limited to, engineering and installation management costs, administrative costs and capital expenditures relating to financing payments, costs of accounting, feasibility, environmental and other reports, interest during the period of acquisition and installation of the Projects, insurance costs, inspection costs, permit fees, filing and recording costs, printing costs, reproduction and binding costs, initial fees and charges of the Corporation and the Trustee, escrow fees, financing discounts, legal fees and charges, financial and other professional consultant fees and charges in connection with the foregoing. “Purchase Agreement” means that certain Certificate Purchase Agreement by and among the Corporation, the City and the Purchaser relating to the 2026 Installment Sale Agreement and the Certificates.
“Purchaser” means Stifel, Nicolaus & Company, Incorporated as initial purchaser of the Certificates.
“Purchase Price” means with respect to any Certificate (or portion thereof) the principal amount with respect to such Certificate (or portion), plus the applicable premium, if any, payable upon purchase thereof pursuant to the provisions of such Certificate and the Trust Agreement. “Qualified Reserve Instrument” means an insurance policy meeting the requirements of Section 3.03(3).
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“Rating Agency” means S&P, if the Certificates are then rated by S&P, and Moody’s, if the Certificates are then rated by Moody’s.
“Rebate Amount” means, for any given period, the amount determined by the Rebate Analyst as required to be rebated or paid as a yield reduction payment to the United States of America with respect to the Certificates.
“Rebate Analyst” means that firm or individual designated by the City to satisfy its obligation to perform the rebate calculations that may be required to be made from time to time with respect to the Certificates.
“Rebate Analyst Fee” means the fee payable to the Rebate Analyst, payable by the City in accordance with the Agreement.
“Rebate Fund” means the fund by that name established and maintained pursuant to Section 4.06.
“Record Date” means the 15th day of the month next preceding each Interest Payment Date, whether or not such day is a Business Day.
“Request” or “Statement” means with respect to the City an instrument in writing signed on behalf of the City by an Authorized City Representative, and with respect to the Corporation means an instrument in writing signed on behalf of the Corporation by an Authorized Corporation Representative or other person at the time designated to act on behalf of the City or the Corporation, respectively, by written certificate furnished to the Trustee.
“Reserve Account” means the account by that name established and maintained pursuant to Section 3.03.
“Reserve Account Requirement” means, as of any date of calculation, an amount equal to the least of (i) 10% of the initial stated principal amount (within the meaning of Section 148 of the Code) of the Certificates; (ii) 125% of the average annual Debt Service (as defined in the Agreement) on the Certificates, or (iii) the Maximum Annual Debt Service, as defined in the Agreement. [“Reserve Policy” means the debt service reserve fund insurance policy issued by the Insurer and credited to the Reserve Account. The Reserve Policy is a Qualified Reserve Instrument.] “Revenue Fund” means the fund by that name established and maintained pursuant to Section 3.02.
“Revenues” means all 2026 Installment Sale Payments and other payments paid by the City and received by the Corporation pursuant to the Agreement and all interest or other income from any investment of any money in any fund or account (other than the Rebate Fund) pursuant to Section 3.04. “S&P” means S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC, a division of The McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of New York, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, then the term “S&P” shall be deemed to refer to any other nationally recognized securities rating agency selected by the City pursuant to the Agreement.
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“Securities Depositories” means: The Depository Trust Company, 711 Stewart Avenue, Garden City, New York 11530, Fax-(516) 227-4039 or 4190; or such other addresses and/or such other securities depositories as the City may designate to the Trustee in writing. “State” means the State of California.
“Supplemental Trust Agreement” means any trust agreement then in full force and effect which has been duly executed and delivered by the City, the Corporation, and the Trustee amendatory hereof or supplemental hereto; but only if and to the extent that such Supplemental Trust Agreement is specifically authorized hereunder.
“Surplus Account” means the account by that name established and maintained pursuant to Section 3.03.
“2026 Installment Sale Payments” means the periodic payments scheduled to be paid by the City under and pursuant to the Agreement.
“Tax Certificate” means the Tax Certificate, dated the Closing Date and executed and delivered by the City.
“Trust Agreement” means this Trust Agreement, dated as of May 1, 2026, by and among the Corporation, the Trustee and the City, as originally executed and as it may from time to time be amended or supplemented by all Supplemental Trust Agreements executed pursuant to the provisions hereof.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, acting in its capacity as trustee under this Trust Agreement, and its successors and assigns appointed pursuant to this Trust Agreement.
Section 1.02 Equal Security. In consideration of the acceptance of the Certificates by the Owners, this Trust Agreement shall be deemed to be and shall constitute a contract among the Trustee, the City, and the Owners to secure the full and final payment of the interest and principal evidenced and represented by of the Certificates, subject to the agreements, conditions, covenants and terms contained herein; and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the Trustee shall be for the equal and proportionate benefit, protection and security of all Owners without distinction, preference or priority as to benefit, protection or security of any Certificates over any other Certificates by reason of the number or date thereof or the time of authorization, sale, execution, issuance or delivery thereof or for any cause whatsoever, except as expressly provided herein or therein.
ARTICLE II
THE CERTIFICATES
Section 2.01 Preparation and Purpose of Certificates. The City has reviewed all proceedings heretofore taken relative to the authorization of the Certificates and has found, as a result of such review, and hereby finds and determines that all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and for the execution and delivery of
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the Certificates do exist, have happened and have been performed in due time, form and manner as required by law. Upon the Request of an Authorized City Representative, the Trustee is hereby duly authorized, to cause the Certificates to be executed and delivered in the form and manner provided herein for the purpose of providing funds to pay for and construct the Projects, and that the Certificates shall be entitled to the benefit, protection and security of the provisions hereof. The City hereby authorizes and directs the Trustee to prepare the Certificates in the initial aggregate principal amount of ____________________ dollars ($________), evidencing and representing the aggregate principal components of the 2026 Installment Sale Payments and each evidencing and representing a proportionate, undivided interest in the 2026 Installment Sale Payments. The Certificates do not constitute a debt or liability of the City or of the State and neither the faith and credit of the City nor of the State are pledged to the payment of the Certificates.
Section 2.02 Terms of the Certificates. The Certificates shall be designated “City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026.” The Certificates shall be dated the Closing Date, shall be executed and delivered in the aggregate principal amount of $_____, only in fully registered form in denominations of $5,000 or any integral multiple of $5,000 (not exceeding the principal amount of Certificates payable at any one time), and shall be payable on the Certificate Payment Dates and in the principal amounts and evidence and represent interest at the rates (based on a 360-day year comprised of twelve 30-day months) as set forth in the following schedule:
Certificate Payment Date
(June 1) Principal Amount Interest Rate
(c) Interest evidenced by the Certificates shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Certificate is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event interest evidenced by such Certificate shall be payable from such Interest Payment Date, (ii) a Certificate is authenticated on or before the first Record Date, in which event interest evidenced by such Certificate shall be payable from the Closing Date, or (iii) interest evidenced by any Certificate is in default as of the date of authentication thereof, in which event interest evidenced by such Certificate shall be payable from the date to which interest has previously been paid or duly provided for. Interest evidenced by the Certificates shall be paid in lawful money of the United States on each
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Interest Payment Date. Interest evidenced by the Certificates shall be paid by check of the Trustee mailed by first-class mail, postage prepaid, on each Interest Payment Date to the Owners of the Certificates at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. Notwithstanding the foregoing, interest evidenced by any Certificate which is not punctually paid or duly provided for on any Interest Payment Date shall, if and to the extent that amounts subsequently become available therefor, be paid on a payment date established by the Trustee to the Person in whose name the ownership of such Certificate is registered on the Registration Books at the close of business on a special record date to be established by the Trustee for the payment of such defaulted interest, notice of which shall be given to such Owner not less than ten days prior to such special record date.
(d) The principal evidenced and represented by the Certificates shall be payable in lawful money of the United States of America upon presentation and surrender thereof at maturity or on prepayment prior to maturity at the Office of the Trustee. (e) The Certificates shall be subject to prepayment as provided in Section 2.10 hereof.
(f) The Certificates shall be in substantially the form set forth in Exhibit A hereto, with appropriate or necessary insertions, omissions and variations as permitted or required hereby.
Section 2.03 Form of Certificates. The Certificates and the assignment to appear thereon shall be substantially in the form set forth in Exhibit A attached hereto and by this reference incorporated herein with such appropriate additions, modifications and insertions as are permitted or required by this Trust Agreement.
Section 2.04 Execution of Certificates. The Certificates shall be executed by the Trustee by the manual signature of an authorized signatory of the Trustee. Only those Certificates executed manually and dated by the Trustee, shall be entitled to any benefit, protection or security hereunder or be valid or obligatory for any purpose, and such execution by the Trustee shall be conclusive evidence that the Certificates so executed and registered have been duly authorized, executed and delivered hereunder and are entitled to the benefit, protection and security hereof.
Section 2.05 Registration Books. The Trustee shall keep or cause to be kept, at the Office of the Trustee, sufficient records for the registration and transfer of ownership of the Certificates, which shall be open to inspection during regular business hours and upon reasonable written notice by the City; 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 such records, the ownership of the Certificates.
Section 2.06 Transfer and Exchange of Certificates.
(a) Any Certificate may be transferred upon the Registration Books by the Person in whose name it is registered, in person or by such Person’s duly authorized attorney, upon surrender of such Certificate to the Trustee for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any Certificate or Certificates shall be so surrendered for transfer, the Trustee shall execute and deliver a new Certificate or Certificates of the same maturity in a like aggregate principal amount, in any Authorized
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Denomination. The Trustee shall require the Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. (b) The Certificates may be exchanged at the Office of the Trustee for Certificates representing and evidencing a like aggregate principal amount, of the same maturity of other Authorized Denominations. The Trustee shall require the payment by the Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange. (c) The Trustee shall not be obligated to make any transfer or exchange of Certificates pursuant to this Section during the period established by the Trustee for the selection of Certificates for prepayment, or with respect to any Certificates selected for prepayment. (d) The transferor shall also provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Section 2.07 Book-Entry System.
(a) The Certificates shall initially be issued as Book-Entry Certificates, and the Certificates for each maturity date shall be in the form of a separate single fully-registered Certificate (which may be typewritten). Upon initial issuance, the ownership of each such Certificate shall be registered in the Registration Books in the name of the Nominee, as nominee of the Depository.
Payment of principal of, and interest and premium, if any, on, any Book-Entry Certificate registered in the name of the Nominee shall be made on the applicable payment date by wire transfer of New York clearing house or equivalent next day funds or by wire transfer of same day funds to the account of the Nominee. Such payments shall be made to the Nominee at the address which is, on the Record Date, shown for the Nominee in the Registration Books. (b) With respect to Book-Entry Certificates, the City, the Corporation, and the Trustee shall have no responsibility or obligation to any Participant or to any Person on behalf of which such a Participant holds an interest in such Book-Entry Certificates. Without limiting the immediately preceding sentence, the City, the Corporation, and the Trustee shall have no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Participant with respect to any ownership interest in Book-Entry Certificates, (ii) the delivery to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any notice with respect to Book-Entry Certificates, including any notice of prepayment, (iii) the selection by the Depository and its Participants of the beneficial interests in Book-Entry Certificates of a maturity to be prepaid in the event such Book-Entry Certificates are prepaid in part, (iv) the payment to any Participant or any other Person, other than an Owner as shown in the Registration Books, of any amount with respect to principal of, or premium, if any, or interest on Book-Entry Certificates, or (v) any consent given or other action taken by the Depository as Owner.
(c) The City, the Corporation, and the Trustee may treat and consider the Person in whose name each Book-Entry Certificate is registered in the Registration Books as the absolute Owner of such Book-Entry Certificate for the purpose of payment of principal of, and premium, if any, and interest on such Certificate, for the purpose of selecting any Certificates, or portions thereof, to be
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prepaid, for the purpose of giving notices of prepayment and other matters with respect to such BookEntry Certificate, for the purpose of registering transfers with respect to such Book-Entry Certificate, for the purpose of obtaining any consent or other action to be taken by Owners and for all other purposes whatsoever, and the City, the Corporation, and the Trustee shall not be affected by any notice to the contrary.
(d) In the event of a prepayment of all or a portion of a Book-Entry Certificate, the Depository, in its discretion (i) may request the Trustee to authenticate and deliver a new Book-Entry Certificate, or (ii) if the Depository is the sole Owner of such Book-Entry Certificate, shall make an appropriate notation on the Book-Entry Certificate indicating the date and amounts of the reduction in principal thereof resulting from such prepayment, except in the case of final payment, in which case such Book-Entry Certificate must be presented to the Trustee prior to payment. (e) The Trustee shall pay all principal of, and premium, if any, and interest on the Book-Entry Certificates only to or “upon the order of” (as that term is used in the Uniform Commercial Code as adopted in the State) the respective Owner, as shown in the Registration Books, or such Owner’s respective attorney duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge the obligations with respect to payment of principal of, and premium, if any, and interest on the Book-Entry Certificates to the extent of the sum or sums so paid.
No Person other than an Owner, as shown in the Registration Books, shall receive an authenticated Book-Entry Certificate. Upon delivery by the Depository to the Owners, the City and the Trustee 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 Trust Agreement shall refer to such nominee of the Depository. (f) In order to qualify the Book-Entry Certificates for the Depository’s book-entry system, the City shall execute and deliver to the Depository a Letter of Representations. The execution and delivery of a Letter of Representations shall not in any way impose upon the City or the Trustee any obligation whatsoever with respect to Persons having interests in such Book-Entry Certificates other than the Owners, as shown on the Registration Books. Such Letter of Representations may provide the time, form, content and manner of transmission, of notices to the Depository. In addition to the execution and delivery of a Letter of Representations by the City, the City and the Trustee shall take such other actions, not inconsistent with this Trust Agreement, as are reasonably necessary to qualify Book-Entry Certificates for the Depository’s book-entry program. (g) In the event the City determines that it is in the best interests of the Beneficial Owners that they be able to obtain certificated Certificates and that such Certificates should therefore be made available, and notifies the Depository and the Trustee of such determination, the Depository will notify the Participants of the availability through the Depository of certificated Certificates. In such event, the Trustee shall transfer and exchange certificated Certificates as requested by the Depository and any other Owners in appropriate amounts. In the event (i) the Depository determines not to continue to act as securities depository for Book-Entry Certificates, or (ii) the Depository shall no longer so act and gives notice to the Trustee of such determination, then the City shall discontinue the Book-Entry system with the Depository. If the City determines to replace the Depository with another qualified securities depository, the City shall prepare or direct the preparation of a new single, separate, fully-registered Certificate for each maturity date of such Book-Entry Certificates, registered in the name of such successor or substitute qualified securities depository or its nominee. If the City fails to identify another qualified securities depository to replace the Depository, then the Book-Entry Certificates shall no longer be restricted to being registered in the Registration Books in the name of
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the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging such Certificates shall designate, in accordance with the provisions of Sections 2.06, 2.08 and 2.09 hereof. Whenever the Depository requests the City to do so, the City shall cooperate with the Depository in taking appropriate action after reasonable notice (i) to make available one or more separate certificates evidencing the Book-Entry Certificates to any Participant having Book-Entry Certificates credited to its account with the Depository, and (ii) to arrange for another securities depository to maintain custody of certificates evidencing the Book-Entry Certificates. (h) Notwithstanding any other provision of this Trust Agreement to the contrary, if the Depository is the sole Owner of the Certificates, so long as any Book-Entry Certificate is registered in the name of the Nominee, all payments of principal of, and premium, if any, and interest on such Book-Entry Certificate and all notices with respect to such Book-Entry Certificate shall be made and given, respectively, as provided in the Letter of Representations or as otherwise instructed by the Depository.
(i) In connection with any notice or other communication to be provided to Owners pursuant to this Trust Agreement by the City or the Trustee, with respect to any consent or other action to be taken by Owners of Book-Entry Certificates, the Trustee shall establish a record date for such consent or other action and give the Depository notice of such record date not less than 15 calendar days in advance of such record date to the extent possible. (j) In connection with any proposed transfer outside the Book-Entry Only system, the City or DTC shall provide or cause to be provided to the Trustee all information necessary to allow the Trustee to comply with any applicable tax reporting obligations, including without limitation any cost basis reporting obligations under Internal Revenue Code Section 6045. The Trustee may rely on the information provided to it and shall have no responsibility to verify or ensure the accuracy of such information.
Section 2.08 Certificates Mutilated, Lost, Destroyed or Stolen. If any Certificate shall become mutilated, the Trustee, at the expense of the Owner of said Certificate, shall execute, and deliver, a new Certificate of the same maturity in a like principal amount in exchange and substitution for the Certificate so mutilated, but only upon surrender to the Trustee of the Certificate so mutilated.
Every mutilated Certificate so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the City. If any Certificate shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence and indemnity satisfactory to the Trustee shall be given, the Trustee, at the expense of the Owner, shall execute and deliver, a new Certificate of the same maturity in a like aggregate principal amount in lieu of and in replacement for the Certificate so lost, destroyed or stolen (or if any such Certificate shall have matured or shall have been selected for prepayment, instead of issuing a replacement Certificate, the Trustee may pay the same without surrender thereof). The Trustee may require payment by the Owner of a sum not exceeding the actual cost of preparing each replacement Certificate issued under this Section and of the expenses which may be incurred by the Trustee. Any Certificate issued under the provisions of this Section in lieu of any Certificate alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Trustee whether or not the Certificate so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Trust Agreement with all other Certificates secured by this Trust Agreement.
Section 2.09 Temporary Certificates. The Certificates may be executed and delivered in temporary form exchangeable for definitive Certificates when ready for delivery. Any temporary
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Certificates may be printed, lithographed or typewritten, shall be of such Authorized Denominations as may be determined by the City, shall be in fully-registered form without coupons and may contain such reference to any of the provisions of this Trust Agreement as may be appropriate. Every temporary Certificate shall be executed and delivered by the Trustee upon the same conditions and in substantially the same manner as the definitive Certificates. If the Trustee executes and delivers temporary Certificates it shall execute and deliver definitive Certificates as promptly thereafter as practicable, and thereupon the temporary Certificates may be surrendered, for cancellation, at the Office of the Trustee, in exchange for such temporary Certificates, definitive Certificates representing and evidencing an equal aggregate principal amount, of such maturities, in Authorized Denominations.
Until so exchanged, the temporary Certificates shall be entitled to the same benefits under this Trust Agreement as definitive Certificates authenticated and delivered hereunder.
Section 2.10 Prepayment of Certificates.
(a) Optional Prepayment. The Certificates maturing on or after June 1, 20__, shall be subject to optional prepayment prior to maturity, at the option of the City, on or after June 1, 20__ in whole or in part (by lot within any maturity), on any date, at a Prepayment Price equal to the principal amount to be prepaid, plus accrued interest to the date fixed for prepayment, without premium. The City shall provide notice to the Trustee at least forty-five (45) days prior to the prepayment date (or such lesser period of time acceptable to the Trustee in its sole discretion) specifying the principal amount evidenced by, maturities of, and amounts within a maturity the 2026 Installment Sales Payments to be prepaid.
(b) Mandatory Prepayment. The Certificates shall be subject to mandatory prepayment prior to maturity, in whole or in part (by lot among Certificates with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate), on any date, from amounts received upon the acceleration of 2026 Installment Sale Payments upon the occurrence of default under any Agreement, at a Prepayment Price equal to the principal amount to be prepaid, plus accrued interest to the date fixed for prepayment, without premium.
(c) [Mandatory Sinking Fund Prepayment.] [To come if Term Certificates will be issued]
(d) Selection of Certificates. Whenever provision is made in this Trust Agreement for the prepayment or purchase of less than all of the Certificates or any given portion thereof, the Trustee shall, subject to the following sentence, select the Certificates to be prepaid or purchased, from all Certificates and Certificates within a maturity subject to prepayment or purchase or such given portion thereof equal to a multiple of $5,000 or any integral multiple thereof not previously called for prepayment or purchase. Upon notice of any prepayment pursuant to Section 2.10(a) hereof or receipt of moneys resulting in a prepayment pursuant to Section 2.10(b) hereof, the Trustee shall request the Cash Flow Consultant to prepare a Cash Flow Report identifying the principal amount evidenced by and maturities of the Certificates to be prepaid. The Trustee shall promptly notify the City in writing of any prepayment or purchase of Certificates and of the Certificates or portions thereof so selected for prepayment or purchase.
(e) Purchase in Lieu of Prepayment. In lieu of prepayment of any Certificates, amounts on deposit in the Revenue Fund may also be used and withdrawn by the Trustee at any time, upon the Request of the City, for the purchase of such Certificates at public or private sale as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is
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payable from the Interest Account) as the City may in its discretion determine, but not in excess of the principal amount thereof plus accrued interest to the purchase date. (f) Notice or Prepayment or Purchase. Notice of prepayment or purchase shall be mailed by first-class mail by the Trustee, upon direction of the City, not less than twenty (20) nor more than sixty (60) days prior to the prepayment or purchase date, to (i) the respective Owners of any Certificates designated for prepayment or purchase at their addresses appearing on the registration books of the Trustee, and (ii) if the Certificates are no longer held by the Depository, to the Securities Depositories and the Municipal Securities Rulemaking Board through its Electronic Municipal Marketplace Access (EMMA) System. Notice of prepayment or purchase shall be given by Electronic Means, certified, registered, or overnight mail to the Securities Depositories and the Municipal Securities Rulemaking Board through its Electronic Municipal Marketplace Access (EMMA) System.
Each notice of prepayment or purchase shall state the date of such notice, the date of initial delivery of the Certificates, the prepayment or purchase date, the Prepayment Price or Certificate Purchase Price, the place or places of prepayment or purchase (including the name and appropriate address or addresses of the Trustee), the CUSIP number (if any) of the Certificates of each maturity date or dates, and, if less than all of the Certificates of any such Certificate Payment Date, the distinctive certificate numbers of the Certificates with such maturity date, to be prepaid or purchased and, in the case of Certificates to be prepaid or purchased in part only, the respective portions of the principal amount thereof to be prepaid or purchased. Each such notice shall also state that on said date there will become due and payable on each of said Certificates the Prepayment Price or Certificate Purchase Price represented thereby or of said specified portion of the principal amount thereof in the case of a Certificate to be prepaid or purchased in part only, together with interest accrued with respect thereto to the prepayment or purchase date, and that from and after such prepayment or purchase date, interest thereon shall cease to accrue, and shall require that such Certificates be then surrendered at the address or addresses of the Trustee specified in the prepayment or purchase notice.
If any of the Certificates are prepaid pursuant to an advance refunding, notice of such advance refunding and prepayment shall be given in the same manner as above provided, and also within the same time period with respect to the actual prepayment or purchase date.
Notice of prepayment or purchase of Certificates shall be given by the Trustee, upon direction of and at the expense of the City. Conditional notice of optional prepayment may be given at the direction of the City and shall be given if funds sufficient to prepay the Certificates are not then on deposit with the Trustee. If at the time of mailing of notice, funds are not then on deposit with the Trustee, such notice shall state that it is conditional upon the deposit of the funds not later than the date and time of prepayment or purchase of the Certificates, and such notice shall be of no effect unless such moneys are so deposited.
Failure by the Trustee to give notice pursuant to this Section 2.10(f) to the Municipal Securities Rulemaking Board through its Electronic Municipal Marketplace Access (EMMA) System or Securities Depositories shall not affect the sufficiency of the proceedings for prepayment or purchase and the sole remedy available shall be an action by the Owners of the Certificates in mandamus for specific performance or similar remedy to compel performance. Failure by the Trustee to mail notice of prepayment or purchase pursuant to this Section 2.10(f) to any one or more of the respective Owners of any Certificates designated for prepayment or purchase shall not affect the sufficiency of the proceedings for prepayment or purchase with respect to the Owner or Owners to whom such notice was mailed and the sole remedy available shall be an action by the Owners of the Certificates in mandamus for specific performance or similar remedy to compel performance.
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(g) Partial Prepayment or Purchase of Certificates. Upon surrender of any Certificate to be prepaid or purchased in part only, the Trustee shall execute and deliver to the Owner thereof, at the expense of the City, a new Certificate or Certificates of authorized denomination, and having the same Certificate Payment Date, equal in aggregate principal amount to the unprepaid or unpurchased portion of the Certificates surrendered.
(h) Effect of Prepayment. Notice of prepayment having been duly given as aforesaid, and moneys for payment of the Prepayment Price of, together with interest accrued to the prepayment date with respect to, the Certificates (or portions thereof) so called for prepayment being held by the Trustee, on the prepayment date designated in such notice, the Certificates (or portions thereof) so called for prepayment shall become due and payable at the Prepayment Price specified in such notice and interest accrued thereon to the prepayment date, interest with respect to the Certificates so called for prepayment shall cease to accrue, said Certificates (or portions thereof) shall cease to be entitled to any benefit or security under this Trust Agreement, and the Owners of said Certificates shall have no rights in respect thereof except to receive payment of said Prepayment Price and accrued interest.
All Certificates prepaid pursuant to the provisions of this Section shall be cancelled upon surrender thereof by the Trustee. All Certificates purchased pursuant to the provisions of this Section shall be registered in the name of the City and delivered to, or as directed in writing by, the City.
Section 2.11 Establishment of Funds and Accounts; Deposit of Proceeds. At any time after the sale of the Certificates, the Trustee shall execute the Certificates for delivery hereunder, and thereupon the Certificates shall be delivered by the Trustee to the purchaser thereof upon the Request of the City and upon receipt of payment therefor from the purchaser thereof. Upon receipt of payment for the Certificates from the purchaser thereof, the Trustee shall set aside and deposit the proceeds received from such sale in the following respective accounts or funds or with the following respective persons, in the following order of priority:
(a) [The Trustee shall credit the Reserve Policy to the Reserve Account within the Revenue Fund established pursuant to Section 3.03 hereof. The initial maximum amount available under the Reserve Policy is equal to the Reserve Account Requirement.] (b) The Trustee shall establish and maintain in trust in the name of the Trustee a separate Fund designated the “Costs of Issuance Fund.” The Trustee shall deposit the amount of $_________, which is equal to the amount set forth in such Request of the City in the Costs of Issuance Fund. The moneys in the Costs of Issuance Fund shall be disbursed, upon the Request of the City, to pay Costs of Issuance. Upon the earlier of payment in full of the Costs of Issuance or the making of adequate provision for the payment thereof, evidenced by a Request of the City to the Trustee, any balance remaining in such Fund shall be transferred to the Acquisition Fund, and pending such transfer and application, the moneys in such Fund may be invested as permitted by Section 3.04 hereof; provided, however, that investment income resulting from any such investment shall be retained in the Costs of Issuance Fund. Any residual earnings received after the transfer referenced above shall, as and when convenient, be transferred by the Trustee to the Acquisition Fund. (c) The Trustee shall establish and maintain in trust in the name of the Trustee a separate Fund designated the “Acquisition Fund.” The Trustee shall deposit the amount of $_____, which is equal to the amount set forth in such Request of the City in the Acquisition Fund. Moneys in the Acquisition Fund shall be disbursed to the City pursuant to a Requisition in the form attached hereto
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as Exhibit B. Such Requisition shall be in the form of a sequentially numbered requisition and shall set forth the name and address of the person or persons to whom said amounts are to be disbursed and state the amounts to be disbursed are for Project Costs properly chargeable to the Acquisition Fund and have not been the subject of any previous requisition. Upon delivery to the Trustee of a Request of the City, any Certificate proceeds remaining in the Acquisition Fund upon completion of the Projects (which completion shall be evidenced by such Request of the City) shall be applied by the Trustee to offset scheduled 2026 Installment Sale Payments required to be paid by the City under the Agreement or in such other manner as may be directed in such Request of the City. Upon the occurrence and continuance of an Event of Default or an event which with notice or lapse of time would constitute an Event of Default, amounts on deposit in the Acquisition Fund shall not be disbursed, but shall instead be applied to the payment of the scheduled principal of and interest represented and evidenced by the Certificates as such amounts become due and payable or the Prepayment Price of the Certificates.
The Trustee shall fully rely on any such Request or Requisition delivered pursuant to this Section and shall not be required to make any investigation in connection therewith. The Trustee shall be under no duty or obligation to analyze or verify any documentation supporting the payments or reimbursements pursuant to this Section, but shall hold and provide to Owners upon request such documentation supporting the payments or reimbursements, solely as a repository for the benefit of Owners.
In order to facilitate the application of proceeds of the Certificates, the Trustee shall have the authority to create a temporary account to facilitate such application of proceeds.
Section 2.12 Validity of Certificates. The validity of the Certificates shall not be dependent on or affected in any way by the proceedings taken by the Corporation, the City or the Trustee for the financing of the Projects or by any contracts made by the City or its agents in connection therewith, and shall not be dependent upon the completion of any of the Projects or upon the performance by any person, firm or corporation of their or its obligation with respect thereto. The recital contained in the Certificates that the same are issued pursuant to this Trust Agreement shall be conclusive evidence of their validity and of the regularity of their execution and delivery, and all Certificates shall be incontestable from and after their execution and delivery. The Certificates shall be deemed to be executed and delivered, within the meaning hereof, whenever the definitive Certificates (or any temporary Certificates exchangeable therefor) shall have been delivered to the purchaser thereof and the proceeds of sale thereof received.
ARTICLE III
REVENUES
Section 3.01 Pledge of Revenues; Assignment. Subject only to the provisions of this Trust Agreement permitting the application thereof for the purposes and on the terms and conditions set forth herein, the Corporation hereby pledges and grants a lien on the Revenues and a security interest in all right, title and interest of any other amounts held by the Trustee in any fund or account established hereunder (other than amounts on deposit in the Acquisition Fund created pursuant to Section 2.11 and the Rebate Fund created pursuant to Section 4.06) whether now or hereafter arising as security for the payment of the principal, interest, and premium, if any, evidenced and represented by the Certificates in accordance with their terms and the provisions of this Trust Agreement. Said pledge and grant shall constitute a first lien on such assets and shall be valid and binding from the date hereof for the benefit of the Owners of the Certificates and successors thereto. The Revenues shall not be used for any other
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purpose while any of the Certificates remain Outstanding; provided, however, that out of the Revenues and other moneys there may be applied such sums for such purposes as are permitted hereunder. This pledge shall constitute a first pledge of and charge and lien upon the Revenues and all other moneys on deposit in the funds and accounts established hereunder (other than amounts on deposit in the Acquisition Fund created pursuant to Section 2.11 and the Rebate Fund created pursuant to Section
4.06) for the payment of the interest and principal evidenced and represented by the Certificates in accordance with the terms hereof and thereof. The Trustee hereby accepts said assignment for the benefit of the Owners, subject to the provisions of this Trust Agreement. The Trustee shall be entitled to and shall receive all of the Revenues, and any Revenues collected or received by the Corporation shall be deemed to be held, and to have been collected or received, by the Corporation as agent of the Trustee and shall forthwith be paid by the Corporation to the Trustee.
Section 3.02 Receipt and Deposit of Revenues in the Revenue Fund. In order to carry out and effectuate the pledge, lien, and security interest described herein, the Corporation agrees and covenants that all Revenues when and as received shall be received by the Corporation in trust hereunder for the benefit of the Owners and shall be deposited when and as received by the Corporation in the “Revenue Fund” which fund the Trustee shall establish and maintain in trust in the name of the Trustee as a separate fund so long as any Certificates shall be Outstanding under this Trust Agreement.
All Revenues shall be held in trust in the Revenue Fund. All Revenues, whether received by the Corporation in trust or deposited with the Trustee as herein provided, shall nevertheless be allocated, applied and disbursed solely for the purposes and uses hereinafter in this Article set forth, and shall be accounted for separately and apart from all other accounts, funds, money or other resources of the Corporation, and the Corporation shall have no beneficial right or interest in any of the Revenues except only as herein provided.
Section 3.03 Establishment and Maintenance of Accounts for Use of Money in the Revenue Fund. Subject to Section 4.06, all money in the Revenue Fund shall be set aside by the Trustee in the following respective special accounts within the Revenue Fund, which accounts the Trustee shall establish and maintain hereunder, in the following order of priority:
(1) Interest Account;
(2) Principal Account;
(3) Reserve Account;
(4) Administration Account; and
(5) Surplus Account.
All money in each of such funds and accounts shall be held in trust by the Trustee and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section. (1) Interest Account. On or before the Business Day immediately preceding each Interest Payment Date, the Trustee shall transfer from amounts on deposit in the Revenue Fund to the Interest Account that amount of money which is equal to the amount of interest becoming due and payable as evidenced by the Certificates on the next succeeding Interest Payment Date. No such deposit need be made if the amount contained in the Interest Account is at least equal to the aggregate amount of interest becoming due and payable as evidenced and represented by the Certificates on such Interest
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Payment Date. All money in the Interest Account shall be used and withdrawn by the Trustee solely for the purpose of paying the interest evidenced and represented by the Certificates as it shall become due and payable (including accrued interest evidenced and represented by any Certificates purchased or prepaid prior to the payment dates thereof).
(2) Principal Account. On or before the Business Day immediately preceding each Certificate Payment Date the Trustee shall transfer from amounts on deposit in the Revenue Fund to the Principal Account an amount of money equal to the amount of principal becoming due and payable as evidenced by the Certificates on the next succeeding Certificate Payment Date. No such deposit need be made if the amount contained in the Principal Account is at least equal to the aggregate amount of principal becoming due and payable on the Certificates on such principal payment date. All the money in the Principal Account shall be used and withdrawn by the Trustee solely for the purpose of paying the principal evidenced and represented by the Certificates as it shall become due and payable, whether on their respective Certificate Payment Dates or prepayment, except that any money in any sinking fund account shall be used and withdrawn by the Trustee only to purchase or to prepay or to pay Term Certificates for which such sinking fund account was created. (3) Reserve Account. The Trustee shall transfer from amounts deposited in the Revenue Fund to the Reserve Account that amount of money (or other authorized deposit of security) which shall be required to maintain the Reserve Account in the full amount of the Reserve Account Requirement. No deposit need be made in the Reserve Account so long as there shall be on deposit therein a sum equal to the Reserve Account Requirement. All money in the Reserve Account (including all amounts which may be obtained from any insurance policy on deposit in the Reserve Account) shall be used and withdrawn by the Trustee solely for the purpose of replenishing the Interest Account or the Principal Account, in that order, in the event of any deficiency at any time in either of such accounts, but solely for the purpose of paying the interest or principal payable in connection with the Agreement, except that any cash amounts in the Reserve Account in excess of the amount required to be on deposit therein shall be withdrawn from the Reserve Account on each Interest Payment Date and deposited in the Interest Account.
In lieu of making a Reserve Account Requirement deposit or in replacement of moneys then on deposit in the Reserve Account (which shall be transferred by the Trustee to the City upon delivery of an insurance policy satisfying the requirements stated below), the City may also deliver to the Trustee an insurance policy (a “Qualified Reserve Instrument”) securing an amount, together with moneys or Permitted Investments on deposit in the Reserve Account, no less than the Reserve Account Requirement, issued by an insurance company licensed to issue insurance policies guaranteeing the timely payment of the principal and interest represented and evidenced by the Certificates and whose unsecured debt obligations (or for which obligations secured by such insurance company’s insurance policies) are rated in one of the two highest rating categories (without respect to any modifier) of the Rating Agency. Notwithstanding anything to the contrary set forth in this Trust Agreement, amounts on deposit in the Reserve Account shall be applied solely to the payment of debt service due on the Certificates.
If and to the extent that the Reserve Account has been funded with a combination of cash (or Permitted Investments) and a Qualified Reserve Instrument, then all such cash (or Permitted Investments) shall be completely used before any demand is made on such Qualified Reserve Instrument, and replenishment of the Qualified Reserve Instrument shall be made prior to any replenishment of any cash (or Permitted Investments). If the Reserve Account is funded, in whole or in part, with more than one Qualified Reserve Instrument, then any draws made against such Qualified
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Reserve Instrument shall be made pro rata. The prior written consent of the Insurer shall be a condition precedent to the deposit of any credit instrument provided in lieu of a cash deposit into the Reserve Account, if any. Amounts on deposit in the Reserve Account shall be applied solely to the payment of debt service due on the Certificates.
The Reserve Policy has been credited to the Reserve Account, and the Trustee shall make claims under the Reserve Policy in accordance with the terms of the Reserve Policy and Section 3.05 hereof. The Reserve Policy is a Qualified Reserve Instrument.
Neither the City nor the Corporation will have any obligation to replace the Reserve Policy or other Qualified Reserve Instrument or to fund the Reserve Account with cash if, at any time that the Certificates are Outstanding, any rating assigned to the Insurer is downgraded, suspended or withdrawn or amounts are not available under the Reserve Policy or other Qualified Reserve Instrument, other than in connection with a draw on the Reserve Policy or other Qualified Reserve Instrument. (4) Administration Account. On or before the Business Day immediately preceding each June 1 on which principal represented and evidenced by the Certificates is due and payable, the Trustee shall transfer, from amounts deposited in the Revenue Fund, and deposit into the Administration Account, an amount equal to the Administration Fee as determined in a Request of the City. All money in the Administration Account shall be used and withdrawn by the Trustee solely for the purpose of paying the fees of the Trustee and, upon the written direction of the City, the fees of the Rebate Analyst and any other similar fee payable in connection with the administration of the Agreement and this Trust Agreement, payable by the City, in accordance with the Agreement. Upon the Request of the City provided to the Trustee on or after any Interest Payment Date, any cash amounts in the Administration Account in excess of the amount required to be on deposit therein shall be withdrawn from the Administration Account and deposited in the Interest Account. (5) Surplus Account. On the Business Day immediately following each Interest Payment Date the Trustee shall deposit in the Surplus Account all money remaining in the Revenue Fund after the deposits required by Section 4.06 and by paragraphs (1), (2), (3) and (4) of this section have been made. On June 30 of each year, beginning on June 30, 2026, the Trustee shall disburse the money in the Surplus Account to the City to the extent the deposit of moneys, together with investment earnings thereon, if any, exceeded the deposits required by paragraphs (1), (2), (3) and (4) of this section.
Section 3.04 Deposit and Investments of Money in Accounts and Funds. Subject to Section 4.06, all money held by the Trustee in any of the accounts or funds established pursuant hereto shall be invested and reinvested in Permitted Investments at the Request of the City received not less than two (2) Business Days prior to the date of making such investment. The Trustee may conclusively rely upon the City’s Request as to both suitability and legality of the directed investment and the Trustee shall have no duty or obligation to determine the legality of any investments. The Trustee shall be entitled to assume that any investment which at the time of purchase is a Permitted Investment remains a Permitted Investment thereafter, absent actual receipt of written notice to the contrary. The Trustee shall notify the City no less than two (2) Business Days prior to the date moneys held hereunder will be available for investment, requesting that the City deliver to the Trustee a Request of the City specifying the Permitted Investments to be acquired by the Trustee with such moneys. All money held in the Reserve Account shall be invested and reinvested in Permitted Investments with a term to maturity not exceeding five years or on the final maturity date of the Certificates, whichever date is earlier; provided, however, that if an obligation may be prepaid at par on the Business Day prior to each Interest Payment Date during which such obligation is outstanding, such obligation may have any
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maturity. If no such Request of the City is received, the Trustee shall hold such moneys uninvested.
All such Permitted Investments shall be valued by the Trustee not less frequently than semi-annually on each Interest Payment Date at the lower of the cost or market value thereof as reflected in the Trustee’s monthly trust statements provided to the City. Subject to Section 4.06, all interest or profits received prior to the completion of the Projects (as certified in writing by the Authorized City Representative) on any money so invested shall be deposited in the Acquisition Fund, and all interest or profits received subsequent thereto on any money so invested shall be deposited in the Interest Account. The Trustee may act as a principal or agent in making or disposing of any investment, and all investments may be made through the Trustee’s investment department or that of its affiliates or subsidiaries, and may charge its ordinary and customary fees for such trades, including maintenance fees. The Trustee or its affiliates may act as sponsor, agent manager or depository with regard to any Permitted Investment. The Trustee shall not incur any liability for losses arising from any investments made pursuant to this Section. The Trustee shall sell in a commercially reasonably manner, or present for prepayment, any investment security whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund or account to which such investment security is credited and the Trustee shall not be liable for the selection of investments or responsible for any loss resulting from the acquisition or disposition of such investment security in accordance herewith. The Trustee shall have no liability in respect of losses incurred as a result of the liquidation of any investment prior to its stated maturity or the failure of the City to provide timely written investment Request. Ratings of Permitted Investments shall be determined at the time of purchase of such Permitted Investments and without regarding to ratings subcategories.
Although the City recognizes that it may obtain a broker confirmation or written statement containing comparable information at no additional cost, the City agrees that confirmations of permitted investments are not required to be issued by the Trustee for each month in which a monthly statement is rendered and that no statement need be rendered for any fund or account if no activity occurred in such fund or account during such month
Section 3.05 [Reserve Policy Payment and Reimbursement Provisions. The following provisions shall govern in the event of a conflict with any contrary provision of this Trust Agreement. (a) The City shall repay any draws under the Reserve Policy and pay all related reasonable expenses incurred by the Insurer in accordance with this Section 3.05. Interest shall accrue and be payable on such draws and expenses from the date of payment by the Insurer at the Late Payment Rate.
Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, the “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
As to the Reserve Account, amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy. The obligation to pay Policy Costs shall be secured by a valid lien on Revenues and other collateral pledged as security for the Certificates (subject only to the priority of payment provisions set forth under this Trust Agreement).
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All cash and investments in the Reserve Account shall be transferred to the Interest Account and the Principal Account, as applicable, for payment of the debt service on the Certificates before any drawing may be made on the Reserve Policy or any other Qualified Reserve Instrument in lieu of cash.
As to the Reserve Account, payment of any Policy Cost shall be made prior to replenishment of any cash amounts. Draws on all Qualified Reserve Instruments (including the Reserve Policy) on which there is available coverage shall be made on a pro rata basis (calculated by reference to the coverage then available thereunder) after applying all available cash and investments in the Reserve Account established for the Certificates. Payment of Policy Costs and reimbursement of amounts with respect to other Qualified Reserve Instruments shall be made on a pro rata basis prior to replenishment of any cash drawn from the Reserve Account. For the avoidance of doubt, “available coverage” means the coverage then available for disbursement pursuant to the terms of the applicable alternative credit instrument without regard to the legal or financial ability or willingness of the provider of such instrument to honor a claim or draw thereon or the failure of such provider to honor any such claim or draw.
(b) Draws under the Reserve Policy may only be used to make payments on Certificates.
(c) If the City shall fail to pay Policy Costs in accordance with the requirements of paragraph (a) above, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under this Trust Agreement, and the Agreement other than (i) acceleration of the maturity of the Certificates, or (ii) remedies which would adversely affect owners of the Certificates.
(d) The City covenants and agrees to include all Insurer Reimbursement Amounts (as more fully described herein) and Policy Costs (as more fully described herein) in its calculation of 2026 Installment Sale Payments and shall pay all such payments from Measure I Receipts as 2026 Installment Sale Payments.
(e) This Trust Agreement and the Agreement shall not be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The City’s obligation to pay such amount, if any, shall expressly survive payment in full of the Certificates. (f) The Trustee shall ascertain the necessity for a claim upon the Reserve Policy in accordance with the provisions of paragraph (a) hereof and provide notice to the Insurer at least three Business Days prior to each date upon which interest or principal is due on the Certificates.]
ARTICLE IV
COVENANTS
Section 4.01 Compliance with Agreement. The Corporation shall not do or permit anything to be done, or omit or refrain from doing anything, in any case where any such act done or permitted to be done, or any such omission of or refraining from action, would or might be a ground for cancellation or termination of the Agreement by the City.
Section 4.02 Amendment of Agreement. The City and the Corporation will not amend or permit the amendment of the Agreement without (a)(1) a determination that such amendment does not
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materially adversely affect the interest of the Owners or the Insurer or (2) the written consents of the Insurer and the Owners of a majority in aggregate principal amount of the Certificates then Outstanding, and (b) an Opinion of Counsel to the effect that such amendment is authorized and permitted by this Trust Agreement, is enforceable against the Corporation and will not cause interest with respect to the Certificates to be included in gross income for federal income tax purposes; provided that no such supplement, amendment, modification or termination shall reduce the amount of 2026 Installment Sale Payments to be made to the Corporation or the Trustee by the City pursuant to the Agreement, or extend the time for making such payments, or permit the creation of any lien prior to or on a parity with the lien created by the Agreement on Revenues (except as expressly provided in the Agreement), in each case without the written consent of all of the Owners of the Certificates then Outstanding.
Section 4.03 Against Encumbrances. The Corporation will not make any pledge of or place any charge or lien upon the Revenues except as provided herein, and will not issue any Certificates, notes or obligations payable from the Revenues or secured by a pledge of or charge or lien upon the Revenues except the Certificates. The Corporation shall at all times, to the extent permitted by law, defend, preserve and protect said pledge of such assets, and the lien thereon and security interest therein created hereby, against all claims and demands of all Persons whomsoever.
Section 4.04 Punctual Payment. The Corporation shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Certificates, in strict conformity with the terms of the Certificates and of this Trust Agreement, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Trust Agreement and received by the Corporation or the Trustee.
Section 4.05 Extension of Payment of Certificates. The City and the Corporation shall not directly or indirectly extend or assent to the extension of the maturity of any of the Certificates or the time of payment of any claims for interest by the purchase of such Certificates or by any other arrangement, and in case the maturity of any of the Certificates or the time of payment of any such claims for interest shall be extended, such Certificates or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Trust Agreement, except subject to the prior payment in full of the principal represented and evidenced by all of the Certificates then Outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the City to direct the Trustee to execute and deliver Certificates for the purpose of refunding any Outstanding Certificates, and such execution and delivery shall not be deemed to constitute an extension of maturity of the Certificates.
Section 4.06 Rebate Fund.
(1) Establishment. The Trustee shall establish a separate fund designated the “Rebate Fund” when required in accordance herewith. Absent an Opinion of Counsel that the exclusion from gross income for federal income tax purposes of interest with respect to the Certificates will not be adversely affected, the City shall cause to be deposited in the Rebate Fund such amounts as are required to be deposited therein pursuant to this Section and the Tax Certificate. All money at any time deposited in the Rebate Fund shall be held by the Trustee in trust for payment to the United States Treasury. All amounts on deposit in the Rebate Fund for the Certificates shall be governed by this Section and the Tax Certificate for the Certificates, unless and to the extent that the City delivers to the Trustee an Opinion of Counsel that the exclusion from gross income for federal income tax purposes of interest with respect to the Certificates will not be adversely affected, if such requirements are not
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satisfied. Notwithstanding anything to the contrary herein or in the Tax Certificate, the Trustee:
(i) shall be deemed conclusively to have complied with the provisions thereof if it follows all Requests of the City; (ii) shall have no liability or responsibility to enforce compliance by the City with the terms of the Tax Certificate; (iii) may rely conclusively on the City’s calculations and determinations and certifications relating to rebate matters; and (iv) shall have no responsibility to independently make any calculations or determinations or to review the City’s calculations or determinations thereunder. (a) Annual Computation. Within 55 days of the end of each Certificate Year (as such term is defined in the Tax Certificate), the City shall calculate or cause to be calculated the amount of rebatable arbitrage, in accordance with Section 148(f)(2) of the Code and Section 1.148-3 of the Treasury Regulations (taking into account any applicable exceptions with respect to the computation of the rebatable arbitrage, described, if applicable, in the Tax Certificate (e.g., the temporary investments exceptions of Section 148(f)(4)(B) and the construction expenditures exception of Section 148(f)(4)(C) of the Code), and taking into account whether the election pursuant to Section 148(f)(4)(C)(vii) of the Code (the “1½% Penalty”) has been made), for this purpose treating the last day of the applicable Certificate Year as a computation date, within the meaning of Section 1.148-1(b) of the Treasury Regulations (the “Rebatable Arbitrage”). The City shall obtain expert advice as to the amount of the Rebatable Arbitrage to comply with this Section. (b) Annual Transfer. Within 55 days of the end of each Certificate Year, upon the Request of the City, an amount shall be deposited to the Rebate Fund by the Trustee from any City Revenues legally available for such purpose (as specified by the City in the aforesaid Request), if and to the extent required so that the balance in the Rebate Fund shall equal the amount of Rebatable Arbitrage so calculated in accordance with clause (i) of this subsection (a). In the event that immediately following the transfer required by the previous sentence, the amount then on deposit to the credit of the Rebate Fund exceeds the amount required to be on deposit therein, upon Request of the City, the Trustee shall withdraw the excess from the Rebate Fund and then credit the excess to the Certificate Payment Fund.
(c) Payment to the Treasury. The Trustee shall pay, as directed by Request of the City, to the United States Treasury, out of amounts in the Rebate Fund:
(1) Not later than 60 days after the end of: (X) the fifth Certificate Year; and (Y) each applicable fifth Certificate Year thereafter, an amount equal to at least 90% of the Rebatable Arbitrage calculated as of the end of such Certificate Year; and (2) Not later than 60 days after the payment of all of the Certificates, an amount equal to 100% of the Rebatable Arbitrage calculated as of the end of such applicable Certificate Year, and any income attributable to the Rebatable Arbitrage, computed in accordance with Section 148(f) of the Code and Section 1.148-3 of the Treasury Regulations.
In the event that, prior to the time of any payment required to be made from the Rebate Fund, the amount in the Rebate Fund is not sufficient to make such payment when such payment is due, the City shall calculate or cause to be calculated the amount of such deficiency and deposit an amount received from any legally available source equal to such deficiency prior to the time such payment is due. Each payment required to be made pursuant to this subsection (a) shall be made to the Internal Revenue Service Center, Ogden, Utah 84201 on or before the date on which such payment is due, and shall be accompanied by Internal Revenue Service Form 8038-T (prepared by the City), or shall be made in such other manner as provided under the Code.
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(2) Disposition of Unexpended Funds. Any funds remaining in the Rebate Fund after prepayment and payment of the Certificates and the payments described in subsection (a) above being made may be withdrawn by the City and utilized in any manner by the City. (3) Survival of Defeasance. Notwithstanding anything in this Section to the contrary, the obligation to comply with the requirements of this Section shall survive the defeasance or payment in full of the Certificates.
Section 4.07 Accounting Records and Reports. The Trustee shall keep proper books of record and account in accordance with industry standards in which complete and correct entries shall be made of all transactions made by the Trustee relating to the receipt, investment, disbursement, allocation and application of all funds received by the Trustee hereunder. Such records shall specify the account or fund to which each investment (or portion thereof) held by the Trustee is to be allocated and shall set forth, in the case of each investment: (a) its purchase price; (b) identifying information, including par amount, coupon rate, and payment dates; (c) the amount received at maturity or its sale price, as the case may be; (d) the amounts and dates of any payments made with respect thereto; and (e) such documentation as is required to be obtained as evidence to establish that all investments have been purchased in arms’ length transactions with no amounts paid to reduce the yield on the investments.
Such records shall be open to inspection by the City at any reasonable time during regular business hours on reasonable notice (including, without limitation, reasonable prior written notice of inspection).
Section 4.08 Observance of Laws and Regulations. The City will faithfully observe and perform all lawful and valid obligations or regulations now or hereafter imposed on it by contract, or prescribed by any state or national law, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of each and every franchise, right or privilege now owned or hereafter acquired by it, including its right to exist and carry on its businesses, to the end that such observance or performance is material to the transactions contemplated hereby.
Section 4.09 Further Assurances. Whenever and so often as reasonably requested to do so by the Trustee or any Owner, the City will promptly execute and deliver or cause to be executed and delivered all such other and further assurances, documents or instruments, and promptly do or cause to be done all such other and further things as may be necessary or reasonably required in order to further and more fully vest in the Trustee and the Owners all rights, interests, powers, benefits, privileges and advantages conferred or intended to be conferred upon them hereby.
Section 4.10 Recordation and Filing. The City will file, record, register, renew, refile and rerecord all such documents, including financing statements (or continuation statements in connection therewith), as may be required by law in order to maintain at all times a security interest in the Agreement under and pursuant to this Trust Agreement, all in such manner, at such times and in such places as may be required in order to fully perfect, preserve and protect the benefit, protection and security of the Owners and the Insurer, and the rights of the Trustee hereunder, and the City will do whatever else may be necessary or be reasonably required in order to perfect and continue the Corporation’s right, title and interest in and to, the Agreement (excepting its right to indemnification thereunder), including the right to receive 2026 Installment Sale Payments from the City as provided herein. The City’s receipt of 2026 Installment Sale Payments is subordinate to certain obligations of the San Bernardino County Transportation Authority as provided in the Measure I Ordinance.
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Section 4.11 Acquisition of the Projects. Subject to and as provided in the Agreement, the Corporation will cause to be acquired and constructed the Projects with all practicable dispatch and such acquisition will be made in an expeditious manner and in conformity with the law so as to complete the same as soon as possible.
ARTICLE V
THE TRUSTEE
Section 5.01 The Trustee. The Bank of New York Mellon Trust Company, N.A. shall serve as the Trustee for the Certificates for the purpose of receiving all money which the City and the City are required to deposit with the Trustee hereunder and for the purpose of allocating, applying and using such money as provided herein and for the purpose of paying the interest, principal and prepayment premiums, if any, evidenced and represented by the Certificates presented for payment in Los Angeles, California, with the rights and obligations provided herein. The City agrees that it will at all times maintain a Trustee having a designated office in San Francisco or Los Angeles, California.
The City may at any time, unless there exists any event of default as defined in Section 7.01, remove the Trustee initially appointed and any successor thereto, upon 30 days written notice, and may appoint a successor or successors thereto by an instrument in writing; provided that any such successor shall (i) be a bank or trust company doing business and having a principal office in San Francisco or Los Angeles, California, (ii) have (or in the case of a bank or trust company which is part of a bank holding company system, the related bank holding company shall have) a combined capital (exclusive of borrowed capital) and surplus of at least seventy-five million dollars ($75,000,000) and (iii) be subject to supervision or examination by federal or state City. If such bank or trust company publishes a report 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 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. The Trustee may at any time resign by giving written notice of such resignation to the City and the Insurer and by mailing to the Owners notice of such resignation. Upon receiving such notice of resignation, the City shall promptly appoint a successor Trustee by an instrument in writing. Any removal or resignation of a Trustee and appointment of a successor Trustee shall become effective only upon the acceptance of appointment by the successor Trustee. If, within thirty (30) days after notice of the removal or resignation of the Trustee no successor Trustee shall have been appointed and shall have accepted such appointment, the removed or resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee, at the expense of the City, which court may thereupon, after such notice, if any, as it may deem proper and prescribe and as may be required by law, appoint a successor Trustee having the qualifications required hereby.
Any bank, corporation or association into which the Trustee may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any bank, corporation or association succeeding to all or substantially all of the corporate trust business of the Trustee shall be the successor of Trustee hereunder without the execution or filing of any paper with any party hereto or any further act on the part of any of the parties hereto except where an instrument of transfer or assignment is required by law to effect such succession, anything herein to the contrary notwithstanding.
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The Trustee is hereby authorized to prepay the Certificates when duly presented for payment on their respective maturity dates or on prior prepayment. The Trustee shall cancel all Certificates upon payment thereof or upon the surrender thereof by the City and shall destroy such Certificates it has received in accordance with its retention policy then in effect. The Trustee shall keep accurate records of all Certificates paid and discharged and canceled by it.
The City, solely from amounts held in the Costs of Issuance Fund or paid by the City specifically for such purpose, shall from time to time, subject to any agreement between the City and the Trustee then in force, pay to the Trustee compensation for its services, reimburse the Trustee for all its advances and expenditures including but not limited to advances to and fees and expenses of independent accountants and in-house and other counsel or other experts employed by it and reasonably required in the exercise and performance of its rights and obligations hereunder, and, to the extent permitted by law, indemnify and hold the Trustee and its officers, directors, employees and agents harmless against any claim, loss, liability, damages, expenses (including legal fees and expenses) or advances , arising out of or in connection with the acceptance or administration of the trusts hereunder, including the costs and expenses of defending itself against any claim (whether asserted by the City, or any holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, or in connection with enforcing the provisions of this Section, except to the extent that such loss, damage, claim, liability or expense is due to its own negligence or willful misconduct. The obligations of the City under this paragraph to compensate, indemnify, reimburse and hold the Trustee harmless shall constitute additional indebtedness hereunder, and such indebtedness shall have priority over the Certificates in respect of all property and funds held or collected by the Trustee as such, except funds held in trust by the Trustee for the benefit of the Owners of particular Certificates, including, without limitation, funds held by the Trustee in trust to prepay all or a portion of Outstanding Certificates prior to their respective maturity dates for which a notice of prepayment has been sent as provided herein.
Section 5.02 Liability of Trustee. The recitals of facts, agreements and covenants herein and in the Certificates shall be taken as recitals of facts, agreements and covenants of the City, and the Trustee assumes no responsibility for the use of any proceeds of the Certificates, the correctness of the same, the collection of the Revenues or makes any representation as to the sufficiency or validity hereof, of the Certificates or any security therefor or any offering material distributed in connection with the Certificates and shall not incur any responsibility in respect thereof other than in connection with the rights or obligations assigned to or imposed upon it herein, in the Certificates or in law or equity. The Trustee shall not be liable in connection with the performance of its duties hereunder except for its own negligence, willful misconduct or breach of fiduciary duty.
The Trustee shall not be bound to recognize any person as the Owner of a Certificate unless and until such Certificate is submitted for inspection, if required, and such Certificate is registered in such person’s name.
Whenever the Trustee shall deem it necessary or desirable that a factual or legal matter be established or proved prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may, in the absence of bad faith on the part of the Trustee, be deemed to be conclusively proved and established by a certificate conforming to the requirements herein or an opinion of counsel, which certificate or opinion shall be full and complete authorization and protection to the Trustee for any action taken or suffered under the provisions hereof upon the faith thereof, but in its discretion the Trustee may in lieu thereof accept other evidence of such matter or may require such additional evidence as it may deem reasonable.
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In accepting the trust hereby created, the Trustee acts solely as Trustee for the Owners and not in its individual capacity and all persons, including without limitation the Owners, the City and the City, having any claim against the Trustee arising from this Trust Agreement not attributable to the Trustee’s negligence or willful misconduct shall look only to the funds and accounts held by the Trustee hereunder for payment except as otherwise provided herein. The duties and obligations of the Trustee shall be determined solely by the express provisions of this Trust Agreement, the Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Trust Agreement, and no implied covenants or obligations (fiduciary or otherwise) shall be read into this Trust Agreement against the Trustee. The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed. The Trustee shall not be liable with respect to any action taken or not taken hereunder in good faith in accordance with the direction of the Owners of not less than a majority in aggregate principal amount of the Certificates at the time Outstanding. The Trustee shall, during the existence of any event of default (which has not been cured), exercise such of the rights and powers vested in it by this Trust Agreement, and use the same degree of care and skill in their exercise, as a prudent person would exercise of use under the circumstances in the conduct of its own affairs. The permissive right of the Trustee to do things enumerated in this Trust Agreement 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 and such immunities and exceptions and its right to payment of its fees and expenses shall survive its resignation or removal and the final payment and defeasance of the Certificates. Under no circumstances shall the Trustee be liable in its individual capacity for the obligations evidenced by the Certificates. The Trustee, in its individual or any other capacity, may become the Owner of any Certificates or other obligations of any party hereto with the same rights which it would have if not the Trustee. At any and all reasonable times, the Trustee, and its agents shall have the right to fully inspect the Projects, including all books, papers and records of the City pertaining to the Projects and the Certificates, and to take such memoranda therefrom and with regard thereto and make photocopies thereof as may be desired. The Trustee shall not be required to give any Certificate or surety in respect of the execution of said trusts and powers or otherwise in respect of the premises. Before taking or refraining from any action hereunder at the request or direction of the Owners, the Trustee may require that an indemnity Certificate satisfactory to the Trustee be furnished to it and be in full force and effect.
None of the provisions contained herein or in the Agreement shall require the Trustee to expend or risk its own funds or continue to do so or otherwise incur individual financial liability in the performance of any of its duties or in the exercise of any of its rights or powers, and the Trustee may refuse to perform any duty or exercise any right or power, if it shall reasonably believe that repayment of such funds or adequate indemnity against such risk or liability is not assured to it. The Trustee may conclusively rely and shall be protected in acting or failing to act upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, Certificate, debenture, note, other evidence of indebtedness or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. In acting or omitting to act pursuant to any other applicable agreements to which the Trustee is a party, or any other documents executed in connection herewith, the Trustee shall be entitled to all of the rights, immunities and indemnities accorded to it under this Trust Agreement. The Trustee shall not be required to take notice or be deemed to have notice of any Event of Default hereunder except failure by the City to make any payment of principal or interest under the Agreement when due, unless the Trustee shall be specifically notified in writing at its corporate trust office of such default by the Owners of not less than 25% of the aggregate
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principal amount of Certificates then Outstanding. Notwithstanding any other provision hereof, the Trustee shall have the right, but shall not be required, to demand any showings, certificates, opinions, appraisals or other information, or official action or evidence thereof, required as a condition of such action deemed by the Trustee to be desirable for the purpose of establishing the rights of the Trustee with respect to the authentication of any Certificates, the withdrawal of any cash, the release of any property or the taking of any other action by the Trustee. When the Trustee incurs expenses or renders services after the occurrence of an Event of Default, such expenses and the compensation for such services are intended to constitute expenses of administration under any federal or state bankruptcy, insolvency, arrangement, moratorium, reorganization or other debtor relief law.
The Trustee shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Trust Agreement and related financing documents and delivered using Electronic Means; provided, however, that the City and/or the City, as applicable, shall provide to the Trustee an incumbency certificate listing officers with the City to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City and/or the City, as applicable, whenever a person is to be added or deleted from the listing. If the City and/or the City, as applicable, elects to give the Trustee Instructions using Electronic Means and the Trustee in its discretion elects to act upon such Instructions, the Trustee’s reasonable understanding of such Instructions shall be deemed controlling. The City and the City understand and agree that the Trustee cannot determine the identity of the actual sender of such Instructions by Electronic Means and that the Trustee shall conclusively presume that directions that purport to have been sent by an Authorized Officer (bearing such officer’s signature) listed on the incumbency certificate provided to the Trustee have been sent by such Authorized Officer. The City and the City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Trustee and that the City, the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City and/or the City, as applicable.
The Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Trustee’s reasonable reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City and the City agree: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Trustee, including without limitation the risk of the Trustee acting on unauthorized Instructions by Electronic Means, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Trustee and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City and/or the City, as applicable; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions by Electronic Means provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances; and (iv) to notify the Trustee immediately upon learning of any compromise or unauthorized use of the security procedures.
The Trustee shall not be liable to the parties hereto or deemed in breach or default hereunder if and to the extent its performance hereunder is prevented by reason of force majeure. The term “force majeure” means an occurrence that is beyond the control of the Trustee and could not have been avoided by exercising due care. Force majeure shall include but not be limited to acts of God, terrorism, war, riots, strikes, fire, floods, earthquakes, epidemics or other similar occurrences.
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ARTICLE VI
AMENDMENT OF THE TRUST AGREEMENT
Section 6.01 Amendment of the Trust Agreement. This Trust Agreement and the rights and obligations of the Corporation, the City, the Trustee and the Owners may be amended at any time by a Supplemental Trust Agreement which shall become binding when the written consents of the Insurer and the Owners of a majority in aggregate principal amount of the Certificates then Outstanding, exclusive of Certificates disqualified as provided in Section 6.02, are filed with the Trustee. No such amendment shall (1) extend the Certificate Payment Date of or reduce the interest rate with respect to, or amount of interest or principal or premium, if any, evidenced and represented by any Certificate without the express written consent of the Insurer and the Owner of such Certificate, or (2) permit the creation by the Corporation of any pledge of or charge or lien upon the Revenues as provided herein superior to or on a parity with the pledge, lien, and security interest described herein for the benefit of the Certificates, or (3) reduce the percentage of Certificates required for the written consent to any such amendment or any amendment of the 2026 Installment Sale Agreement pursuant to Section 4.02 hereof, or (4) modify any rights or obligations of the Trustee, the Corporation or the City without their prior written assent thereto, respectively.
This Trust Agreement and the rights and obligations of the Corporation, the City and of the Owners may also be amended at any time by a Supplemental Trust Agreement which shall become binding upon adoption without the consent of any Owners, but only to the extent permitted by law and after receipt of an approving Opinion of Counsel, for any purpose that will not in the judgment of the City or as set forth in an Opinion of Counsel materially adversely affect the interests of the Owners, including (without limitation) for any one or more of the following purposes:
(a) to add to the agreements and covenants required herein to be performed by the Corporation or the City other agreements and covenants thereafter to be performed by the Corporation or the City, or to surrender any right or power reserved herein to or conferred herein on the Corporation or the City;
(b) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or in regard to questions arising hereunder which the City may deem desirable or necessary and not inconsistent herewith; (c) to add to the agreements and covenants required herein, such agreements and covenants as may be necessary to qualify the Trust Agreement under the Trust Indenture Act of 1939; or
(d) for any other purpose that does not materially adversely affect the interests of the Owners or the Insurer.
In executing, or accepting the additional trusts created by, any Supplemental Trust Agreement permitted by this Article or the modification thereby of the trusts created by the Trust Agreement, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an opinion of counsel stating that the execution of such Supplemental Trust Agreement is authorized or permitted by the Trust Agreement and complies with the terms hereof.
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Section 6.02 Disqualified Certificates. Certificates owned or held by or for the account of the Corporation or the City shall not be deemed Outstanding for the purpose of any consent or other action or any calculation of Outstanding Certificates provided in this article, and shall not be entitled to consent to or take any other action provided in this article.
Section 6.03 Endorsement or Replacement of Certificates After Amendment. After the effective date of any action taken as hereinabove provided, the City may determine that the Certificates may bear a notation by endorsement in form approved by the City as to such action, and in that case upon demand of the Owner of any Outstanding Certificates and presentation of their Certificate for such purpose at the office of the Trustee a suitable notation as to such action shall be made on such Certificate. If the City shall so determine, new Certificates so modified as, in the opinion of the City, shall be necessary to conform to such action shall be prepared, executed and authenticated, and in that case upon demand of the Owner of any Outstanding Certificate a new Certificate or Certificates, shall be exchanged at the office of the Trustee without cost to each Owner for its Certificate or Certificates then Outstanding upon surrender of such Outstanding Certificates.
Section 6.04 Amendment by Mutual Consent. The provisions of this article shall not prevent any Owner from accepting any amendment as to the particular Certificates held by them, provided that due notation thereof is made on such Certificates.
Section 6.05 Information to Rating Agency. The City shall provide any Rating Agency rating the Certificates a copy of each amendment to the Trust Agreement or to the Agreement promptly following the execution or adoption of such amendment.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES OF OWNERS
Section 7.01 Events of Default. If any default in the payment of 2026 Installment Sale Payments or any other “Event of Default” defined in the Agreement shall occur and be continuing, or if any default shall be made by the City in the performance or observance of any other of the covenants, agreements or conditions on its part herein contained and such default shall have continued for a period of thirty (30) days after written notice thereof shall have been given to the City by the Trustee, the Insurer or the Owners of not less than a majority in aggregate principal amount evidenced and represented by the Certificates at the time Outstanding (with the prior written consent of the Insurer), then such default shall constitute an “Event of Default” hereunder, and in each and every such case during the continuance of such Event of Default the Trustee or the Owners of not less than a majority in aggregate principal amount of the Certificates at the time Outstanding shall be entitled, upon notice in writing to the City, but subject to the provisions of Section 7.06, to exercise the remedies provided under the Agreement which are necessary or desirable to collect the 2026 Installment Sale Payments.
No grace period shall be permitted for payment defaults.
The Owners of Certificates, for purposes of the Trust Agreement and the Agreement, to the extent of their interest, shall be entitled to all rights and security of the Corporation pursuant to the Agreement and the Trust Agreement. The City recognizes the rights of the Owners of the Certificates, acting directly or through the Trustee, to enforce the obligations and covenants contained in the Agreement and the Trust Agreement.
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Section 7.02 Application of Funds Upon Acceleration of Agreement. All moneys received by the Trustee pursuant to any right given or action taken under the provisions of this Article VII shall be deposited into a segregated payment account of the Revenue Fund and be applied by the Trustee in the following order; provided that the Trustee shall obtain and follow the instructions contained in an Opinion of Counsel and rebate or set aside for rebate from the specified funds held hereunder, any amount pursuant to such instructions required to be paid to the United States of America under the Code:
First, to the payment of the costs and expenses of the Trustee, if any, in carrying out the provisions of this article, including reasonable compensation to its agents, accountants and counsel and including any indemnification expenses;
Second, to the payment of the principal and interest represented and evidenced by the Certificates, in connection with a mandatory prepayment of Certificates pursuant to Section 2.10(b) hereof and the delivery of a Cash Flow Report; and
Third, to the payment of amounts owed to the Insurer not paid pursuant to First and Second above.
Section 7.03 Other Remedies of the Trustee. The Trustee shall have the right (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights hereunder against the City or any council member, board member, trustee, member, officer or employee thereof, and to compel the City or any such council member, board member, trustee, member, officer or employee thereof to observe or perform its, his, hers or their duties under applicable law and the agreements, conditions, covenants and terms contained herein, or in the Agreement, required to be observed or performed by it, him, her or them; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Trustee or the Owners; or
(c) by suit in equity upon the happening of any default hereunder to require the City and any council member, board member, trustee, member, officer and employee to account as the trustee of any express trust.
Section 7.04 Non-Waiver. A waiver by the Trustee of any default hereunder or breach of any obligation hereunder shall not affect any subsequent default hereunder or any subsequent breach of an obligation hereunder or impair any rights or remedies on any such subsequent default hereunder or on any such subsequent breach of an obligation hereunder. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default hereunder shall impair any such right or remedy or shall be construed to be a waiver of any such default hereunder or an acquiescence therein, and every right or remedy conferred upon the Trustee by applicable law or by this article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or to exercise any remedy is abandoned or determined adversely to the Trustee or the City, the Trustee and the City shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
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Section 7.05 Actions by Trustee as Attorney-in-Fact. Any action, proceeding or suit which any Owner 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, whether or not the Trustee is an Owner, and the Trustee is hereby appointed (and the successive Owners, by taking and holding the Certificates issued hereunder, shall be conclusively deemed to have so appointed it) the true and lawful attorney-in-fact of the Owners for the purpose of bringing any such action, proceeding or suit and for the purpose of doing and performing any and all acts and things for and on behalf of the Owners as a class or classes as may be advisable or necessary in the opinion of the Trustee as such attorney-in-fact.
Nothing herein shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Owner any plan of reorganization, arrangement, adjustment, or composition affecting the Certificates or the rights of any Owner thereof, or to authorize the Trustee to vote in respect of the claim of any Owner in any such proceeding without the approval of the Owners so affected.
Section 7.06 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. If any remedial action hereunder is discontinued or abandoned, the Trustee and the Owners shall be restored to their former positions.
Section 7.07 Limitation on Owners’ Right to Sue. No Owner of any Certificate issued hereunder shall have the right to institute any suit, action or proceeding at law or equity, for any remedy under or upon this Trust Agreement, unless (a) such Owner shall have previously given to the Trustee written notice of the occurrence of an event of default as defined in Section 7.01 hereunder; (b) the Owners of at least a majority in aggregate principal amount of all the Certificates then Outstanding shall have made written request upon the Trustee to exercise the powers hereinbefore granted or to institute such suit, action or proceeding in its own name; (c) said Owners shall have tendered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities to be incurred in compliance with such request; and (d) the Trustee shall have refused or omitted to comply with such request for a period of sixty (60) days after such request and consent shall have been received by, and said tender of indemnity shall have been made to, the Trustee.
The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Trust Agreement at the request or direction of any of the Owners in connection with a default or Event of Default hereunder pursuant to this Trust Agreement, unless such Owners shall have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction.
Such notification, request, consent, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any owner of Certificates of any remedy hereunder; it being understood and intended that no one or more owners of Certificates shall have any right in any manner whatever by their action to enforce any right under this Trust Agreement, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Trust Agreement shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Certificates.
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Packet Pg. 452 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue 37 4917-0149-8253v3/022217-0004
Section 7.08 Limited Liability of the City. Except as expressly provided in the Agreement, the City shall not have any obligation or liability to the Corporation, the Trustee or the Owners, with respect to this Trust Agreement or the Certificates. The obligations under this Trust Agreement do not constitute a debt of the City or of the State, or of any political subdivision thereof, in contravention of any constitutional or statutory debt limitation or restriction. Neither the faith and credit nor the taxing power of the City or the State, or any political subdivision thereof, is pledged to the payment of the 2026 Installment Sale Payments or other payments required to be made under the Agreement.
Section 7.09 Limited Liability of the Corporation. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Trustee or the Owners, with respect to the payment when due of the 2026 Installment Sale Payments by the City, or with respect to the observance or performance by the City of the other agreements, conditions, covenants and terms contained in the Agreement, or with respect to the performance by the Trustee of any obligation contained herein required to be performed by it. Notwithstanding anything to the contrary contained in the Certificates, the Trust Agreement or any other document related thereto, the Corporation shall not have any liability hereunder or by reason hereof or in connection with any of the transactions contemplated hereby except to the extent payable from moneys received from or with respect to the Agreement and available thereof in accordance with the Trust Agreement.
ARTICLE VIII
DEFEASANCE
Section 8.01 Discharge of Certificates.
(a) If the City shall pay or cause to be paid or there shall otherwise be paid to the Owners of all Outstanding Certificates the principal, premium, if any, and interest represented and evidenced by such Certificates at the times and in the manner stipulated herein and therein, and the Insurer shall have been paid all amounts owed to the Insurer under the Insurance Policy and the Reserve Policy, then the Owners of such Certificates shall cease to be entitled to the pledge of and charge and lien upon the Revenues as provided herein, and all agreements, covenants and other obligations of the Corporation and the City to the Owners of such Certificates hereunder shall thereupon cease, terminate and become void and be discharged and satisfied. In such event, the Trustee shall execute and deliver to the City all such instruments as may be necessary or desirable to evidence such discharge and satisfaction and the Trustee shall pay over or deliver to the City all money or securities held by it pursuant hereto which are not required for the payment of the principal, interest, and premium, if any, evidenced and represented by such Certificates.
(b) Any Outstanding Certificates shall prior to the maturity date or prepayment date thereof be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if (1) in case any of such Certificates are to be prepaid on any date prior to their respective maturity dates, the Corporation shall have given to the Trustee in form satisfactory to it irrevocable instructions to provide notice in accordance with Section 2.10(f), (2) there shall have been deposited with the Trustee either (A) money in an amount which shall be sufficient or (B) Defeasance Obligations, in each case the interest on and principal of which when paid will provide money which, together with the money, if any, deposited with the Trustee at the same time, shall be sufficient, in the opinion of an Independent Certified Public Accountant, to pay when due the interest to become due on such Certificates on and prior to the maturity date or redemption date thereof, as the case may be, and the principal, interest, and premium, if any, evidenced and represented by such
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Certificates, and (2) in the event such Certificates are not by their terms subject to prepayment within the next succeeding sixty (60) days, the City shall have given the Trustee in form satisfactory to it irrevocable instructions to mail as soon as practicable, a notice to the Owners of such Certificates that the deposit required by clause (2) above has been made with the Trustee and that such Certificates are deemed to have been paid in accordance with this section and stating the maturity date or redemption date upon which money is to be available for the payment of the principal of and prepayment premiums, if any, on such Certificates. [In addition, the City shall cause to be delivered to the Insurer (i) a report of an Independent Certified Public Accountant or such other accountant as shall be acceptable to the Insurer verifying the sufficiency of the escrow established to pay the Certificates in full on the maturity or prepayment date (“Verification”), (ii) an escrow deposit agreement or other irrevocable instructions (which shall be acceptable in form and substance to the Insurer), and (iii) an Opinion of Counsel to the effect that the Certificates are no longer “Outstanding” under the Trust Agreement; each Verification and defeasance opinion shall be acceptable in form and substance, and addressed, to the City and the Trustee. The Insurer shall be provided with final drafts of the above referenced documentation not less than five Business Days prior to the funding of the escrow.] Certificates shall be deemed “Outstanding” under the Trust Agreement unless and until they are in fact paid and retired or the above criteria are met. [The Trust Agreement, the Agreement and each other Related Document (as defined in [Section 9.01(f)] below) shall not be discharged or terminated unless all amounts due or to become due to the Insurer have been paid in full or duly provided for. The City’s obligation to pay such amounts shall expressly survive payment in full of the Certificates.] Section 8.02 Unclaimed Money. Any moneys held by the Trustee in trust for the payment and discharge of the principal, or premium (if any) or interest represented and evidenced by, any Certificate which remain unclaimed for two years after the date when such principal, premium (if any) or interest has become payable, if such moneys were held by the Trustee at such date, or for two years after the date of deposit of such moneys if deposited with the Trustee after the date when such principal, premium or interest become payable, shall be repaid by the Trustee to the City as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owner of such Certificate shall look only to the City for the payment of such principal, premium (if any) or interest. Any money held by the Trustee pursuant to this paragraph shall be held uninvested and without any liability for interest.
ARTICLE IX
[PROVISIONS RELATED TO THE INSURER AND THE INSURANCE POLICY] Section 9.01 [General Provisions. The following provisions shall govern in the event of a conflict with any contrary provision of this Trust Agreement.] [TO COME] Section 9.02 [Claims Upon the Insurance Policy and Payments by and to the Insurer.
The following provisions shall govern in the event of a conflict with any contrary provision of this Trust Agreement.] [TO COME]
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Packet Pg. 454 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue 39 4917-0149-8253v3/022217-0004
ARTICLE X
MISCELLANEOUS
Section 10.01 Limited Liability of Corporation and City. (a) Limited Liability of the City. Except for the payment of 2026 Installment Sale Payments when due in accordance with the Agreement and the performance of the other covenants and agreements of the City contained herein and in the Agreement, the City shall have no obligation or liability to any of the other parties or to the Owners with respect to this Trust Agreement or the terms, execution, delivery or transfer of the Certificates, or the distribution of 2026 Installment Sale Payments to the Owners by the Trustee.
(b) No Liability of the Corporation to the Owners. Except as expressly provided herein, the Corporation shall not have any obligation or liability to the Owners with respect to the payment when due of the 2026 Installment Sale Payments by the City or with respect to the observance or performance by the City of the other agreements, conditions, and covenants imposed upon the City by the Agreement or by this Trust Agreement.
(c) No Liability of the City or Corporation for Trustee Performance. Except as expressly provided herein, neither the City nor the Corporation shall have any obligation or liability to any other parties or to the Owners with respect to the performance by the Trustee of any duty imposed upon it under this Trust Agreement.
Section 10.02 Benefits of the Trust Agreement Limited to Parties. Nothing contained herein, expressed or implied, is intended to give to any person other than the City, the Corporation, the Trustee, the Insurer and the Owners any right, remedy or claim under or by reason hereof. Any agreement or covenant required herein to be performed by or on behalf of the City or the Corporation shall be for the sole and exclusive benefit of the Trustee, the Corporation, the Insurer, and the Owners.
Section 10.03 Successor Is Deemed Included In All References To Predecessor.
Whenever either the City, the Corporation, or the Trustee or any officer thereof is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the City, the Corporation or the Trustee or such officer, and all agreements, conditions, covenants and terms contained herein required to be observed or performed by or on behalf of the City, the Corporation or the Trustee or any officer thereof shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 10.04 Execution of Documents by Owners. Any declaration, request or other instrument which is permitted or required herein to be executed by Owners may be in one or more instruments of similar tenor and may be executed by Owners in person or by their attorneys appointed in writing. The fact and date of the execution by any Owner or his, her or their attorney of any declaration, request or other instrument or of any writing appointing such attorney may be proved by the certificate of any notary public or other officer authorized to make acknowledgments of deeds to be recorded in the state or territory in which he purports to act that the person signing such declaration, request or other instrument or writing acknowledged to him, her or them the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.
The ownership of any Certificates and the amount, maturity, number and date of holding the same may be proved by the registration books relating to the Certificates at the office of the Trustee.
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Any declaration, request or other instrument or writing of the Owner of any Certificate shall bind all future Owners of such Certificate with respect to anything done or suffered to be done by the City, the Corporation or the Trustee in good faith and in accordance therewith.
Section 10.05 Acquisition of Certificates by Corporation. All Certificates acquired by the City or the Corporation, whether by purchase or gift or otherwise, shall be surrendered to the Trustee for cancellation.
Section 10.06 Destruction of Canceled Certificates. Whenever provision is made herein for the cancellation of any Certificates, the Trustee shall destroy such Certificates in accordance with its retention policy then in effect.
Section 10.07 Content of Statements; Post-Issuance Legal Opinions. Every Statement of the Corporation or the City with respect to compliance with any agreement, condition, covenant or term contained herein shall include: (a) a statement that the person or persons executing such statement have read such agreement, condition, covenant or term and the definitions herein relating thereto; (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements contained in such certificate are based; (c) a statement that, in the opinion of the signers, they have made or caused to be made such examination or investigation as is necessary to enable them to express an informed opinion as to whether or not the City or the Corporation has complied with such agreement, condition, covenant or term; and (d) a statement as to whether, in the opinion of the signers, the City or the Corporation has complied with such agreement, condition, covenant or term.
Any Statement of the Corporation or the City may be based, insofar as it relates to legal matters, upon an Opinion of Counsel unless the person or persons executing such certificate know that the Opinion of Counsel with respect to the matters upon which their certificate may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.
Any Opinion of Counsel may be based, insofar as it relates to factual matters and information with respect to which is in the possession of the City or the Corporation, upon a representation by an officer or officers of the City or the Corporation unless the counsel executing such Opinion of Counsel knows that the representation with respect to the matters upon which their opinion may be based, as aforesaid, is erroneous, or in the exercise of reasonable care should have known that the same was erroneous.
Section 10.08 Accounts and Funds; Business Days. Any account or fund required herein to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee either as an account or a fund, and may, for the purposes of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to all such accounts and funds shall at all times be maintained in accordance with the Tax Certificate and sound accounting practice and with due regard for the protection of the security of the Certificates and the rights of the Owners. Any action required to occur hereunder on a day which is not a Business Day shall be required to occur on the next succeeding Business Day.
Section 10.09 Article and Section Headings and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof. All references herein to “Articles,” “Sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,”
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“herewith,” “hereunder” and other words of similar import refer to the Trust Agreement as a whole and not to any particular article, section, subdivision or clause hereof.
Section 10.10 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the City, the Corporation or the Trustee shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof or of the Certificates, and the Owners shall retain all the benefit, protection and security afforded to them under all applicable provisions of law. The City, the Corporation and the Trustee hereby declare that they would have executed and delivered the Trust Agreement and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof and would have authorized issuance of the Certificates pursuant hereto irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 10.11 Execution in Several Counterparts. This Trust Agreement 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 City, the Corporation and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.
Section 10.12 Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the
Corporation:
Public Property Financing Corporation of California
2945 Townsgate Road, Suite 200
Westlake Village, CA 91361
Attention: Bill Morton
If to the Trustee: U.S. Bank Trust Company, National Association 633 West Fifth Street, 24th Floor,
Los Angeles, CA 90071
Attention: Global Corporate Trust
If to the City: City of Barstow
220 E. Mountain View St., Suite A,
Barstow, CA 92311.
Attention: City Manager
If to the Insurer: [TO COME]
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Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by Electronic Means, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by mail, postage prepaid, by first class mail, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.
Section 10.13 Governing Law. This Trust Agreement shall be governed, in all respects including validity, interpretation and effect by, and shall be enforceable in accordance with, the laws of the United States of America and of the State of California.
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4917-0149-8253v3/022217-0004
IN WITNESS WHEREOF, the Corporation and the City hereto have caused this Trust Agreement to be signed in their respective names by such person as has been designated by their respective governing boards, and the Trustee, to evidence its acceptance of the trust hereby created, has caused this Trust Agreement to be signed in the name of the Trustee by an authorized officer of the Trustee, all as of the day and year first above written.
PUBLIC PROPERTY FINANCING
CORPORATION OF CALIFORNIA
By:
Chairman
U.S. BANK TRUST COMPANY,
NATIONAL ASSOCIATION, as Trustee
By:
Authorized Signatory
CITY OF BARSTOW
By:
City Manager
ATTEST
By:
City Clerk
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4917-0149-8253v3/022217-0004
EXHIBIT A
FORM OF CERTIFICATE
No. __________ $_______________
CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE
CERTIFICATES OF PARTICIPATION, SERIES 2026
Interest Rate
Certificate
Payment Date Dated as of CUSIP No.
_____% June 1, 20__ ______, 2026
REGISTERED OWNER: CEDE & CO.
PRINCIPAL SUM:
THIS IS TO CERTIFY that the registered owner named above, as the registered owner of this City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026 (the “Certificates”), is the owner of a proportionate undivided interest in the rights to receive certain 2026 Installment Sale Payments (as that term is defined in the Trust Agreement hereinafter mentioned) under and pursuant to that certain Installment Sale Agreement (the “Agreements”) by and between the City of Barstow (the “City”) and the Public Property Financing Corporation of California (the “Corporation”), a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California, all of which rights to receive such 2026 Installment Sale Payments having been assigned without recourse by the Corporation to U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), a national banking association duly organized and existing under and by virtue of the laws of the United States of America and having a corporate trust office in Los Angeles, California.
The registered owner of this Certificate is entitled to receive, subject to the terms of the Agreements on the certificate payment date set forth above (the “Certificate Payment Date”), upon surrender of this Certificate on the Certificate Payment Date at the corporate trust office of the Trustee, the principal sum specified above representing the registered owner’s fractional undivided share of the 2026 Installment Sale Payments designated as principal components coming due on the Certificate Payment Date and the 2026 Installment Sale Payments designated as interest components coming due on each June 1 and December 1, commencing [December 1, 2026] (each an “Interest Payment Date”).
The Certificates shall evidence and represent interest from the Interest Payment Date next preceding the date of registration thereof, unless such date of registration is an Interest Payment Date, in which event they shall evidence and represent interest from such date, or unless such date of registration is prior to the first Interest Payment Date, in which event they shall evidence and represent interest from [December 1, 2026;] provided, however, that if at the time of registration of any Certificate interest is then in default on the Outstanding Certificates, such Certificate shall evidence and represent interest from the Interest Payment Date to which interest has previously been paid or made available for payment on the Outstanding Certificates. Payment of interest evidenced and represented by the Certificates due on or before the maturity or prior prepayment thereof shall be made to the person
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Packet Pg. 460 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue A-2
4917-0149-8253v3/022217-0004
whose name appears in the Certificate registration records maintained by the Trustee pursuant to the Trust Agreement as the registered owner thereof as of the close of business on the Record Date preceding each Interest Payment Date, whether or not such day is a Business Day, such interest to be paid by check mailed on such Interest Payment Date (or the next Business Day if such Interest Payment Date is not a Business Day) to such registered owner at the address as it appears in such books or at such other address as may have been filed with the Trustee for that purpose. The Owner of $1,000,000 or more in aggregate principal amount evidenced by the Certificates may request in writing that the Trustee pay the interest evidenced by such Certificates by wire transfer and the Trustee shall comply with such request for all Interest Payment Dates following the fifteenth (15th) day after receipt of such request until such request is rescinded. All such amounts are payable in lawful money of the United States of America.
This Certificate is one of the duly authorized Certificates of the series set forth above, which have been executed by the Trustee pursuant to the terms of a Trust Agreement (together with any supplements or amendments thereto, the “Trust Agreement”), by and among the Trustee, City, and the Corporation, dated as of May 1, 2026. Copies of the Trust Agreement are on file at the corporate trust office of the Trustee, and reference is hereby made to the Trust Agreement and to any and all amendments thereof and supplements thereto for a description of the agreements, conditions, covenants and terms securing the Certificates, for the nature, extent and manner of enforcement of such agreements, conditions, covenants and terms, for the rights and remedies of the registered owners of the Certificates with respect thereto and for the other agreements, conditions, covenants and terms upon which the Certificates are executed and delivered thereunder, to which agreements, conditions, covenants and terms the owner hereof, by acceptance hereof, hereby consents.
To the extent and in the manner permitted by the terms of the Trust Agreement and the Agreements, the provisions of the Trust Agreement may be amended or supplemented by the parties thereto.
This Certificate is transferable by the registered owner hereof, in person or by his attorney duly authorized in writing, at the corporate trust office of the Trustee but only in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement, and upon surrender of this Certificate for cancellation accompanied by delivery of a duly executed written instrument of transfer in the form appearing hereon. Upon such transfer, a new Certificate or Certificates of the same series and Certificate Payment Date representing the same principal amount will be executed and delivered to the transferee in exchange herefor. The Certificates are exchangeable at the corporate trust office of the Trustee for Certificates representing and evidencing a like aggregate principal amount, of authorized denominations of the same series and Certificate Payment Date, in the manner, subject to the limitations and upon payment of the charges provided in the Trust Agreement.
The Trustee may treat the registered owner hereof as the absolute owner hereof for all purposes, whether or not this Certificate shall be overdue, and the Trustee shall not be affected by any knowledge or notice to the contrary; and payment of the interest and principal represented and evidenced by this Certificate shall be made only to such registered owner, which payments shall be valid and effectual to satisfy and discharge liability represented by this Certificate to the extent of the sum or sums so paid.
The Certificates are authorized to be executed and delivered in the form of fully registered Certificates in denominations of five thousand dollars ($5,000) each or any integral multiple thereof so long as no Certificate shall represent principal becoming payable on more than one Certificate Payment Date.
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Packet Pg. 461 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue A-3
4917-0149-8253v3/022217-0004
The Certificates are subject to optional and mandatory prepayment prior to their respective Certificate Payment Dates, as provided in the Trust Agreement.
The Certificates each evidence and represent a fractional undivided interest in the 2026 Installment Sale Payments in an amount equal to the aggregate principal amount of Certificates originally executed and delivered by the Trustee pursuant to the Trust Agreement and enjoy the benefits of a security interest in the moneys held in the funds established pursuant to the Trust Agreement, subject to the provisions of the Trust Agreement permitting the disbursement thereof for or to the purposes and on the conditions and terms set forth therein.
The Trustee has no obligation or liability to the Certificate owners for the payment of the interest or principal represented by the Certificates, but rather the Trustee’s sole obligations are to administer, for the benefit of the Certificate owners, the various funds established under the Trust Agreement and the Agreements. The Corporation has no obligation or liability whatsoever to the Certificate owners.
Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to Trustee or its agent for the registration of transfer, exchange, or payment, and any certificate executed and delivered is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC),
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
The City has certified to the Trustee that all acts, conditions and things required by the statutes of the State of California and the Trust Agreement to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Certificate do exist, have happened and have been performed in regular and due time, form and manner as required by law, and that the Trustee is duly authorized to execute and deliver this Certificate. This is to further certify that the amount of this Certificate, together with all other Certificates executed and delivered under the Trust Agreement, is not in excess of the amount of Certificates authorized to be executed and delivered thereunder.
IN WITNESS WHEREOF, this Certificate has been dated as of the date set forth above and has been executed by the manual signature of an authorized signatory of the Trustee.
Date of Execution: May __, 2026
US BANK TRUST COMPANY,
NATIONAL ASSOCIATION
By:
Authorized Signer
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Packet Pg. 462 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue A-4
4917-0149-8253v3/022217-0004
FORM OF ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto ___________, whose address is _______________________ and whose social security or Taxpayer Identification No. is ______________, the within Certificate and do(es) hereby irrevocably constitute and appoint ___________________________________attorney to transfer such Certificate on the Certificate register of the Trustee, with full power of substitution in the premises.
Dated:
Note: The signature(s) to this Assignment must
correspond with the name(s) as written on the
face of the within Certificate in every
particular, without alteration or enlargement or
any change whatsoever.
Signature must be guaranteed by an eligible
guarantor institution in a Recognized Signature
Guaranty Medallion Program.
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Packet Pg. 463 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue A
-5
4917-0149-8253v3/022217-0004
[STATEMENT OF INSURANCE]
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Packet Pg. 464 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue B-1
4917-0149-8253v3/022217-0004
EXHIBIT B
FORM REQUISITION FROM
THE ACQUISITION FUND
To: U.S. Bank Trust Company, National Association, as Trustee From: City of Barstow
Dated Date:
Re: City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026
Requisition No. ___
1. The undersigned, on behalf of the City of Barstow (the “City”), acting as agent of the Corporation pursuant to the Agreement, hereby requests payment, from the Acquisition Fund the amount of $__________ by wire/check/ACH (circle one) for purposes for which the City is authorized to expend moneys. If the payment is by wire or ACH, please fill in the following information:
Name, Address and Phone Number of Bank:
ABA#:
Account No.:
The undersigned hereby certifies as follows:
The amount requisitioned hereby is for a Project Cost incurred in connection with the Projects, is properly chargeable to the Acquisition Fund and has not been the subject of any previous requisition. The name and address of the person or persons to whom said amounts are to be disbursed and the amounts to be disbursed are as follows:
2. As of the date hereof, no event has occurred and is continuing which constitutes an Event of Default under the Agreement would constitute an Event of Default but for the requirement that notice be given, or time elapse, or both.
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Packet Pg. 465 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue B-2
4917-0149-8253v3/022217-0004
3. The information contained herein is true and correct as of the date of this Requisition.
4. Capitalized terms will herein have the meanings assigned to such terms in the Trust Agreement, dated as of May 1, 2026, among the Public Property Financing Corporation of California, U.S. Bank Trust Company, National Association, and the City.
Authorized City
Representative
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Packet Pg. 466 Attachment: Trust Agreement - Barstow 2026 Transportation Sales Tax Financing, 4917-0149-8253_3 (6299 : Measure I Sales Tax Revenue Stradling
Draft of 2/9/2026
4929-5435-0221v3/022217-0004
INSTALLMENT SALE AGREEMENT
by and between the
CITY OF BARSTOW,
as Purchaser
and the
PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA,
as Seller
for the
CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE
CERTIFICATES OF PARTICIPATION, SERIES 2026
Dated as of May 1, 2026
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Packet Pg. 467 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax
TABLE OF CONTENTS
Page
i
4929-5435-0221v3/022217-0004
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.............................................................................................................. 1 Section 1.02 Terms defined in the Trust Agreement ................................................................... 6
ARTICLE II
THE PROJECT
Section 2.01 Design, Acquisition, Construction and Sale of the Projects................................... 6
ARTICLE III
2026 INSTALLMENT SALE PAYMENTS; ADMINISTRATION FEE
Section 3.01 Purchase Price and Administration Fee.................................................................. 7 Section 3.02 Payment of 2026 Installment Sale Payments and Administration Fee ................... 7 Section 3.03 Prepayment of 2026 Installment Sale Payments .................................................. 10
ARTICLE IV
ADDITIONAL CONTRACTS
Section 4.01 Additional Contracts............................................................................................. 11
ARTICLE V
REPRESENTATIONS AND COVENANTS OF THE CITY AND THE CORPORATION Section 5.01 Authority; Compliance with Installment Sale Agreement and Trust Agreement ............................................................................................................ 11 Section 5.02 Use of Proceeds of Certificates ............................................................................ 12 Section 5.03 Against Encumbrances......................................................................................... 12 Section 5.04 Maintenance of Measure I Revenues ................................................................... 13 Section 5.05 Tax Covenants...................................................................................................... 13 Section 5.06 Prompt Acquisition and Construction of the Projects .......................................... 14 Section 5.07 Accounting Records and Financial Statements.................................................... 14 Section 5.08 Protection of Security and Rights of the Corporation and the Trustee................. 14 Section 5.09 Further Assurances............................................................................................... 14 Section 5.10 Continuing Disclosure .......................................................................................... 14
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.01 Events of Default and Acceleration of Principal .................................................. 15 Section 6.02 Application of Measure I Receipts Upon Acceleration ........................................ 16 Section 6.03 Other Remedies.................................................................................................... 16 Section 6.04 Non-Waiver .......................................................................................................... 16 Section 6.05 Remedies Not Exclusive....................................................................................... 17
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Packet Pg. 468 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax
TABLE OF CONTENTS
(Continued)
Page
ii
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ARTICLE VII
DISCHARGE OF OBLIGATIONS
Section 7.01 Discharge of Obligations...................................................................................... 17
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Liability of City Limited to Measure I Receipts .................................................. 18 Section 8.02 Benefits of Installment Sale Agreement............................................................... 18 Section 8.03 Successor Is Deemed Included in all References to Predecessor......................... 18 Section 8.04 Waiver of Personal Liability................................................................................. 18 Section 8.05 Article and Section Headings, Gender and References........................................ 18 Section 8.06 Partial Invalidity ................................................................................................... 19 Section 8.07 Assignment........................................................................................................... 19 Section 8.08 Net Contract.......................................................................................................... 19 Section 8.09 California Law...................................................................................................... 19 Section 8.10 Indemnification..................................................................................................... 19 Section 8.11 Funds.................................................................................................................... 19 Section 8.12 Notices.................................................................................................................. 20 Section 8.13 [Notices to Insurer; Miscellaneous Insurer Provisions......................................... 20 Section 8.14 Agreement Represents Complete Agreement; Amendments................................ 21 Section 8.15 Effective Date....................................................................................................... 21 Section 8.16 Electronic Signatures............................................................................................ 21 Section 8.17 Execution in Counterparts.................................................................................... 21 EXHIBIT A – INSTALLMENT SALE PAYMENTS SCHEDULE..................................................A-1 EXHIBIT B – DESCRIPTION OF PROJECT..................................................................................B-1
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Packet Pg. 469 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 4929-5435-0221v3/022217-0004
INSTALLMENT SALE AGREEMENT
This INSTALLMENT SALE AGREEMENT (the “Installment Sale Agreement”), dated as of May 1, 2026, by and between the CITY OF BARSTOW, a municipal corporation organized and existing under the Constitution of the State of California (the “City”), and the PUBLIC PROPERTY FINANCING CORPORATION OF CALIFORNIA, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California (the “Corporation”), W I T N E S S E T H:
WHEREAS, the City has determined that the design, acquisition, installation, and construction of certain public capital improvements located in various sites in the City, including the projects described in Exhibit B attached hereto (collectively, the “Projects”) is necessary and proper for City purposes and uses, and under the terms of applicable law, the payment for such Projects may be made from Measure I Receipts, as hereinafter defined, and is for the common benefit of the City as a whole; WHEREAS, the Corporation has agreed to assist the City to finance the Projects; WHEREAS, the City has determined to make the 2026 Installment Sale Payments as hereinafter described to the Corporation for the repayment of the costs of the design, acquisition and construction of the Projects and the incidental costs and expenses related thereto paid by the Corporation; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Installment Sale Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Installment Sale Agreement;
WHEREAS, as security for the Certificates, pursuant to the Trust Agreement, the Corporation has assigned the rights to receive all 2026 Installment Sale Payments, and the Corporation and the City have granted a security interest in all moneys held by the Trustee under the Trust Agreement to the Trustee for the benefit of the Owners of Certificates and any Additional Certificates executed and delivered under this Trust Agreement; and
NOW, THEREFORE, IN CONSIDERATION OF THE PREMISES AND OF THE
MUTUAL AGREEMENTS AND COVENANTS CONTAINED HEREIN AND FOR OTHER VALUABLE CONSIDERATION, THE PARTIES HERETO DO HEREBY AGREE AS FOLLOWS:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall for all purposes hereof and of any amendment hereof or supplement hereto and of any opinion or report or other document mentioned herein or therein have the meanings defined herein, the following definitions to be equally applicable to both the singular and plural forms of any of the terms defined herein:
“Accountant’s Report” means a report signed by an Independent Certified Public Accountant.
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Packet Pg. 470 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 2 4929-5435-0221v3/022217-0004
“Acquisition Fund” means the fund by that name established pursuant to Section 2.11 of the Trust Agreement.
“Administration Fee” means an amount equal to the sum of the Trustee’s fees, the Rebate Analyst fees and any other similar fee payable in connection with the administration of this Installment Sale Agreement and the Trust Agreement, payable on the 15th day of the month preceding each Interest Payment Date.
“Authorized City Representative” means the Mayor of the City, the Mayor Pro Tem of the City, the City Manager of the City, the Finance Director of the City or the City Clerk of the City, or any other person at the time designated to act on behalf of such City by written certificate furnished to the Trustee, containing the specimen signature of such person and signed on behalf of such City by an Authorized City Representative.
“Authorized Corporation Representative” means the Chairman, Treasurer and Secretary of the Corporation, or any other person authorized by the Board of Directors of the Corporation to act on behalf of the Corporation under or with respect to this Installment Sale Agreement. “Business Day” means any day of the year, other than (i) a Saturday, (ii) a Sunday, (iii) a day on which banks located in the city in which either the designated corporate trust office of the Trustee is located is required or authorized by law to be closed, or (iv) a day on which the New York Stock Exchange or the payment system of the Federal Reserve System is not operational. “Certificates” means the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026, issued in accordance with the Trust Agreement. “City” means the City of Barstow, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. “Closing Date” means May ___, 2026.
“Code” means the Internal Revenue Code of 1986, as amended, and the regulations issued thereunder.
“Continuing Disclosure Certificate” means the Continuing Disclosure Certificate, dated the Closing Date, executed by the City, as originally executed and as it may from time to time be amended in accordance with the provisions thereof.
“Contracts” means this Installment Sale Agreement and all other installment sale contracts, capital leases or similar obligations of the City authorized and executed by the City under and pursuant to applicable law, the interest and principal and prepayment premium, if any, payments under and pursuant to which are payable from Measure I Receipts on a parity with the payment of the 2026 Installment Sale Payments.
“Corporation” means the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly organized and existing under and by virtue of the laws of the State of California, and its successors and assigns as provided in this Trust Agreement. “Debt Service” means, for any Fiscal Year, the sum of that portion of the Installment Sale Payments required to be made at the times provided in the Contracts that would have accrued during
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Packet Pg. 471 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 3 4929-5435-0221v3/022217-0004
such Fiscal Year if such Installment Sale Payments were deemed to accrue daily in equal amounts from, in each case, the next preceding Installment Sale Payment Date of interest or principal or the date of the pertinent Contract, as the case may be; provided, that (a) if any of the Installment Sale Payments due under any such Contracts bear interest payable pursuant to a variable interest rate formula, the interest rate on such Contracts for periods when the actual interest rate cannot yet be determined, shall be assumed to be equal to the greater of (i) the actual rate on the date of calculation, or if such Contracts are not yet outstanding, the initial rate (if then established and binding), (ii) if the Contracts have been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation, and (iii)(1) if interest on such Contracts is excludable from gross income under the applicable provisions of the Code, the most recently published “Bond Buyer 25 Bond Revenue Index” (or comparable index if no longer published), or (2) if interest is not so excludable, the interest rate on direct U.S. Treasury obligations with comparable maturities; (b) if any of the Contracts is secured by an irrevocable letter of credit issued by a bank having a combined capital and surplus of at least $75,000,000, the principal payments or deposits with respect to such Contracts nominally due in the last Fiscal Year in which such Contracts mature may, at the option of the City, be treated as if they were due as specified in any loan agreement or reimbursement agreement issued in connection with such letter of credit or pursuant to the prepayment provisions of such letter of credit and interest on such Contracts after such Fiscal Year shall be assumed to be payable pursuant to the terms of such loan agreement or reimbursement agreement or prepayment provisions and (c) if any of such Contracts is not secured by a letter of credit as described in clause (b) of this definition and 20% or more of the original principal of the Installment Sale Payments due under such Contracts is not due until the final stated maturity of the Installment Sale Payments due under such Contracts, such principal may, at the option of the City, be treated as if it were due based upon a level amortization of such principal over the term of such Installment Sale Payments or 30 years, whichever is greater. “Event of Default” means an event described in Section 6.01. “Federal Securities” means United States of America Treasury bills, notes, bonds or certificates of indebtedness, or obligations for which the full faith and credit of the United States of America are pledged for the payment of interest and principal and interest strips of the Resolution Funding Corporation for which separation of principal and interest is maintained in book-entry form. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30, or any other annual accounting period hereafter selected and designated by the City Council of the City as the Fiscal Year of the City. “Independent Certified Public Accountant” means any certified public accountant or firm of such accountants duly licensed and entitled to practice and practicing as such under the laws of the State or a comparable successor, appointed and paid by the City, and who, or each of whom:
(1) is in fact independent according to the Statement of Auditing Standards No. 1 and not under the domination of the City;
(2) does not have a substantial financial interest, direct or indirect, in the operations of the City; and
(3) is not connected with the City as a member, officer or employee of the City, but who may be regularly retained to audit the accounting records of and make reports thereon to the City.
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Packet Pg. 472 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 4 4929-5435-0221v3/022217-0004
“Insolvency Proceeding” has the meaning set forth in the Trust Agreement “Installment Sale Agreement” and “Agreement” means this installment sale agreement by and between the City and the Corporation, dated as of May 1, 2026, as originally executed and as it may from time to time be amended or supplemented in accordance herewith and with the terms of the Trust Agreement.
“Installment Sale Payments” means the installment sale, rental or other periodic payments scheduled to be paid by the City under and pursuant to the Contracts. “Installment Sale Payment Date” means, (i) any date on which Installment Sale Payments are scheduled to be paid by the City under and pursuant to any Contract, and (ii) each 2026 Installment Sale Payment Date.
[“Insurance Policy” means the Municipal Bond Insurance Policy issued by the Insurer, dated ______, 2026.
“Insured Certificates” means the Certificates maturing on June 1 of the years 20__ through 20__, inclusive, the scheduled payment of principal of and interest on the which, when due, will be guaranteed under the Insurance Policy.
“Insurer” means ____________ insurance company, or any successor thereto or assignee thereof.]
“Interest Payment Date” means a date on which interest represented and evidenced by the Certificates is due and payable, being June 1 and December 1 of each year, commencing [December 1, 2026].
“Late Payment Rate” has the meaning set forth in the Trust Agreement. “Maximum Annual Debt Service” means, as of any date of calculation, the greatest total Debt Service payable in any Fiscal Year during the period commencing with the then current Fiscal Year and terminating with the latest Fiscal Year in which payments are due under any Contract. “Measure I Ordinance” means Ordinance No. 04-01, titled, “An Ordinance Providing for the Continuation of a One-Half of One Percent Retail Transaction and Use by the San Bernardino County Transportation Authority for Local Transportation Purposes and the Transportation Expenditure Plan” passed on June 2, 2004 including any extensions of the transportation transaction and use tax previously extended by Ordinance No. 04-01.
“Measure I Project” means a capital project for which Measure I Receipts may be expended pursuant to the Measure I Ordinance and the Transportation Expenditure Plan attached thereto as originally adopted or amended, including the related Administration Fee. “Measure I Receipts” means Measure I Revenues allocated by the San Bernardino County Transportation Authority to the City as the City’s share of local program funding pursuant to the Transportation Expenditure Plan attached to the Measure I Ordinance. “Measure I Receipts Fund” means the fund by that name established as provided in Section 3.02 hereof.
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Packet Pg. 473 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 5 4929-5435-0221v3/022217-0004
“Measure I Revenues” means revenues of the San Bernardino County Transportation Authority pursuant to the Measure I Ordinance derived from a retail transactions and use tax imposed in the County of San Bernardino pursuant to Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code of the State of California and Section 180050 et seq. of the Public Utilities Code of the State of California, as now in effect and as it may from time to time hereafter be amended or supplemented. Collection of the Measure I Revenues commenced on April 1, 1990 and by terms of the Measure I Ordinance will terminate on March 31, 2040 including any extensions of the transportation transaction and use tax previously extended by Ordinance No. 04-01. “Opinion of Counsel” means a written opinion of counsel of national reputation generally recognized to be well qualified in the field of law relating to municipal obligations such as the Certificates, retained by the City and satisfactory to the Trustee (who shall be under no liability by reason of such approval).
“Other Available Revenues” means revenues, other than Measure I Receipts as herein defined, legally available to the City to make 2026 Installment Sale Payments, if any. [“Policy Costs” has the meaning set forth in the Trust Agreement.] “Project” or “Projects” means, as the context suggests, the design, acquisition, installation, and construction of one or more of the public capital improvements located in various sites in the City and financed with proceeds of the Certificates, all as described more particularly in Exhibit B, attached hereto and incorporated herein.
“Purchase Price” means the total of all 2026 Installment Sale Payments owed by the City to the Corporation under the conditions and terms hereof for the costs of the design, acquisition and construction of the Projects and the incidental costs and expenses related thereto paid by the Corporation (including amounts owed to the Insurer in connection with the Insurance Policy and the Reserve Policy).
“Rebate Amount” means, for any given period, the amount determined by the Rebate Analyst as required to be rebated or paid as a yield reduction payment to the United States of America with respect to the Certificates.
“Rebate Analyst” means that firm or individual designated by the City to satisfy its obligation to perform the rebate calculations that may be required to be made from time to time with respect to the Certificates.
“Rebate Fund” means the fund by that name established in Section 4.06 of the Trust Agreement.
“Reserve Account” means the account by that name established pursuant to Section 3.03 of the Trust Agreement.
“Reserve Account Requirement” means, as of any date of calculation, an amount equal to the least of (i) 10% of the initial stated principal amount (within the meaning of Section 148 of the Code) represented and evidenced by the Certificates; (ii) 125% of the average annual Debt Service (as defined in this Agreement) represented and evidenced by the Certificates, or (iii) the Maximum Annual Debt Service, as defined in this Agreement.
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Packet Pg. 474 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 6 4929-5435-0221v3/022217-0004
[“Reserve Policy” means the Municipal Bond Debt Service Reserve Insurance Policy issued by the Insurer, dated _____, 2026, and credited to the Reserve Account.] “2026 Installment Sale Payment Date” means the periodic payment dates upon which the 2026 Installment Sale Payments are required to be deposited with the Trustee as provided in Section 3.02 of this Agreement.
“2026 Installment Sale Payments” means the periodic payments scheduled to be paid by the City under and pursuant to this Installment Sale Agreement. “Tax Certificate” means the Tax Certificate dated the Closing Date and executed and delivered by the City.
“Trust Agreement” means that certain Trust Agreement dated as of May 1, 2026, by and among the Corporation, the Trustee and the City, as originally executed and as it may from time to time be amended or supplemented in accordance with its terms.
“Trustee” means U.S. Bank Trust Company, National Association, a national banking association duly organized and existing under and by virtue of the laws of the United States, acting in its capacity as trustee under and pursuant to the Trust Agreement, and its successors and assigns as provided in the Trust Agreement.
Section 1.02 Terms defined in the Trust Agreement. Capitalized terms not otherwise defined herein have the meanings set forth in the Trust Agreement.
ARTICLE II
THE PROJECT
Section 2.01 Design, Acquisition, Construction and Sale of the Projects. The Corporation hereby agrees to cause the design, acquisition and construction of the Projects for, and to sell the Projects to, the City; and the City agrees to transfer whatever real or personal property interest it may possess which may be required in order for the Corporation to cause such design, acquisition and construction of the Projects. In order to implement this provision, the Corporation hereby appoints the City as its agent for the purpose of such design, acquisition and construction, and the City hereby agrees to enter into such engineering, design and construction contracts and purchase orders as may be necessary, as agent for the Corporation, to provide for the complete design, acquisition and construction of the Projects. The City hereby agrees that as such agent it will cause the acquisition and construction of the Projects to be diligently completed after the deposit of funds in the Acquisition Fund for such purpose pursuant to Section 2.11 of the Trust Agreement, and that it will use its best efforts to cause the design, acquisition and construction of the Projects to be completed by [May __, 2029] [three years from Closing Date]. The Corporation hereby agrees to sell, and hereby sells, the Projects to the City. The City hereby agrees to purchase, and hereby purchases, the Projects from the Corporation. Notwithstanding the foregoing, it is hereby expressly understood and agreed that the Corporation shall be under no liability of any kind or character whatsoever for the payment of any costs or expenses incurred by the City (whether as agent for the Corporation or otherwise) for the acquisition and construction of the Projects and that all such costs and expenses shall be paid by the City, regardless of whether the funds deposited in the Acquisition Fund are sufficient to cover all such costs.
20.b
Packet Pg. 475 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 7 4929-5435-0221v3/022217-0004
ARTICLE III
2026 INSTALLMENT SALE PAYMENTS; ADMINISTRATION FEE
Section 3.01 Purchase Price and Administration Fee.
(a) The Purchase Price to be paid by the City to the Corporation hereunder is the sum of the principal amount of the City’s obligation hereunder plus the interest to accrue on the unpaid balance of such principal amount from the date hereof over the term hereof, subject to prepayment as provided in Section 3.03.
(b) The principal amount of the Purchase Price to be paid by the City to the Corporation hereunder is $_______.
(c) The interest to accrue on the unpaid balance of such principal amount shall be paid by the City as and shall constitute interest paid on the principal amount of the City’s Purchase Price obligation hereunder.
(d) Interest on the unpaid balance of the principal amount of the Purchase Price shall accrue, from the date of the initial execution and delivery of the Certificates, on the principal of each 2026 Installment Sale Payment at the following rates calculated on the basis of a 360-day year comprised of twelve 30-day months:
Principal Payment
Due Date (June 1)
Principal
Amount
Interest
Rate
2027 $ %
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
(e) In addition, the City shall pay the Administration Fee for the administrative cost of the Projects and the financing.
Section 3.02 Payment of 2026 Installment Sale Payments and Administration Fee. The City shall, subject to prepayment as provided in Section 3.03, pay the Corporation or the Trustee, as appropriate, the Purchase Price, without offset or deduction of any kind, by paying (i) the principal installments of the 2026 Installment Sale Payments, which principal installments shall be due annually each on its payment date, (ii) the interest installments of the 2026 Installment Sale Payments, which interest installments shall be due semiannually on each 2026 Installment Sale Payment Date and
20.b
Packet Pg. 476 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 8 4929-5435-0221v3/022217-0004
(iii) the Administration Fee which shall be due semiannually on each 2026 Installment Sale Payment Date. The 2026 Installment Sale Payments Schedule is set forth in Exhibit A attached hereto. Each 2026 Installment Sale Payment and the Administration Fee shall be payable on and shall be required to be deposited with the Trustee on or before the fifteenth day of the calendar month immediately preceding June 1 and December 1 of each year, commencing [December 1, 2026.] The obligation of the City to pay the Purchase Price by paying the 2026 Installment Sale Payments and the Administration Fee is, subject to Section 8.01, absolute and unconditional, and until such time as the 2026 Installment Sale Payments shall have been paid in full (or provision for the payment thereof shall have been made pursuant to Section 7.01), the City will not discontinue or suspend any 2026 Installment Sale Payments or Administration Fee required to be paid by it under this Section when due, whether or not the Projects or any part thereof is complete, or its use is suspended, interfered with, reduced, curtailed or terminated in whole or in part, and such payments shall not be subject to reduction whether by offset or otherwise and shall not be conditional upon the performance or nonperformance by any party to any agreement for any cause whatsoever. [The City shall pay or reimburse the Insurer, from Measure I Receipts or Other Available Revenues, any and all charges, fees, costs and expenses that the Insurer may reasonably pay or incur in connection with (i) the administration, enforcement, defense or preservation of any rights or security in the Trust Agreement or this Installment Sale Agreement (each a “Related Document”); (ii) the pursuit of any remedies under the any Related Document or otherwise afforded by law or equity, (iii) any amendment, waiver or other action with respect to, or related to any Related Document whether or not executed or completed, or (iv) any litigation, proceeding (including an Insolvency Proceeding) or other dispute in connection with any other Related Document or the transactions contemplated thereby, other than costs resulting from the failure of the Insurer to honor its obligations under the Insurance Policy. The Insurer reserves the right to charge a reasonable fee as a condition to executing any amendment, waiver or consent proposed in respect of any Related Document. Amounts payable hereunder shall bear interest at the Late Payment Rate (related to the Insurance Policy) from the date such amount is paid or incurred by the Insurer until the date the Insurer is paid in full. The obligation to reimburse the Insurer shall survive discharge or termination of the Related Documents.] The City has established the “Measure I Receipts Fund,” which the City agrees and covenants to maintain in accordance with the Measure I Ordinance and this Installment Sale Agreement so long as any 2026 Installment Sale Payments remain unpaid, and all money on deposit therein shall be applied and used only as provided herein including, without limitation, to pay the Purchase Price by paying the 2026 Installment Sale Payments and the Administration Fee. The City agrees and covenants that all Measure I Revenues received by it shall be deposited when and as received in the Measure I Receipts Fund and held therein in trust and applied in accordance with this Agreement for the benefit of the Trustee (as assignee of the rights of the Corporation hereunder), the Insurer and the Bond Owners, and for the benefit of the owners of any Contracts.
The City covenants and agrees to apply Measure I Revenues as received to the payment of 2026 Installment Sale Payments prior to any other expenditure of such funds, subject to the release for expenditure as provided in this section below, and only in an amount not exceeding the Measure I Receipts.
[The City covenants and agrees to include all Insurer Reimbursement Amounts (as more fully described in the Trust Agreement), amounts due to the Insurer pursuant to the third full paragraph under this Section 3.02 and Policy Costs (as more fully described in the Trust Agreement and the Insurance
20.b
Packet Pg. 477 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 9 4929-5435-0221v3/022217-0004
Agreement) in its calculation of 2026 Installment Sale Payments and shall pay all such payments from the Measure I Receipts.]
All of the Measure I Receipts and all money in the Measure I Receipts Fund, and in the funds or accounts so specified and provided for in this Installment Sale Agreement, are hereby irrevocably pledged to the punctual payment of the Installment Sale Payments (including 2026 Installment Sale Payments) and the Administration Fee, and the Measure I Receipts shall not be used for any other purpose while any of the 2026 Installment Sale Payments remain outstanding; subject to the provisions of this Installment Sale Agreement permitting application thereof as set forth below and for the purposes and on the terms and conditions set forth herein. This pledge shall constitute a first lien on the Measure I Receipts for the payment of the Installment Sale Payments (including 2026 Installment Sale Payments) and the Administration Fee in accordance with the terms hereof.
Notwithstanding the foregoing, the City may satisfy its obligation to deposit 2026 Installment Sale Payments with the Trustee by depositing Other Available Revenues with the Trustee, and if and when so deposited such Other Available Revenues, shall be irrevocably pledged to the payment of 2026 Installment Sale Payments.
All Measure I Receipts on deposit in the Measure I Receipts Fund shall be transferred to the Trustee and otherwise applied at the following times in the following order of priority, and all moneys in each of such funds shall be held in trust and shall be applied, used and withdrawn only for the purposes hereinafter authorized in this section:
(a) Interest and Principal Account Deposits. On or before the 15th day preceding each Interest Payment Date, the City shall, from the Measure I Receipts in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Interest Account within the Revenue Fund established under the Trust Agreement, a sum equal to the interest becoming due and payable hereunder on the next succeeding Interest Payment Date, except that no such deposit need be made if the Trustee then holds money in the Interest Account equal to the amount of interest becoming due and payable hereunder on the next succeeding Interest Payment Date; and on or before the 15th day preceding each Interest Payment Date, the City shall, from the Measure I Receipts in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Principal Account within the Revenue Fund established under the Trust Agreement, a sum equal to the principal becoming due and payable hereunder on the next succeeding Interest Payment Date, except that no such deposit need be made if the Trustee then holds money in the Principal Account equal to the amount of Principal becoming due and payable hereunder on the next succeeding Interest Payment Date; and all money on deposit in the Interest Account and the Principal Account shall be used to make and satisfy the 2026 Installment Sale Payments due on each date and such payments shall be deposited by the Trustee to the Interest Account or the Principal Account, as the case may be, as defined in, created under and in accordance with the terms of, the Trust Agreement. The City shall also, from the moneys in the Measure I Receipts Fund, transfer to the applicable trustee for deposit in the applicable payment fund, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, any other Debt Service in accordance with the provisions of the Contract, bond, resolution or indenture relating thereto.
(b) Reserve Account Deposit. On or before the 15th day of each month, the City shall, from remaining moneys in the Measure I Receipts Fund, thereafter, without preference or priority, and in the event of any insufficiency of such moneys ratably without any discrimination or preference, transfer to (a) the Trustee for deposit in the Reserve Account that sum, if any, necessary to
20.b
Packet Pg. 478 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 10 4929-5435-0221v3/022217-0004
restore the Reserve Account to an amount equal to the Reserve Account Requirement, all in accordance with and subject to the terms and conditions of Section 3.03 of the Trust Agreement, and (b) the applicable trustee for deposit to reserve funds or accounts established in connection with Contracts an amount that is equal to the amount required to be deposited therein. [The City further agrees to pay to the Insurer all amounts owed to it pursuant to Section 3.05 of the Trust Agreement in connection with any draw on the Reserve Policy, and all related reasonable expenses incurred by the Insurer and shall pay interest thereon from the date of payment by the Insurer at the Late Payment Rate, in each case solely from available Measure I Receipts and subject to the first pledge of and lien upon the Measure I Receipts for the payment of the 2026 Installment Sale Payments.] [Repayment of draws and payment of expenses and accrued interest thereon at the Late Payment Rate (collectively, “Policy Costs”) shall commence in the first month following each draw, and each such monthly payment shall be in an amount at least equal to 1/12 of the aggregate of Policy Costs related to such draw.
Amounts in respect of Policy Costs paid to the Insurer shall be credited first to interest due, then to the expenses due and then to principal due. As and to the extent that payments are made to the Insurer on account of principal due, the coverage under the Reserve Policy will be increased by a like amount, subject to the terms of the Reserve Policy.
If the City shall fail to pay any Policy Costs in accordance with the requirements above, the Insurer shall be entitled to exercise any and all legal and equitable remedies available to it, including those provided under the Trust Agreement and this Installment Sale Agreement other than (i) acceleration of the maturity of the Certificates or (ii) remedies which would adversely affect owners of the Certificates.
Neither the Trust Agreement nor this Installment Sale Agreement shall be discharged until all Policy Costs owing to the Insurer shall have been paid in full. The City’s obligation to pay such amounts shall expressly survive payment in full of the Certificates.] (c) Administration Account Deposit. On or before the 15th day preceding each Interest Payment Date, the City shall, from the remaining Measure I Receipts on deposit in the Measure I Receipts Fund, transfer to the Trustee for deposit in the Administration Account a sum equal to the Administration Fee, as determined in a Request of the City to be provided to the Trustee, becoming due and payable hereunder on the next Interest Payment Date, and all money on deposit in the Administration Account shall be used to pay the Administration Fee due on such Interest Payment Date, in accordance with the terms of the Trust Agreement.
At any time that Measure I Receipts remain in the Measure I Receipts Fund after providing (or otherwise reserving) for (i) all deposits required by subsection (a) (for that year ending June 1), subsection (b), and subsection (c) above, (ii) debt service on any Contracts (for that year ending June 1), and except as may be provided to the contrary in any Contracts, and (iii) amounts then owed to the Insurer in connection with any draw on the Reserve Policy, and so long as the City is not in default hereunder or thereunder, then any amount remaining on deposit in the Measure I Receipts Fund shall be released from the pledge and lien hereunder and shall be applied by the City in accordance with the Measure I Ordinance.
Section 3.03 Prepayment of 2026 Installment Sale Payments. The City may prepay from any source of available funds as a whole or in part on any date, on or after June 1, 20__, all or any part
20.b
Packet Pg. 479 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 11 4929-5435-0221v3/022217-0004
of the principal amount of the unpaid 2026 Installment Sale Payments becoming due on or after June 1, 20__, in such order of prepayment as the City may determine upon written direction to the Corporation and the Trustee (or, if the City fails to designate the order of prepayment, on a proportionate basis as determined by the City among the 2026 Installment Sale Payments and by lot within a 2026 Installment Sale Payment Date), at a prepayment price equal to the principal amount prepaid and Certificates to be prepaid, plus accrued interest to the date of prepayment. Before making any prepayment pursuant to this section, the City shall give written notice to the Corporation and the Trustee describing such event and specifying the date on which the prepayment will be paid and the order thereof, which date shall be not less than thirty (30) days nor more than sixty (60) days from the date such notice is given.
ARTICLE IV
ADDITIONAL CONTRACTS
Section 4.01 Additional Contracts. So long as the City is not in default hereunder, the City may at any time execute any Contract or amend any Contract, the Installment Sale Payments under and pursuant to which, as the case may be, are payable from, and secured by a pledge and lien on, the Measure I Receipts on a parity with the payment by the City of the 2026 Installment Sale Payments as provided herein; provided, that the [lesser of (i)] audited Measure I Receipts for the Fiscal Year next preceding the date of the adoption by the City Council of the City of the resolution authorizing the execution of such Contract and [(ii) San Bernardino County Transportation Authority estimates (if prepared and made available to the City) of the City’s share of Measure I Revenues for the current Fiscal Year,] shall have produced a sum equal to at least [150%] of the Maximum Annual Debt Service on all Contracts outstanding after the execution of such amendment or Contract as calculated in writing by the City and a third-party financial consultant to the City. Notwithstanding the foregoing provisions, there shall be no limitations on the ability of the City to execute any Contract at any time to refund any outstanding Contract where such refunding results in a reduction in annual payment on such Contract.
Policy Costs due and owing to the Insurer, and similar costs due and owing to any other provider of a municipal bond insurance policy or debt service reserve insurance policy or surety with respect to all Contracts outstanding and to be outstanding after the execution of such amendment or Contract, shall be included in the Maximum Annual Debt Service requirement for purposes of the foregoing calculation and the calculation of Maintenance of Revenues in Section 5.04 herein.
Notwithstanding the foregoing provisions, there shall be no limitations on the ability of the City to execute any Contract at any time to refund any outstanding Contract.
The City covenants not to request the San Bernardino County Transportation Authority to issue obligations on its behalf payable from Measure I Revenues as provided in the Measure I Ordinance.
ARTICLE V
REPRESENTATIONS AND COVENANTS OF THE CITY AND THE CORPORATION Section 5.01 Authority; Compliance with Installment Sale Agreement and Trust Agreement. The City is a municipal corporation organized and existing under the Constitution of the State of California, with full legal right, power and authority to execute, deliver and perform its obligations under this Installment Sale Agreement, and compliance with the provision hereof will not materially conflict with or constitute a material breach of or default under any applicable provision of law, or any applicable regulation or agreement to which the City is a party or may be subject.
20.b
Packet Pg. 480 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 12 4929-5435-0221v3/022217-0004
The City will punctually pay the 2026 Installment Sale Payments in strict conformity with the terms hereof, and will faithfully observe and perform all the agreements, conditions, covenants and terms contained herein required to be observed and performed by it, and will not terminate this Installment Sale Agreement for any cause including, without limiting the generality of the foregoing, any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Projects, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of California or any political subdivision of either or any failure of the Corporation to observe or perform any agreement, condition, covenant or term contained herein required to be observed and performed by it, whether express or implied, or any duty, liability or obligation arising out of or connected herewith or the insolvency, or deemed insolvency, or bankruptcy or liquidation of the Corporation or any force majeure, including Acts of God, tempest, storm, earthquake, war, rebellion, riot, civil disorder, acts of public enemies, blockade or embargo, strikes, industrial disputes, lockouts, lack of transportation facilities, fire, explosion, or acts or regulations of governmental authorities.
The Corporation will faithfully observe and perform all the agreements, conditions, covenants and terms contained in the Trust Agreement required to be observed and performed by it, and it is expressly understood and agreed by and among the parties to this Installment Sale Agreement and the Trust Agreement that each of the agreements, conditions, covenants and terms contained in each such agreement is an essential and material term of the obligation of the City to repay the costs of the acquisition and construction of the Projects and the costs and expenses incidental thereto paid by the Corporation pursuant to, and in accordance with, and as authorized under law and this Installment Sale Agreement.
Section 5.02 Use of Proceeds of Certificates. The Corporation and the City agree that the proceeds of the Certificates deposited in the Acquisition Fund will be used by the City, as agent for the Corporation, to pay the costs of the acquisition and construction of the Projects and to pay the incidental costs and expenses related thereto as provided herein and in the Trust Agreement.
Section 5.03 Against Encumbrances. The City will pay or cause to be paid when due all sums of money that may become due or purporting to be due for any labor, services, materials, supplies or equipment furnished, or alleged to have been furnished, to or for the City payable from the Measure I Receipts or which may impair the security for the 2026 Installment Sale Payments and will keep the Measure I Receipts free of any and all liens against any portion of the Measure I Receipts. In the event any such lien attaches to or is filed against any portion of the Measure I Receipts, the City will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that if the City desires to contest any such lien it may do so. If any such lien shall be reduced to final judgment and such judgment or any process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and such stay thereafter expires, the City will forthwith pay or cause to be paid and discharged such judgment. The City will, to the maximum extent permitted by law, indemnify and hold the Corporation and the Trustee harmless from, and defend each of them against, any claim, demand, loss, damage, liability or expense (including attorneys’ fees) as a result of any such lien or claim of lien against any portion of the Measure I Receipts.
The City may pledge, encumber or otherwise secure its obligations with the Measure I Receipts, provided, that except as permitted by Section 4.01 hereof, in all instances any such pledge, lien or security is wholly subordinate and junior to the obligations of the City contained herein.
20.b
Packet Pg. 481 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 13 4929-5435-0221v3/022217-0004
Section 5.04 Maintenance of Measure I Revenues. The City will use its best efforts to comply with all provisions of law and any regulations issued thereunder relating to the Measure I Revenues, including, but not limited to, the Measure I Ordinance, any applicable congestion management plans relating to the City and the California Environmental Quality Act (CEQA) relating to the Projects, and will take any and all reasonable actions required in order to maintain the City’s ability to receive the Measure I Revenues and apply the same as provided herein; provided, that nothing herein shall require the City to take any action or expend any City funds to comply with any such requirements deemed unreasonable in the sole discretion of the City, so long as failure to take such action or expend such funds will not cause the amount of estimated Measure I Revenues to be received by the City in the next Fiscal Year to be less than [150%] of Maximum Annual Debt Service. The City’s receipt of 2026 Installment Sale Payments is subordinate to certain obligations of the San Bernardino County Transportation Authority as provided in the Measure I Ordinance.
Section 5.05 Tax Covenants. Notwithstanding any other provision of the Indenture or the Installment Purchase Agreement, absent an opinion of Bond Counsel that the exclusion from gross income of the interest on the Certificates will not be adversely affected for federal income tax purposes, the City covenants to comply with all applicable requirements of the Code that are necessary to preserve such exclusion from gross income with respect to the Certificates and specifically covenants, without limiting the generality of the foregoing, as follows:
(1) Private Activity. The City will take no action and refrain from taking any action, and the Corporation will make no use of the proceeds of the Certificates or of any other moneys or property, which would cause the Certificates to be “private activity Certificates” within the meaning of Section 141 of the Code;
(2) Arbitrage. The City will make no use of the proceeds of the Certificates or of any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, which will cause the Certificates to be “arbitrage bonds” within the meaning of Section 148 of the Code;
(3) Federal Guarantee. The City will make no use of the proceeds of the Certificates, and the City will not take or omit to take any action, that would cause the Certificates to be “federally guaranteed” within the meaning of Section 149(b) of the Code; (4) Information Reporting. The City will take or cause to be taken all necessary action to comply with the informational reporting requirement of Section 149(e) of the Code which is necessary to preserve the exclusion of interest on the Certificates pursuant to Section 103(a) of the Code; (5) Hedge Bonds. The City will make no use of the proceeds of the Certificates or any other amounts or property, regardless of the source, and the City will not take any action or refrain from taking any action, that would cause the Certificates to be considered “hedge bonds” within the meaning of Section 149(g) of the Code unless the City takes all necessary actions to assure compliance with the requirements of Section 149(g) of the Code to maintain the exclusion from gross income of interest represented and evidenced by the Certificates for federal income tax purposes; and (5) Miscellaneous. The City will not take any action or refrain from taking any action which is inconsistent with its expectations stated in the Tax Certificate executed by the City in connection with the execution and delivery of the Certificates and will comply with the covenants and requirements that are stated therein and incorporated by reference herein.
20.b
Packet Pg. 482 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 14 4929-5435-0221v3/022217-0004
This Section and the covenants that are set forth herein shall not be applicable to, and nothing that is contained herein shall be deemed to prevent the City from providing for or causing the issuance of revenue bonds or issuing bonds or executing and delivering contracts that are payable on a parity with the 2026 Installment Sale Payments, the interest with respect to which has been determined to be subject to federal income taxation.
Section 5.06 Prompt Acquisition and Construction of the Projects. The City will take all necessary and appropriate steps to acquire and construct the Projects, as agent of the Corporation, with all practicable dispatch and in an expeditious manner and in conformity with law so as to complete the same as soon as possible.
Section 5.07 Accounting Records and Financial Statements. (a) The City will keep appropriate accounting records in which complete and correct entries shall be made of all transactions relating to the Measure I Receipts and the Projects, which records shall be available for inspection by the Trustee at reasonable hours and under reasonable conditions.
(b) The City will prepare annually within six months after the close of each Fiscal Year or, if not then available, as soon thereafter as possible, audited financial statements of the City for the preceding Fiscal Year. The Trustee shall have no responsibility to review any such accounting records or audited financial statements.
Section 5.08 Protection of Security and Rights of the Corporation and the Trustee. The City will preserve and protect the security hereof and the rights of the Corporation, the Insurer and the Trustee to the 2026 Installment Sale Payments hereunder and will warrant and defend such rights against all claims and demands of all persons.
Section 5.09 Further Assurances. The City will adopt, deliver, execute and make any and all further assurances, instruments and resolutions as may be reasonably necessary or proper to carry out the intention or to facilitate the performance hereof and for the better assuring and confirming unto the Corporation of the rights and benefits provided to it herein.
Section 5.10 Continuing Disclosure. The City hereby covenants and agrees that it will enter into and comply with and carry out all of the provisions of the Continuing Disclosure Certificate.
Notwithstanding any other provision of this Installment Sale Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not be considered an Event of Default hereunder; however, the Trustee shall at the written request of any Participating Underwriter (as defined in the Continuing Disclosure Certificate) or the Owner of at least 25% aggregate principal amount of Outstanding Certificates, or any Owner or Beneficial Owner may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section. For purposes of this Section, “Beneficial Owner” means any person which has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Certificates (including persons holding Certificates through nominees, depositories or other intermediaries).
When the Trustee incurs expenses or renders services pursuant to this Section, the Trustee shall be entitled to reasonable compensation for such expenses and services rendered.
20.b
Packet Pg. 483 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 15 4929-5435-0221v3/022217-0004
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.01 Events of Default and Acceleration of Principal. If one or more of the following “Events of Default” shall happen, that is to say -- (1) if default shall be made in the due and punctual payment of any 2026 Installment Sale Payment or any Contract when and as the same shall become due and payable; (2) if default shall be made by the City in the performance of any of the agreements or covenants contained herein required to be performed by it, and such default shall have continued for a period of 30 days after the City shall have been given notice in writing of such default by the Corporation or the Trustee;
(3) if the City shall file a petition or answer seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, or if a court of competent jurisdiction shall approve a petition filed with or without the consent of the City seeking arrangement or reorganization under the federal bankruptcy laws or any other applicable law of the United States of America or any state therein, 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 City or of the whole or any substantial part of its property; or (4) if payment of the principal of any Contract is accelerated in accordance with its terms; then and in each and every such case during the continuance of such Event of Default specified in clause (1) above, the Corporation shall, and for any other such Event of Default the Corporation may (with the prior written consent of the Insurer), by notice in writing to the City and the Insurer, declare the entire principal amount of the unpaid 2026 Installment Sale Payments and the accrued interest thereon to be due and payable immediately, and upon any such declaration the same shall become immediately due and payable, anything contained herein to the contrary notwithstanding. This subsection is subject to the condition, however, that if at any time after the entire principal amount of the unpaid 2026 Installment Sale Payments or the unpaid payment of any other Contract referred to in clause (1) above due prior to such declaration and the accrued interest thereon shall have been so declared due and payable and before any judgment or decree for the payment of the money due shall have been obtained or entered the City shall deposit with the Corporation a sum sufficient to pay the unpaid principal amount of the 2026 Installment Sale Payments or the unpaid payment of any other Contract referred to in clause (a) above due and payable prior to such declaration and the accrued interest thereon, with interest on such overdue installments at the rate or rates applicable to such unpaid principal amounts of the 2026 Installment Sale Payments or such Contract if paid in accordance with their terms, and the reasonable expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of the entire principal amount of the unpaid 2026 Installment Sale Payments and the accrued interest thereon due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Corporation or provision deemed by the Corporation to be adequate shall have been made therefor, then and in every such case the Corporation, by written notice to the City, may rescind and annul such declaration and its consequences; but 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.
20.b
Packet Pg. 484 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 16 4929-5435-0221v3/022217-0004
Section 6.02 Application of Measure I Receipts Upon Acceleration. All Measure I Receipts upon the date of the declaration of acceleration by the Trustee as provided in Section 6.01 and all Measure I Receipts thereafter received shall be applied in the following order -- First, to the payment of the costs and expenses of the Trustee and the Corporation, if any, in carrying out the provisions of this article, including reasonable compensation to its agents, accountants and counsel and including any indemnification expenses; Second, to the payment of the interest then due and payable on the entire principal amount of the unpaid 2026 Installment Sale Payments and Contracts, and, if the amount available shall not be sufficient to pay in full all such interest then due and payable, then to the payment thereof ratably, according to the amounts due thereon without any discrimination or preference; Third, to the payment of the unpaid principal amount of the 2026 Installment Sale Payments and the unpaid principal amount of all Contracts which has become due and payable, whether on the original due date or upon acceleration, with interest on the overdue principal and interest amounts of the unpaid 2026 Installment Sale Payments and such Contracts at the rate or rates of interest then applicable to such 2026 Installment Sale Payments and such Contracts if paid in accordance with their terms, and, if the amount available shall not be sufficient to pay in full all the amounts due with respect to the 2026 Installment Sale Payments and all Contracts on any date, together with such interest, then to the payment thereof ratably, according to the principal amount due on such date, without any discrimination or preference; and
[Fourth, to the payment of amounts due to the Insurer not paid pursuant to Second and Third above.]
Section 6.03 Other Remedies. The Trustee shall have the right -- (a) by mandamus or other action or proceeding or suit at law or in equity to enforce its rights against the City or any councilmember, officer or employee thereof, and to compel the City or any such councilmember, officer or employee to perform and carry out its or his duties under law and the agreements and covenants required to be performed by it or him contained herein; (b) by suit in equity to enjoin any acts or things which are unlawful or violate the rights of the Corporation or the Trustee; or
(c) by suit in equity upon the happening of an Event of Default to require the City and its council members, officers and employees to account as the trustee of an express trust.
Section 6.04 Non-Waiver. Nothing in this article or in any other provision hereof shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the 2026 Installment Sale Payments from the Measure I Receipts to the Trustee at the respective due dates or upon prepayment, or shall affect or impair the right of the Trustee, which is also absolute and unconditional, to institute suit to enforce such payment by virtue of the contract embodied herein.
A waiver of any default or breach of duty or contract by the Trustee 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 of duty or contract. No delay or omission by the Trustee to exercise any right or remedy accruing upon any default or breach of duty or contract shall impair any such right or
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Packet Pg. 485 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 17 4929-5435-0221v3/022217-0004
remedy or shall be construed to be a waiver of any such default or breach of duty or contract or an acquiescence therein, and every right or remedy conferred upon the Trustee by law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Trustee.
If any action, proceeding or suit to enforce any right or exercise any remedy is abandoned or determined adversely to the Trustee, the Corporation and the City and the Trustee shall be restored to their former positions, rights and remedies as if such action, proceeding or suit had not been brought or taken.
Section 6.05 Remedies Not Exclusive. No remedy herein conferred upon or reserved to the Trustee is intended to be exclusive of any other remedy, and each such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing in law or in equity or by statute or otherwise and may be exercised without exhausting and without regard to any other remedy conferred by law. The exercise of remedies hereunder shall be subject to the provisions of the Trust Agreement, including Articles VII and IX thereof.
ARTICLE VII
DISCHARGE OF OBLIGATIONS
Section 7.01 Discharge of Obligations.
(a) If the City shall pay or cause to be paid all the 2026 Installment Sale Payments at the times and in the manner provided herein, and all amounts owed the Insurer shall have been paid in full, the right, title and interest of the Corporation herein and the obligations of the City hereunder shall thereupon cease, terminate, become void and be completely discharged and satisfied. (b) Any unpaid principal installment of the 2026 Installment Sale Payments shall on its payment date or date of prepayment be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if the City makes payment of such 2026 Installment Sale Payments and the prepayment premium, if applicable, in the manner provided herein. (c) All or any portion of unpaid principal installments of the 2026 Installment Sale Payments shall, prior to their payment dates or dates of prepayment, be deemed to have been paid within the meaning of and with the effect expressed in subsection (a) of this section if (i) notice is provided by the City to the Trustee as required by the Trust Agreement, (ii) there shall have been deposited with the Trustee either money in an amount which shall be sufficient, or Defeasance Obligations (as that term is defined in the Trust Agreement), the interest on and principal of which when paid will provide money which, together with money, if any, deposited with the Trustee, shall be sufficient, in the opinion of an Independent Certified Public Accountant, to pay when due the interest to become due with respect to the principal installments of such 2026 Installment Sale Payments and the principal installments of such 2026 Installment Sale Payments or such portions thereof on and prior to their payment dates or their dates of prepayment, as the case may be, and the prepayment premiums, if any, applicable thereto and (iii) an opinion of nationally recognized bond counsel is filed with the Trustee to the effect that the action taken pursuant to this subsection will not cause the interest evidenced and represented by the Certificates to be includable in gross income under the Code for federal income tax purposes.
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Packet Pg. 486 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 18 4929-5435-0221v3/022217-0004
(d) After the payment of all 2026 Installment Sale Payments and prepayment premiums, if any, as provided in this section, and payment of all fees and expenses of the Trustee, the Trustee, upon request of the City, shall cause an accounting for such period or periods as may be requested by the City to be prepared and filed with the City and the Corporation and shall execute and deliver to the City and the Corporation all such instruments as may be necessary or desirable to evidence such total discharge and satisfaction of this Installment Sale Agreement, and the Trustee shall pay over and deliver to the City, as an overpayment of 2026 Installment Sale Payments, all such money or investments held by it pursuant hereto other than such money and such investments as are required for the payment or prepayment of the 2026 Installment Sale Payments, which money and investments shall continue to be held uninvested by the Trustee in trust for the payment of the 2026 Installment Sale Payments and shall be applied by the Trustee pursuant to the Trust Agreement.
ARTICLE VIII
MISCELLANEOUS
Section 8.01 Liability of City Limited to Measure I Receipts. Notwithstanding anything contained herein, the City shall not be required to advance any moneys derived from any source of income other than the Measure I Receipts for the payment of the 2026 Installment Sale Payments or for the performance of any agreements or covenants required to be performed by it contained herein.
The obligation of the City to make the 2026 Installment Sale Payments is a special obligation of the City payable solely from the Measure I Receipts as provided herein, and does not constitute a debt of the City or of the State of California or of any political subdivision thereof within the meaning of any constitutional or statutory debt limitation or restriction.
Section 8.02 Benefits of Installment Sale Agreement. Nothing contained herein, expressed or implied, is intended to give to any person other than the Corporation, the City, the Insurer or the Trustee any right, remedy or claim under or pursuant hereto, and any agreement or covenant required herein to be performed by or on behalf of the Corporation, the City or the Trustee shall be for the sole and exclusive benefit of the other parties. The Insurer is a third party beneficiary of this Installment Sale Agreement. [This Installment Sale Agreement shall not be amended, supplemented or modified without the prior written consent of the Insurer.] Section 8.03 Successor Is Deemed Included in all References to Predecessor. Whenever any of the Corporation or the City or the Trustee is named or referred to herein, such reference shall be deemed to include the successor to the powers, duties and functions that are presently vested in the Corporation or the City or the Trustee, and all agreements and covenants required hereby to be performed by or on behalf of the Corporation or the City or the Trustee shall bind and inure to the benefit of the respective successors thereof whether so expressed or not.
Section 8.04 Waiver of Personal Liability. No councilmember, officer or employee of the City shall be individually or personally liable for the payment of the 2026 Installment Sale Payments, but nothing contained herein shall relieve any councilmember, officer or employee of the City from the performance of any official duty provided by any applicable provisions of law or hereby.
Section 8.05 Article and Section Headings, Gender and References. The headings or titles of the several articles and sections hereof and the table of contents appended hereto shall be solely for convenience of reference and shall not affect the meaning, construction or effect hereof, and words
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Packet Pg. 487 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 19 4929-5435-0221v3/022217-0004
of any gender shall be deemed and construed to include all genders. All references herein to “Articles,” “Sections,” “Exhibits” and other subdivisions or clauses are to the corresponding articles, sections, exhibits, subdivisions or clauses hereof; and the words “hereby,” “herein,” “hereof,” “hereto,” “herewith” and other words of similar import refer to the Installment Sale Agreement as a whole and not to any particular article, section, exhibit, subdivision or clause hereof.
Section 8.06 Partial Invalidity. If any one or more of the agreements or covenants or portions thereof required hereby to be performed by or on the part of the Corporation or the City shall be contrary to law, then such agreement or agreements, such covenant or covenants or such portions thereof shall be null and void and shall be deemed separable from the remaining agreements and covenants or portions thereof and shall in no way affect the validity hereof. The Corporation and the City hereby declare that they would have executed this Installment Sale Agreement, and each and every other article, section, paragraph, subdivision, sentence, clause and phrase hereof irrespective of the fact that any one or more articles, sections, paragraphs, subdivisions, sentences, clauses or phrases hereof or the application thereof to any person or circumstance may be held to be unconstitutional, unenforceable or invalid.
Section 8.07 Assignment. The Installment Sale Agreement and any rights hereunder shall be assigned by the Corporation to the Trustee as provided in the Trust Agreement; to which assignment the City hereby expressly acknowledges and consents. Any other assignment without the consent of the Trustee and the Insurer shall be void.
Section 8.08 Net Contract. The Installment Sale Agreement shall be deemed and construed to be a net contract, and the City shall pay absolutely net during the term hereof the 2026 Installment Sale Payments and all other payments required hereunder, free of any deductions and without abatement, diminution or set-off whatsoever.
Section 8.09 California Law. The Installment Sale Agreement shall be construed and governed in accordance with the laws of the State of California.
Section 8.10 Indemnification. The City shall, to the full extent then permitted by law, indemnify, protect, hold harmless, save and keep harmless the Corporation and its directors, officers and employees and the Trustee and its directors, officers and employees from and against any and all liability, obligations, losses, claims and damages whatsoever, regardless of the cause thereof, and expenses in connection therewith, including, without limitation, reasonable counsel fees and expenses, penalties and interest arising out of or as the result of the acquisition, construction, installation and use of the Projects and each portion thereof or any accident in connection with the operation, use, condition or possession of the Projects or any portion thereof resulting in damage to property or injury to or death to any person including, without limitation, any claim alleging latent and other defects, whether or not discoverable by the City or the Corporation; any claim for patent, trademark or copyright infringement; and any claim arising out of strict liability in tort. The indemnification arising under this Section shall continue in full force and effect notwithstanding the full payment of all obligations hereunder or the termination hereof for any reason. The City agrees not to withhold or abate any portion of the payments required pursuant hereto by reason of any defects, malfunctions, breakdowns or infirmities of the Projects. The City and the Corporation mutually agree to promptly give notice to each other of any claim or liability hereby indemnified against following either’s learning thereof.
Section 8.11 Funds. Any fund required to be established and maintained herein by the City may be established and maintained in the accounting records of the City either as an account or a fund,
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Packet Pg. 488 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 20 4929-5435-0221v3/022217-0004
and may, for the purpose of such accounting records, any audits thereof and any reports or statements with respect thereto, be treated either as an account or a fund; but all such records with respect to any such fund shall at all times be maintained in accordance with sound accounting practice and with due regard for the protection of the security of the Certificates and the rights of the owners of such Certificates.
Section 8.12 Notices. Any written notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication to be given hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:
If to the City: City of Barstow
220 E Mountain View St A
Barstow, CA 92311
Attention: City Manager
If to the Corporation: Public Property Financing Corporation of California 2945 Townsgate Road, Suite 200
Westlake Village, CA 91361
Attention: Bill Morton
If to the Insurer: [TO COME]
Section 8.13 [Notices to Insurer; Miscellaneous Insurer Provisions. The Insurer shall be provided with the following information by the City:
(a) Annual audited financial statements within 180 days after the end of the City’s fiscal year (together with a certification of the City that it is not aware of any default or Event of Default under the Installment Sale Agreement or the Trust Agreement), and the City’s annual budget within 30 days after the approval thereof together with such other information, data or reports as the Insurer shall reasonably request from time to time;
(b) Notice of the commencement of any Insolvency Proceeding; (c) Notice of the making of any claim in connection with any Insolvency Proceeding seeking the avoidance as a preferential transfer of any payment of principal or interest on the Certificates;
(d) All reports, notices and correspondence to be delivered to Owners under the terms of this Agreement; and
(e) All information furnished pursuant to the Continuing Disclosure Certificate entered into in connection with the Certificates shall also be provided to the Insurer, simultaneously with the furnishing of such information (the provision of which may be by posting with the MSRB).
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Packet Pg. 489 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax 21 4929-5435-0221v3/022217-0004
The Insurer shall have the right to receive such additional information as it may reasonably request.
The City will permit the Insurer to discuss the affairs, finances and accounts of the City or any information the Insurer may reasonably request regarding the security for the Certificates with appropriate officers of the City and will use commercially reasonable efforts to enable the Insurer to have access to the facilities, books and records of the City on any Business Day upon reasonable prior notice.]
Section 8.14 Agreement Represents Complete Agreement; Amendments. This Installment Sale Agreement (together with the Trust Agreement) represents the entire contract between the parties. This Installment Sale Agreement may not be effectively amended, changed, modified, altered or terminated except by the written agreement of the City and the Corporation, given in accordance with the provisions of the Trust Agreement.
Section 8.15 Effective Date. This Installment Sale Agreement shall become effective upon its execution and delivery, and shall terminate when the Purchase Price shall have been fully paid (or provision for the payment thereof shall have been made pursuant to Article VII).
Section 8.16 Electronic Signatures. Each of the parties hereto agrees that the transaction consisting of this Installment Sale Agreement may be conducted by electronic means. Each party agrees, and acknowledges that it is such party’s intent (i) that, by signing this Installment Sale Agreement using an electronic signature, it is signing, adopting and accepting this Installment Sale Agreement, and (ii) that signing this Installment Sale Agreement using an electronic signature is the legal equivalent of having placed the undersigned officer’s handwritten signature on this Installment Sale Agreement on paper. Each party acknowledges that it is being provided with an electronic or paper copy of this Installment Sale Agreement in a usable format.
Section 8.17 Execution in Counterparts. This Installment Sale Agreement may be executed in several counterparts, each of which shall be deemed an original, and all of which shall constitute but one and the same instrument.
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Packet Pg. 490 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax S-1
4929-5435-0221v3/022217-0004
IN WITNESS WHEREOF, the parties hereto have executed and attested this Installment Sale Agreement by their officers thereunto duly authorized as of the day and year first written above.
CITY OF BARSTOW
By:
City Manager
ATTEST
By: ______________________________
City Clerk
PUBLIC PROPERTY FINANCING
CORPORATION OF CALIFORNIA
By:
Chairman
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Packet Pg. 491 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax A-1
4929-5435-0221v3/022217-0004
EXHIBIT A
2026 SALE PAYMENTS SCHEDULE
2026 Installment
Sale Payment Date*
Interest
Installment
Principal
Installment
Total 2026
Installment Sale
Payments
* Each 2026 Installment Sale Payment shall be payable on and shall be required to be deposited with the Trustee on or before the fifteenth day of the calendar month immediately preceding the respective June 1 and December 1 payment dates as provided in Section 3.02.
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Packet Pg. 492 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax B-1
4929-5435-0221v3/022217-0004
EXHIBIT B
DESCRIPTION OF PROJECTS
FISCAL YEAR 25-26 STREET REHABILITATION PROJECT
Street Rehabilitation Project - Base Bid $ 3,649,866.88 Street Rehabilitation - Alternate #1 - West Section 7 Phase 2 2,849,315.76 Street Rehabilitation - Alternate #2 - West Section 7 Phase 3 2,434,223.13 Street Rehabilitation - Alternate #3 - West Section 7 Phase 4 2,217,744.55 Street Rehabilitation - Alternate #4- Rimrock Road / H to Agarita & Agarita to End 2,714,124.70 Street Rehabilitation - Alternate #5 -Rimrock Road / Agarita to Barstow 1,104,988.70 Street Rehabilitation - Alternate #6 Rimrock Road / Class IV Bike Lane 1,353,523.75 Construction Management Estimate 1,632,378.75
Total Project Cost $ 17,956,166.22
Estimated Co-op Agreement w/San Bern. County Transportation Auth. (SBCTA) (2,001,166.55) Estimated Co-op Agreement w/San Bern. County/Dept. of Public Works (SBCDPW) (897,087.90) Co-op Agreement w/SBCTA (Transportation Development Act (TDA) Funds) (490,000.00) Remaining Amount Due $ 14,567,911.77
The City may add, delete or substitute other improvements for the Projects described above by filing with the Corporation and Trustee a Certificate of the City, provided the project is a Measure I Project.
PED, BICYCLE, AND SAFETY ACTIVE TRANSPORTATION PROGRAM
(ATP)
Project Estimate $ 4,140,000.00
Project Contingency Estimate 207,000.00
Construction Management Estimate 434,700.00
Total Project Cost Estimate $ 4,781,700.00
Active Transportation Program (ATP) Funding (Reimbursable) (4,440,000.00) Remaining Amount Due $ 341,700.00
MAIN STREET & BARSTOW ROAD TRAFFIC SIGNAL UPGRADES
Project Estimate $ 1,086,980.00
Project Contingency Estimate 54,349.00
Construction Management Estimate 128,580.00
Project Management Estimate 17,119.94
Total Project Cost Estimate $ 1,287,028.94
Highway Safety Improvement Program (HSIP) (Reimbursable) (711,524.00) Remaining Amount Due $ 575,504.94
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Packet Pg. 493 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax B-2
4929-5435-0221v3/022217-0004
SAFE ROUTES TO SCHOOL (SRTS) ACTIVE TRANSPORTATION
PROGRAM (ATP)
Project Estimate $ 6,902,000.00
Project Contingency Estimate 345,100.00
Construction Management Estimate 724,710.00
Project Management Estimate 108,706.50
Total Project Cost Estimate $ 8,080,516.50
Active Transportation Program (ATP) Funding (Reimbursable) (6,500,000.00) Remaining Amount Due $ 1,580,516.50
FORT IRWIN ROAD - COUNTY COOPERATIVE AGREEMENT
Project Estimate $ 42,000.00
Total Project Cost Estimate $ 42,000.00
Remaining Amount Due $ 42,000.00
LENWOOD CHANNEL
Project Estimate $ 40,000.00
Total Project Cost Estimate $ 40,000.00
Remaining Amount Due $ 40,000.00
NORTH FIRST AVE. BRIDGE - MOJAVE RIVER & OVERFLOW
Estimated Project Management $ 90,000.00
Total Project Cost Estimate $ 90,000.00
Remaining Amount Due $ 90,000.00
TOTAL FISCAL YEAR 26 CAPITAL IMPROVEMENT PROJECT
SUMMARY
Total Project Cost Estimate (All FY 26 Projects Listed) $ 32,277,411.65 LESS Cooperative Agreement and Reimbursable Funding $ (15,039,778.45) Total Funding Needed to Complete FY 26 Proposed Projects $ 17,237,633.20 FISCAL YEAR 26 PROJECT FUNDING ALLOCATED BY COUNCIL
Measure I $ 1,180,000.00
SB-1 1,219,788.00
Development Impact Fees (Fund 425) 250,201.00
Total FY 26 Budgeted CIP Funding $ 2,649,989.00
Adjusted FY 26 CIP (Total Funding Needed - FY 26 Budgeted Funding) 14,587,644.20 LESS: Council Appropriated Fund Balance (6,205,492.56)
Total FY 26 CIP Funding Required $ 8,382,151.64
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Packet Pg. 494 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax B
-3
4929-5435-0221v3/022217-0004
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Packet Pg. 495 Attachment: Installment Sale Agreement - Barstow 2026 Transportation Sales Tax Financing, 4929-5435-0221_3 (6299 : Measure I Sales Tax Anzel Galvan Draft 2-9-2026
1 CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION
SALES TAX REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2026
CERTIFICATE PURCHASE AGREEMENT
[Pricing Date]
City of Barstow
220 E. Mountain View Street, Suite A
Barstow, California 92311
Attention: City Manager
Ladies and Gentlemen:
The undersigned, Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), acting not as a fiduciary or agent for you, but on behalf of itself, offers to enter into this Certificate Purchase Agreement (which, together with the exhibits hereto, is referred to as the “Purchase Agreement”) with the City of Barstow, California (the “City”), which, upon the acceptance of the City, will be binding upon the City and the Underwriter. This offer is made subject to acceptance by the City by the execution of this Purchase Agreement and delivery of the same to the Underwriter prior to 11:59 P.M., California time, on the date hereof, and, if not so accepted, will be subject to withdrawal by the Underwriter upon notice delivered to the City at any time prior to the acceptance hereof by the City.
Capitalized terms that are used herein and not otherwise defined have the meanings that are set forth in the Trust Agreement, dated as of May 1, 2026 (the “Trust Agreement”), by and among Public Property Financing Corporation of California (the “Corporation”), the City, and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
Section 1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase, and the City hereby agrees to cause to be sold and delivered to the Underwriter all (but not less than all) of the City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026 in the aggregate principal amount of $__________ (the “Certificates”). The Certificates will be dated as of their date of delivery. Interest evidenced by the Certificates shall be payable semiannually on December 1, 2026 and each June 1 and December 1 as provided in the Trust Agreement, and will mature, bear interest and be subject to prepayment prior to maturity as set forth in Exhibit A. The purchase price of the Certificates shall be equal to $__________ (being the aggregate principal amount thereof [plus][less] a [net] original issue [premium][discount] of $___________, less an underwriter’s discount of $___________). The City acknowledges that the Underwriter will on the Closing Date (as such term is defined herein), on behalf of the City, wire a portion of the purchase price in the amount of $_____ representing the premiums for the Policy and the Reserve Policy (as such terms are defined herein), directly to __________ (the “Insurer”).
Section 2. The Certificates. The Certificates will evidence the direct, undivided fractional interests of the owners thereof in installment payments (“Installment Sale Payments”) to be
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Packet Pg. 496 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 2 paid by the City to the Corporation pursuant to the Installment Sale Agreement, dated as of May 1, 2026 (the “Installment Sale Agreement”), by and between the City and the Corporation. Under the Installment Sale Agreement, the Corporation will acquire and construct certain public capital improvements that are described therein (collectively, the “Project”) for, and sell the Project to, the City in consideration for the City’s payment of the Installment Sale Payments.
The Certificates shall be as described in, and shall be secured under and pursuant to the Trust Agreement substantially in the form previously submitted to the Underwriter with only such changes therein as shall be mutually agreed upon by the Corporation, the City and the Underwriter.
The proceeds of the Certificates will be used to: [(i) finance all or a portion of the acquisition, construction and/or installation of the Project, and (ii) pay the costs incurred in connection with the execution and delivery of the Certificates, including the premium for a municipal bond insurance policy to be issued by the Insurer insuring the Certificates maturing on June 1 of the years ___ through ___, inclusive (the “Policy”) and a debt service reserve insurance policy issued by the Insurer for deposit in the Reserve Account established and maintained under the Trust Agreement to satisfy the initial Reserve Requirement for the Certificates.]
The Installment Sale Payments shall be secured by a first lien on Measure I Revenues allocated by the San Bernardino County Transportation Authority to the City (the “Transportation Authority”) as the City’s share of local program funding pursuant to the Transportation Expenditure Plan (the “Expenditure Plan”) attached to the Measure I Ordinance (the “Measure I Receipts”). “Measure I Revenues” means revenues of the Transportation Authority pursuant to the Measure I Ordinance derived from a retail transactions and use tax imposed in the County of San Bernardino (the “County”) pursuant to Part 1.6 (commencing with Section 7251) of Division 2 of the Revenue and Taxation Code of the State of California and Section 180050 et seq. of the Public Utilities Code of the State of California, as now in effect and as it may from time to time hereafter be amended or supplemented.
This Purchase Agreement, the Trust Agreement, the Continuing Disclosure Certificate of the City, dated the date of delivery of the Certificates (the “Continuing Disclosure Certificate”), and the Installment Sale Agreement are collectively referred to herein as the “Legal Documents.” The Trust Agreement and the Installment Sale Agreement are collectively referred to herein as the “Corporation Documents.”
The City Council adopted a resolution approving the execution and delivery of the Certificates, this Purchase Agreement and the Trust Agreement at a regular meeting of the City Council held on __________, 2026 (the “Approving Resolution”). The City Council adopted a resolution approving the Preliminary Official Statement and final Official Statement and authorizing the execution and delivery of the Continuing Disclosure Certificate with respect to the Certificates at a regular meeting of the City Council held on __________, 2026 (the “POS Resolution” and together with the Approving Resolution, the “City Resolutions”).
Section 3. Public Offering and Establishment of Issue Price. (a) The Underwriter agrees to make an initial public offering of all of the Certificates at the public offering prices (or yields) set forth in Exhibit A and incorporated herein by reference. Subsequent to the initial public offering, the Underwriter reserves the right to change the
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Packet Pg. 497 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 3 public offering prices (or yields) as the Underwriter deems necessary in connection with the marketing of the Certificates, provided that the Underwriter shall not change the interest rates set forth on Exhibit A. The Certificates may be offered and sold to certain dealers at prices lower than such initial public offering prices. The City acknowledges and agrees that: (i) the purchase and sale of the Certificates pursuant to this Purchase Agreement is an arm’s-length commercial transaction between the City, on one hand, and the Underwriter, on the other; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Underwriter is and has been acting solely as principal and is not acting as a Municipal Advisor (as defined in Section 15B of the Securities Exchange Act of 1934, as amended); (iii) the Underwriter has not assumed an advisory or fiduciary responsibility in favor of the City with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Underwriter has provided other services or is currently providing other services to the City on other matters); (iv) the Underwriter has financial and other interests that differ from those of the City; and (v) the City has consulted its own legal, financial and other advisors to the extent that it has deemed appropriate.
(b) The Underwriter agrees to assist the City in establishing the issue price of the Certificates and shall execute and deliver to the City at Closing (as defined below) an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form set forth in Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the City and Special Counsel (as such term is defined below), to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Certificates. All actions to be taken by the City under this section to establish the issue price of the Certificates may be taken on behalf of the City by the City’s municipal advisor, Urban Futures, Incorporated (the “Municipal Advisor”) and any notice or report to be provided to the City may be provided to the Municipal Advisor.
(c) Except as otherwise set forth in Exhibit A, the City will treat the first price at which 10% of each maturity of the Certificates (the “10% test”), identified under the column “10% Test Used” in Exhibit A, is sold to the public as the issue price of that maturity. At or promptly after the execution of this Purchase Agreement, the Underwriter shall report to the City the price or prices at which it has sold to the public each maturity of Certificates. If at that time the 10% test has not been satisfied as to any maturity of the Certificates, the Underwriter agrees to promptly report to the City the prices at which it sells the unsold Certificates of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date (as defined below) has occurred, until either:
(i) the Underwriter has sold all of the Certificates of that maturity; or (ii), the 10% test has been satisfied as to the Certificates of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon the request of the City or Special Counsel. For purposes of this Section, if Certificates mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Certificates. For clarity, and notwithstanding any other condition to Closing set forth in this Purchase Agreement, the sale of 10% of each maturity of the Certificates to the public prior to the Closing Date shall not be a condition to Closing.
(d) The Underwriter confirms that it has offered the Certificates to the public on or before the date of this Purchase Agreement at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in Exhibit A, except as otherwise set forth therein.
Exhibit A also sets forth, identified under the column “Hold the Offering Price Rule Used,” as of the date of this Purchase Agreement, the maturities, if any, of the Certificates for which the 10% test has
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Packet Pg. 498 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 4 not been satisfied and for which the City and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the City to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Certificates, the Underwriter will neither offer nor sell unsold Certificates of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(i) the close of the fifth (5th) business day after the sale date; or (ii) the date on which the Underwriter has sold at least 10% of that maturity of the Certificates to the public at a price that is no higher than the initial offering price to the public.
The Underwriter will advise the City promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Certificates to the public at a price that is no higher than the initial offering price to the public. (e) The Underwriter confirms that:
(1) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Certificates to the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group, and each broker-dealer that is a party to such third-party distribution agreement, as applicable, (A) (i) to report the prices at which it sells to the public the unsold Certificates of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Certificates of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Certificates of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter, and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter; (B) to promptly notify the Underwriter of any sales of Certificates that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Certificates to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public; and
(2) any selling group agreement relating to the initial sale of the Certificates to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Certificates to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Certificates of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Certificates of that maturity allocated to it have been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Certificates of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer and (B) comply with the hold-the-offeringprice rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires.
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Packet Pg. 499 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 5 (f) The City acknowledges that, in making the representations set forth in this Section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Certificates to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a third-party distribution agreement was employed in connection with the initial sale of the Certificates to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates, as set forth in the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Certificates, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Certificates. (g) The Underwriter acknowledges that sales of any Certificates to any person that is a related party to an underwriter participating in the initial sale of the Certificates to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section. Further, for purposes of this section:
(i) “public” means any person other than an underwriter or a related party; (ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Certificates to the public (including a member of a selling group or a party to a third party distribution agreement participating in the initial sale of the Certificates to the public); (iii) a purchaser of any of the Certificates is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and (iv) “sale date” means the date of execution of this Purchase Agreement by all parties.
Section 4. The Official Statement. By its acceptance of this proposal, the City ratifies, confirms and approves of the use and distribution by the Underwriter prior to the date hereof of the Preliminary Official Statement relating to the Certificates dated [POS Date] (including the cover page, all appendices and all information incorporated therein and any other supplements or amendments thereto and as disseminated in its printed physical form or in electronic form in all respects materially
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Packet Pg. 500 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 6 consistent with such physical form, the “Preliminary Official Statement”) that an authorized officer of the City deemed “final” as of its date for purposes of Rule 15c2-12 promulgated under the Securities Exchange Act of 1934, as amended (“Rule 15c2-12”), except for certain information that is permitted to be omitted therefrom by Rule 15c2-12. The City agrees to deliver or cause to be delivered to the Underwriter, within seven business days of the date hereof, copies of the final official statement, dated the date hereof, relating to the Certificates (including all information that was previously permitted to have been omitted by Rule 15c2-12), including the cover page, all appendices, all information incorporated therein and any amendments or supplements as have been approved by the City and the Underwriter (the “Official Statement”) in such quantity as the Underwriter shall reasonably request to comply with Section (b)(4) of Rule 15c2-12 and the rules of the Municipal Securities Rulemaking Board (the “MSRB”).
The Underwriter hereby agrees that it will not request that payment be made by any purchaser of the Certificates prior to delivery by the Underwriter to the purchaser of a copy of the Official Statement. The Underwriter agrees: (i) to provide the City with final pricing information on the Certificates on a timely basis; and (ii) to file a copy of the Official Statement, including any supplements prepared by the City in accordance with MSRB rules with the MSRB at http://emma.msrb.org. The City hereby approves of the use and distribution by the Underwriter of the Preliminary Official Statement in connection with the offer and sale of the Certificates. The City will cooperate with the Underwriter in the filing by the Underwriter of the Official Statement with the MSRB.
Section 5. Closing. At 8:30 a.m., California time, on [Closing Date], or at such other time or date as the City and the Underwriter agree upon (the “Closing Date”), the City shall cause the Trustee to execute and deliver the Certificates, in definitive form, registered in the name of Cede & Co., as the nominee of The Depository Trust Company (“DTC”), so that the Certificates may be credited to the account specified by the Underwriter under DTC’s FAST procedures. Concurrently with the delivery of the Certificates, the City will deliver the documents hereinafter mentioned at the offices of Stradling Yocca Carlson & Rauth, LLP, Newport Beach, California (“Special Counsel”), or another place to be mutually agreed upon by the City and the Underwriter. The Underwriter will accept such delivery and pay the purchase price of the Certificates as set forth in Section 1 hereof by wire transfer in immediately available funds. This payment for and delivery of the Certificates, together with the delivery of the aforementioned documents, is herein called the “Closing.” The Certificates shall be registered in the name of Cede & Co., as nominee of DTC in denominations of five thousand dollars ($5,000) or any integral multiple thereof. The City acknowledges that the services of DTC will be used initially by the Underwriter in order to permit the execution and delivery of the Certificates in book-entry form, and agree to cooperate fully with the Underwriter in employing such services.
Section 6. [Reserved].
Section 7. Representations, Warranties and Covenants of the City. The City represents, warrants and covenants to the Underwriter that:
(a) The City is a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State.
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Packet Pg. 501 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 7 (b) The City has full legal right, power and authority to adopt or enter into, as the case may be, and to carry out and consummate the transactions on its part contemplated by the Legal Documents.
(c) By all necessary official action, the City has adopted the City Resolutions, has duly authorized and approved the Legal Documents and the Certificates, has duly authorized and approved the Preliminary Official Statement and the Official Statement and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in, the Legal Documents and the consummation by it of all other transactions contemplated by the Legal Documents in connection with the execution and delivery of the Certificates. As of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered, and assuming due execution and delivery by the other parties thereto, if applicable, the Legal Documents will constitute the legally valid and binding obligations of the City enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors’ rights generally, or by the exercise of judicial discretion and the limitations on legal remedies against municipal corporations in the State. The City has complied, and will at the Closing be in compliance in all material respects, with the terms of the Legal Documents.
(d) The City is not in any material respect in breach of or default under any applicable constitutional provision, law, ordinance or administrative rule or regulation of the State, the County or the Transportation Authority, or administrative regulation of any state or of the United States, or any agency or instrumentality thereof either, or any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party which breach or default has or may have a materially adverse effect on the ability of the City to perform its obligations under the Legal Documents, 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 Legal Documents, 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, 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 Legal Documents.
(e) To the best of the City’s knowledge as confirmed by an officer of the City on or about the date of the Preliminary Official Statement, the Transportation Authority is not in any material respect in breach of or default under the Measure I Ordinance, the Expenditure Plan, any applicable judgment or decree, or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Transportation Authority is a party which breach or default has or may have a materially adverse effect on the ability of the Transportation Authority to perform its obligations, including to meet debt service requirements, under any of its limited tax bonds or similar obligations payable from Measure I Revenues, 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.
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Packet Pg. 502 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 8 (f) Except as described in or contemplated by the Preliminary Official Statement and the Official Statement, all material authorizations, approvals, licenses, permits, consents and orders of any governmental authority, legislative body, board, agency or commission having jurisdiction of the matter which are required for the due authorization by, or which would constitute a condition precedent to or the absence of which would materially adversely affect the due performance by the City of its obligations in connection with the Legal Documents have been duly obtained or, when required for future performance, are expected to be obtained, other than such approvals, consents and orders as may be required under the Blue Sky or securities laws of any state in connection with the offering and sale of the Certificates.
(g) The Preliminary Official Statement was as of its date and at the date hereof, and the Official Statement is, and at all times subsequent to the date of the Official Statement up to and including the Closing will be, true and correct in all material respects, and the Preliminary Official Statement did not as of its date and at date the hereof, and the Official Statement does not and will not, at all times subsequent to the date of the Official Statement up to and including the Closing, contain any untrue statement of a material fact or omit to state a material fact that is necessary to make the statements contained therein, in the light of the circumstances under which they were made, not misleading (except that this representation does not include statements in the Official Statement under the captions [“THE CORPORATION”] and “UNDERWRITING,” information regarding DTC and its book-entry only system, and information regarding the Insurer, the Policy and the Reserve Policy, as to which no view is expressed).
(h) The City will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement. The City will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental authority prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Certificates. (i) As of the time of acceptance hereof, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental authority, public board or body, pending, with service of process upon the City having been accomplished, or threatened in writing to the City: (i) in any way questioning the corporate existence of the City or the titles of the officers of the City to their respective offices; (ii) affecting, contesting or seeking to prohibit, restrain or enjoin the execution or delivery of any of the Certificates, the payment or collection of Installment Sale Payments or any other amounts pledged or to be pledged to pay the principal and interest evidenced by the Certificates, the payment or collection of Measure I Receipts or Measure I Revenues or any other amounts pledged or to be pledged to pay Installment Sale Payments, or in any way contesting or affecting the validity of the Certificates, the Resolutions, or the Legal Documents or the consummation of the transactions contemplated thereby or hereby, or contesting the exclusion of the interest evidenced by the Certificates from taxation, or contesting the powers of the Trustee to execute and deliver the Certificates; (iii) which would be likely to result in any material adverse change relating the City’s ability to pay Installment Sale Payments when due or the City’s right to receive and expend Measure I Receipts on the Project or the payment of Installment Sale Payments when due; (iv) which would be likely to result in any material adverse change relating to the business, operations or financial condition of the City; or (v) contesting the completeness or accuracy of the Preliminary Official Statement or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
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Packet Pg. 503 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 9 (j) To the City’s knowledge, there is no basis for any action, suit, proceeding, inquiry or investigation of the nature described in clauses (i) through (v) of paragraph 7(i). (k) Until the date which is twenty-five (25) days after the end of the underwriting period, if any event shall occur of which the City is aware that would cause the Official Statement to contain any untrue statement of a material fact or omit to state a material fact that is necessary in order to make the statements in the Official Statement, in light of the circumstances under which they were made, not misleading (except that this representation does not include statements in the Official Statement under the caption [“THE CORPORATION”] and “UNDERWRITING,” information regarding DTC and its book entry only system, and information regarding the Insurer, the Policy, and the Reserve Policy, as to which no view is expressed), the City shall forthwith notify the Underwriter of any such event of which it has knowledge and shall cooperate fully in furnishing any information available to it for any supplement to the Official Statement necessary, in the Underwriter’s reasonable opinion, so that the statements therein as so supplemented will not be misleading in light of the circumstances existing at such time and the City shall promptly furnish to the Underwriter a reasonable number of copies of such supplement. As used herein, the term “end of the underwriting period” means the later of such time as: (i) the Trustee delivers the Certificates to the Underwriter; or (ii) the Underwriter does not retain, directly or as a member of an underwriting syndicate, an unsold balance of the Certificates for sale to the public. Unless the Underwriter gives notice to the contrary, the end of the underwriting period shall be deemed to be the Closing Date. Any notice delivered pursuant to this provision shall be written notice delivered by the Underwriter to the City at or prior to the Closing Date of the Certificates and shall specify a date (other than the Closing Date) to be deemed the end of the underwriting period.
(l) Except as disclosed in the Preliminary Official Statement and the Official Statement, the City has not within the last five years failed to comply in any material respect with any continuing disclosure undertakings with regard to Rule 15c2-12 to provide annual reports or notices of material events specified in such rule.
(m) The City will refrain from taking any action, or permitting any action to be taken, with regard to which the City may exercise control, that results in the loss of the tax-exempt status of the interest on the Certificates.
(n) The financial statements relating to the receipts, expenditures and cash balances of the City as of June 30, 2025 attached as Appendix [E] to the Preliminary Official Statement and the Official Statement fairly represent the receipts, expenditures and cash balances of the City.
Except as disclosed in the Preliminary Official Statement and the Official Statement or otherwise disclosed in writing to the Underwriter, there has not been any materially adverse change in the financial condition of the City or in its operations since June 30, 2025 and there has been no occurrence, circumstance or combination thereof which is reasonably expected to result in any such materially adverse change.
(o) To the extent required by law, the City will undertake, pursuant to the Continuing Disclosure Certificate, to provide annual reports and notices of certain events. A form of the Continuing Disclosure Certificate is set forth in Appendix [D] to the Preliminary Official Statement and will also be set forth in the Official Statement.
(p) Between the date of this Purchase Agreement and twenty-five (25) days after the end of the underwriting period, the City will not, without the prior written consent of the
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Packet Pg. 504 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 10 Underwriter, offer or issue any certificates, bonds, notes, or other obligations for borrowed money or incur any material liabilities, direct or contingent, payable from or secured by a pledge of the Measure I Receipts.
(q) Any certificate signed by any officer of the City authorized to execute such certificate in connection with the execution, sale and delivery of the Certificates and delivered to the Underwriter shall be deemed a representation and warranty of the City to the Underwriter as to the statements made therein but not of the person signing such certificate.
Section 8. Conditions to the Obligations of the Underwriter. The Underwriter has entered into this Purchase Agreement in reliance upon the representations and warranties of the City contained herein. The obligations of the Underwriter to accept delivery of and pay for the Certificates on the Closing Date shall be subject, at the option of the Underwriter, to the accuracy in all material respects of the statements of the officers and other officials of the City, as well as authorized representatives of Special Counsel and the Trustee made in any certificates or other documents furnished pursuant to the provisions hereof; to the performance by the Corporation and the City of their obligations to be performed under the Legal Documents, respectively, at or prior to the Closing Date; and to the following additional conditions:
(a) The representations and warranties of the City contained herein shall be true and correct at the date hereof and at the time of the Closing, as if made on the Closing Date. (b) At the time of Closing, the Legal Documents shall be in full force and effect as valid and binding agreements between or among the various parties thereto, and the Legal Documents and the Official Statement shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter.
(c) At the time of the Closing, no material default shall have occurred or be existing under the Legal Documents or any other agreement or document pursuant to which any of the City’s financial obligations were executed and delivered, and neither the City nor the Corporation shall be in default in the payment of principal or interest with respect to any of their respective financial obligations, which default would materially adversely impact the ability of the City to pay the Installment Sale Payments.
(d) In recognition of the desire of the City and the Underwriter to effect a successful public offering of the Certificates, and in view of the potential adverse impact of any of the following events on such a public offering, this Purchase Agreement shall be subject to termination in the discretion of the Underwriter by notification, in writing, to the City prior to delivery of and payment for the Certificates, if between the date hereof and the time of Closing, in the Underwriter’s sole and reasonable judgment any of the following events shall occur (each a “Termination Event”):
(i) the market price or marketability of the Certificates, or the ability of the Underwriter to enforce contracts for the sale of the Certificates, shall be materially adversely affected by any of the following events:
(A) legislation shall have been enacted by the Congress of the United States or the legislature of the State or shall have been favorably reported out of committee of either body or be pending in committee of either body, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President’s Cabinet, or
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Packet Pg. 505 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 11 a decision shall have been rendered by a court of the United States or the State or the Tax Court of the United States, or a ruling, resolution, regulation or temporary regulation, release or announcement shall have been made or shall have been proposed to be made by the Treasury Department of the United States or the Internal Revenue Service, or other federal or state authority with appropriate jurisdiction, with respect to federal or state taxation upon interest received on obligations of the general character of the Certificates;
(B) there shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or
(C) a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of U.S. Securities and Exchange Commission (“SEC”) or any other governmental authority having jurisdiction; or
(D) legislation shall have been enacted by the Congress of the United States or shall have been favorably reported out of committee or be pending in committee, or shall have been recommended to the Congress for passage by the President of the United States or a member of the President's Cabinet, or a decision by a court of the United States shall be rendered, or a ruling, regulation, proposed regulation or statement by or on behalf of the SEC or other governmental agency having jurisdiction of the subject matter shall be made, to the effect that any obligations of the general character of the Certificates are not exempt from registration under or other requirements of the Securities Act of 1933, as amended and as then in effect, or the Securities Exchange Act of 1934, as amended and as then in effect, or that the Trust Agreement is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended and as then in effect; or (E) except as disclosed in or contemplated by the Official Statement, any material adverse change in the affairs of the City or the Corporation shall have occurred; or
(F) any rating of the Certificates or the rating of any obligations of the City or the Insurer shall have been downgraded, withdrawn or placed on credit watch with negative outlook by any major credit rating agency; or
(ii) any event or circumstance shall exist that either makes untrue or incorrect in any material respect any statement or information in the Official Statement (other than any statement provided by the Underwriter) or is not reflected in the Official Statement but should be reflected therein in order to make the statements therein, in the light of the circumstances under which they were made, not misleading and, in either such event, the City refuses to permit the Official Statement to be supplemented to supply such statement or information, or the effect of the Official Statement as so supplemented is to materially adversely affect the market price or marketability of the Certificates or the ability of the Underwriter to enforce contracts for the sale of the Certificates; or (iii) a general banking moratorium shall have been declared by federal or State authorities having jurisdiction and be in force; or
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Packet Pg. 506 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 12 (iv) a material disruption in securities settlement, payment or clearance services affecting the Certificates shall have occurred; or (v) any new restriction on transactions in securities materially affecting the market for securities (including the imposition of any limitation on interest rates) or the extension of credit by, or a charge to the net capital requirements of, underwriters shall have been established by the New York Stock Exchange, the SEC, any other federal or State agency or the Congress of the United States, or by Executive Order; or
(vi) a decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the delivery, offering or sale of the Certificates, including the underlying obligations as contemplated by this Purchase Agreement or by the Official Statement, or any document relating to the delivery, offering or sale of the Certificates, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act of 1933, as amended and as then in effect, the Securities Exchange Act of 1934, as amended and as then in effect, or the Trust Indenture Act of 1939; or
(vii) the commencement of any action, suit or proceeding described in Section 7(i).
Subject to Section 17, upon the occurrence of a Termination Event and the termination of this Purchase Agreement by the Underwriter, all obligations of the City and the Underwriter under this Purchase Agreement shall terminate, without further liability. (e) at or prior to the Closing, the Underwriter shall receive the following documents, in each case to the reasonable satisfaction in form and substance of the Underwriter:
(i) The executed City Resolutions;
(ii) A resolution of the Corporation’s board of directors approving the execution delivery of the Corporation Documents (the “Corporation Resolution”); (iii) The Legal Documents, each duly executed and delivered by the respective parties thereto, with only such amendments, modifications or supplements as may have been agreed to in writing by the Underwriter;
(iv) Specimen Certificates;
(v) The approving opinion of Special Counsel dated the Closing Date and addressed to the City, in substantially the form attached as Appendix [C] to the Official Statement, and a reliance letter thereon addressed to the Trustee;
(vi) A supplemental opinion of Special Counsel dated the Closing Date and addressed to the Underwriter and the Insurer, in substantially the form attached as Exhibit C hereto. (vii) The Official Statement, executed on behalf of the City, and the Preliminary Official Statement;
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Packet Pg. 507 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 13 (viii) Evidence that the rating on the Certificates is as described in the Official Statement;
(ix) A certificate, dated the Closing Date, signed by a duly authorized officer of the Corporation, satisfactory in form and substance to the Underwriter, to the effect that:
(i) the Corporation Resolution was duly adopted at a meeting of its board of directors held on __________, 2026, at which a quorum was present and acting throughout, is in full force and effect as of the date hereof and has not been amended, modified or supplemented, except as agreed to by the Underwriter; (ii) no event affecting the Corporation has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iii) the information and statements contained in the Official Statement under the caption “THE CORPORATION” did not as of its date and do not as of the Closing contain an untrue statement of a material fact or omit to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (iv) the Corporation is not, in any material respect, in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Installment Sale Agreement) or other instrument to which the Corporation is a party or is otherwise subject, which would have a material adverse impact on the Corporation’s ability to perform its obligations under the Corporation Documents, 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; (x) A certificate, dated the Closing Date, signed by a duly authorized officer of the City, satisfactory in form and substance to the Underwriter, to the effect that: (i) the City Resolutions were duly adopted at regular meetings of the City Council of the City held _________, 2026 and _________, 2026, at which a quorum was present and acting throughout, are in full force and effect as of the date hereof and have not been amended, modified or supplemented, except as agreed to by the Underwriter; (ii) the representations, warranties and covenants of the City contained in this Purchase Agreement are true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date by the City; (iii) no event affecting the City has occurred since the date of the Official Statement which should be disclosed in the Official Statement for the purposes for which it is to be used or which is necessary to disclose therein in order to make the statements and information therein not misleading in any material respect; (iv) the information and statements contained in the Official Statement (other than information in the Official Statement under the captions “THE CORPORATION” and “UNDERWRITING” and information regarding DTC and its book-entry only system, and information regarding the Insurer, the Policy and the Reserve Policy) did not as of its date and does not as of the Closing contain an untrue statement of a material fact or omit to state any material fact that is necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect; and (v) the City is not, in any material respect, in breach of or default under any applicable law or administrative regulation of the State or the United States or any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement (including but not limited to the Installment Sale Agreement) or other instrument to which the City is a party or is otherwise subject, which would have a material adverse impact on the City’s ability to perform its obligations under the Legal Documents, 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;
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Packet Pg. 508 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 14 (xi) An opinion dated the Closing Date and addressed to the Underwriter and the Insurer, of _________, as counsel to the Corporation, to the effect that:
(A) the Corporation is duly organized and validly existing as a nonprofit public benefit corporation under the laws of the State of California and is possessed of full power to own and hold real and personal property and to lease, purchase and sell the same; (B) the Corporation Resolution was duly adopted at a meeting of the governing board of the Corporation which was called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout, is in full force and effect and gas not been modified, amended, rescinded or repealed since its date of adoption; (C) the Corporation has full right and lawful authority to execute and deliver the Corporation Documents and such documents have been duly authorized, executed and delivered by and on behalf of the Corporation, and assuming the due authorization, execution and delivery by the other parties thereto, the Corporation Documents are valid and binding obligations of the Corporation enforceable in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws, or by legal or equitable principles relating to or limiting creditors’ rights generally;
(D) except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, to the best knowledge of such counsel, there is no action, suit, proceeding, inquiry, or investigation before or by any court or public board or body pending, with service of process upon the Corporation having been accomplished, or, to the best knowledge of such counsel, threatened in writing wherein an unfavorable decision, ruling, or finding would adversely affect the transactions contemplated by the Certificates, the Legal Documents or any other agreement, document, or certificate related to such transaction;
(E) insofar as it will have a material adverse effect on the ability of the Corporation to enter into, carry out or perform its obligations under the Legal Documents or to consummate the transactions contemplated thereby, to the best of our knowledge, the Corporation is not in material breach of or default under any applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the Corporation is a party or to which the Corporation or any of its property or assets is otherwise subject, and, to the best of our knowledge no event has occurred and is continuing which with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such judgment, decree or instrument; and
(F) no authorization, approval, consent, or order of any governmental agency or, to the best of our knowledge, any other person or corporation is required for the valid authorization, execution and delivery by the Corporation of the Corporation Documents that has not been obtained.
(xii) An opinion dated the Closing Date and addressed to the Underwriter and the Insurer, of Colantuono, Highsmith & Whatley, PC, as City Attorney to the City, to the effect that:
(A) the City is a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State;
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Packet Pg. 509 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 15 (B) the City Resolutions were duly adopted at regular meetings of the City which were called and held pursuant to law, with all public notice required by law and at which a quorum was present and acting throughout, are in full force and effect and have not been modified, amended, rescinded or repealed since their respective date of adoption; (C) the Legal Documents have been duly authorized, executed and delivered by the City and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitute the valid and binding obligations of the City, except as enforcement may be limited by bankruptcy, insolvency, moratorium, or similar laws, or by legal or equitable principles relating to or limiting creditors’ rights generally; (D) no consent, authorization or approval of, or filing or registration with, any governmental or regulatory officer or body which has not already been obtained is required to be obtained by the City for the execution and performance of the Legal Documents or the actions on the part of the City contemplated thereby, including causing the delivery of the Certificates;
(E) except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, to the best knowledge of such counsel, there is no litigation, proceeding, action, suit or investigation at law or in equity before or by any court, governmental authority or body, pending, with service of process upon the City having been accomplished, or, to the best knowledge of such counsel, threatened in writing against the City, challenging the creation, organization or existence of the City, or the validity of the Legal Documents or seeking to restrain or enjoin the payment or collection of Installment Sale Payments or any other amounts pledged or to be pledged to pay the principal and interest evidenced by the Certificates, the payment or collection of Measure I Receipts or Measure I Revenues or any other amounts pledged or to be pledged to pay Installment Sale Payments, the repayment of the Certificates or in any way contesting or affecting the validity of the Legal Documents or contesting the authority of the City to enter into or perform its obligations under any of the Legal Documents, which, in any manner, questions the right of the City to pay the Installment Sale Payments under the Installment Sale Agreement or the use of Measure I Revenues to pay Installment Sale Payments, or which may materially adversely affect the City’s ability to pay the Installment Sale Payments when due; and
(F) The execution and delivery of the Legal Documents and compliance with the provisions thereof do not and will not in any material respect conflict with or constitute on the part of the City a breach of or default under any agreement or other instrument to which the City is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the City is subject, which breach or default has or may have a material adverse effect on the ability of the City to perform its obligations under the Legal Documents; (xiii) A letter of Stradling Yocca Carlson & Rauth LLP, Newport Beach, as disclosure counsel to the City, dated the Closing Date and addressed to the Underwriter and the Insurer, in substantially the form attached as Exhibit D hereto. (xiv) An opinion of Anzel Galvan LLP, San Francisco, California, counsel to the Underwriter, in form and substance satisfactory to the Underwriter; (xv) An opinion of counsel to the Trustee, addressed to the Underwriter and the Insurer, dated the Closing Date, to the effect that:
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Packet Pg. 510 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 16 (A) The Trustee is a national banking association duly organized, validly existing and in good standing under the laws of the United States having full power and authority and being qualified to enter into, accept and administer the trust created under the Trust Agreement to which it is a party and to enter into the Trust Agreement; (B) The Trust Agreement has been duly authorized, executed and delivered by the Trustee and constitutes the legal, valid and binding obligation of the Trustee enforceable against the Trustee in accordance with its terms, except as enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting enforcement of creditors’ rights generally and by the application of equitable principles if equitable remedies are sought; (C) To such counsel’s knowledge, the execution and delivery by the Trustee of the Trust Agreement and the performance of the obligations of the Trustee under the Trust Agreement by the Trustee, will not conflict with or contravene the Articles of Association or Bylaws of the Trustee, or any law, regulation or ruling of any court or governmental authority to which the Trustee is subject;
(D) To such counsel’s knowledge, no authorization, approval, consent, or order of any governmental agency or regulatory authority having jurisdiction over the Trustee that has not been obtained by the Trustee is required for the authorization, execution, delivery and performance by the Trustee of the Trust Agreement; and (E) An authorized representative of the Trustee has duly executed and delivered the Certificates in accordance with the Trust Agreement; (xvi) A certificate, dated the Closing Date, signed by a duly authorized official of the Trustee, in form and substance satisfactory to the Underwriter, and an incumbency certificate of the Trustee;
(xvii) The preliminary and final Statement of Sale with respect to the Installment Sale Agreement required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code;
(xviii) A copy of the executed Blanket Issuer Letter of Representations by and between the City and DTC relating to the book-entry system; (xix) A certificate dated the Closing Date regarding tax, arbitrage and use of proceeds of the City relating to the Certificates in form and substance to the reasonable satisfaction of Special Counsel and the Underwriter;
(xx) A certificate, dated the date of the Preliminary Official Statement, of the City, as required under Rule 15c2-12;
(xxi) Evidence that a debt management policy which complies with Section 8855 of the Government Code has been adopted by the City; (xxii) A certificate dated the Closing Date, signed by a duly authorized officer of the Municipal Advisor to the effect that the Municipal Advisor has participated in the preparation of the Preliminary Official Statement and the Official Statement and nothing has come to the attention
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Packet Pg. 511 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 17 of the Municipal Advisor which would lead it to believe that the Preliminary Official Statement or the Official Statement contain any untrue statement of a material fact or omits to state a fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading; and
(xxiii) A copy of the Measure I Ordinance, including the Expenditure Plan; (xxiv) A letter from the Transportation Authority to the effect that Measure I Revenues may be used to pay for the cost of the Project, including the Installment Sale Payments or other financing costs incurred by the City in connection with the City's financing of the Project. (xxv) Evidence satisfactory to the Underwriter that the Trustee has received the Policy and the Reserve Policy from the Insurer;
(xxvi) An opinion of counsel to the Insurer, dated the Closing Date, in form and substance satisfactory to the Underwriter and Special Counsel, with respect to, among other matters, the Policy, and disclosures relating thereto in the Official Statement; (xxvii) A certificate of the Insurer, dated the Closing Date, in form and substance satisfactory to the Underwriter and Special Counsel, with respect to, among other matters, the Policy and the Reserve Policy, and disclosures relating thereto in the Official Statement; and (xxviii)Such additional legal opinions, certificates, proceedings, instruments or other documents as Special Counsel or the Underwriter may reasonably request.
Section 9. Changes in Official Statement. Within 90 days after the Closing or within 25 days following the “end of the underwriting period” (as defined in Rule 15c2-12), whichever occurs first, if any event relating to or affecting the Certificates, the Trustee, the City or the Corporation shall occur as a result of which it is necessary, in the reasonable opinion of the Underwriter, 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 City will forthwith prepare and furnish to the Underwriter 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 shall cooperate with the Underwriter in the filing by the Underwriter of such amendment or supplement to the Official Statement with the MSRB. The Underwriter acknowledges that the “end of the underwriting period” will be the Closing Date unless the Underwriter notifies the City otherwise in writing.
Section 10. Expenses. Whether or not the Certificates are sold to the Underwriter, the Underwriter shall be under no obligation to pay any expenses incident to the performance of the obligations of the City hereunder. If the Certificates are delivered to the Underwriter, the City shall pay, from the proceeds of the Certificates or from other funds of the City, the following expenses: (a) the cost of preparing, duplicating or printing, mailing and delivering the Legal Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated therein and hereby (and drafts of any thereof); (b) the cost of preparation and printing of the definitive Certificates; (c) the fees and expenses of the Corporation, the City, the Trustee, Special Counsel, Disclosure Counsel, the Municipal Advisor, any entity retained by the City to perform
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Packet Pg. 512 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 18 continuing disclosure compliance research or provide continuing disclosure compliance reports and any other experts or consultants retained by the City or the Corporation; (d) the charges of any rating agency with respect to the Certificates; (e) premiums and other expenses relating to the Policy and the Reserve Policy; (f) reimbursement to the Underwriter for payment of any fees and expenses reasonably incurred in connection with the initial offering, sale and delivery of the Certificates, including but not limited to industry fees (e.g., DTC, DAC, IPREO, CUSIP and Day Loan fees) only if the City and Underwriter have previously discussed and approved the allocation of proceeds towards these fees, and meal and travel expenses of the personnel of the City, but not including entertainment expenses or those to be paid by the Underwriter pursuant to the last paragraph of this Section 10; and (g) all other fees and expenses, not including entertainment expenses, reasonably incurred in connection with the preparation of the Legal Documents, the Preliminary Official Statement, the Official Statement and all other agreements and documents that are contemplated hereby (and drafts of any thereof) and/or the initial offering, sale and delivery of the Certificates. The City has authorized, and does hereby authorize, the Underwriter to pay such expenses on behalf of the City from proceeds of the Certificates at Closing as further described in the closing memorandum relating to the Certificates including fees and expenses of counsel to the Underwriter.
If the Certificates are sold to the Underwriter, the City shall pay out of the proceeds of the Certificates the discount of the Underwriter or the purchase price paid for the Certificates shall reflect such discount.
Except as otherwise provided in this Section 10, the Underwriter shall pay the cost, if any, of qualifying the Certificates for sale in the various states chosen by the Underwriter, all advertising expenses in connection with the public offering of the Certificates and all other expenses incurred by it in connection with its public offering and distribution of the Certificates, not described above.
Section 11. Qualification of Certificates. The City will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request to qualify the Certificates 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 Underwriter may designate and to provide for the continuance of such qualification; provided, however, that the City will not be required to qualify as a foreign corporation or to file any general or special consents to service of process under the laws of any state.
Section 12. Notices. Any notice or other communication to be given to the Underwriter under this Purchase Agreement may be given by delivering the same in writing to Stifel, Nicolaus & Company, Incorporated, 2121 Avenue of the Stars, Suite 2150, Los Angeles, California 90067, Attention: Sara Brown. All notices or communications hereunder by any party shall be given and served upon each other party. Any notice or communication to be given to the City under this Purchase Agreement may be given by delivering the same in writing to the address set forth on the first page of this Purchase Agreement.
Section 13. Parties in Interest. This Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns thereof) and no other person shall acquire or have any right hereunder or by virtue hereof. Except as otherwise expressly provided herein, all of the agreements and representations of the City contained in this Purchase Agreement and in any certificates delivered pursuant hereto shall remain operative and in full force and effect regardless of:
(i) any investigation made by or on behalf of the Underwriter; (ii) delivery of and payment for the Certificates hereunder; or (iii) any termination of this Purchase Agreement.
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Packet Pg. 513 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax 19 Section 14. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.
Section 15. Entire Agreement. This Purchase Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements, prior writings and representations with respect thereto.
Section 16. Counterparts. This Purchase Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 17. Survival of Representations and Warranties. The representations and warranties of the City in or made pursuant to this Purchase Agreement shall not be deemed to have been discharged, satisfied or otherwise rendered void by reason of the Closing or termination of this Purchase Agreement and regardless of any investigations made by or on behalf of the Underwriter (or statements as to the results of such investigations) concerning such representations and statements of the City and regardless of delivery of and payment for the Certificates.
Section 18. Waiver of Jury Trial. THE CITY HEREBY IRREVOCABLY WAIVES TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS PURCHASE AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 19. Effectiveness. This Purchase Agreement shall become effective and binding upon the respective parties hereto upon the execution of the acceptance hereof by the City and shall be valid and enforceable as of the time of such acceptance. [Signature Page Follows]
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Packet Pg. 514 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax S-1
Section 20. Governing Law. This Purchase Agreement shall be governed by and construed in accordance with the laws of the State.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Title: Authorized Officer
Accepted as of the date first stated above:
CITY OF BARSTOW
By:
Its: City Manager
Printed Name:
Time of Execution: _____ a.m./p.m. Pacific Time
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Packet Pg. 515 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax A-1
EXHIBIT A
MATURITY SCHEDULE
Maturity Date
(June 1)
Principal
Amount
Interest
Rate Yield
Initial
Offering
Price
10% Test
Used
10% Test
Satisfied
Hold-theOfferingPrice Rule
Used
$ % %
______________
C
Priced to first optional prepayment date of June 1, 20__ at par.
T
Term Certificate.
I
Insured Certificates.
PREPAYMENT PROVISIONS
Optional Prepayment. The Certificates maturing on or after June 1, 20__, shall be subject to optional prepayment prior to maturity, at the option of the City, on or after June 1, 20__ in whole or in part (by lot within any maturity), on any date, at a Prepayment Price equal to the principal amount to be prepaid, plus accrued interest to the date fixed for prepayment, without premium.
Mandatory Prepayment. The Certificates shall be subject to mandatory prepayment prior to maturity, in whole or in part (by lot among Certificates with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate), on any date, from amounts received upon the acceleration of Installment Sale Payments upon the occurrence of an event of default under the Installment Sale Agreement, at a Prepayment Price equal to the principal amount to be prepaid, plus accrued interest to the date fixed for prepayment, without premium.
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Packet Pg. 516 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax A-2
Mandatory Sinking Fund Prepayment. The Certificates maturing on June 1, 20__, are subject to mandatory prepayment on June 1 of each year commencing Jun3 1, 20__, in part, from mandatory sinking fund payments, on each June 1 specified below, at a Prepayment Price equal to the principal amount of the Certificates to be prepaid, without premium, plus accrued interest thereon to the date of prepayment, in the aggregate respective principal amounts in the respective years as follows:
Mandatory Prepayment
Date (June 1)
Principal
Amount
20__
20__
20__
20__
20__*
___________
*
Maturity date
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Packet Pg. 517 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax B-1
EXHIBIT B
CITY OF BARSTOW
LOCAL MEASURE I TRANSPORTATION
SALES TAX REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2026
FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”) hereby certifies as set forth below with respect to the sale and delivery of the above-captioned obligations (the “Certificates”).
1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.
2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Stifel offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Certificates is attached to this certificate as Schedule B.
(b) As set forth in the Certificate Purchase Agreement, dated [Pricing Date], by and among Stifel, as the Underwriter (as defined below), the City (as defined below), Stifel has agreed in writing that: (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Certificates of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”); and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any third-party distribution agreement shall contain the agreement of each brokerdealer who is a party to the third-party distribution agreement, to comply with the hold-the-offeringprice rule. Pursuant to such agreement, no Underwriter has offered or sold any Maturity of the Holdthe-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Certificates during the Holding Period.
3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Certificates listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Certificates listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date (which Sale Date is [Pricing Date]), or (ii) the date on which Stifel has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.
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Packet Pg. 518 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax B-2
(d) Issuer means the City of Barstow.
(e) Maturity means Certificates with the same credit and payment terms. Certificates with different maturity dates, or Certificates with the same maturity date but different stated interest rates, are treated as separate maturities.
(f) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.
The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (g) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Certificates. The Sale Date of the Certificates is [Pricing Date]. (h) Underwriter means: (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Certificates to the Public; and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Certificates to the Public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Certificates to the Public).
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Certificates, and by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, in connection with rendering its opinion that the interest on the Certificates is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Certificates. The certifications contained herein are not necessarily based on personal knowledge, but may instead be based on either inquiry deemed adequate by the undersigned or institutional knowledge (or both) regarding the matters set forth herein.
STIFEL, NICOLAUS & COMPANY,
INCORPORATED
By:
Name:
By:
Name:
Dated: [Closing Date]
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Packet Pg. 519 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax B-3
SCHEDULE A
SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING
PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
(Attached)
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Packet Pg. 520 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax B-4
SCHEDULE B
PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)
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Packet Pg. 521 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax C-1
EXHIBIT C
FORM OF SUPPLEMENTAL OPINION
[Closing Date]
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Re: $[PAR] City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026
Ladies and Gentlemen:
We have examined certified copies of proceedings taken for the execution, delivery and sale of the above-referenced certificates of participation (the “Certificates”), and we have rendered our opinion to the City of Barstow (the “City”) this day regarding the validity and enforceability of the Certificates (the “Approving Opinion”). The Certificates are being delivered pursuant to a Trust Agreement dated as of May 1, 2026 (the “Trust Agreement”), by and among the City, the Public Property Facilities Corporation of California (the “Corporation”), and U.S. Bank Trust Company, National Association, as Trustee. You may rely upon our Approving Opinion as if it were addressed to you. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Certificate Purchase Agreement dated [Pricing Date] (the “Purchase Agreement”), between the City and Stifel, Nicolaus & Company, Incorporated (the “Underwriter”). This opinion is being delivered to you pursuant to Section 8(e)(vi) of the Purchase Agreement.
We have assumed, but not independently verified, that the signatures on all documents, letters, certificates and instructions which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate. As to questions of fact material to our opinion, we have relied upon the representations of each party made in the aforesaid documents, and we have made no independent investigation of such matters.
Based upon the foregoing and such other information and documents as we consider necessary to render this opinion, we are of the opinion that:
1. The Purchase Agreement has been duly authorized, executed and delivered by the City and, assuming due execution and delivery by the Underwriter, is a valid and binding agreement of the City.
2. The Continuing Disclosure Certificate has been duly authorized, executed and delivered by the City and is a valid and binding agreement of the City. No opinion is expressed herein regarding the adequacy of the Continuing Disclosure Certificate for purposes of Securities Exchange Commission Rule 15c2-12.
3. The statements on the cover of the Official Statement and in the Official Statement under the captions “INTRODUCTION,” “THE CERTIFICATES,” “SECURITY AND SOURCES OF PAYMENT FOR THE CERTIFICATES,” and “TAX MATTERS,” and in “APPENDIX A –
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Packet Pg. 522 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax C-2
SUMMARY OF PRINCIPAL LEGAL DOCUMENTS” and “APPENDIX D – PROPOSED FORM OF SPECIAL COUNSEL OPINION,” excluding any material that may be treated as included under such captions and appendices by any cross-reference, insofar as such statements expressly summarize provisions of the Certificates, and the Legal Documents and Special Counsel’s final opinion concerning certain federal and state tax matters relating to the Certificates, are accurate in all material respects as of the date of Closing.
4. The Certificates are exempt from registration pursuant to the Securities Act of 1933, as amended, and the Trust Agreement is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended.
The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. This opinion is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.
We call attention to the fact that the rights and obligations under the Legal Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or transfer and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California.
We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Certificates, the Trust Agreement, the Installment Sale Agreement dated as of May 1, 2026, between the City and the Corporation (the “Installment Sale Agreement”), the Continuing Disclosure Certificate or the Purchase Agreement, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Installment Sale Agreement or the Trust Agreement, or the accuracy or sufficiency of the description of any such property contained therein.
We express no opinion herein regarding any tax consequences with respect to the Certificates.
No opinion is expressed herein with respect to the compliance with, or applicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Certificates.
We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or occur (or do not occur).
This opinion is furnished by us to you and is solely for your benefit, and may not be used, circulated, quoted or otherwise referred to or relied upon by others without our prior written consent.
This letter is not intended to be, and may not be, relied upon by the owners of the Certificates or any beneficial ownership interest therein. You have acknowledged that no attorney-client relationship exists between us and you with respect to any matters related to the Certificates.
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Packet Pg. 523 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax C-3
Our engagement with respect to the Certificates has concluded with their delivery, and we disclaim any obligation to update this opinion or other matters discussed in the Official Statement.
Respectfully submitted,
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Packet Pg. 524 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax D-1
EXHIBIT D
FORM OF DISCLOSURE COUNSEL LETTER
[Closing Date]
Stifel, Nicolaus & Company, Incorporated
Los Angeles, California
Re: $[PAR] City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026
Ladies and Gentlemen:
We have acted as Disclosure Counsel to the City of Barstow (the “City”) in connection with the execution and delivery of the above-referenced certificates of participation (the “Certificates”).
The Certificates are being delivered pursuant to a Trust Agreement dated as of May 1, 2026 (the “Trust Agreement”), by and among the City, the Public Property Facilities Corporation of California (the “Corporation”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).
Capitalized terms not otherwise defined herein shall have the meanings set forth in the Certificate Purchase Agreement dated [Pricing Date] (the “Purchase Agreement”), between Stifel, Nicolaus & Company, Incorporated (the “Underwriter”) and the City. This letter is being delivered to you pursuant to Section 8(e)(xiii) of the Purchase Agreement.
In rendering the advice contained herein, we have examined originals or copies certified or otherwise identified to our satisfaction of: (i) the electronic version of the Preliminary Official Statement relating to the Certificates, dated [POS Date] and posted on ______, 2026 (the “Preliminary Official Statement”); (ii) the electronic version of the Official Statement relating to the Certificates, dated [Pricing Date] and posted on ______, 2026 (the “Official Statement”); and (iii) the agreements, letters, certificates, and opinions delivered to you pursuant to Section 8 of the Purchase Agreement.
We have assumed, but not independently verified, that the signatures on all documents, letters, opinions and certificates which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate. As to questions of fact material to our opinion, we have relied upon the representations of each party made in the aforesaid documents, and we have made no independent investigation of such matters.
We express no opinion regarding any tax consequences with respect to the Certificates. No opinion is expressed herein with respect to the compliance with, or applicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Certificates.
We are not passing upon and have not undertaken to determine independently or to verify the accuracy or completeness of the statements contained in the Preliminary Official Statement and the Official Statement and are, therefore, unable to make any representation to you in that regard. Based on our participation in conferences prior to the date of the Official Statement with representatives of the City, Urban Futures, Inc., as municipal advisor to the City, the City Attorney, the Underwriter,
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Packet Pg. 525 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax D-2
Underwriter’s counsel, the Corporation, and others, during which the content of the Preliminary Official Statement and the Official Statement and related matters were discussed, our reliance on the oral and written statements of the City and others, our review of and reliance upon the documents, certificates, instructions and records and the opinions of counsel described above and our understanding of applicable law, and subject to the limitations on our role as Disclosure Counsel, we advise you as a matter of fact but not opinion that no information has come to the attention of the attorneys in the firm representing the City as Disclosure Counsel on this matter which caused us to believe that: (a) the Preliminary Official Statement as of its date or as of [POS Date] (excluding therefrom financial, demographic, statistical, economic or demographic data; forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Preliminary Official Statement, as to which we express no view) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, except for such information as is permitted to be excluded from the Preliminary Official Statement pursuant to Rule 15c2-12, including but not limited to information as to pricing, yields, interest rates, maturities, amortization, redemption provisions, ratings, debt service requirements, Underwriters’ discount and CUSIP numbers; or (b) the Official Statement as of its date and as of the date hereof (excluding therefrom financial, demographic, statistical, economic or demographic data; forecasts, numbers, charts, tables, graphs, projections, estimates, assumptions and expressions of opinions; information relating to DTC and its book-entry only system; CUSIP numbers; information under the captions “TAX MATTERS” and “UNDERWRITING”; and the Appendices to the Official Statement, as to which we express no view) contained or contains any untrue statement of a material fact or omitted or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading. We advise you that, in providing advice and assistance as Disclosure Counsel, we provided no independent diligence on the MSRB’s Electronic Municipal Market Access website, and we express no view regarding the City’s or the City’s related entities’ compliance with any obligation to file annual reports or provide notice of events, each as described in Rule 15c2-12. Finally, we advise you that, other than reviewing the various certificates and opinions required by Section 8 of the Purchase Agreement, we have not taken any steps since the date of the Official Statement to verify the accuracy of the statements contained in the Preliminary Official Statement or the Official Statement as of the date hereof. No responsibility is undertaken or opinion rendered with respect to any other disclosure document, materials or activity, or as to any information from another document or source referred to by, or incorporated by reference in, the Official Statement.
By acceptance of this letter you acknowledge that the preceding paragraph is neither a legal opinion nor a guarantee regarding the Preliminary Official Statement or the Official Statement; rather it is a statement of negative assurance regarding factual information that did not come to the attention of the attorneys in our firm working on this matter during the limited activities that we performed as Disclosure Counsel. Our services did not include financial or other non-legal advice.
By acceptance of the letter, the Underwriter recognizes and acknowledges that: (i) the advice herein is based on certain limited activities performed by specific attorneys in our firm in our role as Disclosure Counsel; (ii) the scope of the activities performed by such attorneys in our role as Disclosure Counsel and for purposes of delivering such advice was inherently limited and does not purport to encompass all activities necessary for compliance by the Underwriters with applicable state and federal securities laws; and (iii) the activities performed by such attorneys in our role as Disclosure Counsel rely in part by representations, warranties, certifications and opinions of other parties to the
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Packet Pg. 526 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax D-3
transaction, including representations, warranties and certifications made by the Authority, the City, the Underwriter and others.
This letter is furnished by us as Disclosure Counsel to the City. No attorney-client relationship has existed or exists between our firm and you in connection with the Certificates or by virtue of this letter. This letter is solely for your benefit and is not to be used, circulated, quoted or otherwise referred to or relied upon for any other purpose without our prior written consent. This letter is not intended to and may not be relied upon by owners of Certificates or any beneficial interest therein.
Our engagement with respect to the Certificates terminates as of the date hereof, and we have not undertaken any duty, and expressly disclaim any responsibility, to advise you as to events occurring after the date hereof with respect to the Certificates or other matters discussed herein or in the Official Statement.
Respectfully submitted,
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Packet Pg. 527 Attachment: Purchase Agreement (Barstow 2026 Transportation Sales Tax Revenues COP) - 4911-3789-1469 - 2 (6299 : Measure I Sales Tax City Council Resolution No. 5272-2026 1
RESOLUTION NO. 5272-2026
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BARSTOW APPROVING THE
EXECUTION AND DELIVERY OF THE CITY OF BARSTOW LOCAL MEASURE I TRANSPORTATION SALES TAX REVENUE CERTIFICATES OF PARTICIPATION, SERIES 2026 IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $13,000,000, AUTHORIZING THE EXECUTION AND
DELIVERY OF A TRUST AGREEMENT, AN INSTALLMENT SALE AGREEMENT, AND A
CERTIFICATE PURCHASE AGREEMENT, AND AUTHORIZING NECESSARY ACTIONS AND
EXECUTION OF OTHER NECESSARY DOCUMENTS IN CONNECTION THEREWITH WHEREAS, the City of Barstow (the “City”) is a municipal corporation duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “State”); and WHEREAS, the City desires to provide financing for the design, acquisition, installation, and construction of certain street rehabilitation, pedestrian, bicycle, and safety improvements, traffic signal, safe routes to schools improvements, and bridge and road construction projects located in the City, including all or a portion of the projects described in Exhibit A attached hereto (collectively, the “Projects”) and, for such purposes, the City wishes to authorize the preparation, sale and delivery of City of Barstow Local Measure I Transportation Sales Tax Revenue Certificates of Participation, Series 2026” (the “Certificates”), in the initial aggregate principal amount of not to exceed $13,000,000, which Certificates will evidence undivided fractional interests in certain installment sale payments to be made by the City pursuant to an Installment Sale Agreement (the “Installment Sale Agreement”) to be entered into by the City and the Public Property Financing Corporation of California, a nonprofit public benefit corporation duly organized and existing under the laws of the State, including without limitation Section 5110 et seq. of the Corporations Code of the State (the “Corporation”), the form of which Installment Sale Agreement is on file with the City Clerk of the City (the “City Clerk”); and
WHEREAS, in order to finance the Projects, it is hereby proposed that the City enter into a Trust Agreement (the “Trust Agreement”) by and among the City, the Corporation, and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”), pursuant to which the Corporation will assign to the Trustee its right to receive the Installment Sale Payments (defined below) and pursuant to which the Trustee will execute and deliver the Certificates; and
WHEREAS, pursuant to the Installment Sale Agreement (a) the Corporation will acquire, construct, and complete the Projects for, and sell the Projects to, the City, and (b) the City will purchase the Projects from the Corporation by making installment sale payments to the Corporation (the “Installment Sale Payments”); and
WHEREAS, the Installment Sale Payments shall be payable by the City solely from the Measure I Receipts as such term is defined in the Installment Sale Agreement; and WHEREAS, the Certificates will be secured by and payable from the Installment Sale Payments received by the Corporation from the City under the Installment Sale Agreement; and WHEREAS, in connection with the execution and delivery of the Certificates, it is hereby proposed that the City enter into a Certificate Purchase Agreement (the “Purchase Agreement”) by and between the City and Stifel, Nicolaus & Company, Inc., as underwriter of the Certificates (the “Underwriter”), setting forth certain terms and conditions pertaining to the purchase and sale of the Certificates; and WHEREAS, good faith estimates of certain information relating to the Installment Sale Agreement, the Trust Agreement, and the Certificates are disclosed and set forth in Exhibit B attached hereto as required by
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Packet Pg. 528 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue City Council Resolution No. 5272-2026 2
California Government Code Section 5852.1; such estimates were provided by the City’s Municipal Advisor based on preliminary bond pricing information provided by the Underwriter; and WHEREAS, forms of the Trust Agreement, Installment Sale Agreement and Purchase Agreement have been presented to the City Council at this meeting and are on file with the City Clerk, and each member of the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such financing; and WHEREAS, the City has full legal right, power, and authority under the Constitution and laws of the State of California to enter into the transactions hereinafter authorized.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Barstow, California, as follows:
Section 1. Findings. The City Council hereby specifically finds and declares that the actions authorized hereby constitute and are true and correct with respect to the public affairs of the City, and that the statements, findings and determinations of the City set forth in the preambles of the documents approved herein are true and correct, and the Council hereby declares its intention to enter into the Trust Agreement and the Installment Sale Agreement described in Sections 3 and 4 hereof.
Section 2. Authorization of Certificates. The City Council hereby expresses its intention to prepare, sell and cause the Trustee to deliver Certificates in an amount not-to-exceed $13,000,000 for the purposes set forth in the preambles. Subject to the limitation above, the principal amount of the Certificates shall be determined by an Authorized City Representative (defined herein), upon consultation with the City’s Municipal Advisor and Special Counsel (defined herein). The City Council hereby authorizes the execution and delivery of the Certificates in one or more series of taxable or tax-exempt certificates.
Section 3. Installment Sale Agreement. The proposed form of the Installment Sale Agreement, by and between the Corporation and the City, a copy of which has been provided to the City Council, is hereby approved. The Mayor of the City, the City Manager of the City, the Assistant City Manager of the City, the Finance Director of the City, or the City Clerk (collectively, the “Authorized City Representatives”) are each hereby authorized and directed, severally, for and on behalf of the City, to execute and deliver the Installment Sale Agreement substantially in the form provided to the City Council, with such changes therein, deletions therefrom and additions thereto (including, but not limited to changes, deletions and additions as may be required by a bond rating agency or bond insurer) as such Authorized City Representative shall approve, such approval to be conclusively evidenced by the execution and delivery of the Installment Sale Agreement.
Section 4. Trust Agreement. The proposed form of Trust Agreement by and among the City, the Corporation, and the Trustee, a copy of which has been provided to the City Council, is hereby approved. The Authorized City Representatives are each hereby authorized and directed, severally, for and on behalf of the City, to execute and deliver the Trust Agreement substantially in the form provided to the City Council, with such changes therein, deletions therefrom and additions thereto (including, but not limited to changes, deletions and additions as may be required by a bond rating agency or bond insurer) as such Authorized City Representative shall approve, such approval to be conclusively evidenced by the execution and delivery of the Trust Agreement.
Section 5. Certificate Purchase Agreement The proposed form of Purchase Agreement by and between the City and the Underwriter, a copy of which has been provided to the City Council, is hereby approved, and the Authorized City Representatives are each hereby authorized and directed to execute the
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Packet Pg. 529 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue City Council Resolution No. 5272-2026 3
Purchase Agreement in substantially such form, with any changes, additions, and completions thereto as any of the Authorized City Representatives may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof, subject to the following limitations:
a. The true interest cost of the Certificates shall not exceed 4.00%; b. The aggregate principal amount of the Certificates shall not exceed $13,000,000; and c. The underwriter’s discount for the sale of the Certificates shall not exceed 0.8% of the aggregate principal amount of the Certificates.
Section 6. Bond Insurance. The City Council hereby authorizes the City Manager or her written designee to select a municipal bond insurer to insure payments of interest and principal represented and evidenced by some or all of the Certificates so long as the Authorized City Representatives or such written designees determines that obtaining the municipal bond insurance policy provided thereby will result in a lower interest rate or yield to maturity on such Certificates or will otherwise aid in the marketing of the Certificates.
Stradling Yocca Carlson & Rauth, LLP, as Special Counsel (“Special Counsel”), is hereby directed to make all changes to the Installment Purchase Agreement, the Trust Agreement, and the Purchase Agreement as are necessary to reflect the selection of a municipal bond insurer and the reasonable comments thereof.
Section 9. Reimbursement. The City Council desires to finance certain capital expenditures in connection with the Projects prior to the receipt of the proceeds of the Certificates. The City Council hereby states its intention and reasonably expects to use the proceeds of the Certificates to reimburse itself for Project expenditures. This section of the Resolution is adopted by the City Council for the purpose of establishing compliance with the requirements of Treasury Regulation § 1.150-2 and any other regulations of the Internal Revenue Service relating to the qualification for reimbursement of City expenditures incurred prior to the date of the Certificates. This section of the Resolution does not bind the City to make any expenditure, incur any indebtedness, or proceed with the Projects.
Section 10. Professional Services. Stradling Yocca Carlson & Rauth, LLP, is hereby retained to act as Special Counsel and Disclosure Counsel to the City, Urban Futures, Inc. is hereby retained to serve as Municipal Advisor to the City, and U.S. Bank Trust Company, National Association is hereby retained to act as Trustee for the Certificates. The Authorized City Representatives are, and each of them is, hereby authorized to execute a contract with each of Stradling Yocca Carlson & Rauth LLP, Urban Futures, Inc., and U.S. Bank Trust Company, National Association, and any other entities providing professional services, in order to accomplish the purposes set forth in this Resolution.
Section 11. Electronic Signatures. The City Council hereby approves the execution and delivery of any and all agreements, documents, certificates and instruments referred to herein with electronic signatures as may be permitted under the California Uniform Electronic Transactions Act and digital signatures as may be permitted under Section 16.5 of the Government Code using DocuSign.
Section 12. Other Acts. Each of the Authorized City Representatives is hereby authorized to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise necessary to carry out, give effect to, and comply with the terms and intent of this Resolution. Each of the Authorized City Representatives is hereby authorized and directed to execute and deliver any and all certificates and representations, signature certificates, no-litigation certificates, tax and rebate certificates, and certificates concerning certain portions of the Official Statement distributed in connection with the sale of the Certificates. Each of the Authorized City Representatives is hereby authorized and directed to execute and deliver any and all certificates, investment instructions or agreements relating to the proceeds of the Certificates, certificates or agreements relating to bond insurance, reserve surety, written
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Packet Pg. 530 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue City Council Resolution No. 5272-2026 4
requests, and other certificates necessary or desirable to execute and deliver the Certificates, to pay costs of execution and delivery of the Certificates, or to accomplish the transactions contemplated by this Resolution, the Trust Agreement, the Installment Sale Agreement, and the Purchase Contract, and any such actions previously taken by any Authorized City Representative are hereby ratified, confirmed and approved.
Section 11. Effective Date. This Resolution shall take effect from and after its adoption.
The foregoing Resolution was passed and adopted by the City Council of the City of Barstow, State of California, this ____th day of _______, 2026, by the following vote, to wit:
PASSED, APPROVED, AND ADOPTED this day of , 2026.
Timothy R. Silva, Mayor
ATTEST:
Andrea Flores, City Clerk
APPROVED AS TO FORM:
________________________________
Matthew Summers, City Attorney
I, Andrea Flores, City Clerk of the City of Barstow, do hereby certify under penalty of perjury that the foregoing Resolution No. 5271-2026 is the actual Resolution duly and regularly adopted by the City Council at a regular meeting held on____________, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
________________________________
Andrea Flores, City Clerk
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Packet Pg. 531 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue A-1
4899-0804-0333v3/022217-0004
EXHIBIT A
DESCRIPTION OF THE PROJECT
FISCAL YEAR 25-26 STREET REHABILITATION PROJECT
Street Rehabilitation Project - Base Bid $ 3,649,866.88 Street Rehabilitation - Alternate #1 - West Section 7 Phase 2 2,849,315.76 Street Rehabilitation - Alternate #2 - West Section 7 Phase 3 2,434,223.13 Street Rehabilitation - Alternate #3 - West Section 7 Phase 4 2,217,744.55 Street Rehabilitation - Alternate #4- Rimrock Road / H to Agarita & Agarita to End 2,714,124.70 Street Rehabilitation - Alternate #5 -Rimrock Road / Agarita to Barstow 1,104,988.70 Street Rehabilitation - Alternate #6 Rimrock Road / Class IV Bike Lane 1,353,523.75 Construction Management Estimate 1,632,378.75
Total Project Cost $ 17,956,166.22
Estimated Co-op Agreement w/San Bern. County Transportation Auth. (SBCTA) (2,001,166.55) Estimated Co-op Agreement w/San Bern. County/Dept. of Public Works (SBCDPW) (897,087.90) Co-op Agreement w/SBCTA (Transportation Development Act (TDA) Funds) (490,000.00) Remaining Amount Due $ 14,567,911.77
PED, BICYCLE, AND SAFETY ACTIVE TRANSPORTATION PROGRAM
(ATP)
Project Estimate $ 4,140,000.00
Project Contingency Estimate 207,000.00
Construction Management Estimate 434,700.00
Total Project Cost Estimate $ 4,781,700.00
Active Transportation Program (ATP) Funding (Reimbursable) (4,440,000.00) Remaining Amount Due $ 341,700.00
MAIN STREET & BARSTOW ROAD TRAFFIC SIGNAL UPGRADES
Project Estimate $ 1,086,980.00
Project Contingency Estimate 54,349.00
Construction Management Estimate 128,580.00
Project Management Estimate 17,119.94
Total Project Cost Estimate $ 1,287,028.94
Highway Safety Improvement Program (HSIP) (Reimbursable) (711,524.00) Remaining Amount Due $ 575,504.94
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Packet Pg. 532 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue A-2
4899-0804-0333v3/022217-0004
SAFE ROUTES TO SCHOOL (SRTS) ACTIVE TRANSPORTATION
PROGRAM (ATP)
Project Estimate $ 6,902,000.00
Project Contingency Estimate 345,100.00
Construction Management Estimate 724,710.00
Project Management Estimate 108,706.50
Total Project Cost Estimate $ 8,080,516.50
Active Transportation Program (ATP) Funding (Reimbursable) (6,500,000.00) Remaining Amount Due $ 1,580,516.50
FORT IRWIN ROAD - COUNTY COOPERATIVE AGREEMENT
Project Estimate $ 42,000.00
Total Project Cost Estimate $ 42,000.00
Remaining Amount Due $ 42,000.00
LENWOOD CHANNEL
Project Estimate $ 40,000.00
Total Project Cost Estimate $ 40,000.00
Remaining Amount Due $ 40,000.00
NORTH FIRST AVE. BRIDGE - MOJAVE RIVER & OVERFLOW
Estimated Project Management $ 90,000.00
Total Project Cost Estimate $ 90,000.00
Remaining Amount Due $ 90,000.00
TOTAL FISCAL YEAR 26 CAPITAL IMPROVEMENT PROJECT
SUMMARY
Total Project Cost Estimate (All FY 26 Projects Listed) $ 32,277,411.65 LESS Cooperative Agreement and Reimbursable Funding $ (15,039,778.45) Total Funding Needed to Complete FY 26 Proposed Projects $ 17,237,633.20 FISCAL YEAR 26 PROJECT FUNDING ALLOCATED BY COUNCIL
Measure I $ 1,180,000.00
SB-1 1,219,788.00
Development Impact Fees (Fund 425) 250,201.00
Total FY 26 Budgeted CIP Funding $ 2,649,989.00
Adjusted FY 26 CIP (Total Funding Needed - FY 26 Budgeted Funding) 14,587,644.20 LESS: Council Appropriated Fund Balance (6,205,492.56)
Total FY 26 CIP Funding Required $ 8,382,151.64
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Packet Pg. 533 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue B-1
4899-0804-0333v3/022217-0004
EXHIBIT B
FORM OF GOOD FAITH ESTIMATE
The good faith estimates set forth herein are provided with respect to the Certificates in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by its Municipal Advisor, Urban Futures, Inc, as of February 4, 2026.
Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan and current market conditions, its good faith estimate of the aggregate principal amount represented and evidenced by the Certificates is $11,295,000 (the “Estimated Principal Amount”).
True Interest Cost of the Certificates. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount represented and evidenced by the Certificates is, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost with respect to the Certificates, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Certificates, is 3.06%.
Finance Charge of the Certificates. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount represented and evidenced by the Certificates is, and based on market interest rates prevailing at the time of preparation of such estimate its good faith estimate of the finance charge for the Certificates, which means the sum of all fees and charges paid to third parties (or costs associated with the Certificates), is $390,948.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount represented and evidenced by the Certificates is, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Certificates, less the finance charge of the Certificates, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Certificates, is $12,536,679.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount represented and evidenced by the Certificates is, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service represented and evidenced by the Certificates, plus the finance charge for the Certificates, as described above, not paid with the proceeds of the Certificates, calculated to the final maturity of the Certificates, is $15,961,269, which excludes any reserves or capitalized interest paid or funded with proceeds of the Certificates (which may offset such total payment amount) and further excludes future administrative costs such as trustee and continuing disclosure costs.
The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Certificates executed and delivered, the true interest cost thereof, the finance charges thereof,
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Packet Pg. 534 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue A-2
4899-0804-0333v3/022217-0004
the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Certificates being different than the date assumed for purposes of such estimates, (b) the actual principal amount of represented and evidenced by the Certificates executed and delivered being different from the Estimated Principal Amount, (c) the actual amortization of the principal and interest represented and evidenced by the Certificates being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Certificates being different than those estimated for purposes of such estimates, (e) other market conditions, (f) alterations to the City’s financing plan, or a combination of such factors.
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Packet Pg. 535 Attachment: City Resolution Authorizing Bonds and Legal Documents - Barstow 2026, 4899-0804-0333_3 (6299 : Measure I Sales Tax Revenue
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Packet Pg. 536 Attachment: Disclosure Training (6299 : Measure I Sales Tax Revenue Financing)
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Packet Pg. 537 Attachment: Disclosure Training (6299 : Measure I Sales Tax Revenue Financing)
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Packet Pg. 538 Attachment: Disclosure Training (6299 : Measure I Sales Tax Revenue Financing)
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Packet Pg. 539 Attachment: Disclosure Training (6299 : Measure I Sales Tax Revenue Financing)
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02/17/26 05:15 PM
City Clerk / Records
Maribel Hernandez
Ordinance
Doc ID: 6305
COUNCIL RESOLUTION
AGENDA MATTER:
FIRST READING OF ORDINANCE NO. 1041-2026 AMENDING CHAPTER 5.40 OF THE BARSTOW
MUNICIPAL CODE REGARDING OUTDOOR VENDING REGULATION
EXECUTIVE SUMMARY:
The proposed ordinance updates Chapter 5.40 of the Barstow Municipal Code to modernize regulations governing outdoor vending. The amendments distinguish between sidewalk and non-sidewalk vendors, establish objective permitting and safety standards, and align City regulations with state law. The ordinance is intended to protect public health, safety, accessibility, and pedestrian use of public spaces while allowing lawful vending activity.
DISCUSSION:
Outdoor vending activity has increased throughout the City in recent years. While state law limits a city’s ability to regulate sidewalk vendors operating on public sidewalks, pedestrian paths, and parks, local agencies retain authority to adopt objective regulations related to health, safety, and accessibility.
The current municipal code does not fully distinguish between sidewalk vendors and other outdoor vendors operating on private property or in areas not governed by Government Code section 51036. As a result, enforcement has been difficult and inconsistent. Staff worked with the City Attorney’s Office to update the ordinance to:
Align with state sidewalk vending law
Clarify permitting requirements
Establish enforceable accessibility and safety standards Address non-sidewalk outdoor vending activity
Provide clear administrative citation and appeal procedures
DISCUSSION
The proposed ordinance includes the following key updates:
Renames Chapter 5.40 to Outdoor Vending
Creates updated definitions distinguishing vendor categories Establishes annual permit requirements
Requires health and seller permits consistent with County and State law Maintains ADA clearance standards on sidewalks
Regulates hours of operation in residential and non-residential areas 21 Packet Pg. 546
Joint Special CC/BFPD/Odesa
02/17/26 05:15 PM
City Clerk / Records
Maribel Hernandez
Ordinance
Doc ID: 6305
COUNCIL RESOLUTION
Prohibits sales of age-restricted items
Establishes spacing requirements to prevent congestion Clarifies enforcement, administrative fines, and appeals Establish ability-to-pay determinations consistent with state law Adds limitations on outdoor sales on private and public property Establishes impoundment procedures consistent with legal limits Includes CEQA exemption findings
These updates provide the City with objective, legally defensible regulations while preserving lawful sidewalk vending activities.
FISCAL IMPACT:
None.
RECOMMENDED ACTION:
Introduce Ordinance No. 1041-2026 amending Chapter 5.40 of the Barstow Municipal Code regarding outdoor vending regulation; and
Waive the full reading of the Ordinance.
21 Packet Pg. 547
1 Ord No. 1041-2026
ORDINANCE NO. 1041-2026
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BARSTOW AMENDING CHAPTER 5.40 OF THE BARSTOW MUNICIPAL CODE
REGARDING OUTDOOR VENDING REGULATION
The City Council of the City of Barstow ordains as follows:
SECTION 1. Findings.
WHEREAS, the City finds that the vending of prepared or pre-packaged foods, beverages, and merchandise outdoors may pose unsafe conditions and special dangers to the public health, safety, and welfare of residents and visitors.
WHEREAS, the City finds that state law, specifically Government Code section 51036 et seq., limits the authority to regulate persons who sell food or merchandise from pushcarts, stands, displays, pedal-driven carts, wagons, showcases, racks, and other nonmotorized conveyances, or from one’s person, upon public sidewalks, pedestrian paths, and parks (“sidewalk vendors”).
WHEREAS, the City finds it necessary to regulate sidewalk and other outdoor food vendors to address objective public health, safety, and welfare concerns associated with outdoor vending, including, without limitation, food safety and sanitation; physical obstructions to pedestrian traffic; inadequate clearance for wheelchairs, walkers, and other mobility devices; obstructed sightlines at intersections, crosswalks, and driveways; congestion and queue formation that impedes building exits, emergency vehicle access, and emergency evacuations; noise; blocked fire hydrants; fire hazards; hazards posed by vending equipment; improper disposal of trash and wastewater; and sale of agerestricted items to minors.
WHEREAS, the City finds that outdoor food vending by persons not operating upon public sidewalks, pedestrian paths, and parks (“non-sidewalk vendors”) has proliferated throughout the City and raises similar public health, safety, and welfare concerns as those raised by sidewalk vendors.
WHEREAS, the City finds that Government Code section 51036 et seq. does not apply to the City’s regulation of non-sidewalk food and other vendors.
WHEREAS, the City finds it prudent to amend Chapter 5.40 of the Barstow Municipal Code to distinguish between sidewalk vendors and non-sidewalk vendors and establish reasonable time, place, and manner restrictions for each category of vendors consistent with state law to protect and promote public health, safety and welfare.
SECTION 2. Municipal Code Amendment. Chapter 5.40 of the Barstow Municipal Code, titled, "Sidewalk Vending Permit" is hereby renamed “Outdoor Vending” and amended as follows with additions denoted in underline and deletions noted in strikethrough:
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Chapter 5.40: Outdoor Vending
Sec. 5.40.010. Definitions.
The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning:
Amplified sound means speech, music, or other sound projected or transmitted by electronic equipment including amplifiers, loud speakers, microphones, or similar devices; or combinations of devices which are powered by electricity, battery, or combustible fuel; and which are intended to increase the volume, range, distance, or intensity of speech, music, or other sound.
Cart means a piece of equipment used for outdoor vending which has no motor and is not mobile, except when being pushed, carried, or transported to and from a location. A “cart” includes a pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other nonmotorized conveyance.
Department means the city’s Community Development Department.
Director means the Director of the city’s Community Development Department or their designee.
Enforcement officer means an individual enumerated in section 1.01.160 and designated by the city manager to enforce the provisions of the code and/or any peace officer.
Food means any type of edible substance or beverage.
Permittee means a person who holds a valid sidewalk vending permit.
Residential zoning district means any residential land use district enumerated in chapter 19.10 (Residential Districts).
Roaming sidewalk vendor means a sidewalk vendor who moves from place to place and stops only to complete a transaction.
Sidewalk vending means selling or offering for sale food or merchandise from a cart or one's person from a public sidewalk or pedestrian path.
Sidewalk vending permit means a permit issued pursuant to this chapter by the city’s Community Development Department.
Sidewalk vendor means a person who sells or offers for sale food or merchandise from a cart pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other non-motorized conveyance, or from one's person, upon a public sidewalk or other paved public pedestrian path.
Sidewalk vending violation means a violation of any provision of sections 5.40.020
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through 5.40.050 of the Barstow Municipal Code.
Stationary sidewalk vendor means a sidewalk vendor who vends from a fixed location.
Sec. 5.40.020. Sidewalk vending permits.
(a) It is unlawful for any person to engage in sidewalk vending without a sidewalk vending permit. Only sidewalk vendors with
valid sidewalk vending permits issued by the community development department may upon the city's public sidewalk or other paved public pedestrian path.
(b) A sidewalk vending permit shall be valid for a period of one year from the date of issuance, unless sooner revoked or abandoned as set forth in this chapter. A sidewalk vending permit may be revoked for a violation of this chapter, pursuant to the procedures set forth in section 5.04.060. (c) To apply for a sidewalk vending permit or a renewal of a sidewalk vending permit, the applicant must provide:
(1) A completed application form containing:
(A) Their name and mailing address;
(B) Description of the food or merchandise offered for sale or exchange;
(C) If the sidewalk vendor is an agent of an individual, company, partnership, or corporation, the name and business address of the principal and any owners of the company, partnership, or corporation; and
(D) Certification that the information is true to his or her knowledge and belief; and
(E) If the vendor proposes to be a stationary sidewalk vendor, a description or site plan map of the proposed location(s) where sidewalk vending will take place and showing that the
sidewalk location(s) maintain a minimum 48 inches of
accessible route area as required under this chapter.
(2) A copy of a California's driver's license or identification number, an individual taxpayer identification number, a municipal identification number, or a social security number. Such information is not a public record and will remain confidential as required by Government Code Section 51038(c)(1)(D)(i)(4).
(3) A copy of a valid California Department of Tax and Fee Administration
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seller's permit, as required.
(4) A copy of a valid mobile food permit issued by the San Bernardino County Department of Environmental Health Services, as required. (d) To ensure the safety of residents and the merchantability of products sold by vendors without a fixed place of business, the city requires all sidewalk vending applicants to undergo a fingerprinting background check and to submit the results to the city as an attachment to their application.
(e) The sidewalk vending permit application shall require the applicant to agree, in writing, to comply with all the provisions of this chapter and all applicable local, state and federal laws provisions of the Barstow Municipal Code.
(f) Sidewalk vending permits are non-transferable, non-assignable, and nonsaleable to any other entity or person and are only valid as to the original applicant for the term stated.
(g) Permittees are responsible for the vending activities of their agents.
Notwithstanding any other provision in this chapter, no agent of a permittee shall engage in sidewalk vending in violation of the provisions of this chapter and, in addition to the permittee, is subject to the fines and penalties under this chapter.
(h) If the City issues a sidewalk vending permit, as conditions of such permit issuance:
(1) The permittee agrees to waive and release the City and its officers, officials, agents, employees, contractors, and volunteers from and against any and all claims, costs, liabilities, expenses, or judgments including attorney fees and court costs arising out of any sidewalk vending activities or any illness, injury, or death resulting therefrom, and shall agree to indemnify and hold the City, its officers, officials, agents, employees, contractors, and volunteers from and against any and all such claims, whether caused by negligence or otherwise, except for illness, injury, and death resulting directly from the gross negligence or willful misconduct on the part of the City, its officials, agents, employees, contractors, and volunteers; and
(2) Permittee shall acknowledge that the use of any sidewalk or pedestrian path is at the sidewalk vendor’s own risk and the City will not take any steps to ensure any sidewalk is safe or conducive to the sidewalk vending activities.
(i) Sidewalk vendors shall be covered by an unconditional public general liability insurance policy that includes products and/or completed operations
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for not less than the following sums:
(1) For the injury or death of any one person in any one accident, one hundred thousand dollars ($100,000.00);
(2) For the injury or death to two or more persons in any one accident, three hundred thousand dollars ($300,000.00);
(3) For the damage or destruction of property in any one accident, twenty-five thousand dollars ($25,000.00); and
(4) Five hundred thousand dollars ($500,000.00) single limit for injury, death, or property damage.
No permit shall be issued or valid until the sidewalk vendor furnishes the Department with a "certificate of insurance," for each policy required, executed by the company issuing such policy, and approved as to form by the city attorney. Such policies shall contain a provision which includes the city as “additional insured” and holding the city, its officers, officials, employees, contractors, and volunteers harmless from any and all claims for negligence by reason of granting permission to use such public property.
Such insurance policies shall contain an endorsement that the company issuing such policy or policies will not allow the same to be cancelled without serving, by first class mail, ten (10) days' notice of cancellation upon the Director.
(j) A permittee must immediately notify the Department in writing of any changes to the facts provided in a sidewalk vending permit application after the issuance of a vending permit.
(k) At the time the application or renewal application is filed, the application shall pay the permit processing fee established by separate resolution of the City Council,
(l) There shall be no vested right to sell food or merchandise on the public sidewalks, pedestrian paths, and parks in the city. The city reserves the right to revoke any sidewalk vendor permit as provided herein or further restrict sidewalk vending at any location at any time in accordance with all applicable laws by amendment of this code.
Sec. 5.40.030. Permit Approval, Denial, or Revocation.
(a) If the Director approves the permit, they will endorse their approval on the application and shall deliver the permit to the applicant. (b) The Director may deny an application for a sidewalk vending permit if they make any of the following findings:
(1) The applicant has failed to pay the permit processing fee;
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(2) The applicant has made one or more false or misleading statements in the application for a sidewalk vending permit;
(3) The applicant’s vending operation, as described in the application, is inconsistent with the standards, conditions, and requirements of this chapter; or
(4) The applicant does not possess all federal, state, and local permits, licenses, or approvals necessary to engage in the activity that the applicant seeks to engage in.
(b) If Director denies the sidewalk permit application, the reasons for disapproval shall be noted on the application, and the applicant shall be notified that their application is denied and that no permit will be issued.
Notice shall be mailed by first-class mail to the applicant’s address listed on the application or subsequent address provided by the applicant to the city. (c) If the Director revokes a sidewalk vending permit as provided in this chapter, the city will serve the permittee with a notice of sidewalk vending permit revocation specifying the grounds for revocation at least 30 calendar days before the effective date of the revocation. Notice shall be mailed by firstclass mail to the permittee’s address listed on the permittee’s application or subsequent address provided by the permittee to the city. (c) The decision of the Director to deny a sidewalk vendor permit may be appealed in writing to the city manager within 10 business days of the date the city mails the notice of permit denial to the applicant. The appeal must include copies of all pertinent material necessary to support the sidewalk vendor’s position on appeal. Any actions of the city manager shall be final.
Sec. 5.40.040030. General regulations.
(a) To maintain accessibility standards for the city's disabled residents with disabilities, every sidewalk vendor operating on any sidewalk or public paved pedestrian path must ensure that no obstruction is placed in the sidewalk or public paved pedestrian path that would reduce the width of the sidewalk or pedestrian path to less than 48 inches, exclusive of the top of the curb.
(b) To prevent food-borne illness and protect the health and safety of the city's residents, every sidewalk vendor selling any food or beverage is required to wear a hairnet and food service gloves.
(c) To prevent dangerous distractions and promote the general welfare of the city's residents, sidewalk vendors shall not engage in sidewalk vending with amplified sound and may not emit any loud, unnecessary, or and unusual noises exceeding the ambient noise level at the property line of any property by more than five decibels.
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(d) A sidewalk vending permit does not provide an exclusive right to operate within any specific portion of the public sidewalk or paved pedestrian path. (e) No equipment or objects used for sidewalk vending purposes may be left unattended by a sidewalk vendor at any time. or maintained in public spaces or in any portion of the public right-of-way from 10:00 p.m. to 8:00 a.m. Any equipment or objects left overnight in public spaces or in any portion of the public right-of-way will be considered discarded and may be seized or disposed of by the city.
(f) To facilitate the enforcement of this chapter, every sidewalk vendor must display their city-issued sidewalk vending permit on the street-side portion of their cart pushcart, stand, display, pedal-driven cart, wagon, showcase, rack, or other non-motorized conveyance when operating in the public sidewalk or paved pedestrian path.
(g) To prevent unintended rolling or slipping, a sidewalk vendor is prohibited from operating a pushcart, pedal-driven cart, wagon, or other non-motorized conveyance on a public sidewalk or paved pedestrian path with a slope greater than five percent.
(i) No sidewalk vendor shall obstruct access to or from any business, entrance, public water fountain, fire hydrant, driveway, curb ramp, or other public facility, adjacent to the public sidewalk or paved pedestrian path.
Sec. 5.40.050040. Specific regulations.
(a) Sidewalk vending hours' limitations in areas zoned for in nonresidential zoning districts may only occur between the hours of 9:00 a.m. and 5:00 p.m. or the between the hours of operation imposed on other businesses or uses on that same street, whichever is less restrictive. use will be as restrictive as any limitations on hours of operation imposed on other businesses or uses on the same street, excluding those permitted to operate 24 hours. For purposes of determining applicable hours, businesses on the “same street” include businesses located on the same street-facing block as the sidewalk vendor or on an immediately adjacent street-facing block along that street.
(b) Sidewalk vending in residential zoning districts may only occur between is limited to the hours of 9:00 a.m. through and 5:00 p.m. for areas that are exclusively residential.
(c) Stationary sidewalk vendors are prohibited from operating in residential zoning districts areas that are exclusively residential. Sidewalk vendors shall not leave their equipment or objects used
for sidewalk vending purposes unattended or stored or maintained on any part of the sidewalk, public property or public right-of-way after vending has ceased for the day, and in no event, between the hours of 5:00 p.m. to 9:00
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a.m. in any residential area. Any equipment or objects left overnight in public spaces or in any portion of the public right-of-way will be considered discarded and may be seized or disposed of by the city. (d) A stationary sidewalk vendor is prohibited from operating in a city park if the city has entered into an agreement for concessions that exclusively permits the sale of food or merchandise by the concessionaire. exclusive agreements for the sale of food or merchandise by one or more concessionaires for that city park.
(e) A sidewalk vendor is prohibited from operating within 500 feet of a permitted certified farmers' market, a permitted swap meet, or any area subject to a temporary use permit for the duration of the permit.
(f) A sidewalk vendor shall maintain a distance of 50 feet from any other sidewalk vendor.
(g) A sidewalk vendor shall maintain a minimum distance of 25 feet from any street intersection, driveway, curb ramp, fire hydrant or automated teller machine.
(h) A sidewalk vendor shall not engage in the selling of alcohol, marijuana, adult entertainment material as defined by section 19.26.020, tobacco products, products that contain nicotine, or any products used to smoke/vape nicotine or marijuana, or other age-restricted items. (i) Except as provided in this chapter, no permittee with a stationary sidewalk vending permit shall engage in sidewalk vending from any location other than the location on a public sidewalk or pedestrian path for which the permit is granted.
(j) A roaming sidewalk vending permittee engaged in sidewalk vending shall only stop for the time reasonably necessary to complete a transaction.
Sec. 5.40.060050. Penalties for Sidewalk Vending Violations. Administrative citation.
(a) Every person vending without a sidewalk vending permit required by this chapter is guilty of a violation punishable by an administrative citation pursuant to the procedures set forth in this code chapter 1A in an amount not to exceed:
(1) Two hundred fifty dollars for a first violation; and (2) Five hundred dollars for a second violation within one year of the first violation; and
(3) One thousand dollars for each additional violation within one year of the first violation.
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(b) Every person violating any other provision of this chapter committing any other sidewalk vending violation is guilty of a code violation punishable by an administrative citation not to exceed:
(1) One hundred dollars for a first violation; or
(2) Two hundred dollars for a second violation within one year of the first violation; or
(3) Five hundred dollars for each additional violation within one year of the first violation.
(c) The city may rescind a permittee’s sidewalk vendor permit for the term of that permit upon the fourth or subsequent sidewalk vending violation, not including violations for vending without a permit.
(c)(d) Failure to pay an administrative fine is not punishable as an infraction or misdemeanor. Additional fines, fees, assessments, or any other financial conditions beyond those authorized will not be assessed. However, the city may levy a lien on the violator's real or personal property, including the vehicle used for vending purposes.
(d)(e) A violation of this chapter constitutes a separate and distinct violation for each day that it exists and each such violation may be subject to the maximum fine permitted under this chapter.
(f) If a sidewalk vendor refuses to provide an enforcement officer with valid government issued photo identification for the issuance of an administrative citation, the enforcement officer shall issue the citation to the sidewalk vendor under the name “J. Doe,” with a sequential number for each additional unnamed person. The enforcement officer shall take a photograph of the sidewalk vendor, if possible, and shall document the date, time period, and location where the violation occurred; the circumstances supporting the enforcement officer’s finding that a sidewalk vending violation occurred; and the refusal by the sidewalk vendor to provide identification. The refusal of the sidewalk vendor to provide identification and the issuance of a citation under the name “J. Doe” shall not prevent or inhibit the enforcement of the citation, including the escalation of administrative fines and penalties for subsequent violations as specified in this chapter.
(g) If a violation of this chapter consists of unattended vending equipment and the identity of the sidewalk vendor who committed the violation is unknown, then the enforcement officer may firmly affix a copy of the citation on the equipment in a conspicuous place.
(h) Nothing contained in this chapter shall be construed to impede the ability of any state or local government to enforce health and safety or other generally
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applicable statutes, codes, regulations, and ordinances.
Sec. 5.40.070060. Ability-to-pay determination.
(a) In addition to the applicable procedures set forth in section 6.30.030, any fine issued under section 5.40.050 for a sidewalk vending violation will be accompanied with a notice of and instruction regarding the right to request an ability-to-pay determination.
(1) If the requestor is receiving public benefits under Government Code Section 68632(a), or has a monthly income which is 125 percent or less than the current poverty guidelines updated periodically in the Federal Register by the United States Department of Health and Human Services, the public works director Director will limit the total amount of the requestor's administrative fine to 20 percent of the total.
(b) The Director may allow a person issued a fine for a sidewalk vending violation to complete community service in lieu of paying the total administrative fine, may waive the administrative fine, or may offer an alternative disposition.
Sec. 5.40.080. Limitations on outdoor sales and displays. (a) Except as provided in this section, it is unlawful for any person to sell, attempt to sell, offer for sale, or display for sale any food or merchandise:
(1) On private property except from within a fully enclosed building; or (2) On city property other than on public sidewalks, public parks, and other pedestrian paths.
(b) The prohibition of this section does not apply to the following activities or businesses, provided that the owner of the property has authorized the activities or business in writing, which said written authorization must be kept at the site of the activity or business at all times and must be provided to the city upon demand:
(1) Sales or displays where such sales or displays are permitted as a matter of right or under a permit issued under this code; (2) Display of merchandise outside a fully enclosed building by a business where purchase of such merchandise ordinarily takes place within the building, unless otherwise prohibited by this code; (3) Vending machines, when located in service stations, motels, or other businesses;
(4) Catering for private properties held exclusively on private property;
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(5) Yard sales conducted in accordance with chapter 5.80; (6) Sidewalk vending permittees as described in this chapter; (7) Mobile health and veterinary clinics;
(8) Fundraising activities conducted by nonprofit, educational, or governmental entities;
(9) Permitted certified farmers’ market;
(10) Permitted swap meet; and
(11) Persons providing service businesses to the owner or occupant of public or private property from a vehicle, car, or similar device that is used primarily for the purpose of conducting a service business in, at, out of, or next to the vehicle and that is parked for a reasonable time on a public right-of-way at the prior express invitation of an owner or occupant of adjacent public or private property to provide a service to the owner or occupant.
(c) A violation of this section shall subject to violator to suit for civil remedy or criminal penalty, or both. The criminal penalty for a first or second offense shall be punishable as an infraction. The criminal penalty for a third offense or more shall be punishable as an infraction or misdemeanor. (d) A violation of this section constitutes a separate and distinct violation for each day that it exists.
(e) The remedies provided in this section are in addition to the remedies and penalties available under this code, and all other laws of this state.
Sec. 5.40.090. Impoundment.
(a) If any person sells, attempt to sell, offer for sale, or display for sale any food or merchandise in violation of section 5.40.080 or any other law, an enforcement officer may order the person to immediately cease and desist any vending and to remove themselves from the vending area. If the person fails to comply with such order, the person’s equipment, food, and merchandise may be impounded by an enforcement officer. (1) If any of the equipment, food, or merchandise subject to impoundment cannot be stored, is perishable, presents a health or safety hazard, or is otherwise contraband, then an enforcement officer may immediately dispose of that equipment, food, or merchandise.
(b) For any impoundment under this section, the person from whom property was taken shall be provided with a receipt and instructions for the retrieval
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of the property. The receipt and instructions shall either be given to the person from whom the property was taken at the time the property is obtained, or mailed, by first-class mail, to the person from whom the property was taken immediately after the impoundment if the person provides a valid form of identification which includes the person’s contact information.
(1) The receipt and instructions shall notify the person from whom the property was taken that the property must be claimed within ninety (90) calendar days after the city takes possession of the property or the property will be disposed and shall also include the name, address, and telephone number of the city department providing the notice; the location of the property; and a description of the property. (2) The enforcement officer shall document the date, time period, and location where the impounded property was observed; the circumstances supporting the enforcement officer's finding that the property was subject to impoundment; and a complete description of the property, including any property that was immediately disposed of because it was perishable or presented a health or safety concern.
This document shall be maintained by the City with any impounded property.
(3) Impounded property may be recovered within ninety (90) calendar days from the date of impoundment, upon presentation of the receipt and valid government-issued identification showing the person’s name and address, payment of a sum equal to the cost of removing and storing the impounded property, and payment of fines imposed by the city for the code violation that resulted in the impoundment of the property.
(c) The remedies provided in this section are in addition to the remedies and penalties available under this Code, and all other laws of this state. Nothing contained in this chapter shall be construed to impede the ability of any state or local government to enforce health and safety or other generally applicable statutes, codes, regulations, and ordinances. (d) Nothing in this section shall be construed to authorize the impoundment of a sidewalk vendor’s equipment, food, or merchandise if prohibited by applicable law unless and until one of the following events occurs, and upon such occurrence, sidewalk vendors shall be subject to the same impoundment procedures, protections, notice requirements, and remedies as for any other violator:
(1) A final, non-stayed decision by the California Supreme Court or any other court with jurisdiction interpreting Government Code 51036 et seq. to permit the impoundment of a sidewalk vendor’s vending equipment, food, or merchandise as an enforcement method; or
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(2) An amendment to Government Code 51036 et seq. or other legislative act that expressly authorizes the impoundment of a sidewalk vendor’s vending equipment, food, or merchandise as a method of enforcement and that amendment has become operative.
Sec. 5.40.100. Appeals.
(a) Any person who receives an administrative citation for violating any provision of this chapter may appeal the citation in the same manner as provided in section 6.30.100 of this code.
(b) The impoundment of personal property pursuant to this chapter may be appealed in the same manner as provided in section 6.30.100 of this code. The administrative hearing concerning the impoundment of personal property shall be conducted in the same manner as provided in section
6.30.110, except that the hearing shall be held within five business days of the city’s receipt of the request for a hearing and the city shall provide the requestor with a copy of the enforcement officer’s written report, if any, at the same time the city provides a copy to the hearing authority.
SECTION 3. Severability. If any provision, section, paragraph, sentence or word of this Ordinance, or the application thereof to any person or circumstance, is rendered or declared invalid by any court of competent jurisdiction, the remaining provisions, Sections, paragraphs, sentences or words of this Ordinance, and their application to other persons or circumstances, shall not be affected thereby and shall remain in full force and effect and, to that end, the provisions of this Ordinance are severable.
SECTION 4. Effective Date. This ordinance shall take effect thirty days after adoption as provided by Government Code 36937. The City Clerk shall cause this Ordinance to be published in accordance with California Government Code Section 36933.
SECTION 5. Certification. The City Clerk shall certify to the passage and adoption of this Ordinance and shall cause this Ordinance and her certification, together with proof of publication, to be entered in the Book of Ordinances of the City Council.
SECTION 6. CEQA. The City Council finds the adoption of this ordinance is exempt from review under the California Environmental Quality Act because it relates to an administrative matter. (CEQA Guidelines, 14 Cal. Code of Regulations, Section 5061(b)(3) and 15378(b)(5).
PASSED, APPROVED AND ADOPTED this __ day of ____________________, 2026 ________________________________
Timothy Silva, Mayor
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Packet Pg. 560 Attachment: Draft Ordinance Amending Chapter 5.40 (Outdoor and Food Vending)(433538.2) (6305 : First Reading of Ordinance No. ___-2026 14 Ord No. 1041-2026
ATTEST:
________________________________
Andrea Flores, City Clerk
APPROVED AS TO FORM:
________________________________
Matthew Summers, City Attorney
I, Andrea Flores, City Clerk for the City of Barstow, California, and ex-officio Clerk of the City Council, do hereby certify under penalty of perjury that the foregoing is a true and correct copy of Ordinance No. ___-2026, which was introduced at a regular meeting of the City Council of the City of Barstow held on the _______________________, and adopted at the regular meeting of the City Council of the City of Barstow on the ____ day of ___________________ 2026, by the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
________________________________
Andrea Flores, City Clerk
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Packet Pg. 561 Attachment: Draft Ordinance Amending Chapter 5.40 (Outdoor and Food Vending)(433538.2) (6305 : First Reading of Ordinance No. ___-2026