Berkeley City Council
May 20, 2025

A-1

APPENDIX A

DESCRIPTION OF THE LEASED PROPERTY

The property constituting the Leased Property consists of the land located in the City of Berkeley, County of Alameda, State of California, which is described as follows, including all buildings, improvements and facilities at any time situated thereon:

[To come]

1 Jones Hall draft 4-19-25

OFFICIAL NOTICE OF SALE

$______1

BERKELEY JOINT POWERS FINANCING AUTHORITY
2025 LEASE REVENUE NOTES
(FIRE ADMINISTRATION AND TRAINING PROJECT)
(FEDERALLY TAXABLE)

NOTICE IS HEREBY GIVEN by the Berkeley Joint Powers Financing Authority (the “Authority”), that bids will be received by a representative of the Authority for the purchase of $________* principal amount of notes of the Authority designated the “Berkeley Joint Powers Financing Authority 2025 Lease Revenue Note s ( Fire Administration and Training Project ) (Federally Taxable) ” (the “ Notes”). Bids will be received in electronic form through BiDCOMPTM/Parity® (“Parity”) on:

TUESDAY, June 3, 2025

starting at 8:30 a.m. and ending at 9:00 a.m. Pacific Time.

The Authority reserves the right to postpone or change the time or sale date upon notice delivered via Bloomberg News Service or Thomson Municipal Market Monitor (http://www.tm3.com).

The Notes will be issued under the provisions of resolution adopted by the Authority Commission of the Authority on May 20, 2025 (the “Note Resolution”), and under the laws of the State of California. The Notes are more particularly described in the proposed Indenture of Trust, dated as of June 1, 2025 (the “Indenture”) on file with the Authority (which is incorporated herein by reference) and copies thereof will be furnished to the bidder upon request.

DESCRIPTION OF THE NOTES

PURPOSE: The proceeds of the Notes will be applied by the Authority for the purpose of financing construction of improvements used for fire administration and training by the City of Berkeley (the “City”).

ISSUE; BOOK-ENTRY FORM: The Notes will be issued in the aggregate principal amount of $______* in the form of fully registered Notes without coupons. The Notes will be dated as of as of their original delivery, and will be issued in minimum denominations of $5,000. The Notes will be issued in a book entry only system with no physical distribution of the Notes made to the public.

The Depository Trust Company, New York, New York (“DTC”), will act as depository for the Notes which will be immobilized in its custody. The Notes will be registered in the name of Cede & Co., as nominee for DTC, on behalf of the participants in the DTC system and the subsequent beneficial owners of the Notes.

1 Preliminary, subject to change.

2 MATURITY DATE: The Notes will mature on October 1, 2029. The final principal amount of the Notes is subject to increase or reduction as described below under the heading “Adjustment of Principal Amount”.

PAYMENT PROVISIONS: Interest on the Notes will be payable on October 1, 2025, and on succeeding April 1 and October 1 (the “Interest Payment Dates”), to the registered owners by check or draft of The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) or, in the case of the owner of Notes in an aggregate principal amount of at least $1,000,000, at the written request of such owner by wire transfer. Principal of and premium (if any) on any Note will be paid upon presentation and surrender thereof at the office of the Trustee. Principal, interest and premium (if any) on the Notes are payable in lawful money of the United States of America.

OPTIONAL REDEMPTION: The Notes are subject to optional redemption, in whole or in part, on any date prior to their maturity, at the option of the City, from any source of available funds, at a redemption price equal to the greater of the following:

(i) 100 percent of the principal amount of the Notes to be redeemed, plus interest accrued on the Notes to the redemption date; or

(ii) the sum of the present value of the remaining scheduled payments of principal and interest on the Notes to be redeemed, not including any portion of those payments of interest accrued and unpaid as of the date on which such Notes are to be redeemed, discounted to the date on which such Notes are to be redeemed on a semiannual basis, assuming a 360-day year consisting of twelve 30-day months, at the Treasury Rate plus 15 basis points, plus, in each case, accrued and unpaid interest on the Notes to be redeemed to the date fixed for redemption.

“Treasury Rate” means, with respect to any redemption date for the Notes, the yield to maturity as to such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available on a date selected by the City that is at least two Business Days prior to the redemption date (excluding inflation indexed securities) or, if such Statistical Release is no longer published, any publicly available source of similar market data) most nearly equal to the period from the redemption date to the maturity date of the Notes to be redeemed; provided however, that if the period from the redemption date to such maturity date is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

S
PECIAL MANDATORY REDEMPTION FROM INSURANCE OR CONDEMNATION PROCEEDS. The Notes are subject to redemption as a whole, or in part on any date, from any Net P roceeds required to be used for such purpose as provided in the Indenture, at a redemption price equal to 100% of the principal amount thereof plus interest accrued thereon to the date fixed for redemption, without premium.

S
ECURITY: The Notes are secured by a pledge of Revenues (as defined in the Indenture), which primarily consist of lease payments made by the City to the Authority as compensation for the City’ use and occupancy of certain real property and improvements under a Lease Agreement by and between the City and the Authority. The Authority is not required to advance any moneys derived from any source other than the Revenues and other assets pledged under the Indenture.

T
AX-EXEMPT STATUS: The Authority does not intend for the interest on the Notes to be excluded from gross income for federal income tax purposes. In the opinion of Jones Hall, A Professional Law Corporation, bond counsel to the Authority (“Bond Counsel”), interest on the

3 Notes is exempt from California personal income taxes. Bidders are referred to the Preliminary Official Statement for a description of the proposed opinion of Note Counsel.

LEGAL OPINION: The legal opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, approving the validity of the Notes, will be furnished to the purchaser of the Notes without cost. A copy of the legal opinion, certified by the official in whose office the original is filed, will be printed on each Note at the expense of the Authority.

F
URTHER INFORMATION: A copy of the Preliminary Official Statement describing the Notes, and any other information concerning the proposed financing, will be furnished upon request to the municipal advisor to the Authority as follows (“Municipal Advisor”): NHA Advisors, LLC, 4040 Civic Center Drive, Suite 200, San Rafael, California 94903, telephone: (415) 785-2025 ext. 2006 (Rob Schmidt) or [email protected], website: www.NHAadvisors.com. The Official Notice of Sale and Preliminary Official Statement are available from the Municipal Advisor.

TERMS OF SALE

RIGHT TO CANCEL, POSTPONE OR RESCHEDULE SALE: The Authority reserves the right to cancel, postpone or reschedule the sale of the Notes upon notice delivered via Bloomberg News Service or Thomson Municipal Market Monitor (www.tm3.com). If the sale is postponed, bids will be received at the above place at such date and hour as set forth in the notice. Failure of any bidder to receive such notice or any other form of notice of canceled, postponed or rescheduled sale will not affect the legality or validity of any sale.

S
UBMISSION OF BIDS: Bids will be received electronically as described below, provided that such electronic bid must be received no later than the date and time set for receipt of bids .

All bidders, by submitting a bid, acknowledge that they have an established industry reputation for underwriting new issuances of municipal Notes.

ELECTRONIC BIDS: Solely as an accommodation to bidders, the Authority will accept bids in electronic form solely from Ipreo, a KKR portfolio company, through its BiDCOMP Competitive Bid Calculation System and Parity Electronic Bid Submission System (“Ipreo”). For information about Ipreo, bidders may contact Ipreo at 395 Hudson Street, New York, New York 10014, telephone (212) 849- 5023. If any provision of this Notice of Sale confli cts with information provided by Ipreo, this Notice of Sale shall control. Each bidder submitting an electronic bid understands and agrees by doing so that it is solely responsible for all arrangements with Ipreo, that the Authority does not encourage the use of Ipreo, and that Ipreo is not acting as an agent of the Authority. Instructions for submitting electronic bids must be obtained from Ipreo, and the Authority does not assume any responsibility for ensuring or verifying bidder compliance with Ipreo procedures. Ipreo has advised the Authority that bidders must subscribe to Ipreo if such bidders intend to use Ipreo to submit bids. The Authority shall be entitled to assume that any bid received via Ipreo has been made by a duly authorized agent of the bidder.

Neither the Authority, the Municipal Advisor nor Note Counsel has any responsibility for proper functioning of the Ipreo system, for any error contained in any bid submitted electronically, or for failure of any bid to be transmitted, received or opened at the official time for receipt of bids.

The official time for receipt of bids will be determined by the Authority at the place of bid opening, and the Authority will not be required to accept the time kept by Parity as the official time. The

4 Authority assumes no responsibility for informing any bidder prior to the deadline for receiving bids that its bid is incomplete, or not received.

FORM OF BID; PURCHASE PRICE: Each proposal must be for not less than all of the Notes hereby offered for sale.

The Authority will accept par, discount or premium bids for the Notes.

D
ESIGNATION OF INTEREST RATES: Each bidder must specify the rate or rates of interest which the Note s will bear. The maximum rate bid on any Notes may not exceed [6.00]% per annum. A bidder will be permitted to bid different rates of interest for each maturity of Notes, but:

• each interest rate specified must be in a multiple of 1/20% or 1/8%;

• no Note may bear more than one rate of interest;

• interest on each Note will be computed from the date of original delivery to its stated maturity at the interest rate specified in the proposal, payable on the Interest Payment Dates as set forth above; and

• all Notes maturing at any one time will bear the same rate of interest.

D
ETERMINATION OF BEST BID: The Notes will be awarded to the responsible bidder whose bid produces the lowest true interest cost on the Notes. The true interest cost specified in any bid will be that rate which, when used in computing the present worth of all payments of principal and interest to be paid on all Note s from the date of original delivery (which is assumed to be [June 17], 2025) to their final maturity date of October 1, 2029, produces an amount equal to the purchase price specified in such bid. For purposes of computing the true interest cost represented by any proposal, the purchase price specified in such proposal shall be equal to the par amount of the Notes plus any premium specified in such proposal, and the true interest cost shall be calculated by the use of a semiannual interval of compounding interest based on the Interest Payment Dates for the Notes.

A
DJUSTMENT OF PRINCIPAL AMOUNT: In order to achieve the financial goals of the Authority, the Authority may need to adjust the principal amount of the Notes based on the bids that are received. Therefore, the Authority reserves the right to increase or decrease the aggregate principal amount of the Note s (or, in the case of the term Notes. The aggregate principal amount of the Notes may be reduced as a result of such adjustment, in an amount not exceeding 10% of the amount of Note s hereby offered for sale. Notice of such increase or decrease shall be given to the winning bidder as soon as practicable following the notification o f award, as described below. No such adjustment will have the effect of altering the basis upon which the best bid is determined.

R
IGHT OF REJECTION: The Authority reserves the right, in its discretion, to reject any and all bids and to the extent not prohibited by law to waive any irregularity or informality in any bid.

P
ROMPT AWARD: An authorized representative of the Authority will accept the best responsible bid for the purchase of the Notes by notice to the winning bidder. If two or more bids setting forth identical interest rates and premium, if any, are received, such officer may exercise discretion and judgment in making the award and may award the Note s on a pro rata basis in

5 such denominations as he or she determines. Such authorized representative of the Authority may also reject any and all bids and waive any irregularity or informality in any bid. Sale of the Notes will be awarded or all bids will be rejected not later than 24 hours after the expiration of the time prescribed for the receipt of proposals unless such time of award is waived by the winning bidder; provided, that the award may be made after the expiration of the specified time if the bidder does not notify the Authority in writing of the withdrawal of its proposal.

P
LACE OF DELIVERY; CANCELLATION FOR LATE DELIVERY: It is expected that the Notes will be delivered to DTC for the account of the winning bidder on [June 17], 2025. The winning bidder has the right, at the winning bidder’s option, to cancel the contract of purchase if the Note s are not tendered for delivery within 60 days from the date of the sale thereof, and in such event the winning bidder shall be entitled to the return of the deposit accompanying its bid.

N
O GOOD FAITH DEPOSIT: The Authority does not require a good faith deposit to be submitted in connection with bids for the Notes.

PAYMENT OF PURCHASE PRICE: The winning bidder will be required to pay the purchase price of the Notes in funds that are immediately available to the Authority . Such payment shall be made on the date of original delivery of the Notes to DTC.

STATEMENT OF TRUE INTEREST COST: Each bidder is requested, but not required, to state in its proposal the percentage true interest cost represented by its proposal, determined as described above, which will be considered as informative only and not binding on either the bidder or the Authority.

N
O LITIGATION: There is no litigation pending concerning the validity of the Notes, the corporate existence of the Authority or the entitlement of the officers thereof to their respective offices, and the purchaser will be furnished a no-litigation certificate certifying to the foregoing as of and at the delivery of the Notes.

CUSIP
NUMBERS: It is anticipated that CUSIP number(s) will be printed on the Notes, but neither the failure to print such numbers on any Note s nor any error with respect thereto will constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for the Notes in accordance with the terms hereof. All expenses in relation to the printing of CUSIP numbers on the Notes will be paid for by the Authority, except that the CUSIP Service Bureau charge for the assignment of said numbers will be the responsibility of and shall be paid for by the purchaser.

C
ALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION FEES: All fees payable to the California Debt and Investment Advisory Commission in connection with the issuance of the Notes are the sole responsibility of the purchaser of the Notes.

O
FFICIAL STATEMENT: The Authority has approved a preliminary Official Statement relating to the Notes. Copies of such preliminary Official Statement will be distributed to any bidder, upon request, prior to the sale in a form “deemed final” by the Authority for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”). Within seven business days from the sale date, the Authority will deliver to the purchaser copies of the final Official Statement, executed by an authorized representative of the Authority and the Authority and dated the date of delivery thereof to the purchaser, in sufficient number to allow the purchaser to comply with paragraph (b)(4) of the Rule and to satisfy the Municipal Securities Rulemaking Board (the “MSRB”) Rule G-32 or any other rules adopted by the MSRB, which shall include information

6 permitted to be omitted by paragraph (b)(1) of the Rule and such other amendments or supplements as are been approved by the Authority (the “Final Official Statement”). The purchaser agrees that it will not confirm the sale of any Note s unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Final Official Statement. Upon request, the Authority will furnish to the winning bidder, at no charge, not in excess of 20 printed copies of the Official Statement for use in connection with any resale of the Notes.

C
ERTIFICATE REGARDING OFFICIAL STATEMENT: A responsible officer of the Authority will certify to the original purchaser of the Notes, as a condition of closing, that based on such officer’s participation in the preparation of the Official Statement, nothing has come to his or her attention to lead him or her to believe that the Official Statement (except for certain financial statements, statistical data and other information) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

C
ONTINUING DISCLOSURE. In order to assist bidders in complying with S.E.C. Rule 15c2 - 12(b)(5), the City will execute and deliver a Continuing Disclosure Certificate, under which the City undertakes to provide certain annual financial information and notic es of the occurrence of certain events, if material. A description of this undertaking is set forth in the preliminary Official Statement and will also be set forth in the final Official Statement. Such Continuing Disclosure Certificate will be a document required to be delivered at closing by the City, and the failure by the City to deliver such document in form and substance acceptable to Note Counsel and the winning bidder will relieve the winning bidder of its obligation to purchase the Notes.

A
CKNOWLEDGEMENT OF NO FIDUCIARY DUTY. The Authority acknowledges and agrees that (i) the purchase and sale of the Notes is an arm’s-length commercial transaction between the Authority and the underwriter, (ii) in connection with such transaction, the underwriter is acting solely as a principal and not as an advisor, (including, without limitation, a Municipal Advisor (as such term is defined in Section 975(e) of the Dodd- Frank Wall Street Reform and Consumer Protection Act)), agent or a fiduciary of the Authorit y, (iii) the underwriter has not assumed (individually or collectively) a fiduciary responsibility in favor of the Authority with respect to the offering of the Notes or the process leading thereto (whether or not the underwriter, or any affiliate of an underwriter, has advised or is currently advising the Authority on other matters) or any other obligation to the Authority except as described in this Notice of Sale, (iv) the underwriter has financial and other interests that differ from those of the Author ity and (v) the Authority has consulted with its own legal and municipal advisors to the extent it deemed appropriate in connection with the offering of the Notes.

GIVEN by order of the Authority Commission of the Authority by resolution adopted on May 20, 2025.

CITY OF BERKELEY

NOTICE OF PUBLIC HEARING

REGARDING FINANCING FOR THE CONSTRUCTION OF

CERTAIN PUBLIC CAPITAL IMPROVEMENTS

NOTICE IS HEREBY GIVEN THAT, at its special meeting commencing at 4:30 p.m., or as soon thereafter as the matter can be heard, on May 20, 2025, in the Berkeley Unified School District Boardroom, 1231 Addison Street , Berkeley, California, 94702, the City Council of the City of Berkeley (the “City”) will hold a public hearing at which it will hear and consider information concerning the approval by the City of (i) a lease financing by the City and the Berkeley Joint Powers Financing Authority (the “Authority”) for certain public capital improvements to be used by the City and the substantial public benefits of such financing by the Authority in accordance with the criteria specified in Section 6586 of the California Government Code and (ii) the adoption of a resolution by the City Council of the City approving the execution and delivery of a property lease to be entered into with the Authority in connection with such lease financing.

The proposed lease financing will, among other things, provide funds for the construction of improvements to Fire Department administration and training buildings located at 1250-1288 9th Street, 1226 9 th Street, 1221 8 th Street, 1223 8 th Street, 1225 8 th Street and 1249 8 th Street, Berkeley, California 94710. In connection with the lease financing, the City will lease certain real property and improvements to the Authority, and the Authority will lease such property back to the City.

Those wishing to comment on the proposed lease financing may either appear in person at the public hearing or submit written comments which must be received by the City Council prior to the public hearing. A copy of the agenda material for this hearing will be available on the City’s website at https://berkeleyca.gov/. Once posted, the agenda for this meeting will include a link for public participation using Zoom video technology. Written comments should be mailed or delivered directly to the City Clerk, 2180 Milvia Street, Berkeley, CA 94704, or e - mailed to [email protected] in order to ensure delivery to all Councilmembers and inclusion in the agenda packet.

Communications to the Berkeley City Council are public record and will become part of the City’s electronic records, which are accessible through the City’s website. Please note: e- mail addresses, names, addresses, and other contact information are not required, but if included in any communication to the City Council, will become part of the public record.

If you do not want your e -mail address or any other contact information to be made public, you may deliver communications via U.S. Postal Service or in person to the City Clerk. If you do not want your contact information included in the public record, please do not include that information in your communication. Please contact the City Clerk at (510) 981-6900 or [email protected] for further information.

Published: May 9, 2025 – The Berkeley Voice
To be published one time, in a newspaper of general circulation in the City, once at least five days prior to the hearing.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ I hereby certify that the Notice for this Public Hearing of the Berkeley City Council was posted at the display case located near the walkway in front of the Maudelle Shirek Building, 2134 Martin Luther King Jr. Way, as well as on the City’s website, on May 15, 2025.

__________________________________
Mark Numainville, City Clerk

June ___, 2025

Berkeley Joint Powers Financing Authority
2180 Milvia Street
Berkeley, CA 94704

OPINION: $ _________ Berkeley Joint Powers Financing Authority 2025 Lease Revenue Notes (Fire Administration and Training Project) (Federally Taxable)

Members of the Authority Commission and City Council:

We have acted as bond counsel to the Berkeley Joint Powers Financing Authority (the “Authority”) and City of Berkeley (the “City”) in connection with the issuance by the Authority of the lease revenue notes captioned above, dated the date hereof (the " Notes"). In such capacity, we have examined such law and such certified proceedings, opinions, certifications and other documents as we have deemed necessary to render this opinion.

The Notes are issued pursuant to Article 4 of Chapter 5, Division 7, Title 1 of the Government Code of the State of California, the Indenture of Trust, dated as of June 1, 2025 (the “Indenture”), by and between the Authority and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee"), and a resolution (the "Resolution") of the governing body of the Authority, adopted on May 20, 2025.

Under the Indenture, the Authority has pledged certain revenues (the “Revenues”) for the payment of principal, premium (if any), and interest on the Note s when due, including lease payments made by the City under a Lease Agreement dated as of June 1, 2025 (the “Lease Agreement”) between the Authority and the City.

Regarding questions of fact material to our opinion, we have relied on representations of the Authority contained in the Indenture and the City contained in the Lease Agreement, and in the certified proceedings and other certifications of public officials furnished to us, without undertaking to verify the same by independent investigation.

Based on the foregoing, we are of the opinion that, under existing law:

1. The Authority is a duly created and validly existing joint exercise of powers authority with the power to adopt the Resolution, enter into the Indenture and the Lease Agreement, perform the agreements on its part contained therein, and issue the Notes.

Berkeley Joint Powers Financing Authority
City of Berkeley
June __, 2025

2. The City is a duly created and validly existing municipal corporation and charter city with the power to enter into the Lease Agreement and perform the agreements on its part contained therein.

3. The
Indenture has been duly authorized, executed and delivered by t he Authority, and constitutes a valid and binding obligation of the Authority, enforceable against the Authority.

4. The Lease Agreement has been duly authorized, executed and delivered by the Authority and the City, and constitutes a valid and binding obli gation of the Authority and the
City, enforceable against the Authority and the City.

5. The Indenture creates a valid lien on the Revenues and other funds pledged by the Indenture for the security of the Notes.

6. The Notes have been duly authorized and executed by the Authority, and are valid and binding limited obligations of the Authority, payable solely from the Revenues and other funds provided therefor in the Indenture.

7. The interest on the Notes is not intended to be excluded from gross inco me for federal income tax purposes.

8. The interest on the Notes is exempt from personal income taxation imposed by the State of California.

We express no opinion regarding any other tax consequences arising with respect to the ownership, sale or disposition of, or the amount, accrual or receipt of interest on, the Notes.

The rights of the owners of the Note s and the enforceability of the Notes and the Indenture are limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors' rights generally, and by equitable principles, whether considered at law or in equity.

This opinion is given as of the date hereof, and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention, or any changes in law that may hereafter occur. Moreover, our opinions are not a guarantee of a particular result, and are not binding on the courts; rather, our opinions represent our legal judgment based upon our review of existing law that we deem relevant to such opinions and in reliance upon the representations, covenants and opinions referenced above.

Our engagement with respect to this matter has terminated as of the date hereof.

Respectfully submitted,

A Professional Law Corporation

Berkeley Joint Powers Financing Authority
City of Berkeley
June __, 2025

ACTION CALENDAR
May 20, 2025
To: Honorable Mayor and Members of the City Council
From: Paul Buddenhagen, City Manager
Submitted by: Henry Oyekanmi, Director, Finance
Subject: Issuance of $35,000,000 General Obligation Bonds for Measure O – Affordable Housing

RECOMMENDATION
Adopt a Resolution authorizing the issuance and sale of general obligation bonds to finance acquisition and improvement of affordable housing and authorizing actions related thereto.

FISCAL IMPACTS OF RECOMMENDATION
The issuance of the Measure O general obligation bonds will allow proceeds to be applied to projects previously identified by City Council related to affordable housing. This is the third series of the $135,000,000 bond authorization. The Measure O tax levy was started in FY 2019/20.

BACKGROUND
At an election held on November 6, 2018, more than two-thirds of the voters of the City approved a proposition, designated as Measure O, authorizing the issuance by the City of general obligation bonds in the aggregate principal amount of $135,000,000 to create and preserve affordable housing for low-income households, working families, and individuals including teachers, seniors, veterans, the homeless, and persons with disabilities. It is anticipated that the full authorization will be issued over 10 years through four series of bonds.

On April 16, 2020, the City issued its $38,000,000 City of Berkeley 2020 General Obligation Bonds (2018 Election Measure O: Affordable Housing) (Federally Taxable), which was the first series of bonds under the Measure O authorization.

On May 24, 2022, the City issued its $40,000,000 City of Berkeley 2022 General Obligation Bonds, Series B (2018 Election Measure O: Affordable Housing) (Federally Taxable), which was the second series of bonds under the Measure O authorization.

RATIONALE FOR RECOMMENDATION
The City has identified projects that need immediate funding, and the bond authorization provides the ability to issue bonds at any time. Despite recent volatility in the bond markets, the projected tax rate is anticipated to be lower than originally estimated in the election materials.

May 20, 2025

PRELIMINARY OFFICIAL STATEMENT
The attached Preliminary Official Statement has been reviewed and approved for transmittal to the City Council by the City’s financing team. The distribution of the Preliminary Official Statement by the City is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934. These laws require the Preliminary Official Statement to include all facts that would be material to an investor in the proposed bonds. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the bonds. If the City Council concludes that the Preliminary Official Statement includes all facts that would be material to an investor in the bonds, it must adopt a resolution that authorizes staff to execute a certificate to the effect that the Preliminary Official Statement has been “deemed final.” The Securities and Exchange Commission (the “SEC”), the agency with regulatory authority over the City’s compliance with the federal securities laws, has issued guidance as to the duties of the City Council with respect to its approval of the Preliminary Official Statement. In its “Report of Investigation in the Matter of County of Orange, California as it Relates to the Conduct of the Members of the Board of Supervisors” (Release No. 36761 / January 24, 1996) (the “Release”), the SEC indicated that, if a member of the City Council has knowledge of any facts or circumstances that an investor would want to know about prior to investing in the bonds, whether relating to their repayment, tax- exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the Preliminary Official Statement. In the Release, the SEC indicated that the steps that a member of the City Council could take include becoming familiar with the Preliminary Official Statement and questioning staff and consultants about the disclosure of such facts.

The bonds are payable solely from ad valorem property taxes levied by the City and collected by Alameda County, as described in the section of the Preliminary Official Statement captioned “SECURITY FOR THE BONDS.” However, investors in the bonds consider information about the City’s financial position to be material, and the City has included that information in Appendix A to the Preliminary Official Statement:
“FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF BERKELEY AND ALAMEDA COUNTY.” The City’s Comprehensive Annual Financial Report for fiscal year 2023-24 is included in Appendix B to the Preliminary Official Statement.

ENVIRONMENTAL SUSTAINABILITY
There are no identifiable environmental effects or opportunities associated with the issuance and sale of the bonds.

May 20, 2025

ALTERNATIVE ACTIONS CONSIDERED
None

CONTACT PERSON
Henry Oyekanmi, Director, Finance Department, 510-981-7326 Attachments:
1: Resolution – Resolution of the City Council of the City of Berkeley Authorizing the Issuance and Sale of Not to Exceed $35,000,000 Principal Amount of General Obligation Bonds to Finance Acquisition and Improvement of Affordable Housing and Authorizing Actions Related Thereto
2: Draft Preliminary Official Statement
3: Draft Custodian Agreement
4: Draft Paying Agency Agreement
5: Draft Official Notice of Sale
6: Draft Notice of Intention

Note: this resolution must be calendared as a new business matter (not on the consent calendar)
RESOLUTION NO. [_____]-N.S.

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BERKELEY AUTHORIZING THE ISSUANCE AND SALE OF NOT
TO EXCEED $35,000,000 PRINCIPAL AMOUNT OF GENERAL

OBLIGATION BONDS TO FINANCE ACQUISITION AND

IMPROVEMENT OF AFFORDABLE HOUSING, AND

AUTHORIZING ACTIONS RELATED THERETO
WHEREAS, the City of Berkeley (the “City”) is empowered under Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Bond Law”) to its issue general obligation bonds which are authorized by two-thirds of the electors voting on the proposition; and
WHEREAS, more than two-thirds of the electors voting at an election held on November 6, 2018, voted for a proposition (the “Bond Proposition”) authorizing the issuance by the City of general obligation bonds in the aggregate principal amount of $135,000,000 for the purpose of providing funds for the acquisition and improvement of affordable housing; and
WHEREAS, on April 16, 2020, the City issued the initial series of general obligation bonds under the authority of the Bond Proposition, in the initial principal amount of $38,000,000, entitled the City of Berkeley 2020 General Obligations Bonds, Series A (2018 Election Measure O: Affordable Housing) (Federally Taxable); and WHEREAS, on May 24, 2022, the City issued the second series of general obligation bonds under the authority of the Bond Proposition, in the initial principal amount of $40,000,000, entitled the City of Berkeley 2022 General Obligations Bonds, Series B (2018 Election Measure O: Affordable Housing) (Federally Taxable); and WHEREAS, the City Council wishes at this time to authorize the issuance and sale of a third series of general obligation bonds under such authority in the aggregate principal amount of not to exceed $35,000,000 (the “Bonds”) under this Resolution and in conformity with the Bond Law; and
WHEREAS, further, as required by Government Code Section 5852.1 enacted January 1, 2018 by Senate Bill 450, attached hereto as Appendix B is the information relating to the Bonds that has been obtained by the City Council and is hereby disclosed and made public; and
WHEREAS, pursuant to Resolution No. 67,871-N.S. (March 24, 2017), this City Council previously approved a Debt Management and Disclosure Policy, as revised pursuant to Resolution No. 70,898-N.S. (June 27, 2023), which complies with Government Code Section 8855, and the delivery of the Bonds will be in compliance with said policy;

-2-
NOW, THEREFORE, BE IT RESOLVED by the Council, as follows:

ARTICLE I
DEFINITIONS; AUTHORITY
SECTION 1.01. Definitions. The terms defined in this Section 1.01, as used and capitalized herein, shall, for all purposes of this Resolution, have the meanings given them below, unless the context clearly requires some other meaning. “Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, and (b) any other attorney or firm of attorneys nationally recognized for expertise in rendering opinions as to the legality and tax exempt status of securities issued by public entities. “Bond Law” means Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, commencing with Section 53506 of said Code, as in effect on the date of adoption hereof and as amended hereafter. “Bond Proposition” means the proposition submitted to and approved by more than two- thirds of the voters on November 6, 2018, under which the issuance of the Bonds has been authorized.
“Bond Purchase Agreement” means the Bond Purchase Agreement for the Bonds, which is approved under Section 3.02.
“Bond Sale Documentation” means (a) if the Bonds are sold by competitive bidding in accordance with Section 3.01(a), the Official Notice of Sale and the winning bid of the Original Purchaser, or (b) if the Bonds are sold by negotiation in accordance with Section 3.01(b), the Bond Purchase Agreement between the City and the Original Purchaser.
“Bonds” means the City of Berkeley 2025 General Obligation Bonds, Series C (2018 Election Measure O: Affordable Housing) (Federally Taxable) authorized to be issued under this Resolution in the aggregate principal amount approved hereunder. “City” means the City of Berkeley, a charter city and municipal corporation organized under the Constitution and laws of the State of California, and any successor thereto. “City Representative” means the Mayor, the City Manager, the Finance Director and any other officer of the City authorized by resolution of the City Council of the City to act on behalf of the City with respect to this Resolution and the Bonds. “Closing Date” means the date upon which there is a physical delivery of the Bonds in exchange for the amount representing the purchase price of the Bonds by the Original Purchaser.
“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City and related to the authorization, issuance, sale and delivery of the Bonds, including but not limited to the costs of preparation and reproduction of

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documents, printing expenses, filing and recording fees, initial fees and charges of the Paying Agent and its counsel, legal fees and charges, fees and disbursements of consultants and professionals, rating agency fees, fees and charges for preparation, execution and safekeeping of the Bonds and any other cost, charge or fee in connection with the original issuance of the Bonds.
“County” means the County of Alameda, a political subdivision of the State of California, duly organized and existing under the Constitution and laws of the State of California. “Debt Service Fund” means the account established and held by the City under Section

4.03. “Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository under Section 2.09.
“Depository System Participant” means any participant in the Depository’s book-entry system.
“DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.
“Federal Securities” means United States Treasury notes, bonds, bills or certificates of indebtedness, or any other obligations the timely payment of which is directly or indirectly guaranteed by the faith and credit of the United States of America. “Interest Payment Date” means September 1, 2025, and the first day of each succeeding March and September, or such other dates determined by a City Representative in connection with the pricing of the Bonds. “Official Notice of Sale” means the Official Notice of Sale for the Bonds, which is approved under Section 3.01.
“Original Purchaser” means the original purchaser of the Bonds at the public or negotiated sale thereof.
“Outstanding,” when used as of any particular time with reference to Bonds, means all Bonds except: (a) Bonds theretofore canceled by the Paying Agent or surrendered to the Paying Agent for cancellation; (b) Bonds paid or deemed to have been paid within the meaning of Section 9.02; and (c) Bonds in lieu of or in substitution for which other Bonds shall have been authorized, executed, issued and delivered by the City under this Resolution.
“Owner,” whenever used herein with respect to a Bond, means the person in whose name the ownership of such Bond is registered on the Registration Books. “Paying Agent” means the Paying Agent appointed by the City and acting as paying agent, registrar and authenticating agent for the Bonds, its successors and assigns, and any other corporation or association which may at any time be substituted in its place, as provided in Section 6.01.

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“Principal Office” means the office or offices of the Paying Agent for the payment of the Bonds and the administration of its duties hereunder, as such office or offices shall be identified in a written notice filed with the City by the Paying Agent. “Project Fund” means the fund established and held by the City under Section 4.02. “Record Date” means the 15 th day of the month preceding an Interest Payment Date, whether or not such day is a business day.
“Registration Books” means the records maintained by the Paying Agent for the registration of ownership and registration of transfer of the Bonds under Section 2.08. “Resolution” means this Resolution, as originally adopted by the City Council on May 20, 2025, and including all amendments hereto and supplements hereof which are duly adopted by the City Council from time to time in accordance herewith. “Securities Depositories” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other securities depositories as the City may designate.
“Supplemental Resolution” means any resolution supplemental to or amendatory of this Resolution, adopted by the City in accordance with Article VIII. “Written Request of the City” means an instrument in writing signed by a City Representative or by any other officer of the City duly authorized to act on behalf of the City under a written certificate of a City Representative.

SECTION 1.02. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Resolution; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Resolution as a whole and not to any particular Article, Section or subdivision hereof.

SECTION 1.03. Authority for this Resolution; Findings. This Resolution is entered into under the provisions of the Bond Law. It is hereby certified that all of the things, conditions and acts required to exist, to have happened or to have been performed precedent to and in the issuance of the Bonds do exist, have happened or have been performed in due and regular time and manner as required by the laws of the State of California, and that the amount of the Bonds, together with all other indebtedness of the City, does not exceed any limit prescribed by any laws of the State of California.

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ARTICLE II

THE BONDS
SECTION 2.01. Authorization. Bonds in the aggregate original principal amount of not to exceed $35,000,000 are hereby authorized by the City to be issued by the City under and subject to the terms of the Bond Law and this Resolution, for the purpose of raising money to finance the acquisition and improvement of affordable housing, as provided in the Bond Proposition, and to pay the Costs of Issuance incurred in connection therewith.

This Resolution constitutes a continuing agreement between the City and the Owners of all of the Bonds issued or to be issued hereunder and then Outstanding to secure the full and final payment of principal of and interest and premium, if any, on all Bonds which may be Outstanding hereunder, subject to the covenants, agreements, provisions and conditions herein contained. The Bonds are designated the “City of Berkeley 2025 General Obligation Bonds, Series C (2018 Election Measure O: Affordable Housing) (Federally Taxable).”
SECTION 2.02. Terms of Bonds.
(a) Principal Amount of Bonds. The Bonds are authorized to be issued in the aggregate principal amount of not to exceed $35,000,000. (b) Form; Numbering. The Bonds will be issued in fully registered form, without coupons, in authorized denominations of $5,000 each or any integral multiple thereof.

The Bonds will be lettered and numbered as the Paying Agent prescribes. (c) Date of Bonds. The Bonds will be dated as of the Closing Date. (d) CUSIP Identification Numbers. “CUSIP” identification numbers will be imprinted on the Bonds, but such numbers do not constitute a part of the contract evidenced by the Bonds and no error or omission with respect thereto will constitute cause for refusal of the Original Purchaser to accept delivery of and pay for the Bonds.

In addition, failure on the part of the City to use such CUSIP numbers in any notice to Owners of the Bonds will not constitute an event of default or any violation of the City’s contract with such Owners and will not impair the effectiveness of any such notice. (e) Determination of Maturities and Interest Rates. The Bonds shall mature (or, alternatively, be subject to mandatory sinking fund redemption as hereinafter provided) on September 1 in each year commencing September 1, 2025 and continuing to and including September 1, 2055. The exact principal amount of the Bonds maturing on September 1 in each year shall be determined upon the sale of the Bonds, in accordance with the Bond Sale Documentation.

Each Bond will bear interest at the respective rates to be determined upon the sale of the Bonds in accordance with Article III. Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:
 a Bond is authenticated as of an Interest Payment Date, in which event it will bear interest from such date,

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 a Bond is authenticated prior to an Interest Payment Date and after the close of business on the preceding Record Date, in which event it will bear interest from such Interest Payment Date,
 a Bond is authenticated on or before the first Record Date, in which event it shall bear interest from the Closing Date, or
 at the time of authentication of a Bond, interest is in default thereon, in which event it will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.
(f) Manner of Payment. Interest on the Bonds (including the final interest payment upon maturity) is payable by check of the Paying Agent mailed to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of business on the preceding Record Date; except that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Bonds shall be paid by wire transfer on the succeeding Interest Payment Date to an account in the United States of America as shall be specified in such written request. Principal of and premium (if any) on the Bonds is payable in lawful money of the United States of America upon presentation and surrender at the Principal Office of the Paying Agent.

SECTION 2.03. Redemption.
(a) Optional Redemption. The Bonds shall be subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on the dates and upon payment of a redemption price (equal to the principal amount of Bonds to be redeemed together with a redemption premium, if any) as determined upon the sale of the Bonds in accordance with the Bond Sale Documentation. (b) Mandatory Sinking Fund Redemption. If and to the extent specified in the Bond Sale Documentation, any maturity of the Bonds will be designated as “Term Bonds” which are subject to mandatory sinking fund redemption on September 1 in each of the years and in the respective principal amounts set forth in such bid, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, in each case without premium, together with interest accrued thereon to the redemption date. If some but not all of the Term Bonds have been redeemed under the preceding subsection (a) of this Section, the aggregate principal amount of Term Bonds to be redeemed in each year under this subsection (b) shall be reduced on a pro rata basis in integral multiples of $5,000, as designated in written notice filed by the City with the Paying Agent.
(c) Selection of Bonds for Redemption. Whenever less than all of the Outstanding Bonds of any one maturity are designated for redemption, the Paying Agent shall select the Outstanding Bonds of such maturity to be redeemed by lot in any manner deemed fair by the Paying Agent. For purposes of such selection, each Bond shall be deemed to consist of individual Bonds of $5,000 denominations which may be separately redeemed.

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(d) Redemption Procedure. The Paying Agent shall cause notice of any redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, (i) to the Securities Depositories and the Municipal Securities Rulemaking Board, and (ii) to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books. Such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice shall not affect the validity of the proceedings for the redemption of Bonds. The City is entitled to send a redemption notice that declares that the redemption is conditional upon the availability of moneys to accomplish the redemption, and the City may rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this section. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the Owners or any other party related to or arising from such rescission.

Such notice shall state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the serial numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, or by stating that all of the Bonds of one or more maturities have been called for redemption, and shall require that such Bonds be then surrendered at the Principal Office of the Paying Agent for redemption at the said redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Upon surrender of Bonds redeemed in part only, the City shall execute and the Paying Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

From and after the date fixed for redemption, if notice of such redemption has been duly given and funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under this Resolution other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice. The Paying Agent shall cancel all Bonds redeemed under this Section 2.03, and shall submit to the City a certificate of cancellation.

SECTION 2.04. Form of Bonds. The form of the Bonds, including the form of the Paying Agent’s Certificate of Authentication and the form of Assignment to appear thereon, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Resolution, are set forth in Appendix A attached hereto.

SECTION 2.05. Execution of Bonds. The Bonds shall be executed on behalf of the City by the manual or facsimile signatures of its Mayor and City Clerk who are in office on the date of adoption of this Resolution or at any time thereafter, and the seal of the City shall be impressed, imprinted or reproduced by facsimile thereon. If any officer whose signature appears on any Bond ceases to be such officer before delivery of the Bonds to

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the Original Purchaser, such signature will nevertheless be as effective as if the officer had remained in office until the delivery of the Bonds to the Original Purchaser. Any Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond are the proper officers of the City although at the nominal date of such Bond any such person does not serve as such officer of the City.

Only those Bonds bearing a Certificate of Authentication in the form set forth in Appendix A attached hereto, executed and dated by the Paying Agent, will be valid or obligatory for any purpose or entitled to the benefits of this Resolution, and such Certificate of Authentication of the Paying Agent constitutes conclusive evidence that the Bonds so registered have been duly authenticated, registered and delivered hereunder and are entitled to the benefits of this Resolution.

SECTION 2.06. Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the Principal Office at the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed.

The City may charge a reasonable sum for each new Bond issued upon any transfer.

Whenever any Bond or Bonds is surrendered for transfer, the City shall execute and the Paying Agent shall authenticate and deliver a new Bond or Bonds, for like aggregate principal amount.

SECTION 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Office of the Paying Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The City may charge a reasonable sum for each new Bond issued upon any exchange.

SECTION 2.08. Registration Books. The Paying Agent shall keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, Bonds as herein before provided.

SECTION 2.09. Book-Entry System. Except as provided below, DTC will be the Owner of all of the Bonds, and the Bonds will be registered in the name of Cede & Co. as nominee for DTC. The Bonds shall be initially executed and delivered in the form of a single fully registered Bond for each maturity date of the Bonds in the full aggregate principal amount of the Bonds maturing on such date. The Paying Agent and the City may treat DTC (or its nominee) as the sole and exclusive owner of the Bonds registered in its name for all purposes of this Resolution, and neither the Paying Agent nor the City shall be affected by any notice to the contrary. The Paying Agent and the City shall not have any responsibility or obligation to any Depository System Participant, any person claiming a beneficial ownership interest in the Bonds under or through DTC or a Depository System Participant, or any other person which is not shown on the register of the City as being an owner, with respect to the accuracy of any records maintained by DTC or any Depository System Participant or the payment by DTC or any Depository System Participant by DTC or any Depository System Participant of any amount in respect of the principal or interest with respect to the Bonds. The City shall cause to be

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paid all principal and interest with respect to the Bonds only to DTC, and all such payments shall be valid and effective to fully satisfy and discharge the City’s obligations with respect to the principal and interest with respect to the Bonds to the extent of the sum or sums so paid. Except under the conditions noted below, no person other than DTC shall receive a Bond. Upon delivery by DTC to the City of written notice to the effect that DTC has determined to substitute a new nominee in place of Cede & Co., the term “Cede & Co.” in this Resolution shall refer to such new nominee of DTC.

If the City determines that it is in the best interest of the beneficial owners that they be able to obtain Bonds and delivers a written certificate to DTC and the City to that effect, DTC shall notify the Depository System Participants of the availability through DTC of Bonds. In such event, the City shall issue, transfer and exchange Bonds as requested by DTC and any other owners in appropriate amounts. DTC may determine to discontinue providing its services with respect to the Bonds at any time by giving notice to the City and discharging its responsibilities with respect thereto under applicable law.

Under such circumstances (if there is no successor securities depository), the City shall be obligated to deliver Bonds as described in this Resolution. Whenever DTC requests the City to do so, the City will cooperate with DTC in taking appropriate action after reasonable notice to (a) make available one or more separate Bonds evidencing the Bonds to any Depository System Participant having Bonds credited to its DTC account or (b) arrange for another securities depository to maintain custody of certificates evidencing the Bonds.

Notwithstanding any other provision of this Resolution to the contrary, so long as any Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to the principal and interest with respect to such Bond and all notices with respect to such Bond shall be made and given, respectively, to DTC as provided as in the representation letter delivered on the date of issuance of the Bonds.

SECTION 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond becomes mutilated the City, at the expense of the Owner of said Bond, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like maturity and principal amount in exchange and substitution for the Bond so mutilated, but only upon surrender to the Paying Agent of the Bond so mutilated. The Paying Agent shall cancel every mutilated Bond so surrendered to it. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the City and, if such evidence is satisfactory to the City and the City receives satisfactory indemnity, the City, at the expense of the Owner, shall execute, and the Paying Agent shall thereupon authenticate and deliver, a new Bond of like maturity and principal amount in lieu of and in substitution for the Bond so lost, destroyed or stolen.

The City may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the City and the Paying Agent. Any Bond issued under the provisions of this Section 2.10 in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation of the City whether or not the Bond so alleged to be lost, destroyed or stolen is at any time enforceable by anyone, and such Bond will be equally and proportionately entitled to the benefits of this Resolution with all other Bonds issued under this Resolution.

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Notwithstanding any other provision of this Section 2.10, in lieu of delivering a new Bond for which principal has or is about to become due for a Bond which has been mutilated, lost, destroyed or stolen, the Paying Agent may make payment of such Bond in accordance with its terms.

ARTICLE III

SALE OF BONDS
SECTION 3.01. Competitive Sale of Bonds
(a) Approval of Official Notice of Sale; Competitive Sale Procedures. The Bonds shall be offered for sale by competitive bid in accordance with the provisions of the Official Notice of Sale in substantially the form on file with the City Clerk together with such additions thereto and changes therein as may be approved by a City Representative. The City Council hereby authorizes and directs a City Representative to accept the best responsible bid for the Bonds, to be determined in accordance with the related Official Notice of Sale. A City Representative, on behalf of the City, may exercise his or her own discretion and judgment in awarding the sale of the Bonds, and may, in his or her discretion, reject any and all bids and waive any irregularity or informality in any bid. Sale of the Bonds shall be awarded, or all bids shall be rejected, not later than 24 hours after the expiration of the time prescribed for the receipt of proposals unless such time of award is waived by the successful bidder. (b) Publication of Notice of Intention. The City Council hereby approves and authorizes the publication by Bond Counsel of a notice of the City’s intention to sell the Bonds, in form and substance acceptable to Bond Counsel, in accordance with applicable law.
(c) Furnishing of Documents. The municipal advisor to the City, NHA Advisors, LLC is hereby authorized and directed by the City to cause to be furnished to prospective bidders a reasonable number of copies of said Official Notice of Sale and a reasonable number of copies of the Preliminary Official Statement relating to the Bonds.

SECTION 3.02. Negotiated Sale of Bonds. The Bonds are authorized to be sold by negotiated sale if either (a) no bids are received when the Bonds are offered for public sale under Section 3.01, or (b) bids are received but such bids are not satisfactory as to price or responsibility of the bidders as determined by a City Representative, as a result of which all bids are rejected. In such event, the Bonds are authorized to be sold by negotiation with an underwriter or investment bank which is designated by a City Representative upon consultation with NHA Advisors, LLC as municipal advisor to the City. The Bonds shall be sold to such underwriter or investment bank under the Bond Purchase Agreement in a form deemed advisable by a City Representative, whose execution shall be conclusive evidence of the City Council’s approval of such Bond Purchase Agreement. A City Representative is hereby authorized to accept a bid from such underwriter or investment bank to purchase the Bonds, and to execute the Bond Purchase Agreement on behalf of the City; provided that the true interest cost on the Bonds shall not exceed 8.00% and the underwriter’s discount shall not exceed 1.5% of the principal amount of the Bonds. If it is determined to sell the Bonds by negotiation, a

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City Representative shall disclose the identity of the underwriter at the public meeting first occurring after the bond underwriter has been selected, along with the estimated costs associated with the bond issuance and the circumstances that led to the negotiated sale.

SECTION 3.03. Official Statement. The Board hereby approves, and hereby deems final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934 (“Rule”), the Preliminary Official Statement describing the Bonds in substantially the form on file with the City Clerk. A City Representative is hereby authorized to execute an appropriate certificate stating the City Council’s determination that the Preliminary Official Statement has been deemed final within the meaning of such Rule. Distribution of the Preliminary Official Statement in connection with the sale of the Bonds is hereby approved. Each City Representative is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by a City Representative shall be conclusive evidence of the approval of any such changes and additions. The City Council hereby authorizes the distribution of the final Official Statement. The final Official Statement shall be executed in the name and on behalf of the City by a City Representative.

SECTION 3.04. Costs of Issuance Custodian Agreement. The City shall pay the costs of issuing the Bonds from original issue premium received from the Original Purchaser of the Bonds. The City Council hereby authorizes a City Representative to execute on behalf of the City a Costs of Issuance Custodian Agreement with The Bank of New York Mellon Trust Company, N.A. in substantially the form on file with the City Clerk. As provided in said agreement, amounts provided for payment of the costs of issuing the Bonds shall be deposited thereunder and the payment of costs shall be requisitioned by a City Representative in accordance with said agreement.

SECTION 3.05. Paying Agency Agreement. The City Council hereby authorizes a City Representative to execute on behalf of the City a Paying Agency Agreement with The Bank of New York Mellon Trust Company, N.A. in substantially the form on file with the City Clerk. As provided in said agreement, The Bank of New York Mellon Trust Company, N.A. will act as Paying Agent as described in this Resolution.

Section 3.06. Professional Services. The City Council hereby approves and confirms the engagement of NHA Advisors, LLC to act as the City’s municipal advisor in connection with the issuance and sale of the Bonds, and the engagement of Jones Hall, A Professional Law Corporation, to act as the City’s bond counsel and disclosure counsel in connection with the issuance of the Bonds, and authorizes City Representatives to engage any other parties required for the completion of the transaction.

ARTICLE IV

FUNDS AND ACCOUNTS
SECTION 4.01. Application of Proceeds of Sale of Bonds. On the Closing Date, the proceeds of sale of the Bonds shall be paid by the Original Purchaser to the City, and shall be applied on the Closing Date as follows: (a) the City shall cause to be transferred

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an amount of the original issue premium equal to the estimated Costs of Issuance to The Bank of New York Mellon Trust Company, N.A., to be held and administered in accordance with the agreement which is approved under Section 3.04; (b) after making the transfer described in the preceding clause (a), the City shall deposit in the Debt Service Fund any remaining original issue premium (if any) received by the City on the sale of the Bonds; and (c) the City shall deposit the remainder of such proceeds in the Project Fund.

SECTION 4.02. Project Fund. The City Council hereby establishes a special fund to be held by the City separate and apart from all other funds of the City, to be known as the Project Fund. The proceeds from the sale of the Bonds, to the extent required under Section 4.01(c), shall be deposited by the City in the Project Fund, and shall be expended by the City solely for the payment of the costs of acquisition or improvement of real property for which the Bond proceeds are authorized to be expended under the Bond Proposition. All interest and other gain arising from the investment of amounts deposited to the Project Fund shall be retained in the Project Fund and used for the purposes thereof. Any amounts remaining on deposit in the Project Fund and not needed for the purposes thereof shall be withdrawn from the Project Fund and transferred to the Debt Service Fund, to be applied to pay the principal of and interest and premium (if any) on the Bonds.

Expenditures by the City from the Project Fund shall be preceded by a determination that either (1) the project for which the Bond proceeds are authorized to be expended under the Bond Proposition is exempt from environmental review under the California Environmental Quality Act (“CEQA”) (Public Resources Code Section 21000 et seq.), the CEQA Guidelines (California Code of Regulations, Title 14, Section 15000 et seq.), or other statutory exemption, or (2) all environmental review necessary for the construction of the project has been completed, and the project proponent has provided the City evidence of planned compliance with all CEQA requirements and mitigation measures applicable to construction, and evidence of compliance with all CEQA requirements and mitigation measures applicable to preconstruction;
SECTION 4.03. Debt Service Fund. The City Council hereby establishes a special fund to be held by the City separate and apart from all other funds of the City, to be known as the Debt Service Fund. All taxes levied by the County, as directed by the City herein, for the payment of the principal of and interest and premium (if any) on the Bonds in accordance with Section 5.03 shall be deposited in the Debt Service Fund by the City promptly upon the receipt thereof from the County. The Debt Service Fund is hereby pledged for the payment of the principal of and interest and premium (if any) on the Bonds when and as the same become due. The City shall transfer amounts in the Debt Service Fund, to the extent necessary to pay the principal of and interest on the Bonds as the same become due and payable, to the Paying Agent as required to pay the principal of and interest and premium (if any) on the Bonds. Alternatively, the City may direct the County to transfer such taxes, in whole or in part, directly to the Paying Agent for the purpose of making payments of principal of and interest and premium (if any) on the Bonds.

If, after payment in full of the Bonds, any amounts remain on deposit in the Debt Service Fund, the City shall transfer such amounts to its General Fund, to be applied solely in a manner which is consistent with the requirements of applicable state and federal tax law.

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SECTION 4.04. Investments. The City shall invest all moneys held in any of the funds or accounts established with it hereunder in accordance with the investment policies of the City, as such policies shall exist at the time of investment, and in accordance with Section 53601 of the California Government Code.

ARTICLE V
OTHER COVENANTS OF THE CITY;

SECURITY FOR THE BONDS
SECTION 5.01. Punctual Payment. The City shall punctually pay, or cause to be paid, the principal of and interest on the Bonds, in strict conformity with the terms of the Bonds and of this Resolution, and shall faithfully observe and perform all of the conditions, covenants and requirements of this Resolution and of the Bonds. Nothing herein contained prevents the City from making advances of its own moneys howsoever derived to any of the uses or purposes permitted by law.

SECTION 5.02. Extension of Time for Payment. In order to prevent any accumulation of claims for interest after maturity, the City will not, directly or indirectly, extend or consent to the extension of the time for the payment of any claim for interest on any of the Bonds and will not, directly or indirectly, approve any such arrangement by purchasing or funding said claims for interest or in any other manner.

SECTION 5.03. Security for the Bonds. The Bonds are general obligations of the City and the City has the power, is obligated and hereby covenants to levy ad valorem taxes upon all property within the City subject to taxation by the City, without limitation of rate or amount, for the payment of the Bonds and the interest thereon, in accordance with the Bond Law and Section 43632 of the of the Government Code of the State of California.

Amounts in the General Fund of the City are not pledged to the payment of the Bonds.

However, nothing herein limits the ability of the City to provide for payment of the principal of and interest and premium (if any) on the Bonds from any source of legally available funds of the City. Any amounts so advanced by the City from legally available funds may be reimbursed from ad valorem property taxes subsequently collected under this Section 5.03.

SECTION 5.04. Books and Accounts; Financial Statement . The City will keep, or cause to be kept, proper books of record and accounts, separate from all other records and accounts of the City in which complete and correct entries are made of all transactions relating to the Bonds. Such books of record and accounts shall at all times during business hours be subject to the inspection of the Paying Agent and the Owners of not less than 10% in aggregate principal amount of the Bonds then Outstanding, or their representatives authorized in writing.

SECTION 5.05. Protection of Security and Rights of Bond Owners. The City will preserve and protect the security of the Bonds and the rights of the Bond Owners, and will warrant and defend their rights against all claims and demands of all persons. From and after the sale and delivery of any of the Bonds by the City, the City may not contest the authorization, issuance, sale or repayment of the Bonds.

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SECTION 5.06. Tax Treatment of the Bonds. The City Council hereby determines that it does not intend for the interest on the Bond to be excluded from gross income of the Owners of the Bonds for federal income tax purposes.

SECTION 5.07. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate, which a City Representative is hereby authorized and directed to execute and deliver on the Closing Date. Notwithstanding any other provision of this Resolution, failure of the City to comply with the Continuing Disclosure Certificate will not be considered a default by the City hereunder or under the Bonds; however, any Participating Original Purchaser (as such term is defined in the Continuing Disclosure Certificate) or any holder or beneficial owner of the Bonds may, take such actions as may be necessary and appropriate to compel performance, including seeking mandate or specific performance by court order.

SECTION 5.08. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Resolution, and for the better assuring and confirming unto the Owners of the Bonds of the rights and benefits provided in this Resolution.

ARTICLE VI

THE PAYING AGENT
SECTION 6.01. Appointment of Paying Agent. The Bank of New York Mellon Trust Company, N.A. is hereby appointed to act as Paying Agent for the Bonds. The Paying Agent undertakes to perform such duties, and only such duties, as are specifically set forth in this Resolution, and even during the continuance of an event of default with respect to the Bonds, no implied covenants or obligations shall be read into this Resolution against the Paying Agent. The Paying Agent shall signify its acceptance of the duties and obligations imposed upon it by this Resolution by executing and delivering to the City a certificate to that effect.

The City may remove the Paying Agent initially appointed, and any successor thereto, and may appoint a successor or successors thereto, but any such successor shall be a bank or trust company doing business and having an office in the State of California, having a combined capital (exclusive of borrowed capital) and surplus of at least $50,000,000, and subject to supervision or examination by federal or state authority. If such bank or trust company publishes a report of condition at least annually, under law or under the requirements of any supervising or examining authority above referred to, then for the purposes of this Section 6.01 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 Paying Agent may at any time resign by giving written notice to the City and the Bond Owners of such resignation. Upon receiving notice of such resignation, the City shall promptly appoint a successor Paying Agent by an instrument in writing. Any resignation or removal of the Paying Agent and appointment of a successor Paying

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Agent becomes effective upon acceptance of appointment by the successor Paying Agent.

SECTION 6.02. Paying Agent May Hold Bonds. The Paying Agent may become the Owner of any of the Bonds in its own or any other capacity with the same rights it would have if it were not Paying Agent.

SECTION 6.03. Liability of Paying Agent. The recitals of facts, covenants and agreements herein and in the Bonds contained shall be taken as statements, covenants and agreements of the City, and the Paying Agent assumes no responsibility for the correctness of the same, nor makes any representations as to the validity or sufficiency of this Resolution or of the Bonds, nor shall incur any responsibility in respect thereof, other than as set forth in this Resolution. The Paying Agent is not liable in connection with the performance of its duties hereunder, except for its own negligence or willful default.

In the absence of bad faith, the Paying Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Paying Agent and conforming to the requirements of this Resolution.

The Paying Agent has no liability for any error of judgment made in good faith by a responsible officer of its corporate trust department in the absence of the negligence of the Paying Agent.

No provision of this Resolution requires the Paying Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it has reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.

The Paying Agent may execute any of the powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Paying Agent is not responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

SECTION 6.04. Notice to Paying Agent. The Paying Agent may rely and shall be protected in acting or refraining from acting upon any notice, resolution, request, consent, order, certificate, report, warrant, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or proper parties. The Paying Agent may consult with counsel, who may be of counsel to the City, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

Whenever in the administration of its duties under this Resolution the Paying Agent deems it necessary or desirable that a matter be proved or established 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 Paying Agent, be deemed to be conclusively proved and established by a certificate of the City, and such certificate will be full warrant to the Paying Agent for any action taken or

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suffered under the provisions of this Resolution upon the faith thereof, but in its discretion the Paying Agent may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may seem reasonable.

SECTION 6.05. Compensation; Indemnification. The City will pay to the Paying Agent from time to time reasonable compensation for all services rendered under this Resolution, and also all reasonable expenses, charges, counsel fees and other disbursements, including those of their attorneys, agents and employees, incurred in and about the performance of their powers and duties under this Resolution. The City further agrees to indemnify the Paying Agent against any liabilities which it may incur in the exercise and performance of its powers and duties hereunder which are not due to its negligence or bad faith.

ARTICLE VII

REMEDIES OF BOND OWNERS
SECTION 7.01. Remedies of Bond Owners. Upon the happening and continuation of any default by the City hereunder or under the Bonds, any Bond Owner has the right, for the equal benefit and protection of all Bond Owners similarly situated:
(a) by mandamus, suit, action or proceeding, to compel the City and its members, officers, agents or employees to perform each and every term, provision and covenant contained in this Resolution and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the City and the fulfillment of all duties imposed upon it;
(b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the Bond Owners’ rights; or (c) by suit, action or proceeding in any court of competent jurisdiction, to require the City and its members and employees to account as if it and they were the trustees of an express trust.

SECTION 7.02. Remedies Not Exclusive. No remedy herein conferred upon the Owners of Bonds is exclusive of any other remedy. Each remedy is cumulative and shall be in addition to every other remedy given hereunder or thereafter conferred on the Bond Owners.

ARTICLE VIII

AMENDMENT OF THIS RESOLUTION
SECTION 8.01. Amendments Effective Without Consent of the Owners. For any one or more of the following purposes and at any time or from time to time, the City Council may by Supplemental Resolution amend this Resolution in whole or in part, without the consent of any of the Bond Owners:

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(a) to add to the covenants and agreements of the City in this Resolution, other covenants and agreements to be observed by the City which are not contrary to or inconsistent with this Resolution as theretofore in effect; (b) to confirm, as further assurance, any pledge under, and to subject to any lien or pledge created or to be created by, this Resolution, of any moneys, securities or funds, or to establish any additional funds or accounts to be held under this Resolution;
(c) to cure any ambiguity, supply any omission, or cure or correct any defect or inconsistent provision in this Resolution, which in any event does not materially adversely affect the interests of the Bond Owners, in the opinion of Bond Counsel filed with the City; or
(d) if applicable, to make such additions, deletions or modifications as may be necessary to assure compliance with the applicable provisions of the Tax Code relating to the rebate of excess investment earnings to the United States or otherwise as may be necessary to assure that the interest on the Bonds remains excludable from gross income of the Owners thereof for federal income tax purposes, in the opinion of Bond Counsel filed with the City.

SECTION 8.02. Amendments Effective With Consent to the Owners. Any modification or amendment of this Resolution and of the rights and obligations of the City and of the Owners of the Bonds, in any particular, may be made by a Supplemental Resolution, with the written consent of the Owners of a majority in aggregate principal amount of the Bonds Outstanding at the time such consent is given. Without the consent of the Owners of all affected Bonds, no such modification or amendment may (a) change the maturity of the principal of any Bonds or any interest payable thereon, (b) reduce the principal amount of the Bonds or the rate of interest thereon, (c) reduce the percentage of Bonds the consent of the Owners of which is required to effect any such modification or amendment, (d) change any of the provisions in Section 7.01 relating to a default by the City hereunder or under the Bonds, (e) reduce the amount of moneys pledged for the repayment of the Bonds. Without the consent of the Paying Agent, no such modification or amendment may change or modify any of the rights or obligations of the Paying Agent.

ARTICLE IX

MISCELLANEOUS
SECTION 9.01. Benefits of Resolution Limited to Parties. Nothing in this Resolution, expressed or implied, is intended to give to any person other than the City, the Paying Agent and the Owners of the Bonds, any right, remedy, claim under or by reason of this Resolution. Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the City shall be for the sole and exclusive benefit of the Owners of the Bonds.

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SECTION 9.02. Defeasance.
(a) Discharge of Resolution. Bonds may be paid by the City, in whole or in part, in any of the following ways provided that the City also pays or causes to be paid any other sums payable hereunder by the City:
(i) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable; (ii) by irrevocably depositing, in trust, at or before maturity, money or securities in the necessary amount to pay such Bonds as provided in Section 9.02(c); or
(iii) by delivering such Bonds to the Paying Agent for cancellation by it.

If the City pays all Outstanding Bonds and also pays or causes to be paid all other sums payable hereunder by the City, then and in that case, at the election of the City (evidenced by a certificate of a City Representative filed with the Paying Agent, signifying the intention of the City to discharge all such indebtedness and this Resolution), and notwithstanding that any Bonds have not been surrendered for payment, this Resolution, all taxes and other assets pledged under this Resolution and all covenants, agreements and other obligations of the City under this Resolution shall cease, terminate, become void and be completely discharged and satisfied, except only as provided in Section 9.02(b). In such event, upon request of the City, the Paying Agent 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 shall execute and deliver to the City all such instruments as may be necessary to evidence such discharge and satisfaction, and the Paying Agent shall pay over, transfer, assign or deliver to the City all moneys or securities or other property held by it under this Resolution which are not required for the payment of Bonds not theretofore surrendered for such payment. (b) Discharge of Liability on Bonds. Upon the deposit, in trust, at or before maturity, of money or securities in the necessary amount to pay any Outstanding Bond Bonds as provided in Section 9.02(c), then all liability of the City in respect of such Bond will cease and be completely discharged, except only that thereafter the Owner thereof is entitled only to payment of the principal of and interest on such Bond by the City, and the City remains liable for such payment, but only out of such money or securities deposited with the Paying Agent as aforesaid for such payment, provided further, however, that the provisions of Section 9.02(d) apply in all events.

The City may at any time surrender to the Paying Agent for cancellation by it any Bonds previously issued and delivered, which the City acquires in any manner whatsoever, and such Bonds, upon such surrender and cancellation, will be deemed paid and retired. (c) Deposit of Money or Securities with Paying Agent. Whenever in this Resolution it is provided or permitted that there be deposited with or held in trust by the Paying Agent money or securities in the necessary amount to pay any Bonds, the money or securities so to be deposited or held may include money or securities held by the Paying Agent in the funds and accounts established under this Resolution and must be:

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(i) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity; or
(ii) Federal Securities the principal of and interest on which when due, in the opinion of a certified public accountant delivered to the City, will provide money sufficient to pay the principal of and all unpaid interest to maturity on the Bonds to be paid, as such principal and interest become due.
(d) Payment of Bonds After Discharge of Resolution. Notwithstanding any provisions of this Resolution, any moneys held by the Paying Agent in trust for the payment of the principal of, or interest on, any Bonds and remaining unclaimed for two years after the principal of all of the Bonds has become due and payable, if such moneys were so held at such date, or two years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall, upon request of the City, be repaid to the City free from the trusts created by this Resolution, and all liability of the Paying Agent with respect to such moneys shall thereupon cease.

Before the repayment of such moneys to the City as aforesaid, the Paying Agent may (at the cost of the City) first mail to the Owners of all Bonds which have not been paid at the addresses shown on the Registration Books a notice in such form as may be deemed appropriate by the Paying Agent, with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the City of the moneys held for the payment thereof.

SECTION 9.03. Execution of Documents and Proof of Ownership by Bond Owners. Any request, declaration or other instrument which this Resolution may require or permit to be executed by Bond Owners may be in one or more instruments of similar tenor, and shall be executed by Bond Owners in person or by their attorneys appointed in writing.

Except as otherwise herein expressly provided, the fact and date of the execution by any Bond Owner or his attorney of such request, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.

Except as otherwise herein expressly provided, the ownership of registered Bonds and the amount, maturity, number and date of holding the same are proved by the Registration Books.

Any request, declaration or other instrument or writing of the Owner of any Bond binds all future Owners of such Bond in respect of anything done or suffered to be done by the City or the Paying Agent in good faith and in accordance therewith.

SECTION 9.04. Waiver of Personal Liability. No City Council member, officer, agent or employee of the City has any individual or personal liability for the payment of the principal of or interest on the Bonds. Nothing herein contained relieves any City Council

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member, officer, agent or employee from the performance of any official duty provided by law.

SECTION 9.05. Destruction of Canceled Bonds. Whenever in this Resolution provision is made for the surrender to the City of any Bonds which have been paid or canceled under the provisions of this Resolution, a certificate of destruction duly executed by the Paying Agent constitutes the equivalent of the surrender of such canceled Bonds and the City is entitled to rely upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to.

SECTION 9.06. Partial Invalidity. If any section, paragraph, sentence, clause or phrase of this Resolution is for any reason held illegal or unenforceable, such holding will not affect the validity of the remaining portions of this Resolution. The City hereby declares that it would have adopted this Resolution and each and every other section, paragraph, sentence, clause or phrase hereof and authorized the issue of the Bonds pursuant hereto irrespective of the fact that any one or more sections, paragraphs, sentences, clauses, or phrases of this Resolution may be held illegal, invalid or unenforceable.

SECTION 9.07. Execution of Documents. Each City Representative, and any and all other officers of the City, are each authorized and directed in the name and on behalf of the City to make any and all certificates, requisitions, agreements, notices, consents, warrants and other documents, which they or any of them might deem necessary or appropriate in order to consummate the lawful issuance, sale and delivery of the Bonds, including an agreement for paying agent services. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf in the case such officer shall be absent or unavailable.

SECTION 9.08. Effective Date of Resolution. This Resolution becomes effective upon the date of its passage and adoption.

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The foregoing resolution was adopted by the City Council of Berkeley, California on May 20, 2025, by the following:

Ayes:

Noes:

Absent:

Abstain:

Adena Ishii, Mayor
Attest:

Mark Numainville, City Clerk

APPENDIX A

FORM OF BOND
REGISTERED BOND NO. R-___ ***$***

CITY OF BERKELEY
2025 GENERAL OBLIGATION BOND, SERIES C
(2018 Election Measure O: Affordable Housing) (Federally Taxable) INTEREST RATE: MATURITY DATE: DATED DATE: CUSIP
% per annum September 1, ________, 2025 [_____]
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: THOUSAND DOLLARS
The CITY OF BERKELEY, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”), for value received, hereby promises to pay to the Registered Owner named above, or registered assigns, the Principal Amount set forth above on the Maturity Date set forth above, together with interest thereon at the Interest Rate set forth above, calculated on a 30/360 day basis, until the Principal Amount hereof is paid or provided for, such interest to be paid on March 1 and September 1 of each year, commencing September 1, 2025 (the “Interest Payment Dates”). This Bond will bear interest from the Interest Payment Date next preceding the date of authentication hereof, unless (a) it is authenticated as of a business day following the 15th day of the month immediately preceding any Interest Payment Date and on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (b) it is authenticated on or before [August 15, 2025], in which event it shall bear interest from the Dated Date set forth above.

Principal, interest and redemption premium (if any) are payable in lawful money of the United States of America to the person in whose name this Bond is registered (the “Registered Owner”) on the Bond registration books maintained by the Paying Agent, initially The Bank of New York Mellon Trust Company, N.A., Dallas, Texas.

Principal hereof and any redemption premium hereon are payable upon presentation and surrender of this Bond at the principal corporate trust office of the Paying Agent.

Interest hereon is payable by check mailed by the Paying Agent on each Interest Payment Date to the Registered Owner of this Bond by first-class mail at the address appearing on the Bond registration books at the close of business on the 15 th day of the calendar month next preceding such Interest Payment Date (the “Record Date”); provided, however, that at the written request of the registered owner of Bonds in an aggregate principal amount of at least $1,000,000, which written request is on file with the Paying Agent prior to any Record Date, interest on such Bonds shall be paid on each

succeeding Interest Payment Date by wire transfer in immediately available funds to such account of a financial institution within the United States of America as shall be specified in such written request.

This Bond is one of a series of $35,000,000 aggregate principal amount of bonds (collectively, the “2025 Bonds”) issued for the purpose of raising money to finance the acquisition and improvement of affordable housing, and to pay all necessary legal, financial, engineering and contingent costs in connection therewith. The 2025 Bonds have been issued under authority of and under the laws of the State of California, and the requisite two-thirds vote of the electors of the City cast at an election held on November 6, 2018, upon the question of issuing bonds in the aggregate principal amount of $135,000,000, and under a resolution of the City Council of the City adopted on May 20, 2025 (the “Bond Resolution”). The 2025 Bonds are payable as to both principal and interest from the proceeds of the levy of ad valorem taxes on all property subject to such taxes in the City, which taxes are unlimited as to rate or amount.

The principal of and interest and redemption premium, if any, on this Bond do not constitute a debt of the County, the State of California, or any of its political subdivisions other than the City, or any of the officers, agents and employees thereof, and neither the County, the State of California, any of its political subdivisions other than the City, nor any of the officers, agents and employees thereof shall be liable hereon. In no event shall the principal of and interest and redemption premium, if any, on this Bond be payable out of any funds or properties of the City other than ad valorem taxes levied upon all taxable property in the City.

The 2025 Bonds are issuable only as fully registered bonds in the denominations of $5,000 or any integral multiple thereof. This Bond is exchangeable and transferable for bonds of other authorized denominations at the principal corporate trust office of the Paying Agent, by the Registered Owner or by a person legally empowered to do so, upon presentation and surrender hereof to the Paying Agent, together with a request for exchange or an assignment signed by the Registered Owner or by a person legally empowered to do so, in a form satisfactory to the Paying Agent, all subject to the terms, limitations and conditions provided in the Bond Resolution. Any tax or governmental charges shall be paid by the transferor. The City and the Paying Agent may deem and treat the Registered Owner as the absolute owner of this Bond for the purpose of receiving payment of or on account of principal or interest and for all other purposes, and neither the City nor the Paying Agent shall be affected by any notice to the contrary.

The 2025 Bonds maturing on or before September 1, 2034, are not subject to redemption prior to their respective stated maturities. The 2025 Bonds maturing on or after September 1, 2035, are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on September 1, 2034, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium.

The 2025 Bonds maturing on September 1, 20[__], September 1, 20[__] and September 1, 20[__] (the “Term Bonds”) are subject to redemption prior to their stated maturity date, without a redemption premium, in part by lot, from mandatory sinking fund

payments on each September 1, on and after September 1, 20[__] in the principal amounts as set forth in the following tables:
$_________ Term Bond Due September 1, 20__
Payment Date
(September 1)
Payment
Amount
$_________ Term Bond Due September 1, 20__
Payment Date
(September 1)
Payment
Amount
$_________ Term Bond Due September 1, 20__
Payment Date
(September 1)
Payment
Amount
The Paying Agent shall give notice of the redemption of the 2025 Bonds at the expense of the City. Such notice shall specify: (a) that the 2025 Bonds or a designated portion thereof are to be redeemed, (b) the numbers and CUSIP numbers of the 2025 Bonds to be redeemed, (c) the date of notice and the date of redemption, (d) the place or places where the redemption will be made, and (e) descriptive information regarding the 2025 Bonds including the dated date, interest rate and stated maturity date. Such notice shall further state that on the specified date there shall become due and payable upon each 2025 Bond to be redeemed, the portion of the principal amount of such 2025 Bond to be redeemed, together with interest accrued to said date, the redemption premium, if any, and that from and after such date interest with respect thereto shall cease to accrue and be payable.

Notice of any redemption of 2025 Bonds shall be mailed by first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, to the respective Owners of any 2025 Bonds designated for redemption, at their addresses appearing on the bond registration books maintained by the Paying Agent; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice shall not affect the validity of the proceedings for the redemption of such 2025 Bonds or the cessation of accrual of interest thereon from and after the redemption date.

The City may provide conditional notices of optional redemption, and the City is entitled to rescind any notice of optional redemption of the 2025 Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the Owners or any other party related to or arising from such rescission.

Neither the City nor the Paying Agent will be required: (a) to issue or transfer any Bond during a period beginning with the opening of business on the 15 th calendar day next preceding either any Interest Payment Date or any date of selection of any 2025 Bond to be redeemed and ending with the close of business on the Interest Payment Date or a day on which the applicable notice of redemption is given, or (b) to transfer any Bond which has been selected or called for redemption in whole or in part.

Reference is made to the Bond Resolution for a more complete description of the provisions, among others, with respect to the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the Paying Agent and the Registered Owners, and the terms and conditions upon which the 2025 Bonds are issued and secured. The owner of this Bond assents, by acceptance hereof, to all of the provisions of the Bond Resolution.

It is certified, recited and declared that all acts and conditions required by the Constitution and laws of the State of California to exist, to be performed or to have been met precedent to and in the issuing of the 2025 Bonds in order to make them legal, valid and binding general obligations of the City, have been performed and have been met in regular and due form as required by law; that payment in full for the 2025 Bonds has been received; that no statutory or constitutional limitation on indebtedness or taxation has been exceeded in issuing the 2025 Bonds; and that due provision has been made for levying and collecting ad valorem property taxes on all of the taxable property within the City in an amount sufficient to pay principal and interest when due, and for levying and collecting such taxes the full faith and credit of the City are hereby pledged.

This Bond shall not be valid or obligatory for any purpose and shall not be entitled to any security or benefit under the Bond Resolution until the Certificate of Authentication below has been manually signed by the Paying Agent.

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the City or the Paying Agent for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of 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.

IN WITNESS WHEREOF, the City of Berkeley has caused this Bond to be executed by the facsimile signature of its Mayor and attested by the facsimile signature of its City Clerk, all as of the date stated above.

CITY OF BERKELEY
By
Mayor
Attest:

City Clerk

CERTIFICATE OF AUTHENTICATION
This Bond is one of the Bonds described in the Bond Resolution referred to herein.

Date of Authentication: ________, 2025

THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Paying
Agent
By
Authorized Signatory

ASSIGNMENT
For value received, the undersigned do(es) hereby sell, assign and transfer unto (Name, Address and Tax Identification or Social Security Number of Assignee) the within Bond and do(es) hereby irrevocably constitute and appoint ______________________
attorney, to transfer the same on the registration books of the Bond Registrar, with full power of substitution in the premises.

Dated: ______________
Signature Guaranteed:

Note: Signature(s) must be guaranteed by an
eligible guarantor institution.

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

APPENDIX B

REQUIRED DISCLOSURES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1
The following estimates have been provided by NHA Advisors, LLC, the City’s municipal advisor, as of April, 14, 2025:

1. Estimated True Interest Cost of the Bonds: 5.83%

2. Estimated finance charge of the Bonds, being the sum of all fees and charges paid to third parties, in the amount of approximately $475,000. Such amount consists of costs of issuing the Bonds in the amount of approximately $195,000 together with estimated underwriter’s compensation in the amount of $280,000.

3. Estimated proceeds of the Bonds expected to be received by the City for deposit to the Project Fund, net of proceeds for Costs of Issuance in (2) above to paid, capitalized interest and reserves (if any) from the principal amount of the Bonds: $35,000,000.

4. Estimated Total Payment Amount for the Bonds, being the sum of all debt service to be paid on the Bonds to final maturity:
$$70,962,730.

*All amounts and percentages are estimates, and are made in good faith by the City based on information available as of the date of adoption of this Resolution. Estimates include certain assumptions regarding federally taxable interest rates available in the bond market at the time of pricing the Bonds.
1915930.1

PRELIMINARY OFFICIAL STATEMENT DATED _________, 2025
NEW ISSUE - FULL BOOK-ENTRY RATING: S&P: “___”
See “RATING.”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, under existing law, the interest on the Bonds is not excluded from gross income for federal income tax purposes . In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes . Bond Counsel expresses no opinion regarding any other tax consequences caused by the ownership or disposition of, or the accrual or receipt of interest on, the Bonds . See "LEGAL MATTERS – No Federal Tax Exemption.”
$________*

CITY OF BERKELEY
2025 General Obligation Bonds, Series C
(2018 Election Measure O: Affordable Housing)
(Federally Taxable)
Dated: Date of Delivery Due September 1, as shown on inside front cover Issuance. The general obligation bonds captioned above (the “Bonds”) are being issued by the City of Berkeley (the “City”) under provisions of the California Government Code and under a Resolution adopted by the City Council of the City (th e “City Council”) on May 20, 2025 (the “Bond Resolution”). The Bonds were authorized at an election of the registered voters of the City held on November 6, 2018, which authorized the issuance of general obligation bonds for the purpose of financing the improvement and acquisition of affordable housing (the “2018 Authorization”) . The Bonds are the third series of bonds to be sold and issued under the 2018 Authorization. See “THE BONDS – Authority for Issuance.” Purpose. The Bonds are being issued for the purpose of financing the improvement and acquisition of affordable housing. See “PLAN OF FINANCE – Purpose of Issue.”
Security. The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied by the City and collected by Alameda County (the “County”). The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS.” Book-Entry Only. The Bonds will be issued in book -entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”) . The Bonds are issuable as fully registered securities in denominations of $5,000 or any integral multiple of $5,000. Purchasers of the Bonds (the “Beneficial Owners”) will not receive physical certificates representing their interest in the Bonds . See “THE BONDS” and “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
Payments. Interest on the Bonds accrues from the date of delivery and is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2025. Payments of principal and interest on the Bonds will be paid by The Bank of New York Mellon Trust Company, N.A., as Paying Agent, to DTC for subsequent disbursement to DTC Participants, which will remit such payments to the Beneficial Owners of the Bonds . See “THE BONDS - Description of the Bonds.” Redemption. The Bonds are subject to optional and mandatory redemption prior to maturity . See “THE BONDS – Redemption.”
The following firm, serving as municipal advisor to the City, has structured this issue.

Maturity Schedule
(See inside cover)
Cover Page . This cover page contains certain information for general reference only . It is not a summary of all the provisions of the Bonds. Prospective investors must read the entire Official Statement to obtain information essential to making an informed investment decision.

The Bonds will be offered when, as and if issued and accepted by the Purchaser, subject to the approval as to legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel to the City, and subject to certain other conditions. Jones Hall is also serving as Disclosure Counsel to the City . Certain legal matters are being passed upon for the City by the City Attorney . It is anticipated that the Bonds, in book entry form, will be available for delivery by DTC in New York, New York, on or about July 1, 2025*.

The date of this Official Statement is _________, 2025. * Preliminary; subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment . These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form . Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Agenda VersionPage 32 of 128

MATURITY SCHEDULE
(Base CUSIP†: _____)

Maturity Date
(September 1)
Principal
Amount
Interest
Rate

Yield

Price CUSIP†

C: Priced to first par optional call date of September 1, 20__.

† CUSIPÒ is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, which is owned by FactSet Research Systems Inc. (“FactSet”). FactSet will manage the CUSIP system on behalf of the American Bankers Association. Neither the City nor the Underwriter takes any responsibility for the accuracy of the CUSIP data.

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

Use of Official Statement. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose .

This Official Statement is not a contract between any bond owner and the City or the Purchaser. This Official Statement and the information contained herein are subject to completion or amendment without notice.

No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the City or the Purchaser to give any information or to make any representations relating to the Bonds other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Purchaser.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Estimates and Projections. When used in this Official Statement and in any continuing disclosure by the City, in any press release and in any oral statement made with the approval of an authorized officer of the City, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “forecast,” “expect,” “intend” and similar expressions identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 . Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material.

Information in Official Statement. The information set forth in this Official Statement has been furnished by the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by the City.

Involvement of Purchaser. The Purchaser (as defined in “UNDERWRITING”) has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the Federal Securities Laws as applied to the facts and circumstances of this transaction, but the Purchaser does not guarantee the accuracy or completeness of such information.

Document Summaries. All summaries of the Bond Resolution or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statement s of any or all of such provisions.

No Securities Laws Registration. The Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Bonds have not been registered or qualified under the securities laws of any state.

Effective Date . This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the City, or the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement.

Website. The City maintains a website; however, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.

CITY OF BERKELEY

ELECTED OFFICIALS

Adena Ishii, Mayor
Rashi Kesarwani, Councilmember District 1
Terry Taplin, Councilmember District 2
Ben Bartlett, Councilmember District 3
Igor Tregub, Councilmember District 4
Shoshana O’Keefe, Councilmember District 5
Brent Blackaby, Councilmember District 6
Cecilia Lunaparra, Councilmember District 7
Mark Humbert, Councilmember District 8

CITY OFFICIALS
Paul Buddenhagen
City Manager

Henry Oyekanmi
Director of Finance

David White
Deputy City Manager
Farimah Brown
City Attorney
Jenny Wong
City Auditor

PROFESSIONAL SERVICES

BOND AND DISCLOSURE COUNSEL

Jones Hall, A Professional Law Corporation
San Francisco, California

MUNICIPAL ADVISOR

NHA Advisors, LLC
San Rafael, California

BOND REGISTRAR, TRANSFER AGENT, AND PAYING AGENT

The Bank of New York Mellon Trust Company, N.A.

Dallas, Texas

i

TABLE OF CONTENTS

INTRODUCTION ......................................................................................................................................... 1 PLAN OF FINANCE ..................................................................................................................................... 3 Purpose of Issue .................................................................................................................................... 3 Sources and Uses of Funds .................................................................................................................. 3 THE BONDS ................................................................................................................................................ 4 Authority for Issuance ............................................................................................................................ 4 Description of the Bonds ....................................................................................................................... 4 Payment ................................................................................................................................................ 5 Redemption ........................................................................................................................................... 5 Registration, Transfer and Exchange of Bonds ..................................................................................... 7 Defeasance ........................................................................................................................................... 7 DEBT SERVICE SCHEDULE ...................................................................................................................... 8 SECURITY FOR THE BONDS .................................................................................................................. 10 Ad Valorem Taxes ............................................................................................................................... 10 Debt Service Fund ............................................................................................................................... 10 Limited Obligation ................................................................................................................................ 11 PROPERTY TAXATION ............................................................................................................................ 11 Property Tax Collection Procedures .................................................................................................... 11 Taxation of State-Assessed Utility Property ........................................................................................ 12 Assessed Valuation ............................................................................................................................. 12 Alternative Method of Tax Apportionment - Teeter Plan ..................................................................... 16 Appeals of Assessed Value ................................................................................................................. 17 Tax Rates ............................................................................................................................................ 18 Major Taxpayers .................................................................................................................................. 19 Direct and Overlapping Debt ............................................................................................................... 20

CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS .......................................................................................................................... 21

Article XIIIA of the State Constitution .................................................................................................. 21 Legislation Implementing Article XIIIA ................................................................................................. 21 Article XIIIB of the State Constitution .................................................................................................. 22 Articles XIIIC and XIIID of the State Constitution ................................................................................ 22 Proposition 62 ...................................................................................................................................... 23 Proposition 1A ..................................................................................................................................... 24 Proposition 22 ...................................................................................................................................... 24 Possible Future Initiatives .................................................................................................................... 25 LEGAL MATTERS ..................................................................................................................................... 25 No Federal Tax Exemption .................................................................................................................. 25 Continuing Disclosure .......................................................................................................................... 25 Absence of Material Litigation ............................................................................................................. 26 RATING ..................................................................................................................................................... 26 MUNICIPAL ADVISOR .............................................................................................................................. 27 UNDERWRITING ....................................................................................................................................... 27

APPENDIX A - FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF

BERKELEY AND ALAMEDA COUNTY
APPENDIX B - ANNUAL FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2024

APPENDIX C - PROPOSED FORM OF OPINION OF BOND COUNSEL

APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE

APPENDIX E - DTC AND THE BOOK-ENTRY ONLY SYSTEM

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__________________________________

OFFICIAL STATEMENT
__________________________________

$________*

CITY OF BERKELEY
2025 General Obligation Bonds, Series C
(2018 Election Measure O: Affordable Housing)
(Federally Taxable)

The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Bonds”) by the City of Berkeley (the “City”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Bond Resolution (as defined below).

INTRODUCTION

This Introduction is not a summary of this Official Statement . It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described in this Official Statement. A full review should be made of the entire Official Statement. The offering of Bonds to potential investors is made only by means of the entire Official Statement.

The City. The City is located in Alameda County (the “ County”) on the east side of the San Francisco Bay, approximately 10 miles northeast of San Francisco. The City encompasses a total area of approximately 19 square miles and had an estimated January 1, 2024, population of 125,327, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City. The University of California is a major component of the City's economy, employing more than 265,000 full and part -time workers across all University of California campuses.

The City is among the oldest in California. The City was founded in 1864, incorporated as a town in 1878, and incorporated as a city in 1909. The City's charter was adopted in 1895.

See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF BERKELEY AND ALAMEDA COUNTY” and “APPENDIX B – COMPREHENSIVE ANNUAL FINANCIAL REPORT FOR YEAR ENDED JUNE 30, 2024,” for demographic and financial information regarding the City. The City is currently facing significant budget deficits. See “ APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION FOR THE CITY OF BERKELEY AND ALAMEDA COUNTY - General Fund Budget - Adopted Biennial Budget above.” However, it is important to understand that the Bonds

* Preliminary; subject to change.

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described herein are voter-approved general obligations of the City payable solely from the levy and collection of ad valorem property taxes, unlimited as to rate or amount, and are not payable from the general fund of the City.

Authority for Issuance. The Bonds are being issued under Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California, and pursuant to and consistent with the Charter of the City. The City authorized the issuance of the Bonds under a Resolution adopted by the City Council of the City (the “ City Council”) on May 20, 2025 (the “Bond Resolution”). The Bonds are the third series of bonds issued under the 2018 Authorization. Following the issuance of the Bonds, there will be $________ remaining under the 2018 Authorization.
* See “THE BONDS – Authority for Issuance.”

Purpose for Issuance. The net proceeds of the Bonds will be used to finance affordable housing projects, as approved by the voters at an election held in the City on November 6, 2018 (the “Bond Election”) with respect to the bond measure known as Measure O. See “PLAN OF FINANCE – Purpose of Issue.”

Security and Sources of Payment for the Bonds. The Bonds are general obligations of the City payable solely from ad valorem property taxes levied by the City and collected by the County. The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of interest on, and principal of, the Bonds upon all property subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property that is taxable at limited rates). See “SECURITY FOR THE BONDS.”

Payment and Registration of the Bonds. The Bonds will be dated their date of original issuance and delivery (the “ Dated Date”) and will be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple of $5,000, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available under the book -entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described below. Beneficial Owners will not be entitled to receive physical delivery of the Bonds . See “THE BONDS” and “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

Interest on the Bonds accrues from the Dated Date and is payable semiannually on March 1 and September 1 of each year, commencing September 1, 2025 . See “THE BONDS – Description of the Bonds.”

Early Redemption. The Bonds are subject to optional and mandatory redemption prior to their maturity as described in “THE BONDS - Redemption.”

Other Information. This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of documents referred to in this Official Statement and information concerning the Bonds are available from the City of Berkeley City Clerk, 2180 Milvia Street, Berkeley, California 94704, (510) 981-7000. The City may impose a charge for copying, mailing and handling.

* Preliminary; subject to change.

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PLAN OF FINANCE

Purpose of Issue

The proceeds of the Bonds will be used to finance projects approved by more than the requisite 2/3 of City voters at the Bond Election. The abbreviated form of the ballot measure for Measure O was:

“Shall the measure to issue $135 million in bonds to create and preserve affordable housing for low-income households, working families, and individuals including teachers, seniors, veterans, the homeless, and persons with disabilities; subject to citizen oversight and independent audits, be adopted?”

The Bonds will be the third series of bonds issued pursuant to the authority received at the Bond Election.

Sources and Uses of Funds

The estimated sources and uses of funds with respect to the Bonds will be applied as follows:

Sources of Funds
Principal Amount of Bonds
Plus: Net Original Issue Premium
Less: Purchaser’s Discount
Total Sources

Uses of Funds
Deposit to Project Fund
Deposit to Debt Service Fund
Costs of Issuance(1)
Total Uses

(1) Includes Municipal Advisor fees, Bond Counsel and Disclosure Counsel fees, printing costs, rating agency fees and other related costs.

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THE BONDS

Authority for Issuance

The Bonds are issued under Article 4.5 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”) and other applicable law, and pursuant to the City’s powers under and consistent with the Charter of the City . The City Council authorized the issuance of the Bonds pursuant to the Bond Resolution.

The net proceeds of the Bonds will be used to finance affordable housing projects, as approved by the voters at an election held in the City on November 6, 2018 (the “Bond Election”) with respect to the bond measure known as Measure O.

The City received authorization at the Bond Election, by an affirmative vote of more than 2/3 of the eligible voters within the City (the “ 2018 Authorization”) to issue $ 135,000,000 of general obligation bonds. The Bonds are the third series of Bonds to be sold and issued under the 2018 Authorization.

Description of the Bonds

Book-Entry Form. The Bonds will be issued in book -entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers of the Bonds (the “Beneficial Owners”) will not receive physical certificates representing their interest in the Bonds. Payments of principal of and interest on the Bonds will be paid by the Paying Agent to DTC for subsequent disbursement to DTC Participants which will remit such payments to the Beneficial Owners of the Bonds.

As long as DTC’s book -entry method is used for the Bonds, the Paying Agent will send any notice of prepayment or other notices to owners only to DTC . Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the prepayment of the Bonds called for prepayment or of any other action premised on such notice.

The Paying Agent, the City, and the Purchaser of the Bonds have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Bonds.

See “APPENDIX E – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

Interest. Interest on the Bonds is payable semiannually on March 1 and September 1 of each year (the “Interest Payment Dates”), commencing September 1, 2025.

Interest on the Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless:

1. a Bond is authenticated as of an Interest Payment Date, in which event it will bear interest from such date,

2. a Bond is authenticated prior to an Interest Payment Date and after the close of business on the 15th day of the month preceding the Interest Payment Date (each,

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a “Record Date”), in which event it will bear interest from such Interest Payment Date,

3. a Bond is authenticated on or before August 15, 2025, in which event it shall bear interest from the Closing Date, or

4. at the time of authentication of a Bond, interest is in default thereon, in which event it will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Interest on the Bonds will be calculated on the basis of a 360-day year comprised of twelve 30-day months.

Denominations and Maturity. The Bonds shall be issued in denomination s of $5,000 each or any integral multiple of $5,000 . The Bonds mature on September 1 in the years and amounts set forth on the inside cover page hereof.

See the maturity schedule on the inside cover page hereof and “DEBT SERVICE SCHEDULE” below.

Payment

Interest on the Bonds (including the final interest payment upon maturity) is payable by check of the Paying Agent mailed to the owner thereof at such owner’s address as it appears on the Registration Books (as defined below) at the close of business on the preceding Record Date, except that at the written request of the Owner of at least $1,000,000 aggregate principal amount of the Bonds, which written request is on file with the Paying Agent as of any Record Date, interest on such Bonds shall be paid by wire transfer on the succeeding Interest Payment Date to an account in the United States of America as shall be specified in such written request.

Principal of and premium (if any) on the Bonds is payable in lawful money of the United States of America upon presentation and surrender at the principal office of the Paying Agent.

Redemption
*

Optional Redemption. The Bonds maturing on or before September 1, 20__, are not subject to redemption prior to their respective stated maturities . The Bonds maturing on or after September 1, 20__, are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as designated by the City and by lot within a maturity, from any available source of funds, on September 1, 20__, and on any date thereafter, at a redemption price equal to 100% of the princip al amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption. The Term Bonds maturing on September 1, 20__ and September 1, 20__ (the “Term Bonds”) are subject to redemption prior to their stated maturity date, without a redemption premium, in part by lot, from mandatory sinking fund payments on each September 1, on and after September 1, 20__, in the principal amounts as set forth in the following tables:

* Preliminary; subject to change.

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$_______ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

(Maturity)

$_______ Term Bond Due September 1, 20__

Payment Date
(September 1)
Payment
Amount

(Maturity)

If some but not all of the Term Bonds have been optionally redeemed , the aggregate principal amount of Term Bonds to be subject to Mandatory Sinking Fund Redemption in each year will be reduced on a pro rata basis in integral multiples of $5,000, as designated in written notice filed by the City with the Paying Agent.

Redemption Procedure. The Paying Agent will cause notice of any redemption to be mailed, first class mail, postage prepaid, at least 20 days but not more than 60 days prior to the date fixed for redemption, (i) to the Securities Depositories and the Municipal Securities Rulemaking Board, and (ii) to the respective Owners of any Bonds designated for redemption, at their addresses appearing on the Registration Books (as defined below) maintained by the Paying Agent. Such mailing will not be a condition precedent to such redemption and failure to mail or to receive any such notice will not affect the validity of the proceedings for the redemption of such Bonds.

The City is entitled to send a redemption notice that declares that the redemption is conditional upon the availability of moneys to accomplish the redemption, and the City may rescind any notice of optional redemption of the Bonds by written notice to the Paying Agent on or prior to the date fixed for redemption, and the Paying Agent shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under this section. Any notice of redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption. The City and the Paying Agent have no liability to the Owners or any other party related to or arising from such rescission.

A redemption notice will state the redemption date and the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, will designate the serial numbers of the Bonds to be redeemed by giving the individual number of each Bond or by stating that all Bonds between two stated numbers, both inclusive, or by stating that all of the Bonds of one or more maturities have been called for redemption, and will require that such Bonds be then surrendered at the principal office of the Paying Agent for redemption at the said redemption price, giving notice also that further interest on such Bonds will not accrue from and after the redemption date.

Partial Redemption. Upon surrender of Bonds redeemed in part only, the City will execute and the Paying Agent will authenticate and deliver to the owner, at the expense of the

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City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption . From and after the date fixed for redemption, if notice of such redemption has been duly given and funds available for the payment of the principal of and interest (and premium, if any) on the Bonds so called for redemption have been duly provided, such Bonds so called will cease to be entitled to any benefit under the Bond Resolution other than the right to receive payment of the redemption price, and no interest will accrue thereon on or after the redemption date specified in such notice.

Registration, Transfer and Exchange of Bonds

If the book -entry system as described above and in Appendix E is no longer used with respect to the Bonds, the following provisions will govern the registration, transfer, and exchange of the Bonds.

Registration Books. The Paying Agent will keep or cause to be kept sufficient books for the registration and transfer of the Bonds (the “ Registration Books”), which will at all times be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on said books, the Bonds.

Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation at the principal office of the Paying Agent, accompanied by delivery of a written instrument of transfer in a form approved by the Paying Agent, duly executed. The City may charge a reasonable sum for each new Bond issued upon any transfer.

Whenever any Bond or Bonds are surrendered for transfer, the City will execute and the Paying Agent will authenticate and deliver a new Bond or Bonds, for like aggregate principal amount.

Exchange. Bonds may be exchanged at the principal office of the Paying Agent for a like aggregate principal amount of Bonds of authorized denominations and of the same maturity. The City may charge a reasonable sum for each new Bond issued upon any exchange.

Defeasance

The City has the option to pay and discharge the entire indebtedness on all or any portion of the outstanding Bonds in any one or more of the following ways:

(a) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;

(b) by irrevocably depositing, in trust, at or before maturity:

(i) lawful money of the United States of America in an amount equal to the principal amount of such Bonds and all unpaid interest thereon to maturity; or

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(ii) Federal Securities (as defined below), the principal of and interest on, which when due, in the opinion of a certified public accountant delivered to the City, will provide money sufficient to pay the principal of and all unpaid interest to maturity on the Bonds to be paid, as such principal and interest become due.

(c) by delivering such Bonds to the Paying Agent for cancellation by it.

“Federal Securities” means United States Treasury notes, bonds, bills or certificates of indebtedness, or any other obligations, the timely payment of which is directly or indirectly guaranteed by the faith and credit of the United States of America.

DEBT SERVICE SCHEDULES

The following table shows the debt service schedule with respect to the Bonds (assuming no optional redemptions).

Year Ending
September 1

Principal

Interest

Total
Debt Service

Total

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Combined Debt Service Schedule. In addition to the Bonds described herein, the City has other series of general obligation bonds and refunding bonds outstanding . The following table shows the combined debt service schedule for outstanding general obligation bonds and refunding bonds of the City following the issuance of the Bonds, assuming no optional redemptions. The following table does not show debt service for bonds that are not general obligation bonds and that are payable from other sources of funds.

Year Ending
September 1

2014 Bonds

2015 Refunding
Bonds

2016 Bonds

2017 Bonds

2020 Measure
O Bonds

2020A
Refunding
Bonds

2020B
Refunding Bonds

2021 Measure
T-1 Bonds

2022 Measure O
Bonds

The Bonds

Total
Debt Service
2025 $905,350.00 $3,104,337.50 $747,862.50 $1,748,806.26 $2,020,790.00 $537,450.00 $811,937.50 $2,052,325.00 $2,612,970.00 2026 902,225.00 3,108,087.50 748,062.50 1,746,556.26 2,021,915.00 537,450.00 819,187.50 2,049,075.00 2,611,070.00 2027 903,250.00 3,105,287.50 752,662.50 1,746,156.26 2,021,990.00 541,700.00 814,937.50 2,053,575.00 2,612,070.00 2028 905,450.00 2,140,087.50 756,462.50 1,749,356.26 2,021,015.00 544,950.00 814,687.50 2,050,325.00 2,610,670.00 2029 901,850.00 1,001,287.50 764,462.50 1,748,956.26 2,023,990.00 542,200.00 813,187.50 2,049,575.00 2,611,870.00 2030 902,650.00 399,887.50 770,962.50 1,746,906.26 2,020,740.00 548,700.00 815,437.50 2,051,075.00 2,610,370.00 2031 902,650.00 399,975.00 771,862.50 1,746,906.26 2,021,440.00 543,950.00 816,187.50 2,051,875.00 2,609,370.00 2032 901,850.00 399,737.50 772,312.50 1,746,006.26 2,023,452.50 547,550.00 816,587.50 2,053,475.00 2,612,770.00 2033 904,575.00 398,768.76 772,312.50 1,749,206.26 2,024,327.50 550,350.00 815,987.50 2,048,875.00 2,607,870.00 2034 906,268.76 397,043.76 774,437.50 1,746,356.26 2,024,065.00 549,100.00 814,387.50 2,053,225.00 2,609,970.00 2035 901,931.26 399,968.76 781,187.50 1,747,606.26 2,022,665.00 555,300.00 818,687.50 2,051,225.00 2,608,470.00 2036 905,243.76 397,368.76 786,750.00 1,747,806.26 2,020,127.50 557,100.00 817,600.00 2,052,425.00 2,608,795.00 2037 902,243.76 398,956.26 791,787.50 1,746,956.26 2,020,502.50 557,250.00 815,700.00 2,053,025.00 2,611,545.00 2038 903,150.00 -- 795,562.50 1,748,518.76 2,024,190.00 556,950.00 816,950.00 2,053,025.00 2,611,295.00 2039 902,743.76 -- 798,787.50 1,748,831.26 2,021,002.50 556,200.00 818,850.00 2,052,425.00 2,609,942.50 2040 906,025.00 -- 806,462.50 1,747,893.76 2,021,127.50 -- -- 2,051,225.00 2,610,680.00 2041 901,825.00 -- 813,450.00 1,749,018.76 2,024,377.50 -- -- 2,049,425.00 2,613,265.00 2042 906,275.00 -- 819,750.00 1,748,681.26 2,020,565.00 -- -- 2,052,025.00 2,612,455.00 2043 903,925.00 -- 828,600.00 1,746,881.26 2,024,877.50 -- -- 2,048,925.00 2,613,250.00 2044 -- -- 836,550.00 1,748,618.76 2,021,940.00 -- -- 2,050,225.00 2,613,000.00 2045 -- -- 843,600.00 1,748,731.26 2,022,540.00 -- -- 2,053,675.00 2,608,750.00 2046 -- -- 849,750.00 1,747,218.76 2,021,270.00 -- -- 2,051,275.00 2,610,500.00 2047 -- -- -- 1,747,037.50 2,023,130.00 -- -- 2,050,887.50 2,612,750.00 2048 -- -- -- -- 2,022,950.00 -- -- 2,049,600.00 2,610,250.00 2049 -- -- -- -- 2,020,730.00 -- -- 2,052,412.50 2,613,000.00 2050 -- -- -- -- 2,021,470.00 -- -- 2,049,212.50 2,610,500.00 2051 -- -- -- -- -- -- -- 2,050,112.50 2,612,750.00
2052 -- -- -- -- -- -- -- -- 2,609,250.00
Total $17,169,481.30 $15,650,793.80 $17,383,637.50 $40,199,012.72 $52,577,190.00 $8,226,200.00 $12,240,312.50 $55,384,525.00 $73,109,447.50

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SECURITY FOR THE BONDS

Ad Valorem Taxes

Bonds Payable from Ad Valorem Property Taxes. The Bonds are general obligations of the City, payable solely from ad valorem property taxes levied by the City and collected by the County. The City is empowered and is obligated to annually levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within the City subject to taxation by the City, without limitation of rate or amount (except certain personal property that is taxable at limited rates).

Levy and Collection. The City will levy and the County will collect such ad valorem taxes in such amounts and at such times as is necessary to ensure the timely payment of debt service.

Such taxes, when collected, will be deposited into a debt service fund for the Bonds, which is maintained by the City and which is irrevocably pledged for the payment of principal of and interest on the Bonds when due.

City property taxes are assessed and collected by the County in the same manner, at the same time and in the same installments as other ad valorem taxes on real property and will have the same priority, become delinquent at the same times and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do the other ad valorem taxes on real property. As described below, although the County has adopted the Teeter Plan, the City has elected not to participate in the Teeter Plan, meaning that the City receives all of the property taxes that are actually collected, and the City also receives any penalties and interest on delinquent taxes . See “PROPERTY TAXATION – Alternative Method of Tax Apportionment – Teeter Plan.”

Annual Tax Rates. The amount of the annual ad valorem tax levied by the City to repay the Bonds will be determined by the relationship between the assessed valuation of taxable property in the City and the amount of debt service due on the Bonds. Fluctuations in the annual debt service on the Bonds and the assessed value of taxable property in the City may cause the annual tax rate to fluctuate.

Economic and other factors beyond the City’s control, such as economic recession, deflation of land values, a relocation out of the City or financial difficulty or bankruptcy by one or more major property taxpayers, or the complete or partial destruction of taxable property caused by, among other eventualities, earthquake, flood or other natural disaster, could cause a reduction in the assessed value within the City and necessitate a corresponding increase in the annual tax rate. See “PROPERTY TAXATION – Assessed Valuation – Factors Relating to Increases/Decreases in Assessed Value.”

Debt Service Fund

The City will establish the Debt Service Fund for the Bonds (the “Debt Service Fund ”), which will be established as a separate fund to be maintained distinct from all other funds of the City. All taxes levied by the City pursuant to the Bond Resolution for the payment of the principal of and interest and premium (if any) on the Bonds will be deposited in the Debt Service Fund by the City promptly upon receipt from the County. The Debt Service Fund is pledged for the payment of the principal of and interest and premium (if any) on the Bonds when and as the same become due. The City will transfer amounts in the Debt Service Fund, to the extent necessary to pay the

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principal of and interest on the Bonds as the same become due and payable, to the Paying Agent, as required to pay the principal of and interest and premium (if any) on the Bonds.

If, after payment in full of the Bonds, any amounts remain on deposit in the Debt Service Fund, the City shall transfer such amounts to its General Fund, to be applied solely in a manner that is consistent with the requirements of applicable state and federal tax law.

Limited Obligation

The Bonds are payable solely from the proceeds of an ad valorem tax levied by the City, and collected by the County, for the payment of principal and interest on the Bonds. Although the County is obligated to collect the ad valorem tax for the payment of the Bonds, the Bonds are not a debt of the County.

PROPERTY TAXATION

Property Tax Collection Procedures

In California, property that is subject to ad valorem taxes is classified as “secured” or “unsecured.” The “secured roll” is that part of the assessment roll containing state assessed public utilities’ property and property, the taxes on which are a lien on real property sufficient, in the opinion of the county assessor, to secure payment of the taxes. A tax levied on unsecured property does not become a lien against such unsecured property, but may become a lien on certain other property owned by the taxpayer. Every tax which becomes a lien on secured property has priority over all other liens arising pursuant to State law on such secured property, regardless of the time of the creation of the other liens. Secured and unsecured property are entered separately on the assessment roll maintained by the county assessor . The method of collecting delinquent taxes is substantially different for the two classifications of property.

Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year. If unpaid, such taxes become delinquent after December 10 and April 10, respectively, and a 10% penalty attaches to any delinquent payment . In addition, property on the secured roll with respect to which taxes are delinquent is declared tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of the delinquent taxes and a delinquency penalty, plus a redemption penalty of 1 -1/2% per month to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to sale by the County.

Property taxes are levied for each fiscal year on taxable real and personal property situated in the taxing jurisdiction as of the preceding January 1 . A bill enacted in 1983, SB813 (Statutes of 1983, Chapter 498), however, provided for the supplemental assessment and taxation of property as of the occurrence of a change of ownership or completion of new construction. Thus, this legislation eliminated delays in the realization of increased property taxes from new assessments. As amended, SB813 provided increased revenue to taxing jurisdictions to the extent that supplemental assessments of new construction or changes of ownership occur subsequent to the January 1 lien date and result in increased assessed value.

Property taxes on the unsecured roll are due on the January 1 lien date and become delinquent, if unpaid on the following August 31 . A 10% penalty is also attached to delinquent taxes in respect of property on the unsecured roll, and further, an additional penalty of 1-1/2% per

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month accrues with respect to such taxes beginning the first day of the third month following the delinquency date. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the county clerk specifying certain facts in order to obtain a judgment lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the county recorder’s office, in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.

Taxation of State-Assessed Utility Property

The State Constitution provides that most classes of property owned or used by regulated utilities are assessed by the State Board of Equalization (“ SBE”) and taxed locally. Property valued by the SBE as an operating unit in a primary function of the utility taxpayer is known as “unitary property,” a concept designed to permit assessment of the utility as a going concern rather than assessment of each individual element of rea l and personal property owned by the utility taxpayer . State-assessed unitary and “operating nonunitary” property (which excludes nonunitary property of regulated railways) is allocated to the counties based on the situs of the various components of the unitary property. Except for unitary property of regulated railways and certain other excepted property, all unitary and operating nonunitary property is taxed at special county-wide rates and tax proceeds are distributed to taxing jurisdictions according to statutory formulae generally based on the distribution of taxes in the prior year.

Assessed Valuation

Assessed Valuation History . The following is a table summarizing the historical assessed valuation of the taxable property in the City.

Table 1

CITY OF BERKELEY
Assessed Valuations of All Taxable Property
Fiscal Years 2015-16 to 2024-25

Fiscal Year
Local
Secured(1) Utility Unsecured Total

Percent Change
2015-16 $15,224,697,461 $388,860 $702,428,523 $15,927,514,844 --% 2016-17 16,200,483,693 388,860 711,062,469 16,911,935,022 6.18 2017-18 17,376,072,698 443,960 809,921,331 18,186,437,989 7.54 2018-19 18,696,664,672 443,960 731,012,747 19,428,121,379 6.82 2019-20 19,926,615,530 424,880 860,872,387 20,787,912,797 7.00 2020-21 21,450,331,604 424,880 931,765,413 22,382,521,897 7.67 2021-22 22,405,866,300 513,120 950,013,132 23,356,392,552 4.35 2022-23 24,817,832,049 513,120 1,110,901,185 25,929,246,354 11.02 2023-24 26,609,636,419 513,120 1,211,900,795 27,822,050,334 7.30 2024-25 28,302,520,996 513,120 1,270,511,989 29,573,546,105 6.30

(1) Amounts are net of homeowners’ exemption.

Source: California Municipal Statistics, Inc.

Factors Relating to Increases/Decreases in Assessed Value . As indicated in the previous table, assessed valuations are subject to change in each year. Increases or decreases in assessed valuation result from a variety of factors including but not limited to general economic

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conditions, supply and demand for real property in the area, government regulations such as zoning, and disasters such as wildfires, earthquakes, droughts, floods, climate change and pandemics, among others. The City cannot predict or make any representations regarding the effects that natural disasters or other conditions have or may have on the value of taxable property within the City, or to what extent the effects said disasters might have on economic activity in the City or throughout the State.

Wildfires. According to the State, fire season is starting earlier and ending later each year, with the increased length of the season corresponding to an increase in the extent of forest fires across the State. In addition to destroying land and structures, there have been human fatalities and negative impacts on air quality throughout the State. Fires in the State and neighboring states have threatened the region’s power grids, making some power lines unreliable . The City cannot predict or make any representations regarding the effects that wildfires and related conditions have or may have on the City, or to what extent the effects said disasters might have on economic activity in the City or throughout the State.

To quantify this potential hazard, the California Department of Forestry and Fire Protection (“Cal Fire”) has developed a fire modeling and mapping process that utilizes three main criteria in order to evaluate and recommend potential fire hazards in wildland areas. The criteria are type of vegetation, fire weather, and topography . The maps developed by Cal Fire currently identify certain areas within the City as Fire Hazard Severity Zones. In the event taxable property within the City were destroyed by wildfires, the assessed valuation of such property would be reduced.

Such reduction of assessed valuations could result in a reduction of property tax revenues to the City.

Seismic Events. The City is located in a seismically active region. An earthquake of large magnitude could result in extensive damage to property within the City and could adversely affect the assessed valuation of property within the City, or more generally the region’s economy.

Drought. The State has experienced drought conditions in recent years, including a period of drought followed by record -level precipitation, which resulted in related severe flooding and mudslides in certain regions . As of February 11, 2025 , the U.S. Drought Monitor indicates that the State is classified as experiencing no drought conditions in the northern part of the State, some abnormally dry, moderate and severe drought conditions, with pockets of severe and extreme drought conditions on the southeast border , with the County experiencing no drought conditions.

During 2021, the Governor of the State proclaimed a drought state of emergency for all counties in the State, culminating with an October 19, 2021, proclamation, urging Californians to step up their water conservation efforts. In January 2022, the State Water Board adopted emergency regulations aimed at saving water and raising drought awareness, with prohibitions focused on reducing outdoor water use, enforceable by local agencies and the State Water Board, generally with warning letters, mandatory water use audits, and fines. In January 2023, the State Water Board adopted its first five -year temporary groundwater recharge permit, in addition to adopting new statewide sanitary sewer orders and appointing eleven members to the Advisory Group on Safe Drinking Water Funding. Local agencies can impose and enforce their own drought conservation rules.

Climate Change. In addition to the events described above, climate change caused by human activities may have adverse effects on the assessed value of property within the City. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic

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activity, many scientists expect that climate change will intensify, increasing the frequency, severity and timing of extreme weather events such as coastal storm surges, drought, wildfires, floods, heat waves, and rising sea levels. Projections of the impact of global climate change are complex and depend on a variety of factors outside of the City’s control. The various scientific studies that forecast the amount and timing of adverse impacts of climate change are based on assumptions contained in such studies, but actual events may vary materially. In addition, the scientific understanding of climate change and its effects continues to evolve. Accordingly, the City is unable to forecast with certainty when or if adverse impacts of climate change will occur or the extent of such impacts.

Public Health Emergencies . In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. On February 11, 2020, the World Health Organization announced the official name for the outbreak of the disease known as COVID-19 (“COVID-19”), an upper respiratory tract illness, that spread across the globe . The ultimate impact of COVID-19 on the City’s operations and finances and the economy, real estate market, development within the City and tax collections may not be fully known, and it may be some time before the full adverse impact of the COVID-19 outbreak is known. Further, there could be future COVID- 19 outbreaks or other public health emergencies that could have material adverse effects on the City’s operations and finances. In addition, the City cannot predict whether future pandemics will occur and whether any such pandemics may impact its finances or operations. As of this date, several vaccines have been provided approval by federal health authorities and are widely available , and both the national emergency and state of emergency have officially ended, and the World Health Organization declared an end to the COVID-19 global health emergency.

Property Tax Base Transfer Ballot Measure . On November 3, 2020, State voters approved a constitutional amendment entitled Property Tax Transfers, Exemptions and Revenue for Wildfire Agencies and Counties Amendment (“Proposition 19”), which will: (i) expand special rules that give property tax savings to homeowners that are over the age of 55, severely disabled, or whose property has been impacted by a natural disaster or contamination, when they buy a different home; (ii) narrow ex isting special rules for inherited prop erties; and (iii) broaden the scope of legal entity ownership changes that trigger reassessment of properties. The City cannot make any assurance as to what effect the implementation of Proposition 19 will have on assessed valuation of real property in the City.

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Assessed Valuation by Land Use. The following table shows the land use of parcels in the City, according to assessed valuation. As shown, the majority of land in the City is used for residential purposes.

Table 2

CITY OF BERKELEY
Assessed Valuation and Parcels by Land Use
Fiscal Year 2024-25

2024-25 % of No. of % of
Non-Residential: Assessed Valuation (1) Total Parcels Total Commercial/Office $2,862,766,146 10.11% 1,525 5.22%
Vacant Commercial 39,300,404 0.14 49 0.17
Industrial 1,512,051,876 5.34 403 1.38
Vacant Industrial 137,604,202 0.49 25 0.09
Recreational 31,175,214 0.11 19 0.07
Government/Social/Institutional 78,223,247 0 .28 652 2.23 Subtotal Non-Residential $4,661,121,089 16.47% 2,673 9.15%

Residential:

Single Family Residence $14,011,738,240 49.51% 17,501 59.91% Condominium/Townhouse 1,400,128,968 4.95 2,969 10.16
Cooperative 33,578,452 0.12 103 0.35
2-4 Residential Units 3,363,730,573 11.88 4,022 13.77
5+ Residential Units/Apartments 4,740,740,477 16.75 1,476 5.05 Miscellaneous Residential 4,432,752 0.02 12 0.04
Vacant Residential 87,050,445 0 .31 457 1.56 Subtotal Residential $23,641,399,907 83.53% 26,540 90.85%

Total $28,302,520,996 100.00% 29,213 100.00%
___________________________
(1) Local Secured Assessed Valuation; excluding tax -exempt property.

Source: California Municipal Statistics, Inc.

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Assessed Valuation of Single-Family Residential Parcels. The following table shows a breakdown of the assessed valuations of improved single-family residential parcels in the City, according to assessed valuation.

Table 3

CITY OF BERKELEY
Per Parcel 2024-25 Assessed Valuation
of Single-Family Homes

No. of 2024-25 Average Median
Parcels Assessed Valuation Assessed Valuation Assessed Valuation Single Family Residential 17,501 $14,011,738,240 $800,625 $647,200

2024-25 No. of % of Cumulative Total % of Cumulative
Assessed Valuation Parcels
(1) Total % of Total Valuation Total % of Total
$0 - $99,999 1,362 7.782% 7.782% $ 90,500,548 0.646% 0.646% $100,000 - $199,999 1,903 10.874 18.656 276,514,226 1.973 2.619 $200,000 - $299,999 1,376 7.862 26.518 342,318,212 2.443 5.062 $300,000 - $399,999 1,319 7.537 34.055 461,052,725 3.290 8.353 $400,000 - $499,999 1,190 6.800 40.855 532,895,869 3.803 12.156 $500,000 - $599,999 1,125 6.428 47.283 617,976,096 4.410 16.567 $600,000 - $699,999 1,022 5.840 53.123 664,291,457 4.741 21.307 $700,000 - $799,999 870 4.971 58.094 651,412,454 4.649 25.957 $800,000 - $899,999 935 5.343 63.436 794,713,942 5.672 31.628 $900,000 - $999,999 884 5.051 68.488 837,974,506 5.981 37.609 $1,000,000 - $1,099,999 842 4.811 73.299 881,746,799 6.293 43.902 $1,100,000 - $1,199,999 639 3.651 76.950 733,838,082 5.237 49.139 $1,200,000 - $1,299,999 603 3.446 80.395 753,293,816 5.376 54.515 $1,300,000 - $1,399,999 551 3.148 83.544 744,018,084 5.310 59.825 $1,400,000 - $1,499,999 462 2.640 86.184 667,850,729 4.766 64.592 $1,500,000 - $1,599,999 471 2.691 88.875 729,154,877 5.204 69.795 $1,600,000 - $1,699,999 324 1.851 90.726 534,089,664 3.812 73.607 $1,700,000 - $1,799,999 299 1.708 92.435 522,741,038 3.731 77.338 $1,800,000 - $1,899,999 239 1.366 93.800 442,054,757 3.155 80.493 $1,900,000 - $1,999,999 197 1.126 94.926 383,445,856 2.737 83.229 $2,000,000 and greater 888 5.074 100.000 2,349,854,503 16.771 100.000 17,501 100.000% $14,011,738,240 100.000%

____________________
(1) Improved single family residential parcels. Excludes condominiums and parcels with multiple family units.

Source: California Municipal Statistics, Inc.

Alternative Method of Tax Apportionment - Teeter Plan

The Board of Supervisors of the County has approved the implementation of the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (the “Teeter Plan”), as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan, the County apportions secured property taxes on an accrual basis when due (irrespective of actual collections) to participating political subdivisions, for which the County acts as the tax-levying or tax-collecting agency. In return, the County receives and retains delinquent payments, penalties and interest as co llected that would have been due the local agency in the absence of the Teeter Plan. The City has elected not to participate in the Teeter Plan, so the City receives property taxes actually collected, as well as any penalties and interest on delinquent taxes.

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The property tax levies and collections for the City for fiscal years 2017-18 through 2023- 24 are shown in the following table:

Table 4

CITY OF BERKELEY

SECURED TAX CHARGES AND DELINQUENCIES
2017-18 TO 2023-24
(Dollar amounts in thousands)

Fiscal Year Secured Tax Charge(1)
Amount Delinquent
June 30
% Delinquent
June 30
2017-18 $56,317,983.19 $488,950.31 0.87%
2018-19 59,739,122.88 512,267.28 0.86
2019-20 63,775,410.84 663,946.24 1.04
2020-21 68,573,256.97 647,280.27 0.94
2021-22 71,841,268.69 816,482.41 1.14
2022-23 79,749,223.16 906,881.07 1.14
2023-24 85,366,082.98 1,059,277.48 1.24

(1) 1% General Fund apportionment.

Source: California Municipal Statistics, Inc.

Appeals of Assessed Value

There are two types of appeals of assessed values that could adversely impact property tax revenues within the City.

Appeals may be based on Proposition 8 of November 1978, which requires that for each January 1 lien date, the taxable value of real property must be the least of its base year value, annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution, or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value.

Under California law, property owners may apply for a Proposition 8 reduction of their property tax assessment by filing a written application, in form prescribed by the SBE, with the County board of equalization or assessment appeals board . In most cases, the appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. Proposition 8 reductions may also be unilaterally applied by the County Assessor.

Any reduction in the assessment ultimately granted as a result of such appeal applies to the year for which application is made and during which the written application was filed. These reductions are subject to yearly reappraisals and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA.

A second type of assessment appeal involves a challenge to the base year value of an assessed property. Appeals for reduction in the base year value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date.

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In certain recent years, Proposition 8 appeals resulted in changes to assessed valuation, as shown below.

Year Changes in Assessed Valuation
2020-21 $1,233,243,959
2021-22 (1,335,630,976)
2022-23 ___
2023-24 ___
2024-25 ___

The City cannot predict the changes in assessed values that might result from pending or future appeals by taxpayers. Any reduction in aggregate City assessed valuation due to appeals, as with any reduction in assessed valuation due to other causes, will cause the tax rate levied to repay the Bonds to increase accordingly, so that the fixed debt service on the Bonds (and other outstanding general obligation bonds, if any) may be paid.

Tax Rates

The table below shows historical property tax rates within the City:

Table 5

CITY OF BERKELEY
TYPICAL TAX RATE PER $100 ASSESSED VALUATION
(TRA 13-000 – 2024-25 Assessed Valuation: $28,813,399,805 (1))

Fiscal
Year
2020-21
Fiscal
Year
2021-22
Fiscal
Year
2022-23
Fiscal
Year
2023-24
Fiscal
Year
2024-25
Countywide Rate $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 Alameda County .0036 .0041 .0103 .0088 .0089
Berkeley Unified School District Bonds .0999 .1451 .0839 .0743 .0780 Peralta Community College District .0452 .0407 .0409 .0418 .0394 Bay Area Rapid Transit .0139 .0060 .0140 .0134 .0148
East Bay Regional Park District .0014 .0020 .0058 .0057 .0013 City of Berkeley .0540 .0529 .0623 .0620 .0609
Total $1.2180 $1.2508 $1.2172 $1.2060 $1.2033

(1) N et of homeowners’ exemption.

Source: California Municipal Statistics, Inc.

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Major Taxpayers

The following table shows the twenty largest taxpayers in the City as determined by their secured assessed valuations in 2024-25.

Table 6

CITY OF BERKELEY
Largest 2024-25 Local Secured Taxpayers

2024-25 % of
Property Owner Primary Land Use Assessed Valuation Total (1)

1. Bayer Healthcare LLC Industrial $ 439,329,442 1.55%

2. CA AG Logan Park Property Owner LLC Apartments 167,132,007 0.59

3. Berkeley Multifamily I Property Owner LLC Apartments with Retail 160,806,953 0.57

4. Mark at Berkeley LLC Apartments 152,520,052 0.54

5. MCREF Acheson LLC Apartments 149,273,988 0.53

6. Foundry31 Owner DE LLC Industrial 147,427,512 0.52

7. Kaiser Foundation Health Plan Inc. Medical Offices 140,640,881 0.50

8. Aquatic Park Science Center II LLC Industrial 122,272,400 0.43

9. Berkeley Downtown Hotel Owner LLC Hotel 106,000,000 0.37

10. 1500 San Pablo LLC Apartments 98,638,253 0.35

11. Hanumandla R. & Hanumandla J. Reddy, Trustees Apartments 90,686,301 0.32

12. CVBAF ACQ LLC Apartments 82,320,286 0.29

13. 2176 Kittredge Owner LLC Apartments 81,955,369 0.29

14. Redwood Gardens Renewal LP Apartments 76,515,932 0.27

15. 1951 Shattuck LLC Apartments 73,331,266 0.26

16. GEDR Hillside LLC Apartments 69,360,606 0.25

17. Berkeley VQOF II SPE LLC Apartments 68,610,714 0.24

18. Core Berkeley Bancroft LLC Apartments 67,912,092 0.24

19. Parkershattuck Owner LLC Apartments 66,359,703 0.23

20. John K. Gordon J and Janis L. Mitchell, Trust Commercial Properties 62,367,885 0.22 $2,423,461,642 8.56%
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(1) 2024-25 Local Secured Assessed Valuation: $28,302,520,996.

Source: California Municipal Statistics, Inc.

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Direct and Overlapping Debt

Set forth below is a direct and overlapping debt report (the “ Debt Report”) prepared by California Municipal Statistics, Inc. and effective April 1, 2025. The Debt Report is included for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.

The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term obligations generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations secured by land within the City. In many cases, long -term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.

The contents of the Debt Report are as follows: (1) the first column indicates the public agencies which have outstanding debt as of the date of the Debt Report and whose territory overlaps the City; (2) the second column shows the percentage that the City’s assessed valuation represents of the total assessed valuation of each public agency identified in the first column; and the third column is an apportionment of the dollar amount of each public agency’s outstanding debt to property in the City, as determined by multiplying the total outstanding debt of each agency by the percentage of the City’s assessed valuation represented in the second column.

Table 7

CITY OF BERKELEY

STATEMENT OF DIRECT AND OVERLAPPING BONDED DEBT
(As of April 1, 2025)

2024-25 Assessed Valuation: $29,573,546,105

DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 4/1/25 Alameda County 7.031% $ 33,673,217
Bay Area Rapid Transit District 2.822 67,481,357
Peralta Community College District 18.975 74,357,333
Berkeley Unified School District 99.996 355,655,773
City of Berkeley 100.000 195,595,000(1)
East Bay Regional Park District 4.403 6,502,130
City of Berkeley Thousand Oaks Heights AFUU Assessment District 100.000 750,000 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $734,014,810

DIRECT AND OVERLAPPING GENERAL FUND DEBT:

Alameda County and Coliseum Obligations 7.031% $44,273,680 Alameda-Contra Costa Transit District Certificates of Participation 8.272 794,112 Peralta Community College District Pension Obligation Bonds 18.975 20,392,015 City of Berkeley Lease Revenue Bonds and COP 100.000 15,700,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $81,159,807

COMBINED TOTAL DEBT $815,174,617 (2)

Ratios 2024-25 Assessed Valuation:

Direct Debt ($195,595,000) ................................................................. 0.66% Total Direct and Overlapping Tax and Assessment Debt ..................... 2.48% Combined Direct Debt ($211,295,000) ............................................... 0.71% Combined Total Debt ............................................................................ 2.76%

(1) Excludes Bonds to be sold.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non -bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

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CONSTITUTIONAL AND STATUTORY PROVISIONS

AFFECTING CITY REVENUES AND APPROPRIATIONS

Principal of and interest on the Bonds are payable from the proceeds of an ad valorem tax levied by the City for the payment thereof . See “THE BONDS” and “SECURITY FOR THE BONDS” above. Articles XIIIA, XIIIB, XIIIC and XIIID of the State Constitution, Propositions 62, 111, and 218 and 1A, and certain other provisions of law discussed below are included in this section to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes, and it should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability of the City to levy taxes for payment of the Bonds . The tax levied by the City for payment of the Bonds was approved by the City’s voters in compliance with Article XIIIA and all applicable laws.

Article XIIIA of the State Constitution

On June 6, 1978, California voters approved Proposition 13, which added Article XIIIA to the State Constitution . Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service (i) on indebtedness approved by the voters prior to July 1, 1978, (ii) on bonded indebtedness approved by a two -thirds vote on or after July 1, 1978, for the acquisition or improvement of real property or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55 percent of the voters voting on the proposition . Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real p roperty when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed two percent per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the “full cash value” base in the event of declining property values caused by damage, destruction or other factors, to provide that there would be no increase in the “full cash value” base in the event of reconstruction of property damaged or destroyed in a disaster, and in other minor or technical ways.

Legislation Implementing Article XIIIA

Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA. Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voter -approved indebtedness) . The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies.

The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989.

Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

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All taxable property is shown at full market value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Article XIIIB of the State Constitution

In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues those entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990 . The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges o r fees, and certain other non -tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on Bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.

The State and each local government entity have their own appropriations limit s. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years.

If the aggregate “proceeds of taxes” for the preceding two -year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.

The City has never exceeded its appropriations limit. Because the issuance of the Bonds has been approved by the voters, the tax levy that is required to pay debt service on the Bonds is not subject to the limitations of Article XIIIB.

Articles XIIIC and XIIID of the State Constitution

On November 5, 1996, the voters of the State approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number of interrelated provisions affecting the a bility of the City to levy and collect both existing and future taxes, assessments, fees and charges. The interpretation and application of Proposition 218 will ultimately be determined by the courts with respect to a

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number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.

Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City require a majority vote and taxes for specific purposes, even if deposited in the City’s General Fund, require a two-thirds vote. The voter approval requirements of Proposition 218 reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain property -related fees, charges, and assessments for municipal services and programs . These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same ma nner as it is to property owners . If the City is unable to continue to collect these revenues, the services and programs funded with these revenues would have to be curtailed and/or the City’s General Fund might have to be used to support them. The City is unable to predict whether or not in the future it will be able to continue all existing services and programs funded by the fees, charges and assessments in light of Proposition 218 or, if these services and programs are continued, which amounts (if any) would be used from the City’s General Fund to continue to support these activities.

Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiative s which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund.

Proposition 62

Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two- thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a two - thirds vote of the voters of the governmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was im posed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988.

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California appellate court cases have overturned the provisions of Proposition 62 pertaining to the imposition of taxes for general government purposes . However, the California Supreme Court upheld Proposition 62 in its decision on August 28, 1995, in Fresno County Transportation Authority v. Guardino . This decision reaffirmed the constitutionality of Proposition 62. Certain matters regarding Proposition 62 were not addressed in the Supreme Court’s decision, such as what remedies exist for taxpayers subject to a tax not in compliance with Proposition 62, and whether the decision applies to charter cities . The City has not experienced any substantive adverse financial impact as a result of the passage of this initiative.

Proposition 1A

Proposition 1A, proposed by the Legislature in connection with the State’s Fiscal Year 2004-05 Budget, approved by the voters in November 2004 and generally effective in Fiscal Year 2006-07, provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004. Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the Legislature. Proposition 1A provides, however, that beginning in fiscal year 2008-09, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state financial hardship, the shift is approved by two -thirds of both houses and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county . Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, 0.65 percent of vehicle value, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates.

Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State. However, Proposition 1A could also result in decreased resources being available for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City.

Proposition 22

Proposition 22, entitled “The Local Taxpayer, Public Safety and Transportation Protection Act,” was approved by the voters of the State in November 2010. Proposition 22 amended the state Constitution to eliminate or reduce the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburse local governments), ( iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues.

Notwithstanding the passage of Proposition 22, the State successfully dissolved redevelopment agencies.

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Possible Future Initiatives

Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process . From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

LEGAL MATTERS

No Federal Tax Exemption

Federal Tax Status. Interest on the Bonds is not excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal individual alternative minimum tax.

California Tax Status. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income taxes.

Other Tax Considerations . Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above . Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above.

Form of Opinion. A copy of the proposed form of opinion of Bond Counsel is attached hereto as APPENDIX C.

Continuing Disclosure

The City will covenant for the benefit of owners of the Bonds to provide certain financial information and operating data relating to the City by not later than April 1 after the end of each fiscal year of the City (currently June 30), commencing April 1, 2026, with the report for the 2024- 25 fiscal year (the “ Annual Report ”), and to provide notices of the occurrence of certain enumerated events.

The specific nature of the information to be contained in an Annual Report or the notices of enumerated events is set forth in the form of Continuing Disclosure Certificate attached as APPENDIX D. These covenants will be made in order to assist the Purchaser (as defined below) in complying with Securities Exchange Commission Rule 15c2-12(b)(5) (the “Rule”).

The City and its related governmental entities have previously entered into numerous disclosure undertakings under the Rule in connection with the issuance of long -term obligations See Note 8 of the City’s Comprehensive Annual Financial Report attached to this Official Statement as APPENDIX B.

In the previous five years, the City failed to timely file a material event notice in connection with [the failure to meet its debt service coverage covenant] for one series of the City’s bonds. To ensure future compliance with its continuing disclosure undertakings, the City has developed

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procedures for including all required continuing disclosure information in the supplementary section of its audited financial statements. In addition, the City has engaged NHA Advisors, LLC, to review this information annually to ensure compliance with its continuing disclosure undertakings, including the undertaking to be entered into in connection with the Bonds.

Neither the County nor any other entity other than the City shall have any obligation or incur any liability whatsoever with respect to the performance of the City’s duties regarding continuing disclosure.

Absence of Material Litigation

No litigation is pending or threatened concerning the validity of the Bonds, and a certificate to that effect will be furnished to the purchasers at the time of the original delivery of the Bonds .

The City is not aware of any litigation pending or threatened questioning the political existence of the City or contesting the City’s ability to receive ad valorem taxes or to collect other revenues or contesting the City’s ability to issue and repay the Bonds.

The City is routinely subject to lawsuits and claims. In the opinion of the City, the aggregate amount of the uninsured liabilities of the City under these lawsuits and claims will not materially affect the financial position or operations of the City. The City may be or may become a party to lawsuits and claims which are unrelated to the Bonds or actions taken with respect to the Bonds and which have arisen in the normal course of operating the City. The City maintains certain insurance policies which provide coverage under certain circumstances and with respect to certain types of incidents. The City cannot predict what types of claims may arise in the future.

RATING

Upon issuance of the Bonds, S&P Global Ratings, a business unit of Standard & Poor’s Financial Services LLC (“S&P”), will assign the Bonds a rating of “____.”

The City has furnished to S&P information and material which has not been included in this Official Statement. Generally, rating agencies base their ratings on information and material so furnished and on investigations, studies and assumptions made by the rating agencies . The ratings reflect only the view of such organization and an explanation of the significance of such rating may be obtained from S&P.

There is no assurance that the rating will continue for any given period of time or that they will not be revised downward or withdrawn entirely by such rating agency, if, in the judgment of such rating agency, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.

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MUNICIPAL ADVISOR

The City has retained NHA Advisors, LLC, San Rafael, California, as its municipal advisor (the “Municipal Advisor”) in connection with the preparation of this Official Statement and with respect to the issuance of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. NHA Advisors, LLC, is an independent registered municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Municipal Advisor’s compensation is contingent upon the delivery of the Bonds.

UNDERWRITING

Purchase of the Bonds. Under the terms of a competitive bid, _____________ (the “Purchaser”) has agreed to purchase the Bonds at a price of $__________ (which is equal to the aggregate principal amount of the Bonds ($_________), plus a [net] original issue premium of $________, less a Purchaser’s discount of $________). The Purchaser will purchase all of the Bonds if any are purchased, the obligation to make such purchase being subject to certain terms and conditions set forth in the “Official Notice of Sale,” including the approval of certain legal matters by counsel and certain other conditions.

Offering of the Bonds . The Purchaser intends to offer the Bonds to the public at the offering prices set forth on the inside cover page of this Official Statement . The Purchaser may offer and sell to certain dealers and others at a price lower than the offering prices stated on the inside cover page hereof. The offering prices may be changed from time to time by the Purchaser.

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EXECUTION

The execution of this Official Statement and its delivery have been approved by the City Council.

CITY OF BERKELEY

By:

Director of Finance

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APPENDIX A

FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION

FOR THE CITY OF BERKELEY AND ALAMEDA COUNTY

Introduction

The City of Berkeley, California (the “City”) is located in Alameda County (the “ County”) on the east side of the San Francisco Bay, approximately 10 miles northeast of San Francisco.

The City encompasses a total area of approximately 19 square miles and had an estimated population of 125,327 as of January 1, 2024, giving it the highest population density of any city in the East Bay. The City is defined to a large degree, both culturally and economically, by the presence of the University of California campus located on the eastern side of the City. The University of California is a major component of the City's economy, employing more than 265,000 full and part-time workers across all University of California campuses statewide.

The City is among the oldest in California. The City was founded in 1864, incorporated as a town in 1878, and incorporated as a city in 1909. The City's first charter was adopted in 1895.

Population

Population figures for the City, County and State for the last five years are shown in the following table.

CITY OF BERKELEY
Population Estimates
As of January 1

Year
City of
Berkeley
County of
Alameda
State of
California
2020 127,659 1,681,337 39,535,623
2021 120,950 1,666,341 39,327,868
2022 124,054 1,643,683 39,114,785
2023 125,181 1,650,656 39,061,058
2024 125,327 1,641,869 39,128,162

Source: State Department of Finance estimates (as of January 1).

City Government

The City operates under a Council-Manager form of government. The City is governed by a nine-member City Council, eight of whom are elected by district, plus the Mayor, who is elected on a city-wide basis. The Mayor and the City Council members serve four-year terms. The Council appoints a City Manager who is responsible for daily administration of City affairs and preparation and submission of the annual budget under the direction of the Mayor and the City Council for the Mayor's submission to the City Cou ncil. The City Manager appoints a Director of Finance to supervise the City's financial affairs. The Director of Finance also serves as the City's Treasurer.

The City Attorney, City Clerk and Director of Finance are appointed by the City Manager subject to City Council approval. The City Auditor is elected at the same time as the Mayor .

Current members of the City Council are shown below:

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Member District Term Expires
Adena Ishii Mayor 11/30/2028
Rashi Kesarwani 1 11/30/2026
Terry Taplin 2 11/30/2028
Ben Bartlett 3 11/30/2028
Igor Tregub 4 11/30/2026
Shoshana O’Keefe 5 11/30/2028
Brent Blackaby 6 11/30/2024
Cecilia Lunaparra 7 11/30/2026
Mark Humbert 8 11/30/2026

CITY FINANCIAL INFORMATION

Although the City is including information about the City’s finances in this Appendix A, it is important to understand that the Bonds described in this Official Statement are voter-approved general obligations of the City payable solely from the levy and collection of ad valorem property taxes, unlimited as to rate or amount, and are not payable from the general fund of the City.

Accounting Policies and Financial Reporting

The accounts of the City are organized on the basis of funds and account groups, to account for different activities. 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. Government 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 the spending activities are controlled. The City’s General Fund and other governmental fund types use the modified accrual basis of accounting. All of the City’s other funds, including proprietary fund types and fiduciary fund types use the accrual basis of accounting. The basis of accounting for all funds is more fully explained in the “Notes to the Financial Statements” contained in APPENDIX B.

The City Council employs, at the beginning of each fiscal year, an independent certified public accountant who, at such time or times as specified by the City Council, at least annually, and at such other times as he or she shall determine, examines the combined financial statements of the City in accordance with generally accepted auditing standards, including such tests of the accounting records and such other auditing procedures as such accountant considers necessary.

As soon as practicable after the end of the fiscal year, a final audit and report is submitted by such accountant to the City Council and a copy of the financial statements as of the close of the fiscal year is published.

The City, all its funds and the funds of certain other component entities of the City are audited annually by a certified public accounting firm. The firm of Badawi and Associates, Certified Public Accounts, Berkeley , California, is the City’s current auditor (the “ Auditor”). The annual comprehensive financial report of the City for fiscal year 2023-24 is attached hereto as APPENDIX B. The City’s financial statements are public documents and are included within this Official Statement without the prior approval of the Auditor.

The Governmental Accounting Standards Board (“GASB”) published its Statement No. 34 “Basic Financial Statements – and Management’s Discussion and Analysis – for State and Local

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Governments” on June 30, 1999. Statement No. 34 provides guidelines to auditors, state and local governments and special purpose governments such as school districts and public utilities, on new requirements for financial reporting for all governmental agencies in the United States.

Generally, the basic financial statements and required supplementary information should include (i) Management’s Discussion and Analysis; (ii) government -wide financial statements prepared using the economic measurement focus and the accrual basis of accounting and fund financial statements prepared using both the current financial resources measurement focus and the modified accrual method of accounting (governmental funds) and funds using the economic measurement focus and the accrual basis of accounting (proprietary funds) and (iii) required supplementary information. The City’s financial statements are prepared in conformance with the requirements of Statement No. 34.

Comparative Financial Statements

The following tables provide a recent history of the City’s Comparative Balance Sheet, and both a recent history of General Fund revenues, expenditures, transfers, and ending fund balances and recently budgeted amounts.

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CITY OF BERKELEY

GENERAL FUND BALANCE SHEET
(Fiscal Year Ending June 30)
(Dollar amounts in thousands)

Actual Actual Actual Actual
2020-21 2021-22 2022-23 2023-24
ASSETS:

Cash and investments in treasury* $146,849 $171,955 $160,249 $134,929 Receivables (net of allowance as
applicable):

Accounts 4,782 5,384 9,314 10,228
Interest 834 1,078 2,000 2,620
Taxes 13,092 10,795 9,083 9,915
Subventions/grants 1 -- -- 50
Due from other funds 12,814 17,740 16,034 16,362
Notes receivable 6,197 13,818 15,954 31,326
Other 5 5 4 5
Prepaid Items -- -- -- --
Total assets 184,574 220,776 212,640 205,434

LIABILITIES:

Accounts payable 10,444 7,094 6,147 9,368
Accrued salaries and wages 8,081 8,934 3,541 4,672
Accrued interest payable 740 445 1,117 1,178
Advances from other funds 1,760 814 814 --
Deposits held 921 886 935 1,118
Unearned revenue -- -- -- --
Tax and revenue anticipation notes 42,405 44,660 28,000 23,620 Other liabilities 4,955 6,129 6,515 4,693
Total liabilities 69,307 68,962 47,070 44,649

Deferred Inflows of Resources 3,385 3,770 7,103 7,756

FUND BALANCES
Reserved for:

Assigned to 19,577 12,163 16,753 30,338
Nonspendable -- -- -- 31,326
Restricted and Committed 35,941 60,697 71,799 61,788
Unreserved/Unassigned, report in:

General fund 56,364 75,184 69,915 29,577
Total fund balances 111,882 148,043 158,467 153,029

Total liabilities and fund balances $184,574 $220,776 $212,640 $205,434

* Cash and investments in treasury includes restricted cash and investments.

Source: City of Berkeley, Annual Comprehensive Financial Reports.

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CITY OF BERKELEY

STATEMENT OF GENERAL FUND

REVENUES, EXPENDITURES, TRANSFERS AND BALANCES
(Fiscal Year Ending June 30)
(Dollar amounts in thousands)

Actual

Actual

Actual

Actual
2020-21 2021-22 2022-23 2023-24
REVENUES:

Taxes $187,395 $225,100 $216,259 $216,040
Licenses and Permits 1,805 1,580 1,471 1,457
Subvention and Grants/Intergovernmental 3,700 652 1,589 833 Service Fees 6,990 7,806 9,812 11,952
Fines and Forfeitures 3,579 4,967 6,117 5,947
Rents 189 294 233 273
Franchises 1,714 1,713 1,811 1,987
Private contribution 184 45 134 150
Interest 8,110 (10,069) 3,261 22,319
Other 74 506 560 826
TOTAL REVENUES 213,740 232,595 241,248 261,783

EXPENDITURES:

General Government 27,357 29,693 32,732 42,002
Public Safety 120,179 124,901 128,306 137,522
Highways and Streets 3,163 3,833 3,055 2,224
Health and Human Services 19,320 17,897 15,695 15,531
Culture-Recreation 7,362 8,708 9,291 10,632
Community Development 9,258 12,693 16,592 22,499
Economic Development 2,534 3,005 3,643 3,271
Debt Service 139 98 496 2,347
Capital Outlay -- -- 1,494 5,850
TOTAL EXPENDITURES 189,313 200,827 211,304 241,875

Excess Revenues Over (Under) Expenditures 24,427 31,767 29,944 19,908

Transfers In(out)/Other (10,614) 4,394 (19,520) (25,345)

Net Change in Fund Balance 13,813 36,161 10,424 (5,438)

Fund Balance, July 1 98,069 111,882 148,043 158,467
Prior Period Adjustment -- - - --

Fund Balance, June 30* $111,882 $148,043 $158,467 $153,029

* Totals may not sum due to rounding.

Source: City of Berkeley Annual Comprehensive Financial Reports.

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General Fund Budget

Budgetary Process and Administration. The City employs a two-year budget process.

In year one of the biennial budget cycle, the City Council formally adopts authorized appropriations for the first fiscal year and approves “planned” appropriations for the second fiscal year. In year two, the City Council considers revisions and formally adopts authorized appropriations for the second fiscal year. Although the budget cycle covers a two-year period, the City Charter requires that the City Council adopt an annu al appropriations ordinance for each budget year.

From January to May of each year, the City Council meets publicly to discuss policies and priorities for the upcoming budget. The City Manager prepares a proposed budget based on input from department heads, and presents this to the City Council by the first Monday in May of a budget year or as fixed by the City Council. The City also maintains additional budgetary controls to ensure compliance with the annual appropriated budget. The City Manager is authorized to transfer budgeted amounts within funds as deemed necessary to meet the City’s needs; however, revisions that alter the total budget or move amounts from one fund to another must be approved by the City Council.

Revenues and expenditures relating to the City’s general governmental operations are budgeted and accounted for in the City’s general fund, including public safety, highways and streets, health, housing and human services, culture and recreation, community development and economic development. General taxes and fees support most of these activities. The “business” or proprietary activities of the City are accounted for in each of eight enterprise funds, which include those established for Refuse Collection, Marina Opera tions, Sanitary Sewers, Clean Storm Water, Permit Service Center, Off-Street Parking, Parking Meter, and Building Purchases & Management. These activities are intended to be completely or largely self-supporting through user fees and charges.

The balance of this Appendix is concerned with the operations and performance of the City’s General Fund, unless otherwise noted.

Adopted Biennial Budget. The City adop ted its fiscal years 2024-25 and 2025- 26 biennial budget on June 25, 2024 . For fiscal year 2024-25, the City authorized operating and capital budget expenditures of $776.2 million based on revenues of approximately $667.1 million.

For fiscal year 2025-26, the City authorized operating and capital budget expenditures of $717.0 million based on revenues of approximately $692.6 million. In both fiscal years, prior year savings (accumulated fund balance), bond proceeds collected in prior fiscal years and/or anticipated grant funding offset the net increase in expenditures among the different funds to balance the budget.

The General Fund comprises less than one-half of the total budget, with the remainder of the budget consisting of various special funds that are restricted in purpose. Approximately fifty- five percent of the City’s General Fund revenue is derived from real and unsecured property, sales and soda taxes, and business license taxes.

For fiscal year 2024-25, baseline revenues for the general fund are projected to be $273.4 million, while baseline expenditures are projected to be $ 285.5 million, resulting in a deficit of $12.1 million. For fiscal year 2025-26, baseline revenues for the general fund are projected to be $284 million, which baseline expenditures are projected to be $296.1 million, resulting in a deficit of $12 million. These projected deficits are based on revenue data received through the third quarter of the current fiscal year.

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The City is unable to predict the impact that certain federal policies may have on its finances and operations, including uncertain tariff and trade policies, the impact of reduced federal funding on some City services and programs, and the impending possibilities of increased unemployment and an economic recession. In an effort to maintain a balanced budget and t o prepare for these potentialities , on April 21, 2025, the City imposed a hiring freeze, effective immediately, noting that the action is intended to slow down deficit spending, and that the City continues to discuss additional steps to balance the City budget, including transfers between funds, restricting certain General Fund contributions, maintaining vacant positions and using certain current fund balances.

The City has utilized balancing measures to ensure the current budget is balanced, as has been its historical practice. Some of the measures used include increasing salary savings for the public safety employees from 5% to 9%, utilizing the section 115 pension trust fund to fund a portion of the increased pension cost, and utilizing certain fund balances to balance other funds.

Through these one-time measures, the budget is balanced for both fiscal years.

Five-Year Forecast

Also on June 25, 2024, the Budget and Finance Policy Committee was presented with a five-year forecast, showing a structural annual deficit in fiscal years 2023-24 through 2027-28.

The following table shows the projected revenues and expenditures over the next five fiscal years for the City’s General Fund and Special Funds.

CITY OF BERKELEY
Five-Year Forecast
Fiscal Years 2023-24 through 2027-28

2023-24 2024-25 2025-26 2026-27 2027-28
Beginning Fund Balance $85,414,113 $73,516,703 $61,370,747 $49,297,696 $38,716,143 Total Revenues 273,448,848 273,404,097 284,047,718 296,147,777 302,488,599 Total Expenditures 285,346,258 285,550,053 296,120,769 306,729,330 317,787,520 Annual Surplus/(Shortfall) (11,897,410) (12,145,956) (12,073,051) (10,581,553) (15,298,921) Projected Ending Balance $73,516,703 $61,370,747 $49,297,696 $38,716,143 $23,417,222

Source: City of Berkeley Annual Comprehensive Financial Reports

Given the decreasing level of precision to be expected in the later years of a multi -year forecast, the significance of the projections in the out years is not so much in terms of their absolute amounts, but rather in the relative size of the decrease or increase from the prior year .

This information should be used to provide a multi-year perspective to budgetary decision-making, rather than as a precise prediction of what will occur.

General Fund Reserves

Establishment of General Fund Reserve . On January 24, 2017 , the City Council adopted a General Fund reserve policy, establishing a General Fund reserve (the “Reserve”), to

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prepare for the impact of economic cycles and catastrophic events and assure fluctuations in revenue do not impede the City’s ability to meet expenditure obligations. When revenues fail to meet the City’s normal operating requirements, or the need for disb ursements temporarily exceeds receipts, the Reserve, upon a 2/3 vote of the City Council, may be used in accordance with the standards set forth therein.

The Reserve is composed of two elements, a Stability Reserve and a Catastrophic Reserve:

1) A Stability Reserve is maintained to mitigate loss of service delivery and financial risks associated with unexpected revenue shortfalls during a single fiscal year or during a prolonged recessionary period. The purpose of the Stability Reserve is to provide fiscal stability in response to unexpected downturns or revenue shortfalls, and not to serve as a funding source for new programs or projects.

2) A Catastrophic Reserve is maintained for the purpose of sustaining General Fund operations in the case of a public emergency, such as a natural disaster or other catastrophic event. The Catastrophic Reserve will be used to respond to extreme, onetime events, such as earthquakes, fires, floods, civil unrest, and terrorist attacks. The Catastrophic Reserve will not be accessed to meet operational shortfalls or to fund new programs or projects.

The Reserve is accounted for in the Restricted and Committed fund balance of the City’s balance sheet.

Target Reserve Levels. 55% of the Reserve is allocated to the Stability Reserve and 45% to the Catastrophic Reserve.

The long-term goal for the Reserve is a minimum of 30% of the adopted General Fund revenues, to be achieved within no more than 10 years (“Long-Term Goal”). Based on a risk assessment (according to best practices), to be updated at least every five years, the City Council may consider increasing or lowering the Reserve level.

As of July 1, 2025, the Stability Reserve is projected to have $ 32,798,073, and the Catastrophic Reserve is projected to have $25,516,697, which total 21.33% of adopted General Fund revenues, below the long-term goal of 30% in 2027.

Replenishment of the General Fund Reserve . The City Manager will recommend a replenishment schedule for all monies proposed for appropriation from the Reserve. The replenishment schedule will be adopted simultaneous with the appropriation to withdraw Reserve funds or, if infeasible due to emergency circumstances, no more than three months from the date of the withdrawal appropriation. Repayment shall begin no more than five years from the date of withdrawal and be completed within 10 years from the date of withdrawal.

While staff envisions that, in most cases, repayment will start as soon as possible, the repayment guidelines are meant to reflect a commitment to maintain a sufficient Reserve, while also recognizing that a use of Reserve amounts may occur during an econo mic downturn and it may be necessary to postpone repayment while the economy improves. In fiscal year 2023-24, the City repaid $7.5 million to the Stability Reserve, and $2.2 million is expected to be repaid in fiscal year 2024-25. In Fiscal Year 2023-24, the City repaid $6. 1 million to the Catastrophic Reserve and $1.8 million is expected to be repaid in fiscal year 2024-25.

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Unfunded Liability Obligations and Unfunded Infrastructure Needs

General. On April 11, 2023, the City Manager presented a biennial report of the City’s unfunded liability obligations and unfunded infrastructure needs (the “Report ”). The Report includes, among other things:

1. Employee and retiree benefit costs over a 10-year horizon

2. Costs for current active employees including:
a. total payroll costs for active employees during the current year; b. projected payroll costs for the same number of employees for the next 10-year period.

3. A summary of all current City obligations including:
a. general obligation bonds;
b. certificates of participation;
c. loans;
d. all other current long-term obligations.

4. Summary of all capital assets and infrastructure including:
a. Appraisal of Public Buildings valued at $5 million or more b. Condition of Streets and Roads, projecting costs to bring streets and roads condition to an average Pavement Condition Index of 75 within 5 years. c. Sewers: updated asset management plan for public sewers including projected costs for succeeding 5 years and projected revenue from sewer fees for the succeeding 5 years.

Certain provisions of the Report are described herein. The Report is not incorporated by reference herein, is available on the City’s internet website at:
https://berkeleyca.gov/sites/default/files/documents/2023-05-23%20Special%20Item%2001%20 Unfunded%20Liability%20Obligations_0.pdf. The City takes no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness of information posted there, and such information is not incorporated in this Official Statement by these references.

The Report concludes that maintaining a careful balance between cash on hand to fund daily operations and liquidity to cover unfunded liabilities is a key challenge for all governments, and reports that liabilities tied to pension benefits total $1,971 million (of which only 77.4% is funded). For OPEB benefits, net liability is $146 million (of which only 26.17% is funded). The City’s unfunded infrastructure needs total $2.52 billion.

Unfunded Liabilities. Due to projected increases in expenses, primarily pension and medical expenses, the City is projecting a General Fund structural deficit.

The City provides retirement benefits to its employees through three plans in the California Public Employees’ Retirement System (“ CalPERS”). See “- Retirement Programs” below for additional information . The City has a significant pension liability that is anticipated to grow, increasing by more than $40 million over the next ten years, which will put a strain on resources and services.

In addition, the City’s retiree health plans are significantly underfunded, as detailed in the Report.

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Unfunded Infrastructure Needs. The City has an extensive portfolio of capital assets and infrastructure, including 95 buildings, 254 miles of public sanitary mains and 130 miles of sewer laterals, 216 centerline miles (450 lane miles) of public streets, 52 parks, 2 pools, 3 camps and 42 facilities served by the City’s IT systems. In addition, Berkeley is a relatively older city, and faces related challenges with its aging infrastructure. Despite the passage of several local bond measures to support capital facilities, there are significant unfunded needs related to parks, pools, camps, waterfront property, streets, sidewalks, storm drain/watershed, sewer, transportation and buildings/facilities. As needed improvements continue to be deferred, operating and maintenance costs rise and rehabilitation and replacement costs increase substantially . The Report details available annual funding and unfunded needs for capital and major maintenance.

As a result of the age of the City’s infrastructure and limited resources allocated to infrastructure, the projected costs of the City’s aging infrastructure needs are anticipated to reach more than $2.52 billion by fiscal year 2027-28.

The Report also highlights that the City is located on the east side of the San Francisco bay, and has waterfront property with docks, pilings, parking lots and streets that have reached the end of their useful life. The City’s mechanism for managing its waterfront revenues and expenditures (the “Marina Fund”) is projected to have insufficient funding due to decreasing revenues and increasing expenditures, a trend that could be aggravated by failure to maintain the marina infrastructure. The City has created the Berkeley Marina Area Specific Plan to address an estimated $113 million in infrastructure repairs but has not identified any specific funding sources.

The City is currently facing significant budget deficits. See “General Fund Budget - Adopted Biennial Budget above.”

State Budget and its Impact on the City

Fiscal Year 2025-26 State Budget. The Governor sent the fiscal year 2025 -26 budget proposal to the legislature on January 10, 2025 (the “ 2025-26 State Budget Proposal ”). The 2025-26 State Budget Proposal presents a balanced budget with what are noted as significant reserves in the coming fiscal year, resulting in an upgrade to the State’s financial forecast in the near term and modest upward revisions in the long term. A stronger-than-anticipated performance of the economy, stock market, and cash receipts, combined with an improved economic outlook, are noted as contributors to an upgraded revenue forecast, with General Fund revenues, before accounting for transfers and tax policy proposals, projected to be higher by approximately $16.5 billion (2.7%) than was assumed in the 2024 -25 State Budget for the three-year budget window of fiscal years 2023-24 through 2025-26.

Voters approved Proposition 1A in November 2004 to amend the State Constitution to place constraints on the State’s ability to divert certain specified revenues from local agencies to the State. Subsequently, in November 2010, voters approved Proposition 22 to amend the State Constitution to further constrain or eliminate the State’s ability to redirect revenues from local agencies. “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Proposition 1A” and “– Proposition 22.”

Additional Information. Information about the 2025-26 State Budget Proposal and other State budgets is available at www.dof.ca.gov or www.ebudget.ca.gov. An impartial analysis of the budget is posted by the Legislative Analyst Office at www.lao.ca.gov. In addition, various State official statements, many of which contain a summary of the current and past State budgets, may

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be found at the website of the State Treasurer, www.treasurer.ca.gov . The information referred to in this paragraph is prepared by the respective State agency maintaining each website and not by the City. The City takes no responsibility for the continued accuracy of the Internet addresses or for the accuracy or timeliness o f information posted there, and such information is not incorporated in this Official Statement by these references.

Federal Revenues

General. The federal government provides annual funding for several City programs, including funding from the Housing of Urban Development through the Community Block Grant, Emergency Solutions Grant, and HOME Investment Partnership in addition to other health and human services programs.

In January 2025, the federal government indicated that it was considering the reduction of federal funding to a number of programs, including programs that impact City programs. The City is unable to predict whether the federal government’s review of spending may eventually impact its receipt of federal funding, and whether any such impact would have a material effect on the finances or operations of the City. The City is reviewing mitigation plans for federal funding changes that may impact the City in the future.

Sanctuary Cities. On January 21, 2025, the City Council adopted a resolution reaffirming the City’s status as a sanctuary city and to reassert policies and procedures to guide and support staff should U.S. Immigration and Customs Enforcement (“ICE”) contact City officials or visit City offices.

In January 2025, President Trump signed an executive order directing the Department of Homeland Security and the Department of Justice to explore denying federal funds to sanctuary jurisdictions and to pursue civil or criminal actions against them. Additionally, the United States Congress is considering bill H.R. 32, the “No Bailout for Sanctuary Cities Act,” that would empower the president to withhold federal funding from cities, counties and states with sanctuary city status.

Multiple lawsuits have been filed by local governments challenging the executive order.

The City is unable to predict the outcome of ongoing litigation against the sanctuary cities executive order or whether the federal government’s restriction of funding for sanctuary cities may eventually impact its receipt of federal funding, and whether any such impact would have a material effect on the finances or operations of the City. The City is reviewing mitigation plans to deal with any ongoing litigation that may impact City financials.

Ad Valorem Property Taxes

Tax Levies and Collections . Property taxes collected by the City decreased by $1.2 million, or 1.0%, to $117.8 million in fiscal year 2023 -24 from $119.0 million in fiscal year 2022- 23, primarily as a result of increases/decreases in the following revenue sources:

• Property Transfer Tax revenue in fiscal year 2023 -24 was $18.0 million, $4.0 million less than the fiscal year 2022 -23 total of $22.0 million. This decline was primarily as a result of a 26.2% decrease in the dollar value of property sales and a 10.0% decrease in the number of property sales transactions.

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• Measure P Property Tax revenue in fiscal year 2023-24 was $6.8 million, $2.9 million or 29.9% less than the fiscal year 2022-23 total of $9.7 million.

This decline was primarily due to a 40.0% decrease in the dollar value of property sales, a 34.1% decrease in the number of property sales transactions, and significantly less property sales of $10 million or more in fiscal year 2023-24 than there were in fiscal year 2022-23;

• Secured Property Taxes increased by $5.6 million from $79.3 million in fiscal year 2022 -23 to $84.9 million in fiscal year 2023 -24, due to an increase in assessed value of 7.256% in the City.

• Secured Property Taxes increased $5.6 million due to an increase in assessed value of 7.256% in the City.

• Vehicle In-Lieu Taxes increased $1.2 million or 7.3% in fiscal year 2023-24 from $16.7 million in fiscal year 2022-23 to $17.9 million in fiscal year 2023- 24, due to increase in assessed value of 7.256% in the City.

Taxes are levied for each fiscal year on taxable real and personal property that is situated in the City as of the preceding January 1. A supplemental roll is developed when property changes hands, which produces additional revenue.

A ten percent penalty attaches to any delinquent payment for secured roll taxes. In addition, property on the secured roll with respect to which taxes are delinquent becomes tax - defaulted. Such property may thereafter be redeemed by payment of the delinquent taxes and the delinquency penalty, plus a redemption penalty to the time of redemption. If taxes are unpaid for a period of five years or more, the property is subject to auction sale by the County Tax Collector.

In the case of unsecured property taxes, a 10% penalty attaches to delinquent taxes on property on the unsecured roll, and an additional penalty of 1.5% per month begins to accrue beginning November 1 of the fiscal year, and a lien is recorded against the assessee. The taxing authority has four ways of collecting unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a certificate in the office of the County Clerk specifying certain facts in order to obtain a judgment lien on specific property of the taxpayer; (3) filing a certificate of delinquency for recording in the County Recorder’s office in order to obtain a lien on specified property of the taxpayer; and (4) seizure and sale of personal property, improvements or posses sory interests belonging or assessed to the assessee.

The County levies (except for levies to support prior voter -approved indebtedness) and collects all property taxes for property falling within that county’s taxing boundaries.

See Table 1 of the forepart of this Official Statement for a table summarizing the historical and current assessed valuation of the taxable property in the City.

The City does not participate in the Teeter Plan. See Table 4 of the forepart of this Official Statement for a history of secured tax charges and delinquencies within the City during the past 10 years.

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Other General Fund Revenues and Transfers

In addition to property taxes, the City has several other major tax and fee revenue sources, as described below. The following table summarizes the City’s actual audited general fund revenues and transfers from fiscal year 2020-21 through fiscal year 2023-24.

CITY OF BERKELEY

GENERAL FUND REVENUES AND TRANSFERS

Actual

Actual

Actual

Actual
Revenue Revenue Revenue Revenue
FY 2021 FY 2022 FY 2023 FY 2024
Real Property $68,166,155 $70,657,482 $79,260,689 $84,850,061 Unsecured Property 3,448,412 4,422,414 3,830,697 4,506,444 Supplemental Taxes 2,249,517 2,317,723 3,561,752 2,842,273 Property Transfer Tax 21,469,955 42,901,750 22,878,336 17,528,223 Property Transfer Tax-Measure P 10,919,576 20,591,313 10,199,580 6,272,861 Sales Tax 15,792,305 18,928,278 19,194,971 18,717,040
Soda Tax 953,069 1,025,800 1,162,310 1,101,210
Business License 17,809,332 20,324,937 21,854,193 23,754,845 Business License – Cannabis Recreation 1,712,641 1,250,792 997,572 152,834 Measure U1 4,818,740 4,913,872 5,844,564 6,322,118
Utility Users Tax 13,892,200 14,750,065 17,634,565 17,209,441 Hotel Tax 2,292,480 5,727,046 7,477,911 6,979,323
Vehicle In-Lieu 14,380,453 15,006,003 16,659,665 17,875,821 Parking Fines 3,571,391 4,765,819 5,875,858 6,034,002
Moving Violations 131,756 156,253 149,420 166,152
Interest 5,917,722 6,694,122 12,117,025 15,155,999
Ambulance Fees 3,081,204 3,833,730 5,143,120 7,910,668
Franchise Fees 1,726,470 1,720,056 1,822,528 2,008,162
Other Revenue 18,514,060 17,185,630 15,872,263 13,600,820 Transfers and IDC 21,180,762 29,445,571 23,605,162 20,312,614 TOTAL $232,028,200 $286,618,657 $275,142,181 $273,300,911

Source: City of Berkeley Budget Office. Revenues were recorded using the budget basis of accounting (i.e., Cash).

Sales and Use Tax. The sales tax is an excise tax imposed on retailers for the privilege of selling or leasing tangible personal property. The use tax is an excise tax imposed for the storage, use, or other consumption of tangible personal property purchased from any retailer. The total sales tax rate within the City is currently 10.25%. The proceeds of sales and uses taxes imposed within the City are distributed by the State to various agencies, with the City receiving

1.0% of the amount collected.

Collection of the sales and use tax is administered by the California Department of Tax and Fee Administration (the “ CDTFA”). This process was formerly administered by the State Board of Equalization. The Taxpayer Transparency and Fairness Act of 2017, which took effect July 1, 2017, restructured the State Board of Equalization and separated its functions among three separate entities: the State Board of Equalization, the CDTFA and the Office of Tax Appeals.

The State Board of Equalization will continue to perform the duties assigned to it by the state Constitution, while all other duties will be transferred to the newly established CDTFA and the Office of Tax Appeals. CDTFA will handle most of the taxes and fees previously collected by the State Board of Equalization, including sales and use tax . According to the CDTFA, it distributes quarterly tax revenues to local jurisdictions (like the City) using the following method:

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Using the prior year’s like quarterly tax allocation as a starting point, the CDTFA first eliminates nonrecurring transactions such as fund transfers, audit payments and refunds, and then adjusts for growth, in order to establish the estimated base amount. The CDTFA disburses 90% of the base amount to each local jurisdiction in three monthly installments (advances) prior to the final computation of the quarter’s actual receipts. Ten percent is withheld as a reserve against unexpected occurrences that can af fect tax collections (such as earthquakes, fire or other natural disaster) or distributions of revenue such as unusually large refunds or negative fund transfers. The first and second advances each represent 30% of the 90% distribution, while the third advance represents the remaining 40%. One advance payment is made each month, and the quarterly reconciliation payment (clean-up) is distributed in conjunction with the first advance for the subsequent quarter . Statements showing total collections, administra tive costs, prior advances and the current advance are provided with each quarterly clean-up payment.

The CDTFA receives an administrative fee based on the cost of services provided by the Board to the City in administering the City’s sales tax, which is deducted from revenue generated by the sales and use tax before it is distributed to the City.

Sales tax revenues increased approximately $42,822 or 0.2% to $19.97 million in fiscal year 2023-24 from $19.92 million in fiscal year 2022-23. The City currently projects that sales tax revenue will decrease by 1.2% in fiscal year 2024-25 and then increase 2.9% in fiscal year 2025-

26. CITY OF BERKELEY

TAXABLE TRANSACTIONS
(Figures in Thousands)

2019 2020 2021 2022 2023
Retail and Food Services:

Apparel Stores $42,772 $20,385 $37,143 $43,166 $44,187
Gen. Merchandise Stores 21,434 16,902 19,066 22,498 19,762 Food Stores 155,025 169,569 144,467 115,170 115,398
Eating and Drinking Places 391,474 208,146 283,279 366,323 383,140 Home Furnishings and Appliances 66,188 45,479 87,133 59,435 51,568 Bldg. Materials, Farm Implements 101,937 113,116 141,811 152,845 149,126 Auto Dealers, Auto Supplies 119,679 94,927 114,276 135,123 109,251 Gas/Service Stations 94,217 57,950 87,759 110,009 99,486 Other Retail Stores 261,020 188,434 236,279 245,362 224,668 Total Retail and Food Services 1,263,746 914,910 1,151,213 1,249,931 1,196,586 All Other Outlets 372,108 315,081 341,988 431,788 401,687 TOTAL ALL OUTLETS $1,635,854 $1,229,990 $1,493,201 $1,681,719 $1,598,273

Source: State Department of Tax and Fee Administration.

Factors that have historically affected sales tax revenues include the overall economic growth of the Bay Area, competition from neighboring cities, the growth of specific industries within the City, the City’s business attraction and retention efforts, and catalog and Internet sales.

Utility Users Tax. The City imposes a 7.5% tax on users of gas, electricity and telephone, as well as cellular telephone services for billing addresses within the City. The tax is not applicable to State, County, or City agencies, or to insurance companies and banks. Some of the factors affecting this revenue stream include consumer demand for these utilities, legislative and regulatory action, rate changes, and the evolution of technology . Utility users taxes decreased

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$0.8 million or 4.6% from $17.6 million in fiscal year 2022-23 to $16.8 million in fiscal year 2023-

24. The decrease came primarily from decreases in every category, except electric (increased $0.8 million), as follows: Gas (decreased $1.1 million); telephone (decreased $0.7 million); cellular (decreased $0.04); and cable (decreased $0.05 million). Utility users tax is expected to be flat from fiscal year 2024-25 through fiscal year 2025-26.

Business License Tax. The City requires all businesses within the City to be licensed and imposes a business license tax on all business locations and a new license registration fee on applicants for a new license. The annual tax is generally determined based on the type of business and the business’s gross receipts. The tax rate varies between $0.60 per $1,000 gross receipts for grocers, on the low end, and $50.00 per $1,000 gross receipts for adult cannabis sales on the high end. Most types of businesses are required to pay a minimum tax of at least $51 per year. The overall revenue from this tax is dependent on the number of license renewals each year and the growth of businesses and industries within the City and the Bay Area more generally. Business license taxes revenue decreased $0.7 million or 3.0% from $23.4 million in fiscal year 2021-22 to $23.9 million in fiscal year 2022-23 primarily due to business licenses taxes on recreational cannabis of $1.0 million being added to business license taxes for fiscal year 2022-23 but being included in other revenue categories in fiscal year 2023-24. The City projects an 0.41% decrease in business licenses taxes in fiscal year 2024-25 and a 2% increase in fiscal year 2025-26.

Property Transfer Tax. The City’s transfer tax rate is 1.5% for properties with a consideration up to $1.5 million and 2.5% for transferred properties with a consideration over $1.5 million. The $1.5 million threshold will be adjusted annually to capture approximately the top 33% of such transfers based on transfers that occurred in the 12 months preceding September 1 of the preceding year. However, the threshold cannot be reduced below $1.5 million, meaning that the tax on properties transferred for $1.5 m illion or less would remain at 1.5%, notwithstanding any adjustment. The tax is due when the transfer is recorded with the County. Title companies collect the tax as part of the sale closing process and remit the funds to the County when sales or transfers are finalized. The County remits the amounts due monthly, and the amounts are credited to the general fund. A buyer of residential housing built before 1989 may voluntarily choose to reserve up to one-third of the transfer tax to perform seismic upgrades. Buyers typically have up to one year to complete the work and file for a rebate. Previously , title companies held the reserved amount in escrow until the work was completed, but since May 2007, the City has held the money in escrow accounts, with the interest going to the City.

Prior to fiscal year 2017-18, it was the City Council’s policy that property transfer tax in excess of $10.5 million was treated as one -time revenue to be transferred to the Capital Improvement Fund for capital infrastructure needs, but that amount was increased to $12.5 million in fiscal year 2017-18 until fiscal year 2022-23; in fiscal year 2022-23, the City Council increased the baseline for fiscal year 2022 -23 and fiscal year 2023- 24 to $18 million, with a permanent adjustment to $16 million beginning in fiscal year 2024-25.

Parking Fines. The City issues and adjudicates citations and civil penalties for parking violations through its own administrative structure. It has a great degree of control over the administration of parking fines, although issuing agencies within the County try to standardize parking penalties to the extent possible. Revenue from parking fines is affected by the penalties imposed for violations, the number of employees issuing tickets, how many tickets employees are able to issue, and the number of working parking meters, among other factors. Currently, the City

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must remit an additional $12.50 per citation to the State/County for State and County construction funds, Maddy emergency medical fund, and DNA identification fund.

Vehicle in Lieu Fees. Vehicle license fees (“VLF”) imposed for the operation of vehicles on state highways are collected by the State Department of Motor Vehicles in lieu of personal property taxes on vehicles. In connection with the offset of the VLF, the State Legislature authorized appropriations from the State General Fund to “backfill” the offset so that local governments, which receive all of the vehicle license fee revenues, would not experience any loss of revenues. The legislation that established the VLF offset program also provided that if there were insufficient State General Fund moneys to fully “backfill” the VLF offset, the percentage offset would be reduced proportionately (i.e., the license fee payable by drivers would be increased) to assure that local governments would not be underfunded.

As part of the 2004 Budget Act negotiations, an agreement was made between the State and local government officials under which the VLF rate was permanently reduced from 2% to

0.65%. In order to protect local governments, the reduction in VLF revenue to cities and counties from this rate change was replaced by an increase in the amount of property tax they receive.

Commencing in fiscal year 2004 -05, local governments began to receive their full share of replacement property taxes, and those replacement prop erty taxes now enjoy constitutional protection against certain transfers by the State because of the approval of Proposition 1A at the November 2004 election.

As a part of its fiscal year 2009 -10 budget, California increased the vehicle license fee from 0.65% to 1.15% for registration fees due on or after the May 19, 2009 special election. This provision expired on July 1, 2011. On July 1, 2011, vehicle license fees returned to 0.65%, and the City is unaware of any current State legislative efforts likely to increase these in fees in the future.

Vehicle in-lieu taxes increased $1.2 million or 7.3% in fiscal year 2023 -24 from $16.7 million in fiscal year 2022-23 to $17.9 million in fiscal year 2023-24 due to increases in assessed value of 7.256% in the City.

Other Revenues. The City also collects additional general fund revenues from franchise fees, transient occupancy taxes, ambulance fees, a tax on sugar -sweetened beverages, and other more minor sources. Under the City’s cable and electric and gas franchise fee arrangements, the local cable provider pays an annual franchise fee of 5% of gross revenues, and the electricity and gas providers pay the greater of 2% of gross receipts attributable to miles of line operated or 0.5% of gross receipts. The transient occupancy tax, also known as the hotel tax, is a 12% tax on the room charge for rental of transient lodging , which was significantly reduced due to restrictions on travel and events due to COVID -19. The City also has an agreement with the County to be the exclusive provider of all emergency ground ambulance services within the City; the specific ambulance fee depends on the type of service delivered and is billed to clients or their insurance companies. Finally, other more minor revenue sources include payments for moving violations, interest on existing funds, and other service fees.

Retirement Programs

PERS Plan Description . The City contributes to three plans in California Public Employees’ Retirement System (“PERS”). The first plan covers all of the City’s full-time and part- time benefited sworn uniformed fire employees and all chiefs (and is referred to as the Safety Fire Plan in this Official Statement). The second covers all of the City’s full-time and part-time benefited

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sworn uniformed police employees and all chiefs (and is referred to as the Safety Police Plan in this Official Statement). The third plan covers all remaining eligible City employees (and is referred to as the Miscellaneous Plan in this Official Statement). These plans are agent multiple-employer defined benefit pension plans administered by PERS, which acts as a common investment and administrative agent for participating public employers within the State of California.

PERS Plan Eligibility. For a more detailed discussion of the eligibility requirements for the City’s PERS retirement plans, see Appendix B, Note 12.

PERS Plan Contributions. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the PERS Board of Administration (the “ Board of Administration”). For the measurement period ended June 30, 2023 (the measurement date), the average active employee contribution rate is 8.0% of annual pay for the Miscellaneous Plan and 9.0% of annual pay for the Safety Plan (Fire and Police), and the employer contribution rate is 23.446% of annual payroll for the Miscellaneous Plan, 48.776% of annual payroll for the Public Safety Fire Plan, and 79.138% of annual payroll for the Public Safety Police Plan. The contribution requirements of the plan members are established by State statute, and the employer contribution rates are established and may be amended by PERS.

Implementation of GASB No. 68 . Commencing with fiscal year ended June 30, 2015, the City implemented the provisions of GASB Statement No. 68, which require certain new pension disclosures in the notes to its audited financial statements commencing with the audit for fiscal year 2014-15. Statement No. 68 generally requires the City to recognize its proportionate share of the unfunded pension obligation by recognizing a net pension liability measured as of a date (the measurement date) no earlier than the end of its prior fiscal year.

For a more detailed discussion of the eligibility requirements for the City’s retirement plans, see Appendix C, Note 12. The City’s fiscal year 2023-24 contributions to the pension plans and the funded status of the pension plans as of June 30, 2023, are set forth below.

Total Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Employee
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
Contributions
Employer
PERS – Miscellaneous Plan
$1,256,885,291 $895,078,800 $361,806,491 71.21% $110,614,150 327.09% $34,576,213

PERS – Public Safety Fire Plan
$334,094,804 $233,174,881 $100,919,923 69.79% $18,118,697 556.99% $10,869,629

PERS – Public Safety Police Plan
$518,958,201 $313,908,941 $205,049,260 60.49% $21,578,636 950.24% $19,066,702

Recent Actions by PERS. On November 15, 2021, the CalPERS Board selected a new asset allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time retaining the reduction of discount rate from 7.0% to 6.8%. Notable changes for employers include a decrease in median total employer contribution rates, from less than 1% in miscellaneous plans to a decrease of more than 2% in some safety plans. Contribution changes took effect in fiscal year 2023-24 for public agencies.

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Dollar Contribution Based on Projected PERS Rate Increases . The City’s projected annual financial contributions as a result of the PERS rate changes for the next four years are shown in the table below, with dollar amounts shown in millions:

2023-24 2024-25 2025-26 2026-27
Projected
Miscellaneous $25.8 $30.1 $31.9 $34.6
Police 14.1 16.4 17.9 18.9
Fire 6.1 8.0 8.8 9.4
Total $46.0 $54.5 $58.6 $62.9

Berkeley Police Retirement Income Benefit Plan. Prior to December 22, 2012, the City maintained the Berkeley Police Retirement Income Benefit Plan (“ BPRIBP”), a single-employer defined benefit income plan, for its police retirees and surviving spouses. Effective September 19, 2012, police retired on or after this date are no longer covered by BPRIBP. The City replaced this plan with the “Retiree Health Premium Assistance Coverage Plan.”

The City’s fiscal year 2023-24 contribution to the BPRIBP and the funded status of the BPRIBP is set forth below.

Fiscal Year
Ended
Total Pension
Liability
Plan Fiduciary
Net Position
Plan Net
Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Payroll
Plan Net
Pension
Liability as
a
Percentage
of Covered
Employee
Payroll
Contributions
Employer
6/30/2024 $68,306,425 $3,612,186 $64,694,239 5.29% $21,578,636* 271.89% $2,235,650 ______________
* Estimated.

For a more detailed discussion of the BPRIBP, see APPENDIX B to this Official Statement.

Peace Officers Research Association of California. Effective December 23, 2012, the City established a new sick leave program called Peace Officers Research Association of California (“PORAC”). If a sworn member of the Berkeley Police department has an accrued sick leave balance on December 23, 2012 that exceeds 200 hours, one half of all those hours in excess of 200 shall be maintained in a separate account. The financial value of those hours shall be converted and deposited into the employee’s PORAC medical trust account over five successive years in equal installments commencing on January 1, 2013. The conversion was at the employee’s rate of pay on December 23, 2012. The City may accelerate the payment of hours to be converted. The remaining fifty percent of the sick leave balance in excess of 200 hours was credited into the employee’s separate “catastrophic/service time” bank no later than February 1, 2013, up to a maximum of 500 hours.

The City’s contribution to PORAC for the calendar year ending December 31, 2024 was $392,104.

Safety Members Pension Fund. In addition, the City maintains the Safety Members Pension Fund (“ SMPF”), a defined benefit plan for fire and police officers who retired prior to March 1973. In March 1973, all active fire and police officers were transferred from SMPF to

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PERS. The City pays the benefits to SMPF members on a pay-as-you-go basis, primarily through a Funding Agreement, purchased by the Berkeley Civic Improvement Corporation on behalf of the City in 1989. For the fiscal year ended June 30, 2024, the City’s contribution to SMPF was $74,479.

The funded status of the SMPF as of June 30, 2024, the most recent actuarial date, is set forth below:

Actuarial
Valuation
Date
Plan
Fiduciary Net
Position
Total Pension
Liability
Plan Net
Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
6/30/2024 -- $146,122 $146,122 --% N/A N/A

For a more detailed discussion of the SMPF, see APPENDIX B of this Official Statement.

Post-Employment Health Benefits

The City offers certain post-employment health benefits to retirees. There are three plans:
(i) the City of Berkeley Fire Employees Retiree Health Plan (“ FRHF”), (ii) the City of Berkeley Miscellaneous Employees Retiree Health Plan (“ RHPAP”) and (iii) the Police Retiree Premium Assistance Plan (“PRPAP”).

The City has adopted Government Accounting Standards Board Statement 75 which requires governmental agencies to change their accounting for Other Post-Employment Benefits (“OPEB”) from pay-as-you-go to an accrual basis.

See Appendix B, Note 3 for information about the City’s OPEB liabilities.

City of Berkeley Fire Employees Retiree Health Plan. The FRFH is a single-employer defined benefit medical plan. To be eligible for benefits, sworn Fire employees must retire from the City on or after July 1, 1997, be vested in a PERS pension, and retire from the City on or after age 50. Benefits commence immediately upon retirement. Benefits are payable for the retiree’s lifetime and continue for his or her covered spouse’s/domestic partner’s lifetime. The amount the City contributes toward the Fire Employ ees Retiree Health Plan is 4.5% per year regardless of the amount of increase in the underlying premium rate. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City Labor Negotiating Team, and are approved by the City Manager and City Council. As of June 30, 2024, there were 138 active employees, 27 retirees deferred and 89 retirees receiving benefits.

The City’s targeted funding policy is equal to the service cost for active employees plus an amount to amortize unfunded liabilities over 30 years (rolling 30-year amortization) as a level percentage of payroll. The City strives to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45.

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For the FRFH, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2023-24 and the four preceding years were as follows:

Fiscal Year
Ended Annual OPEB Cost
Percentage of
Annual OPEB Cost
Contributed

Net OPEB
Liability
6/30/2020 $2,104,622 36% $21,177,486
6/30/2021 2,575,970 35 23,873,248
6/30/2022 1,354,619 39 18,507,610
6/30/2023 3,659,767 36 22,908,062
6/30/2024 3,879,000 38 22,235,604

The funded status of the FRFH as of June 30, 2024, the date of the most recent actuarial report, is set forth below:

Actuarial
Valuation
Date
Actuarial
Value of
Assets
Actuarial
Accrued
Liability
(AAL)-Unit
Credit
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
7/1/2024 $12,665,380 $35,573,442 $22,235,604 38.0% $18,640,673 119.29%

City of Berkeley Miscellaneous Employees Retiree Health Premium Assistance Plan. The RHPAP is a single -employer defined benefit medical plan. It provides retiree health benefits to eligible retirees and his/her spouse or domestic partner. The establishment and amendments of benefit provisions are negotiated between the employee bargaining units and the City and are approved by the City Council.

Retirees who are at least age 50, with at least 8 years of service with the City at the time of separation from service are eligible to receive retiree health benefits commencing at age 55.

Benefits are payable for the retiree’s lifetime and continue for h is or her covered spouse’s/domestic partner’s lifetime. The City pays the monthly cost of the monthly premiums up to a participant’s applicable percentage of the base dollar amount and subject to annual 4.5% increases regardless of the amount of increase i n the underlying premium rate. As of June 30, 2024, there were 1,140 active employees, 393 inactive employees or beneficiaries currently receiving benefits and 203 inactive employees entitled to but not yet receiving benefits.

The City’s targeted funding policy is equal to the normal cost for active employees plus an amount to amortize unfunded liabilities over 30 years as a level percentage of payrolls. The City is required to contribute the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. Any changes to the contribution requirements of the plan are negotiated by the bargaining units and City negotiating staff, and approved by the City Council.

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For the RHPAP, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for fiscal year 2023-24 and the four preceding years were as follows:

Fiscal Year
Ended
Annual
OPEB Cost
Percentage of
Annual OPEB Cost
Contributed
Net OPEB
Obligation
6/30/2020 $5,534,572 32.7% $60,659,492
6/30/2021 4,871,995 42.9 41,895,470
6/30/2022 2,071,289 50.2 29,470,744
6/30/2023 6,017,367 52.3 29,845,739
6/30/2024 6,553,000 56.8 26,807,574

The funded status of the RHPAP as of June 30, 2024, the most recent actuarial report, is set forth below:

Actuarial
Valuation
Date
Actuarial
Accrued
Liability
(AAL)
Actuarial
Value of
Assets
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
7/1/2024 $62,048,880 $35,241,306 $26,807,574 56.8% $118,898,025 22.55%

Police Retiree Premium Assistance Plan. Effective September 19, 2012, the City replaced the “Berkeley Police Retirement Income Benefit Plan” with the “Retiree Health Premium Assistance Coverage Plan” for any police employees hired on or after that date, as well as any current employees who retir e on or after such date. Under the newly established retiree health premium assistance plan, benefits will be the paid by the City directly to the provider who is providing retiree health coverage to the retiree or his or her surviving spouse. The maximum amount will be equal in value to the City sponsored health plan.

In order to be eligible for the Retiree Health Premium Assistance Coverage a “Retiree” must meet all of the following criteria:

I. A person who is vested in, and
II. Has reached the age of 50, and
III. Has retired from the City at age 50 or thereafter, and IV. Has applied for and is receiving a pension from at the time of retirement.

The maximum amount the City will contribute toward the payment of medical insurance premiums is based on the employee’s years of service as a sworn member of the Berkeley Police Department at time of retirement. The retiree must have at least 10 years of service as a sworn member of the Berkeley Police Department to qualify for this benefit.

Years of Service City Percentage
10 to 14 25%
15 to 19 50
20 or more 100

Beginning September 19, 2012, each month after the employee retires the City will pay the health care service provider an appropriate percentage based on years of service above an amount equal to $1,200 per month for two -party coverage for the retiree and a qualifying spouse/domestic partner or $600 per month for single party coverage. Upon death of either the

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retiree or the retiree’s spouse, the City will only pay the appropriate percentage of the single party rate to the provider on behalf of the surviving retiree or spouse/domestic partner. If there is no spouse/domestic partner at the time of retirement, the City shall only pay the single party rate.

The retiree and/or surviving spouse/domestic partner will be responsible for payment of the difference between the amount the City contributes toward payment of the premium and the actual premium cost. The funds for this difference will come from the retiree ’s retirement account and the retiree must authorize such withdrawal of funds.

Beginning July 1, 2013 and effective each July 1 thereafter, the base rates the City contributes toward payment of the premium amount described in the preceding paragraph shall be increased by either the amount Kaiser increases the retiree medical premium for that year, or 6%, whichever is less. The retiree and/or surviving spouse/domestic partner shall pay the difference between the amount the City contributes toward payment of the premium and the actual premium cost. As of July 1, 2024, there were 150 active employees and 47 retirees.

For the retiree health premium assistance plan, the City’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB asset for fiscal year 2023-24 and the four preceding years were as follows:

Fiscal Year
Ended Annual OPEB Cost
Percentage of
Annual OPEB Cost
Contributed

Net OPEB
Liability
6/30/2020 $4,432,549 4.0% $57,472,394
6/30/2021 5,076,625 4.0 49,355,501
6/30/2022 4,636,861 6.2 32,429,614
6/30/2023 5,245,557 5.8 35,423,408
6/30/2024 2,591,000 6.0 34,445,786

The actuarial cost method used for determining the benefit obligations is the Projected Unit Credit Cost Method. Under this method, the actuarial present value of projected benefits is the value of benefits expected to be paid for current actives and retirees and is calculated based on the assumptions and census data described this report. The Actuarial Accrued Liability (AAL) is the actuarial present value of benefits attributed to employee service rendered prior to the valuation date. The AAL equals the p resent value of benefits multiplied by a fraction equal to service to data over service at expected retirement. The Normal Cost is the actuarial present value of benefits attributed to one year of service. This equals the present value of benefits divided by service at expected retirement. Since retirees are not accruing any more service, their normal cost is zero. In determining the Annual Required Contribution, the Unfunded AAL is amortized as a level percentage of payroll over 30 years.

As of July 1, 2024, the most recent actuarial valuation date, the plan was 6.0% funded.

The actuarial accrued liability for benefit was $36.7 million, and the actuarial value of assets was $2.2 million, resulting in an unfunded accrued liability of $34.4 million. The covered payroll (annual payroll of active employees covered by the plan) was approximately $22.6 million. The fair value of the assets was determined using market values as of the date of the actuarial report. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents mu lti-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Funded status of the plan as of June 30, 2024, the most recent actuarial valuation date is as follows:

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Actuarial
Value of
Assets
Actuarial
Accrued
Liability (AAL)-
Unit Credit
Unfunded
Actuarial
Accrued
Liability-
UAAL
Funded
Ratio
Covered
Payroll
UAAL
as
Percentage
of covered
Payroll
$2,214,765 $36,660,551 $34,445,786 6.0% $22,582,297 152.5%

Defined Contribution Plans

The City offers certain supplemental retirement and income plans to retirees. See Appendix B, Note 12 for information about the City’s defined contribution plans.

Labor Relations

As of March 31 , 2025, the City employed approximately 1,605 full-time equivalent budgeted employees. There are six employee unions as shown below. In addition, the City employs approximately 155 unrepresented employees that include Executive Management, Confidential professional or Confidential Office support positions. The City has not experienced any work stoppages or strikes by its employees.

CITY OF BERKELEY
Labor Relations
Labor Organization Employees
Contract Expiration
Date
Berkeley Fire Fighters Association/I.A.F.F. Local 1227 164 06/30/2026 Berkeley Police Association 140 06/30/2026
I. B. E. W. Local 1245 11 06/30/2025
Service Employees International Local 1021 Maintenance and Clerical Chapters
460 06/26/2027
Service Employees International Local 1021 Community Services and Part-Time Recreation Leaders Association Chapters
393 06/26/2027
Public Employees Local 1 199 06/26/2027
Unrepresented Employees 131 06/26/2027

Source: City of Berkeley.

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Risk Management

The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters.

The City is self -insured for liability claims below $350,000. The City is a member of the Bay Cities Joint Powers Insurance Authority (“BCJPIA”). The BCJPIA consists of 20 municipal or public agency members, all located within the metropolitan San Francisco Bay Area. The BCJPIA provides general liability, auto liability, and errors and omissions coverage between $350,000 and $1,000,000. The California Affiliated Risk Management Authority (“CARMA”) provides additional coverage to the BCJPIA and its member entities for claims in excess of $1,000,000, up to $29,000,000.

The City is self-insured for workers’ compensation. Payments are made to the Workers’ Compensation Self-Insurance Internal Service Fund by transfers from the City’s general fund and other funds of the City on a pay-as-you-go basis.

The City requires pre-employment physical examinations for high risk, high hazard employees as well as annual examination for all uniformed officers. As part of its workers’ compensation program, copies of all injured employee medical reports are monitored by a third - party agent to ensure that injured employees receive proper care.

At June 30, 2024, $7,229,101 and $40,698,360 have been accrued for public liability, and workers’ compensation claims, respectively. These accruals represent estimates of amounts to ultimately be paid for reported claims and, upon past experience, recent claim settlement trends and other information . It is the City’s practice to obtain an actuarial study on an annual basis.

Although the amount of actual losses incurred through June 30, 2024 are dependent on future developments, based upon information from the administrators and others involved with the administration of the programs, the City’s management believes that the aggregate accrual is adequate to cover such losses.

City Debt Structure

Short-Term Debt. The City has issued Tax and Revenue Anticipation Notes (“TRANs”) in each recent year. The City’s TRANs are a general obligation of the City, payable from the City’s general fund and any other lawfully available moneys. The fiscal year 2024- 25 TRANs have an outstanding principal amount of $35,395,000 and mature on July 29, 2025.

General Fund Obligations. The City currently has outstanding long -term General Fund debt and lease obligations described below. The City has never defaulted on the payment of principal of or interest on any of its indebtedness.

Certificates of Participation . On June 2, 2021 , Berkeley Joint Powers Financing Authority (the “ Authority”) executed and delivered certificates of participation in the aggregate principal amount of $3,975,000 (the “Certificates of Participation”). The City’s underlying rental obligation is a general fund obligation of the City. The bonds bear interest at rates between 2.00%-5.00%, and the final maturity date is October 1, 2031. As of ____ 1, 2025, the principal balance outstanding was $________.

Lease Revenue Bonds. In October 2012, Authority issued lease revenue bonds on behalf of the City in the aggregate principal amount of $27,260,000 to refund the

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Authority’s 1999 Lease Revenue Bonds and 2003 Certificates of Participation. The City’s underlying rental obligation is a general fund obligation of the City. The bonds bear interest at rates between 3.00%-5.00%, and the final maturity date is October 1, 2037. As of _____ 1, 2025, the principal balance outstanding was $________.

General Obligation Bonds . The City has previously issued general obligation and general obligation refunding bonds that are secured by ad valorem taxes levied and collected in the City. See “DEBT SERVICE SCHEDULES.- Combined Debt Service Schedule” in the front part of this Official Statement for a summary of the City’s outstanding general obligations.

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Employment

The unemployment rate in the Oakland -Fremont-Berkeley MD was 4.5 % in February 2025, down from a revised 4.7% in January 2025, and unchanged from the year-ago estimate of

4.5%. This compares with an unadjusted unemployment rate of 5.5% for California and 4.5% for the nation during the same period. The unemployment rate was 4.4 % in Alameda County, and

4.6% in Contra Costa County.

The table below provides information about employment by industry type for Alameda County for calendar years 2020 through 2024.

OAKLAND- FREMONT-BERKELEY MD
(Alameda and Contra Costa Counties)
Civilian Labor Force, Employment and
Unemployment, Unemployment by Industry
(Annual Averages)

2020 2021 2022 2023 2024
Civilian Labor Force (1) 1,425,400 1,414,000 1,432,000 1,448,500 1,448,600 Employment 1,303,300 1,329,500 1,384,800 1,392,800 1,383,700 Unemployment 122,000 84,500 47,200 55,700 64,900
Unemployment Rate 8.6% 6.0% 3.3% 3.8% 4.5%
Wage and Salary Employment: (2)
Agriculture 1,500 1,700 1,900 1,800 1,500
Mining and Logging 200 200 300 300 300
Construction 71,100 74,300 75,600 75,700 74,100
Manufacturing 98,700 106,000 112,300 111,200 104,100
Wholesale Trade 42,100 41,100 41,500 41,200 40,700
Retail Trade 101,500 105,300 106,200 105,300 103,400
Transportation, Warehousing, Utilities 44,600 47,100 51,700 52,200 52,000 Information 25,600 24,700 25,000 24,200 22,400
Finance and Insurance 35,900 34,800 33,600 32,200 31,500 Real Estate and Rental and Leasing 16,800 17,200 18,400 18,500 18,400 Professional and Business Services 184,900 190,700 194,700 188,200 186,000 Educational and Health Services 191,300 198,500 205,800 216,900 229,400 Leisure and Hospitality 84,700 92,500 108,300 111,700 110,800 Other Services 33,100 35,600 39,200 41,500 42,700
Federal Government 14,200 13,400 13,100 13,200 13,300
State Government 38,200 35,900 33,100 33,500 32,300
Local Government 113,500 111,800 115,200 117,700 121,400 Total, All Industries (3) 1,097,900 1,130,800 1,175,800 1,185,100 1,184,300

(1) Labor force data is by place of residence; includes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Calculations may not foot due to rounding.

Source: State of California Employment Development Department.

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The following tables show the major employers in the City and the County.

CITY OF BERKELEY
Major Employers
2024

Employer
Number of
Employees
% of Total
Employment
University of California Berkeley 13,847 21.26%
Lawrence Berkeley National Laboratory 3,581 5.50
Sutter East Bay Medical Foundation/Hospitals 2,031 3.12 Berkeley Unified School District 1,767 2.71
City of Berkeley 1,764 2.71
Bayer Corporation 979 1.50
Kaiser Permanente Medical Group 959 1.47
Siemens Corporation/Healthcare Diagnostics, Inc. 594 0.91 Berkeley Bowl Produce 586 0.90
YMCA of The Central Bay Area 542 0.83

Source: City of Berkeley, Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2024.

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ALAMEDA COUNTY
Major Employers
(Listed Alphabetically)
As of April 2025

Employer Name Location Industry
Alameda County Law Enforcement Oakland Government Offices-County Alameda County Sheriff's Dept San Leandro Government Offices-County Alameda County Sheriff's Ofc Oakland Government Offices-County Alta Bates Summit Med Ctr Alta Berkeley Hospitals
BART PD Oakland Transit Lines
California State Univ East Bay Hayward Schools-Universities & Colleges Academic Cooper Vision Inc Pleasanton Optical Goods-Wholesale
Dell EMC Pleasanton Computer Storage Devices (mfrs)
East Bay Muni Utility Dist Oakland Water & Sewage Companies-Utility Kaiser Permanente Oakland Med Oakland Hospitals
Lawerence Berkeley Lab Berkeley Laboratories-Research & Development Lawrence Livermore Natl Lab Livermore University-College Dept/Facility/Office Peoplesoft Inc Pleasanton Computer Software-Manufacturers Ross Stores Inc Dublin Department Stores
Sanfrancisco Bayarea Rapid Oakland Transit Lines
Stanford Health Care-Vllycr Livermore Clinics
Tesla Fremont Factory Fremont Automobile-Manufacturers
Transportation Dept-California Oakland Government Offices-State UCSF Benioff Children's Hosp Oakland Hospitals
University of CA Berkeley Berkeley Schools-Universities & Colleges Academic University of Ca-Berkeley Berkeley University-College Dept/Facility/Office University-Ca-Berkeley Dept Berkeley University-College Dept/Facility/Office Valley Care Health System Livermore Health Services

Source: California Employment Development Department, extracted from The America's Labor Market Information System (ALMIS) Employer Database, 2025 1st Edition.

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Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after -tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner -occupants of non- farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income and median household effective buying income for the City, the County, the State and the United States for the period 2021 through 2025.

CITY OF BERKELEY; ALAMEDA COUNTY;
STATE OF CALIFORNIA; UNITED STATES
Effective Buying Income
2021 through 2025

Year

Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective Buying
Income
2021 City of Berkeley $6,203,796 $79,437
Alameda County 77,794,202 88,389
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 City of Berkeley $6,646,946 $88,676
Alameda County 85,225,529 99,940
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 City of Berkeley $6,074,419 $88,720
Alameda County 80,766,211 98,721
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

2024 City of Berkeley $6,251,098 $89,175
Alameda County 84,213,255 101,689
California 1,510,708,521 80,973
United States 11,987,185,826 67,876

2025 City of Berkeley $6,486,075 $89,591
Alameda County 88,476,678 106,127
California 1,557,429,767 82,725
United States 12,525,577,707 69,687

Source: Claritas, LLC.

A-30
Construction Activity

Provided below are the building permits and valuations for the City and County for calendar years 2019 through 2023.

CITY OF BERKELEY
Total Building Permit Valuations
(Valuations in Thousands)

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $9,666.3 $6,444.7 $13,533.1 $9,058.9 $18,885.4 New Multi-family 7,513.6 12,643.5 53,032.6 12,373.6 22,887.6 Res. Alterations/Additions 40,596.9 26,204.9 47,099.2 28,834.2 36,880.3 Total Residential 57,776.8 45,293.1 113,664.9 50,266.7 78,653.3

New Commercial 10,816.3 25,867.1 15,167.2 5,577.0 0.0
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 4,718.7 272.0 1,760.3 3,501.9 2,024.2
Com. Alterations/Additions 12,885.4 23,290.5 65,213.8 13,158.1 21,111.1 Total Nonresidential 28,420.4 49,429.6 82,141.3 22,237.0 23,135.3

New Dwelling Units
Single Family 46 21 69 40 70
Multiple Family 42 117 286 72 384
TOTAL 88 138 355 112 454

Source: Construction Industry Research Board, Building Permit Summary.

ALAMEDA COUNTY
Total Building Permit Valuations
(Valuations in Thousands)

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $675,129.8 $394,500.3 $407,585.0 $339,046.4 $332,289.9 New Multi-family 782,536.4 722,038.0 829,822.2 795,917.3 507,952.9 Res. Alterations/Additions 512,409.9 293,866.8 222,971.3 323,712.1 425,659.0 Total Residential 1,970,076.1 1,410,405.1 1,460,378.5 1,458,675.8 $1,265,901.8

New Commercial 718,569.0 238,516.5 312,914.6 268,498.1 405,330.0 New Industrial 5,638.5 0.0 600.0 33,740.8 65,576.2
New Other 78,049.8 131,447.0 110,817.0 120,294.6 94,551.2 Com. Alterations/Additions 992,668.1 628,230.5 892,656.8 993,782.1 852,215.1 Total Nonresidential 1,794,925.4 998,194.0 1,316,988.4 1,416,315.6 $1,417,672.5

New Dwelling Units
Single Family 1,871 1,152 1,589 1,175 1,061
Multiple Family 4,145 2,610 4,494 3,366 3,686
TOTAL 6,016 3,762 6,083 4,541 4,747

Source: Construction Industry Research Board, Building Permit Summary.