Attachment 12 — Burbank City Council, June 4, 2024

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 them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement con stitute an offer to sell or the 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.

Draft of 5/7/2024
PRELIMINARY OFFICIAL STATEMENT DATED [____], 2024
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NEW ISSUE – FULL BOOK-ENTRY ONLY Rating: S&P: “[_]”
(See “RATING” herein)
In the opinion of Bond Counsel, under existing law, interest on the 2024 Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the tax covenants described herein, interest on the 2024 Bonds will be excludable from the gross income of the owners thereof for federal income tax purposes and will not be treated as an item of tax preference for purposes of the federal alternative minimum tax on individuals. See “ TAX MATTERS.”
$[____]*
City of Burbank, California
Burbank Water and Power
Water Revenue Refunding Bonds, Series of 2024
Dated: Date of Delivery Due: June 1, as shown on the inside cover The Burbank Water and Power Water Revenue Refunding Bonds, Series of 2024 (the “2024 Bonds”) are being issued by the City of Burbank, California (the “ City”) pursuant to a resolution adopted by the City Council of the City on [____], 2024, and the Burbank Water and Power Water Revenue Bond Indenture dated as of November 1, 2010 (as supplemented and amended, the “Indenture”), between the City and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”).

The 2024 Bonds are being issued to (i) refund all of the outstanding Burbank Water and Power Water Revenue Bonds, Series of 2010B (Build America Bonds) and (ii) pay costs of issuance of the 2024 Bonds. See “PLAN OF REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

Under the Indenture, the 2024 Bonds will be payable from and secured by Water Net Revenues (as defined herein) and by certain other funds pledged therefor under the Indenture. The general fund and the Electric Utility Fund of the City are not liable for, and neither the faith and credit nor the taxing power of the City is pledged to, the payment of the 2024 Bonds.

The 2024 Bonds are secured by a pledge of Water Net Revenues on parity with the City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of 2021 (the “2021 Bonds ”) which are outstanding in the aggregate principal amount of $23,410,000. The City is authorized under the Indenture to incur additional obligations payable from and secured by the Water Net Revenues on parity with the 2024 Bonds and the 2021 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS” and “THE WATER SYSTEM.” No debt service reserve fund is being established in connection with the issuance of the 2024 Bonds.

The 2024 Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on June 1 and December 1 of each year, commencing on December 1, 2024 , and will be issued in fully- registered form without coupons in integral multiples of $5,000. The 2024 Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers of the 2024 Bonds will not receive certificates representing their interests in the 2024 Bonds. Payments of the principal of, premium, if any, and interest on the 2024 Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the 2024 Bonds. See “DESCRIPTION OF THE 2024 BONDS – Book-Entry Only System.” The 2024 Bonds are subject to redemption prior to maturity as described herein. See “DESCRIPTION OF THE 2024 BONDS – Redemption.”
THE 2024 BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE FROM WATER NET REVENUES. THE 2024 BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE CITY, THE STATE OF CALIFORNIA (THE “STATE”) OR OF ANY POLITICAL SUBDIVISION

THEREOF WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION, OR A

PLEDGE OF THE FAITH AND CREDIT OF THE CITY, THE STATE OR OF ANY POLITICAL SUBDIVISION

THEREOF, BUT SHALL BE PAYABLE, EXCEPT TO THE EXTENT OF CERTAIN AVAILABLE MONEYS PLEDGED THEREFOR, SOLELY FROM WATER NET REVENUES. NEITHER THE FAITH AND CREDIT

NOR THE TAXING POWER OF THE CITY, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF * Preliminary, subject to change.

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IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR THE INTEREST ON THE 2024 BONDS. THE ISSUANCE OF THE 2024 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR

CONTINGENTLY OBLIGATE THE CITY, THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF TO

LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE OF 2024 BONDS. INVESTORS MUST READ THE ENTIRE OFFICIAL

STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION WITH RESPECT TO THE PURCHASE OF THE 2024 BONDS.

The 2024 Bonds are offered when, as and if issued and received by the Underwriters and subject to the approval as to their legality by Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel. Certain legal matters will be passed upon for the City by the City Attorney and Norton Rose Fulbright US LLP, Los Angeles, Cal ifornia, Disclosure Counsel to the City, and for the Underwriter s by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California. It is anticipated that the 2024 Bonds will be delivered in book-entry form through the facilities of DTC on or about [____], 2024.

J.P. Morgan Stern Brothers & Co.

________, 2024
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$[____]*
City of Burbank, California
Burbank Water and Power
Water Revenue Refunding Bonds, Series of 2024

Due
June 1*
Principal
Amount*
Interest
Rate
Price or
Yield

CUSIP†

* Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2023 CUSIP Global Services. All rights reserved. CUSI P® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter s or their agents or counsel take any responsibility for the accuracy of such numbers.

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City of Burbank, California

CITY COUNCIL
Nick Schultz, Mayor/Councilmember
Nikki Perez, Vice Mayor/Councilmember
Konstantine Anthony, Councilmember
Zizette Mullins, Councilmember
Tamala Takahashi, Councilmember

BURBANK WATER AND POWER OFFICIALS
Joseph Lillio, Interim General Manager
Richard H. Wilson, Assistant General Manager/Water
Stela Kalomian, Acting Chief Financial Officer

____________________

BOND AND DISCLOSURE COUNSEL

Norton Rose Fulbright US LLP
Los Angeles, California

MUNICIPAL ADVISOR
KNN Public Finance, LLC
Los Angeles, California

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

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No dealer, broker, salesperson or other person has been authorized by the City or the Underwriters to give any information or to make any representations, other than as contained in this Official Statement, and if given or made, such other information or representations must not be relied upon as having been authorized by any of the foregoing. This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of the 2024 Bonds by any person in any jurisdiction in which it is unlawful for such person to make such offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers of the 2024 Bonds.

Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The information set forth herein has been furnished by the City and other sources that are believed to be reliable. This Official Statement speaks only as of its date, and the information and expressions of opinion contained herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or in the City ’s Water System (as defined herein) since the date hereof.

The Underwriters have provided the following sentence for inclusion in this Official Statement:

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

IN CONNECTION WITH THE OFFERING OF THE 2024 BONDS, THE UNDERWRITER S

MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF SUCH 2024 BONDS AT LEVELS ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “project,” “expect,” “anticipate,” “intend,” “believe,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Except as specifically set forth herein, the City does not plan to issue any updates or revisions to those forward-looking statements if or when its expectations or events, conditions or circumstances on which such statements are based occur.

The City maintains websites and certain social media accounts. However, the information presented therein is not part of this Official Statement and should not be relied upon in making investment decisions with respect to the 2024 Bonds.

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TABLE OF CONTENTS

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INTRODUCTION .......................................................................................................................... 1 General ..................................................................................................................................... 1 The City, BWP and the Water System ..................................................................................... 2 Security and Sources of Payment for the 2024 Bonds ............................................................. 2 No Reserve Fund ...................................................................................................................... 3 Rate Covenant .......................................................................................................................... 3 Continuing Disclosure .............................................................................................................. 3 Forward-Looking Statements ................................................................................................... 3 Other Matters ............................................................................................................................ 4 PLAN OF REFUNDING ................................................................................................................ 4 ESTIMATED SOURCES AND USES OF FUNDS ...................................................................... 5 DESCRIPTION OF THE 2024 BONDS ........................................................................................ 5 General ..................................................................................................................................... 5 Redemption .............................................................................................................................. 6 Notice of Redemption .............................................................................................................. 6 Effect of Redemption ............................................................................................................... 6 DEBT SERVICE SCHEDULE ....................................................................................................... 8 SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS ..................................... 9 Pledge of Water Net Revenues ................................................................................................. 9 Limited Obligations .................................................................................................................. 9 Rate Covenant ........................................................................................................................ 10 No Reserve Fund .................................................................................................................... 10 Allocation of Water Net Revenues Under the Indenture ........................................................ 10 Additional Bonds and Parity Debt .......................................................................................... 10 BURBANK WATER AND POWER ........................................................................................... 11 General ................................................................................................................................... 11 Senior Management of Burbank Water and Power ................................................................ 11 Burbank Water and Power Board ........................................................................................... 12 Employee Relations ................................................................................................................ 13 Pension Plan and Other Post-Employment Employee Benefits for Employees of the Water System ............................................................................................................ 13 Insurance ................................................................................................................................ 16 TH
E WATER SYSTEM ............................................................................................................... 16 General ................................................................................................................................... 16 Overall Description of the Water System ............................................................................... 16 Water Supply .......................................................................................................................... 17 Customers, Water Sales, Water Revenues and Maximum Day Demand ............................... 25 Largest Water Customers ....................................................................................................... 25 ATTACHMENT 12
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TABLE OF CONTENTS
(continued)
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Water Rates and Charges ....................................................................................................... 26 Historical Net Revenues and Debt Service Coverage ............................................................ 27 Financial Reserves .................................................................................................................. 32 Customer Relations ................................................................................................................ 32 Environmental Issues ............................................................................................................. 32 Limitations on Remedies ........................................................................................................ 39 CONSTITUTIONAL LIMITATIONS ON GOVERNMENTAL SPENDING............................ 40 TAX MATTERS ........................................................................................................................... 42 LITIGATION ................................................................................................................................ 45 CERTAIN LEGAL MATTERS ................................................................................................... 45 FINANCIAL STATEMENTS ...................................................................................................... 45 RATING ....................................................................................................................................... 45 VERIFICATION OF MATHEMATICAL COMPUTATIONS ................................................... 46 CONTINUING DISCLOSURE .................................................................................................... 46 MUNICIPAL ADVISOR.............................................................................................................. 46 UNDERWRITING ....................................................................................................................... 46 MISCELLANEOUS ..................................................................................................................... 47

APPENDIX A - GENERAL INFORMATION ABOUT THE CITY OF BURBANK AND LOS ANGELES COUNTY ................................................................................. A-1

APPENDIX B - AUDITED FINANCIAL STATEMENTS OF THE CITY OF

BURBANK WATER AND ELECTRIC UTILITY ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2023 ............................................................. B-1 APPENDIX C - SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE .............. C-1 APPENDIX D - FORM OF CONTINUING DISCLOSURE AGREEMENT ........................... D-1 APPENDIX E - FORM OF OPINION OF BOND COUNSEL ................................................. E-1 APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM ....................................... F-1 ATTACHMENT 12
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OFFICIAL STATEMENT
Relating to
$[____]*
City of Burbank, California
Burbank Water and Power
Water Revenue Refunding Bonds, Series of 2024

INTRODUCTION
This Introduction is not a summary of this Official Statement, and is qualified by more complete and detailed information contained in the entire Official Statement. A full review should be made of the entire Official Statement, including the cover page and attached appendices. The offering of 2024 Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms used but not defined in this Introduction shall have the meanings given such terms elsewhere in this Official Statement. Certain definitions of capitalized terms used and not otherwise defined in this Official Statement are set forth in “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.” General
This Official Statement, including the Appendices hereto, is provided to furnish information in connection with the issuance and sale by the City of Burbank, California (the “City”) of $[____] * Burbank
Water and Power Water Revenue Refunding Bonds, Series of 2024 (the “2024 Bonds”). The 2024 Bonds are authorized and issued pursuant to Article 12 of Chapter 4 of Title 2 (formerly Article 12 of Chapter 14) of the Burbank Municipal Code, as amended, and a resolution adopted by the City Council of the City (the “City Council”) on [____], 2024. The 2024 Bond s are issued pursuant to the Burbank Water and Power Water Revenue Bond Indenture, dated as of November 1, 2010 (the “Master Water Revenue Bond Indenture”), as supplemented and amended, including as supplemented and amended by the Fourth Supplemental Burbank Wa ter and Power Water Revenue Bond Indenture, dated as of May 1, 2024 (the “Fourth Supplemental Indenture ”), by and between the City and U.S. Bank Trust Company, National Association, as successor trustee (the “Trustee”). The Master Water Revenue Bond Indenture, as previously amended and supplemented, and as amended and supplemented by the Fourth Supplemental Indenture, is referred to herein as the “Indenture.”
The 2024 Bonds are being issued to (i) refund on a current basis all of the outstanding City of Burbank, California Burbank Water and Power Water Revenue Bonds, Series of 2010B (Build America Bonds) (the “2010B Refunded Bonds”) and (ii) pay costs of issuance of the 2024 Bonds. See “PLAN OF REFUNDING” and “ESTIMATED SOURCES AND USES OF FUNDS.”
The 2024 Bonds will be issued in fully registered form, registered in the name of The Depository Trust Company, New York, New York (“DTC”), or its nominee, which will act as securities depository for the 2024 Bonds. Purchasers of the 2024 Bonds will not receive certificates representing the 2024 Bonds that are purchased. See “DESCRIPTION OF THE 2024 BONDS – Book- Entry Only System ” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

* Preliminary, subject to change.

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The City, BWP and the Water System
The City is located in the greater metropolitan Los Angeles area approximately 12 miles northeast of the Los Angeles Civic Center complex. See “APPENDIX A – GENERAL INFORMATION ABOUT THE CITY OF BURBANK AND LOS ANGELES COUNTY.” The City was incorporated as a general law city in 1911 and adopted its City Charter in 1927 (as amended, the “ City Charter ”). The City ’s population as of January 1, 2023 was approximately 104,535. The City provides its residents with electric, water and sewer services and operates its own police and fire departments. The City owns and operates a potable and recycled water system which includes a water transmission and distribution system and a water treatment system (the “Water System”). The Water System provides service to all water customers within the City and is managed by Burbank Water and Power ( “BWP”), a department of the City . See “BURBANK WATER AND POWER” and “THE WATER SYSTEM.”
Security and Sources of Payment for the 2024 Bonds
The 2024 Bonds are payable from and secured by a pledge of Water Net Revenues (as defined herein) and by certain other funds pledged therefor under the Indenture.

The 2024 Bonds are secured by a pledge of Water Net Revenues on parity with the outstanding 2021 Bonds (as defined below). Additionally, under the Indenture, the City may issue additional obligations on a parity with the 2024 Bonds. See “– Outstanding Bonds and Parity Debt; Additional Bonds and Parity Debt” below.

THE 2024 BONDS ARE SPECIAL, LIMITED OBLIGATIONS OF THE CITY PAYABLE FROM WATER NET REVENUES. THE 2024 BONDS SHALL NOT BE DEEMED TO

CONSTITUTE A DEBT OR LIABILITY OF THE CITY, THE STATE OF CALIFORNIA (THE “STATE”) OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF

ANY CONSTITUTIONAL OR STATUTORY LIMITATION, OR A PLEDGE OF THE FAITH

AND CREDIT OF THE CITY, THE STATE OR OF ANY POLITICAL SUBDIVISION THEREOF,

BUT SHALL BE PAYABLE, EXCEPT TO THE EXTENT OF CERTAIN AVAILABLE MONEYS PLEDGED THEREFOR, SOLELY FROM WATER NET REVENUES. NEITHER THE FAITH

AND CREDIT NOR THE TAXING POWER OF THE CITY, THE STATE OR OF ANY

POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, PREMIUM, IF ANY, OR THE INTEREST ON THE 2024 BONDS. THE ISSUANCE OF THE 2024 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE

THE CITY, THE STATE, OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR TO

PLEDGE ANY FORM OF TAXATION WHATSOEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT.

See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS.” Outstanding Bonds and Parity Debt; Additional Bonds and Parity Debt In addition to the 2010B Refunded Bonds (which are anticipated to be refunded in full with proceeds of the 2024 Bonds), the City previously issued the City of Burbank, California Burbank Water and Power Water Revenue/Refunding Bonds, Series of 2021 (the “2021 Bonds”) under the Indenture, which are currently outstanding in the aggregate principal amount of $23,410,000. The 2021 Bonds were issued ATTACHMENT 12
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primarily to finance the costs of certain improvements to the Water System. The 2021 Bonds are payable from and secured by the Water Net Revenues on parity with the 2024 Bonds.

The City may incur additional obligations paya ble from and secured by the Water Net Revenues on parity with the 2024 Bonds and 2021 Bonds subject to the terms and conditions set forth in the Indenture.

See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS – Additional Bonds and Parity Debt.”
The 2024 Bonds and the 2021 Bonds, together with all additional water revenue bonds hereafter issued under the Indenture on a parity with the 2024 Bonds and the 2021 Bonds, are collectively referred to herein as the “Bonds.”
No Reserve Fund
No debt service reserve fund will be established under the Indenture for the 2024 Bonds.

Rate Covenant
The City covenants in the Indenture that it shall prescribe, revise and collect such charges for the services, facilities and water furnished by the Water System which, after making allowances for contingencies and error in the estimates, shall provide Water Net Revenues at least sufficient to pay the following amounts in the order set forth:
(1) The interest on, and principal and Redemption Price of, the outstanding Bonds and any Parity Debt as the same shall become due and payable;
(2) All payments required for compliance with the Indenture, including payments required to be made into any bond reserve fund; and
(3) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon or payable from the Water Net Revenues; and the charges shall be fixed so that in each Fiscal Year the Water Net Revenues shall be at least equal to

1.20 times the amount of the Annual Debt Service . See “SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS – Rate Covenant.”
Continuing Disclosure
In connection with the issuance of the 2024 Bonds, the City will covenant for the benefit of owners of the 2024 Bonds to provide certain financial information and operating data relating to the Water System and to provide notices of the occurrence of certain specified events. See “CONTINUING DISCLOSURE” and “APPENDIX D – FORM OF CONTINUING DISCLOSURE AGREEMENT.” Forward-Looking Statements
The statements contained in this Official Statement, including the Appendices hereto, and in any other information provided by BWP or the City, that are not purely historical, are forward-looking statements, including statements regarding BWP or the City’s expectations, hopes, intentions or strategies regarding the future. Prospective investors should not place undue reliance on forward-looking statements.

All forward-looking statements included in this Official Statement are based on information available to BWP and the City on the date hereof, and BWP and the City assume no obligation to update any such ATTACHMENT 12
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forward-looking statements. It is important to note that BWP’s actual results could differ materially from those in such forward-looking statements.

The forward-looking statements herein are necessarily based on various assumptions and estimates and are inherently subject to various risks and uncertainties, including risks and uncertainties relating to the possible invalidity of the underlying assumptions and estimates and possible changes or developments in social, economic, business, industry, market, legal and regulatory circumstances and conditions and actions taken or omitted to be taken by third parties, including customers, suppliers and competitors, and legislative, judicial and other governmental authorities and officials. Assumptions related to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately an d many of which are beyond the control of BWP and the City. Any of such assumptions could be inaccurate and, therefore, there can be no assurance that the forward -looking statements included in this Official Statement would prove to be accurate.

Other Matters
Brief descriptions or summaries of the 2024 Bonds, the security and sources of payment therefor, the Water System, the Indenture and certain other documents are included in this Official Statement. Such descriptions and summaries do not purport to be comprehensive or definitive. All references herein to the 2024 Bonds, the Bonds, the Indenture, the Continuing Disclosure Agreement and any other documents are qualified in their entirety by reference to the terms of such bonds or such documents, copies of which are available for inspection at the office of the City Clerk located at 275 East Olive Avenue, Burbank, California 91502, telephone: (818) 238- 5851. All references to contracts, indentures and other agreements are qualified in their entirety by reference to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors ’ rights and possible exercise of judicial discretion in exercising such rights. Financial and statistical information set forth herein, except for the audited financial statements included in APPENDIX B, is unaudited. The source of all such information is from the City unless otherwise stated. Terms not defined herein have the meanings as set forth in the respective documents.

PLAN OF REFUNDING
On the date of delivery of the 2024 Bonds, a portion of the proceeds of the 2024 Bonds, together with certain other moneys, will be applied to redeem all of the outstanding 2010B Refunded Bonds. Upon the delivery date of the 2024 Bonds, [____] will deliver a report stating that the firm has verified the mathematical accuracy of certain computations relating to the redemption price of and accrued interest on the 2010B Refunded Bonds and the adequacy of the moneys available to pay such redemption price of and accrued interest on the 2010B Refunded Bonds on the redemption date therefor. See “ VERIFICATION OF MATHEMATICAL COMPUTATIONS” herein.

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ESTIMATED SOURCES AND USES OF FUNDS
The estimated sources and uses of funds relating to the 2024 Bonds are shown below:

Sources:

Principal Amount
Original Issue [Premium/Discount]
Debt Service Fund Release
Total Sources

Uses:

Redemption of 2010B Refunded Bonds
Deposit to Series 2024 Costs of Issuance Fund(1)
Total Uses
___________________________
(1) Includes legal fees, Municipal Advisor fees, Underwriter s’ discount, Trustee fees, printing costs, rating agency fees, verification agent fees and other costs incurred or to be incurred in connection with the issuance of the 2024 Bonds.

DESCRIPTION OF THE 2024 BONDS
General
The 2024 Bonds will be dated their date of delivery, and will bear interest from their date at the rates per annum set forth on the inside cover page of this Official Statement. The 2024 Bonds will mature on June 1 in the years and in the principal amounts set forth on the inside cov er page of this Official Statement. Ownership interests in the 2024 Bonds will be issued in denominations of $5,000 principal amount or any integral multiple thereof (“Authorized Denominations”).

Interest on the 2024 Bonds will be payable commencing on December 1, 2024, and semiannually thereafter on June 1 and December 1 (each an “Interest Payment Date”) of each year in lawful money of the United States of America by check mailed by first class mail on each Interest Payment Date to the Owner thereof as of the close of business on the 15th day (whether or not a Business Day) of the calendar month immediately preceding such Interest Payment Date (each a “Record Date”); provided, that upon the written request of an Owner of one million dollars ($1,000,000) or more in aggregate principal amount of the 2024 Bonds received by the Trustee prior to the applicable Record Date (which such request shall remain in effect until rescinded in writing by such Owner), interest shall be paid by wire transfer in immediately available funds.

Interest on the 2024 Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: a 2024 Bond is authenticated on or before 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 2024 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date; or interest on any 2024 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest with respect to the 2024 Bonds will be computed on the basis of a 360-day year composed of twelve 30-day months. Principal of and premium, if any, on the 2024 Bonds are payable when due upon presentation at the Corporate Trust Office of the Trustee, in lawful money of the United States of America.

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While the 2024 Bonds are subject to the book- entry system, payments of principal, premium, if any, and interest will be paid by the Trustee to DTC for subsequent disbursement to beneficial owners of the 2024 Bonds. See “– Book-Entry Only System” and “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM.”
See “APPENDIX C – Summary of Certain Provisions of the Indenture ” for a description of the provisions of the Indenture relating to the transfer, registration and exchange of the 2024 Bonds.

Redemption
Optional Redemption. The 2024 Bonds maturing on or before June 1, [____] are not subject to optional redemption prior to maturity. The 2024 Bonds maturing on or after June 1, [____] are subject to redemption prior to their respective stated maturities, at the option of the City, from any source of available funds, as a whole or in part on any date (by such maturities as may be specified by the City and by lot within a maturity), on or after June 1, [____], at a Redemption Price equal to 100% of the principal amount of the 2024 Bonds to be redeemed, plus accrued interest to the date fixed for redemption, without premium.

Selection of 2024 Bonds for Redemption. If less than all of the 2024 Bonds are to be redeemed, the maturities of 2024 Bonds to be redeemed shall be selected by the City. If less than all of the 2024 Bonds of a maturity are to be redeemed, the Trustee shall select the 2024 Bonds of such maturity to be redeemed, from all 2024 Bonds of the respective maturity not previously called for redemption, in a uthorized denominations, by lot in any manner which the Trustee in its sole discretion shall deem appropriate. The Trustee will promptly notify the City in writing of the 2024 Bonds so selected for redemption.

Notice of Redemption
Notice of redemption shall be mailed by the Trustee, not less than twenty (20) nor more than sixty (60) days prior to the redemption date, (i) to the respective Owners of any 2024 Bonds designated for redemption at their addresses appearing on the bond registration books of the Trustee by first -class mail, (ii) to the Securities Depository by facsimile or other electronic means of communications and by first-class mail, and (iii) to EMMA at www.emma.msrb.org, by electronic means of communication, or to such other securities depositories or information services as the City may designate in a Request of the City delivered to the Trustee. Notice of redemption shall be given in the form and otherwise in accordance with the terms of the Indenture.

The City has the right to rescind any notice of the optional redemption of any 2024 Bonds by written notice to the Trustee on or prior to the dated fixed for such redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the 2024 Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture. The City and the Trustee will have no liability to the Owners or any other party related to or arising from such rescission of notice of redemption. The Trustee will provide notice of rescission of redemption in the same manner as the original notice of redemption was provided.

Effect of Redemption
Notice of redemption having been given as provided in the Indenture, and moneys for payment of the Redemption Price of, together with interest accrued to the redemption date on, the 2024 Bonds (or portions thereof) so called for redemption being held by the Trustee, on the redemption date designated in such notice, the 2024 Bonds (or portions thereof) so called for redemption will become due and payable at the Redemption Price specified in such notice, together with interest accrued thereon to the date fixed for ATTACHMENT 12
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redemption, interest on the 2024 Bonds so called for redemption will cease to accrue, such 2024 Bonds (or portions thereof) will cease to be entitled to any benefit or security under the Indenture, and the Owners of such 2024 Bonds will have no rights in respect thereof except to receive payment of such Redemption Price and accrued interest.

Book-Entry Only System
The 2024 Bonds will be issued as fully registered bonds in book-entry only form, registered in the name of Cede & Co. as nominee of DTC, and will be available to ultimate purchasers in Authorized Denominations, under the book-entry system maintained by DTC. While the 2024 Bonds are subject to the book-entry system, the principal, interest and any redemption premium with respect to a 2024 Bond will be paid by the Trustee to DTC, which in turn is obligated to remit such payment to its DTC Participants for subsequent disbursement to Beneficial Owners of the 2024 Bonds. Purchasers of the 2024 Bonds will not receive certificates representing their interests therein, which will be held at DTC.

At any time that the 2024 Bonds are not subject to the book- entry system, the principal and premium, if any, with respect to each 2024 Bond is payable upon surrender of such 2024 Bond at the Office of the Trustee in Los Angeles, California, upon maturity or the earlier redemption thereof.

See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM” for further information regarding DTC and the book-entry system.
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DEBT SERVICE SCHEDULE
The table below shows annual debt service payments on the outstanding 2010B Refunded Bonds (net of the projec ted federal Build America Bond subsidy) and 2021 Bonds, assuming no optional redemption. The 2010B Refunded Bonds are anticipated to be redeemed in full with proceeds of the 2024 Bonds.

Year
Ending
June 1
2010B Refunded
Bonds Debt
Service(1)(2)
2021 Bonds
Debt Service(2)
2024 Bonds Debt
Service
Total Debt
Service(2)
2024 $2,072,909 $1,420,950 $3,493,859
2025 2,073,504 1,439,450 3,512,954
2026 2,072,951 1,455,950 3,528,901
2027 2,070,579 1,480,450 3,551,029
2028 2,071,694 1,497,450 3,569,144
2029 2,066,106 1,527,200 3,593,306
2030 2,064,005 1,553,950 3,617,955
2031 2,065,202 1,572,700 3,637,902
2032 2,199,507 1,463,700 3,663,207
2033 2,381,813 1,313,200 3,695,013
2034 2,380,039 1,344,400 3,724,439
2035 2,375,807 1,378,400 3,754,207
2036 2,374,115 1,420,000 3,794,115
2037 2,369,775 1,463,800 3,833,575
2038 2,370,742 1,499,600 3,870,342
2039 2,368,601 1,542,600 3,911,201
2040 2,363,354 1,592,400 3,955,754
2041 -- 1,293,600 1,293,600
2042 -- 1,295,000 1,295,000
2043 -- 1,295,000 1,295,000
2044 -- 1,293,600 1,293,600
2045 -- 1,295,800 1,295,800
2046 -- 1,296,400 1,296,400
2047 -- 1,295,400 1,295,400
2048 -- 1,292,800 1,292,800
2049 -- 1,293,600 1,293,600
2050 -- 1,292,600 1,292,600
2051 -- 1,294,800 1,294,800
Total $37,740,703 $39,204,800 $76,945,503
___________________
(1) Presented net of projected federal Build America Bond subsidy, assuming current federal sequestration reduction rate of 5.7% through maturity of the 2010B Refunded Bonds. (2) Rounded to nearest dollar.

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SECURITY AND SOURCES OF PAYMENT FOR THE 2024 BONDS
The following discussion describes the security and sources of payment of the 2024 Bonds. For a summary of the terms of the Indenture, see “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
The principal of and interest on the 2024 Bonds are not a debt of the City (except to the limited extent described in this Official Statement), nor a legal or equitable pledge, charge, lien or encumbrance, upon any of their respective property, or upon any of its income, receipts, or revenues except the Water Net Revenues and other amounts pledged under the Indenture.

Pledge of Water Net Revenues
Pursuant to the Indenture, the City has irrevocably pledged Water Net Revenues to secure the payment of the principal or Redemption Price of and interest on the Bonds, including the 2024 Bonds, and all Parity Debt. The City has also pledged to the Bonds (including the 2024 Bonds) all amounts held by the Trustee under the Indenture (except for amounts held in the Rebate Fund) subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein. The pledge under the Indenture constitutes a first lien on the Water Net Revenues and the pledged amounts held by the Trustee under the Indenture.
“Parity Debt ” of the Water System means any indebtedness, installment sale obligation, lease obligation or other obligation of the City for borrowed money or interest rate swap agreement having an equal lien and charge upon the Water Net Revenues, therefore payable on a parity with the Bonds (whether or not any Bonds are outstanding).
“Water Net Revenues” means the amount of Water Revenues of the Water System remaining after the payment therefrom of the Water Operating Expenses.
“Water Revenues” means all the revenues from rates, fees and charges for providing water service to persons and real property and all other fees, rents and charges and other revenues derived by the City from the ownership, operation, use or service of the Water System, i ncluding contributions in aid of construction; provided, that the City may by election in a Supplemental Indenture relating to a Series of Bonds or Parity Debt exclude from Water Revenues any Subsidy Payment. “Water Operating Expenses” means the amount required to pay the expenses of management, repair and other costs necessary to operate, maintain and preserve the Water System in good repair and working order, including but not limited to, the expenses of conducting the Water System, but excluding depreciation.

The Bonds (including the 2024 Bonds) are not
payable from or secured by the revenues of the
City’s electric enterprise (the “Electric System”), which is also owned by the City and managed by the City.

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City, the State or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or the interest on the 2024 Bonds. The issuance of the 2024 Bonds shall not directly or indirectly or contingently obligate the City, the State or any political subdivision thereof to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment.

Rate Covenant
The City covenants in the Indenture that it shall prescribe, revise and collect such charges for the services, facilities and water f urnished by the Water System which, after making allowances for contingencies and error in the estimates, shall provide Water Net Revenues at least sufficient to pay the following amounts in the order set forth:
(1) The interest on, and principal and Redemption Price of, the outstanding Bonds and any Parity Debt as the same shall become due and payable;
(2) All payments required for compliance with the Indenture, including payments required to be made into any bond reserve fund; and
(3) All payments required to meet any other obligations of the City which are charges, liens, encumbrances upon or payable from the Water Net Revenues; and the charges shall be fixed so that in each Fiscal Year the Water Net Revenues shall be at least equal to

1.20 times the amount of the Annual Debt Service. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE –Covenants – Rates and Charges.” No Reserve Fund
No debt service reserve fund will be established under the Indenture for the 2024 Bonds.

Allocation of Water Net Revenues Under the Indenture
Pursuant to the Indenture, as long as any Bonds are outstanding or any Parity Debt remains unpaid, the City will deposit in a trust fund, designated as the “Water Revenue Fund,” which fund the City shall establish and maintain, all Water Net Revenues, when and as received by the City. For further information regarding the allocation of revenues with respect to the Bonds, see “ APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Pledge of Water Net Revenues; Water Revenue Fund.” Additional Bonds and Parity Debt
Pursuant to the Indenture, the City is precluded from issuing any obligations or securities payable in whole or in part from Water Net Revenues, except in accordance with and subject to the terms and conditions provided in the Indenture.

The Indenture permits the issuance of additional Bonds or Parity Debt upon the satisfaction of certain conditions precedent to the issuance of such additional Bonds or Parity Debt, including the delivery to the Trustee of a Certificate of the City certifying that the sum of: (1) the Water Net Revenues; plus (2) 90% of the amount by which the City projects Water Net Revenues for any period of 12 consecutive months during the 18 months immediately preceding the date on which any additional Bonds or Parity Debt will become outstanding would have been increased had increases in rates, fees and charges during such period of 12 months been in effect throughout such period of 12 months; plus (3) 75% of the amount by which the City projects Water Net Revenues will increase during the period of 12 months commencing on the date of ATTACHMENT 12
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issuance of such additional Bonds or Parity Debt due to improvements to the Water System under construction (financed from any source) or to be financed with the proceeds of such additional Bonds or Parity Debt, shall have been at least equal to 1.20 times the amount of Debt Service due within the next consecutive 12 month period on all Bonds and Parity Debt then outstanding and the additional Bonds or Parity Debt then proposed to be issued. “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
Notwithstanding the foregoing, the Indenture provides that the City may issue Bonds at any time to refund any outstanding Bonds or Parity Debt issued pursuant to the Indenture without compliance with the provisions described above.

The City may also issue or incur obligations which are payable from Water Net Revenues on a basis that is junior and subordinate to the payment of the principal, premium, interest and reserve fund requirements for the Bonds and all Parity Debt without meeting the tests set forth above. See “APPENDIX C – SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE – Issuance of Bonds – Limitations on the Issuance of Obligations.”

BURBANK WATER AND POWER
General
The City is a charter city, originally incorporated in 1911, and is administered by a Council - Manager form of government. The City ’s estimated population as of January 1, 2023 was 104,535, according to the California Department of Finance. The City is located in the greater metropolitan Los Angeles area, approximately 12 miles northeast of the Los Angeles Civic Center complex. See “APPENDIX A – GENERAL INFORMATION ABOUT THE CITY OF BURBANK AND LOS ANGELES COUNTY” for additional information relating to the City.

The City ’s Public Service Department was established in 1913 under the laws of the State of California to supervise the purchase, distribution and sale of water and the generation, purchase, distribution and sale of electricity. In 2000, the name of the Public Service Department was changed to Burbank Water and Power. BWP provides service to all water and electric customers wi thin the City and is a department provided for under the City Charter. The City owns and operates the Water System.

The funds and accounts of the Water System and the Electric System are held separately, and the funds and accounts of one system are not pledged to the other system’s obligations. On or about [____], 2024, the City expects to issue its Burbank Water and Power Electric Revenue Refunding Bonds, Series of 2024 (the “2024 Electric Bonds”). Revenues of the Water System will not be pledged to the 2024 Electric Bonds.

Senior Management of Burbank Water and Power
BWP is under the direct management of the BWP General Manager, subject to the policy and direction of the Burbank City Council and the Burbank Water and Power Board (the “BWP Board”) and the broad administrative direction of the City Manager. The BWP Board consists of seven members appointed by the Burbank City Council. The BWP General Manager is responsible for policy and planning relating to the operation of both the Water System and Electric System. Legal services are provided by the City Attorney ’s office, and various administrative services are also provided by the City. Senior Management of the Water System includes:

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Joseph Lillio, Interim General Manager, holds a Bachelor of Science in Business Administration with an option in accounting from C alifornia State University, Los Angeles and a Master of Public Administration with an option in public sector management and leadership from California State University, Northridge. Mr. Lillio joined BWP in May 2023. Mr. Lillio came to Burbank from the City of El Segundo where he served as the Chief Financial Officer for over seven years. Prior to that, he served in various leadership roles at the City of Oxnard, Las Virgenes Municipal Water District, City of San Fernando, and City of Santa Clarita. He has over 20 years of experience in municipal finance which includes water, wastewater, and solid waste utilities. He also has seven years of private sector finance experience working in the corporate finance office for Princess Cruises.

Richard H. Wilson, P.E., Assistant General Manager/Water, holds a Bachelor of Science degree in Mechanical Engineering from Worcester Polytechnic Institute in Worcester, Massachusetts. He has over 30 years of design and construction experience in several industries including shipbuilding, oil, mining, and public utilities, including the East Bay Municipal Utility District and the City of Vallejo. He holds licenses in both civil and mechanical engineering in the State of California. Mr. Wilson joined Burbank Water and Power in November 2018.

Stela Kalomian, Acting Chief Financial Officer (“CFO”), holds a Bachelor of Science in Business Administration with an emphasis in Finance and a Master of Business Administration with an emphasis in Finance from California State University, Los Angeles. She has over 15 years of utility experience. Prior to joining BWP, she worked in the Customer Service Division with the City of Glendale, Glendale Water and Power. Ms. Kalomian joined BWP in 2009 and focuses primarily in the areas of fi nancial reporting, budgeting, and auditing. She has held the positions of Senior Utility Accounting Analyst, Financial Analyst, and Financial Accounting Manager before assuming the Acting CFO position from December 2022 to May 2023 and again since February 2024.

Burbank Water and Power Board
The BWP Board consists of seven members appointed by the City Council. The BWP Board is responsible for reviewing and making recommendations for any water rate increases to the City Council.

Water rate increases, if any, are customarily presented by BWP for City Council approval.

As set forth in the Burbank Municipal Code, the BWP Board has the following powers and duties:
(1) To review and make recommendations on all capital improvements which require C ity Council approval;
(2) To review and make recommendations on power purchase agreements with terms of more than five years;
(3) To review and make recommendations regarding BWP’s budget; (4) To review and make recommendations regarding electric and water rates; (5) To approve all contract awards for goods, services and public work construction projects which are provided for in BWP’s budget; and
(6) To perform such advisory functions as delegated to it by the provisions of the Burbank Municipal Code or other action of the City Council or the General Manager of BWP.

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

Name Position
Term Expires
July 31,
Christopher G. Malotte Chairperson 2024
William Luddy Vice-Chairperson 2026
Philippe Eskandar Member 2024
Laura Tenenbaum Member 2024
Earle H. LeMasters Member 2026
Timothy R. Cherry Member 2026
Vacant Member 2024

Employee Relations
As of June 30, 2023, 54 full -time equivalent City employees were assigned to the Water System.

Certain functions supporting the Water System ’s operations, including but not limited to, meter reading, customer billing and collection, finance, administration, and operations technology are performed by BWP staff.

All BWP employees fall into one of four categories:
(1) Those represented by Local No. 18 of the International Brotherhood of Electrical Workers (“IBEW”);
(2) Those represented by the Burbank City Employees ’ Association ( “BCEA”), which is affiliated with the American Federation of State, County and Municipal Employees as Local No. 3143;
(3) Those represented by the Burbank Management Association (“BMA”); and (4) Those that are unrepresented.

The BCEA, BMA and IBEW labor contracts are current. The BCEA labor contract will expire on June 30, 2024, the BMA labor contract will expire on June 30, 2025, and the IBEW labor contract will expire on June 30, 2027. Work will continue during negotiations pu rsuant to each labor contract until a new contract is in place.

There have been no strikes or other material work stoppages by City employees within the last [fifteen] years.

Pension Plan and Other Post-Employment Employee Benefits for Employees of the Water System Pension Plan. The City’s defined benefit pension plan, the Public Employees Retirement System (“PERS”), provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and their beneficiaries. PERS is part of the Public Agency portion of the California Public Employees Retirement System (“CalPERS”), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State. A menu of benefit provisions, as well as other requirements, is established by state statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through local ordinance. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, ATTACHMENT 12
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assumptions and membership information that can be found on the CalPERS website at www.calpers.ca.gov. The foregoing internet address is included for reference only, and the information on the internet site is not incorporated by reference herein.

Employees of the Water System participate in the City’s CalPERS Miscellaneous Plan. City active plan members in the CalPERS Miscellaneous Plan hired prior to January 1, 2013 have been required to contribute 8% of their annual covered salary since July 1, 2008. Miscellaneous Plan members hired on or after January 1, 2013 and who have no prior membership in any California public retirement system are required to contribute 6.50% of their annual covered salary; the entire 6.50% is paid by such employees.

All Public Employees’ Pension Reform Act members pay their full employee contribution. They City no longer pays for any employee contributions for any bargaining group.

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 CalPERS Board of Administration. The City is required to contribute at an actuarially determined rate for the normal cost and a flat dollar amount for the required unfunded liability contribution. In Fiscal Year 2022-23, the City contributed 39.47% of annual covered payroll for Miscellaneous Plan. The contribution requirements of plan members are established by state statute and the employer contribution rate is established and may be amended by CalPERS. The Water System is allocated its portion of the required contributions.

Approximately 5.38% of the City’ s PERS obligations are allocated to the Water System. The City contributed 100% of the portion of the employer’s actuarially required contribution allocable to the Water System from the Water Utility Fund for the Fiscal Years ending June 30, 2021, June 30, 2022, and June 30, 2023, in the amounts of $944,000, $1,037,000 and $1,122,000, respectively. In addition to the required contribution, the Water Utility also made an additional voluntary lump sum Miscellaneous Plan payment of $440,000 to CalPERS to reduce the City’s unfunded actuarial liability during the Fiscal Year ended June 30, 2023. This payment was the last year of a four- year citywide funding plan that began in Fiscal Year 2019-20 to reduce future pension obligations.

In Fiscal Year 2015, the City implemented Governmental Accounting Standards Board (GASB) Statement No. 68, “Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27” and GASB Statement No. 71, “ Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68 ”. These GASB Statements establish standards for measuring and recognizing liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. For defined benefit pension plans, these GASB Statements identify the methods and assumptions that should be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. As of June 30, 2023, the proportionate share of the City’s net pension liabilities allocable to the Water System was reported to be $12,653,000 (measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update procedures), an increase of $7,259,000 over the prior fiscal year. The Water System’s proportionate share of the Net Pension Liabilities was 5. 38% of the Net Pension Liabilities for the City’s Miscellaneous Plan as a whole in for Fiscal Year 2022 -23. Reported deferred outflows of resources as of June 30, 2023 (to be recognized as a reduction of net pension liability in future periods) were $5,192,000, with reported deferred inflows of resources (to be recognized as pension expense in future periods) of $133,000. For the Fiscal Year ended June 30, 2023, the City’s Miscellaneous Plan Net Pension Liability as a percentage of covered-employee payroll was 267.83%. The Miscellaneous Plan Net Pension as a percentage of the Total Pension Liability for the City ’s Miscellaneous Plan was

77.57% for such Fiscal Year.

Post-Retirement Health Care Plans . The City also administers certain post -employment health care benefits under Burbank Employees Retiree Medical Trust ( “BERMT”) and the CalPERS Public Employees’
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Medical and Hospital Care Act ( “PEMHCA”) plan. The Water System also makes contributions for OPEB. The Water System assumes its share of OPEB costs based upon the results of actuarial studies.

BERMT is a single employer, defined benefit plan which was established in April 2003 by the City’s employee associations to provide post -retirement medical benefits to all non -safety employees, including elected and appointed officials. The trust is controlled by seven voting members from the various employee associations appointed to three-year terms. The city appoints an eighth member to the board, but that member is non- voting. Represented plan members are required to contribute $50 per biweekly pay period, which the City matches. Plan provisions and contribution requirements are established by and may be amended by the BERMT board. Investments are determined by the BERMT plan t rustees and are governed by ERISA provisions. Eligibility for benefits requires that members are retired and have reached age 58 with a minimum of five years of contributions into the plan. The benefit provided ranges from $150 to $630 in reimbursements per month for eligible medical expenses. The Water System has allocated its portion of the required contributions. For the Fiscal Year ended June 30, 2023, the allocable portion of City contributions to BERMT paid from the Water Utility Fund totaled $55,571.

The PEMHCA Plan was established with CalPERS as a single employer plan. The City pays the required PEMHCA minimum contribution for all miscellaneous and safety employees retiring directly from the City. The 2023 PEMHCA minimum contribution was $151 per month. In addition, the City paid $100 per month for 13 management retirees and paid $188 per month for nine IBEW retirees. For these management/IBEW retirees, the PEMHCA minimum required contribution of $151 is paid in addition to the retiree health contribution amounts. The PEMHCA benefit provisions are established and amended through negotiations between the City and its employee associations. The Water System is allocated its portion of the required contributions. For the Fiscal Year ended June 30, 2023, the allocable portion of City employer’s contributions to the PEMHCA plan paid from the Water Utility Fund totaled $203,000.

As of June 30, 2021 (the most recent actuarial valuation date), the PEMHCA plan had a funded ratio of

65.90%.

The City also entered into an agreement to provide certain OPEB to the IBEW employees on July 22, 2008, through the Utility Retiree Medical Trust, a single employer plan. The agreement is to supplement benefit payments from BERMT and PEMHCA for IBEW members and 12 management employees. The total target benefit is $1,200/month for individuals age 50 to age 64 and $750/month for those age 65 and above, with the exception that for qualifying employees who retire after December 16, 2015 and who have not contributed to Medicare while employed at the City and who are also not otherwise eligible for premium-free Medicare Part A at age 65 and older, the maximum amount at age 65 and older shall be $975/month, including payments from BERMT, PEMHCA minimum and Utility Retiree Medical Trust.

For the Fiscal Year ended June 30, 2023, the City contributed $1,506,000. For the Fiscal Year ended June 30, 2023, the City’s annual required contribution for Utility Retiree Medical Trust (URMT) was $34,000, which was payable from the City’s Electric Utility Fund. As of June 30, 2021 (the most recent actuarial valuation date), the URMT had a funded ratio of 126.70%.

In Fiscal Year 2018, the City implemented GASB Statement No. 75, “ Accounting and Financial Reporting for Postemployment Benef it Other Than Pension Plans. ” This Statement replaces the requirements of Statements No. 45, “Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions”, as amended, and No. 57, “OPEB Measurements by Agent Employers and Agent Multiple - Employer Plans”, for OPEB. This Statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. For defined benefit OPEB, this Statement identifies the methods and assumptions that are required to be used to project benefit payments, discount projected benefit payments to their actuarial present value, and attribute that present value to periods of employee service. Note disclosure and required ATTACHMENT 12
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supplementary information requirements about defined benefit OPEB are also addressed. As of June 30, 2023, the proportionate share of the City’s net OPEB liabilities allocable to the Water System was $941,000.

Additional information on the City’s pension and OPEB plans is provided in the notes in the audited financial statements in APPENDIX B to this Official Statement and in the City’s Annual Comprehensive Financial Report.

Insurance
The City is self-insured and self-administered for certain exposures through Risk Management, a division of the Management Services Department of the City. The City is self-insured for individual claims up to $2,000,000 for worker’s compensation, and $1,000,000 for general liability. Since July 1, 2004, the City has been a member in Authority for California Cities Excess Liability (ACCEL), which is a risk sharing pool for municipal excess liability. Each individual member self-insures all general liability losses for the first $1,000,000 and the members of the pool share losses between $1,000,000 and $10,000,000. The members jointly purchase additional layers of coverage beyond the pooled layer, with the City purchasing an additional $45,000,000 of excess coverage, for total coverage of $55,000,000. The layers of coverage above $10,000,000 are not pooled, but rather jointly purchased. The City self -insures its worker ’s compensation coverage for the first $2,000,000 of each loss, and the City purchases excess coverage up to statutory limits. The City charges the W ater Fund based upon the proportional payroll cost, job classification, and claim history. There have been no significant settlements or reductions in insurance coverage for the past three years. The City maintains a $10,000,000 flood insurance policy. The City does not currently maintain insurance coverage for the Water System for earthquake or wildfire risks.

THE WATER SYSTEM
General
The City owns and operates the Water System, which provides both potable water and recycled water for non-drinking uses such as landscaping irrigation. The Water System provides service to all water customers within the City. For the Fiscal Year ended June 30, 2023, the number of customers of the Water System was approximately 26,871 and the total water consumption (potable and recycled) was approximately 15,300 acre-feet (“AF”) or approximately 6.6 billion gallons. An AF is the amount of water that will cover one acre to a depth of one foot and equals 325,851 gallons.

Overall Description of the Water System
Potable Water. The City’s potable water requirements are met with treated local groundwater and water purchased from the Metropolitan Water District of Southern California (“MWD”). The potable water system is an integrated water system consisting of groundwater extraction and production (pumping and blending), transmission and distribution facilities. The potable water system has eleven pressure zones and is divided into three primary pressure zones and eight hillside pressure zones. There are approximately 276 miles of pipe, ranging in size from 3 inches to 30 inches in diameter, approximately 1,869 fire hydrants, connected for general fire protection service, and 13 booster stations with 27 booster pumps for the distribution of water to the various zones. Total potable water storage consists of eight concrete reservoirs, one concrete forebay and fourteen steel water tanks, with a total capacity of approximately 169.4 AF. The average potable daily use for the last five years was approximately 39.8 AF and the maximum demand was about 54.6 AF per day. The annual average potable water sales for the last five years were approximately 14,570 AF/year.

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Recycled Water. Wastewater generated within the City is treated at the Burbank Water Reclamation Plant. This water is treated to “ tertiary” levels meaning it can be used for non- potable uses.

BWP delivers recycled water for landscape irrigation, power plant use, commercial uses, golf course irrigation, and water truck filling. The City’s recycled water system consists of transmission and distribution facilities divided into eight pressure zones. The recycled water distribution system has seven pumping stations with 23 booster pumps. Recycled water storage consists of six storage tanks with a capacity of approximately 5.4 AF. The recycled water distribution system has approximately 35 miles of pipeline in service, including approximately 5% repurposed old potable mains, ranging from 4 to 16 inches in diameter.

Average recycled daily water used in Fiscal Year 2022-23 was 8.1 AF. Average recycled water sales in the last five years were approximately 2,918 AF/year.

Water Supply
General. The City does not have ownership rights to the naturally occurring groundwater underneath the City. Instead, the primary potable water supply for the City is imported water from MWD.

The purchase of water from MWD is the largest expense of the Water Enterprise Fund.

MWD obtains its water supply from multiple sources, primarily from the Colorado River, through the Colorado River Aqueduct, and the California State Water Project ( “SWP”), which is a state water management project that collects water from rivers in the northern part of the State and through a network of aqueducts and pumping stations redistributes it to the southern part of the State.

Water imported from MWD may arrive treated or untreated. The treated water is ready for distribution to potable water customers. The imported untreated water is initially put in the Lopez and/or Pacoima Spreading Grounds, which are water conservation facilities managed by the Los Angeles County Flood Control District that provide groundwater recharge for the San Fernando Basin. Untreated water at the Lopez and Pacoima Spreading Grounds percolates into the San Fernando Basin and, as described below, the City receives credits for all of the water it deposits in the Lopez and Pacoima Spreading Grounds.

Groundwater from the San Fernando Basin is available to the City as a result of such credits is pumped and then treated at the Burbank Operable Unit ( “BOU”), a groundwater treatment facility owned by the City, before distribution to customers. See also “– Water Treatment – Burbank Operable Unit.” In addition to untreated water purchased annually from MWD, the City also pu ts seasonal replenishment water from MWD when available (see “– Other BWP Groundwater Rights – Seasonal Replenishment Water ” below) and Cyclic Storage Water received from MWD (see “– Other BWP Groundwater Rights – Cyclic Storage Program” below) in the Lopez and Pacoima Spreading Grounds.

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Burbank Water and Power
Historical Potable Water Production
Fiscal Year
Burbank Operable
Unit Local
Production(1)
Imported Water
from MWD
2014 54% 46%
2015 59 41
2016 65 35
2017 65 35
2018 63 37
2019 63 37
2020(2) 58 42
2021(3) 73 27
2022(3) 78 22
2023(3) 81 19
__________________
(1) Approximately 60-70% of the BOU’s annual local water production is from untreated water from MWD and the balance is from the import return credits (see “– Groundwater Supply Rights”). (2) BOU availability was impacted due to a fire at an electrical substation that supplies electricity to the BOU. (3) Relative increases in BOU local production after Fiscal Year 2021 are due to technological and operational changes, although the ability to operate at this higher level of production is subject to a variety of factors, including review and approval by the Environmental Protection Agency and the California Division of Drinking Water.

Source: BWP
Imported Water. MWD is obligated to supply all of the City’s water needs if requested by the City unless MWD does not have sufficient water available to satisfy all of the water demands of its members, in which case restrictions are imposed upon the amount of water that MWD ’s members, including the City, may receive. Treated water purchases are used to blend with BOU water as part of the City’s drinking water permit and to meet nitrate concentration standards. Treated water purchases are also needed during periods of high demand or when water demand exceeds the BOU capacity. For the Fiscal Year 2023, approximately 19% of BWP’s water requirement (full -service treated water) was purchased from MWD and distributed by BWP to its customers.

Five MWD potable water service connections can supply over 100% of the City’s maximum daily water demand, with a rated capacity in excess of 200 AF per day. Water purchased from MWD is delivered on demand and is metered at the point of delivery. During the past five Fiscal Years, approximately 29.4% of BWP’s annual water requirement (full-service treated water) was purchased from MWD and distributed by BWP to its customers.

MWD’s current rate structure provides for a member agency’s agreement to purchase water from MWD by means of a voluntary purchase order. In consideration of executing its purchase order, the member agency is entitled to purchase a greater amount of water at a lower “ Tier 1” water supply rate. The City’s current MWD purchase order contract became effective on January 1, 2015 and expires on December 31, 2024. Under its purchase order, the City is able to purchase up to 90% of its base period demand at the Tier 1 rate. The City’s current base period demand is 18,640 AF. This means the City may currently purchase up to 16,776 AF/year of water at the Tier 1 rate. Any water purchased from MWD during the 10-year term of the purchase order in excess of 167,760 AF must be purchased at a highe r “Tier 2” rate. Under its purchase order, the City may vary its purchases from MWD from year to year but agrees to purchase at least 108,910 AF of water over the 10- year commitment period. For calendar year 2024, MWD ’s Tier 1 full service rate is $1,256 per acre-foot for treated water and $903 per acre-foot for untreated water, and the ATTACHMENT 12
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Tier 2 full service rate is $1,455 per acre-foot for treated water and $1,102 per acre-foot for untreated water.

For calendar year 2025 and 2026, MWD ’s full-service treated water rate are $1,395 and $1,528 per acre - foot respectively and untreated water rate are $912 and $984 per acre-foot respectively.

Groundwater Supply Rights. The San Fernando Basin and the Upper Los Angeles River Area (“ULARA”) are adjudicated according to the 1979 final judgment in a state court case entitled City of Los Angeles vs. City of San Fernando, et al., Los Angeles County Superior Court Case No. 650079 (the “Judgment”), which established the ULARA Watermaster to oversee the San Fernando Basin and report on an ongoing basis to the Superior Court. The Judgment established that the City of Los Angeles owns all naturally occurring water in the San Fernando Basin but recognized that a portion of the water imported into the San Fernando Basin percolates into the groundwater table. Under the Judgment, the City has a right to pump from the San Fernando Basin 20% of all water it delivers to customers (at no cost) and is known as an import return credit (“Import Return Credit”). The 20% entitlement is calculated based on the total of MWD treated water, BOU -produced and treated groundwater, and recycled water sold. Unused Import Return Credits in any year can be accumulated and banked for future use. Under the Judgment, the City has an additional right to purchase credits from the City of Los Angeles to pump up to 4,200 AF of groundwater per year (the “ Physical Solution”) at the City of Los Angeles ’s prior year average cost of water. The Physical Solution is exercised when the price of MWD untreated water is higher than the Physical Solution from the City of Los Angeles or when MWD water is unavailable. The City did not purchase Physical Solution in over a decade prior to the last three Fiscal Years (Fiscal Years 2020-21, 2021-22, and 2022- 2023).

Other BWP Groundwater Rights.

Seasonal Replenishment Water. When conditions allow, the City has the ability to purchase seasonally discounted replenishment water from MWD to count toward stored groundwater credits in the San Fernando Basin. This class of water, however, has not been available since May 2007 (except in Fiscal Year 2012 when the reservoirs were full from the heavy precipitation in the winter of 2011), due to issues associated with litigation involving the San Francisco Bay/Sacr amento-San Joaquin River Delta. When replenishment water is not available, as has been the case for the past decade, the City can purchase full service untreated water from MWD or Physical Solution water from the City of Los Angeles.

Cyclic Storage Program. In
2017, MWD created a Cyclic Storage Program to store water supply that was in excess of MWD’s demand and storage capacity. The program allows MWD to deliver water in advance of demand to member agencies for storage in the San Fernando groundwater basin. Member agencies participating in the program are charged MWD’s rate for full service untreated water in effect at the time the stored water is withdrawn ; however, deliveries are excluded from the capacity charge that would otherwise be in place. In December of 2018, the City made an advance payment for 5,719 AF at a cost of $3.97 million of Cyclic Storage Water ( “CSW”) under this program, funded by a loan of $3.95 million from the Electric Fund. During Fiscal Year 2020, BWP made another advance payment for 5,609 AF at a cost of $4.1 million, partially funded by a loan of $2.5 million from the Electric Fund. By June 30, 2021, the City accumulated a total of 11,283 AF in CSW. City ratepayers benefited from these advance purchases of CSW water by avoiding MWD’ s rate increases. As of July 31, 2022, the full outstanding balance of these loans were paid off in full.

With the heavy precipitation in Fiscal Year 2023, MWD offered water under the Cyclic Storage P
rogram. The City entered into an agreement to take 3,500 AF starting in July 2023.

Exchange Agreement with City of Los Angeles. The City entered into an exchange agreement with the City of Los Angeles in January 2011, under which the City exchanges recycled water for groundwater credits on a one-to-one ratio. Because the right to pump groundwater from local wells is limited by stored ATTACHMENT 12
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groundwater credits, this exchange reduces the number of groundwater credits that the City must otherwise purchase or obtain. The exchange began operation in October 2019. The water delivered to the City of Los Angeles under the exchange agreement, resulting in a corresponding increase in groundwater credits.

Fiscal
Year
Exchange Volume
(AF)
2020 43
2021 50
2022 47
2023 39

Sustainable Groundwater Management Act. The State’s Sustainable Groundwater Management Act requires qualifying local agencies to create a Groundwater Sustainability Agency and adopt a Groundwater Sustainability Plan. The San Fernando Basin is classified as a very low -priority basin and is currently not required to form a Groundwater Sustainability Agency. The City has 23,837 AF of groundwater inventory as of April 1, 2024.

Developments Affecting Water Supply.

Drought. T he State has a history of experiencing periods of drought, including most recently in 2012- 2016. In April 2021, Governor Newsom declared a drought state of emergency in 41 of the State ’s 58 counties, primarily in the northern portion of the State and in the Central Valley. In July 2021, Governor Newsom issued an executive order expanding the drought state of emergency to 50 of the State ’s 58 counties and calling for Californians to voluntarily reduce water use by 15% to 2020 levels.

The SWP is one source of water for MWD, is a state water management project that c ollects water
from rivers in the northern part of the State and through a network of aqueducts and pumping stations and redistributes it to the southern part of the State. Water allocation from the SWP varies according to factors including reservoir storage, weather projections, and projected runoff into streams, reservoirs, and aquifers.

These factors are impacted by precipitation that usually occurs from December through April, when California historically receives more than 90% of its snow and rain.

On August 16, 2021 the historic Colorado River Shortage Declaration was made by the Bureau of Reclamation declaring an official shortage condition due to the lowering of Lake Mead’s water level behind Hoover Dam to below 1,075 feet. The next day, on August 17, 2021, MWD declared a Water Supply Alert signaling an urgent need throughout the region to do more to reduce water use and asked water agencies to look within their respective water shortage contingency plans to implement appropriate local actions to achieve conservation through the current drought conditions.

BWP has adopted a Water Shortage Contingency Plan (“WSCP”) that lays out various methods for mitigating the effects of water shortages of increasing intensity in six stages. The WSCP includes voluntary and mandatory water use restrictions designed to reduce flexible water use depending on the cause, severity, and anticipated duration of the supply shortage. The WSCP details the protocols and procedures that BWP will implement at each stage of a d eclared water shortage to help water users comply with the shortage response actions. On September 14, 2021, the City Council authorized the move to Stage II (three days a week watering during the months of April through October and once a week watering du ring the cooler months of November through March) and defined conditions to move to Stage III (two days a week watering) in compliance with the City’s 2008 Sustainable Water Use Ordinance.

On June 27, 2022, the City moved to Stage III of the Sustainable Water Use Ordinance. Stage III allows landscape watering for only one day a week on Saturday from November to March before 9 AM or ATTACHMENT 12
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after 6 PM. Attended hand -watering is allowed before 9 AM and after 6 PM. By activating Stage III, all existing Stage I and Stage II restrictions remain in place, plus the additional restrictions are (i) watering of outdoor landscaped areas during the months of November through March is limited to fifteen (15) minutes per station, one (1) day per week (Saturday) and (ii) the fil ling or refilling of an artificial or ornamental body of water that does not use recycled water is prohibited. [ The City is currently in Stage III of the Sustainable Water Use Ordinance.][**Update for June 4 City Council meeting**] A long drought could interfere with the City’s ability to add to its groundwater credits. However, the City currently plans to keep a reserve of 10,000 AF in groundwater credits. This would allow normal extractions to continue for approximately three years without replenishment, assuming the purchase of 4,200 AF per year of Physical Solution water annually from the City of Los Angeles (see “ – Groundwater Supply Rights” above). After that, assuming the groundwater basin still holds enough water, the City would have to negotiate the purchase of additional groundwater from the City of Los Angeles.

Beginning in 2022, BWP is required to prepare and submit an annual water supply and demand assessment (“Annual Assessment”) to the California Department of Water Resources ( “DWR”) by July 1 of every year to evaluate actual forecasted near -term water supply conditions (for the next 12 months), followed by a dry year, and determine if a water shortage is imminent. If the Annual Assessment anticipates that demands will exceed available supply, the City Council will vote to determine the appropriate water shortage level and associated actions necessary to reduce demand to ensure adequate supply.

Impact of Drought on MWD. T
he MWD Official Statement described in “– Information About the Metropolitan Water District of Southern California” includes a discussion of MWD’s water sources and the impact of drought conditions and environmental restrictions in Appendix A to the MWD Official Statement, which is entitled “The Metropolitan Water District of Southern California”.

MWD has adopted a Water Shortage Contingency Plan (June 2021), which can be found on MWD’s
website: https://www.mwdh2o.com/media/21648/water -shortage-contingency-plan-june- 2021.pdf.

Although the City believes MWD is the best source of information about MWD’s water sources and operational plans, and, therefore, encourages potential investors to review the MWD Official Statement and the Water Shortage Contingency Plan (June 2021), the City can provide no assurances as to the accuracy, completeness or timeliness of the such information . See also “RISK FACTORS – Drought Conditions.”
Upgrades at Pacoima Spreading Grounds. The Pacoima Spreading Grounds, which are managed by the Los Angeles County Flood Control District, are undergoing upgrades that began in June 2021 and are expected to be completed in September 2024. During the upgrades, the City has access to spreading at the Lopez Spreading Grounds, although the Lopez Spreading Grounds have a spreading rate of approximately one -third that of the Pacoima Spreading Grounds. Additionally, the Lopez Spreading Grounds are anticipated to receive upgrades that will limit spreading and the City expects that there will be an approximately sixteen- month period when spreading is unavailabl e at both the Lopez and Pacoima Spreading Grounds. The City ’s advance purchase of CSW, along with other groundwater credits, are anticipated to provide the City sufficient groundwater credits during the time the Lopez and Pacoima Spreading Grounds are unavailable. See “– Other BWP Groundwater Rights – Cyclic Storage Program” above
Risk Assessment. On
October 23, 2018, America’s Water Infrastructure Act (“AWIA”) was signed into U.S. law. AWIA Section 2013 requires community drinking water systems serving mor e than 3,300 people to develop or update risk assessments and emergency response plans ( “ERPs”). The law specifies ATTACHMENT 12
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the components that the risk assessments and ERPs must address (including risks of failure, such as security, water quality and seismic protection, and consequences of failure) and establishes deadlines by which water systems must certify to the U.S. Environmental Protection Agency completion of the risk assessment and ERP. BWP ’s risk assessment was certified as complete on March 25, 2020. The findings of the risk assessment were incorporated into the City ’s updated emergency response plan, which was also certified as complete on September 24, 2020. The certifications were completed ahead of their respective deadlines.

BWP is currently in compliance with all requirements of AWIA. AWIA requires community drinking water systems to perform risk assessments and update their ERPs every five years, with BWP’s next certification due in 2025.

Water Treatment
Burbank Operable Unit. The Burbank Operable Unit ( “BOU”) is an Environmental Protection Agency (“EPA”) led project to clean up groundwater impacted by historical industrial releases, primarily by Lockheed-Martin. See “THE WATER SYSTEM – Environmental Issues.” The BOU commenced operation in January 1996 to treat, blend, disinfect and pump groundwater from eight groundwater wells into the City ’s distribution system. In January 1998, the BOU treatment capacity from was expanded from 6,000 gallons per minute (“gpm”) to 9,000 gpm. The treated groundwater is blended with imported MWD treated water to reduce and control the level of nitrate concentrations. In the Fiscal Year 2023, a total of 10,806 AF of groundwater was treated at the BOU at a capacity of 73.5% and an average flow rate of 6,615 gpm. See “– Water Supply – Developments Affecting Water Supply.” BWP has overseen many improvements to assure the reliability of the BOU. Both the vapor phase granulated activated carbon (“VPGAC”) and the liquid phase granulated activated carbon (“LPGAC”) units were modified in 2004. The internal piping configuration of the LPGAC was reconfigured, and a complete redesign of the internal screens and piping of the VPGAC and the airflow patterns that were completed in 2008. The boiler upgrades for onsite regeneration of the VPGAC carbon were completed in 2013.

Supervisory Control and Data Acquisition (SCADA) upgrade and primary controller replacement were completed in 2014 and software was upgraded in November 2022.

Current planned improvements at the BOU incl ude energy efficiency improvements, at least two new LPGAC vessels for liquid phase treatment, two replacement wells in North Hollywood, and a pipeline to bring the water from the wells to the BOU, the costs of which will be paid by Lockheed- Martin. Along with nitrate, other constituents of concern in the groundwater may increase and negatively impact production at the BOU. It may eventually be necessary to build additional treatment processes with funding expected to come from parties found to be responsible for the contamination. A proposed focus feasibility study is being planned to evaluate the replacement and efficiency of the equipment, control volatile organic compounds as well as installing a permanent backwash system along with well optimization and pumping at the BOU.

The City’s drinking water permit mandates blending of the BOU water with imported MWD water to meet acceptable nitrate levels. If the MWD supply were interrupted, production of groundwater might also be impacted, although the City bel ieves that lower nitrate levels at the BOU wells have reduced this risk.

Interconnection with LADWP. During Fiscal Year 2020, the construction of a “ temporary interconnection” (“ LAIX”) was completed under an agreement between BWP and the Los Angeles Department of Water and Power (“LADWP”). This temporary interconnection uses excess capacity at the BOU when BWP demand is lower than BOU capacity. The transfer agreement stipulates that LADWP will directly pay MWD for the treated surface water used to blend with the treated groundwater and reimburse ATTACHMENT 12
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BWP for its volumetric portion of the costs to operate, maintain, distribute, and pump the water. The LAIX began normal operation in October 2019 and is expected to be superseded by a permanent intertie in the future. During Fiscal Year 2023, no water was delivered to LADWP however in Fiscal Year 2022, 581 AF was delivered to LADWP through LAIX.

Information About the Metropolitan Water District of Southern California On May 8, 2024, MWD issued water revenue refunding bonds (the “ 2024 MWD Bonds”). In connection with the marketing of the 2024 MWD Bonds, MWD prepared an official statement dated April 22, 2024 (the “MWD Official Statement”). The MWD Official Statement includes a discu ssion of MWD’s water sources in Appendix A to the MWD Official Statement, which is entitled “The Metropolitan Water District of Southern California”. Although the City believes MWD is the best source of information about MWD’s water sources and operational plans, and, therefore, encourages potential investors to review the MWD Official Statement, the City can provide no assurances as to the accuracy, completeness or timeliness of the MWD Official Statement. The MWD Official Statement is available on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system.

Capital Improvement Plan
The critical objectives for the Water System are reliability, public safety, water quality, and business management. Reliability addresses supply, st orage and distribution. Public safety addresses fire flow and fire hydrants. Water quality focuses on maintaining water supply, treatment facilities and distribution systems to meet all applicable regulatory and legal requirements and to maintain the publi c’s trust in the water delivered by BWP. Business management is the replacement and repair of the meters and management of water supply cost.

Regular maintenance replacements are required to maintain system reliability. The City issued the 2021 Bonds in November 2021 to provide funds to (i) finance a portion of the costs of the 2021 water projects, (ii) prepay certain loans outstanding under the State Revolving Fund Program (the “State Water Loans”), and (iii) pay the costs of issuing the 2021 Bonds. The 2021 water projects include the replacement and upgrading of a pumping station installed in the 1940’ s, replacement of a reservoir, an accelerated pipeline replacement program, and other replacements and upgrades of facilities of the Water System. The estimated capital spending on the Water System over the next five years is approximately $50 million, of which $24.5 million will be funded with proceeds from the 2021 Bonds. BWP anticipates funding the remainder on a pay -go basis. The City believes that its planned capital spending will be sufficient to maintain the Water System in efficient operating condition.

The following table is a summary of BWP ’s Five-Year Capital Improvement Program. The costs in the table do not include costs for BOU improvements des cribed in “THE WATER SYSTEM – Water Treatment,” because those costs are paid by Lockheed-Martin.

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BURBANK WATER AND POWER

FIVE-YEAR CAPITAL IMPROVEMENT PROGRAM FORECAST
(Fiscal Years Ending June 30)
($000s)
2024 2025 2026 2027 2028 Total
System Replacement $ 6,824 $ 3,799 $ 3,836 $ 3,803 $ 4,131 $22,393 Plant Replacement 42 43 44 45 46 220
Automation and Control 21 96 22 22 23 184
Reservoirs and Tanks 290 215 600 4,952 236 6,293
Boosters 0 0 0 0 0 0
Production Facilities 1,938 2,041 0 0 0 3,979
Miscellaneous Facilities 276 77 277 228 279 1,137
Customer Service and Other 945 496 60 222 228 1,951
Customer Projects/Aid-in-
construction 634 634 659 684 709 3,320
Recycled Water 594 448 158 320 211 1,731
Capital Outlay and Other 458 956 883 2,052 1,378 5,727 Total CIP $12,022 $8,805 $6,539 $12,328 $7,241 $46,935 __________________
Source: BWP.

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Customers, Water Sales, Water Revenues and Maximum Day Demand The City’s water sales are dominated by sales to residential customers. The average number of customers, water sales in AF, and water revenues derived from sales, by classification of service, and maximum day demand during the past five Fiscal Years are listed below:

BURBANK WATER AND POWER

CUSTOMERS, WATER SALES, WATER REVENUES
Fiscal Years Ended June 30,

2019 2020 2021 2022 2023
Number of Potable Water
Customers:

Residential(1) 22,173 22,161 22,188 22,216 22,211
Commercial(2) 3,235 3,205 3,212 3,211 3,206
Other(3) 1,160 1,171 1,184 1,195 1,192
Recycled 236 240 250 256 262
Total 26,804 26,777 26,834 26,878 26,871

AF Sales Per Year:

Potable
Residential(1) 11,331 11,671 12,642 11,713 9,630
Commercial(2) 3,340 3,155 2,645 2,943 2,794
Other(3) 199 183 170 200 231
Recycled 2,824 3,032 2,927 3,134 2,673
Total in Acre-Feet(4) 17,694 18,041 18,384 17,990 15,328

Water Revenues ($ in thousands):

Retail(5) $30,578 $32,394 $32,961 $32,876 $32,703
Other Operating Revenues(6) 702 955 1,064 1,083 1,280
Total $31,280 $33,349 $34,025 $33,959 $33,983

Maximum Demand Day (AF) 63.1 62.8 57.1 60.1 54.6
__________________
(1) Residential includes multi-family dwellings.
(2) Commercial includes Large Commercial.
(3) Other includes city department water, school, fire protection, and miscellaneous users. (4) In Fiscal Year 2022-23, the City experienced a wet winter with heavy rainfall from multiple atmospheric rivers along with state mandate to voluntarily reduce water use by 15% to 2020 levels. (5) Potable and recycled.
(6) Other operating revenues include connection fees, recycled water credits and other miscellaneous revenues.

Source: BWP.

Largest Water Customers
BWP’s five largest water customers (excluding other City departments) accounted for approximately 7.04% of the City’s water sales for the Fiscal Year 2023. During the same period, the City’s ten largest water customers (excluding other City departments) accounted for approximately 9.44% of the City’s water sales and the City’s 25 largest water customers (excluding other City departments) accounted for approximately 12.04% of the City’s water sales.

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Water Rates and Charges
Subject to the requirements of Proposition 218, the City has the power to establish rates and charges as needed to operate the Water System. Pursuant to the Burbank Municipal Code, the utility m ust remain self- supporting from a financial standpoint and must maintain rates sufficient to maintain its financial health. Because costs can change suddenly and materially (see, for example, the factors listed in “RISK FACTORS – Water System Expenses”), a regular review and report on rates is necessary. BWP regularly evaluates such information needed to maintain adequate rates and uses such information in its assessment of its rates. Water rates are established by the City Council and are not subject to regulation by the California Public Utilities Commission (the “CPUC”) or by any other state agency.

The City’s potable water rates consist of three components: a fixed monthly water availability charge based on meter size, a tiered quantity charge based on usage, and an additional water cost adjustment charge (the “WCAC”) based on usage.

Recycled water rates consist of two components: a fixed monthly water availability charge based on meter size and a quantity charge based on usage.

Current water rates, including the WCAC, were established by the BWP Board, and approved by the City Council as part of the annual budget process. In May 2021, the City Council approved a 6.0% rate increase, spread out over three increases of 1.96% effective on October 1, 2021, January 1, 2022, and April 1, 2022. The rate increases were being phased in to allow economic recovery from the COVID -19 pandemic for the community. In connection with the approval of the Fiscal Year 2023-24 budget, the City Council approved a 9.00% rate increase to be effective on July 1, 2024.

The Water System’s base rates have changed 12 times over the last 10 years. The City provides no free water services. The following table sets forth the percentage change in overall system rates since July 1, 2012.

Burbank Water and Power
Percentage Change in Water Rates(1)
Effective Date Overall System
07/01/13 4.75%
07/01/14 4.75
07/01/15 3.40
07/01/16 3.40
07/01/17 3.40
07/01/18 4.90
07/01/19 4.90
10/01/21 1.96
01/01/22 1.96
04/01/22 1.96
07/01/22 6.00
07/01/23 9.00
(1) Percentage change is based upon the immediately preceding rate.

Source: BWP.

The following table sets forth the weighted average billing price, factoring in fixed and usage-based charges, per hundred cubic feet of BWP’s various customer classes for the five fiscal years shown.

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BURBANK WATER AND POWER

WEIGHTED AVERAGE BILLING PRICE
($ per CCF(1))
Fiscal Year Ended June 30,

2019 2020 2021 2022 2023
Residential(2) $4.04 $4.21 $4.18 $4.33 $5.04
Commercial 3.87 4.17 4.29 4.25 4.85
Weighted Average Potable Water Rate 4.00 4.20 4.20 4.31 5.00 Weighted Average Recycled Water Rate 2.88 2.98 3.02 3.08 3.50 __________________
(1) CCF is one hundred of cubic feet; one AF is equal to approximately 435.6 CCF. (2) Residential includes multi-family dwellings.

Source: BWP.

Billing and Collection. Water service charges are billed monthly by BWP. Electric, refuse, water and sewer service charges are issued jointly in a general utility bill. The general utility bill is due within 21 days from the date the bill is delivered or mailed. All services may be disconnected if payment is 21 days delinquent. Delinquent fees and charges may be made a lien against the property, placed on the tax roll of the county and collected in the same manner as ad valorem taxes.

As shown in the following table, delinquency rates for collection of payment for electric, refuse, water and sewer services of the City (expressed as a percentage of annual total revenues received by the City for the use of such utility systems) has been less than 1% for each of the past five fiscal years.

BURBANK WATER AND POWER
DELINQUENCY RATE AS OF JUNE 30
June 30 Delinquency Rate
2019 0.22%
2020 0.35
2021 0.90
2022(1) 3.80
2023(1) 1.70
_________________
(1) Collections activity was suspended due to COVID 19 from March 2020 to April 2023 for residential customers and disconnection resumed on April 3, 2023.

Source: BWP.

Historical Net Revenues and Debt Service Coverage
The following two tables set forth (i) summaries of net revenues of the Water System for the five Fiscal Years ended June 30, 2023 together with debt service coverage ratios with respect to BWP’s Water System revenue bonds and (ii) the statement of net position of BWP’ s Water System for the five Fiscal Years ended June 30, 2023. This information was prepared by the City on the basis of audited financial statements.

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BURBANK WATER AND POWER

HISTORICAL NET REVENUES AND DEBT SERVICE COVERAGE

WATER SYSTEM
Fiscal Years ending June 30
(Dollar amounts in $000s)
2019 2020 2021 2022 2023

Operating revenue:

Retail $30,578 $32,394 $32,961 $32,876 $32,703
Intergovernmental - - - 378 21
Other Operating Revenues (1) 702 955 1,064 1,117 1,280
Total Operating Revenues $31,280 $33,349 $34,025 $34,371 $34,004

Optional advanced pension
payment(2) - $553 $530 $440 $440
Other Operating Expenses $24,673 27,141 26,079 26,677 27,124 Total operating expenses (3) $24,673 $27,694 $26,609 $27,117 $27,564 Operating Income/ (Loss) $6,607 $5,655 $7,416 $7,254 $6,440

Other non-operating income:(4) 573 510 (230) (401) 1,557

Net Income Available for Debt
Service (a) $7,180 $6,165 $7,186 $6,853 $7,997

Net Bonds Debt
Service (5)(b) $2,077 $2,077 $1,049 $2,535 $3,473

State Water Loan Payments 598 597 598 59 -
Annual Debt Service $2,675 $2,675 $1,647 $2,594 $3,473

Rate Covenant Coverage
(a)/(b) 2.68x 2.31x 4.36x 2.64x 2.30x

Revenues Available After
Debt Service (a)-(b) $4,505 $3,490 $5,539 $4,259 $4,524 __________________
(1) Other operating revenues include connection fees, recycled water credits, intergovernmental income, and other miscellaneous revenues. Other operating revenues do not include aid-in-construction. (2) During the Fiscal Year 2021 audit, the optional advanced payment to CalPERS to reduce the City’s unfunded actuarial liability for Fiscal Year 2020, Fiscal Year 2021, Fiscal Year 2022, and Fiscal Year 2023 was reclassified from Non-operating expense to Operating expense.
(3) Operating expenses includes costs of imported water, costs of treating water, wages and salaries, and cost allocation from th e Electric Utility Fund and the City for shared services, Operating expenses do not include depreciation, and interest expense.

Operating expenses for Fiscal Year 2020 and after were higher primarily due to higher water supply expense attributable to MWD rate increases and higher demand as well as higher professional service expenses. (4) Other non-operating income available for debt service includes interest income, other non -operating revenues, less other non- operating expenses. Other non-operating income does not include capital contributions, Build America Bonds subsidy, and non-cash adjustments to record market value adjustment for investment per GASB 31 and market value adjustment for pension per GASB 68.
(5) Represents debt service on outstanding Bonds. Debt service on the 2010B Refunded Bonds is net of the f ederal subsidy on the 2010B Refunded Bonds. The 2010B Refunded Bonds are anticipated to be redeemed in full with proceeds of the 2024 Bonds.

Source: BWP.

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City of Burbank
Water Utility Fund
Statement of Net Position
($000’s)
Fiscal Year Ended June 30,
ASSETS 2019 2020 2021 2022 2023
Current and regulatory assets:

Cash and cash equivalents

$13,77

$10,707 $14,379 $38,221 $41,4
Accounts receivable, net

3,10

3,834 4,032 3,772 3,2
Inventories

3,79

623 605 756 1,1
Leases Receivable

0 0 0 2

2 Deposits and prepaid expenses

4,02

11,981 10,758 4,679 5,4
Interest receivable

5 40 29 4

5 Regulatory costs to be recovered in one year

16 169 169 0 0
Restricted nonpooled investments

182 0 0 0 0
Total current and regulatory assets

25,10

27,354 29,972 47,498 51,3
Noncurrent and regulatory assets:

Regulatory costs for future recovery

7 42 23 0 0
Leases Receivable 0 0 0 177 1
Total noncurrent and regulatory assets

7 42 23 177 1
Capital assets:

Land

309 309 309 3
Utility plant and equipment

160,36

166,195 171,230 175,121 179,8
Construction in progress

7,54

4,541 2,577 2,796 5,3
Total utility plant and equipment

167,91
0 171,045 174,116 178,226 185,5
79 Less accumulated depreciation (73,292) (77,241) (81,435) (84,719) (89,184) Net utility plant and equipment

94,618 93,804 92,681 93,507 96,39
5 Deferred outflows of resources:

Deferred amounts from pensions and OPEB(1)(2)
Total deferred outflows of resources

2,391 2,323 2,341 1,968 5,731
Total assets & deferred outflows of resources $122,18

$123,523 $125,017 $143,150 $153,606

LIABILITIES AND FUND EQUITY
Current liabilities:

Accounts payable and accrued expenses

$1,43

$2,028 $1,321 $2,242 $9,5
Bond interest payable

14 136 135 216 2
Customer deposits

1,52

1,767 1,369 1,066 9
Current portion of revenue bonds payable, net 89

0 0 1,410 1,4
Current portion of loan payable

43 443 454 0 0
Current portion of compensated absences

67 63 56 58 80
Total current liabilities

4,50

4,437 3,335 4,993 12,2
Noncurrent liabilities:

Revenue bonds payable, net

30,04

27,859 27,866 55,295 53,5
Loan payable

5,97

5,530 5,076 0 0
Interfund loan payable 3,95

6,450 6,450 0
Compensated absences

750 865 1,073 1,040 9
Regulatory credit 118
Net OPEB liability(2)

91 455 451 362 941
Net pension liability(1)

11,499 12,114 12,218 5,394 12,65
Total noncurrent and regulatory 53,12

53,392 53,134 62,091 68,0
Deferred inflows of resources
Deferred amounts on pensions and OPEB(1)(2) 83

967 500 5,158 5

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Deferred amounts from leases 0 0 0 199 1
Regulatory credits for future recovery 16

0 0 0 0
Regulatory credits 2,772 0 0 0 0
Total deferred inflows of resources 3,769 967 500 5.357 751 Total liabilities & deferred inflows of resources 61,400 58,795 56,969 72,439 81,086 Fund equity:

Total net position

60,789 64,725 68,048 70,709 72,519
Total liabilities and net position

$122,189 $123.523 $125,017 $143,150 $153,606
(1) Starting in Fiscal Year 2015, Burbank implemented Governmental Accounting Standards Board (GASB) Statement No. 68, “Accounting and Financial Reporting for Pensions, an Amendment of GASB Statement No. 27 ” and GASB Statement No. 71, “Pension Transition for Contributions Made Subsequent to the Measurement Date, an Amendment of GASB Statement No. 68”. (2) Starting in Fiscal Year 2018, Burbank implemented GASB Statement No. 75, “ Accounting and Financial Reporting for Postemployment Benefit Other Than Pension Plans.” This Statement replaces the requirements of Statements No. 45, “Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions”, as amended, and No. 57, “OPEB Measurements by Agent Employers and Agent Multiple-Employer Plans”, for OPEB.

Source: BWP.

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Projected Water Net Revenues and Debt Service Coverage
The following table sets forth a five -year projection of Water Net Revenues, together with debt service coverage ratios. The projections reflect the rate increases shown in the table, inflationary increases in non- salary expenses of between 2% and 5% in Fi scal Years 2023 -24 through 2027- 28, and annual increases of between 4% and 5% % for salaries.

BURBANK WATER AND POWER

PROJECTED WATER NET REVENUES AND DEBT SERVICE COVERAGE

WATER SYSTEM
Fiscal Years ending June 30
(Dollar amounts in $000s)

2024 2025 2026 2027 2028
Rate increase (1) 9% 9% 9% 9% 9%
Potable water sales in Acre-Feet 14,260 14,989 15,240 15,528 15,816 Recycled water sales in Acre-Feet 2,937 3,094 3,229 3,229 3,229

Operating revenue: (2)
Retail $36,626 $43,246 $47,952 $52,948 $58,454
Other operating 1,622 1,386 1,480 1,580 1,689
Total operating revenue 38,248 44,632 49,432 54,528 60,143

Total operating expenses (3) 31,925 35,036 35,894 39,247 41,117 Operating Income/ (Loss) 6,323 9,596 13,538 15,281 19,026

Interest Income 1,008 400 516 520 535
Other non-operating income (61) (172) 27 27 27
Total non-operating income: 947 228 543 547 562

Water Net Revenues 7,270 9,824 14,081 15,828 19,588
Net Debt Service (4) 3,657 3,817 3,529 3,551 3,569

Rate Covenant Coverage 1.99x 2.57x 3.99x 4.46x 5.49x

Revenues Available After Debt
Service $3,613 $6,007 $10,552 $12,277 $16,019

(1) Rate increases indicated are expected proposed rate increases and have not been approved by the City Council. Actual rate changes may differ materially from this table.
(2) Other operating revenues include connection fees, recycled water credits, intergovernmental income, and other miscellaneous revenues. Other operating revenues do not include aid-in-construction. (3) Operating expenses include costs of imported water, costs of treating water, wages and salaries, and cost allocation from the Electric Utility Fund and the City for shared services. Operating expenses do not include depreciation, and interest expense. (4) Presented net of projected federal Build America Bond subsidy, assuming current federal sequestration reduction rate of

5.7%.

Source: BWP.

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Financial Reserves
BWP management in itially developed a financial reserve policy to maintain its long -term rate stability in 2003. The policy was last updated in 2023. Financial reserves were established for general operating expenses, debt repayment and capital funding, and replenishment reserves for storage when water prices are low. Under the updated financial reserve policy, BWP ’s financial reserve is based on available cash to fund normal operation per day or days cash on hand. Days cash on hand is calculated by taking the unrestricted cash and investments less depreciation and dividing by the annual operating expenses for one day. The financial reserve policy includes a minimum reserve and a recommended reserve. The approved minimum financial reserve for the Water System is 120 days cash on hand and the recommended reserve ranges between 200 – 300 days cash on hand. The City had 543 days cash on hand on June 30, 2023. The high days cash on hand is due to the issuance of the 2021 Bonds.

Customer Relations
As a community owned utility, BWP’s relationship with its customers and community stakeholders continues to be an important focus. As the utility moves forward with sustainability and drought, BWP will educate, engage, and work with customers will become increasingly important.

In late 2020, BWP’s marketing group began pursuing an omni-channel marketing strategy with an emphasis on digital and social media channels to broaden its reach. This has resulted in greater opportunities for engagement with both residential and commerci al customers about key issues such as COVID relief, water conservation, and new EV rebate programs. 76% of customers in the latest residential survey conducted in 202[_] rated outbound communications as highly satisfactory, and BWP recently won two national awards from the American Public Power Association (APPA). APPA recognized BWP in print/digital and web/social media categories with Awards of Excellence.

BWP’s water meets or exceeds all State and Federal drinking water standards. The water is monitored and tested on a daily basis with over 3,200 water samples analyzed per year. The results are recorded by the CDPH’s database and distributed to the customers annually.

Litigation
BWP is presently involved in certain matters of litigation that have arisen in the normal course of conducting water operations. Management believes, based on consultation with the City Attorney, that these cases in the aggregate are not expected to result in a material adverse financial impact on the Water Fund.

Environmental Issues
Utilities such as the Water System are subject to continuing environmental regulation. Federal, state and local standards and procedures which regulate the environmental impact of utilities are subject to change. These changes may arise from continuing legislative, regulatory and judicial action regarding such standards and procedures. Consequently, there is no assurance that the Water System or any City facility or project will remain subject to the regulations currently in effect, will always be in compliance with future regulations or will always be able to obtain all required operating permits. An inability to comply with environmental standards could result in additional capital expenditures, reduced operating levels or the shutdown of individual units not in compliance. In addition, increased environmental regulations have, and may in the future, create certain barriers to new facility development and require modification of existing facilities and may result in additional costs for affe cted resources. The City cannot predict at this time whether any additional legislation or rules will be enacted which will affect the City’s operations, including ATTACHMENT 12
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the Water System managed by BWP, and if such laws or rules are enacted, what the costs to the City might be in the future because of such action. See “RISK FACTORS” below.

In April 2024, the EPA published a final rule which established national limits in drinking water for six types of per- and polyfluoroalkyl substances (“PFAS”). As of April 2024, public water systems have three years to begin monitoring for PFAS and then two additional years to become compliant with the new limits. In recent years, PFAS had received significant publicity for their potential impacts on the environment and human health. Companies have voluntarily stopped using two types of the PFAS for which national limits have been established (Perfluorooctanoic Acid (“PFOA”) or Perfluorooctanesulfonic Acid (“PFOS”)), and the City has not detected either in the City ’s water. The water that BWP purchases from MWD has one of the 5,000 PFAS chemicals that are in use worldwide, called Perfluorohexanoic Acid (“PFHxA”), at a low detection of 2.8 parts per trillion (ppt). PFHxA is not one of the six PFAS for which national limits have been established. For the past two decades, BWP has been removing the extremely low trace amounts of PFAS from its groundwater wells using a granular activated carbon-removal process as water passes through the BOU . While BWP has already taken measures to monitor for and remove PFAS, BWP anticipates that compliance with the new PFAS regulations could result in increased costs typically associated with heightened regulation or newly regulated substances , including costs associated with additional treatment processes, capital expenditures, and increased operational costs. When treatment processes are unavailable or not feasible, the City has the option to purchase treated water from MWD.

RISK FACTORS
The following factors, which represent certain risk factors, should be considered along with all other information in this Official Statement by potential investors in evaluating the 2024 Bonds. The following is not intended to be an exhaustive list and there can be no assurance made that other risk factors do not currently exist or will not become evident at any future time.

Revenues of the Water System; Rate Covenant Not a Guarantee The ability of the City to pay the principal of and interest on the 2024 Bonds depends on the ability of the City to generate Water Net Revenues in the levels required by the Indenture. Although, as more particularly described herein, the City expects that sufficient revenues will be generated through the imposition and collection of service charges, impact fees, and other Water Revenues described herein, there is no assurance that such imposition of service charges, impact fees, or other Water Revenues will result in the generation of Water Net Revenues in the amounts require d by the Indenture. As a result, the City’ s covenant does not constitute a guarantee that sufficient Water Net Revenues will be available to pay the principal of and interest on the 2024 Bonds when due.

Water Supply and Cost
The City’s water supply is dep endent on the reliability of imported water from MWD. The City does not have ownership rights to the naturally occurring groundwater underneath the City. Instead, the primary potable water supply for the City is imported water from MWD. See “ THE WATER SYSTEM – Water Supply.” The City cannot guarantee that it would be able to meet its rate covenant if the supply of imported water from MWD were to be reduced or unavailable.

Demand and Usage
There can be no assurance that the local demand for services provided by the Water System will continue according to historical levels. In addition, drought conditions and voluntary or mandatory conservation measures could decrease usage of the services of the Water System. See “–Drought ATTACHMENT 12
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Conditions.” Although a decline in demand would result in certain reduced commodity expenses, such reductions would not be expected to be sufficient to fully offset the decline in revenues. Reduction in revenues resulting from a decline in demand could require an increase in rates or charges in order to produce Water Net Revenues sufficient to comply with the City’ s rate covenant. See “THE WATER SYSTEM – Water Rates and Charges.” Rate increases could increase the likelihood of nonpayment.

Water System Expenses
There can be no assurance that the City’s expenses for the Water System will be consistent with the descriptions in this Official Statement. Changes in technology, changes in quality standards, or decreased development, increases in the cost of operation, increased regulation or other expenses could require increases in rates or charges in order to comply with the City ’s rate covenant in the Indenture. In addition, the Water System’s biggest expense – the cost of purchasing of water – is dependent upon MWD.

Statutory and Regulatory Impact
The kind and degree of water treatment is regulated, to a large extent, by the federal government and the State of California. Treatment standards set forth in federal and state law control the operations of the Water System and mandate its use of technology. If the federal government, acting through the Environmental Protection Agency, or the State of California, or additional federal or state legislation, should impose stricter water quality standards upon the Water System, the Water System’s expenses could increase accordingly and rates and charges would have to be increased to offset those expenses.

It is not possible to predict the direction which federal or state regulation will take with respect to drinking water quality standards, although it is likely that both will impose more stringent standards with attendant higher costs.

Although the City has covenanted in the Indenture to prescribe, revise and collect such charges for the services, facilities and water furnished by the Water System during each fiscal year at specified levels, no assurance can be given that the cost of compliance with such laws and regulations will not materially adversely affect the ability of the City to generate Water Net Revenues in the amounts required by the Indenture and to pay the 2024 Bonds. Certain potential increasing regulatory standards could materially increase the cost to the City of providing water services.

Litigation
At any given time, there are certain claims and disputes, including those currently in litigation, that arise in the normal course of the City ’s Water System enterprise activities. In the view of BWP management, there is no litigation, present or pending, which will, individually or in the aggregate, materially impair the City’s ability to service its Water System indebtedness or which will have a material adverse effect on the business operations of the Water System. See “LITIGATION.” Global Health Emergencies; COVID-19 Pandemic
A pandemic, epidemic or outbreak of an infectious disease can have significant adverse health and financial impacts on global and local economies. Beginning in 2020, the COVID -19 pandemic negatively affected economic activity throughout the world, including the United States and the State . The COVID- 19 pandemic, and actions by local and national governments to mitigate the effects of the pandemic, impacted travel, commerce, asset values and financial markets globally, and negatively affected economic output worldwide and within the State and the City. The City implemented certain temporary measures intended to mitigate the impact of the COVID -19 pandemic and to assist the City’ s customers, including ATTACHMENT 12
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waiving late fees and suspending service shut-offs due to nonpayment. The City was subjected to periodic orders from the State government that regulate service shut-offs.

Total water sales were minimally impacted by the COVID -19 pandemic. The decrease in commercial sales was offset by an increase in residential demand primarily driven by the “stay-at-home” order.

Future pandemics and other widespread public health emergencies may arise from time to time. No assurance can be given that the operations or finances of the Electric System will not be negatively affected in the event of a resurgence of the COVID-19 pandemic, or if another national or localized outbreak of highly contagious or epidemic disease occurs in the future.

Earthquake, Flood, Wildfire or Other Natural Disasters
General. The occurrence of an earthquake, flood, fire, or other natural disaster which results in the temporary or permanent closure of major components of the Water System or results in significantly increased costs could materially adversely affect the ability of the City to operate the Water System or to generate Water Net Revenues at the levels required by the Indenture.

Seismic. The City is located in a region of seismic activity. Damage from seismic activity could occur through surface fault rupture, ground shaking, liquefaction, and landslides. Surface fault rupture is an actual cracking or breaking of the ground along a fault during an earthquake. The City contains one active fault–the Verdugo Fault, located south of the Verdugo Mountains–but no Alquist-Priolo Earthquake Fault Zone has been designated in the City. In addition to the Verdugo Fault, several other active faults in the region have the potential to cause ground shaking that would affect the City. These faults are the San Fernando Fault (northwest of the City), Sierra Madre Fault (at the base of the San Gabriel Mountains e ast of the City), Hollywood Fault (south of the City), Newport -Inglewood Fault (12.5 miles southwest of the City), and the Raymond Fault (6 miles southeast of the City). The San Andreas Fault, a large fault that runs nearly the entire length of California, is located approximately 27 miles to the northwest of the City. Much of the City is located atop soils susceptible to liquefaction, particularly in areas west of Interstate 5.

Liquefaction risk is higher in areas where the groundwater table lies within 50 feet of the surface. Most groundwater underlying the City is deeper than 100 feet below the surface. As long as groundwater continues to be extracted in the upper Los Angeles River area and annual rainfall remains at normal levels, the City expects that groundwater levels in the City will remain deeper than 50 feet, resulting in a low risk of liquefaction for most of the City. In the City, hazards from landslides and mudslides are limited to properties at the base of undeveloped or unimproved slopes in the Verdugo Mountains. Significant earthquakes that have occurred in recent years in the Los Angeles and Burbank area, including the Northridge earthquake in 1994, that resulted in only temporary electrical outages in the Water System and, after inspection to determine the scope of any damage, only minor damage to the Water System. It is impossible to accurately predict the cost or effect of an earthquake on the Water System or on BWP’s ability to provide uninterrupted service to all parts of its service area. In the event of a severe earthquake, however, the amount of moneys available to pay debt service on the 2024 Bonds could be reduced significantly.

Flood. Based on flood risk evaluations prepared by the Federal Emergency Management Agency (“FEMA”) for the City, effective September 26, 2008, most of the City is located in Zone X, which describes lands subject to the 0.2% annual (500-year) flood zone or that lie within the 100-year flood zone, but with flooding depths less than one foot. Areas of the City that are within the FEMA -mapped 100-year floodplain include: (i) a narrow area along the Lockheed Drain Channel in the vicinity of Empire Avenue and W. Vanowen Street from near the Burbank Airport eastwards towards Interstate 5, then southward in the vicinity of Victory Boulevard, (ii) a narrow area west of Victory Boulevard in the vicinity of South Main Street, and (iii) several small areas south of Highway 134 near the City’ s southern boundary. In ATTACHMENT 12
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addition, there is a large area in the northeastern portion of the City mapped as Zone D, which describes areas in which flood hazards are undetermined, but possible.

Wildfire. In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes.

In some instances, entire neighborhoods have been destroyed. Two portions of the City have been categorized by the California Department of Forestry and Fire Protection (“CALFIRE”) as Very High Fire Hazard Severity Zones. These areas are a large area in the northeastern portion of the City, in and bordering the Verdugo Mountains, and a smaller portion at the southern end of the City that includes Warner Brothers Studios. Wildland and wildland/urban interface fires are relatively common in the Verdugo Mountains in the northeastern portion of the City and surrounding areas. In 2005, the Harvard Fire burned approximately 1,000 acres of brush within City limits before being contained, with no structures burned. In 2017, the La Tuna Fire burned in the Verdugo Mountains, including portions of the City, ultimately claiming approximately 7,200 acres and destroying 10 structures. Steep wildland and wildland/urban interface areas that have previously experienced fire damage are at higher risk of damage from mudslides.

Some believe that climate change will lead to even more frequent and damaging wildfires in the future. While the City and the Water System have not suffered direct effects of wildfire, there can be no assurance that wildfires will not affect the City and the Water System in the future, or the effects of any such wildfire, which could be material.

Drought Conditions
California is subject to droughts, including in the years 1976-77, 1987-1992, 2008-09 and 2012-16 (although drought conditions may vary significantly throughout different parts of the State). In April 2021, Governor Newsom declared a drought state of emergency in 41 of the State’s 58 counties, primarily in the northern portion of the State and in the Central Valley. In July 2021, Governor Newsom issued an executive order expanding the drought state of emergency to 50 of the State’s 58 counties (not including the County) and calling for Californians to voluntarily reduce water use by 15%. In October 2021, Governor Newsom expanded the executive order to include all counties in the State. The City cannot predict what effect drought conditions may have on revenues of the Water System, or whether or to what extent water reduction requirements or voluntary guidance may affect the Water System.

In March 2021, the DWR announced an adjustment to its initial SWP allocation for the 2021 water year. DWR announced that it expects to deliver 5% of requested supplies in 2021, down from the initial allocation of 10% announced in December 2020. Allocations represent the amount of SWP water that DWR will deliver for the year and are reviewed monthly based on several factors, such as water in storage, environmental requirements, and rain and snow runoff proje ctions. For 2020, the initial SWP allocation was 10% and the final allocation was 20% in May.

On August 16, 2021, the historic Colorado River Shortage Declaration was made, with the federal Bureau of Reclamation declaring an official shortage condition due to the lowering of Lake Mead’s water level behind Hoover dam to below 1,075 feet. The next day, on August 17, 2021, MWD declared a Water Supply Alert, signaling an urgent need throughout the region to do more to reduce water use, and asked water agencies to look within their respective water shortage contingency plans to implement appropriate local actions to achieve conservation through the current drought conditions. On September 14, 2021, the City Council authorized the move to Stage II of its Water Shortage Contingency Plan (three days a week watering during the months of April through October and once a week watering during the cooler months of November through March) and defined conditions to move to Stage III (two days a week watering) in accordance with the City’s 2008 Sustainable Water Use Ordinance.

ATTACHMENT 12
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Major or sustained water conservation measures may reduce Water System revenues, which may necessitate increases in water rates and charges. To address the impact of conservation measures on the Water System revenues, BWP is exploring the use of a drought surcharge that would be implemented during periods of mandatory conservation. Such a drought surcharge would be subject to approval by the City Council and the requirements of Proposition 218.

Potential Impact of Climate Change
The issue of climate change has become an important factor in water resources planning. There is evidence that increasing concentrations of greenhouse gases have caused and will continue to cause a rise in temperatures around the world, which will result in a wide range of changes in climate patterns.

Moreover, there is evidence that a warming trend occurred during the latter part of the 20th century and will likely continue through the 21st century. These changes will have a direct effect on water resources in the State, and numerous studies on climate and water in the State have been conducted to determine the potential impacts. Based on these studies, global climate change could result in the following types of water resources impacts in the State, including impacts on the Water System:
• Changes in the timing, intensity, and variability of precipitation, and an increased amount of precipitation falling as rain instead of as snow,
• Long- term changes in watershed vegetation and increased incidence of wildfires that could affect water quality,
• Increased water temperatures with accompanying adverse effects on some fisheries, • Increases in evaporation and concomitant increased irrigation need, • Changes in urban and agricultural water demand,
• Rising sea levels resulting in potential pumping cutbacks on the State Water Project, and • Effects on the groundwater basin.

However, other than the general trends listed above, there is no clear scientific consensus on exactly how climate change will quantitatively affect water supplies available to the Water System. The City is acting to mitigate and prepare for climate threats and hazards. The City Council adopted the Greenhouse Gas Reduction Plan in 2022. The Greenhouse Gas Reduction Plan sets a path to reduce greenhouse gas emission goals within the City. The City cannot predict the impact of climate change on the Water System, including impacts on demand, water supply, and expenses.

Cybersecurity
The City, including the Water System, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. United States government agencies have in the past issued warnings indicating that critical infrastructure sectors such as water systems may be specific targets of cybersecurity threats.

The City has implemented industry best practices, engineering and procedures and has made the necessary investment to protect against and mitigate the adverse effects of cyberattacks, including steps to ATTACHMENT 12
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harden its cybersecurity and provide training for employees in cyber awareness and the use of the City ’s digital networks and systems. No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City or disrupt the operation of the Water System. There have been no detected cyberattacks that have affected the Water System.

Limited Obligations
The Bonds (including the 2024 Bonds) are special, limited obligations of the City payable from Water Net Revenues. The 2024 Bonds shall not be deemed to constitute a debt or liability of the City, the State, or of any political subdivision thereof within the meaning of any constitutional or statutory limitation, or a pledge of the faith and credit of the City, the State, or of any political subdivision thereof, but shall be payable, except to the extent of certain moneys pledged therefor under the Indenture, solely from Water Net Revenues. Neither the faith and credit nor the taxing power of the City, the State, or of any political subdivision thereof is pledged to the payment of the principal of, premium, if any, or the interest on the 2024 Bonds. The issuance of the 2024 Bonds shall not directly or indirectly or contingently obligate the City, the State, or any political subdivision thereof to levy or to pledge any form of taxation whatsoever therefor or to make any appropriation for their payment.

No Reserve Fund
No debt service reserve fund has been or will be established to secure the 2024 Bonds.

Additional Bonds or Parity Debt
Upon the issuance of the 2024 Bonds and the redemption of the 2010B Refunded Bonds, the 2021 Bonds will be the only other outstanding obligations payable from Water Net Revenues on a parity with the 2024 Bonds. In addition, the City is permitted under the Indenture, subject to satisfaction of certai n conditions, to incur future Parity Debt and additional Bonds. In the event Water Net Revenues were insufficient to pay all of the City ’s obligations with respect to the Bonds (including the 2024 Bonds) and any Parity Debt when due, the City would be obligated to make payments on the Parity Debt and the Bonds (including the 2024 Bonds) on a pro rata basis.

Effect of Bankruptcy
In addition to the limitations on remedies contained in the Indenture, the rights and obligations under the 2024 Bonds and the Indenture may be subject to the following: the United States Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; usual equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State of California and its governmental bodies in the interest of serving a significant and legitimate public purpose.

Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the Owners of the 2024 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation or modification of their rights and may otherwise have material adverse consequences. The opinion of Bond Counsel notes that the rights of the owners of the 2024 Bonds and the enforceability of the 2024 Bond s and the Indenture are ATTACHMENT 12
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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.

Loss of Tax Exemption
The City has covenanted in the Indenture and the Tax Certificate that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of interest on the 2024 Bonds under section 103 of the Internal Revenue Code of 1986. In the event the City fails to comply with the foregoing tax covenant, interest on the 2024 Bonds may be includable in the gross income of the Owners thereof for federal tax purposes retroactive to the date of issuance of the 2024 Bonds. See “TAX MATTERS.”
Secondary Market
There can be no guarantee that there will be a secondary market for the 2024 Bonds or, if a secondary market exists, that any 2024 Bonds can be sold for any particular price. Prices of bond issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price. No assurance can be given that the market price for the 2024 Bonds will not be affected by the introduction or enactment of any future legislation (includi ng without limitation amendments to the Internal Revenue Code), or changes in interpretation of the Internal Revenue Code, or any action of the Internal Revenue Service, including but not limited to the publication of proposed or final regulations, the issuance of rulings, the selection of the 2024 Bonds for audit or examination, or the course or result of any Internal Revenue Service audit or examination of the 2024 Bonds or obligations that present similar tax issues as the 2024 Bonds.

Limitations on Remedies
In addition to the limitations on remedies contained in the Indenture, the rights of the Owners are subject to the limitations on legal remedies against cities and other public agencies in the State.

Additionally, enforceability of the rights and remedies of the Owners, and the obligations incurred by the City, may become subject to the following: the federal Bankruptcy Code and applicable bankruptcy, insolvency, reorganization, moratorium, or similar laws relating to or affecting the enforcement of creditor’s rights generally, now or hereafter in effect; equity principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the United States Constit ution; and the reasonable and necessary exercise, in certain exceptional situations, of the police powers inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. The opinion to be delivered by Norton Rose Fulbright US LLP, Bond Counsel, concurrently with the issuance of the 2024 Bonds, that the 2024 Bonds constitute valid and binding limited obligations of the City payable from and secured by a pledge of Water Net Revenues as and to the extent provided in the Indenture, will be subject to the limitations described above and the various other legal opinions to be delivered concurrently with the issuance of the 2024 Bonds will be similarly qualified. If the City fails to comply with its covenants under the Indenture or to pay principal of or interest on the 2024 Bonds, there can be no assurance that remedies will be available to fully protect the interests of the Owners. Bankruptcy proceedings, or the exercise of powers by the federal or State government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitation, or modification of their rights.

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CONSTITUTIONAL LIMITATIONS ON GOVERNMENTAL SPENDING
Articles XIIIC and XIIID of the State Constitution
General. On November 5, 1996, California voters approved Proposition 218, the so-called “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which affect the ability of local governments to levy and collect both existing and future taxes, assessments, and property-related fees and charges. Proposition 218, which generally became effective on November 6, 1996, changed, among other things, the procedure for the imposition of any new or increased property- related “fee” or “charge,” which is defined as “any levy other than an ad valorem tax, a special tax or an assessment, imposed by a [local government] upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property related service” (and referred to in this section as a “property-related fee or charge”).

On November 2, 2010, California voters approved Proposition 26, the so- called “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as d efined in Proposition 26) without a two- thirds vote of the Legislature. Proposition 26’s amendments to Article XIIIC broadly define “tax,” but specifically exclude, among other things:
(1) A charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege. (2) A charge imposed for a specific government service or prod uct provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product. (3) A charge imposed as a condition of property development. (4) Assessments and property -related fees imposed in accordance with the provisions of Article XIII D.

Property-Related Fees and Charges. Under Article XIIID, before a municipality may impose or increase any property-related fee or charge, the entity must give written notice to the record owner of each parcel of land affected by that fee or charge. The municipality must then hold a hearing upon the proposed imposition or increase at least 45 days after the written notice is mailed, and, if a majority of the propert y owners of the identified parcels present written protests against the proposal, the municipality may not impose or increase the property-related fee or charge.

Further, under Article XIIID, revenues derived from a property- related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge. The amount of a property- related fee or charge may not exceed the prop ortional cost of the service attributable to the parcel, and no property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question.

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Initiative Power. In addition, Article XIIIC states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher than that applicable to statewide statutory initiatives.” Judicial Interpretation of Articles XIIIC and XIIID. After Proposition 218 was enacted in 1996, appellate court cases and an Attorney General’s opinion initially indicated that fees and charges levied for water and wastewater services would not be considered property- related fees and charges, and th us not subject to the requirements of Article XIIID regarding notice, hearing and protests in connection with any increase in the fees and charges being imposed. However, three subsequent court cases have held that water and wastewater charges could be subject to the requirements of Article XIIID under certain circumstances.

In Richmond v. Shasta Community Services District (2004) 32 Cal.4th 409, the California Supreme Court addressed the applicability of the notice, hearing and protest provisions of Arti cle XIIID to certain charges related to water service. In Richmond, the Court held that capacity charges are not subject to Proposition 218. The Court also indicated in dictum that a fee for ongoing water service through an existing connection could, under certain circumstances, constitute a property-related fee and charge, with the result that a local government imposing such a fee and charge must comply with the notice, hearing and protest requirements of Article XIIID.

In Howard Jarvis Taxpayers Association v. City of Fresno (2005) 127 Cal.App.4th 914, the California Court of Appeal, Fifth District, concluded that water, sewer and trash fees are property -related fees subject to Proposition 218 and a municipality must comply with Article XIIID before imposing or increasing such fees. The California Supreme Court denied the City of Fresno’s petition for review of the Court of Appeal’s decision on June 15, 2005.

In July 2006 the California Supreme Court, in Bighorn-Desert View Water Agency v. Verjil (2006) 39 Cal.4th 205, addressed the validity of a local voter initiative measure that would have (a) reduced a water agency’s rates for water consumption (and other water charges), and (b) required the water agency to obtain voter approval before increasing any existing water rate, fee, or charge, or imposing any new water rate, fee, or charge. The court adopted the position indicated by its statement in Richmond that a public water agency’s charges for ongoing water delivery are “fees and charges ” within the meaning of Article XIIID, and went on to hold that charges for ongoing water delivery are also “ fees” within the meaning of Article XIIIC’s mandate that the initiative power of the electorate cannot be prohibited or limited in matters of reducing or repealing any local tax, assessment, fee or charge. Therefore, the court held, Article XIIIC authorizes local voters to adopt an initiative measure that would reduce or repeal a public agency ’s water rates and other water delivery charges. (However, the court ultimately ruled in favor of the water agency and held that the entire initiative measure was invalid on the grounds that the second part of the initiative measure, which would have subjected future water rate increases to prior voter approval, was not supported by Article XIIIC and was therefore invalid.)
The court in Bighorn specifically noted that it was not holding that the initiative power is free of all limitations; the court stated that it was not determining whether the electorate’s initiative power is subject to the statutory provision requiring that water service charges be set at a level that will pay for operating expenses, provide for repairs and depreciation of assets, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due.

In August 2013, an Orange County Superior Court judge ruled that the tiered pricing model of the City of San Juan Capistrano, which charges higher rates to customers who use more water, violates ATTACHMENT 12
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Proposition 218. The City of San Juan Capistrano appealed the decision, to the 4th District Court of Appeal, which published its decision on April 20, 2015. The court ’s decision found that the City of San Juan Capistrano’s tiered rates were not sufficiently cost-justified, but that the Constitution does allow for tiered rates. In July 2015, the California Supreme Court denied a request to depublish the case.

The Cit y believes that its rate structure is distinguishable from the structure deemed unconstitutional in the San Juan Capistrano case and consistent with Proposition 218 and the Constitution because the City’s tiered rates correlate with the actual costs for the various tiers. 120-Day Statute of Limitations for New or Increased Water and Sewer Rates. Senate Bill 323 (“SB 323”), signed by the Governor in September of 2021, restricts challenges to new or increased water or sewer rates to 120 days after the receipt of notice of the rate increase. SB 323 applies to rates for both retail and wholesale water and sewer fees adopted or increased after January 1, 2022. Prior to the adoption of SB 323 a plaintiff seeking to challenge water or sewer rates could generally bring an action for a refund for amounts paid within the preceding year, or could seek to invalidate the rates within 3 years of payment.

Articles XIIIC and XIIID and the City’s Water Rates and Charges. The City’s current water rates (see “THE WATER SYSTEM – Water Rates and Charges”) were adopted by resolution of the City Council on [____], following notice to property owners and a public hearing held at least 45 days after the notice had been mailed, in compliance with Articles XIIIC and XIIID.

Further, the City believes its water rates and charges do not constitute “taxes” under Article XIIIC as revised by Proposition 26 because, as described in subsection 1(e)(7) of Article XIIIC, they are “property- related fees imposed in accordance with the provisions of Article XIIID ” (and are also charges for a “property-related service” as defined in subsection 2(g) of Article XIIID) and because, as described in subsection 1(e)(2) of Article XIIIC, they are charged for water service, “ a specific government service or product provided directly to the payor that is not provided to those not charged.” Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted.

Under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the 2024 Bonds.

There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for water services, or to call into question previously adopted water services rate increases.

TAX MATTERS
The Internal Revenue Code of 1986 (the “ Code”) imposes certain requirements that must be met subsequent to the issuance and delivery of the 2024 Bonds for interest thereon to be and remain excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Noncompliance with such requirements could cause the interest on the 2024 Bonds to be included in the gross income of the owners thereof for federal income tax purposes retroactive to the date of issue of the 2024 Bonds. The City has covenanted in the Indenture not to take any action or omit to take any action which, if taken or omitted, respectively, would adversely affect the exclusion of the interest on the 2024 Bonds from the gross income of the owners thereof for federal income tax purposes.

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In the opinion of Norton Rose Fulbright US LLP, Bond Counsel, under existing law interest on the 2024 Bonds is exempt from personal income taxes of the State of California and, assuming compliance with the aforementioned covenants, interest on the 2024 Bonds is excluded pursuant to section 103(a) of the Code from the gross income of the owners thereof for federal income tax purposes. Bond Counsel is of the further opinion that interest on the 2024 Bonds is not an item of tax preference for purposes of t he federal alternative minimum tax on individuals. The Code contains other provisions that could result in tax consequences, upon which no opinion will be rendered by Bond Counsel, as a result of ownership of the 2024 Bonds or the inclusion in certain computations of interest that is excluded from gross income. In rendering the foregoing opinions, Bond Counsel will rely upon representations and certifications of the City made in the Tax Certificate, dated the date of delivery of the 2024 Bonds, pertaining to the use, expenditure, and investment of the proceeds of the 2024 Bonds.

For taxable years beginning after 2022, the Code imposes a minimum tax of 15 percent on the adjusted financial statement income of certain large corporations, generally consisting of corporations (other than S corporations, regulated investment companies and real estate investment trusts) with more than $1 billion in average annual adjusted financial statement income, determined over a three-year period.

For this purpose, adjusted fi nancial statement income generally consists of the net income or loss of the taxpayer set forth on the taxpayer ’s applicable financial statement for the taxable year, subject to various adjustments, but is not reduced for interest earned on tax -exempt obligations, such as the 2024 Bonds.

Prospective purchasers that could be subject to this minimum tax should consult with their own tax advisors regarding the potential consequences of owning the 2024 Bonds.

The initial public offering price of certain of the 2024 Bonds (the “ Discount Bonds”) may be less than the amount payable on such 2024 Bond s at maturity. An amount equal to the difference between the initial public offering price of a Discount Bond (assuming that a substantial amount of the Discount Bonds of that maturity are sold to the public at such price) and the amount payable at maturity constitutes original issue discount to the initial purchaser of such Discount Bond. A portion of such original issue discount allocable to the holding period of such Discount Bond by the initial purchaser will, upon the disposition of such Discount Bond (including by reason of its payment at maturity), be treated as interest excludable from gross income, rather than as taxable gain, for federal income tax purposes, on the same terms and conditions as those for other interest on the 2024 Bonds described above. Such interest is considered to be accrued actuarially in accordance with the constant interest method over the life of a Discount Bond, taking into account the semiannual compounding of accrued interest, at the yield to maturity on such Discount Bond and generally will be allocated to an initial purchaser in a different amount from the amount of the payment denominated as interest actually received by the initial purchaser during the tax year.

However, such interest may be required to be taken into account in determining the amount of the branch profits tax applicable to certain foreign corporations doing business in the United States, even though there will not be a corresponding cash payment. In addition, the accrual of such interest may result in certain other collateral federal income tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, owners of an interest in a financial asset securitization investment trust, corporations subject to the alternative minimum tax on adjusted financial statement income, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Moreover, in the event of the redemption, sale or other taxable disposition of a Discount Bond by the initial owner prior to maturity, the amount realized by such owner in excess of the basis of such Discount Bond in the hands of such owner (adjusted upward by the portion of the original issue discount allocable to the period for which such Discount Bond was held) is includable in gross income. Owners of Discount Bonds should consult with their own tax advisors with respect to the determination of accrued original issue discount on Discount ATTACHMENT 12
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Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Discount Bonds.

The purchase price of certain 2024 Bonds (the “Premium Bonds”) paid by an owner may be greater than the amount payable on such 2024 Bonds at maturity. An amount equal to the excess of a purchaser ’s tax basis in a Premium Bond over the amount payable at maturity constitutes premium to such purchaser.

The basis for federal income tax purposes of a Premium Bond in the hands of such purchaser must be reduced each year by the amortizable bond premium, although no federal income tax deduction is allowed as a result of such reduction in basis for amortizable bond premium. Such reduction in basis will increase the amount of any gain (or decrease the amount of any loss) to be recognized for federal income tax purposes upon a sale or other taxable disposition of a Premium Bond. The amount of premium that is amortizable each year by a purchaser is determined by using such purchaser’s yield to maturity (or, in some cases with respect to a callable bond, the yield based on a call date that results in the lowest yield on the bond). Purchasers of the Premium Bonds should consult with their own tax advisors with respect to the determination of amortizable bond premium on Premium Bonds for federal income tax purposes and with respect to the state and local tax consequences of owning and disposing of Premium Bonds.

Bond Counsel has not undertaken to advise in the future whether any events after the date of issuance of the 2024 Bonds may affect the tax status of interest on the 2024 Bonds or the tax consequences of the ownership of the 2024 Bonds. No assurance can be given that pending or future legislation, or amendments to the Code, if enacted into law, or any proposed legislation or amendments to the Code, will not contain provisions that could directly or indirectly reduce the benefit of the exemption of interest on the 2024 Bonds from personal income taxation by the State of California or of the exclusion of the interest on the 2024 Bonds from the gross income of the owners thereof for federal income tax purposes. Furthermore, Bond Counsel will express no opinion as to the effect on the exclusion from gross income of interest on the 2024 Bonds of any action taken or not taken after the date of such opinion without the approval of Bond Counsel.

Except as described above, Bond Counsel will express no opinion with respect to any federal, state or local tax consequences under present law, or proposed legislation, resulting from the receipt or accrual of interest on, or the acquisition or disposition of, the 2024 Bond s. Prospective purchasers of the 2024 Bonds should be aware that the ownership of tax-exempt obligations such as the 2024 Bonds may result in collateral federal tax consequences to, among others, financial institutions, life insurance companies, property and casualty insurance companies, certain foreign corporations doing business in the United States, S corporations with subchapter C earnings and profits, individual recipients of Social Security or Railroad Retirement benefits, individuals otherwise qualifying for the earned income tax credit, owners of an interest in a financial asset securitization investment trust, corporations subject to the alternative minimum tax on adjusted financial statement income, and taxpayers who may be deemed to have incurred or continued indebtedness to purchase or carry, or who have paid or incurred certain expenses allocable to, tax-exempt obligations. Prospective purchasers should consult their own tax advisors as to the applicability of these consequences to their particular circumstances.

Bond Counsel’s opinion is not a guarantee of a result, but represents its legal judgment based upon its review of existing statutes, regulations, published rulings and court decisions and the covenants of the City described above. No ruling has been sought from the Internal Revenue Service (the “ Service”) with respect to the matters addressed in the opinion of Bond Counsel, and Bond Counsel’s opinion is not binding on the Service. The Service has an ongoing program of auditing the tax- exempt status of the interest on municipal obligations. If an audit of the 2024 Bonds is commenced, under current procedures the Service is likely to treat the City as the “taxpayer,” and the owners would have no right to participate in the audit process. In responding to or defending an audit of the tax-exempt status of the interest on the 2024 Bonds, the City may have different or conflicting interests from the owners of the 2024 Bonds. Public awareness ATTACHMENT 12
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of any future audit of the 2024 Bonds could adversely affect the value and liquidity o f the 2024 Bonds during the pendency of the audit, regardless of the ultimate outcome.

Existing law may change so as to reduce or eliminate the benefit to holders of the 2024 Bonds of the exclusion of interest thereon from gross income for federal income t ax purposes. Proposed legislative or administrative action, whether or not taken, could also affect the value and marketability of the 2024 Bonds. Prospective purchasers of the 2024 Bonds should consult with their own tax advisors with respect to any proposed changes in tax law.

A copy of the form of opinion of Bond Counsel relating to the 2024 Bonds is included in APPENDIX E hereto.

LITIGATION
To the knowledge of the City, there is no controversy or litigation of any nature now pending or threatened restraining or enjoining the issuance of the 2024 Bonds or the execution and delivery of the Indenture or in any way contesting or affecting the validity of the 2024 Bonds or any proceedings of the City taken with respect to the execution and delivery thereof.

CERTAIN LEGAL MATTERS
The issuance of the 2024 Bonds is subject to the approving opinion of Norton Rose Fulbright US LLP, Los Angeles, California, Bond Counsel to the City. A complete copy of the proposed form of Bond Counsel opinion is contained in APPENDIX E. Bond Counsel and counsel to the Underwriters will receive compensation from the City contingent upon the sale and delivery of the 2024 Bonds. Certain legal matters will be passed on for the City by the City Attorney and by Norton Rose Fulbright LLP, Los Angeles, California, Disclosure Counsel . Certain legal matters will be passed upon for the Underwriter s by their counsel, Stradling Yocca Carlson & Rauth LLP, Newport Beach, California.

FINANCIAL STATEMENTS
Lance, Soll & Lunghard, LLP (the “Auditor”), audited the financial statements of the City’s Water and Electric Utility Enterprise Funds for the Fiscal Year ended June 30, 2023. The Auditor’s examination was made in accordance with generally accepted auditing standards and Governmental Auditing Standards, issued by the Comptroller General of the United States. See “APPENDIX B – Audited Financial Statements of the City of Burbank Water and Electric Utility Enterprise Funds for the Fiscal Year Ended June 30, 2023.”
The City has not requested nor did the City obtain permission from the Auditor to include the audited financial statements as an appendix to this Official Statement. Accordingly, the Auditor has not performed any post-audit review of the financial condition or operations of the City and has not participated in the preparation of, or reviewed, this Official Statement.

RATING
S&P Global Ratings (“S&P”) has assigned the 2024 Bonds the long-term rating of “[_]”.

This rating reflects only the views of S&P , and any explanation of the significance of such rating may be obtained only from S&P. There is no assurance that the rating will remain in effect for any given period of time or that it will not be revised downward or withdrawn entirely by S&P, if, in its judgment, circumstances so warrant. The City undertakes no responsibility to oppose any such revision or withdrawal.

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Any downward revision or withdrawal of the rating may have an adverse effect on the market price of the 2024 Bonds.

VERIFICATION OF MATHEMATICAL COMPUTATIONS
[____] will verify the accuracy of the redemption price of (including the applicable make -whole premium) and accrued interest on the 2010B Refunded Bonds and the adequacy of the moneys available to pay such redemption price of and accrued interest on the 2010B Refunded Bonds upon the redemption date therefor. See “PLAN OF REFUNDING.”

CONTINUING DISCLOSURE
The City will covenant for the benefit of owners of the 2024 Bonds to provide certain financial information and operating data relating to the City by not later than 9 months after the end of each fiscal year of the City (currently June 30th), commencing with the report for the 2023-24 Fiscal Year (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. Such reports are required to be filed with the Municipal Securities Rulemaking Board through its Electronic Municipal Market Access system (“EMMA”). The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is described in “ APPENDIX D – Form of Continuing Disclosure Agreement,” attached to this Official Statement. These covenants have been made in order to assist the Underwriters of the 2024 Bonds in complying with Securities and Exchange Commission Rule 15c2-12.

The City has entered into a number of continuing disclosure undertakings in connection with City obligations, including obligations payable from the City ’s General Fund, as well as obligations payable from the revenues relating to the Water System and the Electric System, and the City has prepared continuing disclosure reports pursuant to these undertakings.

Within the past five years, the City and certain of its related entities have failed to comply in certain respects with continuing disclosure obligations related to outstanding indebtedness, by (i) failing to provide timely notice of a rating upgrade relating to a series of the City’s wastewater revenue bonds, which notice was provided [_] days after such rating upgrade, and (ii) with respect to the City’ s then-outstanding water revenue and electric revenue bonds, failing to timely file audited financial statements for Fiscal Years 2021- 22 and 2022-23 and failing to timely file required notices of such failures (the audited financial statements for Fiscal Years 2012- 22 and 2022- 23 were filed 58 and 84 days late, respectively, and notices of such failures were subsequently filed in May 2024).

The City has adopted a disclosure policy intended to assure future compliance with the City ’s continuing disclosure requirements.

MUNICIPAL ADVISOR
KNN Public Finance, LLC (the “Municipal Advisor”) has assisted the City with various matters relating to the planning, structuring and delivery of the 2024 Bonds. The Municipal Advisor is a financial advisory firm and is not engaged in the business of underwriting or distributing municipal securities or other public securities. The Municipal Advisor assumes no responsibility for the accuracy, completeness or fairness of this Official Statement. The Municipal Advisor will receive compensation from the City contingent upon the sale and delivery of the 2024 Bonds.

UNDERWRITING
The 2024 Bonds will be purchased for reoffering by the Underwriters set forth on the cover of this Official Statement (the “Underwriters”), for whom J.P. Morgan Securities LLC is acting as senior managing ATTACHMENT 12
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underwriter, at an aggregate purchase price of $________, representing the principal amount of the 2024 Bonds of $________, less an Underwriters’ discount of $________ and [plus/less] an original issue [premium/discount] of $________. The Underwriters will be obligated to purchase all of the 2024 Bonds if any of the 2024 Bonds are purchased.

The Underwriters may offer and sell the 2024 Bonds to certain dealers (including dealers depositing 2024 Bonds into investment trusts) and others at prices lower than the public offering prices stated on the inside cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriters.

The Underwriters and their respective affiliates are full -service financial institutions engaged in various activities that may include securities trading, commercial and investment banking, municipal advisory, brokerage, and asset management. In the ordinary course of business, the Underwriters and their respective affiliates may actively trade debt and, if applicable, equity securities (or related derivative securities) and provide financial instruments (which may include bank loans, credit support, or interest rate swaps). The Underwriters and their respective affiliates may engage in transactions for their own accounts involving the securities and instruments made the subject of this securities offering or other offering of the City. The Underwriter s and their respective affiliates may make a market in credit defa ult swaps with respect to municipal securities in the future. The Underwriter s and their respective affiliates may also communicate independent investment recommendations, market color or trading ideas and publish independent research views in respect of this securities offering or other offerings of the City.

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

CITY OF BURBANK, CALIFORNIA

By
City Manager

By
BWP Interim General Manager

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APPENDIX A

GENERAL INFORMATION ABOUT THE CITY OF BURBANK AND

LOS ANGELES COUNTY
The following information concerning the City of Burbank (the “ City”) and Los Angeles County (the “ County”) are included only for the purpose of supplying general information regarding the community. The 2024 Bonds are not a debt of the City, the County, the State of California (the “State”) or any of its political subdivis ions, and neither the City, the County, the State nor any of its political subdivisions is liable therefor, except the City to the limited extent set forth in the Indenture.

General Information
The County. Located along the southern coast of California, Los Angeles County covers about 4,080 square miles. It measures approximately 75 miles from north to south and 70 miles from east to west.

The county includes Santa Catalina and San Clemente Islands and is bordered by the Pacific Ocean and Ventura, San Bernardino and Orange Counties.

Almost half of the county is mountainous and some 14% is a coastal plain known as the Los Angeles Basin. The low Santa Monica mountains and Hollywood Hills run east and west and form the northern boundary of the Basin and the southern boundary of the San Fernando Valley. The San Fernando Valley terminates at the base of the San Gabriel Mountains whose highest peak is over 10,000 feet. Beyond this mountain range the rest of the county is a semi-dry plateau, the beginning of the vast Mojave Desert.

According to the Los Angeles County Regional Planning Commission, the 86 incorporated cities in the county covered about 1,344 square miles or 27% of the total county. Approximately 16% of the land in the county was devoted to residential use and over two thirds of the land was open space and vacant.

The City. On July 8, 1911, Burbank was incorporated as a city. Today, Burbank ranks as the fourteenth-largest city in Los Angeles County, with a population of over 104,000 residents. Pr esently, Burbank maintains its long- standing relationship with Warner Bros. and Disney and is now home to hundreds of media and related support companies such as ABC, Nickelodeon Animation, Yahoo!, and other post production, film processing, special effects, equipment rental and related businesses. As such, Burbank is happily referred to as the “Media Capital of the World.” Population
The following table shows population estimates for the City, the County and the State of California for the past five years as of January 1, except as noted.

CITY OF BURBANK, LOS ANGELES COUNTY,

STATE OF CALIFORNIA
Population Estimates

Area 2019 2020 2021 2022 2023*

City of Burbank 104,338 104,535 106,164 104,976 104,535 Los Angeles County 10,163,139 10,135,614 9,942,011 9,834,503 9,761,210 State of California 39,605,361 39,648,938 39,286,510 39,078,674 38,940,231

* As of May, 2023.

Source: State of California, Department of Finance.

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Employment and Industry

The City is included in the Los Angeles -Long Beach-Glendale Metropolitan Division (“MD”), which includes all of the County. The seasonally adjusted unemployment rate in the County was unchanged over the month at 5.4% in March 2024, from a revised 5.4% in February 2024, and was above the rate of

4.9% one year ago. Civilian employment increased by 1,600 to 4,727,800 in March 2024, while unemployment increased by 100 to 268,100. The civilian labor force declined by 1,400 over the month to 4,995,900 in March 2024. (All of the above figures are seasonally adjusted.) The unadjusted unemployment rate for the County was 5.2% in March 2024.

The California seasonally adjusted unemployment rate was 5.3% in March 2024, 5.3% in February 2024, and 4.5% a year ago in March 2023. The comparable estimates for the nation were 3.8% in March 2024, 3.9% in February 2024, and 3.5% a year ago.

The table below lists employment by industry group for the County for the past five years for which data is available. These figures are cou nty-wide statistics and may not necessarily accurately reflect employment trends in the City.

LOS ANGELES-LONG BEACH-GLENDALE MD
(Los Angeles County)
Annual Average Labor Force and Employment by Industry
Calendar Years 2017 through 2021
(March 2021 Benchmark)

2019 2020 2021 2022 2023
Civilian Labor Force(1) 5,148,600 4,974,700 5,007,600 5,013,400 5,015,600 Employment 4,917,700 4,363,300 4,558,900 4,764,500 4,763,600 Unemployment 230,900 611,300 448,700 248,800 252,000
Unemployment Rate 4.5% 12.3% 9.0% 5.0% 5.0%
Wage and Salary Employment: (2)
Total Farm 4,400 4,400 4,600 4,800 4,700
Mining and Logging 2,000 1,700 1,600 1,700 1,700
Construction 149,900 146,600 149,000 151,300 151,000
Manufacturing 341,200 315,400 313,100 321,700 319,200
Wholesale Trade 221,900 201,100 202,600 204,400 200,400 Retail Trade 413,600 375,700 396,100 406,500 407,200
Trans., Warehousing, Utilities 213,100 207,900 215,200 223,600 218,800 Information 215,600 191,100 208,800 234,900 193,000
Financial and Insurance 135,900 132,300 129,000 126,600 123,000 Real Estate, Rental & Leasing 88,400 80,900 84,100 89,200 88,000 Professional and Business Services 648,400 601,000 630,800 666,900 652,500 Educational and Health Services 840,100 821,700 844,400 871,100 914,500 Leisure and Hospitality 547,300 393,700 434,200 512,400 534,100 Other Services 158,400 128,800 135,700 153,000 157,800
Federal Government 47,300 50,200 47,700 47,100 47,900
State Government 86,500 89,000 90,700 95,400 98,300
Local Government 453,000 431,000 421,900 427,500 436,200 Total All Industries (3) 4,566,900 4,172,500 4,309,700 4,537,900 4,548,200

(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) Totals may not add due to rounding.

Source: State of California Employment Development Department.

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Largest Employers
The following table lists the principal employers within the City, by number of employees, as of June 30, 2023.

CITY OF BURBANK
Principal Employers
As of June 30, 2023

Employer Name Number of Employees
Warner Bros. Entertainment 10,000
The Walt Disney Company 7,800
Hollywood Burbank Airport 2,685
Providence St. Joseph’s Hospital 2,507
Burbank Unified School District 2,000
City of Burbank 1,433
Nickelodeon 895
Netflix, Inc. 850
Cast & Crew 784
Deluxe Shared Services 668

Source: City of Burbank Annual Comprehensive Financial Report for fiscal year ended June 30, 2023.

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Major Employers
The tables below lists the major employers in the County as of March 2024, in alphabetical order without regard to the number of employees. Major private employers in the County include those in aerospace, health care, entertainment, electronics, retail and manufacturing. Major public sector employers include public universities and schools, the State of California and County.

LOS ANGELES COUNTY
Major Employers- Listed Alphabetically
March 2024

Employer Name Location Industry

AHMC Healthcare Inc Alhambra Health Care Management
All Nations Church Sylmar Churches
California State Univ Northridge Northridge Schools-Universities & Colleges Academic California State-Long Beach Long Beach Schools-Universities & Colleges Academic Cedars-Sinai Health System West Hollywood Health Care Management Infineon Technologies Americas El Segundo Semiconductor Devices (mfrs) Kaiser Permanente Los Angeles Los Angeles Hospitals
LAC + USC MEDICAL CTR Los Angeles Hospitals
Live Nation Los Angeles Entertainment Bureaus
Long Beach City Hall Long Beach City Hall
Longshore Dispatch Wilmington Labor Organizations
Los Angeles County Sheriff Monterey Park Government Offices-County Los Angeles Intl Airport-Lax Los Angeles Airports
Los Angeles Medical Ctr Los Angeles Pathologists
Los Angeles Police Dept Los Angeles Police Departments
Northrop Grumman Whittier Aerospace Industries (mfrs)
Security Industry Specialist Culver City Security Systems Consultants Six Flags Magic Mountain Valencia Amusement & Theme Parks Sony Pictures Entrtn Inc Culver City Motion Picture Producers & Studios Space Exploration Tech Corp Hawthorne Aerospace Industries (mfrs) Twentieth Century Fox Los Angeles Motion Picture Producers & Studios UCLA Community Based Learning Los Angeles Junior-Community College-Tech Institutes Vision X Los Angeles Call Centers
Walt Disney Co Burbank Amusement & Theme Parks
Water Garden Management Santa Monica Office Buildings & Parks

Source: State of California Employment Development Department, extracted from the America’s Labor Market Information System (ALMIS) Employer Database, 2024 2nd Edition.

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Commercial Activity
A summary of historic taxable sales within the City during the past five years in which data is available is shown in the following table. Total taxable sales for calendar year 2023 in the City were reported to be $3,723,806,152, a 5.69% increase over the total taxable sales of $3,523,349,312 reported for calendar year 2022.

CITY OF BURBANK
Taxable Transactions
(Dollars in Thousands)

Year
Retail
Permits
Retail Stores
Taxable
Transactions
Total
Permits
Total Outlets
Taxable
Transactions
2019 2,510 2,509,441 4,711 3,418,274
2020 2,737 1,936,343 5,115 2,412,666
2021 2,638 2,370,514 4,934 3,117,610
2022(1) - 2,606,153 - 3,523,349
2023(1) - 2,549,790 - 3,723,806

Source: State Department of Tax and Fee Administration. (1) City permit data are no longer available.

A summary of historic taxable sales within the County during the past five years in which data is available is shown in the following table. Total taxa ble sales for calendar year 2023 in the County were reported to be $207,350,896, a 2.98% decrease over the total taxable sales of $213,716,609 reported for calendar year 2022.

LOS ANGELES COUNTY
Taxable Transactions
(Dollars in Thousands)

Year
Retail
Permits
Retail Stores
Taxable
Transactions
Total
Permits
Total Outlets
Taxable
Transactions
2019 206,732 122,444,678 342,359 172,313,603
2020 226,643 113,415,974 376,990 157,737,984
2021 208,412 139,000,373 349,061 192,524,203
2022 210,441 150,622,624 354,092 213,716,609
2023 202,366 145,470,173 342,582 207,350,896

Source: State Department of Tax and Fee Administration.

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Building Activity
The tables below summarize building activity in the City and the County for the past five available years.

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

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $7,409.5 $9,502.7 $19,536.9 $15,164.1 [_] New Multi-family 250.0 431.6 13,426.9 162,384.2
Res. Alterations/Additions 17,654.4 15,220.3 25,239.8 27,482.6 Total Residential 25,313.9 25,154.6 58,203.6 205,030.9

New Commercial(1) 229,894.8 134,044.0 6,061.0 - -
New Industrial(1) 0.0 0.0 0.0 - -
New Other(1) 1,438.8 4,784.1 1,351.0 - -
Com. Alterations/Additions(1) 34,420.3 38,902.4 92,721.2 - - Total Nonresidential 265,753.9 177,730.5 100,133.2 51,990.1

New Dwelling Units
Single Family 54 93 159 109
Multiple Family 2 2 52 895
TOTAL 56 95 211 1,004

Source: Construction Industry Research Board, Building Permit Summary. (1) Non-residential data in subcategories are no longer available.

LOS ANGELES COUNTY
Total Building Permit Valuations
(Valuations in Thousands)

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $1,967,219.3 $1,874,304.5 $2,085,629.2 $2,180,485.5 [_] New Multi-family 2,961,257.4 2,789,673.9 3,026,725.8 3,523,926.4 Res. Alterations/Additions 1,625,839.3 1,014,422.1 908,148.2 1,422,550.9 Total Residential 6,554,316.0 5,678,400.5 6,020,503.2 7,126,962.9

New Commercial(1) 2,675,678.8 1,885,027.0 577,756.7 - - New Industrial(1) 63,727.8 32,196.2 27,844.8 - -
New Other(1) 446,182.7 354,758.2 311,726.3 - -
Com. Alterations/Additions(1) 3,404,012.4 1,241,068.1 946,020.7 - - Total Nonresidential 6,589,601.7 3,513,049.5 1,863,348.5 4,184,085.6

New Dwelling Units
Single Family 5,738 6,198 7,327 8,301
Multiple Family 15,884 14,056 16,718 18,912
TOTAL 21,622 20,254 24,045 27,213

Source: Construction Industry Research Board, Building Permit Summary. (1) Non-residential data in subcategories are no longer available.

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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and non-tax 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), non-tax 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 for the County of Los Angeles, the State and the United States for the period 2020 through 2024.

LOS ANGELES COUNTY
Effective Buying Income
2020 through 2024

Year Area

Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective
Buying Income
2020 City of Burbank $3,807,795 $66,599
Los Angeles County 281,835,290 60,174
California 1,243,564,816 65,870
United States 9,487,165,436 55,303

2021 City of Burbank $3,946,975 $68,289
Los Angeles County 289,720,470 62,353
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 City of Burbank $4,439,867 $76,510
Los Angeles County 327,445,237 71,404
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 City of Burbank $4,509,661 $76,913
Los Angeles County 332,188,114 71,057
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

2024 City of Burbank $4,518,732 $78,644
Los Angeles County 342,046,555 74,202
California 1,510,708,521 80,609
United States 11,987,185,826 67,310

Source: Claritas, LLC.

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APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE

CITY OF BURBANK WATER AND ELECTRIC UTILITY ENTERPRISE FUNDS FOR THE FISCAL YEAR ENDED JUNE 30, 2023
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APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
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APPENDIX D

FORM OF CONTINUING DISCLOSURE AGREEMENT
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APPENDIX E

FORM OF OPINION OF BOND COUNSEL

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APPENDIX F

DTC AND THE BOOK-ENTRY ONLY SYSTEM
The information in this Appendix F regarding DTC and its book- entry system has been obtained from DTC’s website, for use in securities offering documents, and the City takes no responsibility for the accuracy or completeness thereof or for the absence of material changes in such information after the date hereof.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the 2024 Bonds. The 2024 Bonds will be issued as fully–registered securities registered in the name of Cede & Co. (DTC ’s partnership nominee) or such other n ame as may be requested by an authorized representative of DTC. One fully- registered bond certificate will be issued for each maturity of the 2024 Bonds, each in the aggregate principal amount of such maturity, and will be deposited with DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “ clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC ’s participants (“Direct Participants”) deposit with DTC.

DTC also facilitates the post -trade settlement among Direct Parti cipants of sales and other securities transactions in deposited securities, through electronic computerized book- entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly- owned subsidiary of The Depository Trust & Clearing Corporation ( “DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants”). DTC has a Standard & Poor ’s rating of AA+. The DTC Rules applicable to Participants are on file with the Securities and Exchange Commission.

More information about DTC can be found at www.dtcc.com.

Purchases of the 2024 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2024 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2024 Bond (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2024 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in the 2024 Bonds, except in the event that use of the book- entry system for the 2024 Bonds is discontinued.

To facilitate subsequent transfers, all 2024 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co. or such other name as may be requested by an authorized representative of DTC. The deposit of 2024 Bonds with DTC and their registration in the ATTACHMENT 12
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name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2024 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2024 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2024 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2024 Bonds, such as redemptions, tenders, defaults and proposed amendments to the 2024 Bond documents. For example, Beneficial Owners of 2024 Bonds may wish to ascertain that the nominee holding the 2024 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of the notices be provided directly to them.

While the 2024 Bonds are in the book-entry-only system, redemption notices will be sent to DTC.

If less than all of the 2024 Bonds of a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the 2024 Bonds unless authorized by a Direct Participant in accordance with DTC ’s MMI Procedures.

Under its usual procedures, DTC mails an Omnibus Proxy to the City as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts the 2024 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Principal and interest payments on t he 2024 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC ’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the City or the Trustee on the payable date in accordance with their respective holdings shown on DTC ’s records.

Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities h eld for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee or the City, subject to any statutory or regulatory requirements as may be in effect from time t o time. Payment of principal and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

DTC may discontinue providing its services as depository with respect to the 2024 Bonds at any time by giving reasonable notice to the City or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, certificates representing the 2024 Bonds are required to be printed and delivered.

The City may decide to discontinue use of the system of book- entry-only transfers through DTC (or a successor securities depository). In that event, certificates representing the 2024 Bonds will be printed and delivered to DTC.

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Burbank City CouncilJune 4, 2024

Burbank City Council
June 4, 2024