CleanPowerSF Sfpuc Commission
June 27, 2023

1 Nikolai J. Sklaroff,
Capital Finance Director
June 27, 2023
Water Financing
Authorization
2023 Water Revenue Bond Sales

Agenda
• FY 2022-23 Capital Financing Plan
• Water Capital Financing Strategy
• Item 1 & 2: Series 2023 ABCD Water Revenue Bonds
• Commission Authorization
• Authorize the issuance of 2023 Water Revenue Bonds:
• Item 1: 2023 Sub-Series A and B up to $450 million
• Item 2: 2023 S ub-Series C and D up to $1,662 million for a refunding • Item 3: Dealer Agreement for Water Enterprise
C
ommercial Paper Program
2 FY 2022-23 Capital Financing Plan
3 Description
Approximate Issue Size
($million)
Commission
Acts

1. Water - Clean Water State Revolving Fund (SRF) amended Loan Agreement - Westside Recycled Water Project $4.9 increase to $191 total 11/2022

2. Wastewater & Power - Renewal or replacement of bank
credit facilities for interim funding programs
$125 (Power)
$100 (Wastewater)
2/2023

3. Wastewater - Revenue Bonds Issuance $775 New Money 3/2023

4. Wastewater - Water Infrastructure Finance and Innovation Act (WIFIA) Loan Agreement - Resilience Projects
$791 Programmatic
Agreement and
$369 Loan
4/2023

5. Water - Revenue Bonds Issuance $425 New Money 5/2023

6. CleanPowerSF Credit Agreement -Amend credit agreement $20 increase to $40 total TBD

7. Power - Revenue Bond issuance $110 8/2023


Dates and amounts are preliminary and subject to change. 
Capital Financing Strategy
(Water Enterprise)
• Mitigate upward pressure on rates and charges
 10-Y ear Financial Plan* calls for issuance of
$1.346 billion of Water Revenue Bonds
 Focus on most efficient use of project funding; only
i
ssue financing when needed
• Actively manage capital financing costs
 Low-c ost alternative ways to issue bonds
 Refinance outstanding debt for savings and flexibility  Leverage investor demand for green bonds
4*10-Year Financial Plan (FY 2023-24 to FY 2032-33), February 2023 Enterprise Debt Overview
5 Outstanding as of June 1, 2023 ($ million)
Water Wastewater Power
Revenue Bonds $4,459 $2,745 $159
Federal WIFIA Loans
• Executed
• Drawn
-
-
1,582*
122
-
-
State Revolving Fund
Loans
• Executed**
• Drawn***
429
185
401
324
-
-
Commercial Paper
• Authorized
• Drawn
500
211
750
0 250
116
*Amount includes Project 1 sub-loan agreement of $369 million from the new total WIFIA Master Loan agreement of $791 million. ** Includes $15 million grant for Recycled Water Project. ***Does not include reimbursements submitted but not yet received.

Enterprise Debt Ratings
(as of June 1, 2023)
6 Moody’s
Investors Service
S&P Global
Ratings
Fitch
Ratings
Long‐Term Outlook Long‐Term Outlook Long‐Term Outlook
Water Enterprise* Aa2 Stable AA- Stable -- --
Wastewater Enterprise Aa2 Stable AA Stable -- --
Power Enterprise -- -- AA Stable AA- Stable
CleanPowerSF** A2 Stable -- -- -- --
*On June 1, 2023, S&P Global Ratings affirmed the AA- rating and Stable Outlook; the rating from Moody's Investors Service remains under review in conjunction with the sale at the time this presentation is being posted. **On December 9, 2020, Moody's Investors Service, assigned a first-time A2 Issuer Rating to CleanPowerSF , with a Stable outlook, however no outstanding debt is associated with this rating.

Low-Cost Borrowing Alternatives
• SFPUC is mitigating borrowing costs by taking
adv
antage of low-cost loans when available
• SRF loan rate is half t he State’s General Obligation Bond interest rate
• State Revolving Fund Loans
 Two S RF loans executed:
 Two SRF pending appl ications submitted
 Sunol Ozone: $214 million
 Lead Line: $38.5 million
7 Project Loan Term
(Years)
Interest
Rate
Amount
($ millions)
Recycled Water 30 1.0% $176 (+ $15 as a grant)
Mt. Tunnel 30 1.1% $238
Transaction Description
Series 2023ABCD Water Revenue Bonds
• Bonds will f und Regional, Local, and Hetch Hetchy Water Capital Projects, including Renewal and Replacement and refinance certain outstanding bonds through a tender offering process to achieve debt service savings
• Four Series of Bonds:
8 Purpose Amount (Up to)
($millions)
Sub-Series A Fund regional and local water capital projects (new money and refund commercial paper)
$340 million
Sub-Series B Fund Hetch Hetchy water capital projects (new money and refund commercial paper)
$110 million
Sub-Series C (Green
Bonds) (WSIP)
Refinance certain outstanding WSIP bonds
through a tender process to achieve debt service
savings
$1,662 million for
Series C and
Series D together*Sub-Series D (Local
Water)
Refinance certain outstanding Local Water bonds
through a tender process to achieve debt service
savings
*Refunding Par will be determined by tender participation; assuming 30% participation, par will be approximately $422 million.

Series 2023CD Tender Offering
9 UST : Rate Movement Since 1/1/2022 MMD AAA: Rate Movement Since 1/1/2022 Market Movements Since 2022 Water Financing
Inverse relationship between interest rates and bond
prices
●
%
$
When interest rates rise,
bond prices fall
●
%
$
When interest rates fall,
bond prices rise
2022
kick-off
2022
abandoned

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%
Jan-22
Feb-22
Mar-…
Apr-22
May-…
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-…
Dec-22
Jan-23
Feb-23
Mar-…
Apr-23
May-…
Jun-23
10-YR UST 30-YR UST

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Jul-22
Aug-22
Sep-22
Oct-22
Nov-22
Dec-22
Jan-23
Feb-23
Mar-23
Apr-23
May-23
Jun-23
10-YR MMD
Tender Process
10 Bond Proceeds
Payment for
Tendered
Bonds
New T/E Refunding Bonds
Participating
Bondholders of
Tendered Bonds
SFPUC New Bondholders
Tendered Bonds

TENDER OFFER
 Investors may be interested in selling their existing SFPUC bonds at prices which are attractive to the SFPUC to refin
ance
 Certain investors may need liquidity or simply want to exit bond positions  Due to rising rates, investors interested in selling their bonds would do so below par  However, the SFPUC can offer investors the opportunity to tender back bonds for a price that is better than what they can be sold for in the open market
 Win-Win opportunity to refinance bonds at prices which allow the SFPUC to generate significant debt service savings
Plan of Finance
• 2023AB Bonds and 2023CD Bonds are expected to be
s
old one week apart with separately led underwriting
syndicates and two separate Preliminary Official
Statements
• Will be sold on negotiated basis w
ith bond underwriters
selected via a competitive RFP process from firms in
Controller’s underwriting pool
11 Lead
Underwriters
Pricing
Date
Closing
Date
Co-Managers
2023AB Wells Fargo July 11 July 27 Ramirez & Co., Inc.; RBC Capital Markets;
UBS, and
US Bancorp2023CD Jefferies LLC July 18 August 10
Sources & Uses of Funds
(Series 2023ABCD Water Revenue Bonds)*
12 *Preliminary, subject to change. Current estimates based on rates as of June 1, 2023. **Total par of $819.425 million based on 30% tender assumption. A small amount of structuring advance refunding bonds may also be issued to achieve debt service savings in each year. 2023 Series A
(Regional &
Local Water)
2023 Series B
(Hetch Hetchy
Water)
2023 Series C
(WSIP
Refunding)
(Green Bonds)
2023 Series D
(Local Water
Refunding) Total**
SOURCES:

Par Amount $302,950,000 $98,420,000 $391,240,000 $25,050,000 $817,660,000 Premium 35,763,764 11,618,892 60,865,419 3,623,838 111,871,914 Total Sources $338,713,764 110,038,892 $452,105,419 $28,673,838 $929,531,914 USES:

CP Takeout $228,876,588 $70,934,083 - - $299,810,671
Project Fund $81,520,257 $29,902,657 - - $111,422,914
Refunding Escrow
Deposit - - $448,964,047 $28,470,882 $477,434,929
Capitalized Interest $26,676,430 $8,666,427 - - $35,342,858 Cost of Issuance $1,212,803 $396,781 $2,456,702 $159,117 $4,225,405 Underwriter's Discount $427,685 $138,943 $684,670 $43,837 $1,295,136 Total Uses $338,713,764 $110,038,892 $452,105,419 $28,673,838 $929,531,914 13 • SB 450 enacted in October 2017 requires local agencies to disclose estimates of certain debt financing-related information at authorization:
"Good Faith Estimate"
True Interest
Cost (TIC)
Finance
Charge of the
Bonds
Amount of
Proceeds Received
from Sale
Total Payment
Amount
2023AB 4.10% $2,712,109 $411,237,690 $763,307,500
2023CD* 3.46% $3,330,320 $477,448,938 $678,672,012
*The Good Faith Estimates assume a refunding in which approximately 30% of invited bonds will be tendered to the SFPUC or refunded by escrow. Actual results may vary based on prevailing market conditions when the bonds are priced and based on investor participation rates in the tender process.

Preliminary and subject to change based on market conditions at the time the bonds are sold. Current estimates based on rates as of June 2, 2023.
_________________
Source: Refinitiv TM3 as of 6/17/2023 courtesy of Montague DeRose and Associates.  Municipal bond market interest rates over time ("Yield Curve") publ
ished by Municipal Market Data (MMD)
Market Overview
(Tax-Exempt Interest Rates)
14 0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 AAA MMD Yield
Years to Maturity
AAA MMD Yield Curves
5 Yr Range 6/16/2023 6/17/2022
Projected Aggregate Net Debt Service
15 *Preliminary, subject to change. Years are in fiscal year basis.

Projected Water
Bond Issuance FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 FY32 FY33 Total $ millions - $430 - $439 - - - - $477 - $1,346
2024 Financial Plan – Projected Annual Par Amounts of Revenue Bond Issuance **Does not include future debt as projected in 2024 Financial plan (see table below). -
50,000,000
100,000,000
150,000,000
200,000,000
250,000,000
300,000,000
350,000,000
400,000,000
Water Debt Service Projections
Outstanding Bond NDS 2023C&D Refunding NDS
Planned SRF Loans 2023A&B New Money NDS
Prior Outstanding Bond NDS
16 Green Bonds Program
• WSIP Programmatic Certification with Climate Bonds Initiative  The Climate Bonds Initiative (CBI) is an international, investor-focused non-profit organization, regarded by the capital markets as the highest standard for green bond certification
 WSIP Programmatic Certification received from CBI in 2016  Third-party verification by Sustainalytics
• 2023C CBI Certification Process
 Under WSIP Programmatic Certification,
complete Climate Bonds Information
Form (bond details, green bond
framework, and other basic information)

SFPUC Green Bond Issuance
17 $259M
$506M $623M
$492M $391M*
$241M
$408M
$608M
$696M
$32M
$74M
$0
$200
$400
$600
$800
$1,000
$1,200
2015 2016 2017 2018 2019 2020 2021 2022 2023
(In millions)
All SFPUC Green Bond Issuance by Enterprise
2015-Present (Calendar Years)
Water Wastewater Power
*Planned 2023 Issuance - Preliminary and subject to change based on market conditions at the time the bonds are sold.

Current estimates based on 30% tender assumption.

SFPUC Green Bond Issuance
18 Total Green Bond Issuance
($ millions)
Enterprise (Series) Total
Water (8*): $2,271*
Wastewater (8): $1,953
Power (2): $ 106
Total (18*): $4,331*
SFPUC Water Certified Green Bonds Issued to Date (8 issuances) Water Revenue Bonds Series 2016C (Green Bonds) $259,350,000 Water Revenue Bonds Series 2017A (Green Bonds) $121,140,000 Water Revenue Bonds Series 2017D (Refunding) (Green Bonds) $350,305,000 Water Revenue Bonds Series 2017G (Refunding) (Green Bonds) $34,280,000 Water Revenue Bonds Series 2019A (Refunding) (Green Bonds) $622,580,000 Water Revenue Bonds Series 2020A (Green Bonds) $150,895,000 Water Revenue Bonds Series 2020E (Green Bonds) $341,435,000 Water Revenue Bonds Series 2023C (Refunding) (Green Bonds)* $391,240,000* Total $2,271,225,000
SFPUC Wastewater Certified Green Bonds Issued to Date (8 issuances) Wastewater Revenue Bonds Series 2016A (Green Bonds) $240,580,000​ Wastewater Revenue Bonds Series 2018A (Green Bonds) $229,050,000​ Wastewater Revenue Bonds Series 2018C (Green Bonds) $179,145,000​ Wastewater Revenue Bonds Series 2021A (Green Bonds) $260,835,000​ Wastewater Revenue Bonds Series 2021A (Green Notes) $218,355,000​ Wastewater Revenue Bonds Series 2021B (Green Notes) $129,110,000​ Wastewater Revenue Bonds Series 2023A (Green Bonds) $530,565,000 Wastewater Revenue Bonds Series 2023C (Refunding) (Green Bonds) $165,660,000 Total $1,953,300,000
SFPUC Power Green Bonds Issued to Date (2 issuance)
Power Revenue Bonds Series 2015A (Green Bonds) $32,050,000 Power Revenue Bonds Series 2021A (Green Bonds) $74,280,000 Total $106,330,000
*Planned 2023 Issuance - Preliminary and subject
to change based on market conditions at the time
the bonds are sold. Current estimates based on
30% tender assumption.

Form of Transaction Documents
• Preliminary Official Statements (POS) (Sub Series ABCD )  Disclosure describing bond terms and conditions of the Water Enterprise. • Continuing Disclosure Certificates (Appendix in POS) (Sub Series ABCD )  Outlines disclosure reporting requirements during term of bonds. • 43rd and 44th Supplemental Indenture (Sub Series AB)
 Agreement between SFPUC and bond trustee providing for the issuance of and security of the b
onds.
 45th and 46th Supplemental Indenture (Sub Series CD)
 Agreement between SFPUC and bond trustee providing for the issuance of and security of the b
onds.
• Bond Purchase Contracts (Sub Series ABCD )
 Agreements between SFPUC and bond underwriters, which outline terms of each bond sale. • Escrow Agreement (Sub Series CD )
 Agreement between SFPUC and the escrow agent who holds refunding proceeds until r
efunded bonds are redeemed.
• Dealer Manager Agreement for Invitation to Tender (Sub Series CD )  Between the SFPUC and Dealer Manager setting forth the required provisions to manage a
ctivities related to the Invitation to Tender.
• Invitation to Tender (Sub Series CD)
 Formal invitation to the holders of certain specific outstanding bonds to offer to sell all or a p
ortion of their holdings to the SFPUC.
19 Supplemental Indenture
(Amendments)
• Bring existing Indenture up to more modern and market- ac
cepted standards for issuing debt, including specific
updates related to the issuance of variable rate debt, and short-term debt which is projected to be refinanced rather than paid from net revenues
• Proposed amendments with respect to the potential use of
low-cost federal loans such as WIFIA loans
• Clarity on rate-s etting obligations of the Water Enterprise • May still issue other obligations on a subordinate basis 20 21
• Commission Disclosure Training
Deputy City Attorney Mark Blake and SFPUC Disclosure
Counsel, Steve Spitz, Partner, Orrick Herrington & Sutcliffe LLP provided Commission refreshed Disclosure Training at its February 14, 2023 Meeting, titled “How Commissioners
Discharge their Legal Obligations Under Federal Securities Laws”
• Disclosure Standard:

Rule 10b-5 “unlawful for any person . . . to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not
misleading . . . .”
Commission Legal Obligations
Recommended Commission Action
• Authorize issuance of up to $450,255,000 2023A Bonds
and 2023B
Bonds, and up to $1,662,385,000 2023C and
2023D Refunding Bonds.
• Approve form of related bond sale documents.
• Approve and authorize the General Manager to deem the d
raft POS final.
• Authorize General Manager to sell Bonds in one or more s
eries on a negotiated basis and to enter into Bond
Purchase Contracts with the Bond Underwriters.
22 Anticipated Financing Schedule
23 May 3rd and 8th Rating presentations
June 1st Received S&P Rating
June 22nd Receive Moody’s Rating (expected)
June 27th Commission Approval of Water Transactions
June 28th Post Preliminary Official Statements
July 11th Pricing of 2023 Series AB Bonds (new money)
July 18th Pricing of 2023 Series CD Bonds (tender-refunding) July 27th Closing of 2023 Series AB Bonds (new money)
August 10th Closing of 2023 Series CD Bonds (tender-refunding) May

S M T W T F S
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7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31
June

S M T W T F S
1 2 3
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11 12 13 14 15 16 17
18 19 20 21 22 23 24
25 26 27 28 29 30
July

S M T W T F S
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30 31
August

S M T W T F S
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Water Bond Dealer Agreements
Background
On July 21, 2022, Commission approved a commercial paper dealer agreement extension for Dealer Agreements for Bank of America Merrill Lynch, Barclays Capital Inc., J.P. Morgan Securities LLC and U.S. Bancorp Investments Inc. with an expiration on July 21, 2023, and now require replacement.

Water Enterprise Interim Funding Program
Recommended Commission Action
Approve Water Enterprise Commercial Paper Program Form of Dealer Agreements between the SFPUC and BofA Securities, Inc., J.P. Morgan Securities LLC, and Wells Fargo Bank, National Association. 24 Amount Bank Facility Type
$200 million Sumitomo Mitsui Letter of Credit- Water Commercial Paper Program $100 million Sumitomo Mitsui Letter of Credit- Water Commercial Paper Program $100 million Barclays PLC Letter of Credit- Water Commercial Paper Program $100 million US Bank Revolving Credit Agreement
25 Questions

AGENDA ITEM
Public Utilities Commission
City and County of San Francisco

DEPARTMENT

Financial Services

AGENDA NO.

7 MEETING DATE

June 27, 2023

Approve Replacement Dealer Agreements for Commercial Paper Program of Water Enterprise Capital Program: Regular Calendar

Project Manager: Nikolai J. Sklaroff

Approve Dealer Agreements for the Commercial Paper Program of the Water Enterprise Summary of
Proposed
Commission Action
Approve Water Enterprise Commercial Paper Program Dealer Agreements for BofA Securities Inc., J.P. Morgan Securities LLC, and Wells Fargo Bank, National Association; and authorize the General Manager to enter into these associated agreements.

Background,
Description of Scope
of Services, and
Agreement Terms:

On July 11 , 2017, by Resolution No. 17-0161, this Commission approved D ealer Agreements for Bank of America Merrill Lynch, Barclays Capital Inc., J.P. Morgan Securities LLC., and U.S. Bancorp Investments Inc. with an expiration date of July 21, 2022. The agreements were ex tended for one year and will expire on July 21, 2023 and require replacement.

A commercial paper dealer is typically a large financial firm that has the capital and level of sophistication necessary to facilitate the investment and reinvestment of commercial paper to investors on behalf of the San Francisco Public Utilities Commission ( SFPUC). A commercial paper dealer sets prices ( i.e.,
interest rate levels) on
commercial paper (which has maturities of less than 270 days).

The purpose of this requested action is to approve new dealer agreements in support of the Water Enterprise’s Commercial Paper Program (a component of the Interim Funding (Commercial Paper) Program.)

The Water Interim Funding (Commercial Paper) Program, authorized by the Commission and Board of Supervisors in the total amount of $500 million, is made up of two components: (1) three series totaling $400 million that are for the issuance of commercial paper , each supported by a high-grade bank credit facility in the form of letter s of credit (“LOCs”); and (2) one series for $100 million as a direct bank Agenda Title: Approve Dealer Agreements for the Commercial Paper Program of the Water Enterprise Commission Meeting Date: June 27, 2023

loan that can be used to make draws from a high -grade bank pursuant to a revolving credit agreement (“Revolver”). Currently, the four series of the Water Interim Funding Program are as follows:

(1) Series A -1/A-1-T: $100 M Sumitomo Mitsui Banking
Corporation acting through its New York Branch LOC
(Exp. 5/16/2025)
(2) Series A -2/A-2-T: $ 200M Sumitomo Mitsui Banking
Corporation acting through its New York Branch LOC
(Exp. 6/14/2027)
(3) Series A-3/A-3-T: $100M Barclays Bank PLC LOC (Exp. 07/19/2024)
(4) Series R-1: $100M US Bank Revolver (Exp. 7/18/2024)

The SFPUC currently provides most of the interim funding of the Water Enterprise capital program through the issuance of commercial paper (CP). In today’s market, CP results in an approximate all-in borrowing rate of about 3%. CP is a cost -effective means to fund the encumbrance, contract certification , and cash spending requirements of the Water Enterprise capital program until long-term revenue bond or long-term State and federal loan financing proceeds are available.

Dealer Agreements:

In connection with the Water Commercial Paper Program, the Commission issued a request for proposals from prequalified banks to serve as the commercial paper dealer(s) for the Water Commercial P
aper Program to sell and remarket Commercial Paper Notes. A request for proposals was sent to 33 prequalified firms in December 2022 to the Controller’s Office of Public Finance underwriting pool.

Staff recommends as the lowest cost, responsive and responsible bidders, the following proposals: BofA Securities, Inc. , J .P. Morgan Securities LLC , and Wells Fargo Bank, National Association. The annual fee for each dealer is 0.05% of outstanding CP for all dealers.

The fees are consistent with dealer fees obtai
ned in the past for the
Water, Wastewater and Power CP Programs. The combined not -to- exceed annual fees for the three firms will be in the amount of $250,000.

The term of the dealer agreements is five years, with optional extension up to a total term of nine years. These fees are included in the Water Enterprise capital budget.

The dealer agreements provide that each firm can remarket up to $ 500 million of the Water CP Program, but in no case will the combined amount of CP remarketed by the three firms exceed the authorized amount of $500 million at any given time.

Agenda Title: Approve Dealer Agreements for the Commercial Paper Program of the Water Enterprise Commission Meeting Date: June 27, 2023

Summary of
Documents

The following are brief summaries of each document that the Commission is being asked to approve in form:

Dealer Agreements:

These agreements replace the expiring dealer agreements and are by and between the SFPUC and each respective dealer BofA Securities, Inc., J .P. Morgan Securities LLC, and Wells Fargo Bank, National Association. The Form of Dealer Agreement, generally, sets out the terms pursuant to which such dealer may purchase or arrange for the sale of the commercial paper.

Offering Memorandum:

The Offering Memorandum (OM) is the disclosure document that is used by the Dealers in the initial issuance or remarketing of the CP to prospective investors. It contains brief descriptions of the SFPUC, including the Water Enterprise and Water Interim Funding Program; the CP Notes; the supporting credit banks, and the bank Reimbursement Agreements. Unlike the SFPUC’s Official Statement prepared for a long- term revenue bond transaction, the OM for a CP Program supported by a Liquidity Facilities or Letters of Credit does not include detailed financial and/or operating information of the SFPUC.

Disclosure Considerations:

The Water CP Program, through the Water Interim Funding Program, is supported by the two (2) Sumitomo Mitsui Banking Corporation Letters of Credit and a Barcl ays Bank PLC Letter of Credit as described in the OM. CP investors rely primarily on the financial standing of the credit banks ( Sumitomo Mitsui and Barclays ) for the source of repayment. Very limited information is provided about the SFPUC or the Water Enterprise.

Upon closing of this transaction, staff will post the key transaction documents on EMMA, the municipal bond industry’s on- line disclosure repository. There is no continuing disclosure undertaking for CP as it is exempt from the requirements of SEC Rule 15c-2-12.

Budget & Costs: The Water Enterprise capital budget and associated appropriations cover these associated costs.

Environmental
Review:

This item approves commercial paper program dealer agreements to fund projects that have undergone any applicable California Environmental Quality Act (CEQA) review and have proceeded to construction. The Commission made CEQA findings at the time that it approved those projects.

Approval of this item doesn’t change the sc ope of those projects, and Agenda Title: Approve Dealer Agreements for the Commercial Paper Program of the Water Enterprise Commission Meeting Date: June 27, 2023

the projects remain within the scope of the prior environmental review.

This item also includes commercial paper program dealer agreements to fund future projects that have not yet completed CEQA review. For those future projects, no work will occur after the planning and design phases until CEQA review is complete and the Commission approves those projects.

Attachments: 1. Form of Dealer Agreement for BofA Securities, Inc., J.P.

Morgan Securities LLC, and Wells Fargo Bank, National
Association

2. Form of Offering Memorandum

PUBLIC UTILITIES COMMISSION
City and County of San Francisco
RESOLUTION NO.: __________________
WHEREAS, On November 5, 2002, the voters of the City and County of San Francisco (City) approved Proposition E (codified at Charter Section 8B.124), which among other things, authorized the Public Utilities Commission of the City (Commission) to issue revenue bonds, including notes, commercial paper or other forms of indebtedness, when authorized by ordinance approved by a two-thirds vote of the Board of Supervisors of the City (Board), for the purpose of reconstructing, replacing, expanding, repairing or improving water facilities or clean water facilities or combinations of water and clean water facilities under the jurisdiction of the Commission (Water Enterprise); and
WHEREAS, Pursuant to Section 43.5 of the San Francisco Administrative Code (Article V), enacted by Ordinance No. 203-98 adopted by the Board on June 8, 1998, and signed by the Mayor of the City on June 19, 1998, as amended by Ordinance No. 270-06, adopted on October 24, 2006 by the Board and signed by the Mayor on October 31, 2006, the Board established a procedure pursuant to which the Commission may issue short-term indebtedness, including the issuance of commercial paper in anticipation of the issuance of its revenue bonds; and
WHEREAS, On March 25, 2003, by Resolution No. 03-0048, this Commission authorized and on May 6, 2003, by Resolution No. 300-03, signed by the Mayor of the City on May 16, 2003, the Board approved the issuance of commercial paper notes for the Water Enterprise commercial paper program (Water CP Program) in an aggregate principal amount not- to-exceed $250 million of commercial paper notes outstanding at any one time; and WHEREAS, On October 27, 2009, by Resolution No. 09-175, this Commission authorized and on December 16, 2008, by Ordinance No. 311-08, signed by the Mayor on December 19, 2008, the Board adopted an ordinance authorizing an increase in the Water CP Program to an aggregate principal amount not-to-exceed $500 million of commercial paper notes outstanding at any one time from an aggregate principal amount not-to exceed amount of $250 million of commercial paper notes outstanding at any one time; and WHEREAS, Under Resolution No. 09-175 and Ordinance No. 311-08, the Commission is authorized to take any and all necessary actions in connection with the issuance of the Water CP Program commercial paper notes, including, the execution of one or more commercial paper dealer agreements entered into in connection with the sale and issuance of the Water CP Program commercial paper notes; and
WHEREAS, In connection with the Water CP Program, the Commission has previously authorized, executed and delivered commercial paper dealer agreements (Current CP Dealer Agreements); and
WHEREAS, The Current CP Dealer Agreements will terminate by their respective terms on July 21, 2023; and
WHEREAS, To maintain the Water CP Program, the Commission issued a request for bids from qualified banks to serve as commercial paper dealers for the Water CP Program commercial paper notes, and after an evaluation of the responses to such request for bids, the Commission staff determined that the bids from BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Bank, National Association were most advantageous to the Commission and were determined to be the lowest cost, responsive and responsible bidders to serve as commercial paper dealers for the Water CP Program commercial paper notes; and

WHEREAS,
The Commission finds it necessary to execute one or more commercial paper dealer agreements for the Water CP Program commercial paper notes, and as a result, to deliver an updated offering memorandum in connection with the sale and issuance of the Water CP
Program commercial paper notes reflecting changes relating thereto; and

WHEREAS,
The proposed form of the dealer agreements (Dealer Agreement) has been presented to the Commission and filed with the Secretary, and the Commission finds it in its best
interest to enter into such agreement with one or more qualified commercial paper dealers; and

WHEREAS,
The proposed form of offering memorandum (Offering Memorandum) has been presented to the Commission and filed with the Secretary; and WHEREAS, This item approves commercial paper program dealer agreements to fund projects that have undergone any applicable California Environmental Quality Act (CEQA) review and have proceeded to construction, and the Commission made CEQA findings at the time that it approved those projects; and

WHEREAS,
Approval of this item doesn’t change the scope of those projects, and the projects remain within the scope of the prior environmental review; and

WHEREAS,
This item also includes commercial paper program dealer agreements to fund future projects that have not yet completed CEQA review and for those future projects, no
work will occur after the planning and design phases until CEQA review is complete and the Commission approves those projects; now, therefore, be it

RESOLVED
by the Public Utilities Commission of the City and County of San Francisco, as follows:

Section 1.

Approval of Dealer Agreements. The Dealer Agreements, in substan tially the form submitted to this Commission, are hereby approved and recommended to the Director of the City’s Office of Public Finance (Director) for approval pursuant to Article V of the City’s Administrative Code. The General Manager of the Commission or the General Manager’s designee
(General Manager), the Deputy Chief Financial Officer, and the Capital Finance Director, are each authorized and directed to execute and deliver one or more of
Dealer Agreements in substantially said form, for an initial term of not-to-exceed five years, subject to such additions thereto or changes therein which the General Manager, upon consultation with the City Attorney and Director, shall approve, such approval to be conclusively evidenced by the execution and delivery of such Dealer Agreements.

Section 2. Extensions of Term of Dealer Agreement. The General Manager, the Deputy Chief Financial Officer and the Capital Finance Director, are further authorized, in consultation with the City Attorney and the Director, to execute one or more amendments in order to extend the term of any Dealer Agreement authorized hereunder as long as the aggregate term
of such Dealer Agreement does not to exceed nine years from the commencement date
of the initial term of such Dealer Agreement and so long as the total compensation
to the commercial paper dealer(s) shall not exceed an aggregate of $250,000 per year.

Section 3. Approval of Offering Memorandum. The General Manager, upon consultation with the City Attorney and the Director, is hereby authorized and directed to prepare and cause the distribution of the Offering Memorandum relating to the Water CP Program, in substantially the form on file with the Commission, subject to such additions thereto and changes therein, and any amendments or supplements thereto from time to time which the General Manager, upon consultation with the City Attorney and the Director, shall approve. The General Manager is further authorized and directed to distribute, in connection with the sale of any Water CP Program commercial paper notes, one or more Offering Memoranda in such form, as the General Manager, upon consultation with the City Attorney, bond counsel and the Director shall approve.

Section 4. Further Actions. The General Manager, the Deputy Chief Financial Officer, and the Capital Finance Director, in consultation with the City Attorney and the Director, are each hereby authorized and directed to execute such other agreements, certifications o
r documents and to take any and all necessary action in furtherance of the execution of the Dealer Agreements and
any future extension of the Dealer Agreement and the preparation of the Offering Memorandum.

Section 5.

Delegation. The General Manager is autho rized to delegate any of the responsibilities or duties set forth in this resolution to the Assistant General Manager, Business Services and Chief Financial Officer of the Commission.

Section 6. R
atification. All actions heretofore taken by the officials, employees and agents of
the Commission with respect to the expiration of the Curr ent CP Dealer Agreement, entering into the Dealer Agreement, and the preparation of the Offering Memorandum, are hereby approved, confirmed and ratified.

Sec
tion 7. Effective Date. This resolution shall take effect from and after its adoption.

I hereby certify that the foregoing resolution was adopted by the Public Utilities Commission at its meeting on June 27, 2023.

Secretary, Public Utilities Commission
Form of Water Enterprise CP Dealer Agreement
4856-8430-6778.4

DEALER AGREEMENT
(Dated as of July 1, 2023)
THIS DEALER AGREEMENT (this “Agreement”) is entered into as of July 1, 2023 by and between the Public Utilities Commission (the “Commission”) of the City and County of San Francisco (the “City”) and [BofA Securities, Inc.][J.P. Morgan Securities LLC][Wells Fargo Bank, National Association ] (“[BofA][JPM][Wells]”). [BofA][JPM][Wells] is referred to as the “Dealer” herein.

RECITALS
The Commission proposes to issue and reissue its Commercial Paper Notes (Water Series, Proposition E), in the current maximum amount of $400,000,000 (which could be increased to a maximum amount of $500,000,000) at any time outstanding, authorized in three series: (i) Series A-1 (the “Series A-1 Notes”) consisting of Tax-Exempt Subseries A-1 (the “Subseries A-1 Notes”) and Taxable Subseries A -1-T (the “Subseries A -1-T Notes”), (ii) Series A-2 (the “Series A- 2 Notes”) consisting of Tax- Exempt Subseries A -2 (the “Subseries A -2 Notes”) and Taxable Subseries A -2-T (the “Subseries A -2-T Notes”) and (iii) Series A -3 (the “Series A -3 Notes”) consisting of Tax-Exempt Subseries A-3 (the “Subseries A-3 Notes”) and Taxable Subseries A-3- T (the “Subseries A-3-T Notes”). The Series A-1 Notes, the Series A-2 Notes and the Series A-3 Notes are referred to herein collectively as the “Notes” and each as a “Series.” The Notes are authorized to be issued pursuant to the Chart er; Article V of Chapter 43 of Part I of the San Francisco Administrative Code, and various other ordinances and resolutions of the Board and resolutions of the Commission (collectively, the “Issuance Authorizations”).

As described in the Offering Memorandum, dated July [10], 2023, relating to the Notes (as the same may be amended, supplemented, restated or replaced, the “Offering Memorandum”), each Series of Notes is further issued pursuant to the terms of an Issuing and Paying Agent Agreement (each, an “I ssuing and Paying Agent Agreement” and collectively, the “Issuing and Paying Agent Agreements”), each by and between U.S . Bank Trust Company, National Association (as successor in interest to U.S. Bank, National Association), as Issuing and Paying Agent (the “Issuing and Paying Agent”) and the Commission.

As further described in the Offering Memorandum, each Series of Notes will be supported either by (i) an irrevocable direct -pay letter of credit (each, a “Letter of Credit” and collectively, the “Letters of Credit”) issued by a bank (each, a “LOC Bank” and collectively, the “LOC Banks”), pursuant to the terms of a reimbursement agreement (each, a “Reimbursement Agreement” and collectively, the “Reimbursement Agreements”) or (ii) a revolving credit and term loan agreement (each, a “Liquidity Agreement” and collectively, the “Liquidity Agreements”) issued by a bank (each, a “Liquidity Bank” and collectively, the “Liquidity Banks”). Each of the LOC Banks and the Liquidity Banks is referred to herein as a “Bank” and collectively as the “Banks.” [BofA][JPM][Wells] has agreed to act as a non -exclusive Dealer for the Notes and to perform the duties imposed by this Agreement.
2 4856-8430-6778.4

AGREEMENTS
NOW, THEREFORE, for and in consideration of the covenants herein made, and subje ct to the conditions herein set forth, the parties hereto agree as follows:

Section 1. D efinitions. Unless the context clearly indicates a contrary meaning, each capitalized term used in this Agreement shall have the meaning given to that term in the Issuing and Paying Agent Agreements.

Section 2. Ap pointment of Dealer; Acceptance; Allocations; Evaluations. (a) Subject to the terms and conditions set forth in this Agreement, the Commission hereby appoints [BofA][JPM][Wells] as a Dealer for the Notes, and [BofA][JPM][Wells] hereby accepts such appointment and accepts and agrees to perform the duties and obligations imposed upon it as a Dealer under this Agreement, subject to the terms, conditions and limitations set forth in this Agreement. (b) The Dealer shall act as a non-exclusive Dealer with respect to the Notes and shall be responsible to solicit and arrange sales of the Notes allocated to it, including, without limitation, the initial placement of such Notes and subsequent sales, establishing the rates and maturities of such Notes from time to time . The Dealer acknowledges that the Commission may enter into agreements with other dealers in connection with the offering and sale of the Notes. The Commission reserves the right to allocate and reallocate Notes among the Dealer and the other dealers with respect to the Notes at any time in its sole discretion for any reason.
(c) The Dealer acknowledges that the Commission intends to conduct a regular evaluation of the Dealer . Such evaluation will consider, among other things, an analysis of interest rates on the Notes allocated hereunder and managed by the Dealer in comparison to the interest rates provided by other dealers.
(d) The Dealer acknowledges that the Commission has delivered to it executed copies of the Issuance Authorizations, the Issuing and Paying Agent Agreements, the Letters of Credit, the Reimbursement Agreeme nts, the Liquidity Agreements and a Certificate of Designated Representatives in accordance with Section 6 hereof. (e) The Dealer hereby agrees that it will comply with all statutes and regulations applicable to it, including without limitation, all applicable securities laws and requirements of the Securities Exchange Commission, the Municipal Securities Rulemaking Board or any regulatory body having jurisdiction over the Dealer, non- compliance with which would adversely affect the Notes or the Commission’s Note program.

Section 3. S
ale and Purchase of Notes. (a) The Dealer acknowledges that the terms and conditions of the Notes are set forth in the Issuing and Paying Agent Agreements and that in particular, the Notes of each Series (i) shall be issued in denominations of $100,000 and in integral multiples of $1,000 in excess thereof, (ii) shall bear interest at an annual rate (in the case of the Tax-Exempt Notes, calculated on the basis of a year consisting of 365 days and the actual number 3 4856-8430-6778.4
of days elapsed, and, in the case of the Taxable Notes, on the basis of the actual number of days elapsed and a year consisting of 360 days) payable at maturity which shall not in any event exceed the Maximum Interest Rate of 12%, (iii) shall mature on a Business Day not more than 270 days after their respective issuance dates, but in no event later than the Business Day immediately preceding the applicable Termination Date, and (iv) shall be sold at a price equal to 100% of the principal amount thereof.
(b) The Dealer shall use its reasonable best efforts, consistent with commercial customs and practices, to solicit and arrange sales of the Notes at such rates and maturities as may prevail from time to time in the market in accordance with Section 4 below, and, in any event, the Dealer shall use its reasonable best efforts to solicit and arrange sales of the Notes up to the Maximum Interest Rate, as required by the applicable Issuing and Paying Agent Agreement, and irrespective of whether the rate for unreimbursed drawings under the Letters of Credit or unreimbursed advances under the Liquidity Agreements is less than the Maximum Interest Rate . The Dealer agrees to make a good faith effort to notify Commission if for any reason it believes that it will not be able to sell the Notes on the date such Notes are to be issued . The Dealer and the Commission agree that any Notes which the Dealer may purchase or for which the Dealer may arrange the sale, will be purchased or sold on the terms and conditions and in the manner provided in the Issuing and Paying Agent Agreements and this Agreement. Anything herein to the contrary notwithstanding, to the extent of any conflict between the provisions hereof and the Issuing and Paying Agent Agreements, the provisions of the Issuing and Paying Agent Agreements shall be controlling.

Section 4. T
ransactions in Notes. All transactions in Notes between the Dealer and the Commission shall be in accordance with the Issuance Authorizations, the Issuing and Paying Agent Agreements, this Agreement, the Letters of Cred it, the Reimbursement Agreements, the Liquidity Agreements and with the customs and practices in the commercial paper market regarding settlement and delivery formally adopted in writing from time to time by the New York Clearinghouse, to the extent not inconsistent with the Issuing and Paying Agent Agreements. As early as possible, but not later than 1:00 p.m. (New York City time) on the date on which any Notes are to be issued, the Dealer shall notify the Commission and the Director of the Controller’s Office of Public Finance of the City (the “City’s Office of Public Finance”) (which shall be deemed to include their designee) of the proposed final maturities, prices and interest rates (which interest rates shall not exceed the Maximum Interest Rate) at which the Dealer has arranged for the sale of or will purchase the Notes, and provide the Commission and the Director of the City’s Office of Public Finance with any other information as required for delivery of such Notes. The Dealer shall not be obligated to purchase any Notes unless and until agreement, as described in the following sentence, has been reached in each case on the proposed final maturities, prices and interest rates and the Dealer has agreed to such purchase. Not later than 1:00 p.m. (New York City time) on the date of issuance of the Notes, the Commission and the Director of the City’s Office of Public Finance may approve or disapprove of such final maturities, prices and interest rates (provided that if either the Commission or the Direc tor of the City’s Office of Public Finance does not provide notice to the Dealer of disapproval then the Commission or the Director of the City’s Office of Public Finance, as applicable, shall be deemed to have approved such terms) and such Dealer shall ei ther (a) confirm each transaction made with or arranged by it or (b) notify the Commission and the Issuing and Paying Agent of the difference, if any, between the amount of maturing Notes and the amount of Notes which the Dealer has arranged to sell or has agreed to purchase. Such confirmation or notification shall be given by telephone (or by other 4 4856-8430-6778.4
telecommunications medium acceptable to the Commission) and confirmed in writing to the Commission and the Issuing and Paying Agent in the Dealer’s customary form.

Section 5. P ayment for Notes . The Dealer shall pay for the Notes purchased by the Dealer or sold by the Dealer in immediately available funds by 12:00 p.m. (New York City time) on the Business Day such Notes are delivered to the Dealer. All Notes will be sold at par, and will be executed in the manner provided for in the Issuing and Paying Agent Agreements.

Section 6. Des ignated Representative. Note transactions with the Commission, pursuant to Section 4 hereof, shall be with the Director of the City’s Office of Public Finance and any one of the officers or employees of the Commission or the City who are designated as a Designated Representative by a certificate signed by the General Manager of the Commission . The Commission will deliver to the Dealer a Certificate o f Designated Representatives in the form appended to the Issuing and Paying Agent Agreements as Exhibit B. The General Manager and the Director of the City’s Office of Public Finance agree to provide the Dealer with a revised Certificate of Designated Rep resentatives in substantially said form when and as required by changes in the Designated Representatives . The Dealer may rely upon such Certificate of Designated Representatives unless and until otherwise notified in writing by the General Manager or the Director of the City’s Office of Public Finance.

The Controller of the City shall, throughout the term of this A gre ement, be authorized to
initiate Note transactions, notwithstanding any provision hereof or future amendment hereof to the contrary.

Section 7. C
ertain Representations of the Commission. The Commission represents to the Dealer as follows:
(a) As of the date of each issuance of Notes: (i) the Commission has full power a
nd authority to issue the Notes, to enter into, perform and observe the covenants and agreements on its part contained in this Agreement, the Issuing and Paying Agent Agreements, the Letters of Credit, the Reimbursement Agreements and the Liquidity Agreements (collectively, the “Documents”); (ii) such Documents have been duly authorized, executed and delivered by the Commission; and such Documents constitute legally valid and binding obligations of the Commission, in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally and subject, as to enforceability, to the general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law).
(b) As of the date of each issuance of Notes, the Issuance Authorizations are in full force and effect and have not been repealed, modified or amended since their adoption. (c) As of the date of each issuance of Notes, such Notes have been duly authorized and executed by the Commission, and when authenticated and delivered by the Issuing and Paying Agent, will be in conformity with, and entitled to the benefits of the Issuance Authorizations and the Issuing and Paying Agent Agreements. 5 4856-8430-6778.4
(d) The then-current Offering Memorandum related to the Notes will not as of its respective date, and as of each date of issuance or resale of one or more Notes pursuant to an Issuance Request, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided that the Commission makes no representation with respect to information therein regarding the Banks, the Letters of Credit, the Reimbursement Agreements, the Liquidity Agreements, the Dealer or any other dealers, the Issuing and Paying Agent and DTC and its book-entry only system.)
(e) Although the Notes are exempted from the provisions of Rule 15c-2-12, the Commission has not failed during the previous five years to comply, in all material respects, with any previous undertakings in a written continuing disclosure contract or agreement under Rule 15c2-12, except as otherwise disclosed in writing to the Dealer. (f) The Commission will cooperate with the Dealer in arranging for the qualification of the Notes for sale and the determination of their eligibility for investment under the laws of such jurisdictions as the Dealer may designate and will use its best efforts to continue such qualifications in effect so long as the Notes are being offered by the Dealer; provided, however, that the Commission will not be required to execute a special or general consent to service of process or qualify to do business in connection with action taken under this subsection nor will the Commission be required to incur any material expense.
(g) The adoption by the City and the Commission of the Issuance Authorizations, and the making and performance by the Commission of the other Documents and the Notes do not and will not materially conflict with or result in a material breach or violation of any of the terms or provisions of, or constitute a default under, any resolution, indenture, deed of trust, mortgage commitment, agreement or other instrument to which the Commission is a party or by which the Commission is bound, or any constitutional provision, existing law, administrative regulation, court order or consent decree to which the Commission or its property is subject. (h) The Commission shall not adopt any amendment to the Documents that adversely affects the rights or obligations of the Dealer without the Dealer’s prior written consent.

Section 8. O
ffering Memorandum and Disclosure.
(a) The Commission shall prepare or cause to be prepared the Offering Memorandum, including any amendments thereto, in word-searchable Portable Document Format (“PDF”), as described in the Municipal Securities Rulemaking Board’s (“MSRB”) Rule G-32 and shall provide the electronic copy of the word-searchable PDF format of the Offering Memorandum to the Dealer no later than one (1) business day prior to the date Notes are first issued to enable the Dealer to comply with MSRB Rule G -32. The Commission shall prepare or cause to be prepared an update to the Offering Memorandum on an annual basis by December 31 of each year (or at any other time in the sole discretion 6 4856-8430-6778.4
of the Commission) if in the judgment of the Commission, the then- existing Of fering Memorandum is misleading in any material respect.
(b) The Commission shall file on the Electronic Municipal Market Access (“EMMA”) database of the MSRB or shall provide the Dealer with:
(i) copies of any notices filed by the Commission in accordance with Rule l5c2-12(b)(5)(i)(C) promulgated under the Securities Exchange Act of 1934 with respect to any outstanding revenue bonds, notes or other obligations for borrowed money of the Commission relating to the Water Enterprise (the “Commission Bonds”) promptly following the filing thereof; (ii) copies of annual reports filed by the Commission in accordance with Rule 15c2-12(b)(5)(i)(A) with respect to Commission Bonds promptly following the filing thereof;
(iii) copies of the official statements or other disclosure documents with respect to Commission Bonds promptly following the issuance thereof; (iv) prompt notice and a copy of any amendment to the Issuing and Paying Agent Agreements, or of the substitution, termination or extension of any Letter of Credit or Liquidity Agreement;
(v) prompt notice of the occurrence and continuance of an event of default under the Issuing and Paying Agent Agreements, the Reimbursement Agreements or the Liquidity Agreements;
(vi) prompt notice of the suspension, reduction or withdrawal o f the rating on any Commission Bonds or the public announcement of the possibility thereof by the Rating Agencies then rating the Commission Bonds; and (vii) prompt notice of the receipt by the Commission of notification from Bond Counsel that the Commission may not continue to rely on their opinion regarding the validity or tax-exempt status of the Notes. (c) The Commission will furnish the Dealer such documents and information concerning the business, operations and financial condition of the Commission, as the Dealer may from time to time reasonably request.
(d) If in the reasonable opinion of the Dealer, with the concurrence of Bond Counsel (or the Commission’s Disclosure Counsel) and the City Attorney, changes in applicable law require that a disclosure document more extensive than the Offering Memorandum be prepared and distributed, the Commission agrees to prepare such document, with the assistance of the Dealer.
(e) The Dealer shall provide a copy of the Offering Memorandum, as supplemented, amended and updated from ti me to time, to each person to whom it sells Notes prior to or with the delivery of any payment confirmation. The Dealer agrees to 7 4856-8430-6778.4
promptly post the Offering Memorandum and any supplements thereto, upon receipt from the Commission, to EMMA and will advise customers that the Offering Memorandum, as supplemented, is available from EMMA and the Commission agrees that this shall satisfy the Dealer’s obligations in the previous sentence. The Dealer shall not provide prospective or actual purchasers of the Notes with any written offering materials, disclosure documents or other documents or information in connection with the solicitation of purchases and sales of the Notes other than the Offering Memorandum and any supplements, amendments or updates thereto and the Issuing and Paying Agent Agreements, the Letters of Credit, the Reimbursement Agreements or the Liquidity Agreements, as the same may be amended, supplemented or replaced from time to time.
(f) The Commission authorizes the use and distribution of copies of the Offering Memorandum by the Dealer in connection with the sale (or potential sale) of the Notes.

Section 9. C
onditions To Dealer’s Obligations. The obligations of the Dealer under this Agreement have been undertaken in reliance on, and shall be subject to, the due performance by the Commission of its obligations and agreements to be performed hereunder and to the accuracy of and compliance with the respective representations, warranties, covenants and agreements of the Commission contained herein, in each case on and as of the date of delivery of this Agreement and on and as of each date on which the Notes are to be issued. The obligations of the Dealer hereunder with respect to each date on which the Notes are to be issued are also subject, in the discretion of the Dealer, to the following further conditions precedent:
(a) The Documents shall be in full force and effect and the Notes to be issued on s
uch date shall have the full benefits of all of the foregoing, all of which shall not have been amended, modified or supplemented in a manner that adversely affects the Dealer, except as may have been agreed to in writing by the Dealer, and there shall be in full force and effect such additional resolutions, agreements, instruments and certificates (including such certificates as may be required by Norton Rose Fulbright US LLP, Bond Counsel, regarding the exclusion from gross income of interest on all or a portion of the Notes from federal income tax) and such opinions of counsel, which resolutions, agreements, certificates and opinions of counsel shall be satisfactory in form and substance to the Dealer and there shall have been taken in connection therewith and in connection with the issuance or resale of the Notes all such action as shall, in the opinion of the aforesaid Bond Counsel, be necessary in connection with the transactions contemplated hereby. (b) No Event of Default (as such term is defined in the applicable Reimbursement Agreement or Liquidity Agreement) shall have occurred and be continuing; and no event shall have occurred and be continuing which with the passage of time or giving of notice or both, would constitute such an Event of Default. (c) The Dealer shall have received:
(i) executed copies of the Letters of Credit, the Reimbursement Agreements, the Liquidity Agreements and the Issuing and Paying Agent Agreements; together, upon request, with a copy of the transcript of all proceedings 8 4856-8430-6778.4
relating to the authorization of the Notes certified by a duly authorized official of the Commission;
(ii) a copy of the opinion of Norton Rose Fulbright US LLP, Bond Counsel, in the form attached as Appendix B to the Offering Memorandum; (iii) a certificate of the Commission executed by any duly authorized official of the Commission, dated as of or prior to such date, to the effect that the information concerning the Commission which is contained in the Offering Memorandum (or other disclosure materials provided by or on behalf of the Commission) is true and correct and does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made therein, in light of the circumstances under which they were made, not misleading; and
(iv) copies of such other documents, certificates and opinions as the Dealer shall have reasonably requested.

Section 10. Compensation to Dealer.
(a) For the services to be performed by the Dealer under this Agreement, the Commission agrees to pay the Dealer an annual fee equal to 5 basis points (0.05%) of the average outstanding principal amount of the Notes managed by the Dealer, payabl e quarterly in arrears, within 30 days after receipt of the bill for the preceding quarter, commencing with the quarter ending September 30, 2023.
(b) The Commission’s obligations under this Section 10 which have accrued or arisen prior to the effective date o f any termination or expiration of this Agreement shall survive such termination or expiration.

Section 11. Termination or Suspension. This Agreement may be terminated by the Commission at any time with respect to the Dealer and by the Dealer upon not less than 90 days’ prior written notice to the Commission and the Banks, provided that the Dealer may terminate with 60 days’ prior written notice to the Commission and the Banks if other dealers are in place with respect to the Notes. Notwithstanding the previous sentence, if the Dealer notifies the Commission and the Banks that it believes the Offering Memorandum (or other disclosure materials provided by the Commission) contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading, and the Commission shall fail to cure such defect prior to the sale or resale of any Notes in a manner reasonably satisfactory to the Dealer, the Dealer may suspend its obligations under this Agreement until the Offering Memorandum is appropriately amended or supplemented. Notwithstanding the foregoing, no such termination or suspension shall affect the rights or obligations of the Commission or the Dealer hereunder arising prior to such termination or suspension. In addition the Dealer may suspend its obligations under this Agreement if any of the rating agencies then rating the Notes shall either (i) downgrade its respective rating assigned to the Notes, or (ii) suspend or withdraw its respective then- current rating assigned to the Notes, 9 4856-8430-6778.4
which, in either case, in the Dealer’s reasonable opinion adversely affects the marketability of the Notes.

Section 12. Counterparts. T his Agreement may be executed in several counterparts, each of which shall be regarded as an original but all of which shall constitute one and the same document.

Section 13. Governing Law; Venue. The
formation, interpretation and performance of
this Agreement shall be governed by the laws of the S tate of California. Venue for all litigation relative to the formation, interpretation and performance of this Agreement shall be in City and County of San Francisco.

Section 14. Notices. Exc
ept as otherwise specifically provided herein, all notices required or provided for under this Agreement shall be in writing and shall be delivered by hand, first-class mail (postage prepaid), overnight express delivery or electronic mail, and shall be effective when received at the following addresses or at such other address as a party may designate in a notice delivered to the other part hereto in accordance herewith:

If to the Commission: C
ity and County of San Francisco
Public Utilities Commission
525 Golden Gate Ave., 13th Floor
San Francisco, California 94102
Fax: (415) 554-3161
Attention: Chief Financial Officer & Assistant General
Manager, Business Services
E-Mail: [email protected]
With copies to: City and County of San Francisco
Office of Public Finance
City Hall, Room 338
San Francisco, California 94102
Fax: (415) 554-4864
Attention: Anna Van Degna - Director of Public Finance
Email: [email protected]
City and County of San Francisco
Office of the Controller
City Hall, Room 316
San Francisco, California 94102
Fax: (415) 554-7466
Attention: Benjamin Rosenfield – Controller
Email: [email protected]
10 4856-8430-6778.4
If to Dealer: [______________________
______________________
______________________
______________________
Attention: ______________________
Telephone: (___) ___-____
Telecopy: (___) ___-____
E-Mail: ______________________
Section 15. Assignment. Thi
s Agreement shall not be assignable by any party hereto without the prior written consent of the other parties. This Agreement shall inure to the benefit of and shall be binding upon the Commission and the Dealer and their respective successor and assigns. This Agreement shall not be deemed to give any legal or equitable right, remedy or claim to any other person or entity other than the parties hereto.

Section 16. Headings. Th
e section headings hereof have been inserted for convenience of reference only, shall not be part of this Agreement, and shall not be used to construe, define, limit or interpret the meaning of any provision hereof.

Section 17. Severability. If a
ny provision of this Agreement shall be held or deemed by a court of competent jurisdiction to be invalid, inoperative or unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining provisions hereof.

Section 18. [BofA
Agreement and JPM Agreement only: ] Entire Agreement and Termination of Prior Dealer Agreement . This Agreement constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and supersedes all prior agreements and understandings between the parties, including any prior deal er agreement with respect to any Series of the Notes (specifically, that certain Dealer Agreement, dated as of July 1, 2017, as amended (the “Prior Dealer Agreement”), by and between the Commission and [BofA][JPM], which pursuant to its terms, was set to expire on July 21, 2023). Such Prior Dealer Agreement is terminated as of July [10] , 2023. This Agreement shall only be amended, supplemented or modified in a writing signed by all of the parties hereto. [Wells Agreement
only:] Entire Agreement . This Agr eement constitutes the entire agreement between the parties hereto with respect to the matters covered hereby, and supersedes all prior agreements and understandings between the parties, including any prior dealer agreement with respect to any Series of the Notes. This Agreement shall only be amended, supplemented or modified in a writing signed by all of the parties hereto.

Section 19. No Personal Liability . The
Commission, the City and their respective
supervisors, members, officers, employees, representatives, agents and attorneys shall not be held personally liable for the execution or performance of this Agreement, or any breach or default of the provisions hereof.

Section 20. City Requirements. Th
e Dealer hereby agrees to the City’s requirements, as
provided in Exhibit A attached hereto and incorporated hereby by this reference. 11 4856-8430-6778.4
Section 21. Term. The initial term of this Agreement shall be from the date first written above through July [__], 2028. The in itial term of this Agreement may be extended by written instrument signed by the parties hereto, provided that such extension is authorized under the Issuance Authorizations. The Commission shall use its best efforts to notify the Dealer of its intent to terminate or extend this Agreement at least sixty (60) days prior to such termination or extension.

Section 22. Dealing in Notes by the Dealer; No Obligation to Purchase Notes. (a) The Dealer, in its individual capacity, may in good faith buy, sell, own, hold and deal in any of the Notes, including, without limitation, any Notes offered and sold by the Dealer pursuant to this Agreement, and may join in any action which any owner of the Notes may be entitled to take with like effect as if it did not act in any capacity hereunder.

The Dealer may sell any of the Notes at prices above or below par, at any time. The Dealer, in its individual capacity, either as principal or agent, may also engage in or be interested in any financial or other transaction with the Commission and may act as depositary, account party, or agent for any committee or body of owners of the Notes or other obligations of the Commission as freely as if it did not act in any capacity hereunder. (b) Nothing in this Agreement shall be deemed to constitute the Dealer as an underwriter of the Notes or to obligate the Dealer to purchase any Notes for its own account at any time.

Section 23. No Advisory or Fiduciary Role; Municipal Advisor Rules. (a) The Commission acknowledges and agrees that (i) the placement of Notes pursuant to this Agreement is an arm’s -length commercial transaction between the Commission and the Dealer; (ii) in connection therewith and with the discussions, undertakings and procedures leading up to the consummation of such transaction, the Dealer is and has been acting solely as a principal and is not acting as the agent, advisor, municipal advisor or fiduciary of the Commission; (iii) the Dealer has not assumed an advisory or fiduciary responsibility in favor of the Commission with respect to the offering contemplated hereby or the discussions, undertakings and procedures leading thereto (irrespective of whether the Dealer has provided other services or is currently providing other services to the Commission on other matters) and the Dealer has no obligation to the Commission with respect to the transactions contemplated hereby except the obligations expressly set forth in this Agreement; (iv) the Dealer and the Commission have different financial interests; and (v) the Commission has consulted its own legal, financial and other advisors to the extent it has deemed appropriate.
(b) The Commission acknowledges that [BofA][JPM][Wells] may not be able to perform some of the services the Commission may request of [BofA][JPM][Wells] from time to time in connection with [BofA][JPM][Wells]’s engagement as Dealer to the extent that such services would cause [BofA][JPM][Wells] to be considered a “ municipal advisor” under SEC Rel. No. 34-70462 (Sept. 20, 2013)) (such final rules and to the extent referenced therein, Section 975, the “Municipal Advisor Rules”) implementing Section 975 (“Section 975”) of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the date first above written.

PUBLIC UTILITIES COMMISSION OF THE

CITY AND COUNTY OF SAN FRANCISCO
By:

Nikolai J. Sklaroff
Capital Finance Director
APPROVED AS TO FORM:

DAVID CHIU
City Attorney
By:

Mark D. Blake
Deputy City Attorney
ACKNOWLEDGED:

ANNA VAN DEGNA
Director of Public Finance of the
City and County of San Francisco
By:

Director of Public Finance
[BOFA SECURITIES, INC.]
[J.P. MORGAN SECURITIES LLC]
[WELLS FARGO BANK, NATIONAL
ASSOCIATION]
By:

Authorized Signatory

4856-8430-6778.4

EXHIBIT A
City Requirements
For purposes of this Exhibit A the term Dealer shall mean [BofA Securities, Inc.][J.P.

Morgan Securities LLC][Wells Fargo Bank, National Association]. (a) Tropical Hardwood and Virgin Redwood Ban. The City urges contractors not to import, purchase, obtain, or use for any purpose, any tropical hardwood, tropical hardwood wood product, virgin redwood or virgin redwood wood product. (b) Nondiscrimination: Penalties.
(i) Dealer Shall Not Discriminate. In the performance of this Agreement, the Dealer agrees not to discriminate against any employee, City and County employee working with the Dealer or subcontractor, applicant for employment with the Dealer or subcontractor, or against any person seeking accommodations, advantages, facilities, privileges, services, or membership in all business, social, or other establishments or organizations, on the basis of the fact or perception of a person’s race, color, creed, religion, national origin, ancestry, age, height, weight, sex, sexual orientation, gender identity, domestic partner status, marital status, disability or Acquired Immune Deficiency Syndrome or HIV status, or association with members of such protected classes, or in retaliation for opposition to discrimination against such classes. (ii) Subcontracts. The Dealer shall incorporate by reference in all subcontracts made in fulfillment of its obligations hereunder the provisions of Sections 12B.2(a), 12B.2(c)-(k) and 12C.3 of the San Francisco Administrative Code and shall require all subcontractors to comply with such provisions. The Dealer’s failure to comply with the obligations in this subsection shall constitute a material breach of this Agreement. (iii) Non-Discrimination in Benefits. The Dealer does not as of the date of this Agreement and will not during the term of this Agreement, in any of its operations in San Francisco, on real property owned by San Francisco, or where work is being performed for the City elsewhere in the United States, discriminate in the provision of bereavement leave, family medical leave, health benefits, membership or membership discounts, moving expenses, pension and retirement benefits or travel benefits, as well as any benefits other than the benefits specified above, between employees with domestic partners and employees with spouses, and/or between the domestic partners and spouses of such employees, where the domestic partnership has been registered with a governmental entity pursuant to state or local law authorizing such registration, subject to the conditions set forth in Section 12B.2(b) of the San Francisco Administrative Code. (iv) HRC Form . The Dealer shall execute the “Chapter 12B Declaration:

Nondiscrimination in Contracts and Benefits” form (Form HRC-12B-101) with supporting documentation and secure the approval of the form by the San Francisco Human Rights Commission.

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(v) Incorporation of Administrative Code Provisions by Reference . The provisions of Chapters 12B and 12C of the San Francisco Administrative Code are incorporated in this Section by reference and made a part of this Agreement as though fully set forth herein. The Dealer shall comply fully with and be bound by all of the provisions that apply to this Agreement under such Chapters of the San Francisco Administrative Code, including but not limited to the remedies provided in such Chapters. Without limiting the foregoing, the Dealer understands that pursuant to Section 12B.2(h) of the San Francisco Administrative Code, a penalty of $50 for each person for each calendar day during which such person was discriminated against in violation of the provisions of this Agreement may be assessed against the Dealer and/or deducted from any payments due the Dealer; provided, however, that such damages shall not be set off against the payment of rental or other contract related to Commercial Paper Notes or other debt obligations of the City.
(c) Limitations on Contributions . Through execution of this Agreement, the Dealer acknowledges that it is familiar with Section 1.126 of the City’s Campaign and Governmental Conduct Code, which prohibits any person who contracts with the City, including the Commission, for the rendition of personal services, for the furnishing of any material, supplies or equipment, for the sale or lease of any land or building, or for a grant, loan or loan guarantee, from making any campaign contribution to (A) an individual holding a City elective office if the contract must be approved by the individual, a board on which that individual serves, or a board on which an appointee of that individual serves, (B) a candidate for the office held by such individual, or (C) a committee controlled by such individual, at any time from the commencement of negotiations for the contract until the later of either the termination of negotiations for such contract or six months after the date the contract is approved. The Dealer acknowledges that the foregoing restriction applies only if the contract or combination or series of contracts approved by the same individual or board in a fiscal year have a total anticipated or actual value of $50,000 or more. The Dealer further acknowledges that the prohibition on contributions applies to each prospective party to the contract; each member of the Dealer’s board of directors; the Dealer’s chairperson, chief executive officer, chief financial officer and chief operating officer; any person with an ownership interest of more than 20 percent in the Dealer; any subcontractor listed in the bid or contract; and any committee that is sponsored or controlled by the Dealer. Additionally, the Dealer acknowledges that the Dealer must inform each of the persons described in the preceding sentence of the prohibitions contained in Section 1.126 of the City’s Campaign and Governmental Conduct Code. (d) MacBride Principles - Northern Ireland. Pursuant to San Francisco Administrative Code Section 12F.5, the City urges companies doing business in Northern Ireland to move towards resolving employment inequities, and encourages such companies to abide by the MacBride Principles. The City urges San Francisco companies to do business with corporations that abide by the MacBride Principles. By signing below, the person executing this Agreement on behalf of the Dealer acknowledges and agrees that he or she has read and understood this section. (e) Conflict of Interest. Through its execution of this Agreement, the Dealer hereby acknowledges that it is familiar with the provision of Section 15.103 of the City’s Charter, Article III, Chapter 2 of City’s Campaign and Governmental Conduct Code, and Section 87100 et seq. and Section 1090 et seq. of the Government Code of the State of California, and certifies that it

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does not know of any facts which constitutes a violation of said provisions and agrees that it will immediately notify the City if it becomes aware of any such fact during the term of this Agreement. (f) Earned Income Credit (“EIC”) Forms . San Francisco Administrative Code section 12O requires that employers provide their employees with IRS Form W -5 (The Earned Income Credit Advance Payment Certificate) and the IRS EIC Schedule, as set forth below.

Employers can locate these forms at the IRS Office, on the Internet, or anywhere that Federal Tax Forms can be found.
(i) The Dealer shall provide EIC Forms to each Eligible Employee at each of the following times: (A ) within thirty days following the date on which this Agreement becomes effective (unless the Dealer has already provided such EIC Forms at least once during the calendar year in which such effective date falls); (B) promptly after any Eligible Employee is hired by the Dealer; and (C) annually between January 1 and January 31 of each calendar year during the term of this Agreement.
(ii) Failure to comply with any requirement contained in the immediately preceding paragraph shall constitute a material breach by the Dealer of the terms of this Agreement. If, within thirty days after the Dealer receives written notice of such a breach, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured within such period of thirty days, the Dealer fails to commence efforts to cure within such period or thereafter fails to diligently pursue such cure to completion, the City may pursue any rights or remedies available under this Agreement or under applicable law. (iii) Any subcontract entered into by the Dealer shall require the subcontractor to comply, as to the subcontractor’s Eligible Employees, with each of the terms of this Section.
(iv) Capitalized terms used in this Section and not defined in this Agreement shall have the meanings assigned to such terms in Section 12O of the San Francisco Administrative Code.
(g) Local Business Enterprise Utilization; Liquidated Damages. (i) The LBE Ordinance. The Dealer shall comply with all the requirements of the Disadvantaged Business Enterprise Ordinance set forth in Chapter 14B of the San Francisco Administrative Code as it now exists or as it may be amended in the future (collectively the “LBE Ordinance”), provided such amendments do not materially increase the Dealer’s obligations or liabilities, or materially diminish the Dealer’s rights, under this Agreement. Such provisions of the LBE Ordinance are incorporated by reference and made a part of this Agreement as though fully set forth in this section. The Dealer’s willful failure to comply with any applicable provisions of the LBE Ordinance is a material breach of the Dealer’s obligations under this Agreement and shall entitle City, subject to any applicable notice and cure provisions set forth in this Agreement, to exercise any of the remedies provid ed for under this Agreement, under the LBE Ordinance or otherwise available at law or in equity, which remedies shall be cumulative unless this Agreement expressly provides that any remedy is exclusive. In addition, the Dealer shall comply fully

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with all other applicable local, state and federal laws prohibiting discrimination and requiring equal opportunity in contracting, including subcontracting. (ii) Compliance and Enforcement. If the Dealer willfully fails to comply with any of the provisions of the LBE Ordinance, the rules and regulations implementing the LBE Ordinance, or the provisions of this Agreement pertaining to LBE participation, the Dealer shall be liable for liquidated damages in an amount equal to the Dealer’s net profit on this Agreement, or 10% of the total amount of this Agreement, or $1,000, whichever is greatest. The Director of the City’s Human Rights Commission or any other public official authorized to enforce the LBE Ordinance (separately and collectively, the “Director of HRC”) m ay also impose other sanctions against the Dealer authorized in the LBE Ordinance, including declaring the Dealer to be irresponsible and ineligible to contract with the City for a period of up to five years or revocation of the Dealer’s LBE certification.

The Director of HRC will determine the sanctions to be imposed, including the amount of liquidated damages, after investigation pursuant to the San Francisco Administrative Code Section 14B.17.

By entering into this Agreement, the Dealer acknowledges and agrees that any liquidated damages assessed by the Director of the HRC shall be payable to City upon demand. The Dealer further acknowledges and agrees that any liquidated damages assessed may be withheld from any monies due to the Dealer on any contract with City.

The Dealer agrees to maintain records necessary for monitoring its compliance with the LBE Ordinance for a period of three years following termination or expiration of this Agreement, and shall make such records available for audit and inspection by the Director of HRC or the Controller upon request.
(h) Drug-Free Workplace Policy. The Dealer acknowledges that pursuant to the Federal Drug-Free Workplace Act of 1989, the unlawful manufacture, distribution, dispensation, possession, or use of a controlled substance is prohibited on Commission or City premises. The Dealer agrees that any violation of this prohibition by the Dealer, its employees, agents or assigns will be deemed a material breach of this Agreement.
(i) Compliance with Americans with Disabilities Act. The Dealer acknowledges that, pursuant to the Americans with Disabilities Act (“ADA”), programs, services and other activities provided by a public entity to the public, whether directly or through a contractor, must be accessible to the disabled public. The Dealer shall provide the services specified in this Agreement in a manner that complies with the ADA and any and all other applicable federal, state and local disability rights legislation. The Dealer agrees not to discriminate against disabled persons in the provision of services, benefits or activities provided under this Agreement and further agrees that any violation of this prohibition on the part of the Dealer, its employees, agents or assigns will constitute a material breach of this Agreement.
(j) Sunshine Ordinance . In accordance with San Francisco Administrative Code Section 67.24(e), contracts, contractors’ bids, responses to solicitations and all other records of communications between the Commission or the City and persons or firms seeking contracts, shall be open to inspection immediately after a contract has been awarded. Nothing in this provision

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requires the disclosure of a private person or organization’s net worth or other proprietary financial data submitted f or qualification for a contract or other benefit until and unless that person or organization is awarded the contract or benefit. Information provided which is covered by this paragraph will be made available to the public upon request. (k) Requiring Minimum Compensation for Covered Employees. (i) The Dealer agrees to comply fully with and be bound by all of the provisions of the Minimum Compensation Ordinance (“MCO”), as set forth in San Francisco Administrative Code Chapter 12P (“Chapter 12P”), including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 12P are incorporated herein by reference and made a part of this Agreement as though fully set forth. The text of the MCO is available on the web at www.sfgov.org/olse/mco. A partial listing of some of the Dealer’s obligations under the MCO is set forth in this Section. The Dealer is required to comply with all the provisions of the MCO, irrespective of this listing of obligations in this Section.
(ii) The MCO requi res the Dealer to pay the Dealer’s employees a minimum hourly gross compensation wage rate and to provide minimum compensated and uncompensated time off. The minimum wage rate may change from year to year and the Dealer is obligated to keep informed of the then -current requirements. Any subcontract entered into by the Dealer shall require the subcontractor to comply with the requirements of the MCO and shall contain contractual obligations substantially the same as those set forth in this Section. It is the Dealer’s obligation to ensure that any subcontractors of any tier under this Agreement comply with the requirements of the MCO. If any subcontractor under this Agreement fails to comply, City may pursue any of the remedies set forth in this Section against the Dealer.
(iii) The Dealer shall not take adverse action or otherwise discriminate against an employee or other person for the exercise or attempted exercise of rights under the MCO. Such actions, if taken within 90 days of the exercise or attempt ed exercise of such rights, will be rebuttably presumed to be retaliation prohibited by the MCO. (iv) The Dealer shall maintain employee and payroll records as required by the MCO. If the Dealer fails to do so, it shall be presumed that the Dealer paid no more than the minimum wage required under State law.
(v) The City is authorized to inspect the Dealer’s job sites and conduct interviews with employees and conduct audits of the Dealer. (vi) The Dealer’s commitment to provide the Minimum Compensation is a material element of the City’s consideration for this Agreement. The City in its sole discretion shall determine whether such a breach has occurred. The City and the public will suffer actual damage that will be impractical or extremely difficult to determine if the Dealer fails to comply with these requirements. The Dealer agrees that the sums set forth in Section 12P.6.1 of the MCO as liquidated damages are not a penalty, but are reasonable estimates of the loss that the City and the public will incur for the Dealer’s noncompliance.

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The procedures governing the assessment of liquidated damages shall be those set forth in Section 12P.6.2 of Chapter 12P.
(vii) The Dealer understands and agrees that if it fails to comply with the requirements of the MCO, the City shall have the right to pursue any rights or remedies available under Chapter 12P (including liquidated damages), under the terms of the contract, and under applicable law. If, within 30 days after receiving written notice of a breach of this Agreement for violating the MCO, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Dealer fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, the City shall have the right to pursue any rights or remedies available under applicable law, including those set forth in Section 12P.6(c) of Chapter 12P. Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to the City.
(viii) The Dealer represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the MCO. (ix) The City may conduct random audits of the Dealer. Random audits shall be (A) noticed in advance in writing; (B) limited to ascertaining whether Covered Employees are paid at least the minimum compensation required by the MCO; (C) accomplished through an examination of pertinent records at a mutually agreed upon time and location within ten days of the written notice; and (D) limited to one audit of the Dealer every two years for the duration of this Agreement. Nothing in this Agreement is intended to preclude the City from investigating any report of an alleged violation of the MCO.
(l) Requiring Health Benefits for Covered Employees . Unless exempt, the Dealer agrees to comply fully with and be bound by all of the provisions of the Health Care Accountability Ordinance (“HCAO”), as set forth in San Francisco Administrative Code Chapter 12Q, including the remedies provided, and implementing regulations, as the same may be amended from time to time. The provisions of Chapter 12Q are incorporated herein by reference and made a part of this Agreement as though fully set forth herein. The text of the HCAO is available on the web at http://www.sfgov.org/lwlh.htm. Capitalized terms used in this Section and not defined in this Agreement shall have the meanings assigned to such terms in Chapter 12Q. (i) For each Covered Employee, the Dealer shall provide the appropriate health benefit set forth in Section 12Q.3 of the HCAO. If the Dealer chooses to offer the health plan option, such health plan shall meet the minimum standards set forth by the San Francisco Health Commission.
(ii) Notwithstanding the above, if the Dealer is a small business as defined in Section 12Q.3(d) of the HCAO, it shall have no obligation to comply with part (i) above. (iii) The Dealer’s failure to comply with the HCAO shall constitute a material breach of this Agreement. The City shall notify the Dealer if such a breach has occurred.

If, within 30 days after receiving City’s written notice of a breach of this Agreement for

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violating the HCAO, the Dealer fails to cure such breach or, if such breach cannot reasonably be cured within such period of 30 days, the Dealer fails to commence efforts to cure within such period, or thereafter fails diligently to pursue such cure to completion, City shall have the right to pursue the remedies set forth in Section 12Q.5(f)(1-5). Each of these remedies shall be exercisable individually or in combination with any other rights or remedies available to City.
(iv) Any subcontract entered into by the Dealer shall require the subcontractor to comply with the requirements of the HCAO and shall contain contractual obligations substantially the same as those set forth in this Section. The Dealer shall notify City’s Office of Contract Administration when it enters into such a subcontract and shall certify to the Office of Contract Administration that it has notified the subcontractor of the obligations under the HCAO and has imposed the requirements of the HCAO on subcontractor through the subcontract. The Dealer shall be responsible for its subcontractors’ compliance with this Chapter. If a subcontractor fails to comply, the City may pursue the remedies set forth in this Section against the Dealer based on the subcontractor’s failure to comply, provided that City has first provided the Dealer with notice and an opportunity to obtain a cure of the violation. (v) The Dealer shall not discharge, reduce in compensation, or otherwise discriminate against any employee for notifying City with regard to the Dealer’s noncompliance or anticipated noncomplian ce with the requirements of the HCAO, for opposing any practice proscribed by the HCAO, for participating in proceedings related to the HCAO, or for seeking to assert or enforce any rights under the HCAO by any lawful means.
(vi) The Dealer represents and warrants that it is not an entity that was set up, or is being used, for the purpose of evading the intent of the HCAO. (vii) The Dealer shall maintain employee and payroll records in compliance with the California Labor Code and Industrial Welfare Commission orders, including the number of hours each employee has worked on the City Contract. (viii) The Dealer shall keep itself informed of the current requirements of the HCAO.
(ix) The Dealer shall provide reports to the City in accordance with any reporting standards promulgated by the City under the HCAO, including reports on subcontractors and subtenants, as applicable.
(x) The Dealer shall provide City with access to records pertaining to compliance with HCAO after receiving a written request from City to do so and being provided at least ten business days to respond.
(xi) The Dealer shall allow City to inspect the Dealer’s job sites and have access to the Dealer’s employees in order to monitor and determine compliance with HCAO.

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(xii) The City may conduct random audits of the Dealer to ascertain its compliance with HCAO. The Dealer agrees to cooperate with City when it conducts such audits.
(xiii) If the Dealer is exempt from the HCAO when this Agreement is executed because its amount is less than $25,000 ($50,000 for nonprofits), but the Dealer later enters into an agreement or agreements that cause the Dealer’s aggregate amount of all agreements with City to reach $75,000, all the agreements shall be thereafter subject to the HCAO. This obligation aris es on the effective date of the agreement that causes the cumulative amount of agreements between the Dealer and the City to be equal to or greater than $75,000 in the fiscal year.
(m) Prohibition on Political Activity with City Funds. In accordance with San Francisco Administrative Code Chapter 12.G, the Dealer may not participate in, support, or attempt to influence any political campaign for a candidate or for a ballot measure (collectively, “Political Activity”) in the performance of the services provi ded under this Agreement. The Dealer agrees to comply with San Francisco Administrative Code Chapter 12.G and any implementing rules and regulations promulgated by the City’s Controller. The terms and provisions of Chapter 12.G are incorporated herein by this reference. In the event the Dealer violates the provisions of this section, the City may, in addition to any other rights or remedies available hereunder, (i) terminate this Agreement, and (ii) prohibit the Dealer from bidding on or receiving any ne w City contract for a period of two (2) years. The Controller will not consider the Dealer’s use of profit as a violation of this section.
(n) Graffiti Removal. Graffiti is detrimental to the health, safety and welfare of the community in that it promotes a perception in the community that the laws protecting public and private property can be disregarded with impunity. This perception fosters a sense of disrespect of the law that results in an increase in crime; degrades the community and leads to urban blight; is detrimental to property values, business opportunities and the enjoyment of life; is inconsistent with the City’s property maintenance goals and aesthetic standards; and results in additional graffiti and in other properties becoming the target of graffiti unless it is quickly removed from public and private property. Graffiti results in visual pollution and is a public nuisance. Graffiti must be abated as quickly as possible to avoid detrimental impacts on the City and its residents, and to prevent the further spread of graffiti.

The Dealer shall remove all graffiti from any real property owned or leased by such Dealer in the City and County of San Francisco within forty eight (48) hours of the earlier of such Dealer’s (i) discovery or notific ation of the graffiti or (ii) receipt of notification of the graffiti from the Department of Public Works. This Section is not intended to require any Dealer to breach any lease or other agreement that it may have concerning its use of the real property. The term “graffiti” means any inscription, word, figure, marking or design that is affixed, marked, etched, scratched, drawn or painted on any building, structure, fixture or other improvement, whether permanent or temporary, including by way of example only and without limitation, signs, banners, billboards and fencing surrounding construction sites, whether public or private, without the consent of the owner of the property or the owner’s authorized agent, and which is visible from the public right-of-way. “Graffiti” shall not include: (A) any sign or banner that is authorized by, and in compliance with, the applicable requirements of the San Francisco Public Works Code, the

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San Francisco Planning Code or the San Francisco Building Code; or (B) any mural or other painting or marking on the property that is protected as a work of fine art under the California Art Preservation Act (California Civil Code Sections 987 et seq.) or as a work of visual art under the Federal Visual Artists Rights Act of 1990 (17 U.S.C. Section 101 et seq.).

Any failure of the Dealer to comply with this Section of this Agreement shall constitute a material breach of this Agreement.
(o) Food Service Waste Reduction Requirements . The Dealer agrees to comply fully with and be bound by all of the provisions of the Food Service Waste Reduction Ordinance, as set forth in San Francisco Environment Code Chapter 16, including the remedies provided, and implementing guidelines and rules. The provisions of Chapter 16 are incorporated herein by reference and made a part of this Agreement as though fully set forth. This provision is a material term of this Agreement. By entering into this Agreement, the Dealer agrees that if it breaches this provision, the City will suffer actual damages that will be impractical or extremely difficult to determine; further, the Dealer agrees that the sum of one hundred dollars ($100) liquidated damages for the first breach, two hundred dollars ($200) liquidated damages for the second breach in the same year, and five hundred dollars ($500) liquidated damages for subsequent breaches in the same year is reasonable estimate of the damage that the City will incur based on the violation, established in light of the circumstances existing at the time this Agreement w as made. Such amount shall not be considered a penalty, but rather agreed monetary damages sustained by the City because of such Dealer’s failure to comply with this provision. (p) Preservative-treated Wood Containing Arsenic . The Dealer may not purchase preservative-treated wood products containing arsenic in the performance of this Agreement unless an exemption from the requirements of Chapter 13 of the San Francisco Environment Code is obtained from the Department of the Environment under Section 1304 of the Code. The term “preservative-treated wood containing arsenic” shall mean wood treated with a preservative that contains arsenic, elemental arsenic, or an arsenic copper combination, including, but not limited to, chromated copper arsenate preservative, ammoniacal copper zinc arsenate preservative, or ammoniacal copper arsenate preservative. The Dealer may purchase preservative- treated wood products on the list of environmentally preferable alternatives prepared and adopted by the Department of the Environment. This provision does not preclude the Dealer from purchasing preservative-treated wood containing arsenic for saltwater immersion. The term “saltwater immersion” shall mean a pressure-treated wood that is used for construction purposes or facilities that are partially or totally immersed in saltwater.
(q) Nondisclosure of Private Information. The Dealer agrees to comply fully with and be bound by all of the provisions of Chapter 12M of the San Francisco Administrative Code (the “Nondisclosure of Private information Ordinance ”), including the remedies provided. The provisions of the Nondisclosure of Private Information Ordinance are incorporated herein by reference and made a part of this Agreement as though fully set forth. Capitalized terms used in this section and not defined in this Agreement shall have the meanings assigned to such terms in the Nondisclosure of Private Information Ordinance. Consistent with the requirements of the Nondisclosure of Private Information Ordinance, the Dealer agrees to all of the following:

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(i) Neither the Dealer nor any of its Subcontractors shall disclose Private Information obtained from the City in the performance of this Agreement to any other Subcontractor, person, or other entity, unless one of the following is true:
(1) the disclosure is authorized by this Agreement;
(2) the Dealer received advance written approval from the Contracting Department to disclose the information; or
(3) the disclosure is required by law or judicial order. (ii) Any disclosure or use of Private Information authorized by this Agreement shall be in accordance with any conditions or restrictions stated in this Agreement. Any disclosure or use of Private Information authorized by a Contracting Department shall be in accordance with any conditions or restrictions stated in the approval. (iii) Private Information shall mean any information that: (1) could be used to identify an individual, including without limitation, name, address, social security number, medical information, financial information, date and location of birth, and names of relatives; or (2) the law forbids any person from disclosing. (iv) Any failure of the Bark to comply with the Nondisclosure of Private Information Ordinance shall be a material breach of this Agreement. In such an event, in addition to any other remedies available to it under equity or law, the City may terminate this Agreement, debar the Dealer, or bring a false claim action against the Dealer. (r) Proprietary or Confidential Information of City. The Dealer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential) (collectively, “Representatives”), (b) to the extent required or requested by any regulatory authority (including by any self -regulatory having jurisdiction or claiming to have jurisdiction over the Dealer or its Representatives), (c) to the extent required by applicable laws, rule, judicial order or regulations or by any subpoena or similar legal process, (d) to any other party to this Agreement, (e) in connection with the exercise of any remedies hereunder or any suit, action or proceeding relating to this Agreement or the enforcement of rights here under, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights or obligations under this Agreement or (ii) any actual or prospective counterparty (or its advisors) to any swap or derivative transaction relating to the City and its obligations, (g) with the consent of the City or (h) to the extent such Information (i) is or becomes publicly available other than as a result of a breach of this Section by the Dealer or its Representatives (ii) becomes available to the Dealer or its Representatives on a nonconfidential basis from a source other than the City, (iii) has been or is subsequently independently conceived or developed by the Dealer or its Representatives without reference to the Information or (iv) was within the Dealer or its Representatives’ possession prior to its disclosure by or on behalf of the City to the Dealer or its

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Representatives’ pursuant hereto. For the purposes of this Section, “ Information” means all information received from the City relating to the City or its business, other than any such information that is available to the Dealer on a nonconfidential basis prior to disclosure by t he City; provided that, in the case of information received from the City after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.
(s) Submi
tting False Claims; Monetary Penalties . Pursuant to San Francisco Administrative Code Section 21.35, any contractor, subcontractor or consultant who submits a false claim shall be liable to the City for three times the amount of damages which the City sustains because of the false claim. A contractor, subcontractor or consultant who submits a false claim shall also be liable to the City for the costs, including attorneys’ fees, of a civil action brought to recover any of those penalties or damages, and may be liable to the City for a civil penalty of up to $10,000 for each false claim. A contractor, subcontractor or consultant will be deemed to have submitted a false claim to the City if the contractor, subcontractor or consultant: (i) knowingly presents or causes to be presented to an officer or employee of the City a false claim or request for payment or approval; (ii) knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the City; (iii) conspires to defraud the City by getting a false claim allowed or paid by the City; (iv) knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the City; or (v) is a beneficiary of an inadvertent submission of a false claim to the City, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the City within a reasonable time after discovery of the false claim. (t) Subcontracting. Except as otherwise provided in this Agreement, the Dealer is prohibited from subcontracting this Agreement or any part of it unless such subcontracting is first approved by City in writing. Neither party shall, on the basis of this Agreement, contract on behalf of or in the name of the other party. An agreement made in violation of this provision shall confer no rights on any party and shall be null and void.
(u) Non-Waiver of Rights . The omission by either party at any time to enforce any default or right reserved to it, or to require performance of any of the terms, covenants, or provisions hereof by the other party at the time designated, shall not be a waiver of any such default or right to which the party is entitled, nor shall it in any way affect the right of the party to enforce such provisions thereafter.
(v) City a Third Party Beneficiary . The City is hereby designated as a third party beneficiary for the purpose of enforcing all of the obligations of the Dealer contained in this Exhibit A to this Agreement.

4887-6902-7162.1

OFFERING MEMORANDUM
DATED JULY [_], 2022
Ratings: See “RATINGS” herein

Public Utilities Commission
of the City and County of San Francisco
Commercial Paper Notes
(Water Series, Proposition E)
$100,000,000
Tax Exempt Subseries A-1 and
Taxable Subseries A-1-T
$200,000,000
Tax Exempt Subseries A-2 and
Taxable Subseries A-2-T
$100,000,000
Tax Exempt Subseries A-3 and
Taxable Subseries A-3-T

The Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Water Series, Proposition E), Tax Exempt Subseries A -1, A -2 and A -3 (the “Subseries A -1 Notes, ” the “Subseries A -2 Notes ” and the “ Subseries A -3 Notes, ” respectively, and collectively, the “Tax-Exempt CP Notes”) and Taxable Subseries A-1-T, A-2-T and A-3-T (the “Subseries A-1-T Notes,” the “Subseries A-2-T Notes” and the “Subseries A-3-T Notes,” respectively, and collectively, the “ Taxable CP Notes” and, together with the Tax -Exempt CP Notes, the “ CP Notes”) are special obligations of the Public Utilities Commission of the City and County of San Francisco (the “Commission”), payable solely from and secured by a pledge of Available Water Enterprise Revenues (as def ined herein).

The Commission (i) has entered into a reimbursement agreement with Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”) , pursuant to which SMBC has issued an irrevocable direct -pay letter of credit for the account of the Commission supporting payment of principal and interest on maturing Subseries A -1 Notes and maturing Subseries A -1-T Notes, (ii) has entered into a reimbursement agreement with SMBC, pursuant to which SMBC has issued an irrevocable direct-pay letter of credit for the account of the Commission supporting payment of principal and interest on maturing Subseries A -2 Notes and maturing Subseries A -2-T Notes, and (iii) has entered into a reimbursement agreement with Barclay s Bank PLC (“Barclays”), pursuant to which Barclays has issued an irrevocable direct -pay letter of credit for the account of the Commission supporting payment of principal and interest on maturing Subseries A-3 Notes and maturing Subseries A-3-T Notes.

If SMBC or Barclays fails to make payment under its applicable letter of credit, the Commission makes no representation, and no assurance can be given, that the Commission would have sufficient funds on hand and available to make the corresponding payment of principal and interest on the CP Notes. See “THE CP NOTES—Security for the CP Notes; CP Notes are Limited Obligations.” Prospective investors should therefore base their investment decisions, insofar as it relates to the creditworthiness of a Subs eries of Commercial Paper Notes, solely on the credit of the applicable Bank, rather than the Commission.

The CP Notes are payable from Available Water Enterprise Revenues (as defined herein) and, as described herein, are payable o n a subordinate basis to the Commission ’s outstanding water revenue bonds and other Senior Debt (which includes, the CWSRF Loan ) (as such terms are defined herein). See “THE COMMISSION AND THE WATER ENTERPRISE—Senior and Parity Indebtedness. ”

THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT LIABLE, AND NEITHER THE

CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE CP NOTES OR THE INTEREST THEREON.

The CP Notes have not been registered under the Securities Act of 1933, as am ended, in reliance upon an exemption from registration contained in such Act.

DEALERS FOR ALL SERIES:

BofA Merrill Lynch J.P. Morgan Wells Fargo

TABLE OF CONTENTS

Page

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INTRODUCTION ....................................................................................................................................... 1 THE COMMISSION AND THE WATER ENTERPRISE ......................................................................... 3 The Commission ............................................................................................................................. 3 The Water Enterprise ...................................................................................................................... 4 Sources of Revenue......................................................................................................................... 5 Senior and Parity Indebtedness ....................................................................................................... 6 Investment Policy ........................................................................................................................... 7 Water Enterprise Financial and Operating Data ............................................................................. 7 THE CP NOTES .......................................................................................................................................... 7 Authorization and Certain Terms of the CP Notes ......................................................................... 7 Security for the CP Notes; CP Notes are Limited Obligations ....................................................... 8 SMBC A-1 LETTER OF CREDIT AND SMBC A-1 REIMBURSEMENT AGREEMENT (Relating to Series A-1 Notes) ...................................................................................................... 10 SMBC A-1 Letter of Credit .......................................................................................................... 11 SMBC A-1 Reimbursement Agreement Events of Default .......................................................... 12 SMBC A-1 Reimbursement Agreement Remedies ...................................................................... 15 Related Covenants ........................................................................................................................ 15 SMBC A-2 LETTER OF CREDIT AND SMBC A-2 REIMBURSEMENT AGREEMENT (Relating to Series A-2 Notes) ...................................................................................................... 15 SMBC A-2 Letter of Credit .......................................................................................................... 16 SMBC A-2 Reimbursement Agreement Events of Default .......................................................... 17 SMBC A-2 Reimbursement Agreement Remedies ...................................................................... 19 Related Covenants ........................................................................................................................ 20

BARCLAYS LETTER OF CREDIT AND BARCLAYS REIMBURSEMENT AGREEMENT (Relating to Series A-3 Notes) ...................................................................................................... 20 Barclays Letter of Credit ............................................................................................................... 21 Barclays Reimbursement Agreement Bail-In Acknowledgement and Agreement ....................... 22 Barclays Reimbursement Agreement Events of Default .............................................................. 22 Barclays Reimbursement Agreement Remedies ........................................................................... 24 Related Covenants ........................................................................................................................ 25 THE BANKS ............................................................................................................................................. 26 Sumitomo Mitsui Banking Corporation, acting through its New York Branch ........................... 26 Barclays Bank PLC ....................................................................................................................... 27 RATINGS .................................................................................................................................................. 27 ABSENCE OF LITIGATION ................................................................................................................... 28 THE DEALERS ......................................................................................................................................... 28 TAX MATTERS ........................................................................................................................................ 28 Tax-Exempt CP Notes .................................................................................................................. 28 Information Reporting and Backup Withholding ......................................................................... 29 State Tax Exemption ..................................................................................................................... 29 Taxable CP Notes ......................................................................................................................... 29 Future Developments .................................................................................................................... 30 Table of Contents
(continued)
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LEGAL MATTERS ................................................................................................................................... 30 RELATIONSHIPS AMONG THE PARTIES ........................................................................................... 30 ADDITIONAL INFORMATION .............................................................................................................. 30

APPENDIX A BOOK-ENTRY SYSTEM FOR CP NOTES

APPENDIX B FORM OF OPINION OF BOND COUNSEL

APPENDIX C WATER ENTERPRISE FINANCIAL STATEMENTS

4887-6902-7162.1
In the opinion of Norton Rose Fulbright US LLP, San Francisco, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions and assuming compliance with certain covenants in the documents pertaining to the Tax- Exempt CP Notes and requirements of the Internal Revenue Code of 1986, as amended, as described herein, interest on the Tax- Exempt CP Notes is not includable in the gross income of the owners of the Tax-Exempt CP Notes for federal income tax purposes.

In the further opinion of Bond Counsel, interest on the Tax- Exempt CP Notes is not treated as an item of tax preference for purposes of the federal alternative minimum tax. In the further opinion of Bond Counsel, interest on the CP Notes is exempt from personal income taxes imposed by the State of California. See “TAX MATTERS” herein.

OFFERING MEMORANDUM
Public Utilities Commission
of the City and County of San Francisco
Commercial Paper Notes
(Water Series, Proposition E)
$100,000,000
Tax Exempt Subseries A-1 and
Taxable Subseries A-1-T
$200,000,000
Tax Exempt Subseries A-2 and
Taxable Subseries A-2-T
$100,000,000
Tax Exempt Subseries A-3 and
Taxable Subseries A-3-T

INTRODUCTION
The purpose of this Offering Memorandum is to provide certain general information in connection with the issuance and sale of the Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Water Series, Proposition E), Tax Exempt Subseries A -1, A -2 and A -3 (the “Subseries A -1 Notes,” the “Subseries A -2 Notes ” and the “ Subseries A -3 Notes, ” respectively, and collectively, the “Tax-Exempt CP Notes”) and Taxable Subseries A-1-T, A-2-T and A-3-T (the “Subseries A-1-T Notes, ” the “Subseries A -2-T Notes ” and the “ Subseries A -3-T Notes, ” respectively, and collectively, the “Taxable CP Notes”). The Subseries A -1 Notes, the Subseries A -2 Notes, the Subseries A-3 Notes, the Subseries A-1-T Notes, the Subseries A -2-T Notes and the Subseries A -3-T Notes are referred to herein collectively as the “CP Notes” and each as a “Subseries.” The Subseries A -1 Notes and Subseries A -1-T Notes are referred to herein collectively as the “Series A-1 Notes,” the Subseries A-2 Notes and Subseries A-2-T Notes are referred to herein collectively as the “Series A-2 Notes,” and the Subseries A-3 Notes and Subseries A-3-T Notes are referred to herein collectively as the “Series A-3 Notes.”
Capitalized terms used below and not defined shall have the respective meanings given such terms in the Issuing and Paying Agent Agreement, dated as of July 1, 2017, as amended by the First Amendment to Issuing and Paying Agent Agreement, dated as of May 18, 2021 (together, the “Series A-1 Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as issuing and paying agent (the “Issuing and Paying Agent”) and the Commission, the Issuing and Paying Agent Agreement, dated as of June 1, 2019 (the “ Series A-2 Issuing and Paying Agent Agreement”), by and between the Issuing and Paying Agent and the Commission, or the Issuing and Paying Agent Agreement, dated as of July 1, 2017 ( the “Series A-3 Issuing and Paying

2 4887-6902-7162.1
Agent Agreement” and, together with the Series A-1 Issuing and Paying Agent Agreement and the Series A-2 Issuing and Paying Agent Agreement, the “Issuing and Paying Agent Agreements”), by and between the Issuing and Paying Agent and the Commission, as applicable.

If not defined below or in the Issuing and Paying Agent Agreements, capitalized terms used herein shall have the meanings given such terms in the Amended and Restated Indenture, dated as of August 1, 2002, as amended and supplemented from time to time (the “ Water Bonds Indenture ”), between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) , as successor trustee, providing for the issuance from time to time of the Commission’s Water Revenue Bonds or other obligations on parity with the Water Revenue Bonds, designated as the “Water Revenue Bonds,” as provided therein, as the same may be supplemented, amended and modified from time to time.

Sources of Payment. The CP Notes are payable solely from Available Water Enterprise Revenues (as defined herein) of the Public Utilities Commission of the City and County of San Francisco (the “Commission”) and are payable on a subordinate basis to the Commission’s outstanding Water Revenue Bonds and any future Water Revenue Bonds or other Senior Debt (as defined herein).

The general fund of the City and County of San Francisco (the “City”) is not liable, and neither the credit nor the taxing power of the City is pledged, for the payment of the CP Notes, or the interest thereon.

Issuance of CP Notes. The CP Notes are issued pursuant to the Charter of the City (the “Charter”), Proposition E, adopted by the voters of the City in November 2002, various ordinances and resolutions of the City and the Commission, and the Issuing and Paying Agent Agreements.

The Commission may issue, and have outstanding at any one time, an aggregate principal amount of Series A-1 Notes not to exceed $100,000,000, an aggregate principal amount of Series A-2 Notes not to exceed $200,000,000 and an aggregate principal amount of Series A-3 Notes not to exceed $100,000,000.

Credit Facilities. The Commission has covenanted pursuant to each Issuing and Paying Agent Agreement that it will maintain in effect a letter of credit or another credit or liquidity facility enabling the Commission to borrow an amount equal to the principal amount of the related Subseries of CP Notes which may be outstanding under such Issuing and Paying Agent Agreement. As described below, the Commission has arranged for a separate letter of credit or liquidity facility to be delivered for each Subseries of the CP Notes by the respective banks described below (collectively, the “Banks”). (a) Series A-1 Notes (SMBC). The Commission has entered into a Reimbursement Agreement, dated as of May 1, 2021 (the “SMBC A -1 Reimbursement Agreement” ), with Sumitomo Mitsui Banking Corporation, acting through its New York Branch (“SMBC”), pursuant to which SMBC has issued an irrevocable direct-pay Letter of Credit (the “ SMBC A-1 Letter of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Subseries A -1 Notes and maturing Subseries A-1-T Notes. The SMBC A -1 Letter of Credit, which has a Stated Expiration Date of May 16, 2025 (subject to extension or earlier termination in accordance with the terms thereof), may not be drawn on for any purpose other than as stated in the immediately preceding sentence.

See “SMBC A-1 LETTER OF CREDIT AND SMBC A-1 REIMBURSEMENT AGREEMENT.” (b) Series A-2 Notes (SMBC). The Commission has entered into a Reimbursement Agreement, dated as of June 1, 2019, as amended and supplemented by Amendment No. 1 to Reimbursement Agreement, dated as of June 15, 2022 (together, the “SMBC A-2 Reimbursement Agreement”), with SMBC, pursuant to which SMBC has issued an irrevocable direct-pay Letter of

3 4887-6902-7162.1
Credit (the “SMBC A-2 Letter of Credit”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Subseries A- 2 Notes and maturing Subseries A-2-T Notes. The SMBC A-2 Letter of Credit, which has a Stated Expiration Date of June 14, 2027 (subject to extension or earlier termination in accordance with the terms thereof), may not be drawn on for any purpose other than as stated in the immediately preceding sentence. See “ SMBC A -2 LETTER OF CREDIT AND SMBC A -2 REIMBURSEMENT AGREEMENT.”
(c) Series A-3 Notes (Barclays). The Commission has entered into a Reimbursement Agreement, dated as of July 1, 2017, as amended and supplemented by a First Amendment to Reimbursement Agreement, dated as of July 22, 2021 (together, the “Barclays Reimbursement Agreement”), with Barclays Bank PLC ( “Barclays”), pursuant to which Barclays has issued an irrevocable direct -pay Letter of Credit (the “ Barclays Letter of Credit ”) for the account of the Commission in favor of the Issuing and Paying Agent supporting the payment of the principal of and interest on maturing Subseries A-3 Notes and maturing Subseries A-3-T Notes. The Barclays Letter of Credit, which has a Stated Expiration Date of July 19, 2024 (subject to extension or earlier termination in accordance with the terms thereof), may not be drawn on for any purpose other than as stated in the immediately preceding sentence. See “BARCLAYS LETTER OF CREDIT AND BARCLAYS REIMBURSEMENT AGREEMENT” herein.

General Information About this Offering Memorandum . The information in this Offering Memorandum has been obtained from the Commission, the Banks and other sources believed to be reliable.

The references herein to the Ordinances, the Resolutions, the Issuing and Paying Agent Agreements, the SMBC A-1 Letter of Credit and SMBC A -1 Reimbursement Agreement, the SMBC A-2 Letter of Credit and SMBC A-2 Reimbursement Agreement, and the Barclays Letter of Credit and Barclays Reimbursement Agreement, do not purport to be complete or definitive, do not constitute summaries thereof, and are qualified in their entirety by reference to the provisions thereof.

The information and expressions of opinion in this Offering Memorandum are subject to change without notice after the date hereof and future use of this Offering Memorandum shall not otherwise create any implication that there has been no change in the matters referred to in this Offering Memorandum since the date hereof. The information contained herein will not typically be distributed or updated upon each new sale of CP Notes.

The CP Notes are exempt from registration under section 3(a)(2) of the Securities Act of 1933, as amended.

THE COMMISSION AND THE WATER ENTERPRISE
The Commission
The Commission, which consists of five members appointed by the Mayor of the City (the “Mayor”), is a department of the City responsible for the maintenance, operation and development of three utility enterprises: the Water Enterprise, the Wastewater Enterprise and the Power Enterprise. (a) The Water Enterprise provides retail drinking water to the City and wholesale water to customers in three other Bay Area counties.
(b) The Wastewater Enterprise, formerly known as the Clean Water Enterprise, consists of a sanitary waste and stormwater collection, treatment and disposal system for the City.

4 4887-6902-7162.1
(c) The Power Enterprise consists of power distribution facilities and a hydroelectric generating system, and provides power to City agencies, the Modesto Irrigation District, the Turlock Irrigation District and certain other customers.

Each of the Commission’s enterprises is operated and managed as a separate financial entity and separate enterprise funds are maintained for each enterprise.

No revenues from either the Wastewater Enterprise or the Power Enterprise have been pledged for payment of the CP Notes and no such revenues will be available for the repayment thereof.

The Commission operates and maintains dams and reservoirs, power generation and transmission facilities, water transmission facilities, water and wastewater treatment plants, water distribution facilities, wastewater collection facilities and power distribution facilities. The Commission’s facilities extend from the Hetch Hetchy watershed in the Sierra Nevada, across the Central Valley, over and around the southern end of San Francisco Bay and north along the San Francisco Peninsula to the City.

The Water Enterprise
[Will update again prior to posting in July]
General. The Water Enterprise is responsible for the storage, treatment and distribution of water from the Hetch Hetchy Project and various local sources in San Mateo, Santa Clara and Alameda Counties.

The Water Enterprise service area has a population of approximately 2.7 million people, of which over 800,000 live in the City and are served directly by the Water Enterprise (the “Retail Customers”). The balance of the population is served by 27 suburban wholesale customers located in the counties of San Mateo, Santa Clara and Alameda (collectively, the “Wholesale Customers”) who purchase water from the Commission pursuant to a Water Supply Agreement, dated as of July 1, 2009 (the “WSA”), by and among the City and the Wholesale Customers. The WSA sets forth a minimum purchase requirement by the Wholesale Customers, provides an assured water supply to the Wholesale Customers and establishes a formula for setting wholesale water rates. The City’s water system is unique among major American water systems because approximately two-thirds of the water delivered by the Water Enterprise is utilized outside of the City.

The Water Enterprise ’s distribution and transmission systems face great risks and challenges, including: an aging infrastructure, portions of which were built in the late 1800s and early 1900s and are approaching the end of their useful lives; seismic vulnerability and the risk of failure following a major earthquake; increased demand for water to keep pace with projected population growth within the Commission’s service area; uncertain impacts of global climate change; and changing and potentially more stringent water quality regulations.

Capital Improvement Plan.

The Water Enterprise Ten-Year Capital Plan for Fiscal Year 2023-24 to Fiscal Year 2032-33 (the “CIP”), which includes the Water Enterprise -related components of the Hetch Hetchy Water and Power Ten-Year Capital Plan, totals approximately $ 2.71 billion. The Water Enterprise ’s CIP is expected to be primarily funded from proceeds of a combination of revenue bonds, commercial paper, r evenues and the CWSRF Loan.

A major component of the CIP has been the Water System Improvement Program (“WSIP”), which is a $4.788 billion capital program. WSIP consists of 87 capital projects to repair, replace and upgrade

5 4887-6902-7162.1
critical portions of the Water Enterprise’s Regional Water System (the “Regional Water System”) and Local Water System (the “Local Water System”) to meet specific levels of service goals and objectives for seismic reliability, delivery reliability, water quality and water supply in an environmentally sustainable manner.

The Local Water System was 100% complete as of October 2020 . T he Regional Water System was approximately 99% complete as of January 1, 2021, with t he final major Regional Water System project, the $823 million Calaveras Dam Replacement Project, being completed in May 2019. It is expected that WSIP will be fully completed by February 2027.

Capital Improvement Plan Financing Program.

Revenue bonds are the primary source of financing of the CIP. Prior to 2002, revenue bonds were required to be approved by the electorate. In 2002, San Francisco voters approved Proposition E, which authorized the Commission to issue revenue bonds for improvements to the Water Enterprise with the approval of two-thirds of the City’s Board of Supervisors (the “Board”). To date, the Board has authorized the issuance of $4,758,617,508 aggregate amount of revenue bonds (including notes, loans and commercial paper in anticipation thereof) under Proposition E, of which approximately $645,108,526 remains unissued.

In 2002, San Francisco voters also approved Proposition A, which authorized the Commission to issue $1,628,000,000 in revenue bonds for improvements to the Water Enterprise, of which $128,770,000 remains unissued.

As described under “—Se nior and Parity Indebtedness” below, as of May 1, 2023, the Water Enterprise had approximately $4.459 billion aggregate principal amount of Water Revenue Bonds, the CWSRF Loan (as defined below) and DWSRF Loan (defined below) outstanding, which are senior to the CP Notes. As of the date of this Offering Memorandum, the Water Revenue Bonds have an underlying rating of “Aa2” by Moody’s Investors Service, Inc. (“Moody’s”), and an underlying rating of “AA -” by S&P Global Ratings, a division of Standard & Poor’s Financial Services LLC (“S&P”).

The CP Notes are issued pursuant to authorizations of the Board under Proposition E.

Sources of Revenue
The Water Enterprise ’s principal source of operating revenue is the sale of water to its Retail Customers and Wholesale Customers. For Fiscal Year ended June 30, 2022, the Water Enterprise had water service billings in the amount of $591.4 million, of which approximately 51.8 % was attributable to the Wholesale Customers and approximately 48.2% was attributable to the Retail Customers.

The Water Enterprise also receives revenue from other sources, which are categorized as non- operating for financial reporting purposes. Non-operating revenue includes rental income, interest earnings, capacity fees, installation fees, laboratory testing fees and miscellaneous customer penalty and processing fees.

The Commission is authorized and required under the Charter and Proposition E to set rates, fees and other charges in connection with providing the utility services under its jurisdiction, subject to rejection — within thirty days of submission — by resolution of the Board. If the Board fails to act within thirty days the rates will become effective without further action.

Wholesale Customer rates are determined based upon the Wholesale Customer ’s collective share of the Water Enterprise’s total revenue requirement. The setting of water rates by the Commission is not subject to any State or federal regulatory approval. The imposition of rates and charges by the Commission is subject to various constitutional and statutory limitations, including some requirements of Articles XIIIA,

6 4887-6902-7162.1
XIIIB, XIIIC and XIIID of the California Constitution and are subject to reduction or repeal through the initiative process as provided in Article XIIIC of the California Constitution.

Senior and Parity Indebtedness
[Will need to update further prior to posting OM]
Senior Indebtedness. As of May 1, 2023, the Commission had outstanding approximately $4.459 billion aggregate principal amount of Water Revenue Bonds (including those issued prior to Proposition E) and loans which are senior in payment priority to the CP Notes. In addition, the Commission has authorized (but not yet issued) an additional $774 million aggregate amount of Water Revenue Bonds (approximately $645 million of which is under Proposition E and approximately $129 million of which is under Proposition A).

In September 2017, the Commission entered into a Clean Water State Revolving Fund (SRF) Loan (the “CWSRF Loan”) under the low-interest-rate loan program administered by the California State Water Resources Control Board (the “SWRCB”), which provides for a $15,000,000 grant and a loan in the amount of $171,220,000, for the San Francisco Westside Recycled Water Project. In April 2023, the Commission entered into an amendment to the CWSRF Loan in order to increase the loan amount of the CWSRF Loan from $171,220,000 to $176,094,031. The CWSRF Loan is a disbursement loan, with interest on the loan accruing upon disbursement. As of March 31, 2023, the SFPUC had submitted requests for reimbursement in the amount of $145,799,713 of the CWSRF Loan. The obligation of the Commission to repay amounts borrowed under the CWSRF Loan will be secured on parity with the Water Revenue Bonds and will be senior in payment priority to the CP Notes.

In April 2022, the Commission entered into a Drinking Water State Revolving Fund (SRF) Loan (the “DWSRF Loan”) with the SWRCB, which provide s a low -interest-rate loan in the amount of $238,218,951 for the Mountain Tunnel Improvement Project (the “MTIP”), a capital project of Hetch Hetchy Water & Power. A component of the MTIP, the Flow Control Facility, is a joint asset of the Water Enterprise and Power Enterprise. The Power Enterprise will be responsible for repayment to the Water Enterprise of the DWSRF Loan debt service representing its allocable share of the cost of the “Flow Control Facility” component of the MTIP (the “Power Enterprise Portion”). Pursuant to a Memorandum of Understanding that is expected to be entered into by and between the Water Enterprise and the Power Enterprise, the Power Enterprise Portion paid by the Water Enterprise under the DWSRF Loan will be reimbursed to the Water Enterprise by the Power Enterprise. As of Ma rch 3 1, 2023, the SFPUC had submitted requests for reimbursement in the amount of $38,970,186 of the DWSRF Loan. The obligation of the Commission to repay amounts borrowed under the DWSRF Loan will be secured on parity with the Water Revenue Bonds and will be senior in payment priority to the CP Notes.

The Commission’s Water Revenue Bonds and obligations issued on parity with such Water Revenue Bonds constitute “Senior Debt” as such term is used herein.

Subject to the rate covenant and additional bonds test discussed under the caption “ THE CP NOTES—CP Notes are Limited Obligations,” there is no limitation on Commission indebtedness senior to the CP Notes in the Charter, the Resolutions, the Ordinances or the Issuing and Paying Agent Agreements.

The Commission, with majority voter approval or a two-thirds vote of the Board, may authorize additional Water Revenue Bonds or other Senior Debt the payment of which will be prior to the payment of the CP Notes.

Parity Indebtedness. The Commission has previously entered into a Revolving Credit Agreement with U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National

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Association) (“U.S. Bank”), dated as of July 25, 2017, as amended by a First Amendment to Revolving Credit Agreement, dated as of July 1, 2020, as amended by a Second Amendment to Revolving Credit Agreement, dated as of January 12, 2021, and as amended by a Third Amendment to Revolving Credit Agreement, dated as of January 7, 2022 (collectively, the “Revolving Credit Agreement”), pursuant to which Commission is permitted to borrow from U.S. Bank up to $100,000,000 prior to July 18, 2024. The direct placement obligations issued under the Revolving Credit Agreement are payable on parity with the CP Notes. Under the Revolving Credit Agreement, upon a failure by the Commission to perform or observe its covenants, a default in other specified indebtedness of the Commission, or other specified events of default, U.S. Bank could terminate its commitment and declare all amounts then outstanding to be immediately due and payable.

The direct placement obligations issued under the Revolving Credit Agreement are not offered pursuant to this Offering Memorandum.

The Commission may authorize additional indebtedness on parity with the CP Notes without notice to, or the consent of, any holder of the CP Notes.

Investment Policy
The investment policy of the City is reviewed annually and is subject to change. A copy of the City’s Annual Statement of Investment Policy can be found at http://www.sftreasurer.org/. Neither such website nor the information contained therein is incorporated herein by reference.

Water Enterprise Financial and Operating Data
The financial statements of the Water Enterprise for the Fiscal Year ended June 30, 20 22, are attached to this Offering Memorandum as APPENDIX D. Additional financial and operating data relating to the Commission and the Water Enterprise may be found in the Commission ’s most recent filings made pursuant to continuing disclosure undertakings of the Commission in connection with certain outstanding Water Revenue Bonds, which are filed with the Municipal Securities Rulemaking Board (“MSRB”) through the Electronic Municipal Market Access (“EMMA”) website. The Commission may provide supplemental information in its annual continuing disclosure report filings, and may from time to time provide voluntary notices, in its sole discretion, to provide information that may be material to investors. See “ADDITIONAL INFORMATION.”

THE CP NOTES
Authorization and Certain Terms of the CP Notes
Authority for Issuance. The CP Notes are authorized to be issued pursuant to the Charter; Proposition E, adopted by the voters of the City in November 2002; Article V of Chapter 43 of the San Francisco Administrative Code, enacted by Ordinance No. 203-98, adopted on June 8, 1998 by the Board and signed by the Mayor on June 19, 1998, as amended, to establish a procedure for the Commission to issue commercial paper notes; various ordinances adopted by the Board pursuant to Proposition E authorizing the issuance of Water Revenue Bonds (including commercial paper notes in anticipation thereof) and various resolutions adopted by the Commission providing for the issuance by the Commission of not to exceed $500,000,000 principal amount of CP Notes and related letters of credit, reimbursement agreements, credit agreements and liquidity facilities.

Pursuant to such authorizations, in addition to the CP Notes offered hereunder, the Commission has entered into a direct-purchase, Revolving Credit Agreement with U.S. Bank, pursuant to which the bank

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has agreed to loan, from time to time, up to $100,000,000 principal amount of direct placement obligations which are on parity with the CP Notes. See also “ THE COMMISSION AND THE WATER ENTERPRISE—Senior and Parity Indebtedness ” above. The direct placement obligations issued under the Revolving Credit Agreement are not offered pursuant to this Offering Memorandum.

As described herein, the Series A-1 Notes, the Series A-2 Notes and the Series A-3 Notes are issued pursuant to the terms of three separate Issuin g and Paying Agent Agreements, each entered into by the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as Issuing and Paying Agent.

The Commission may issue, and have outstanding at any one time, an aggregate principal amount of Series A -1 Notes up to $100,000,000, an aggregate principal amount of Series A -2 Notes up to $200,000,000 and an aggregate principal amount of Series A-3 Notes up to $100,000,000.

Purpose. The CP Notes are issued from time to time to finance projects associated with the Commission’s Water Enterprise or to pay maturing CP Notes issued for such purpose.

Terms of CP Notes. The CP Notes are dated the date of their original issuance, issued in book- entry form only in denominations of $100,000, and in integral multiples of $1,000 in excess of $100,000, and bear interest at separately stated interest rates not to exceed 12% per annum.

The CP Notes are fully registered notes registered in the name of Cede & Co., as registered owner and nominee for The Depository Trust Company ( “DTC”), New York, New York. Beneficial ownership interests in the CP Notes are available in book- entry form only, and purchasers of the CP Notes will not receive certificates representing their interests in the CP Notes purchased. While held in book-entry form, all payments of principal of and interest on the CP Notes will be made by wire transfer to DTC or its nominee as the sole registered owner of the CP Notes. Payments to the beneficial o wners are the responsibility of DTC and its participants. See APPENDIX A – “ BOOK-ENTRY SYSTEM FOR CP NOTES.”
Each CP Note (i) will bear interest payable at maturity at an annual rate calculated, in the case of the Tax-Exempt CP Notes, on the basis of actual days elapsed and a year of 365 or 366 days, as applicable, and, in the case of the Taxable CP Notes, on the basis of actual days elapsed and a year of 360 days, (ii) will mature not more than 270 days after its issuance date, but in no event later than the one (1) Business Days immediately preceding the termination date of the applicable Letter of Credit, (iii) will be sold at a price of not less than 100% of the principal amount thereof, and (iv) will mature on a Business Day. The CP Notes will not be subject to redemption prior to maturity. Payments of principal of and interest on maturing CP Notes will be made by the Issuing and Paying Agent directly to DTC.

As of the date of this Offering Memorandum, the Commission had issued $[_______] of CP Notes under Series A-1/A-1-T, $[________] of CP Notes under Series A-2/A-2-T and [had not issued] CP Notes under Series A-3/A-3-T.

Security for the CP Notes; CP Notes are Limited Obligations The Commission expects to reimburse SMBC and Barclays for draws made under its respective letter of credit for purposes of paying the CP Notes with the proceeds of other CP Notes until the Commission provides permanent financing for the Water Enterprise projects financed or refinanced with the CP Notes or until, from time to time, revenues of the Water Enterprise are available to pay for the CP Notes.

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Timely payment of the CP Notes may be dependent upon the availability of the funds under the SMBC A-1 Letter of Credit, the SMBC A-2 Letter of Credit, or the Barclays Letter of Credit, as applicable.

If SMBC fails to make available funds under the SMBC A-1 Letter of Credit and proceeds of refunding CP Notes are not available to pay maturing Series A-1 Notes, if SMBC fails to make available funds under the SMBC A-2 Letter of Credit and proceeds of refunding CP Notes are not available to pay maturing Series A-2 Notes, or if Barclays fails to make available funds under the Barclays Letter of Credit and proceeds of refunding CP Notes are not available to pay maturing Series A -3 Notes, the Commission makes no representation, and no assurance can be given, that the Commission would have sufficient funds on hand and available to make the corresponding payment of principal and interest on the CP Notes. See “ SMBC A-1 LETTER OF CREDIT AND SMBC A-1 REIMBURSEMENT AGREEMENT,” SMBC A-2 LETTER OF CREDIT AND SMBC A-2 REIMBURSEMENT AGREEMENT,” and “ BARCLAYS LETTER OF CREDIT AND BARCLAYS REIMBURSEMENT AGREEMENT” for a discussion of the terms of such credit facilities.

In the event of a material credit or capital impairment or the insolvency of SMBC or Barclays, there is no assurance that the respective Bank will be able to fulfill its obligations under the SMBC A-1 Letter of Credit, SMBC A-2 Letter of Credit or Barclays Letter of Credit, as applicable. The Banks are subject to regulation under various jurisdictions and to various laws governing their bankruptcy, reorganization, recovery and resolution, liquidation and/or similar proceedings. In certain jurisdictions, regulators may take actions suspending the obligation of the subject Bank to make payment under its let ter of credit or liquidity facility (as the case may be), without notice to or the consent of Holders of the CP Notes, including the right in certain jurisdictions to convert the Bank ’s obligation to equity. If regulators exercise these varying powers, the holders of the CP Notes may not be able to sell their CP Notes and the value of their CP Notes might be affected. See also “ BARCLAYS LETTER OF CREDIT AND BARCLAYS REIMBURSEMENT AGREEMENT—Barclays Reimbursement Agreement Bail -In Acknowledgement and Agreement.”
Pursuant to the Issuing and Paying Agent Agreements, the Commission has pledged to the payment of the CP Notes Available Water Enterprise Revenues as and to the extent provided therein. The CP Notes will be payable solely from the proceeds of CP Notes or Available Water Enterprise Revenues, as provided in the Issuing and Paying Agent Agreements.

THE GENERAL FUND OF THE CITY AND COUNTY OF SAN FRANCISCO IS NOT

LIABLE, AND NEITHER THE CREDIT NOR THE TAXING POWER OF THE CITY AND COUNTY OF SAN FRANCISCO IS PLEDGED, FOR THE PAYMENT OF THE CP NOTES. “Available Water Enterprise Revenues,” m
eans all of the moneys in the Revenue Fund (as defined
in the Water Bonds Indenture and comprised primarily of Water Enterprise Revenues and earnings thereon) remaining after the payments required by the provisions of the Water Bonds Indenture relating to :
(i) operation and maintenance expenses; (ii) pension charges and certain compensation insurance and outside reserve funds with respect to the employees of the Commission ; (iii) principal, interest, reserve , sinking fund and other mandatory funds created to secure revenue bonds or other evidences of indebtedness issued by the Commission to fund or refund the acquisition, construction or extension of the Water Enterprise or related facilities owned, operated or controlled by the Commission ( including payments on the Commission’s outstanding Water Revenue Bonds and other Senior Debt and principal, interest, reserve, and sinking fund payments on other bonds of the Commission hereafter issued and payable on a basis senior to the CP Notes ); (iv) principal and interest on general obligation bonds issued by the City for Water Enterprise purposes; (v) reconstruction and replacement as determined by the Commission or as required by any Water Enterprise revenue bond ordinance duly adopted and approved; and (vi) the acquisition of land, real property or interest in real property for, and the acquisition, construction, enlargement and improvement of, new and existing buildings, structures, facilities, equipment, appliances and other property

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necessary or convenient to the development or improvement of such utility owned, controlled, or operated by the Commission; and for any other lawful purpose of the Commission including the transfer of surplus funds pursuant to the Charter.
“Water Enterprise Revenues” i s defined as all gross revenues of the Water Enterprise, including all charges received for and all o ther income and receipts derived by the Commission or the City from the operation of the Water Enterprise, or arising from the Water Enterprise, including connection and installation charges, but excluding (i) any money received by or for the account of the City or the Commission from the levy or collection of taxes, (ii) monies received from the State of California (the “State”) and the United States of America and required to be deposited in restricted funds, (iii) refundable deposits made to establish credit, (iv) advances and contributions made to the Commission or the City to be applied to construction, (v) monies required to be paid to the State or the United States of America pursuant to agreements of the City or the Commission, (vi) monies received from insurance proceeds or the sale of or by the taking by or under the threat of eminent domain of all or any part of the Water Enterprise (which moneys will be received and disposed of pursuant to the Water Bonds Indenture), (vii) proceeds of Water Revenue Bonds or proceeds from loans obtained by the Commission, (viii) moneys or securities received by the City or the Commission as gifts or grants, the use of which is restricted by the donor or the grantor, (ix) sewer service fees or charges, (x) any surcharge imposed by or upon the direction of any joint powers agency or other governmental entity, other than the Commission, the City or any department or agency of the City, whether or not collected by the Commission, the City or any department or agency of the City, for the purpose of financing improvements to the facilities comprising the Water Enterprise.

The term “Water Enterprise Revenues” also incl
udes (i) all interest, profits or other income derived
from the deposit or investment of any moneys in any fund or account established under the Water Bonds Indenture (excluding any rebate fund and any escrow fund pledged for the payment of defeased bonds) or in any fund or account of the Water Enterprise and legally available to pay debt service on the Commission’s outstanding water revenue bonds, and notes or other evidences of indebtedness payable from Water Enterprise Revenues on a parity with the outstanding water revenue bonds , and (ii) any other moneys, proceeds and other amounts that the Commission determines should be Water Enterprise Revenues under the Water Bonds Indenture.

Under each Issuing and Paying Agent Agreement, the Commission has covenanted to establish, ma
intain and collect rates and charges with respect to the Water Enterprise sufficient (after giving effect to the expected receipt of refinancing proceeds from the sale of CP Notes or Water Revenue Bonds) to pay the CP Notes, the Bank Notes and all other obligations payable from the Water Enterprise.

The Commission has also covenanted not to issue any additional bonds, notes or other obligations for borrowed money payable from or secured by the revenues of the Water Enterprise unless the Commission certifies that either (i) actual revenues for the most recently completed fiscal year or (ii) projected revenues for the next three fiscal years following the issuance of such additional bonds, notes or other indebtedness, are or will be sufficient to satisfy the rate covenant, assuming the issuance of such additional bonds, notes or other indebtedness to pay any maturing CP Notes.

SMBC A-1 LETTER OF CREDIT AND
SMBC A-1 REIMBURSEMENT AGREEMENT
(RELATING TO SERIES A-1 NOTES)
The following description is a summary of certain provisions of the SMBC A-1 Letter of Credit and the SMBC A-1 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the SMBC A-1 Letter of Credit or the SMBC A-1 Reimbursement Agreement. Investors should obtain and review copies of the SMBC A-1 Letter of Credit and the SMBC A-

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1 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading shall have the meanings assigned to them in the SMBC A -1 Reimbursement Agreement or the SMBC A-1 Letter of Credit.

The Commission has entered into the SMBC A-1 Reimbursement Agreement with SMBC pursuant to which SMBC issued an irrevocable direct-pay letter of credit (the “SMBC A-1 Letter of Credit”) for the account of the Commission supporting the payment of principal of and interest due thereon at maturity or upon acceleration of Series A-1 Notes. The Series A-1 Notes are issued pursuant to the terms of the Issuing and Paying Agent Agreement, dated as of July 1, 2017, as amended by the First Amendment to Issuing and Paying Agent Agreement, dated as of May 18, 2021 (together, the “Series A -1 Issuing and Paying Agent Agreement”), each by and between U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as issuing and paying agent (the “Series A-1 Issuing and Paying Agent”), and the Commission.

SMBC A-1 Letter of Credit
The SMBC A-1 Letter of Credit is an irrevocable transferable obligation of SMBC and supports the payment of principal of a nd interest on maturing Series A -1 Notes only. The SMBC A -1 Letter of Credit may not be drawn on for any other purpose. The SMBC A-1 Letter of Credit was issued in an amount equal to the maximum principal amount of $100,000,000 of the Series A -1 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a 360-day year (the “Stated Amount”).

The Series A-1 Issuing and Paying Agent is authorized to draw on the SMBC A-1 Letter of Credit in an aggregate amount not to exceed the Stated Amount of the SMBC A -1 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the SMBC A-1 Letter of Credit, in one or more Drawings, payable as set forth in the SMBC A -1 Letter of Credit on any Business Day, by presentation of the appropriate certifications for the following purposes (presentation of any such certificate being a “Drawing”), in each case an aggregate amount not exceeding the Stated Amount of the SMBC A-1 Letter of Credit:
(a) with respect to the payment at maturity of the principal of and interest at maturity on Series A -1 Notes issued in accordance with the Series A -1 Issuing and Paying Agent Agreement),
(b) with respect to the payment at maturity of the principal of and interest to maturity on Series A-1 Notes issued in accordance with the Series A-1 Issuing and Paying Agent Agreement that otherwise mature on or after the date that the Series A-1 Issuing and Paying Agent receives the Final Drawing Notice from SMBC,
(c) with respect to a payment of the principal of and interest due upon acceleration of certain of the Series A-1 Notes issued in accordance with the Series A-1 Issuing and Paying Agent Agreement, or
(d) with respect to the payment of the principal of and interest due upon acceleration of all outstanding Series A -1 Notes issued in accordance with the Series A -1 Issuing and Paying Agent Agreement (the “Final Acceleration Drawing”).

Upon SMBC honoring any Drawing, the Stated Amount and the amount available to be drawn under the SMBC A -1 Letter of Credit for subsequent Drawings will be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount and the amounts from time to tim e available to be drawn under the SMBC A -1 Letter of Credit (except in the case of the

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Final Acceleration Drawing or a Drawing resulting from the delivery of the Final Drawing Notice) will be increased when and to the extent, but only when and to the extent, (a) (i) of transfer by the Series A -1 Issuing and Paying Agent to SMBC on the date such Drawing is honored of proceeds of Series A-1 Notes issued on such date or (ii) the Series A- 1 Issuing and Paying Agent receives written notice from SMBC that SMBC has been reimbursed by or on behalf of the Commission for any amount drawn under the SMBC A -1 Letter of Credit and
(b) that the Series A-1 Issuing and Paying Agent has not received from SMBC a No- Issuance Notice.

Upon SMBC’s honoring the Final Acceleration Drawing, the Stated Amount shall be permanently reduced to zero and the Stated Amount shall no longer be reinstated.

The SMBC A-1 Letter of Credit will expire at 4:00 P.M., New York City time, on the date (the earliest of such dates to occur is referred to herein as the “Termination Date”) which is the earliest of:
(a) May 16, 2025 (the “Stated Expiration Date”) or such later date as is specified by SMBC in a written notice to the Series A-1 Issuing and Paying Agent, (b) the later of (i) the date on which SMBC receives written notice from the Series A- 1 Issuing and Paying Agent that an Alternate Facility as specified in such notice has been substituted for the SMBC A-1 Letter of Credit in accordance with the Series A-1 Issuing and Paying Agent Agreement and (i) the effective date of such Alternate Facility (after SMBC honors any properly presented and conforming Drawing on or prior to such date), (c) the date on which SMBC receives written notice from the Series A -1 Issuing and Paying Agent that there are no longer any Series A-1 Notes Outstanding within the meaning of the Series A-1 Issuing and Paying Agent Agreement, nor does the Commission intend to issue any additional Series A-1 Notes under the Series A-1 Issuing and Paying Agent Agreement and that the Series A-1 Issuing and Paying Agent elects to terminate the SMBC A-1 Letter of Credit, (d) the earlier of (i) the 15th calendar day after the date on which the Series A-1 Issuing and Paying Agent receives the Final Drawing Notice and (i) the date on which the Drawing resulting from the delivery of the Final Drawing Notice is honored under the SMBC A-1 Letter of Credit, and
(e) the date on which the Final Acceleration Drawing is honored under the SMBC A- 1 Letter of Credit.

SMBC A-1 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Def ault” under the SMBC A-1 Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation, or (ii) any Obligation (other than a Reimbursement Obligation) and, in such case, such failure shall continue for three Business Days;

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(b) any representation or warranty made by or on behalf of the Commission in the SMBC A-1 Reimbursement Agreement or in any other Basic Document or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered;
(c) the Commission defaults in the due performance or observance of certain covenants set forth in the SMBC A-1 Reimbursement Agreement; (d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the SMBC A-1 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of 30 days after the occurrence thereof;
(e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any su bstantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in paragraph (f) below;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (e)(v) above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged or any such proceeding continues undismissed or unstayed for a period of 30 or more days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction; (h) any material provision of the SMBC A-1 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture at any time for any reason ceases to be valid and binding on the Commission for any reason or is declared by any court or other Governmental Authority with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission or by a Governmental Authority with competent juris diction, or the Commission denies that it has any further liability under the SMBC A-1 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture;
(i) dissolution or termination of the existence of the Commission;

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(j) the Commission (i) defaults on the payment of the principal of or interest on any Water Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Water Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Water Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which is to permit (determined without regard to whether any notice is required) any such Water Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Water Enterprise Debt;
(k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Water Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, ma ndatory redemption or mandatory tender of such Debt (other than Water Enterprise Debt); (l) any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 is entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a period of 30 days; (m) (i) the Commission defaults in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same is not cured within any applicable cure period or (ii) any “event of default” under any Basic Document (as defined respectively therein) occurs;
(n) a ruling, assessment, notice of deficien cy or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-1 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-1 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Moody’s or S&P downgrades its long-term unenhanced rating of any Senior Debt of the Commission to below Baa2 (or its equivalent), or BBB (or its equivalent), respectively, or suspended or withdrawn its rating of the same; or
(p) the passage of any Law has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the SMBC A-1 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the SMBC A-1 Reimbursement Agreement or any of the other Basic Documents.

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SMBC A-1 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the SMBC A -1 Reimbursement Agreement, SMBC may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the SMBC A-1 Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediately due and payable, whereupon the same will be immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “ —SMBC A-1 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by SMBC in writing); or
(b) issue a No-Issuance Notice (the effect of which will be as provided in the SMBC A-1 Reimbursement Agreement), reduce the Stated Amount of the SMBC A -1 Letter of Credit to the amount of the then outstanding Series A-1 Notes supported by the SMBC A-1 Letter of Credit plus a corresponding amount of interest coverage reduce the Stated Amount of the SMBC A -1 Letter of Credit as the then outstanding Series A -1 Notes are paid, and terminate the SMBC A -1 Letter of Credit when no Series A-1 Notes remain outstanding; or (c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the SMBC A -1 Letter of Credit to occur on the 15th calendar day after the date of receipt thereof by the Series A-1 Issuing and Paying Agent); or (d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

Related Covenants
Under the Series A -1 Issuing and Paying Agent Agreement, the Commiss ion has covenanted to maintain in effect the SMBC A-1 Letter of Credit or an Alternate Facility meeting the requirements of the Series A-1 Issuing and Paying Agent Agreement at all times that CP Notes are outstanding thereunder. The Commission has further covenanted that if it is unable to obtain a commitment for an Alternate Facility at least 90 days prior to the Expiration Date, it will use its best efforts, to the extent permitted by law, to endeavor to refinance such outstanding CP Notes or Bank Notes, as the case may be.

The Commission will deliver written notice of a proposed Alternate Facility to the Series A- 1 Issuing and Paying Agent, the related Bank, the City and each Dealer not less than 45 days prior to the substitution date. The Series A-1 Issuing and Paying Agent will deliver written notice of such substitution to the registered Holders of such Series A-1 CP Notes at least 30 days prior to the substitution date.

SMBC A-2 LETTER OF CREDIT AND
SMBC A-2 REIMBURSEMENT AGREEMENT
(RELATING TO SERIES A-2 NOTES)
The following description is a summary of certain provisions of the SMBC A-2 Letter of Credit and the SMBC A-2 Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the SMBC A-2 Letter of Credit or the SMBC A-2 Reimbursement Agreement. Investors should obtain and review copies of the SMBC A-2 Letter of Credit and the SMBC A- 2 Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized

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terms appearing under this heading shall have the meanings assigned to them in the SMBC A -2 Reimbursement Agreement or the SMBC A-2 Letter of Credit.

The Commission has entered into the SMBC A -2 Reimbursement Agreement with SMBC, pursuant to which SMBC issued an irrevocable direct-pay letter of credit (the “SMBC A-2 Letter of Credit”) for the account of the Commission supporting the payment of principal of and interest due thereon at maturity or upon acceleration of Series A-2 Notes. The Series A-2 Notes are issued pursuant to the terms of the Issuing and Paying Agent Agreement, dated as of June 1, 2019 (the “Series A-2 Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as issuing and paying agent (the “Series A-2 Issuing and Paying Agent”), and the Commission.

SMBC A-2 Letter of Credit
The SMBC A-2 Letter of Credit is an irrevocable transferable obligation of SMBC and supports the payment of principal o f and interest on maturing Series A -2 Notes only. The SMBC A -2 Letter of Credit may not be drawn on for any other purpose. The SMBC A-2 Letter of Credit was issued in an amount equal to the maximum principal amount of $200,000,000 of the Series A -2 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a 360-day year (the “Stated Amount”).

The Series A-2 Issuing and Paying Agent is authorized to draw on the SMBC A-2 Letter of Credit in an aggregate amount not to exce ed the Stated Amount of the SMBC A -2 Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the SMBC A-2 Letter of Credit, in one or more Drawings, payable as set forth in the SMBC A -2 Letter of Credit on any Business Day, by presentation of the appropriate certifications for the following purposes (presentation of any such certificate being a “ Drawing”), in each case an aggregate amount not exceeding the Stated Amount of the SMBC A-2 Letter of Credit:
(a) with respect to the payment at maturity of the principal of and interest at maturity on Series A -2 Notes issued in accordance with the Series A -2 Issuing and Paying Agent Agreement),
(b) with respect to the payment at maturity of the principal of and interest to maturity on Series A-2 Notes issued in accordance with the Series A-2 Issuing and Paying Agent Agreement that otherwise mature on or after the date that the Series A-2 Issuing and Paying Agent receives the Final Drawing Notice from SMBC,
(c) with respect to a payment of the principal of and interest due upon acceleration of certain of the Series A-2 Notes issued in accordance with the Series A-2 Issuing and Paying Agent Agreement, or
(d) with respect to the payment of the principal of and interest due upon acceleration of all outstanding Series A -2 Notes issued in accordance with the Series A -2 Issuing and Paying Agent Agreement (the “Final Acceleration Drawing”).

Upon SMBC honoring any Drawing, the Stated Amount and the amount available to be drawn under the SMBC A -2 Letter of Credit for subsequent Drawings will be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount and the amounts from time to time available to be drawn under the SMBC A -2 Letter of Credit (except in the case of the Final Acceleration Drawing or a Drawing resulting from the delivery of the Final Drawing Notice) will be increased when and to the extent, but only when and to the extent,

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(a) (i) of transfer by the Series A -2 Issuing and Paying Agent to SMBC on the date such Drawing is honored of proceeds of Series A-2 Notes issued on such date or (ii) the Series A- 2 Issuing and Paying Agent receives written notice from SMBC that SMBC has been reimbursed by or on behalf of the Commission for any amount drawn under the SMBC A -2 Letter of Credit and
(b) that the Series A-2 Issuing and Paying Agent has not received from SMBC a No- Issuance Notice.

Upon SMBC’s honoring the Final Acceleration Drawing, the Stated Amount shall be permanently reduced to zero and the Stated Amount shall no longer be reinstated.

The SMBC A-2 Letter of Credit will expire at 4:00 P.M., New York City time, on the date (the earliest of such dates to occur is referred to herein as the “Termination Date”) which is the earliest of:
(a) June 14, 2027 (the “Stated Expiration Date”) or such later date as is specified by SMBC in a written notice to the Series A-2 Issuing and Paying Agent, (b) the later of (i) the date on which SMBC receives written notice from the Series A- 2 Issuing and Paying Agent that an Alternate Facility as specified in such notice has been substituted for the SMBC A-2 Letter of Credit in accordance with the Series A-2 Issuing and Paying Agent Agreement and ( i) the ef fective date of such Alternate Facility (after SMBC honors any properly presented and conforming Drawing on or prior to such date), (c) the date on which SMBC receives written notice from the Series A -2 Issuing and Paying Agent that there are no longer any Series A-2 Notes Outstanding within the meaning of the Series A-2 Issuing and Paying Agent Agreement, nor does the Commission intend to issue any additional Series A-2 Notes under the Series A-2 Issuing and Paying Agent Agreement and that the Series A-2 Issuing and Paying Agent elects to terminate the SMBC A-2 Letter of Credit, (d) the earlier of (i) the 15th calendar day after the date on which the Series A-2 Issuing and Paying Agent receives the Final Drawing Notice and ( i) the date on which the Drawing resulting from the delivery of the Final Drawing Notice is honored under the SMBC A-2 Letter of Credit, and
(e) the date on which the Final Acceleration Drawing is honored under the SMBC A- 2 Letter of Credit.

SMBC A-2 Reimbursement Agreement Events of Default
If any of the following events occurs, each such event will be an “Event of Default ” under the SMBC A-2 Reimbursement Agreement:
(a) the Commiss ion fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation, or (ii) any Obligation (other than a Reimbursement Obligation) and, in such case, such failure shall continue for three Business Days; (b) any representation or warranty made by or on behalf of the Commission in the SMBC A-2 Reimbursement Agreement or in any other Basic Document or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered;

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(c) the Commission defaults in the due performance or observance of certain covenants set forth in the SMBC A-2 Reimbursement Agreement; (d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the SMBC A-2 Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of 30 days after the occurrence thereof;
(e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) become insolvent or shall not pay, or be unable to pay, or admit in writing its inability to pay, its debts generally as they become due, (iii) make an assignment for the benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institute any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fail to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) take any corporate action in furtherance of any matter described in parts (i) through (v) above, or (vii) fail to contest in good faith any appointment or proceeding described in paragraph (f) below;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (e)(v) above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged or any such proceeding continues undismissed or unstayed for a period of 30 or more days; (g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction; (h) any material provision of the SMBC A-2 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture at any time for any reason ceases to be valid and binding on the Commission for any reason or is declared by any court or other Governmental Authority with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission or by a Governmental Authority with competent jurisdiction, or the Commission denies that it has any further liability under the SMBC A-2 Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Water Enterprise Debt, including without limitation, the Water Bonds Indenture;
(i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Water Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Water Enterprise Debt was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Water Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing,

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securing or relating thereto , or any other default, event of default or similar event occurs or condition exists, the effect of which is to permit (determined without regard to whether any notice is required) any such Water Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Water Enterprise Debt;
(k) the Commission (i) defaults on the payment of the principal of or interest on any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, beyond the period of grace, if any, provided in the instrument or agreement under which such Debt (other than Water Enterprise Debt) was created or incurred; or (ii) defaults in the observance or performance of any agreement or condition relating to any Debt (other than Water Enterprise Debt) aggregating in excess of $10,000,000, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which is to permit (determined without regard to whether any notice is required) any such Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Debt (other than Water Enterprise Debt); (l) any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 is entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded or unstayed for a period of 30 days; (m) (i) the Commission defaults in the due performance or observance of any material term, covenant or agreement contained in any other Basic Document and the same is not cured within any applicable cure period or (ii) any “ event of default ” under any Basic Document (as defined respectively therein) occurs;
(n) a ruling, assessment, notice of deficiency or technical advice by the Internal Revenue Service is rendered to the effect that interest on the Series A-2 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-2 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Moody’s or S&P downgrades its long-term unenhanced rating of any Senior Debt of the Commission to below Baa2 (or its equivalent), or BBB (or its equivalent), respectively, or suspended or withdrawn its rating of the same; or
(p) the passage of any Law has occurred which could reasonably be expected to have a material adverse effect on the Commission ’s ability to perform its obligations under the SM BC A-2 Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the SMBC A-2 Reimbursement Agreement or any of the other Basic Documents.

SMBC A-2 Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the SMBC A -2 Reimbursement Agreement, SMBC may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the SMBC A-2 Reimbursement Agreement or by law provided:

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(a) declare all Obligations to be immediately due and payable, whereupon the same will be immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “—SMBC A -2 Reimbursement Agreement Events of Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by SMBC in writing); or
(b) issue a No-Issuance Notice (the effect of which will be as provided in the SMBC A-2 Reimbursement Agreement), reduce the Stated Amount of the SMBC A-2 Letter of Credit to the amount of the then outstanding Series A-2 Notes supported by the SMBC A-2 Letter of Credit plus a corresponding amount of interest coverage reduce the Stated Amount of the SMBC A -2 Letter of Credit as the then outstanding S eries A-2 Notes are paid, and terminate the SMBC A -2 Letter of Credit when no Series A-2 Notes remain outstanding; or (c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the SMBC A -2 Letter of Credit to occur on the 15th calendar day after the date of receipt thereof by the Series A-2 Issuing and Paying Agent); or (d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

Related Covenants
Under the Series A -2 Issuing and Paying Agent Agreement, the Commission has covenanted to maintain in effect the SMBC A-2 Letter of Credit or an Alternate Facility meeting the requirements of the Series A-2 Issuing and Paying Agent Agreement at all times that CP Notes are outstanding thereunder. The Commission has further covenanted that if it is unable to obtain a commitment for an Alternate Facility at least 90 days prior to the Expiration Date, it will use its best efforts, to the extent permitted by law, to endeavor to refinance such outstanding CP Notes or Bank Notes, as the case may be.

The Commission will deliver written notice of a proposed Alternate Facility to the Series A-2 Issuing and Paying Agent, the related Bank, the City and each Dealer not less than 45 days prior to the substitution date. The Series A-2 Issuing and Paying Agent will deliver written notice of such substitution to the registered Holders of such Series A-2 CP Notes at least 30 days prior to the substitution date.

BARCLAYS LETTER OF CREDIT

AND BARCLAYS REIMBURSEMENT AGREEMENT
(RELATING TO SERIES A-3 NOTES)
The following description is a summary of certain provisions of the Barclays Letter of Credit and the Barclays Reimbursement Agreement. Such summary does not purport to be a complete description or restatement of the material provisions of the Barclays Letter of Credit or the Barclays Reimbursement Agreement. Investors should obtain and review copies of the Barclays Letter of Credit and the Barclays Reimbursement Agreement in order to understand all of the terms of those documents. All capitalized terms appearing under this heading “ BARCLAYS LETTER OF CREDIT AND BARCLAYS REIMBURSEMENT AGREEMENT” shall have the meanings assigned to them in the Barclays Reimbursement Agreement or the Barclays Letter of Credit.

The Commission has entered into the Barclays Reimbursement Agreement with Barclays, pursuant to which Barclays issued an irrevocable direct-pay letter of credit (the “Barclays Letter of Credit”) for the

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account of the Commission supporting the payment of principal of and interest due thereon at maturity or upon acceleration of Series A-3 Notes. The Series A-3 Notes are issued pursuant to the terms of the Issuing and Paying Agent Agreement, dated as of July 1, 2017 (the “ Series A -3 Issuing and Paying Agent Agreement”), by and between U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as issuing and paying agent (the “Series A-3 Issuing and Paying Agent”), and the Commission.

Barclays Letter of Credit
The Barclays Letter of Credit is an irrevocable transferable obligation of Barclays and supports the payment of principal of and interest on maturing Series A-3 Notes only. The Barclays Letter of Credit may not be drawn on for any other purpose. The Barclays Letter of Credit has been issued in an amount equal to the maximum principal amount of $100,000,000 of the Series A-3 Notes plus 270 days’ interest thereon at the rate of 12% per annum calculated on the basis of a year of 36 0 days (the “Stated Amount”). The Series A-3 Issuing and Paying Agent is authorized to draw on the Barclays Letter of Credit in an aggregate amount not to exceed the Stated Amount of the Barclays Letter of Credit and in accordance with the terms and conditions and, subject to the reductions and reinstatements as described therein, in amounts as set forth in the Barclays Letter of Credit, in one or more Drawings, payable as se t forth in the Barclays Letter of Credit on any Business Day, by presentation of the appropriate certifications, (i) for the payment at maturity of the principal of and interest on Series A -3 Notes or (ii) for the payment at maturity of the principal of and interest to maturity on Series A-3 Notes that otherwise mature on or after the date that the Series A -3 Issuing and Paying Agent receives a Final Drawing Notice from Barclays.

Upon Barclays honoring any Drawing, the Stated Amount and the amount available to be drawn under the Barclays Letter of Credit by the Series A-3 Issuing and Paying Agent pursuant to any subsequent Drawing shall be automatically decreased by an amount equal to the amount of such Drawing. In connection therewith, the Stated Amount shall be increased when and to the extent, but only when and to the extent (i) (A) of transfer by the Series A -3 Issuing and Paying Agent to Barclays on the date such Drawing is honored of proceeds of Series A-3 Notes issued on such date or (B) the Series A-3 Issuing and Paying Agent receives written notice from Barclays that Barclays has been reimbursed by or on behalf of the Commission for any amount drawn under the Barclays Letter of Credit by any Drawing, and (ii) that the Series A-3 Issuing and Paying Agent has not received a No-Issuance Notice from Barclays.

The Barclays Letter of Credit shall expire at the close of business of Barclays, on the date (the earliest of such date to occur referred to as the “Termination Date”) which is the earliest of:
(a) July 19, 2024 (unless extended pursuant to the terms of the Barclays Letter of Credit),
(b) the later of the date on which Barclays receives written notice from the Series A-3 Issuing and Paying Agent that an Alternate Facility (as defined in the Series A-3 Issuing and Paying Agent Agreement) has been substituted for the Barclays Letter of Credit in accordance with the Series A -3 Issuing and Paying Agent Agreement and the effective date of any such Alternate Facility (after Barclays honors any properly presented and conforming Drawing on such date), (c) the date on which Barclays receives written notice from the Series A-3 Issuing and Paying Agent that there are no longer any Series A-3 Notes Outstanding within the meaning of the Series A-3 Issuing and Paying Agent Agreement and that the Series A-3 Issuing and Paying Agent elects to terminate the Barclays Letter of Credit, and

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(d) the earlier of (a) the 15th calendar day after the date on which the Series A -3 Issuing and Paying Agent receives the Final Drawing Notice, and (b) the date on which the Drawing resulting from the delivery of the Final Drawing Notice is honored under the Barclays Letter of Credit.

Barclays Reimbursement Agreement Bail-In Acknowledgement and Agreement The Commission has acknowledged and agreed that notwithstanding any other term of the Barclays Reimbursement Agreement or any other agreement, arrangement or understanding with Barclays, any liability arising under or in connection with the Barclays Reimbursement Agreement may be subject to Bail-In Action (defined below) and the Commission accepted to be bound by the effect of:
(a) any Bail-In Action in relation to such liability, including (without limitation):
(i) a reduction, in full or in part, of any amount due in respect of any such liability;
(ii) a conversion of all or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, the Commission; and (iii) a cancellation of any such liability; and
(b) variation of any term of the Barclays Reimbursement Agreement to the ex tent necessary to give effect to Bail-In Action in relation to any such liability. “Bail-I
n Action ” means the exercise by a resolution authority of any write- down or conversion power existing from time to time (including, without limitation, any power to a mend or alter the maturity of eligible liabilities of an institution under resolution or amend the amount of interest payable under such eligible liabilities or the date on which interest becomes payable, including by suspending payment for a temporary period and together with any power to terminate and value transactions) under, and exercised in compliance with, any laws, regulations, rules or requirements in effect in the United Kingdom relating to the transposition of the Bank Recovery and Resolution Directive, as amended from time to time, including but not limited to, the Banking Act 2009 as amended from time to time, and the instruments, rules and standards created thereunder, pursuant to which the Bank’ s obligations (or those of our affiliates) can be reduced (including to zero), cancelled or converted into shares, other securities, or other obligations of the Bank or any other person.

Barclays Reimbursement Agreement Events of Default
If
any of the following events occurs, each such event will be an “Event of Default ” under the Barclays Reimbursement Agreement:
(a) the Commission fails to pay, or cause to be paid, as and when due, (i) any Reimbursement Obligation, or (ii) any Obligation (other than a Reimbursement Obligation) under the Barclays Reimbursement Agreement or under the Fee Agreement and, in such case, such failure continues for five Business Days;
(b) any representation or warranty made by or on behalf of the Commission in the Barclays Reimbursement Agreement or in any other Basic Documen t or in any certificate or statement delivered thereunder is incorrect or untrue in any material respect when made or deemed to have been made or delivered;

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(c) the Commission defaults in the due performance or observance of certain no cure period covenants set forth in the Barclays Reimbursement Agreement; (d) the Commission defaults in the due performance or observance of any other term, covenant or agreement contained in the Barclays Reimbursement Agreement or any other Basic Document and such default remains unremedied for a period of 30 days after the occurrence thereof;
(e) the Commission or the City and County of San Francisco, directly or indirectly, (i) has entered involuntarily against it an order for relief under the United States Bankruptcy Code, as amended, (ii) becomes insolvent or does not pay, or is unable to pay, or admits in writing its inability to pay, its debts generally as they become due, (iii) makes an assignment for the benefit of creditors, (iv) applies for, seeks, consents to, or acquiesces in, the appointment of a receiver, custodian, trustee, examiner, liquidator or similar official for it or any substantial part of its Property, (v) institutes any proceeding seeking to have entered against it an order for relief under the United States Bankruptcy Code, as amended, to adjudicate it insolvent, or seeking dissolution, winding up, liquidation, reorganization, arrangement, marshalling of assets, adjustment or composition of it or its debts under any law relating to bankruptcy, insolvency or reorganization or relief of debtors or fails to file an answer or other pleading denying the material allegations of any such proceeding filed against it, (vi) takes any corporate action in furtherance of any matter described in clauses (i) through (v) above, or (vii) fails to contest in good faith any appointment or proceeding described in paragraph (f) below;
(f) a custodian, receiver, trustee, examiner, liquidator or similar official is appointed for the Commission or the City and County of San Francisco or any substantial part of its Property, or a proceeding described in clause (v) of paragraph (e) above is instituted against the Commission or the City and County of San Francisco and such proceeding continues undischarged, undismissed and unstayed for a period of 30 days;
(g) a debt moratorium, debt restructuring, debt adjustment or comparable restriction is imposed on the repayment when due and payable of the principal of or interest on any Debt of the Commission by the Commission or any Governmental Authority with appropriate jurisdiction; (h) any material provision of the Barclays Reimbursement Agreement, the Charter or any other Basic Document at any time for any reason ceases to be valid and binding on the Commission as a result of any legislative or administrative act ion by a Governmental Authority with competent jurisdiction or shall be declared in a final non appealable judgment by any court with competent jurisdiction to be null and void, invalid, or unenforceable, or the validity or enforceability thereof is publicly contested by the Commission, or the Commission publicly contests the validity or enforceability of any obligation to pay Water Enterprise Debt, including, without limitation, the Water Bonds Indenture, or any Authorized Representative publicly repudiates or otherwise denies in writing that it has any further liability or obligation under or with respect to any provision of the Barclays Reimbursement Agreement, the Charter, any other Basic Document or any operative document related to Water Enterprise Deb t, including, without limitation, the Water Bonds Indenture;
(i) dissolution or termination of the existence of the Commission; (j) the Commission (i) defaults on the payment of the principal of or interest on any Water Enterprise Debt, beyond the period of grace, if any, provided in the instrument or agreement under which such Water Enterprise Debt was created or incurred; or (ii) defaults in the observance

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or performance of any agreement or condition relating to any Water Enterprise Debt, including, without limitation, any Bank Agreement, or contained in any instrument or agreement evidencing, securing or relating thereto, or any other default, event of default or similar event occurs or condition exists, the effect of which default, event of default or similar event or condition is to permit (determined without regard to whether any notice is required) any such Water Enterprise Debt to become immediately due and payable in full as the result of the acceleration, mandatory redemption or mandatory tender of such Water Enterprise Debt; (k) Reserved;
(l) any final, unappealable judgment or judgments, writ or writs or warrant or warrants of attachment, or any similar process or processes, in an aggregate amount not less than $10,000,000 are entered or filed against the Commission or against any of its Property and remain unpaid, unvacated, unbonded and unstayed for a period of 60 days; (m) (i) the Commission defaults in the due performance or observance of any material term, covenant or agreement contained in any other Basic Documen t and the same shall not have been cured within any applicable cure period or (ii) any “event of default” under any other Basic Document (as defined respectively therein) has occurred; (n) a ruling, assessment, notice of deficiency or technical advice by the I nternal Revenue Service is rendered to the effect that interest on the Series A-3 Notes is includable in the gross income of the holder(s) or owner(s) of such Series A-3 Notes and either (i) the Commission, after it has been notified by the Internal Revenue Service, does not challenge such ruling, assessment, notice or advice in a court of law during the period within which such challenge is permitted or (ii) the Commission challenges such ruling, assessment, notice or advice and a court of law makes a determination, not subject to appeal or review by another court of law, that such ruling, assessment, notice or advice is correctly rendered; (o) any of Fitch, Moody ’s and S&P downgrades its long term unenhanced rating of any Senior Debt of the Commission to below “A-” (or its equivalent), “A3” (or its equivalent), or “A-” (or its equivalent) respectively, and such rating remains below “A-“ (or its equivalent), “A3” (or its equivalent), or “A -“ (or its equivalent) for one hundred twenty (120) days, or suspends or withdraws its rating of the same; or
(p) the passage of any Law has occurred which could reasonably be expected to have a material adverse effect on the Commission’s ability to perform its obligations under the Barclays Reimbursement Agreement or the other Basic Documents or to result in a material adverse effect on the enforceability or validity of the Barclays Reimbursement Agreement or any of the other Basic Documents.

Barclays Reimbursement Agreement Remedies
Upon the occurrence of any Event of Default under the Barclays Reimbursement Agreement, Barclays may exercise any one or more of the following rights and remedies in addition to any other remedies provided in the Barclays Reimbursement Agreement or by law provided:
(a) declare all Obligations to be immediate ly due and payable, whereupon the same are immediately due and payable without any further notice of any kind, which notice is waived by the Commission; provided, however, that in the case of an Event of Default described in paragraph (e), (f) or (g) above under the subcaption “—Barclays Reimbursement Agreement Events of

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Default,” such acceleration will automatically occur (unless such automatic acceleration is waived by Barclays in writing); or
(b) issue a No Issuance Notice (the effect of which will be as provided in the Barclays Reimbursement Agreement), reduce the Stated Amount of the Barclays Letter of Credit to the amount of the then outstanding Series A-3 Notes supported by the Barclays Letter of Credit plus a corresponding amount of interest coverage , reduce the Stated Amount of the Barclays Letter of Credit as the then outstanding Series A -3 Notes are paid and/or terminate the Barclays Letter of Credit when no Series A-3 Notes remain outstanding; or
(c) issue the Final Drawing Notice (the effect of which will be to cause the Termination Date of the Barclays Letter of Credit to occur on the 15th calendar day after the date of receipt thereof by the Series A-3 Issuing and Paying Agent); or (d) pursue any rights and remedies it may have under the Basic Documents; or (e) pursue any other action available at law or in equity.

Related Covenants
Under the Series A -3 Issuing and Paying Agent Agreement, the Commission has covenanted to maintain in effect the related Barclays Letter of Credit or an Alternate Facility meeting the requirements of such Issuing and Paying Agent Agreement at all times that CP Notes are outstanding thereunder. The Commission has further covenanted that if it is unable to obtain a binding commitment for an Alternate Facility at least 90 days prior to the Expiration Date, it will use its best efforts, to the extent permitted by law, to endeavor to refinance such outstanding CP Notes or Bank Notes, as the case may be.

The Commission will deliver written notice of a proposed Alternate Facility to the Seri es A -3 Issuing and Paying Agent, the related Bank, the City and each Dealer not less than 45 days prior to the substitution date. The Series A-3 Issuing and Paying Agent will deliver written notice of such substitution to the registered Holders of such Series A-3 CP Notes at least 30 days prior to the substitution date.

[Remainder of page left blank intentionally]

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THE BANKS
The following information has been furnished by the Banks for use in this Offering Memorandum.

Such information has not been independently confirmed or verified by the Commission. No representation is made herein by the Commission as to the accuracy or a dequacy of such information subsequent to the date hereof, or that the information contained and incorporated herein by reference is correct. The Commission has assumed no obligation to update such information in the future, or to advise of any adverse change in the financial condition of the Banks. Investors are advised to obtain and carefully review any financial reports and other information published after the date hereof about the Banks prior to making a decision to purchase the CP Notes.

Sumitomo Mitsui Banking Corporation, acting through its New York Branch Sumitomo Mitsui Banking Corporation (Kabushiki Kaisha Mitsui Sumitomo Ginko) (“SMBC”) is a joint stock corporation with limited liability (Kabushiki Kaisha) under the laws of Japan. The registered head office of SMBC is located at 1-1-2, Marunouchi, Chiyoda-ku, Tokyo, 100-0005, Japan.

SMBC was established in April 2001 through the merger of two leading banks, The Sakura Bank, Limited and The Sumitomo Bank, Limited. In December 2002, Sumitomo Mitsui Financial Group, Inc. (“SMFG”) was established through a statutory share transfer as a holding company under which SMBC became a wholly-owned subsidiary.

SMBC is one of the world’s leading commercial banks and provides an extensive range of banking services to its customers in Japan and overseas. In Japan, SMBC accepts deposits, makes loans and extends guarantees to corporations, individuals, governments and governmental entities. It also offers financing solutions such as syndicated lending, structured finance and project finance. SMBC also underwrites and deals in bonds issued by or under the guarantee of the Japanese government and local government authorities, and acts in various administrative and advisory capacities for certain types of corporate and government bonds. Internationally, SMBC operates through a network of branches, representative offices, subsidiaries and affiliates to provide many financing products, including syndicated lending and project finance.

The New York Branch of SMBC is licensed by the New York State Department of Financial Services to conduct branch banking business at 277 Park Avenue, New York, New York, and is subject to examination by the New York State Department of Financial Services and the Federal Reserve Bank of New York.

Financial and Other Information
Audited consolidated financial statements for SMFG and its consolidated subsidiaries, as well as other corporate data, financial information and analyses, are available in English on SMFG’s website at www.smfg.co.jp/english. The information on SMFG’s website does not form part of this Offering Memorandum and is not incorporated herein by reference. SMBC does not accept any responsibility for any information contained in this Offering Memorandum other than the information relating to SMBC, acting through its New York Branch.

The delivery of this Offering Memorandum shall not create any implication that there has been no change in the affairs of SMBC since the date hereof, or that the information contained or referred to herein is correct as of any time subsequent to its date.

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Barclays Bank PLC
[TO BE UPDATED]
Barclays Bank PLC (the Bank, and together with its subsidiary undertakings, the Barclays Bank Group) is a public limited company registered in England and Wales under number 1026167. The liability of the members of the Bank is limited. It has its registered head office at 1 Churchill Place, London E14 5HP, United Kingdom (telephone number +44 (0)20 7116 1000). The Bank was incorporated on 7 August 1925 under the Colonial Bank Act 1925 and on 4 October 1971 was registered as a company limited by shares under the Companies Acts 1948 to 1967. Pursuant to The Barclays Bank Act 1984, on 1 January 1985, the Bank was re -registered as a public limited company and its name was changed from 'Barclays Bank International Limited' to 'Barclays Bank PLC'. The whole of the issued ordinary share capital of the Bank is beneficially owned by Barclays PLC. Barclays PLC (together with its subsidiary undertakings, the Group or Barclays) is the ultimate holding company of the Group. The Bank’s principal activity is to offer products and services designed for larger corporate, wholesale and international banking clients.

Barclays is a British universal bank, supporting individuals and small businesses through its consumer banking services, and larger businesses and institutions through its corporate and investment banking services. Barclays is diversified by business, geography and income type. The Group's operations include consumer banking and payments services in the UK, U.S. and Europe, as well as a top- tier global corporate and investment bank. The Group operates as two divisions – the Barclays UK (Barclays UK) division and the Barclays International (Barclays International) division – which are supported by Barclays Execution Services Limited, the Group- wide service company providing technology, operations and functional services to businesses across the Group. Barclays UK consists of UK Personal Banking, UK Business Banking and Barclaycard Consumer UK businesses. These businesses are carried on by its UK ring-fenced bank, Barclays Bank UK PLC (BBUKPLC) and certain other entities within the Group.

Barclays International consists of Corporate and Investment Bank and Consumer, Cards and Payments businesses. These businesses operate within its non-ring-fenced bank, the Bank and its subsidiaries, and by certain other entities within the Group.

The short term unsecured obligations of the Bank are rated A -1 by S&P Global Rati ngs UK Limited, P -1 by Moody's Investors Service Ltd. and F1 by Fitch Ratings Limited and the long term unsecured unsubordinated obligations of the Bank are rated A by S&P Global Ratings UK Limited, A1 by Moody's Investors Service Ltd. and A+ by Fitch Ratings Limited.

RATINGS
Moody’s has assigned its rating of “P-1” to the Series A -1 Notes, the Series A -2 Notes and the Series A-3 Notes. S&P has assigned its rating of “A-1” to the Series A-1 Notes, the Series A-2 Notes and the Series A-3 Notes.

Such ratings reflect only the views of each respective rating agency, and an explanation of the significance of such ratings, and any outlook associated with such ratings, may be obtained only from the respective rating agency. The Commission furnished to such rating agencies certain information and materials regarding the CP Notes and the Water Enterprise. In addition, each Bank furnished certain information to such rating agencies regarding such Bank and its respective Letter of Credit.

There is no assurance such ratings will continue for any given period or that they will not be revised downward or withdrawn entirely by the rating agencies, if in the judgment of such rating agencies, circumstances so warrant and, therefore, any prospective purchaser should confirm the ratings prior to purchasing the CP Notes. Any such change in or withdrawal of such ratings could have an adverse effect

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on the market price of the CP Notes. The above ratings are not recommendations to buy, sell or hold the CP Notes. The Commission has not undertaken to provide notice to the holders of the CP Notes of any change in the ratings on the CP Notes.

The ratings on a Subseries of the CP Notes may be adversely affected by a downgrade of the credit ratings of the respective Bank providing liquidity or credit support for such Subseries of CP Notes.

Although the Commission has covenanted to maintain a liquidity facility for each Subseries of CP Notes, it is not obligated to replace any liquidity or credit provider in the event of a downgrade of such Bank ’s rating. The Commission has not covenanted to provide notice to holders of the CP Notes of any downgrade of the credit ratings of the Banks.

ABSENCE OF LITIGATION
[CONFIRM] There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body pending or, to the best of the knowledge of the Commission after reasonable investigation, threatened in any way (i) seeking to restrain or enjoin the issuance, sale or delivery of any of the CP Notes or (ii) challenging the validity of the CP Notes.

THE DEALERS
The Commission has appointed BofA Securities, Inc., J.P. Morgan Securities LLC and Wells Fargo Bank, National Association, each as a non-exclusive dealer with respect to the offering and sale from time to time of the CP Notes.

Each Dealer and its respective affiliates together comprise a full service financial institution engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, principal investment, hedging, financing and brokerage activities. Each Dealer and its respective affiliates may have, from time to time, performed and may in the future perform, various investment banking services for Commission for which they received or will receive customary fees and expenses. In the ordinary course of their various business activities, each Dealer and its respective affiliates may make or hold a broad array of investments and active ly trade debt and equity securities (or related derivative securities and financial instruments which may include bank loans and/or credit default swaps) for its own account and for the accounts of its customers and may at any time hold long and short posi tions in such securities and instruments. Such investment securities activities may involve securities and instruments of the Commission.

No Dealer is acting as a financial or municipal advisor to the Commission in connection with the CP Notes.

TAX MATTERS
Tax-Exempt CP Notes
In the opinion of Norton Rose Fulbright US LLP, San Francisco, California, Bond Counsel (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions and assuming compliance by the Commission with certain covenants in the Issuing and Paying Agent Agreements, the Tax Certificate executed in connection with the issuance of the Tax Exempt CP Notes (the "Tax Certificate") and requirements of the Internal Revenue Code of 1986, as amended, regarding the use, expendit ure and investment of proceeds of the CP Notes and the timely payment of certain investment earnings to the United States, interest on the Tax Exempt CP Notes is not includable in the gross income of the owners of the Tax Exempt CP Notes for federal income tax purposes. Failure to comply with such covenants and requirements

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may cause interest on the Tax Exempt CP Notes to be included in federal gross income retroactive to the date of issuance of the Tax Exempt CP Notes.

In the further opinion of Bond Couns el, interest on the Tax Exempt CP Notes is not treated as an item of tax preference for purposes of the federal alternative minimum tax.

Ownership of, or the receipt of interest on, tax exempt obligations may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, financial institutions, property and casualty insurance companies, certain foreign corporations doing business in the United States, certain S corporations with excess passive income, individual recipients of Social Security or Railroad Retirement benefits, taxpayers that may be deemed to have incurred or continued indebtedness to purchase or carry tax-exempt obligations and taxpayers who may be eligible for the earned income tax credit. Bond Counsel expressed no opinion as to any collateral tax consequences and, accordingly, prospective purchasers of the CP Notes should consult their tax advisors as to the applicability of any such collateral tax consequences.

Certain requirements and procedures c ontained or referred to in the Issuing and Paying Agent Agreements, the Tax Certificate, or other relevant documents may be changed, and certain actions may be taken or not taken, under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of counsel nationally recognized in the area of tax-exempt obligations. Bond Counsel expresses no opinion as to the effect of any change to any document pertaining to the Tax-Exempt CP Notes or of any action taken or not taken where such change is made or action is taken or not taken without the approval of Bond Counsel or in reliance upon the advice of counsel other than Bond Counsel with respect to the exclusion from gross income of interest on the Tax- Exempt CP Notes for federal income tax purposes.

Information Reporting and Backup Withholding
Interest paid on the Tax-Exempt CP Notes is subject to information reporting in a manner similar to interest paid on taxable obligations. Although such reporting requirement does not, in and of itself, affect the excludability of interest from gross income for federal income tax purposes, such reporting requirement causes the payment of interest on the Tax -Exempt CP Notes to be subject to backup withhol ding if such interest is paid to beneficial owners that (a) are not "exempt recipients," and (b) either fail to provide certain identifying information (such as the beneficial owner's taxpayer identification number) in the required manner or have been identified by the IRS as having failed to report all interest and dividends required to be shown on their income tax returns. Generally, individuals are not exempt recipients, whereas corporations and certain other entities are exempt recipients. Amounts wit hheld under the backup withholding rules from a payment to a beneficial owner are allowed as a refund or credit against such beneficial owner's federal income tax liability so long as the required information is furnished to the IRS.

State Tax Exemption
In the further opinion of Bond Counsel, interest on the Tax- Exempt CP Notes is exempt from personal income taxes imposed by the State of California.

Taxable CP Notes
Interest on the Taxable CP Notes is not excluded from gross income for federal income tax purposes, but, in the opinion of Bond Counsel, interest on the Taxable CP notes is exempt from personal income taxes imposed by the State of California.

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Future Developments
Future or pending legislative proposals, if enacted, regulations, rulings or court decisions may cause interest on the Tax-Exempt CP Notes to be subject, directly or indirectly to federal income taxation or may cause interest on the CP Notes to be subject, directly or indirectly, to State or local income taxation or may otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest.

Legislation or regulatory actions and future or pending proposals may also affect the economic value of the federal or State tax exemption or the market value of the CP Notes. Prospective purchasers of the CP Notes should consult their tax advisors regarding pending or proposed federal or State tax legislation, regulations, rulings or litigation, as to which Bond Counsel expresses no opinion.

The form of opinion of Bond Counsel is attached hereto as Appendix B.

LEGAL MATTERS
Norton Rose Fulbright US LLP, San Francisco, California, Bond Counsel, rendered the legal opinion described in “TAX MATTERS” above, a copy of which is set forth in APPENDIX B hereto, as supplemented by a letter of Bond Counsel dated May 18, 2021, which is set forth in APPENDIX C hereto.

Bond Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in this Offering Memorandum.

Upon the issuance of each respective Letter of Credit and the entering into of each respective Reimbursement Agreement, outside counsel to the respective Banks delivered opinions relating to such respective Letters of Credit and Reimbursement Agreements.

RELATIONSHIPS AMONG THE PARTIES
[CONFIRM]
BofA Securities, Inc., one of the Dealers for the CP Notes, has entered into a distribution agreement with its affiliate Merrill Lynch, Pierce, Fenner & Smith Incorporated ( “MLPF&S”). As part of this arrangement, BofA Securities, Inc. may distribute securities to MLPF&S, which may in turn distribute such securities to investors through the financial advisor network of MLPF&S. As part of this arrangement, BofA Securities, Inc. may compensate MLPF&S as a dealer for t heir selling efforts with respect to the Notes.

BofA Securities, Inc., one of the Dealers for the CP Notes is a wholly-owned, indirect subsidiary of Bank of America Corporation. Barclays Capital Inc., one of the Dealers for the CP Notes, and Barclays Bank PLC, the provider of the Barclays Letter of Credit for the Series A -3 Notes are both wholly-owned, indirect subsidiaries of Barclays PLC.

ADDITIONAL INFORMATION
The descriptions of and references to the Issuing and Paying Agent Agreements, the SMBC A -1 Letter of Credit, the SMBC A -1 Reimbursement Agreement, the SMBC A-2 Letter of Credit, the SMBC A-2 Reimbursement Agreement, the Barclays Letter of Credit and the Barclays Reimbursement Agreement contained herein do not purport to be complete, and such references to and descriptions of such documents and all other documents and other items described herein are qualified in their entirety by reference to each such document and item. Capitalized terms used herein not otherwise defined shall have the meanings ascribed thereto in the related Issuing and Paying Agent Agreement.

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The CP Notes are exempt from the continuing disclosure requirements of Securities Exchange Commission Rule 15c2- 12, and the Commission has not undertaken to provide any secondary market information regarding the CP Notes. The Commission files official statements and continuing disclosure reports and notices with respect to its Water Revenue Bonds with the Municipal Securities Rulemaking Board (the “MSRB”). Such filings may be accessed thro ugh the Electronic Municipal Market Access (EMMA) website of the MSRB, currently located at http://emma.msrb.org. Such filings are not incorporated by reference herein.

The information and expressions of opinion in this Offering Memorandum are subject to change without notice, and neither the delivery thereof nor the delivery of this Offering Memorandum shall, under any circumstances, create any implication that there has been no change in the affairs of the Commission or such information or expressions of opinion since the date hereof.

Copies of the Resolutions, the Ordinances and the Issuing and Paying Agent Agreements, and redacted forms of the SMBC A-1 Letter of Credit, the SMBC A-1 Reimbursement Agreement, the SMBC A-2 Letter of Credit , the SMBC A -2 Reimbursement Agreement, the Barclays Letter of Credit and the Barclays Reimbursement Agreement, may be obtained from the Dealers, and may also be obtained from the Commission at the following address:

City and County of San Francisco
Public Utilities Commission
Attention: Capital Finance Director
525 Golden Gate Ave., 4th Floor
San Francisco, California 94102
Tel: (415) 551-2973
Fax. (415) 487-5258
Email: [email protected]
No dealer or other person has been authorized by the Commission to give any information or to make any representations other than those contained in this Offering Memorandum, and if given or made, such other information or representations must not be relied upon as having been authorized by the Commission.

The Dealers have provided the following sentence for inclusion in this Offering Memorandum.

The Dealers have reviewed the information in this Offering Memorandum in accordance with, and as part of, their responsibility to investors under the federal securities law as applied to the facts and circumstances of this transaction, but the Dealers do not guarantee the accuracy or completeness of such information.

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APPENDIX A

BOOK-ENTRY SYSTEM FOR CP NOTES
General
Two master CP Notes in the collective, aggregate principal amount not exceeding the $100,000,000 evidencing the Commercial Paper Notes (Water Series, Proposition E), Tax Exempt Subseries A -1 and Taxable Subseries A-1-T, respectively, have been registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), New York, NY.

Two master CP Notes in the collective, aggregate principal amount not exceeding the $200,000,000 evidencing the Commercial Pa per Notes (Water Series, Proposition E), Tax Exempt Subseries A -2 and Taxable Subseries A -2-T, respectively, have been registered in the name of Cede & Co., as nominee of DTC.

Two master CP Notes in the collective, aggregate principal amount not exceeding the $100,000,000 evidencing the Commercial Paper Notes (Water Series, Proposition E), Tax Exempt Subseries A -3 and Taxable Subseries A -3-T, respectively, have been registered in the name of Cede & Co., as nominee of DTC.

Book-Entry System
DTC will act as s ecurities depository for the CP Notes. The CP Notes will be issued as fully - registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

DTC, the world’s largest 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 meanin g of the New York Uniform Commercial Code, and a “ clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments from over 100 countries that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non- U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly ( “Indirect Participants”). DTC has a Standard & Poor ’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com.

Purchases of the CP Notes under the DTC system must be made by or through Direct Participants, which will receive a credit for the CP Notes on DTC ’s records. The ownership interest of each actual

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purchaser of each CP Note ( “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 CP Notes 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 CP Notes, except in the event that use of the book-entry system for the CP Notes is discontinued.

To facilitate subseque nt transfers, all CP Notes 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 the CP Notes with DTC a nd their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership.

DTC has no knowledge of the actual Beneficial Owners of the CP Notes; DTC ’s records reflect only the identity of the Direct Participants to whose accounts such CP Notes are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of the CP Notes may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the CP Notes. For example, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to the CP Notes unless authorized by a Direct Participant in accordance with DTC ’s Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the issuer 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 CP Notes are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Payments of principal of and interest on the CP Notes 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 Commission or the Issuing and Paying Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC (nor its nominee), the Issuing and Paying Agent, or the Commission, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal of and interest evidenced by the CP Notes to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Commission or the Issuing and Paying Agent, 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.

NEITHER THE COMMISSION NOR THE ISSUING AND PAYING AGENT WILL HAVE

ANY RESPONSIBILITY OR OBLIGATION TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS

OR BENEFICIAL OWNERS WITH RESPECT TO THE PAYMENTS OR THE PROVIDING OF NOTICE TO DTC PARTICIPANTS, INDIRECT PARTICIPANTS OR BENEFICIAL OWNERS.

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Neither the Commission nor the Issuing and Paying Agent can give any assurances that DTC, DTC Participants, Indirect Participants or others will distribute payments of principal of and interest on the CP Notes paid to DTC or its nominee, as the registered Owner, or any redemption or other notice, to the Beneficial Owners or that they will do so on a timely basis or that DTC will serve and act in a manner described in this Offering Memorandum.

Discontinuation of the Book-Entry Only System
DTC may discontinue providing its services as securities depository with respec t to the CP Notes at any time by giving reasonable notice to the Commission or the Issuing and Paying Agent. Under such circumstances, in the event that a successor securities depository is not obtained, CP Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.

The Commission may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, CP Note certificates will be printed and delivered as described in the Issuing and Paying Agent Agreement.

SO LONG AS CEDE & CO. IS THE REGISTERED OWNER OF THE CP NOTES, AS

NOMINEE OF DTC, REFERENCES HEREIN TO THE OWNERS OR HOLDERS OF THE CP NOTES (OTHER THAN UNDER THE CAPTION “TAX MATTERS” HEREIN) SHALL MEAN CEDE & CO.

AND SHALL NOT MEAN THE BENEFICIAL OWNERS OF THE CP NOTES.

NEITHER THE COMMISSION, THE ISSUING AND PAYING AGENT, NOR THE DEALERS

WILL HAVE ANY RESPONSIBILITY OR OBLIGATION TO DTC DIRECT PARTICIPANTS,

INDIRECT PARTICIPANTS, OR TO ANY BENEFICIAL OWNER WITH RESPECT TO (I) THE

ACCURACY OF ANY RECORDS MAINTAINED BY DTC, ANY DTC DIRECT PARTICIPANT, OR INDIRECT PARTICIPANT; (II) THE DELIVERY OF ANY NOTICE THAT IS PERMITTED OR

REQUIRED TO BE GIVEN TO THE OWNERS OF THE CP NOTES UNDER THE ISSUING AND PAYING AGENT AGREEMENT; (III) THE PAYMENT BY DTC OR ANY DTC DIRECT

PARTICIPANT OR INDIRECT PARTICIPANT OF ANY AMOUNT WITH RESPECT TO THE PRINCIPAL OR INTEREST DUE WITH RESPECT TO THE CP NOTES; (IV) ANY CONSENT GIVEN OR OTHER ACTION TAKEN BY DTC AS THE REGISTERED OWNER OF CP NOTES; OR (V) ANY OTHER MATTER.

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APPENDIX B

FORM OF OPINION OF BOND COUNSEL
June 15, 2022
Public Utilities Commission
of the City and County of San Francisco
San Francisco, California
Re: Public Utilities Commission of the City and County of San Francisco Commercial Paper Notes (Water Series, Proposition E),
Tax Exempt Subseries A-1, A-2 and A-3, and
Taxable Subseries A-1-T, A-2-T and A-3-T
Ladies and Gentlemen:

We have acted as bond counsel to the Public Utilities Commission of the City and County of San Francisco (the “Commission”) in connection with the issuance of the Commission’s Commercial Paper Notes (Water Series, Proposition E), Tax Exempt Subseries A-1, A-2 and A-3 (the “Subseries A-1 Notes,” “Subseries A-2 Notes” and “Subseries A -3 Notes,” respectively, and collectively, the “Tax Exempt CP Notes”) and Taxable Subseries A-1-T, A-2-T and A-3-T (the “Subseries A-1-T Notes,” “Subseries A-2-T Notes” and “Subseries A -3-T Notes,” respectively, and collectively, the “Taxable CP Notes”). The Subseries A-1 Notes, the Subseries A-1-T Notes, the Subseries A-2 Notes, the Subseries A-2-T Notes, the Subseries A-3 Notes and the Subseries A -3-T Notes are referred to herein collectively as the “CP Notes” and each as a “Subseries.”
The CP Notes are being issued pursuant to the Charter of the City and County of San Francisco (the “City”), Article V of Chapter 43 of the San Francisco Administrative Code, enacted by Ordinance No. 203-98, adopted by the Board of Supervisors of the City (the “Board”) on June 8, 1998, and signed by the Mayor of the City (the “Mayor”) on June 19, 1998, as amended by Ordinance 270- 06 adopted by the Board on October 24, 2006 and signed by the Mayor of the City on October 31, 2006, to establish a procedure for the Commission to issue commercial paper notes (as amended, the “Procedural Ordinance”), and various other ordinances and resolutions of the Board and the Commission (collectively with the Procedural Ordinance, the “Issuance Authorizations”). Each Series of Notes is issued pursuant to an Issuing and Paying Agent Agreement (each an “Issuing and Paying Agent Agreement” and collectively, the “Issuing and Paying Agent Agreements”), by and between the Commission and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association) (in such capacity, the “Issuing and Paying Agent”), (a) in the case of the Subseries A-1 Notes and the Subseries A -1-T Notes, dated as of Ju ly 1, 2017, as amended by the First Amendment to Issuing and Paying Agent Agreement, dated as of May 18, 2021; (b) in the case of the Subseries A-2 Notes and the Subseries A-2-T Notes, dated as of June 1, 2019, and (c) in the case of the Subseries A-3 Notes and the Subseries A-3-T Notes, dated as of July 1, 2017. Capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Issuing and Paying Agent Agreements.

Pursuant to each Issuing and Paying Agent Agreement, the Commission has pledged Available Water Enterprise Revenues for the payment of the principal of and interest on the Notes. Additionally, payment of the principal of and (in some cases) interest on each Subseries of Notes is supported by a letter

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of credit or dedicated liquidity facility (each such letter of credit or agreement providing such dedicated liquidity facility, a “Bank Facility”) issued or provided by a bank or other financial institution (e ach, a “Bank”).

In our capacity as bond counsel, we have reviewed the Charter of the City, the Issuance Authorizations, the Issuing and Paying Agent Agreements, the Bank Facilities and agreements related thereto, certifications of the City, the Commission, the Banks and others, opinions of the City Attorney and of counsel for the Banks, and such other documents, opinions and instruments as we have deemed necessary to render the opinions set forth herein. Our services as bond counsel were limited to such examination and to rendering the opinions set forth below.

We have assumed the genuineness of all documents and signatures presented to us. We have not undertaken to verify independently, and have assumed, the accuracy of the factual matters represented, warranted or certified in the documents. Furthermore, we have assumed compliance with all covenants and agreements contained in the Issuing and Paying Agent Agreements, including (without limitation) covenants and agreements compliance with which is necessary to assure that future actions, omissions or events will not cause interest on the Tax Exempt CP Notes to be included in gross income for federal income tax purposes.

Certain requirements and procedures contained or referred to in each Issuing and Paying Agent Agreement and other relevant documents may be changed and certain actions may be taken or not taken under the circumstances and subject to the terms and conditions set forth in such documents, upon the advice or with the approving opinion of nationally recognized bond counsel. We express no opinion as to the effect of any change to any document pertaining to the CP Notes of any Subseries or of any action taken or not taken where such change is made or action is taken or not taken without our approval or in reliance upon the advice of counsel other than our firm with respect to the exclusion from gross income of the interest on the Tax Exempt CP Notes for federal income tax purposes.

Our opinion in item two below is subject to the limitations on the i mposition of fees and charges by the Commission relating to the Water Enterprise under Articles XIIIC and XIIID of the California Constitution and to bankruptcy, insolvency, reorganization, arrangement, moratorium and other similar laws affecting creditors’ rights generally, to the application of general equitable principles (regardless of whether considered in a proceeding in equity or at law), to the exercise of judicial discretion in appropriate cases and to the limitations on legal remedies against public agencies in the State of California. In addition, we express no opinion with respect to any indemnification, contribution, penalty, choice of forum or waiver provisions contained in the Issuing and Paying Agent Agreements.

Based on and subject to the foregoing, and in reliance thereon, as of the date hereof, we are of the following opinions:

1. Each Subseries of the CP Notes has been duly authorized by the Commission in accordance with the laws of the State of California and the Issuance Authorizations.

2. Each Issuing and Paying Agent Agreement has been duly authorized, executed and delivered by the Commission and, assuming due authorization, execution and delivery by the Issuing and Paying Agent, constitutes a valid, legal and binding obligation of the Commission enforceable against the Commission in accordance with its terms. Each Issuing and Paying Agent Agreement creates a valid pledge, to secure the payment of the principal of and interest on the CP Notes of the related Subseries, of the Available Water Enterprise Revenues, as and to the extent set forth in such Issuing and Paying Agent Agreement and subject to the provisions of such Issuing and Paying Agent Agreement permitting the application thereof for the purposes and on the terms and conditions set forth therein.

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3. Each Subseries of CP Notes has been duly executed by the Commission and authenticated by the Paying Agent, and when issued and delivered against payment therefor in accordance with the terms of the related Issuing and Paying Agent A greement, will constitute the valid, legal and binding limited obligations of the Commission, payable from and secured by a pledge of Available Water Enterprise Revenues. Each Subseries of Notes will also be payable from the proceeds of refunding Notes of such Subseries or drawings or amounts available under the related Bank Facility as provided in the Issuing and Paying Agent Agreement. The general fund of the City is not liable, and the credit or taxing power of the City is not pledged, for the payment of the CP Notes or the interest thereon.

4. Under existing statutes, regulations, rulings and judicial decisions and assuming continuing compliance by the Commission with certain covenants in the Issuing and Paying Agent Agreements, the Tax Certificate executed in connection with the issuance of the Tax Exempt CP Notes and requirements of the Internal Code of 1986, as amended, regarding the use, expenditure and investment of proceeds of the Tax Exempt CP Notes and the timely payment of certain investment earnings to the United States, interest on the Tax Exempt CP Notes is not included in gross income of the owners of the Tax Exempt CP Notes for purposes of federal income taxation. Failure to comply with such covenants and requirements may cause interest on the Tax Exempt CP Notes to be included in federal gross income retroactive to the date of issuance of the Tax Exempt CP Notes.

5. Interest on the Tax Exempt CP Notes is not treated as an item of tax preference for purposes of the federal alternative minimum tax.

6. Interest on the CP Notes is exempt from personal income tax imposed by the State of California.

Other than as described herein, we have neither addressed nor are we opining on the tax consequences to any person of the investment in, or the receipt or accrual of interest on, the CP Notes.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and judicial decisions. Such opinions may be adversely affected by actions taken or events occurring, including a change in law, regulation or ruling (or in the application or official interpretation of any law, regulation or ruling) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions are taken or such events occur, and we have no obligation to update this opinion in light of any such actions or events.

Unless otherwise notified by us, you may continue to rely on this opinion to the extent that (i) there is no change in applicable state or federal law; (ii) the representations and warranties of the parties contained in the related Issuing and Paying Agent Agreement and Bank Facility and agreements related thereto, and in certain certificates delivered by authorized officers of the Commission, remain true and accurate; (iii) no amendment has been made to the related Issuing and Paying Agent Agreement or Bank Facility or the CP Notes; and ( iv) no litigation affecting the issuance or legality is pending or threatened at the time of the delivery of any such CP Notes. We undertake no obligation to determine, at any time, whether the conditions described in (i) through (iv) of the preceding sentence have been met.

This opinion is limited to the laws of the State of California and the laws of the United States.

Respectfully submitted,

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APPENDIX C

WATER ENTERPRISE FINANCIAL STATEMENTS