Agenda, first session — Coalinga City Council, August 1, 2024 (part 4 of 5)

EXHIBIT A

FORM OF SERIES A BOND

UNITED STATES OF AMERICA

STATE OF CALIFORNIA

FRESNO COUNTY

COALINGA PUBLIC FINANCING AUTHORITY
Wastewater Revenue Bond, Series 2024
(Solar Project)

INTEREST RATE MATURITY DATE ORIGINAL ISSUE DATE CUSIP
________% April 1, ____ August 29, 2024 19021E ___
REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT: _____________________________ DOLLARS The COALINGA PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority, duly organized and existing under the laws of the State of California (the “Authority”), for value received, hereby promises to pay to the Registered Owner specified above or registered assigns (the “Registered Owner”), on the Maturity Date specified above (subject to any right of prior redemption hereinafter provided for), the Principal Amount specified above, in lawful money of the United States of America, and to pay interest thereon in like lawful money from the Interest Payment Date (as hereinafter defined) next preceding the date of authentication of this Bond unless (i) this Bond is authenticated on or before an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such interest payment date, in which event it shall bear interest from such Interest Payment Date, or (ii) this Bond is authenticated on or before March 15, 2025, in which event it shall bear interest from the Original Issue Date specified above; provided, however, that if at the time of authentication of this Bond, interest is in default on this Bond, this Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment on this Bond, at the Interest Rate per annum specified above, payable semiannually on April 1 and October 1 in each year, commencing April 1, 2025 (collectively, the “Interest Payment Dates”), calculated on the basis of a 360-day year composed of twelve 30-day months.

Principal hereof and premium, if any, upon early redemption hereof are payable upon presentation and surrender hereof at the corporate trust office (the “Trust Office”) of Computershare Trust Company, N.A., as trustee (the “Trustee”), in Los Angeles, California, or such other place as designated by the Trustee. Interest hereon is payable by check of the Trustee mailed on the applicable Interest Payment Date to the Registered Owner hereof at the Registered Owner's address as it appears on the registration books of the Trustee as of the close of business on the fifteenth day of the month preceding each Interest Payment Date (a “Record Date”), or, upon written request filed with the Trustee at least five days prior to such Record Date by a Registered Owner of at least $1,000,000 in aggregate principal amount of Bonds, by wire transfer in immediately available funds to an account in the United States designated by such Registered Owner in such written request.

Exhibit A

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This Bond is not a debt of the City of Coalinga (the “City”), Fresno County, the State of California, or any of its political subdivisions, and neither the City, said County, said State, nor any of its political subdivisions, is liable hereon nor in any event shall this Bond be payable out of any funds or properties of the Authority other than the Revenues.

This Bond is one of a duly authorized issue of bonds of the Authority designated as the “Coalinga Public Financing Authority (Fresno County, California) Wastewater Revenue Bonds, Series 2024 (Solar Project)” (the “Bonds”), in an aggregate principal amount of ____________ dollars ($_________), all of like tenor and date (except for such variation, if any, as may be required to designate varying numbers, maturities, interest rates or redemption provisions) and all issued pursuant to the provisions of Article 4 of Chapter 5 of Division 7 of Title 1 (commencing with section 6584) of the California Government Code (the “Bond Law”), and pursuant to an Indenture of Trust, dated as of August 1, 2024, by and between the Authority and the Trustee (the “Indenture”), and a resolution of the Board of Directors of the Authority adopted on August 1, 2024, authorizing the issuance of the Bonds. Reference is hereby made to the Indenture (copies of which are on file at the office of the Authority) and all supplements thereto for a description of the terms on which the Bonds are issued, the provisions with regard to the nature and extent of the Revenues, and the rights thereunder of the owners of the Bonds and the rights, duties and immunities of the Trustee and the rights and obligations of the Authority thereunder, to all of the provisions of which the Registered Owner of this Bond, by acceptance hereof, assents and agrees.

The Bonds have been issued by the Authority to finance the acquisition and construction of certain improvements and facilities (the “2024 Wastewater Project”) constituting part of the City’s municipal wastewater enterprise (the “Wastewater System”).

In order to provide for the repayment of the Bonds, the Authority will sell the 2024 Wastewater Project to the City pursuant to an installment sale agreement (the “Installment Sale Agreement”), under which the City will agree to make installment payments to the Authority payable from the net revenues of the Wastewater System which payments will be calculated to be sufficient, in time and amount, to enable the Authority to pay the principal of and interest and premium (if any) on the Bonds when due and payable.

Such payments by the City under the Installment Sale Agreement will be on a parity, as to payment and security, with the City’s obligations with respect to the payment of installment payments under that a wastewater installment sale agreement, dated as of March 1, 2021, which provides for the payment of a portion of the debt service due by the Authority under its Coalinga Public Financing Authority Revenue Bonds, Series 2021A (Water and Wastewater Financing Projects) (Federally Taxable).

This Bond and the interest and premium, if any, hereon and all other Bonds and the interest and premium, if any, thereon (to the extent set forth in the Indenture) are special obligations of the Authority, and are payable from, and are secured by a charge and lien on the Revenues as defined in the Indenture, consisting primarily of installment payments to be made by the City under the Installment Sale Agreement. As and to the extent set forth in the Indenture, all of the Revenues are exclusively and irrevocably pledged in accordance with the terms hereof and the provisions of the Indenture, to the payment of the principal of and interest and premium (if any) on the Bonds.

The rights and obligations of the Authority and the owners of the Bonds may be modified or amended at any time in the manner, to the extent and upon the terms provided in the Indenture, but no such modification or amendment shall extend the fixed maturity of any Exhibit A

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Bonds, or reduce the amount of principal thereof or premium (if any) thereon, or extend the time of payment, or change the method of computing the rate of interest thereon, or extend the time of payment of interest thereon, without the consent of the owner of each Bond so affected.

The Bonds maturing on or before April 1, ____, are not subject to optional redemption prior to maturity. The Bonds maturing on or after April 1, ____, shall be subject to redemption, at the option of the City on any date on or after April 1, ____, as a whole or in part, by such maturities as shall be determined by the City, and at random within a maturity, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

The Bonds maturing on April 1, ____, are also subject to mandatory redemption from sinking account payments made by the Authority, in part at random, on April 1, ____, and on April 1 in each year thereafter to and including April 1, ____, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table:

Redemption Date Principal
(April 1) Amount
† Maturity.

As provided in the Indenture, notice of redemption shall be mailed by the Trustee by first class mail not less than thirty (30) nor more than sixty (60) days prior to the redemption date to the respective owners of any Bonds designated for redemption at their addresses appearing on the registration books of the Trustee, but neither failure to receive such notice nor any defect in the notice so mailed shall affect the sufficiency of the proceedings for redemption or the cessation of accrual of interest thereon from and after the date fixed for redemption.

If this Bond is called for redemption and payment is duly provided therefor as specified in the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.

Exhibit A

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

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

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

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

DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

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

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

Exhibit A

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IN WITNESS WHEREOF, the Coalinga Public Financing Authority, has caused this Bond to be executed in its name and on its behalf with the facsimile signature of its Executive Director and attested to by the facsimile signature of its Secretary, all as of the Original Issue Date.

COALINGA PUBLIC FINANCING

AUTHORITY
By
Executive Director
Attest:

By
Secretary

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

Dated: _________________

COMPUTERSHARE TRUST COMPANY,
N.A., as Trustee
By
Authorized Signatory
Exhibit A

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

Dated:

Signature Guaranteed:

Notice: Signature guarantee shall be made by a
guarantor institution participating in the Securities
Transfer Agents Medallion Program or in such other
guarantee program acceptable to the Trustee.

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

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STATEMENT OF INSURANCE
[TO COME]
Stradling Yocca Carlson & Rauth LLP 06/24/24
06/28/24
07/10/24

INSTALLMENT SALE AGREEMENT
Dated as of August 1, 2024
by and between
COALINGA PUBLIC FINANCING AUTHORITY, as Seller
and the
CITY OF COALINGA, as Purchaser
Relating to
$_________
Coalinga Public Financing Authority
(Fresno County, California)
Wastewater Revenue Bonds, Series 2024
(Solar Project)
-iTABLE OF CONTENTS
Page

ARTICLE I

DEFINITIONS
Section 1.1. Definitions ....................................................................................................................................................................2

ARTICLE II

COVENANTS AND REPRESENTATIONS
Section 2.1. Covenants and Representations of the City ............................................................................................................3 Section 2.2. Covenants and Representations of the Authority ..................................................................................................4

ARTICLE III
ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION OF 2024 WASTEWATER PROJECT Section 3.1. The Bonds .....................................................................................................................................................................5 Section 3.2. Plans and Specifications for the 2024 Wastewater Project ....................................................................................5 Section 3.3. Acquisition and Construction of the 2024 Wastewater Project ............................................................................5 Section 3.4. Grant of Easements .....................................................................................................................................................5 Section 3.5. Appointment of City as Agent of Authority ...........................................................................................................6

ARTICLE IV
SALE; INSTALLMENT PAYMENTS
Section 4.1. Sale ..............................................................................................................................................................................7 Section 4.2. Term 7..............................................................................................................................................................................

Section 4.3. Title ..............................................................................................................................................................................7 Section 4.4. Installment Payments .................................................................................................................................................7 Section 4.5. Application of Gross Revenues; Pledge and Application of Net Revenues .......................................................8 Section 4.6. Special Obligation of the City; Obligations Absolute ............................................................................................9 Section 4.7. Rate Covenant ............................................................................................................................................................10 Section 4.8. Limitations on Future Obligations Secured by Net Revenues ...........................................................................11 Section 4.9. Additional Payments ...............................................................................................................................................13 Section 4.10. Payments to Reserve Account ...............................................................................................................................14 Section 4.11. Payment of Rebatable Amounts ............................................................................................................................14

ARTICLE V

MAINTENANCE, TAXES, INSURANCE AND OTHER MATTERS
Section 5.1. Maintenance, Utilities, Taxes and Assessments ...................................................................................................15 Section 5.2. Operation of Wastewater System ...........................................................................................................................15 Section 5.3. Insurance ....................................................................................................................................................................15 Section 5.4. Eminent Domain .......................................................................................................................................................16 Section 5.5. Records and Accounts ..............................................................................................................................................16 Section 5.6. Continuing Disclosure ..............................................................................................................................................16 Section 5.7. Incorporation by Reference ......................................................................................................................................16

ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
Section 6.1. Disclaimer of Warranties ..........................................................................................................................................17 Section 6.2. Access to the Wastewater System ...........................................................................................................................17 Section 6.3. Release and Indemnification Covenants ................................................................................................................17 Section 6.4. Non-Liability of Authority for Wastewater System Obligations .......................................................................17

ARTICLE VII

ASSIGNMENT, SALE AND AMENDMENT
Section 7.1. Assignment by the City ............................................................................................................................................18 Section 7.2. Sale or Other Disposition of Wastewater System .................................................................................................18 Section 7.3. Amendment of Installment Sale Agreement .........................................................................................................18

ARTICLE VIII

EVENTS OF DEFAULT
Section 8.1. Events of Default Defined ........................................................................................................................................19 Section 8.2. Remedies on Default .................................................................................................................................................19 Section 8.3. No Remedy Exclusive ...............................................................................................................................................20 -iiSection 8.4. Agreement to Pay Attorneys’ Fees and Expenses ................................................................................................20 Section 8.5. No Additional Waiver Implied by One Waiver ...................................................................................................20 Section 8.6. Trustee and Bond Owners to Exercise Rights .......................................................................................................20 Section 8.7. Rights of the Owners of Parity Obligations .........................................................................................................20

ARTICLE IX

PREPAYMENT OF INSTALLMENT PAYMENTS
Section 9.1. Security Deposit ........................................................................................................................................................22 Section 9.2. Optional Prepayment ...............................................................................................................................................22 Section 9.3. Credit for Amounts on Deposit ...............................................................................................................................22

ARTICLE X

MISCELLANEOUS
Section 10.1. Further Assurances .................................................................................................................................................23 Section 10.2. Notices ......................................................................................................................................................................23 Section 10.3. Third Party Beneficiary ..........................................................................................................................................23 Section 10.4. Governing Law ........................................................................................................................................................23 Section 10.5. Binding Effect ...........................................................................................................................................................24 Section 10.6. Severability of Invalid Provisions .........................................................................................................................24 Section 10.7. Article and Section Headings and References ....................................................................................................24 Section 10.8. Execution of Counterparts .....................................................................................................................................24 Section 10.9. Waiver of Personal Liability ..................................................................................................................................24 Section 10.10. Limitation of Rights to Parties and Bond Owners ............................................................................................24 Section 10.11. Captions ..................................................................................................................................................................24

EXHIBIT A SCHEDULE OF INSTALLMENT PAYMENTS
EXHIBIT B DESCRIPTION OF THE 2024 WASTEWATER PROJECT

INSTALLMENT SALE AGREEMENT
THIS INSTALLMENT SALE AGREEMENT, dated as of August 1, 2024 (this “Installment Sale Agreement”), is by and between the COALINGA PUBLIC FINANCING AUTHORITY, a joint powers authority duly organized and existing under the laws of the State of California (the “Authority”), and the CITY OF COALINGA, a general law city and municipal corporation duly organized and existing under the laws of the State of California (the “City”), WITNESSETH:

WHEREAS, under Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Bond Law”) the Authority is authorized to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of, or for the purpose of making loans to, public entities including the City, and to provide financing for public capital improvements of public entities including the City; WHEREAS, the City has determined that, due to prevailing financial market conditions and for other reasons, it is in the best interests of the City to finance the acquisition and construction of improvements and facilities (the “2024 Wastewater Project”) to the City’s municipal wastewater enterprise (the “Wastewater System”); WHEREAS, for the purpose of raising funds necessary to provide such financial assistance to the City, the Authority proposes to authorize the issuance of its revenue bonds under the provisions of the Bond Law, designated as the Coalinga Public Financing Authority Wastewater Revenue Bonds, Series 2024 (Solar Project) (the “Bonds”), all pursuant to and secured by an indenture of trust, by and between the Authority and Computershare Trust Company, N.A., as trustee;
WHEREAS, in order to provide for the repayment of the Bonds, the Authority will sell the 2024 Wastewater Project to the City pursuant to this Installment Sale Agreement, under which the City will agree to make installment payments to the Authority payable from the net revenues of the Wastewater System which payments will be calculated to be sufficient, in time and amount, to enable the Authority to pay the principal of and interest and premium (if any) on the Bonds when due and payable;
WHEREAS, such payments by the City under the Installment Sale Agreement will be on a parity, as to payment and security, with the City’s obligations with respect to the payment of installment payments under that a wastewater installment sale agreement, dated as of March 1, 2021, which provides for the payment of a portion of the debt service due by the Authority under its Coalinga Public Financing Authority Revenue Bonds, Series 2021A (Water and Wastewater Financing Projects) (Federally Taxable); and WHEREAS, the Authority and the City have duly authorized the execution and delivery of this Installment Sale Agreement;
NOW, THEREFORE, for and in consideration of the premises and the material covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows:
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ARTICLE I

DEFINITIONS
Section 1.1. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms in this Installment Sale Agreement shall have the respective meanings specified in the Indenture.
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ARTICLE II

COVENANTS AND REPRESENTATIONS
Section 2.1. Covenants and Representations of the City. The City makes the following covenants and representations to the Authority that as of the Closing Date:
(a) The City is a general law city and municipal corporation duly organized and validly existing under the laws of the State, has full legal right, power and authority to enter into this Installment Sale Agreement and to carry out and consummate all transactions contemplated hereby, and by proper action has duly authorized the execution and delivery of this Installment Sale Agreement.
(b) The representatives of the City executing this Installment Sale Agreement are fully authorized to execute the same.
(c) This Installment Sale Agreement has been duly authorized, executed and delivered by the City, and constitutes the legal, valid and binding agreement of the City, enforceable against the City in accordance with its terms.
(d) The execution and delivery of this Installment Sale Agreement, the consummation of the transactions herein contemplated and the fulfillment of or compliance with the terms and conditions hereof, will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it, the Wastewater System or the 2024 Wastewater Project are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Installment Sale Agreement, or the financial condition, assets, improvements or operations of the Wastewater System.
(e) No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority, is necessary in connection with the execution and delivery of this Installment Sale Agreement or the consummation of any transaction herein contemplated, except as have been obtained or made and as are in full force and effect. (f) There is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending or threatened against or affecting the City or the Wastewater System which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of this Installment Sale Agreement or upon the financial condition or operation of the Wastewater System, and the City is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially and adversely affect the consummation of the transactions contemplated by this Installment Sale Agreement, or the financial conditions or operations of the Wastewater System. -4-
(g) The City has heretofore established the Wastewater Fund into which the City deposits and will continue to deposit all Gross Revenues, and which the City will maintain throughout the Term of this Installment Sale Agreement. (h) There are no outstanding bonds, notes, loans, leases, installment sale agreements or other obligations which have any security interest in or claim upon the Net Revenues, which security interest or claim is superior to or on a parity with the Installment Payments other than the 2021 Installment Sale Agreement.

Section 2.2. Covenants and Representations of the Authority. The Authority makes the following covenants and representations to the City that as of the Closing Date:
(a) The Authority is a joint powers entity, duly organized and existing under the laws of the State. The Authority has the power to enter into the transactions contemplated by this Installment Sale Agreement and to carry out its obligations hereunder. By proper action of its governing body, the Authority has been duly authorized to execute, deliver and duly perform this Installment Sale Agreement and the Indenture.
(b) To finance the 2024 Wastewater Project and the Costs of Issuance, the Authority will issue the Bonds, which will mature, bear interest and be subject to redemption as set forth in the Indenture.
(c) The Bonds will be issued under and secured by the Indenture, and pursuant thereto, certain of the Authority’s interests in this Installment Sale Agreement have been assigned to the Trustee as security for payment of a portion of the principal of, premium, if any, and interest on the Bonds.
(d) The Authority is not in default under any of the provisions of the laws of the State, which default would affect its existence or its powers referred to in subsection (a) of this Section

2.2. -5-

ARTICLE III
ISSUANCE OF BONDS; ACQUISITION AND CONSTRUCTION OF 2024

WASTEWATER PROJECT
Section 3.1. The Bonds. The Authority has authorized the issuance of the Bonds pursuant to the Indenture in the aggregate principal amount of ___________ dollars ($________). The Authority agrees that the proceeds of sale of the Bonds shall be paid to the Trustee on the Closing Date for deposit pursuant to the terms and conditions of the Indenture. The City hereby approves the Indenture, the assignment to the Trustee of the rights of the Authority assigned under and pursuant to the Indenture, and the issuance of the Bonds by the Authority under and pursuant to the Indenture.

Section 3.2. Plans and Specifications for the 2024 Wastewater Project. Before any payment is made for the 2024 Wastewater Project or any component thereof from amounts on deposit in the Project Fund, the City shall have filed with the Authority detailed Plans and Specifications relating thereto. The City may from time to time file amendments to such Plans and Specifications with the Authority, and may thereby change or modify the description of the 2024 Wastewater Project or any component thereof.

Section 3.3. Acquisition and Construction of the 2024 Wastewater Project. The Authority hereby agrees with due diligence to supervise and provide for, or cause to be supervised and provided for, the Acquisition and Construction of the 2024 Wastewater Project in accordance with Plans and Specifications, purchase orders, construction contracts and other documents relating thereto and approved by the City pursuant to all applicable requirements of law. Direct payment of the costs of the 2024 Wastewater Project shall be made from amounts on deposit in the Project Fund, pursuant to Section 3.04 of the Indenture. All contracts for, and all work relating to, the Acquisition and Construction of the 2024 Wastewater Project shall be subject to all applicable provisions of law relating to the acquisition and construction of public works by the City. The Authority expects that the Acquisition and Construction of the 2024 Wastewater Project will be completed on or before August 1, 2027; provided, however, that the failure to complete the 2024 Wastewater Project by the estimated Completion Date thereof shall not constitute an Event of Default hereunder or a grounds for termination hereof, nor shall such failure result in the diminution, abatement or extinguishment of the obligations of the City hereunder to pay the Installment Payments allocable to such 2024 Wastewater Project.

The City shall have the right from time to time in its sole discretion to amend the description of the 2024 Wastewater Project to be financed and sold by the Authority hereunder.

Upon the completion of the Acquisition and Construction of the 2024 Wastewater Project, but in any event not later than thirty (30) days following such completion, the Authorized Representative of the City shall execute and deliver to the Trustee a Written Certificate which (a) states that the Acquisition and Construction of such 2024 Wastewater Project have been substantially completed; (b) identifies the total cost of the 2024 Wastewater Project; and (c) identifies (i) the amounts, if any, to remain on deposit in the Project Fund for payment of costs of the 2024 Wastewater Project thereafter intended to be requisitioned by the Authority and (ii) the amounts to be transferred to the Bond Fund. Upon the filing with the Trustee of the final Written Requisition for payment of costs of the 2024 Wastewater Project, the Authority shall direct the Trustee to close the Project Fund.

Section 3.4. Grant of Easements. The City hereby grants to the Authority all necessary easements, rights of way and rights of access in and to all real property or interests therein now -6-
or hereafter acquired and owned by the City, as may be necessary or convenient to enable the Authority to acquire, construct and install the 2024 Wastewater Project thereon or thereabouts.

The City covenants that it will execute, deliver and record any and all additional documents as may be required to be executed, delivered and recorded to establish such easements, rights of way and rights of access.

Section 3.5. Appointment of City as Agent of Authority. The Authority hereby appoints the City as its agent to carry out all phases of the Acquisition and Construction of the 2024 Wastewater Project pursuant to and in accordance with the provisions hereof. The City hereby accepts such appointment and assumes all rights, liabilities, duties and responsibilities of the Authority regarding the Acquisition and Construction of the 2024 Wastewater Project. The Authority, or the City as agent of the Authority hereunder, shall enter into, administer and enforce all purchase orders or other contracts relating to the Acquisition and Construction of the 2024 Wastewater Project. The City shall submit Written Requisitions of the City to the Trustee from time to time pursuant to and in accordance with the provisions of Section 3.04 of the Indenture for payment, or for reimbursement to the City for payment, of all Project Costs. All contracts for, and all work relating to, the Acquisition and Construction of the 2024 Wastewater Project shall be subject to all applicable provisions of law relating to the acquisition, construction, improvement, and equipping of like property by joint powers entities and by municipal corporations.
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ARTICLE IV
SALE; INSTALLMENT PAYMENTS
Section 4.1. Sale. The Authority hereby agrees to sell the 2024 Wastewater Project to the City, and the City hereby agrees to purchase the 2024 Wastewater Project from the Authority, upon the terms and conditions set forth in this Installment Sale Agreement.

Section 4.2. Term. The Term of this Installment Sale Agreement shall commence on the Closing Date, and shall end on the date on which the City shall have paid all of the Installment Payments and all other amounts due and payable hereunder and under the Indenture. The provisions of this Section 4.2 are subject in all respects to any other provisions of this Installment Sale Agreement relating to the termination hereof with respect to the 2024 Wastewater Project or any portion thereof.

Section 4.3. Title. Upon the Completion Date of each component of the 2024 Wastewater Project, title to such component shall be deemed conveyed to and vested in the City. The Authority and the City shall execute, deliver and cause to be recorded any and all documents necessary to convey such title to the City.

Section 4.4. Installment Payments.
(a) Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, but solely from the Net Revenues and other funds pledged hereunder, as the purchase price of the 2024 Wastewater Project the aggregate principal amount of ___________ dollars ($_________), together with interest on the unpaid principal balance, payable in Installment Payments coming due and payable in the respective amounts and on each Installment Payment Date specified in Exhibit A. The Installment Payments shall be paid by the City to the Trustee, as assignee of the Authority pursuant to the Indenture, in the amounts and at the times as set forth in Section 4.5(b).
(b) Effect of Prepayment. In the event that the City prepays all remaining Installment Payments in full pursuant to Article IX, the City’s obligations under this Installment Sale Agreement shall thereupon cease and terminate, including but not limited to the City’s obligation to pay Installment Payments therefor under this Section 4.4; provided, however, that the City’s obligations to compensate and indemnify the Trustee pursuant to Sections 4.9 and 6.3 shall survive such prepayment. In the event that the City prepays the Installment Payments in part but not in whole pursuant to Section 9.2, the principal component of each succeeding Installment Payment shall be reduced as provided in such Sections, and the interest component of each remaining Installment Payment shall be reduced by the aggregate corresponding amount of interest which would otherwise be payable on the Bonds thereby redeemed pursuant to the applicable provisions of Section 4.01 of the Indenture. (c) Rate on Overdue Payments. In the event the City should fail to make any of the payments required in this Section 4.4 and Section 4.10, the payment in default shall continue as an obligation of the City until the amount in default shall have been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at the rate of ten percent (10%) per annum.
(d) Assignment. The City understands and agrees that all Installment Payments have been assigned by the Authority to the Trustee in trust, pursuant to the Indenture, for the benefit of the Owners of the Bonds, and the City hereby assents to such assignment. The Authority -8-
hereby directs the City, and the City hereby agrees, to pay to the Trustee at its Trust Office, all amounts payable by the City pursuant to this Section 4.4 and all amounts payable by the City pursuant to Article IX.

Section 4.5. Application of Gross Revenues; Pledge and Application of Net Revenues. (a) Deposits Into Wastewater Fund; Transfers to Make Installment Payments. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Wastewater Fund.

Upon receipt of Gross Revenues, the City shall segregate such amounts as shall be estimated to be required to pay all Operation and Maintenance Costs for the period beginning on such date and ending on the next anticipated date of receipt of Gross Revenues. Amounts remaining on deposit in the Wastewater Fund shall be the Net Revenues.

The City covenants and agrees that all Net Revenues will be held by the City in the Wastewater Fund in trust for the benefit of the Trustee (as assignee of the rights of the Authority hereunder) and the Bond Owners, and for the benefit of the owners of any Parity Obligations.
(b) Pledge of Net Revenues; Transfers. All of the Net Revenues are hereby irrevocably pledged, charged and assigned to the punctual payment of the Installment Payments and all Parity Obligations and, except as otherwise provided herein, the Net Revenues shall not be used for any other purpose so long as any of the Installment Payments remain unpaid. Such pledge, charge and assignment shall constitute a first lien on the Net Revenues for the payment of the Installment Payments and all Parity Obligations in accordance with the terms hereof.

On or before each Installment Payment Date, commencing March 15, 2025, the City shall withdraw from the Wastewater Fund:
(i) and transfer to the Trustee for deposit in the Bond Fund (and transfer on a parity to such similar funds or accounts established for the payment of Parity Obligations such amounts as are required for the payment thereof), an amount (other than amounts resulting from the prepayment of the Installment Payments pursuant to Article IX and other than amounts required for payment of principal of or interest on any Bonds which have matured or been called for redemption but which have not been presented for payment), equal to the interest component of the Installment Payment coming due and payable on the next succeeding Interest Payment Date, and the principal component of the Installment Payment coming due and payable on the next succeeding principal payment date, if any, provided that any amounts on deposit in the Bond Fund representing capitalized interest or on deposit in a similar fund created with respect to Parity Obligations, shall be credited against the City’s obligation to make such deposits or transfers therein,
(ii) and transfer to the Trustee for deposit in the Reserve Fund (and transfer on a parity to such similar funds or accounts established as reserve funds with respect to Parity Obligations such amounts as are required for the replenishment thereof), the amount, if any, required to increase the amount on deposit in the Reserve Fund to the Reserve Requirement and (including amounts due under the Reserve Policy), (iii) and pay all other amounts, including Additional Payments, when and as due and payable under this Installment Sale Agreement and under any agreements relating to Parity Obligations, and
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(iv) and pay all amounts when and as due and payable with respect to any Subordinate Debt.
(c) Release from Lien. Following the transfers described in paragraph (b) of this Section

4.5, excess Net Revenues shall be released from the lien of this Installment Sale Agreement and shall be available for any lawful purpose of the City.

Section 4.6. Special Obligation of the City; Obligations Absolute. The City’s obligation to pay the Installment Payments, the Additional Payments, any other amounts coming due and payable hereunder and payments with respect to Parity Obligations shall be a special obligation of the City limited solely to the Net Revenues. Under no circumstances shall the City be required to advance moneys derived from any source of income other than the Net Revenues and other sources specifically identified herein for the payment of the Installment Payments, the Additional Payments or payments with respect to Parity Obligations, nor shall any other funds or property of the City be liable for the payment of the Installment Payments, the Additional Payments or payments with respect to Parity Obligations and any other amounts coming due and payable hereunder.

The obligations of the City to make the Installment Payments, the Additional Payments and payments with respect to Parity Obligations from the Net Revenues and to perform and observe the other agreements contained herein and under agreements with respect to Parity Obligations shall be absolute and unconditional and shall not be subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trustee of any obligation to the City or otherwise with respect to the Wastewater System, whether hereunder or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until such time as all of the Installment Payments, all of the Additional Payments and all other amounts coming due and payable hereunder shall have been fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Installment Payments, Additional Payments, payments with respect to Parity Obligations or such other amounts, (b) will perform and observe all other agreements contained in this Installment Sale Agreement and under any agreements with respect to Parity Obligations, and (c) will not terminate the Term of this Installment Sale Agreement or such agreements with respect to Parity Obligations for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Wastewater System, failure to complete the Acquisition and Construction of the 2024 Wastewater Project by the estimated Completion Date thereof, sale of the Wastewater System, the taking by eminent domain of title to or temporary use of any component of the Wastewater System, commercial frustration of purpose, any change in the tax law or other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture, this Installment Sale Agreement or agreements with respect to Parity Obligations.

Nothing contained in this Section 4.6 shall be construed to release the Authority or the Trustee from the performance of any of the agreements on its part contained herein or in the Indenture, and in the event the Authority or the Trustee shall fail to perform any such agreements, the City may institute such action against the Authority or the Trustee as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in the preceding paragraph. The City may, however, at the City’s own cost and expense and in the City’s own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City’s rights -10-
hereunder, and in such event the Authority hereby agrees to cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request.

Section 4.7. Rate Covenant.
(a) The City hereby covenants that it shall fix, prescribe and collect rates, fees and charges for the services and facilities of the Wastewater System for each Fiscal Year, which after allowances for contingencies and error in the estimates, shall produce Gross Revenues at least sufficient to pay the following amounts during such Fiscal Year:
(i) All current Operation and Maintenance Costs;
(ii) The Installment Payments and all payments required with respect to other Parity Obligations;
(iii) All payments required with respect to all Subordinate Debt; (iv) All payments required for compliance with the terms of the Indenture and hereof, including amounts required to replenish the Reserve Account; (v) All payments to meet any other obligations of the City which are charges, liens or encumbrances upon, or payable from, the Gross Revenues; and (vi) any other lawful purposes of the Authority, including, but not limited to, deposits to the Rate Stabilization Fund in accordance with paragraph (c) of this Section

4.7. (b) In addition to the requirements of the foregoing subsection (a) of this Section 4.7, the City hereby covenants that it shall fix, prescribe and collect rates, fees and charges for the services and facilities of the Wastewater System for each Fiscal Year so as to yield Net Revenues during such Fiscal Year equal to at least 1.25 times the Installment Payments and all payments required with respect to all Parity Obligations in such Fiscal Year.

The City may make or permit to be made adjustments from time to time in such rates, fees and charges and may make or permit to be made such classification thereof as it deems necessary, but shall not reduce or permit to be reduced such rates, fees and charges below those then in effect unless the Gross Revenues from such reduced rates, fees and charges will at all times be sufficient to meet the requirements of this Section 4.7. (c) The "Rate Stabilization Fund," previously held and maintained by the City is hereby continued. The Rate Stabilization Fund is not pledged to secure payment of the Installment Payments. Amounts in the Rate Stabilization Fund shall be applied solely for the uses and purposes set forth in this subsection (c). The City shall have the right to deposit into the Rate Stabilization Fund from time to time any amount of funds which are legally available therefor; provided that deposits for each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the end of such Fiscal Year.

For the purpose of computing the amount of Net Revenues for any Fiscal Year for purposes of the preceding subsection (b), the City shall be permitted to transfer amounts on deposit in the Rate Stabilization Fund to the Wastewater Fund, such transfers to be made until (but not after) one hundred eighty (180) days after the end of such Fiscal Year. In addition, the -11-
City shall be permitted to withdraw amounts on deposit in the Rate Stabilization Fund for any other lawful purpose.

Notwithstanding the foregoing, amounts on deposit in the Rate Stabilization Fund and transferred to the Wastewater Fund shall be accounted separately from all other amounts deposited in the Wastewater Fund and, if such amounts shall become available to the City in accordance with subparagraph (vi) of paragraph (a) of this Section 4.7, such amounts may not again be deposited in the Rate Stabilization Fund.

Section 4.8. Limitations on Future Obligations Secured by Net Revenues. (a) No Obligations Superior to Installment Payments. In order to protect further the availability of the Net Revenues and the security for the Installment Payments and any Parity Obligations, the City hereby agrees that the City shall not, so long as the Installment Payments are not fully paid or any Parity Obligations are outstanding, issue or incur any obligations payable from Net Revenues superior to the Installment Payments or such Parity Obligations. (b) Parity Obligations. The City further covenants that it will not issue or incur any Parity Obligations unless:
(i) The City is not in default under the terms of this Installment Sale Agreement or any agreements relating to then existing Parity Obligations; (ii) (A) Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, as shown by the books of the City, shall have amounted to at least 1.25 times the maximum amount of Installment Payments and debt service on all Parity Obligations outstanding immediately subsequent to the incurring of such additional obligations coming due and payable in any future Fiscal Year.

Either or both of the following items may be added to such Net Revenues for the purpose of applying the restriction contained in this subsection (b)(ii)(A):
(1) An allowance for revenues to be derived from any additions to or improvements or extensions of the Wastewater System which, during all or any part of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, were not in service, in an amount equal to 100% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions, all as shown by the certificate or opinion of a qualified independent consultant employed by the City. (2) An allowance for any increase in the charges made for service from the Wastewater System which has become effective prior to the incurring of such Parity Obligations but which, during all or any part of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such -12-
Parity Obligations are authorized to be issued or incurred, was not in effect, in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, as shown by the certificate or opinion of a qualified independent consultant employed by the City;
or
(B) Estimated Net Revenues, based on a report of a qualified independent engineer employed by the City or a report of a qualified independent consultant employed by the City, for each of the five (5) Fiscal Years next following the earlier of (i) the end of the period during which interest on the Parity Obligations proposed to be executed is to be capitalized or, if no interest is capitalized the Fiscal Year in which the proposed Parity Obligations are to be issued, or (ii) the date on which substantially all projects financed with the proposed Parity Obligations are expected to commence operations, shall have amounted to at least 1.25 times the maximum amount of Installment Payments and debt service on all Parity Obligations outstanding immediately subsequent to the incurring of such additional obligations coming due and payable in any future Fiscal Year. If employing this option, the City must demonstrate that, at the time of such incurrence, Net Revenues for the most recent Fiscal Year, or other more recent twelve month period, were at least equal to 1.25 times the maximum amount of Installment Payments and the maximum amount of debt service on any then outstanding Parity Obligations.

Any or all of the following items may be added to such Net Revenues for the purpose of applying the restriction contained in this subsection (b)(ii)(B):
(1) An allowance for revenues that are estimated to be derived from any increase in the rates, fees and charges in effect and being charged or from any increase in the rates, fees and charges that have been approved but are not yet in place; and
(2) An allowance for revenues that are estimated to be derived from customers of the Wastewater System anticipated to be served by the additions, betterments or improvements to the Wastewater System to be financed by the proposed Parity Obligation during such five year period; and
(3) An allowance for a reduction in expenses that are estimated to be realized by the City pursuant to a contractual guarantee from the provider of energy efficiency improvements during such five year period. (iii) A reserve fund may, but shall not be required to be, funded for such Parity Obligations.
(iv) Interest with respect to such Parity Obligations shall be paid on the Installment Payment Dates.
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(v) Principal with respect to such Parity Obligations shall be paid on March 15.

Notwithstanding the foregoing provisions, there shall be no limitations on the ability of the City to issue or incur Parity Obligations at any time to refund the Installment Payments or Parity Obligations for debt service savings.
(c) Subordinate Debt. There shall be no limitations on the ability of the City to issue or incur Subordinate Debt so long as the City is not in default under the terms of this Installment Sale Agreement, any agreements relating to then existing Parity Obligations or any agreement relating to then existing Subordinate Debt; provided, that, Subordinate Debt shall not be accelerated without the prior written consent of the Municipal Bond Insurer. (d) Calculating Debt Service on Variable Rate Debt. For all purposes of Sections 4.7 and 4.8, variable rate indebtedness shall be assumed to bear interest at the highest of: (i) the actual rate on the date of calculation, or if the indebtedness is not yet outstanding, the initial rate (if established and binding); (ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation; or (iii) (A) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published), or (B) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any rate covenant measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period; provided, further that, so long as any Bonds remain outstanding or any amounts are owed to the Municipal Bond Insurer, the City shall not issue or incur indebtedness payable from or secured in whole or in part by the Net Revenues that (i) bears interest at other than fixed rates or (ii) permits the holder to tender such indebtedness for purchase prior to the stated maturity thereof, in either case without the prior written consent of the Municipal Bond Insurer.
(e) Calculating Debt Service on Swaps. If any interest rate swap agreement under which the City is obligated to make payments based on a fixed interest rate is in place with respect to variable rate Parity Obligations, the amount payable by the City with respect to such variable rate Parity Obligations shall be assumed to be the fixed rate payable under such interest rate swap agreement; provided, that, so long as any Bonds insured by the Municipal Bond Insurer remain outstanding or any amounts are owed to the Municipal Bond Insurer, the City shall not enter into any interest rate exchange agreement, cap, collar, floor ceiling or other agreement or instrument involving reciprocal payment obligations between the City and a counterparty based on interest rates applied to a notional amount of principal, without the prior written consent of the Municipal Bond Insurer.

Section 4.9. Additional Payments. In addition to the Installment Payments, the City shall pay when due all costs and expenses incurred by the Authority to comply with the provisions of the Indenture, including without limitation all Costs of Issuance (to the extent not paid from amounts on deposit in the Costs of Issuance Fund or the Project Fund), and shall pay to the Trustee upon request therefor all compensation for fees due to the Trustee and all of its costs and expenses payable as a result of the performance of and compliance with its duties hereunder or under the Indenture or any related documents, together with all amounts required to indemnify the Trustee pursuant to Section 6.3 hereof or Section 8.12 of the Indenture, and all costs and expenses of attorneys, auditors, engineers and accountants. The City shall also pay to the Municipal Bond Insurer as Additional Payments (i) all Reserve Policy Costs not paid as an Installment Payment pursuant to Section 5.06 of the Indenture, all interest on Municipal Bond Insurer Advances pursuant to Section 11.06 of the Indenture and (iii) all amounts required to -14-
indemnify the Municipal Bond Insurer pursuant to Section 11.07 of the Indenture. The rights of the Trustee and the obligations of the City under this Section 4.9 shall survive the termination of this Installment Sale Agreement and any resignation or removal of the Trustee.

Section 4.10. Payments to Reserve Account. In addition to the Installment Payments, the City shall pay to the Trustee, from Net Revenues, such amounts as shall be required to replenish the Reserve Account in the event of a draw therefrom or a valuation determines that a deficiency exists therein, all in accordance with the Indenture.

Section 4.11. Payment of Rebatable Amounts. The City agrees to furnish all information to, and cooperate fully with, the Authority and its officers, employees, agents and attorneys, in order to assure compliance with the provisions of Section 6.07(b) of the Indenture. In the event that the Authority shall determine, pursuant to Section 6.07(b) of the Indenture, that any amounts are due and payable to the United States of America thereunder and that neither the Authority nor the Trustee has on deposit an amount of available moneys (excluding moneys on deposit in the funds and accounts established for the payment of the principal of or interest or redemption premium, if any, on the Bonds) to make such payment, the Authority shall promptly notify the City of such fact. Upon receipt of any such notice, the City shall promptly pay to the Trustee from any source of legally available funds, the amounts determined by the Authority to be due and payable to the United States of America under such Section 6.07(b). -15-

ARTICLE V

MAINTENANCE, TAXES, INSURANCE AND OTHER MATTERS
Section 5.1. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Installment Sale Agreement, all improvement, repair and maintenance of the Wastewater System shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Wastewater System, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Wastewater System resulting from ordinary wear and tear.

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

The City may, at the City’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its opinion, by nonpayment of any such items, the interest of the Authority hereunder or under the Indenture will be materially adversely affected, in which event the City shall promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.

Section 5.2. Operation of Wastewater System. The City covenants and agrees to operate or cause to be operated the Wastewater System in an efficient and economical manner and to operate, maintain and preserve or caused to be operated, maintained and preserved the Wastewater System in good repair and working order. The City covenants that, in order to fully preserve and protect the priority and security of the Bonds, the City shall pay from the Gross Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Wastewater System which, if unpaid, may become a lien or charge upon the Gross Revenues or the Net Revenues prior or superior to the lien granted hereunder, or which may otherwise impair the ability of the City to pay the Installment Payments in accordance herewith.

Section 5.3. Insurance. The City shall maintain or cause to be maintained, throughout the Term of this Installment Sale Agreement, but only if and to the extent available at reasonable cost from reputable insurers, liability and casualty insurance in such amounts and against such risks as shall be appropriate for water systems of like size and with similar facilities as the Wastewater System. Such insurance may be maintained as part of or in conjunction with any other insurance carried by the City and may be maintained in whole or in part in the form of self-insurance by the City or in the form of the participation by the City in a joint powers agency or other program providing pooled insurance. All amounts collected from insurance against accident to or destruction of any portion of the Wastewater System shall be used to repair, rebuild or replace such damaged or destroyed portion of the Wastewater System. The proceeds of liability insurance shall be applied toward the extinguishment or satisfaction of the liability with respect to which such proceeds shall have been paid. -16-
Section 5.4. Eminent Domain. Any amounts received as awards as a result of the taking of all or any part of the Wastewater System by the lawful exercise of eminent domain, at the election of the City (evidenced by a Written Certificate of the City filed with the Trustee and the Authority) shall either (a) be used for the acquisition or construction of improvements and extension of the Wastewater System in replacement of the condemned portions thereof, or (b) applied as a credit against the City’s obligation to make the Installment Payments and payments with respect to any Parity Obligations in accordance with written instructions of the City filed with the Trustee.

Section 5.5. Records and Accounts. The City shall keep proper books of record and accounts of the Wastewater System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relating to the Wastewater System.

Said books shall, upon prior request, be subject to the reasonable inspection by the Owners of not less than ten percent (10%) in aggregate principal amount of the Outstanding Bonds, or their representatives authorized in writing. The City shall cause the books and accounts of the Wastewater System to be audited annually by an Independent Accountant, not more than two hundred seventy (270) days after the close of each Fiscal Year, and shall make a copy of such report available for inspection by the Bond Owners at the office of the City and the Municipal Bond Insurer. Simultaneously with the delivery of the audited financial statements, the City shall also provide the Municipal Bond Insurer with (i) a certification of the City stating that it is not aware of any default or Event of Default under this Installment Sale Agreement, and (ii) the Wastewater System’s annual budget.

Section 5.6. Continuing Disclosure. The City hereby covenants and agrees that it will comply with and carry out all of the provisions of the Continuing Disclosure Certificate.

Notwithstanding any other provision of this Installment Sale Agreement, failure of the City to comply with the Continuing Disclosure Certificate shall not constitute an Event of Default hereunder; provided, however, that any Participating Underwriter or any Owner or beneficial owner of the Bonds may take such actions as may be necessary and appropriate to compel performance by the City of its obligations under this Section 5.6, including seeking mandate or specific performance by court order.

Section 5.7. Incorporation by Reference. The City hereby covenants and agrees that it shall fully observe, perform, and fulfill each of the provisions (as each of those provisions may be amended, supplemented, modified or waived with the prior written consent of the Municipal Bond Insurer) of the Indenture applicable to it, each of the provisions thereof being expressly incorporated into this Section 5.7 by reference solely for the benefit of the Municipal Bond Insurer as if set forth directly herein.
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ARTICLE VI
DISCLAIMER OF WARRANTIES; ACCESS
Section 6.1. Disclaimer of Warranties. The Authority and the Trustee make no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for any particular purpose or fitness for the use contemplated by the City of the Wastewater System and the 2024 Wastewater Project, or any other representation or warranty with respect to the 2024 Wastewater Project. In no event shall the Authority or the Trustee be liable for incidental, indirect, special or consequential damages in connection with or arising out of this Installment Sale Agreement or the Indenture for the existence, furnishing, functioning or City’s use of the Wastewater System and the 2024 Wastewater Project.

Section 6.2. Access to the Wastewater System. The City agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have the right at all reasonable times to enter upon and to examine and inspect the Wastewater System. The City further agrees that the Authority and the Trustee, and any duly authorized representative thereof, shall have such rights of access to the Wastewater System as may be reasonably necessary to cause the proper maintenance of the Wastewater System in the event of failure by the City to perform its obligations hereunder.

Section 6.3. Release and Indemnification Covenants. The City shall and hereby agrees to indemnify and save the Authority and the Trustee and their respective officers, agents, successors and assigns harmless from and against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Wastewater System by the City, (b) any breach or default on the part of the City in the performance of any of its obligations under this Installment Sale Agreement, (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Wastewater System, (d) any act or negligence of any sublessee of the City with respect to the Wastewater System, (e) the Acquisition and Construction of the 2024 Wastewater Project or the authorization of payment of the 2024 Wastewater Project Costs, (f) the performance by the Trustee of its duties and obligations hereunder and under the Indenture, including any duties referred to in Section 8.12 of the Indenture, (g) the presence on, under or about, or release from, the Wastewater System of any substance, material or waste which is, or which becomes, regulated or classified as hazardous or toxic under State, federal or local law, or (h) the offer, sale and issuance of the Bonds. No indemnification is made under this Section 6.3 or elsewhere in this Installment Sale Agreement for adjudicated willful misconduct or negligence by the Authority or the Trustee, or their respective officers, employees, successors or assigns. The rights of the Trustee and the obligations of the City under this Section 6.3 shall survive the termination of this Installment Sale Agreement and the resignation or removal of the Trustee.

Section 6.4. Non-Liability of Authority for Wastewater System Obligations. The Authority and its successor and assigns shall have no obligation and shall incur no liabilities or debts whatsoever for the obligations, liabilities and debts of the City incurred in connection with the Wastewater System.
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ARTICLE VII

ASSIGNMENT, SALE AND AMENDMENT
Section 7.1. Assignment by the City. The obligations of the City under this Installment Sale Agreement may not be assigned by the City.

Section 7.2. Sale or Other Disposition of Wastewater System. Except as provided herein, the City covenants that the Wastewater System shall not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole; provided, however, the City may lease the Wastewater System to a related public entity that (a) assumes all liabilities of the City with respect to the Wastewater System, and (b) covenants to maintain Gross Revenues sufficient to operate and maintain the Wastewater System and duly provide for the punctual payment of all obligations assumed by such related public entity in connection with such lease including, but not limited to, the Installment Payments hereunder.

Neither the Net Revenues nor any other funds pledged or otherwise made available to secure payment of the Installment Payments shall be mortgaged, encumbered, sold, leased, pledged, any charge placed thereon, or disposed or used except as authorized by the terms of this Installment Sale Agreement. The City shall not enter into any agreement which impairs the operation of the Wastewater System or any part of it necessary to secure adequate Net Revenues to pay the Installment Payments, or which otherwise would impair the rights of the Bond Owners and the owners of any Parity Obligations with respect to the Net Revenues. If any substantial part of the Wastewater System shall be sold, the payment therefor shall either (a) be used for the acquisition or construction of improvements, extensions or replacements of Wastewater System, or (b) to the extent not so used, be paid to the Trustee to be applied to prepay the Installment Payments or any Parity Obligations, in accordance with written instructions of the City filed with the Trustee.

Section 7.3. Amendment of Installment Sale Agreement. The City and the Authority shall have the right to modify or amend this Installment Sale Agreement, with the prior written consent of the Municipal Bond Insurer, but without the consent of any of the Bond Owners or any of the owners of Parity Obligations, but only if such amendment or modification does not cause interest represented by the Bonds to be includable in gross income for federal income tax purposes in the opinion of Bond Counsel, and only if such amendment or modification does not materially adversely affect the interests of the Owners of the Bonds or the owners of any Parity Obligations in the opinion of Bond Counsel, and only if such amendment or modification is for any one or more of the following purposes:
(a) to provide for the issuance of Parity Obligations pursuant to Section 4.8; (b) to add to the covenants and agreements of the City contained in this Installment Sale Agreement, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City; (c) to cure any ambiguity, or to cure, correct or supplement any defective provision contained herein, or in any other respect whatsoever as the Authority and the City may deem necessary or desirable; or
(d) to amend any provision thereof for the purpose of complying with the applicable requirements of the Tax Code.
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ARTICLE VIII

EVENTS OF DEFAULT
Section 8.1. Events of Default Defined. The following events shall be Events of Default hereunder:
(a) Failure by the City to pay any Installment Payment when and as the same become due and payable hereunder.
(b) Failure by the City to pay any Additional Payment when due and payable hereunder, and the continuation of such failure for a period of ten (10) days. (c) Failure by the City to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in the preceding clauses (a) or (b), for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority or the Trustee; provided, however, that if the City shall notify the Authority and the Trustee that in its reasonable opinion the failure stated in the notice can be corrected, but not within such thirty (30) day period, such failure shall not constitute an Event of Default hereunder if the City shall commence to cure such failure within such thirty (30) day period and thereafter diligently and in good faith cure such failure in a reasonable period of time.
(d) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar acts which may hereafter be enacted.
(e) The occurrence and continuation of any payment event of default under and as defined in the instruments authorizing the issuance of any Parity Obligations.

Section 8.2. Remedies on Default. Whenever any Event of Default shall have happened and be continuing, the Trustee as assignee of the Authority shall have the right, at its option and without any further demand or notice, but subject in all respects to the provisions of Article VII of the Indenture, to:
(a) declare all principal components of the unpaid Installment Payments, together with accrued interest thereon at the net effective rate of interest per annum then borne by the Outstanding Bonds from the immediately preceding Interest Payment Date on which payment was made, to be immediately due and payable, whereupon the same shall immediately become due and payable;
(b) take whatever action at law or in equity may appear necessary or desirable to collect the Installment Payments then due or thereafter to become due during the Term of this Installment Sale Agreement, or enforce performance and observance of any obligation, agreement or covenant of the City under this Installment Sale Agreement; and (c) as a matter of right, in connection with the filing of a suit or other commencement of judicial proceedings to enforce the rights of the Trustee and the Bond Owners hereunder, cause -20-
the appointment of a receiver or receivers of the Gross Revenues and other amounts pledged hereunder, with such powers as the court making such appointment shall confer.

The provisions of the preceding clause (a), however, are subject to the condition that if, at any time after the principal components of the unpaid Installment Payments shall have been so declared due and payable pursuant to the preceding clause (a), and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all principal components of the Installment Payments coming due prior to such declaration and all matured interest components (if any) of the Installment Payments, with interest on such overdue principal and interest components calculated at the net effective rate of interest per annum then borne by the Outstanding Bonds, and the reasonable expenses of the Trustee (including any fees and expenses of its attorneys), and any and all other defaults known to the Trustee (other than in the payment of the principal and interest components of the Installment Payments due and payable solely by reason of such declaration) shall have been made good, then, and in every such case, the Authority, with the written consent of the Trustee, shall rescind and annul such declaration and its consequences.

However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon. As provided in Section 8.6, the Trustee shall be required to exercise the remedies provided herein in accordance with the Indenture.

Section 8.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Installment Sale Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law.

Section 8.4. Agreement to Pay Attorneys’ Fees and Expenses. In the event either party to this Installment Sale Agreement shall default under any of the provisions hereof and the nondefaulting party, the Trustee or the Owner of any Bonds should employ attorneys or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party, the Trustee or such Owner, as the case may be, the reasonable fees of such attorneys and such other expenses so incurred.

Section 8.5. No Additional Waiver Implied by One Waiver. In the event any agreement contained in this Installment Sale Agreement shall be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach so waived and shall not be deemed to waive any other breach hereunder.

Section 8.6. Trustee and Bond Owners to Exercise Rights. Such rights and remedies as are given to the Authority under this Article VIII have been assigned by the Authority to the Trustee under the Indenture, to which assignment the City hereby consents. Such rights and remedies shall be exercised by the Trustee and the Owners of the Bonds as provided in the Indenture.

Section 8.7. Rights of the Owners of Parity Obligations. Notwithstanding anything in this Article VIII to the contrary, it is hereby acknowledged and agreed that the rights of the -21-
Trustee and the Bond Owners hereunder in and to the Net Revenues and the Wastewater System shall be exercised on a parity and proportionate basis with the rights of the owners of any Parity Obligations and any fiduciary acting for the benefit of such owners. The provisions of this Article VIII, and the provisions of any instruments authorizing the issuance of any Parity Obligations, shall be construed in accordance with the foregoing sentence. -22-

ARTICLE IX

PREPAYMENT OF INSTALLMENT PAYMENTS
Section 9.1. Security Deposit. Notwithstanding any other provision of this Installment Sale Agreement, the City may on any date secure the payment of Installment Payments in whole or in part by irrevocably depositing with the Trustee or any other fiduciary an amount of cash which, together with amounts on deposit in the Bond Fund, the accounts therein and the cash on deposit in the Reserve Account, is either (a) sufficient to pay all such Installment Payments, including the principal and interest components thereof, in accordance with the Installment Payment schedule set forth in Exhibit A, or (b) invested in whole or in part in Federal Securities in such amount as will, in the written opinion of an Independent Accountant, together with interest to accrue thereon and together with any cash which is so deposited, be fully sufficient to pay all such Installment Payments when due pursuant to Section 4.4(a) or when due on any optional prepayment date pursuant to Section 9.2, as the City shall instruct at the time of said deposit. In the event of a security deposit pursuant to this Section 9.1 with respect to all of the Installment Payments, all obligations of the City under this Installment Sale Agreement, and all security provided by this Installment Sale Agreement for said obligations, shall cease and terminate, excepting only the obligation of the City to make, or cause to be made, all of such Installment Payments from such security deposit, and the obligation of the City to compensate and indemnify the Trustee pursuant to Sections 4.9 and 6.3. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Installment Payments in accordance with the provisions of this Installment Sale Agreement.

Section 9.2. Optional Prepayment. The City may exercise its option to prepay the principal components of the Installment Payments in whole, or in part in integral multiples of $5,000, on any date on or after March 15, ____, by paying a prepayment price equal to the aggregate principal components of the Installment Payments to be prepaid, together with the interest component of the Installment Payment required to be paid on or accrued to such date.

Such prepayment price shall be deposited by the Trustee in the Redemption Fund or in another trustee-held fund to be applied to the redemption of Bonds pursuant to Section 4.01(b) of the Indenture. The City shall give the Trustee written notice of its intention to exercise its option not less than forty-five (45) days in advance of the date of exercise.

Section 9.3. Credit for Amounts on Deposit. In the event of prepayment of the principal components of the Installment Payments in full under this Article IX, such that the Indenture shall be discharged by its terms as a result of such prepayment, and upon payment in full of all Additional Payments and other amounts then due and payable hereunder, all available amounts then on deposit in the funds and accounts established under the Indenture shall be credited towards the amounts then required to be so prepaid. -23-

ARTICLE X

MISCELLANEOUS
Section 10.1. Further Assurances. The City agrees that it will execute and deliver any and all such further agreements, instruments, financing statements or other assurances as may be reasonably necessary or requested by the Authority or the Trustee to carry out the intention or to facilitate the performance of this Installment Sale Agreement, including, without limitation, to perfect and continue the security interests herein intended to be created.

Section 10.2. Notices. Any notice, request, complaint, demand or other communication under this Installment Sale Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by telecopy, telex or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by telecopy, telex or other form of telecommunication, (b) 48 hours after deposit in the United States mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt.

If to the Authority: Coalinga Public Financing Authority c/o City of Coalinga
155 West Durian
Coalinga, CA 93210
Attention: Financial Services Director
Phone: (559) 935-1533 x129
If to the City: City of Coalinga
155 West Durian
Coalinga, CA 93210
Attention: Financial Services Director
Phone: (559) 935-1533 x129
If to the Trustee: Computershare Trust Company, N.A.

CTO Mail Operations
1505 Energy Park Drive
St. Paul, MN 55108
Attention: Mataka Mposa
Phone: (612) 448-7816
If to the Municipal Bond Insurer: See Section 11.01 of the Indenture The Authority, the City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

Section 10.3. Third Party Beneficiaries. The Trustee and the Municipal Bond Insurer shall each be and each is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary.

Section 10.4. Governing Law. This Installment Sale Agreement shall be construed in accordance with and governed by the laws of the State.
-24-
Section 10.5. Binding Effect. This Installment Sale Agreement shall inure to the benefit of and shall be binding upon the Authority and the City, and their respective successors and assigns, subject, however, to the limitations contained herein.

Section 10.6. Severability of Invalid Provisions. If any one or more of the provisions contained in this Installment Sale Agreement shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Installment Sale Agreement and such invalidity, illegality or unenforceability shall not affect any other provision of this Installment Sale Agreement, and this Installment Sale Agreement shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Authority and the City each hereby declares that it would have entered into this Installment Sale Agreement and each and every other Section, paragraph, sentence, clause or phrase hereof irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Installment Sale Agreement may be held illegal, invalid or unenforceable.

Section 10.7. Article and Section Headings and References. The headings or titles of the several Articles and Sections hereof, and any table of contents appended to copies hereof, shall be solely for convenience of reference and shall not affect the meaning, construction or effect of this Installment Sale Agreement. All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Installment Sale Agreement; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Installment Sale Agreement as a whole and not to any particular Article, Section or subdivision hereof; and words of the masculine gender shall mean and include words of the feminine and neuter genders.

Section 10.8. Execution of Counterparts. This Installment Sale Agreement may be executed in any number of counterparts, each of which shall for all purposes be deemed to be an original and all of which shall together constitute but one and the same instrument.

Section 10.9. Waiver of Personal Liability. No member of the City Council, officer, agent or employee of the City shall be individually or personally liable for the payment of Installment Payments or Additional Payments or be subject to any personal liability or accountability by reason of this Installment Sale Agreement; but nothing herein contained shall relieve any such member of the City Council, officer, agent or employee from the performance of any official duty provided by law or by this Installment Sale Agreement.

Section 10.10. Limitation of Rights to Parties and Bond Owners. Nothing in this Installment Sale Agreement expressed or implied is intended or shall be construed to give to any person other than the Authority, the Trustee, the City and the Owners of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Installment Sale Agreement or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Authority, the Trustee, the City and the Owners of the Bonds.

Section 10.11. Captions. The captions or headings in this Installment Sale Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or Section of this Installment Sale Agreement. -25-
IN WITNESS WHEREOF, the Authority and the City have caused this Installment Sale Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.

COALINGA PUBLIC FINANCING
AUTHORITY, as Purchaser
By
Marissa Trejo,
Executive Director
CITY OF COALINGA, as Seller
By
Marissa Trejo,
City Manager
Exhibit A

Page 1 ends

EXHIBIT A

SCHEDULE OF INSTALLMENT PAYMENTS
Installment
Payment Principal Interest
Date Component Component Total
Total
Exhibit B

EXHIBIT B
DESCRIPTION OF THE 2024 WATER PROJECT
The 2024 Wastewater Project includes, but is not limited to, the installation of a solar photovoltaic (PV) system which will generate electricity through the conversion of solar energy.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

PRELIMINARY OFFICIAL STATEMENT DATED AUGUST 13 2024
NEW ISSUE—FULL BOOK ENTRY RATINGS:

S&P: “AA” (___-Insured)
Moody’s: “___” (Underlying)
See “RATINGS” herein
In the opinion of Stradling Yocca Carlson & Rauth, LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that with respect to applicable corporations as defined in section 59(k) of the Internal Revenue Code of 1986, as amended, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See “TAX MATTERS” herein. $_______*

COALINGA PUBLIC FINANCING AUTHORITY
(Fresno County, California)
Wastewater Revenue Bonds, Series 2024
(Solar Project)
Dated: Date of Delivery Due: April 1, as shown on the inside cover The $________* Coalinga Public Financing Authority (Fresno County, California) Wastewater Revenue Bonds, Series 2024 (Solar Project) (the “Bonds”), will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). DTC will act as securities depository of the Bonds. Individual purchases of Bonds will be made in book-entry form only, in denominations of $5,000 or any integral multiple thereof. Purchasers of Bonds will not receive certificates representing their interest in the Bonds purchased but will receive a credit balance in the records of DTC. Principal of and interest on the Bonds are payable directly to DTC by Computershare Trust Company, N.A., Los Angeles, California, as trustee (the “Trustee”). Principal is payable on the dates set forth below. Interest is payable semiannually on each April 1 and October 1, commencing April 1, 2025. Upon receipt of payments of principal of, premium, if any, and interest on the Bonds, DTC is obligated in turn to remit such principal, premium, if any, and interest to the DTC Participants (as defined herein) for subsequent disbursement to purchasers of the Bonds, as described herein.

The Bonds are subject to redemption prior to maturity. See “THE BONDS—Redemption” herein.

The Bonds are special obligations of the Coalinga Public Financing Authority (the “Authority”) payable from the revenues pledged under the Indenture of Trust, dated as of August 1, 2024, by and between the Authority and the Trustee, consisting primarily of installment payments (the “Installment Payments”) to be made by the City of Coalinga (the “City”) under an installment sale agreement, dated as of August 1, 2024, by and between the Authority and the City (the “Installment Sale Agreement”). The Installment Payments are secured by a pledge of and lien on the net revenues of the City’s municipal wastewater enterprise (the “Wastewater System”). The Bonds are being issued to (a) finance the acquisition and construction of certain improvements and facilities which constitute part of the Wastewater System (see “THE 2024 WASTEWATER PROJECT” herein); (b) fund a portion of the interest on the Bonds through April 1, 2026, (c) purchase a reserve fund surety bond in lieu of cash funding a reserve fund for the Bonds, and (d) pay the costs of issuance of the Bonds, including to purchase a municipal bond insurance policy for the Bonds.

The City is legally required under the Installment Sale Agreement to make Installment Payments from a first and prior lien on the Net Revenues of the Wastewater System. “Net Revenues” are the gross revenues of the Wastewater System, less operating and maintenance expenses of the Wastewater System. The City will covenant in the Installment Sale Agreement that it will not issue any obligations senior to the Installment Payments. The Installment Payments are not subject to abatement. Installment Payments are scheduled in an amount sufficient to pay, when due, the principal of and interest on the Bonds. The City has covenanted under the Installment Sale Agreement to prescribe, revise and collect such charges from the services and facilities of the Water System which will produce gross revenues sufficient in each Fiscal Year to provide Net Revenues equal to at least 1.25 times the aggregate of obligations of the City with respect to the Installment Payments and payments with respect to any parity obligations hereafter issued or incurred by the City in such Fiscal Year. The City’s obligations under the Installment Sale Agreement will be on a parity, as to payment and security, with the City’s obligations with respect to the payment of installment payments under a water installment sale agreement, dated as of March 1, 2021, which provides for the payment of a portion of the debt service due by the Authority under its Coalinga Public Financing Authority Revenue Bonds, Series 2021A (Water and Wastewater Financing Projects) (Federally Taxable).

NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE INSTALLMENT PAYMENTS CONSTITUTES AN OBLIGATION OF THE CITY OR THE

AUTHORITY FOR WHICH THE CITY IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE AUTHORITY HAS NO TAXING POWER. NEITHER THE BONDS NOR THE OBLIGATION OF THE CITY TO MAKE INSTALLMENT

PAYMENTS UNDER THE INSTALLMENT SALE AGREEMENT CONSTITUTES A DEBT OF THE CITY, THE COUNTY OF FRESNO, THE STATE OF CALIFORNIA OR ANY OF ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR STATUTORY DEBT LIMITATION OR RESTRICTION.

The scheduled payment of principal of and interest on the Bonds when due will be guaranteed under a municipal bond insurance policy to be issued concurrently with the delivery of the Bonds by ___________.
[INSURER LOGO]

MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES OR YIELDS

SEE THE INSIDE COVER
The following firm, serving as financial advisor to the Authority and the City, has structured this issue:

This cover page contains information for general reference only. It is not a summary of this issue. Potential purchasers of the Bonds are advised to read the entire Official Statement to obtain information essential to making an informed investment decision.

The Bonds will be offered when, as and if issued, and received by the Underwriter, subject to the approval as to their validity by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the City and the Authority by the City Attorney, by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Disclosure Counsel, and for the Underwriter by Kutak Rock LLP, Irvine, California, as Underwriter’s Counsel. It is anticipated that the Bonds will be available for delivery through DTC in New York, New York, on or about August 29, 2024.

Dated: August ___, 2024
*Preliminary, subject to change.
$_______*

COALINGA PUBLIC FINANCING AUTHORITY
(Fresno County, California)
Wastewater Revenue Bonds, Series 2024
(Solar Project)
MATURITIES, PRINCIPAL AMOUNTS, INTEREST RATES AND PRICES OR YIELDS* $_________ Serial Bonds
CUSIP† Prefix: ______
Maturity Principal Interest CUSIP†
April 1 Amount Rate Price Yield Suffix
$________ ____% Term Bonds maturing April 1, ____; Price: ____%, to yield ______%; CUSIP† _______ *Preliminary, subject to change.
†Copyright 2024, American Bankers Association. CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by FactSet Research Systems Inc. on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for CUSIP Global Services. CUSIP numbers have been assigned by an independent company not affiliated with the Authority or the City and are included solely for the convenience of the registered owners of the Bonds. None of the Authority, the City or the Underwriter is responsible for the selection or uses of these CUSIP numbers and no representation is made as to their correctness on the Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the delivery of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

For purposes of compliance with Rule 15c2-12 of the United States Securities and Exchange Commission, as amended (“Rule 15c2-12”), this Preliminary Official Statement constitutes an “official statement” of the Authority with respect to the Bonds that has been deemed “final” by the Authority and the City as of its date except for the omission of no more than the information permitted by Rule 15c2-12.

No dealer, broker, salesperson or other person has been authorized by the Authority, the City or the Underwriter to give any information or to make any representations other than as set forth herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy norshall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement that involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of facts.

The information set forth in this Official Statement has been obtained from official sources and other sources that are believed to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation of the Underwriter. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall under any circumstances create any implication that there has been no change in the affairs of the Authority or the City since the date hereof. This Official Statement is submitted in connection with the sale of the Bondsreferred to herein and may not be reproduced or used, in whole or in part, for any other purpose. The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed orimplied by such forward-looking statements.

No assurance is given that actual results will meet the Authority’s or the City’s forecasts in any way, regardless of the level of optimism communicated in the information. The Authority is not obligated to issue any updates or revisionsto the forward-looking statements if or when its expectations, or events, conditions or circumstances on which such statements are based occur. See “CONTINUING DISCLOSURE” herein.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT

TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING TRANSACTIONS, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE

BONDS TO CERTAIN DEALERSAND OTHERSAT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED

ON THE INSIDE COVER PAGE OF THIS OFFICIAL STATEMENT, AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

The execution, sale and delivery of the Bonds has not been registered under the Securities Act of 1933 or the Securities Exchange Act of 1934, both as amended, in reliance upon exemptions provided thereunder by Sections 3(a)(2) and 3(a)(12), respectively, for the issuance and sale of municipal securities. ____________ (the “Municipal Bond Insurer”) makes no representation regarding the Bonds or the advisability of investing in the Bonds. In addition, the Municipal Bond Insurer has not independently verified, makes no representation regarding, and does not accept any responsibility for the accuracy or completeness of this Official Statement or any information or disclosure contained herein, or omitted herefrom, other than with respect to the accuracy of the information regarding the Municipal Bond Insurer supplied by the Municipal Bond Insurer and presented under the heading “MUNICIPAL BOND INSURANCE” and “APPENDIX H—SPECIMEN MUNICIPAL BOND INSURANCE POLICY.”
The City maintains a website, however, the information presented therein is not a part of this Official Statement and should not be relied on in making an investment decision with respect to the Bonds.

TABLE OF CONTENTS
Page Page
INTRODUCTION............................................................................................ 1 General.......................................................................................................... 1 The Authority ............................................................................................... 1 The City ........................................................................................................ 1 The Wastewater System................................................................................ 2 Authority for Issuance of the Bonds.............................................................. 2 Purpose of the Bonds..................................................................................... 2 Security and Source of Repayment................................................................ 2 Municipal Bond Insurance Policy; Reserve Policy ........................................ 3 Redemption of the Bonds.............................................................................. 4 Book-Entry Form .......................................................................................... 4 Continuing Disclosure................................................................................... 4 Tax Matters................................................................................................... 4 Professionals Involved in the Offering........................................................... 5 Forward-Looking Statements........................................................................ 5 Other Matters................................................................................................ 5 Other Information ......................................................................................... 6 THE WASTEWATER IMPROVEMENT PROJECT ..................................... 6 ESTIMATED SOURCES AND USES OF FUNDS ........................................ 7 DEBT SERVICE REQUIREMENTS ............................................................... 8 THE BONDS..................................................................................................... 9 General Provisions ........................................................................................ 9 Book-Entry Only System............................................................................... 9 Transfer and Exchange................................................................................ 10 Terms of Redemption ................................................................................. 10 SECURITY FOR THE BONDS...................................................................... 12 Revenues..................................................................................................... 12 Installment Payments.................................................................................. 12 Special Obligations of the City; Obligations Absolute ................................. 13 Pledge and Application of Net Revenues .................................................... 14 Rates, Fees and Charges.............................................................................. 15 Limitations on Future Obligations Secured by Net Revenues..................... 15 Additional Payments ................................................................................... 17 Rate Stabilization Fund ............................................................................... 18 Reserve Account ......................................................................................... 18 Flow of Funds ............................................................................................. 19 MUNICIPAL BOND INSURANCE............................................................... 19 THE AUTHORITY ........................................................................................ 19 THE CITY....................................................................................................... 20 THE WASTEWATER SYSTEM ................................................................... 20 General........................................................................................................ 20 Wastewater System Management ............................................................... 21 Wastewater System Employee Relations..................................................... 21 Wastewater System Facilities...................................................................... 21 Wastewater System Service Area................................................................ 22 Wastewater System Use.............................................................................. 23 Wastewater System Customers....................................................................23 Wastewater System Rates............................................................................24 Wastewater System Financial Statements....................................................25 Wastewater System Historical and Planned Capital Improvements ............28 Wastewater System Historical and Projected Operating Results and Debt Service Coverage ..............................................................................28

GENERAL CITY INFORMATION APPLICABLE TO THE WASTEWATER
SYSTEM...........................................................................................................30 Enterprise Reserve Policies..........................................................................30 Risk Management.........................................................................................30 Employee Pension Plans...............................................................................30 Other Post-Employment Benefits ................................................................33 INVESTMENT OF CITY FUNDS.................................................................34

CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND FEES
..........................................................................................................................34 Article XIIIA................................................................................................34 Article XIIIB ................................................................................................35 Proposition 218 ............................................................................................35 Effect of Proposition 218 on the City; Possible Limitations on Enforcement Remedies..............................................................................37 Proposition 26 ..............................................................................................38 Future Initiatives..........................................................................................38 RISK FACTORS RELATING TO THE BONDS...........................................39 Limited Obligations......................................................................................39 Maintenance and Operation Costs...............................................................39 Limited Recourse on Default .......................................................................39 Limitations on Remedies..............................................................................39 Initiatives......................................................................................................40 Bankruptcy ...................................................................................................40 Additional Obligations .................................................................................40 Seismic Considerations................................................................................40 Drought and Climate Change.......................................................................40 Cybersecurity ...............................................................................................41 Secondary Market........................................................................................41 Risks Relating to the Municipal Bond Insurance Policy ...............................41 LEGAL MATTERS .........................................................................................42 ABSENCE OF LITIGATION..........................................................................42 RATINGS.........................................................................................................42 CONTINUING DISCLOSURE.......................................................................43 TAX MATTERS ..............................................................................................43 UNDERWRITING...........................................................................................46 MUNICIPAL ADVISOR..................................................................................46 FINANCIAL STATEMENTS.........................................................................46 OTHER INFORMATION...............................................................................46 MISCELLANEOUS.........................................................................................47 APPENDIX A: GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY AND THE COUNTY APPENDIX B: AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023 APPENDIX C: CITY INVESTMENT POLICY
APPENDIX D: SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS APPENDIX E: FORMS OF FINAL OPINIONS OF BOND COUNSEL
APPENDIX F: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX G: BOOK-ENTRY ONLY SYSTEM
APPENDIX H: SPECIMEN MUNICIPAL BOND INSURANCE POLICY

COALINGA PUBLIC FINANCING AUTHORITY

CITY OF COALINGA
155 West Durian
Coalinga, CA 93210
(559) 935-1533
http://www.coalinga.com

AUTHORITY BOARD OF DIRECTORS AND CITY COUNCIL
James Horn, Chair/Mayor
Jose Manny Ramirez, Vice Chair/Mayor Pro Tem
Lonnie Hedgecock, Boardmember/Councilmember
Roger Schindler, Boardmember/Councilmember
Nathan Vosburg, Boardmember/Councilmember

AUTHORITY/CITY STAFF
Marissa Trejo, Executive Director/City Manager
Sean Brewer, Assistant Executive Director/Assistant City Manager Mai Vang, Financial Services Director
Dawn Kahikina, Treasurer
Shannon Jensen, Authority Secretary/City Clerk
Mario Zamora, Esq., Authority Counsel/City Attorney

SPECIAL SERVICES
Wulff Hansen & Co.

San Rafael, California
Municipal Advisor
Computershare Trust Company, N.A.

Los Angeles, California
Trustee
Stradling Yocca Carlson & Rauth LLP
Newport Beach, California
Bond Counsel and Disclosure Counsel

LOCATION MAP
$_________

COALINGA PUBLIC FINANCING AUTHORITY
(Fresno County, California)
Wastewater Revenue Bonds, Series 2024
(Solar Project)

INTRODUCTION
The following introduction presents a brief description of certain information in connection with the Bonds (as defined below) and is qualified in its entirety by reference to the entire Official Statement and the documents summarized or described herein. References to, and summariesof, provisionsof the Constitution and the lawsof the State of California (the “State”) and any documents referred to herein do not purport to be complete and such references are qualified in their entirety by reference to the complete provisions thereof. Capitalized terms used in this Official Statement and not defined elsewhere herein have the meanings given such terms in the Indenture. See APPENDIX D—SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS—Definitions.

General
The purpose of this Official Statement is to provide certain information concerning the issuance, sale and delivery by the Coalinga Public Financing Authority, a joint exercise of powers entity organized and existing under the laws of the State (the “Authority”), of its Coalinga Public Financing Authority (Fresno County, California) Wastewater Revenue Bonds, Series 2024 (Solar Project), in the aggregate principal amount of $_________ (the “Bonds”).

The Bonds are special obligations of the Authority payable from the revenues pledged under the Indenture of Trust, dated as of August 1, 2024 (the “Indenture”), by and between the Authority and Computershare Trust Company, N.A., Los Angeles, California, as trustee (the “Trustee”), consisting primarily of installment payments (the “Installment Payments”) to be made by the City of Coalinga (the “City”) under an installment sale agreement, dated as of August 1, 2024, by and between the Authority and the City (the “Installment Sale Agreement”). The Installment Payments are secured by a pledge of and lien on the net revenues (the “Net Revenues”) of the City’s municipal wastewater enterprise (the “Wastewater System”).

The Authority
The Authority is a joint exercise of powers entity, organized pursuant to a Joint Exercise of Powers Agreement, dated February 17, 1991, by and among the City, the Coalinga Redevelopment Agency (the “Agency”) and the Coalinga-Huron Unified School District (the “School District”) to provide, in part, for the financing of public capital improvements by the City. See “THE AUTHORITY.” The City
The City, a general law city incorporated on April 3, 1906, is located the southwestern tip of Fresno County (the “County”) and the western San Joaquin Valley, in central California. The City is located 52 miles (84 km) southwest of Fresno, 10 miles west of I-5 and sits at an elevation of 673 feet (205 m). The City occupies a land area of 6.61 square miles and serves a population of approximately 17,200. The City is -2-
surrounded by hills and ranches. Monterey County lies to the west of the City and Kings County sits to the east.

Members of the City Council of the City (the “City Council”) are elected by district from five districts within the City for overlapping four-year terms. The policies of the City Council are carried out by the appointed City Manager. For certain information with respect to the City, see “THE CITY” and APPENDIX A—GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY AND THE COUNTY.

The Wastewater System
The City’s Public Works Department operates and maintains the Wastewater System which consists of a collection system, sanitary sewer pipeline, lift stations, and a treatment plant. For a discussion of the Wastewater System, see “THE WASTEWATER SYSTEM” herein.

Authority for Issuance of the Bonds
The Bonds are being issued pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code, the Indenture and resolutions of the governing body of the Authority and of the City Council of the City adopted on August 1, 2024.

Purpose of the Bonds
The Bonds are being issued to (a) finance the WastewaterImprovement Project (as defined herein), (b) fund a portion of the interest on the Bonds through April 1, 2026, (c) fund the cost of a municipal bond insurance reserve fund policy in lieu of cash funding a reserve fund for the Bonds (the “Reserve Policy”), and (d) pay the costs of issuance of the Bonds, including the premium for a municipal bond insurance policy for the Bonds (the “Municipal Bond Insurance Policy.”
See “THE FINANCING PLAN” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

Security and Source of Repayment
In accordance with the Installment Sale Agreement, the City is required to make Installment Payments to the Trustee for the account of the Authority. The Installment Payments are designed to be sufficient, in both time and amount, to pay, when due, the principal of, and interest on, the Bonds. The City is also required to make additional payments in the amount of any taxes, assessments, insurance premiums, expenses of the Authority and the Trustee incidental to the sale and delivery of the Bonds, administrative costs or charges of the Authority in connection with the Wastewater Improvement Project and costs and expenses which the Authority may incur as a consequence of a default by the City. See APPENDIX D— SUMMARY OF PRINCIPAL LEGAL DOCUMENTS—Installment Sale Agreement.

The City’s obligations with respect to the Installment Sale Agreement and any additional obligations hereafter issued and incurred on a parity as to payment and security with the Installment Payments (collectively, the “Parity Obligations”) are secured by a first lien on the Net Revenues. The City’s obligations under the Installment Sale Agreement will be on a parity, as to payment and security, with the City’s obligations with respect to the payment of installment payments under an Installment Sale Agreement, dated as of March 1, 2021, which provides for the payment of the debt service due by the -3-
Authority under its Coalinga Public Financing Authority Revenue Bonds, Series 2021B (Wastewater Project) (Tax-Exempt). The City has covenanted in the Installment Sale Agreement that it will not issue any obligations senior to the Installment Payments and Parity Obligations.

THE OBLIGATION OF THE CITY TO MAKE THE INSTALLMENT PAYMENTS DOES

NOT CONSTITUTE A DEBT OF THE AUTHORITY, THE CITY, THE COUNTY OR THE STATE

OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY

CONSTITUTIONAL OR STATUTORY DEBT LIMIT OR RESTRICTION, AND DOES NOT

CONSTITUTE AN OBLIGATION FOR WHICH THE AUTHORITY, THE CITY, THE COUNTY

OR THE STATE IS OBLIGATED TO LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY OR THE STATE HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. “Wastewater System” means the entire municipal wastewater system of the City comprising means any and all properties and assets, real and personal, tangible and intangible, of the City, now or hereafter existing, used or pertaining to the disposal or reuse of sewer, including sewage treatment plants, intercepting and collecting sewers, outfall sewers, force mains, pumping stations, ejector stations, pipes, valves, machinery and all other appurtenances necessary, useful or convenient for the collection, treatment, purification or disposal of sewage, and any necessary lands, rights of way and other real or personal property useful in connection therewith, including all additions, extensions, expansions, improvements and betterments thereto and equippings thereof.
“Gross Revenues” means all user fee charges derived by the City from, the ownership and operation of the Wastewater System, including but not limited to investment earnings thereon. “Net Revenues” means, for any period, an amount equal to all of the Gross Revenues received during such period minus the amount required to pay all Wastewater System Operation and Maintenance Costs becoming payable during such period.
“Operation and Maintenance Costs” means the reasonable and necessary costs and expenses paid by the City for maintaining and operating the Wastewater System, including but not limited to (a) costs of electricity and other forms of energy supplied to the Wastewater System, (b) the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the Wastewater System in good repair and working order, and (c) the reasonable administrative costs of the City attributable to the operation and maintenance of the Wastewater System; but in all cases excluding (i) debt service payable on obligations incurred by the City with respect to the Wastewater System including but not limited to the Installment Payments and any Parity Obligations, (ii) depreciation, replacement and obsolescence charges or reserves therefor, and (iii) amortization of intangibles or other bookkeeping entries of a similar nature.

See “SECURITY FOR THE BONDS.”
Municipal Bond Insurance Policy; Reserve Policy
The scheduled payment of the principal of and interest on the Bonds when due will be guaranteed under the Municipal Bond Insurance Policy to be issued by ___________ (the “Municipal Bond Insurer”) simultaneously with the issuance of the Bonds. See “MUNICIPAL BOND INSURANCE.” -4-
In addition, the Municipal Bond Insurer has made a commitment to issue the Reserve Policy in an amount equal to the Reserve Requirement for the Bonds. See “SOURCES OF PAYMENT FOR THE BONDS—Reserve Account.”
Redemption of the Bonds
The Bonds are subject to redemption prior to their stated maturity dates, as provided herein. See “THE BONDS—Terms of Redemption.”
Book-Entry Form
The Bonds will be delivered in fully registered form only and, when issued and delivered, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”). DTC will act as securities depository for the Bonds. Ownership interests in the Bonds may be purchased in denominations of $5,000 or any integral multiple thereof, in book-entry form only. Principal, premium, if any, and interest are payable directly to DTC by the Trustee. Upon receipt of payments of principal of, premium, if any, and interest on the Bonds, DTC is obligated to remit such principal, premium, if any, and interest to the participants in DTC for subsequent disbursement to the beneficial owners of the Bonds. See “THE BONDS—Book-Entry Only System” below and APPENDIX G—BOOK-ENTRY ONLY SYSTEM.

Continuing Disclosure
The City will covenant, pursuant to a continuing disclosure certificate (the “Continuing Disclosure Certificate”) to be executed on the date of delivery of the Bonds, for the benefit of owners and beneficial owners of the Bonds, to provide certain financial information and operating data related to the Wastewater System by not later than nine months following the end of the City’s Fiscal Year (the “Annual Report”), and to provide notices of the occurrence of certain enumerated events. The Annual Report and notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board. The specific nature of the information to be contained in the Annual Report and any notices of enumerated events is summarized below under the caption “CONTINUING DISCLOSURE.” The form of the Continuing Disclosure Certificate is set forth in APPENDIX F—FORM OF CONTINUING DISCLOSURE CERTIFICATE. The covenants of the City in the Continuing Disclosure Certificate have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2-12(b)(5), as amended (the “Rule”).

Tax Matters
In the opinion of Stradling Yocca Carlson & Rauth, LLP, Newport Beach, California, Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that with respect to applicable corporations as defined in section 59(k) of the Internal Revenue Code of 1986, as amended, interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations. In the further opinion of Bond Counsel, interest (and original issue discount) on the Bonds is exempt from State of California personal income tax. See “TAX MATTERS.”
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Professionals Involved in the Offering
The proceedings of the Authority and the City in connection with the issuance of the Bonds are subject to the approval as to their legality of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Certain legal matters will be passed upon for the Authority and the City by Stradling Yocca Carlson & Rauth LLP, Newport Beach,California, as DisclosureCounsel, and by Griswold, LaSalle, Cobb, Dowd & Gin, LLP, Hanford, California, Authority Counsel and City Attorney.

Computershare Trust Company, N.A., Los Angeles, California, will act asthe Trustee underthe Indenture.

Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, Irvine, California. The fees of Bond Counsel, Disclosure Counsel, counsel to the Underwriter and the Trustee are contingent upon the sale and delivery of the Bonds.

Forward-Looking Statements
This Official Statement, and particularly the information contained under the headings entitled “THE 2024 WASTEWATER IMPROVEMENT PROJECT,” “THE WASTEWATER SYSTEM,” “RISK FACTORS RELATING TO THE BONDS” and APPENDIX A—GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY AND THE COUNTY, contains statements relating to future results that are “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 2000. When used in this Official Statement, the words “estimate,” “forecast,” “intend,” “expect” and similar expressions identify forward-looking statements. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties.

Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The City is not obligated to issue any updates or revisions to the forward-looking statementsif or when its expectations, or events, conditions or circumstances on which such statements are based occur. See “RISK FACTORS RELATING TO THE BONDS” and “TAX MATTERS.”
Other Matters
There follows in this Official Statement brief descriptions of the Bonds, the security for the Bonds, the Indenture, the Authority, the City, the Wastewater System, the Wastewater Improvement Project and certain other information relevant to the issuance of the Bonds. The descriptions and summaries of documents herein do not purport to be comprehensive or definitive, and reference is made to each such document for the complete details of all its respective terms and conditions. All statements herein with respect to such documents are qualified in their entirety by reference to each such document for the complete details of all of their respective terms and conditions. Allstatements herein with respect to certain rights and remedies are qualified by reference to laws and principles of equity relating to or affecting creditors’ rights generally. See APPENDIX D—SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.

The information and expressions of opinion herein speak only as of the date of this Official Statement and are subject to change without notice. Neither delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the Authority or the City since the date hereof. -6-
All financial and other information presented in this Official Statement has been provided by the Authority and the City from their records, except for information expressly attributed to othersources. The presentation of information, including the table of receipts from taxes and other revenues, is intended to show recent historic information and is not intended to indicate future or continuing trends in the financial or other affairs of the Authority or the City. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future.

Other Information
Copies of the documents are on file and, upon request and payment to the City of a charge for copying, mailing and handling, from the Financial Services Director, City of Coalinga, 155 West Durian, Coalinga, CA 93210, Telephone: (559) 935-1533.

The information and expressions of opinion herein speak only as of their date and are subject to change without notice. Neither the delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement, under any circumstances, creates any implication that there has been no change in the affairs of the City or the Authority since the date hereof.

The presentation of information, including tables of receipt of revenues, is intended to show recent historical information and is not intended to indicate future or continuing trends in the financial position or other affairs of the City or the Authority. No representation is made that past experience, as it might be shown by such financial and other information, will necessarily continue or be repeated in the future.

THE WASTEWATER IMPROVEMENT PROJECT
The Bonds are being issued to (a) finance the Wastewater Improvement Project, (b) fund a portion of interest on the Bonds through April 1, 2026, (c) fund the cost of the Reserve Policy, and (d) pay a the costs of issuance of the Bonds, including the premium for the Municipal Bond Insurance Policy.

The WastewaterImprovement Project consists of various improvements to the Wastewater System including, but not limited to, the installation of a solar photovoltaic (PV) system which will generate electricity through the conversion of solar energy. -7-

ESTIMATED SOURCES AND USES OF FUNDS

SOURCES
Par Amount of Bonds
Plus/Less: Net Original Issue Premium/Discount
Total Uses
USES
Deposit to Project Fund (1)
Deposit to Interest Account (2)
Costs of Issuance (3)
Total Uses
(1) Represents the amount required to finance the Wastewater Improvement Project. (2) Represents capitalized interest with respect to a portion of the Bonds through April 1, 2026. (3) Includes the Underwriter’s discount, legal and financing costs, printing costs, fees of the rating agency, initial fees of the Trustee, the premiums for the Municipal Bond Insurance Policy and the Reserve Policy and other costs related to the issuance of the Bonds.
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DEBT SERVICE REQUIREMENTS
Annual debt service on the Bonds (assuming no redemptions of the Bonds other than sinking fund redemptions) is presented below.

Year
Ending
(April 1) Principal (1) Interest (2) Total
Totals
(1) Includes mandatory sinking fund installments.
(2) Interest on a portion of the Bonds is funded through April 1, 2026.

Payments made by the City under the Installment Sale Agreement are scheduled, in time and amount to pay the debt service on the Bonds.
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THE BONDS
General Provisions
The Bonds will be issued in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof. The Bonds will mature on April 1 in each of the years and in the amounts and will bear interest (calculated on the basis of a 360-day year of twelve 30-day months) at the rates set forth on the inside cover page hereof.

Interest on the Bonds will be payable semiannually on each April 1 and October 1, commencing April 1, 2025 (each, an “Interest Payment Date”), to the person whose name appears on the Registration Books as the Owner thereof as of the 15th calendar day of the month immediately preceding each such Interest Payment Date (each, a “Record Date”), such interest to be paid by check of the Trustee mailed by first-class mail to the Owners at the respective addresses of such Owners as they appear on the Registration Books; provided, however, that payment of interest may be made by wire transfer in immediately available funds to an account in the United States of America to any Owner of Bonds in the aggregate principal amount of $1,000,000 or more who furnishes written wire instructions to the Trustee at least five days before the applicable Record Date. Principal of any Bond and any premium upon redemption will be paid by check of the Trustee upon presentation and surrenderthereof at the corporate trust office of the Trustee, except as provided in APPENDIX G—BOOK-ENTRY ONLY SYSTEM. Principal of and interest and premium (if any) on the Bonds will be payable in lawful money of the United States of America.

Each Bond will be dated as of its date of delivery and will bear interest from the Interest Payment Date next preceding such date of authentication thereof, unless (a) it is authenticated after a Record Date and on or before the following Interest Payment Date, in which event it will bear interest from such Interest Payment Date, or (b) it is authenticated on or before March 15, 2025, in which event it will bear interest from the Closing Date; provided, however, that if, as of the date of authentication of any Bond, interest thereon is in default, such Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Book-Entry Only System
The Bonds, when issued, will be registered in the name of Cede & Co., as registered owner and nominee of The Depository Trust Company (“DTC”). DTC will act assecurities depository for the Bonds so purchased. Individual purchases will be made in book-entry-only form. Purchasers will not receive a certificate representing their beneficial ownership interest in the Bonds. So long as Cede & Co. is the registered owner of the Bonds, as nominee of DTC, references herein to the Bondholders, holders or registered owners shall mean Cede & Co. as aforesaid, and shall not mean the “Beneficial Owners” of the Bonds. In this Official Statement, the term “Beneficial Owner” shall mean the person for whom a Participant (as defined herein) acquires an interest in the Bonds. See APPENDIX G—BOOK-ENTRY ONLY SYSTEM.

In the event the use of the book-entry-only system is discontinued, principal of the Bonds will be payable upon surrender thereof at the principal corporate trust office of the Trustee in Los Angeles, California. Interest payable on the Bonds will be paid by check mailed on the Interest Payment Date to the person in whose name each Bond is registered in the registration books maintained by the Trustee as of the applicable Record Date for such Interest Payment Date.
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Transfer and Exchange
Transfer of Bonds. Any Bond may, in accordance with its terms, be transferred on the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee. Whenever any Bonds or Bonds shall be surrendered for transfer, the Authority shall execute and the Trustee shall authenticate and shall deliver a new Bond or Bonds for a like aggregate principal amount and of like maturity. The Trustee may require the Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer.

Exchangeof Bonds. Any Bond may be exchanged at the principal corporate trust office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations and of like maturity. The Trustee shall require the Bond Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange.

Terms of Redemption
Optional Redemption. The Bonds are subject to redemption, at the option of the City, on any date on or after April 1, ____, as a whole or in part, by such maturities as shall be determined by the City, and by lot within a maturity, from prepayments of Installment Payments made at the option of the City pursuant to the Installment Sale Agreement, from any available source of funds, at a redemption price equal to the principal amount of the Bonds to be redeemed, together with accrued interest thereon to the date fixed for redemption, without premium.

Mandatory Sinking Fund Redemption. The Bonds maturing on April 1, ____, are also subject to mandatory redemption from sinking account payments made by the Authority, in part by lot, on April 1, ____, and on each April 1 thereafter to and including April 1, ____, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table:

Redemption Date Principal
(April 1) Amount
† Maturity.

The Bonds maturing on April 1, ____, are also subject to mandatory redemption from sinking account payments made by the Authority, in part by lot, on April 1, ____, and on each April 1 thereafter to and including April 1, ____, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest thereon to the redemption date, without premium, as set forth in the following table:
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Redemption Date Principal
(April 1) Amount
† Maturity.

Purchaseof Bonds In Lieu of Optional and Mandatory Sinking Fund Redemption. In lieu of optional and mandatory sinking fund redemption of Bonds as provided above, amounts held by the Trustee for such redemption may also be used on any Interest Payment Date, upon receipt by the Trustee at least ninety (90) days prior to the next scheduled Interest Payment Date of the written request of an Authorized Representative of the City, for the purchase of Bonds at public or private sale as and when and atsuch prices (including brokerage, accrued interest and other charges) as the City may in its discretion direct, but not to exceed the redemption price which would be payable if such Bonds were redeemed. Such purchases may be affected through the investment department of the Trustee or of an affiliate of the Trustee. The aggregate principal amount of Bonds of the same maturity purchased in lieu of redemption shall not exceed the aggregate principal amount of Bonds of such maturity which would otherwise be subject to such redemption.

Selection of Bonds for Redemption. The Trustee shall select the Bonds to be redeemed from all Bonds or such given portion thereof not previously called for redemption by lot within a maturity. For purposes of such selection, the Trustee shall treat each Bond as consisting of separate $5,000 portions and each such portion shall be subject to redemption as if such portion were a separate Bond. No Bonds selected for redemption may be transferred.

Notice of Redemption. Notice of redemption shall be mailed by first class mail, postage prepaid, not less than thirty (30) nor more than sixty (60) days before any redemption date, to the respective Owners of any Bonds designated for redemption at their addresses appearing on the Registration Books, and to the Securities Depositories and to the Information Services. Each notice of redemption shall state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and Bond numbers of the Bonds to be redeemed, the maturity or maturities of the Bonds to be redeemed and in the case of Bonds to be redeemed in part only, the respective portions of the principal amount thereof to be redeemed. Each such notice shall also state that on the redemption date there will become due and payable on each of said Bonds the redemption price thereof, and that from and after such redemption date interest thereon shall cease to accrue and shall require that such Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein shall affect the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds shall be given by the Trustee, at the expense of the Authority, for and on behalf of the Authority.

Notice of any optional redemption of Bonds shall either (i) explicitly state that the proposed redemption is conditioned on there being on deposit in the applicable fund or account on the redemption date sufficient money to pay the full redemption price of the Bonds to be redeemed, or (ii) be sent only if sufficient money to pay the full redemption price of the Bondsto be redeemed is on deposit in the applicable fund or account.
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Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Authority shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the Bonds surrendered.

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

All Bonds redeemed pursuant to the provisions of the Indenture shall be canceled by the Trustee upon surrender thereof and destroyed.

SECURITY FOR THE BONDS
Revenues
The Bonds are special obligations of the Authority payable from and secured by a pledge of the Revenues, consisting primarily of Installment Payments to be made by the City under the Installment Sale Agreement and any other amounts (including proceeds of the sale of the Bonds) held in any fund or account established pursuant to the Indenture.

The Installment Payments payable to the Trustee are calculated to be sufficient to pay, when due, the principal of and interest on the Bonds.

Installment Payments
Obligation to Pay. The City agrees to pay to the Authority, its successors and assigns, but solely from the Net Revenues, as the purchase price of the Wastewater System and the Wastewater Improvement Project, an amount equal to the aggregate principal amount of the Bonds, together with interest on the unpaid principal balance, payable in Installment Payments coming due and payable on each Installment Payment Date. The Installment Payments will be paid by the City to the Trustee, as assignee of the Authority pursuant to the Indenture.

The City’s obligations under the Installment Sale Agreement are secured by a pledge of and lien on Net Revenues.

Effect of Prepayment. In the event that the City prepays all remaining Installment Payments in full, the City’s obligations under the Installment Sale Agreement will thereupon cease and terminate, including but not limited to the City’s obligation to pay Installment Payments; provided, however, that the City’s obligations to compensate and indemnify the Trustee shall survive such prepayment. In the event that the City prepaysthe Installment Paymentsin part but not in whole, the principal component of each succeeding Installment Payment will be reduced and the interest component of each remaining Installment Payment -13-
will be reduced by the aggregate corresponding amount of interest which would otherwise be payable on the Bonds thereby redeemed.

Rate on Overdue Payments. In the event the City fails to make any of the payments required in the Installment Sale Agreement, the payment in default will continue as an obligation of the City until the amount in default is fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment, at the rate of ten percent (10%) per annum.

Assignment. The City agrees that all Installment Payments have been assigned by the Authority to the Trustee in trust, pursuant to the Indenture, for the benefit of the Owners of the Bonds, and the City assents to such assignment.

Special Obligations of the City; Obligations Absolute
Installment Payments. The City’s obligation to pay the Installment Payments, the Wastewater System Additional Payments, any other amounts coming due and payable under the Installment Sale Agreement and payments with respect to Parity Obligations is a special obligation of the City limited solely to the Net Revenues. Under no circumstances is the City required to advance moneys derived from any source of income other than Net Revenues and other sources specifically identified in the Installment Sale Agreement forthe payment of the Installment Payments, the WastewaterAdditional Payments or payments with respect to Parity Obligations, nor will any other funds or property of the City be liable for the payment of the Installment Payments, the Wastewater Additional Payments or payments with respect to Parity Obligations and any other amounts coming due and payable under the Installment Sale Agreement.

The obligations of theCity to make the Installment Payments, the WastewaterAdditional Payments and payments with respect to Parity Obligations from Net Revenues and to perform and observe the other agreements contained in the Installment Sale Agreement and under agreements with respect to Parity Obligations are absolute and unconditional and are not subject to any defense or any right of setoff, counterclaim or recoupment arising out of any breach of the City, the Authority or the Trustee of any obligation to the City or otherwise with respect to the Wastewater System, whether under the Installment Sale Agreement or otherwise, or out of indebtedness or liability at any time owing to the City by the Authority or the Trustee. Until such time as all of the Installment Payments, all of the Wastewater Additional Payments and all other amounts coming due and payable under the Installment Sale Agreement and payments with respect to Parity Obligations shall have been fully paid or prepaid, the City (a) will not suspend or discontinue payment of any Installment Payments, Wastewater Additional Payments, payments with respect to Parity Obligations or such other amounts, (b) will perform and observe all other agreements contained in the Installment Sale Agreement and under any agreements with respect to Parity Obligations, and (c) will not terminate the Installment Sale Agreement or agreements with respect to Parity Obligations for any cause, including, without limiting the generality of the foregoing, the occurrence of any acts or circumstances that may constitute failure of consideration, eviction or constructive eviction, destruction of or damage to the Wastewater System, failure to complete the Wastewater Improvement Project by the estimated Completion Dates thereof, sale of the Wastewater System, the taking by eminent domain of title to or temporary use of any component of the Wastewater System, commercial frustration of purpose, any change in the tax law or other laws of the United States of America or the State or any political subdivision of either thereof or any failure of the Authority or the Trustee to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with the Indenture, the Installment Sale Agreement or agreements with respect to Parity Obligations. -14-
Nothing contained in the Installment Sale Agreement shall be construed to release the Authority or the Trustee from the performance of any of the agreements on its part contained in the Installment Sale Agreement or in the Indenture, and in the event the Authority or the Trustee shall fail to perform any such agreements, the City may institute such action against the Authority or the Trustee as the City may deem necessary to compel performance so long as such action does not abrogate the obligations of the City contained in the preceding paragraph. The City may, however, at the City’s own cost and expense and in the City’s own name or in the name of the Authority prosecute or defend any action or proceeding or take any other action involving third persons which the City deems reasonably necessary in order to secure or protect the City’s rights under, the Installment Sale Agreement and in such event the Authority hereby agreesto cooperate fully with the City and to take such action necessary to effect the substitution of the City for the Authority in such action or proceeding if the City shall so request.

Pledge and Application of Net Revenues
Pledge of Net Revenues. The City agrees that the payment of the Installment Payments will be secured by a pledge, charge and first and prior lien upon Net Revenues, and Net Revenues sufficient to pay the Installment Payments as they become due and payable are charged, assigned, transferred and set over by theCity to theAuthority and its assignsforthe purpose ofsecuring payment of the Installment Payments.

The Net Revenues shall constitute a trust fund for the security and payment of the Installment Payments.

Deposit to and Transfer from Wastewater Fund. All of the Gross Revenues shall be deposited by the City immediately upon receipt in the Wastewater Fund.

The City shall withdraw from the Wastewater Fund such amounts atsuch times asshall be required to pay all Maintenance and Operation Costs as they come due and payable.

The City covenants and agrees that all Gross Revenues will be held by the City in the Wastewater Fund in trust for the benefit of the Trustee (as assignee of the rights of the Authority hereunder), the Owners, the owners of any Parity Obligations and the owners of any Subordinate Obligations.

On or before each Installment Payment Date, the City shall withdraw from the Wastewater Fund and transfer to the Trustee, for deposit into the Bond Fund, amounts which, together with the balance then on deposit in the Bond Fund (other than amounts resulting from the prepayment of the Installment Payments and other than amounts required for payment of the principal or interest with respect to any Bonds which have matured or been called for redemption but which have not been presented for payment), is equal to the aggregate amount of the Installment Payment coming due and payable on the nextsucceeding Interest Payment Date.

In addition, the City shall withdraw from the Wastewater Fund such amounts at such times as shall be required to pay (i) the principal of and interest on any Parity Obligations and otherwise comply with the provisions of the instruments authorizing the issuance of any Parity Obligations; and (ii) pay all other amounts when and as due and payable hereunder.

Release from Lien. Following the transfers with respect to the April 1 Interest Payment Date, Net Revenuesin excess of amountsrequired forthe payment of Installment Payments and any Parity Obligations in that Fiscal Year shall be released from the lien of the Installment Sale Agreement and shall be available for any lawful purpose of the City.
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Rates, Fees and Charges
The City will, at all times while any of the Installment Payments, any Parity Obligations and any Obligations remain outstanding, fix, prescribe and collect rates, fees and charges for the wastewater service for each Fiscal Year so as to yield Gross Revenues at least sufficient, after making reasonable allowances for contingencies and errorsin the estimates, to pay the following amounts during such Fiscal Year in the order below set forth:
(i) All current Maintenance and Operation Costs.
(ii) The Installment Payments and all payments required with respect to the any Parity Obligations.
(iii) Payments required with respect to the any Subordinate Obligations. (iv) All payments to meet any other obligations of the City which are charges, liens or encumbrances upon, or payable from, the Net Revenues.
(v) Any other lawful purposes of the City, including, but not limited to, depositsto the Rate Stabilization Fund.

In addition, theCity shall fix, prescribe and collectrates, fees and chargesforthewastewater service during each Fiscal Year which are sufficient to yield Net Revenues at least equal to one hundred twentyfive percent (125%) of the amounts payable under the preceding paragraphs(ii) and (iii) above in such Fiscal Year.

Limitations on Future Obligations Secured by Net Revenues No Obligations SuperiortoInstallment Payments. In order to protect further the availability of the Net Revenues and the security for the Installment Payments and any Parity Obligations, the City hereby agrees that the City shall not, so long as any Installment Payments or any Parity Obligations are outstanding, issue or incur any obligations payable from Gross Revenues or Net Revenues superior to the Installment Payments or any Parity Obligations.

Parity Obligations. The City further covenants that it will not issue or incur any Parity Obligations unless:
(i) The City is not in default under the terms of this Installment Sale Agreement or any agreements relating to then existing Parity Obligations; (ii) (A) Net Revenues, calculated on sound accounting principles, as shown by the books of the City for the latest Fiscal Year or any twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, as shown by the books of the City, shall have amounted to at least

1.25 times the maximum amount of Installment Payments and debt service on all Parity Obligations outstanding immediately subsequent to the incurring of such additional obligations coming due and payable in any future Fiscal Year. -16-
Either or both of the following items may be added to such Net Revenues for the purpose of applying the restriction contained in this subsection (b)(ii)(A):
(1) An allowance for revenues to be derived from any additions to or improvements or extensions of the Wastewater System which, during all or any part of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, were not in service, in an amount equal to 100% of the estimated additional average annual Net Revenues to be derived from such additions, improvements and extensions, all as shown by the certificate or opinion of a qualified independent consultant employed by the City. (2) An allowance for any increase in the charges made for service from the Wastewater System which has become effective prior to the incurring of such Parity Obligations but which, during all or any part of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, was not in effect, in an amount equal to 100% of the amount by which the Net Revenues would have been increased if such increase in charges had been in effect during the whole of such Fiscal Year or the twelve (12) month period out of the most recent eighteen months selected by the City ending not more than sixty (60) days prior to the adoption of the resolution pursuant to which such Parity Obligations are authorized to be issued or incurred, as shown by the certificate or opinion of a qualified independent consultant employed by the City; or
(B) Estimated Net Revenues, based on a report of a qualified independent engineer employed by the City or a report of a qualified independent consultant employed by the City, for each of the five (5) Fiscal Years next following the earlier of (i) the end of the period during which interest on the Parity Obligations proposed to be executed is to be capitalized or, if no interest is capitalized the Fiscal Year in which the proposed Parity Obligations are to be issued, or (ii) the date on which substantially all projects financed with the proposed Parity Obligations are expected to commence operations, shall have amounted to at least 1.25 times the maximum amount of Installment Payments and debt service on all Parity Obligations outstanding immediately subsequent to the incurring of such additional obligations coming due and payable in any future Fiscal Year.

Any or all of the following items may be added to such Net Revenues for the purpose of applying the restriction contained in this subsection (b)(ii)(B):
(1) An allowance for revenues that are estimated to be derived from any increase in the rates, fees and charges in effect and being charged or from any increase in the rates, fees and charges that have been approved but are not yet in place; and
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(2) An allowance for revenues that are estimated to be derived from customers of the Wastewater System anticipated to be served by the additions, betterments or improvements to the Wastewater System to be financed by the proposed Parity Obligation during such five year period; and (3) An allowance for a reduction in expenses that are estimated to be realized by the City pursuant to a contractual guarantee from the provider of energy efficiency improvements during such five year period.
(iii) A reserve fund may, but shall not be required to be, funded for such Parity Obligations. (iv) Interest with respect to such Parity Obligations shall be paid on the Installment Payment Dates.
(v) Principal with respect to such Parity Obligations shall be paid on March 15.

Subordinate Obligations. There shall be no limitations on the ability of the City to issue or incur Subordinate Obligations so long as the City is not in default under the terms of this Installment Sale Agreement, any agreements relating to then existing Parity Obligations or any agreement relating to then existing Subordinate Obligations.

Calculating Debt Service on Variable Rate Debt. For all purposes, variable rate indebtedness shall be assumed to bear interest at the highest of: (i) the actual rate on the date of calculation, or if the indebtedness is not yet outstanding, the initial rate (if established and binding); (ii) if the indebtedness has been outstanding for at least twelve months, the average rate over the twelve months immediately preceding the date of calculation; or (iii) (A) if interest on the indebtedness is excludable from gross income under the applicable provisions of the Code, the most recently published Bond Buyer “Revenue Bond Index” (or comparable index if no longer published), or (B) if interest is not so excludable, the interest rate on direct U.S. Treasury Obligations with comparable maturities plus 50 basis points; provided, however, that for purposes of any rate covenant measuring actual debt service coverage during a test period, variable rate indebtedness shall be deemed to bear interest at the actual rate per annum applicable during the test period.

Calculating Debt Service on Swaps. If any interest rate swap agreement under which the City is obligated to make payments based on a fixed interest rate is in place with respect to variable rate Parity Obligations, the amount payable by the City with respect to such variable rate Parity Obligations shall be assumed to be the fixed rate payable under such interest rate swap agreement.

Additional Payments
In addition to the Installment Payments, the City shall pay, from Net Revenues, when due all costs and expenses incurred by the Authority to comply with the provisions of the Indenture and the Installment Sale Agreement, including, without limitation all Costs of Issuance (to the extent not paid from amounts on deposit in the Costs of Issuance Fund), compensation due to the Trustee for its fees, costs and expenses -18-
incurred under the Indenture, compensation due to the Authority for its fees, costs and expenses incurred under the Indenture and all costs and expenses of attorneys, auditors, engineers and accountants.

Rate Stabilization Fund
From time to time, the City may deposit in the Wastewater Rate Stabilization Fund from Gross Revenues such amounts as the City may determine, provided that deposits for each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the end of such Fiscal Year. There are no current moneys in the Wastewater Rate Stabilization Fund.

The City may withdraw amounts from the Wastewater Rate Stabilization Fund (i) for transfer to the Wastewater Fund for inclusion in Gross Revenues for any Fiscal Year, such withdrawals to be made until (but not after) one hundred eighty (180) days after the end of such Fiscal Year, or (ii) for any other lawful purpose of the City.

All interest or other earnings on deposits in the Wastewater Rate Stabilization Fund shall be withdrawn therefrom and accounted for as Gross Revenues.

Notwithstanding the foregoing, (i) no deposit of Gross Revenues to the Wastewater Rate Stabilization Fund may be made to the extent that such Gross Revenues were included in the calculations of parity test and withdrawal of the Gross Revenues to be deposited in the Wastewater Rate Stabilization Fund from Gross Revenues that would cause noncompliance with the rate covenant and (ii) no deposit of Net Revenues shall be made in the Wastewater Rate Stabilization Fund to the extent that such deposit would cause noncompliance with the rate covenant in any Fiscal Year.

The Wastewater Rate Stabilization Fund is not pledged to secure the payments with respect to the Installment Payments, the payments with respect to any Parity Obligations or the payments with respect to any Wastewater Subordinate Obligations.

Reserve Account
The Reserve Account is established by the Indenture. The Reserve Account is required to be funded in an amount equal to the least of (a) Maximum Annual Debt Service on all the Bonds, (b) 125% of average annual debt service on the Bonds, and (c) 10% of the principal amount of the Bonds (the “Reserve Requirement”). The Reserve Requirement as of the date is delivery of the Bonds is $________. Amounts in the Reserve Account are to be used only for the payment of the principal of and interest on Bonds to the extent amounts in the Principal Account and/or the Interest Account are insufficient therefor.

On the date of delivery of the Bonds, in lieu of a cash deposit to the Reserve Account, the Municipal Bond Insurer will issue the Reserve Policy, in an amount equal to the initial Reserve Requirement.

There is no obligation for the Authority to replace the Reserve Policy or to cash fund the Reserve Account if the rating of the Municipal Bond Insurer is downgraded or withdrawn.

If the City is required to replenish cash in the Reserve Account, it shall be paid by the City from Net Revenues.
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Flow of Funds
No later than the first Business Day preceding each date on which principal of or interest on the Bonds becomes due and payable, the Trustee shall transfer from the Bond Fund and deposit into the following respective accounts, the following amounts in the following order of priority, the requirements of each such account (including the making up of any deficiencies in any such account resulting from lack of Revenues sufficient to make any earlier required deposit) at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:
(a) The Trustee will deposit in the Interest Account an amount required to cause the aggregate amount on deposit in the Interest Account to be at least equal to the amount of interest becoming due and payable on such date on all Bonds then Outstanding.
(b) The Trustee will deposit in the Principal Account an amount required to cause the aggregate amount on deposit in the Principal Account to equal the principal amount of the Bonds coming due and payable on such date.
(c) The Trustee will deposit in the Sinking Account an amount equal to the aggregate principal amount of the Term Bonds required to be redeemed on such date, if any. (d) The Trustee will deposit in the Reserve Account an amount, if any, required to cause the amount on deposit in the Reserve Account to be equal to the Reserve Requirement.

MUNICIPAL BOND INSURANCE
[TO COME]

THE AUTHORITY
The Authority is a joint exercise of powers entity duly organized and existing under and pursuant to that certain Joint Exercise of Powers Agreement, dated February 17, 1991, by and among the City, the Agency, and the School District. The Authority is authorized pursuant to Article 4 (commencing with section 6584) of the California Government Code to borrow money for the purpose of financing the acquisition of bonds, notes and other obligations of, or for the purpose of making loans to, public entities, including the City, the Agency, and the School District, and to provide financing for public capital improvements for lease to public entities, including the City, the Agency, and the School District. The members of the City Council of the City also sit as the Board of Directors of the Authority. The Authority is administered by the City staff.
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THE CITY
The City, a general law city incorporated on April 3, 1906, is located the southwestern tip of the County in the western San Joaquin Valley in central California. The City is located 52 miles (84 km) southwest of Fresno, 10 miles west of I-5 and sits at an elevation of 673 feet (205 m). The City occupies a land area of 6.61 square miles and serves a population of approximately 17,200. The City is surrounded by hills and ranches. Monterey County lies to the west of the City and Kings County sits to the east.

The City Council members are elected for overlapping four-year terms. Members of the City Council are elected by district instead of from the City at large. One council member represents each of the five districts within the City. The policies of the City Council are carried out by the appointed City Manager.

The City Council also directly hires the City Attorney who serves as the City’s primary legal advisor. Key administrative personnel of the City are listed at the front of this Official Statement. The current members of the City Council are as follows:

COALINGA CITY COUNCIL MEMBERS
Name and Office District Current Term Expires
James Horn, Mayor 2 December 2024
Jose Manny Ramirez, Mayor Pro Tem 4 December 2024
Lonnie Hedgecock Councilmember 5 December 2026
Roger Schindler Councilmember 1 December 2024
Nathan Vosburg Councilmember 3 December 2926
See APPENDIX A— GENERAL, ECONOMIC AND DEMOGRAPHIC INFORMATION RELATING TO THE CITY AND THE COUNTY for additional description of the City as well as certain economic and demographic information relating to the surrounding area.

THE WASTEWATER SYSTEM
General
The City operates and maintains the Wastewater System which consists of a Citywide wastewater collection and treatment system. The Wastewater System collects and treats wastewater generated from residential and commercial customers; there are currently no significant industrial users that discharge wastewater into the Wastewater System. All residences and businesses in the City are required to connect to the Wastewater System.

The Wastewater System’s collection and conveyance facilities include approximately 42 miles of sanitary sewer pipeline ranging from six inches to twenty-four inches in diameter. The Wastewater System’s collection system includes 4 lift stations and a wastewater treatment plant capable of treating up to a maximum of 1.3 MGD of wastewater flow.

The small pipes (typically 4 inches in diameter) that connect homes and businesses to the Wastewater System are called service laterals. Each property owner is responsible for the maintenance of the complete service lateral, including the portion of such lateral placed in the public right-of-way or easement.
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The wastewater generated by Wastewater System customers flows from service laterals through the collection system to the City’s wastewater treatment plant. The treatment plant was constructed in the 1940s and updated substantially in 1977. The wastewater treatment plant is located 2.5 miles west of the center of the City on Melcher Road. The treatment plant treats approximately 1.0 MGD of wastewater and is permitted for a maximum capacity of 1.32 MGD. For additional information about the Wastewater System’s facilities, see “Wastewater System Facilities.” The City does not currently recycle effluent discharged from its wastewater treatment facilities; however, the City will coordinate any future recycled water plans with local water, wastewater, groundwater, and planning agencies within and near the City’s service area.

Wastewater System Management
The Wastewater System is operated by the City’s Utilities Department and is managed by the Utilities Supervisor. The Utilities Supervisor supervises seven staff members. Generally, staff members perform administrative, engineering, construction and maintenance, water treatment, water quality, preventive maintenance, and customer service activities.

Alvaro Preciado, Chief Plant Operator, manages the operation of the wastewater treatment plant.

Mr. Precaido has over twenty years of operating experience and has been with the City for twenty-six years.

Mr. Preciado has an AA degree from West Hills College and holds a Water Treatment T-2 and Water Distribution D-2 certificate.

Wastewater System Employee Relations
Service Employees International Union Local 521 represents the Wastewater System’s nonmanagement employees as a collective bargaining unit. The current contract expires on June 30, ____. The Wastewater System has not experienced a labor stoppage or an interruption in service since its inception.

Wastewater System Facilities
The City’s Wastewater System is comprised of a network of over 42 miles of sanitary sewer pipeline with sizes ranging from six to 24-inches in diameter, four lift stations located at various locations within the City and their associated force mains, and a wastewater treatment plant.

The backbone of the sewer collection system consists of a series of sewer truck lines and sewers interceptor. The sewer inceptors typically include larger pipelines, approximately 21-inches or larger, while the sewer trunk lines typically range from 12 to 18-inches. The lift stations raise wastewater flows to higher elevation in order to continue gravity flow at reasonable slopes and depths. The sewer truck lines and sewer interceptor’s function to convey Wastewater collected in the Wastewater System to the Wastewater System’s wastewater treatment plant (the “WWTP”).

The City owns and operates the WWTP under California Regional Water Quality Control Board (“RWQCB”) Waste Discharge Requirements (“WDRs”) Order No. 94-184. The WWTP treats and disposes municipal wastewater generated by residences and businesses within the City. The WWTP is located at the confluence of Los Gatos Creek and Warthan Creek, approximately one mile east of the City.

The treatment process at the WWTP consists of screening, primary clarification, and secondary treatment (aerated facultative lagoons followed by stabilization lagoons). Treated effluent quality is undisinfected -22-
secondary effluent as described in Section 30301.900 of Title 22 of the California Code of Regulations (“CCR”).

The WWTP has undergone two major modifications and additions over the last 40 years. According to WDR Order No. 76-180, the WWTP originally consisted of a primary clarifier followed by three oxidation ponds in series. Final disposal consisted of irrigating land controlled by the City and West Hills Community College for agricultural reclamation. At that time, the WWTP’s treatment capacity was 0.6 MGD.

In 1980 the City submitted a Report of Waste Discharge for the expansion of the existing treatment capacity from 0.6 MGD to 0.93 MGD. The modifications consisted of influent screening followed by aerated facultative lagoons and stabilization ponds. Final effluent disposal was consistent with previous practices on City-owned land and West Hills Community College grounds. These modifications and additions were implemented in 1982. WDR Order No. 80-064 was adopted on May 26, 1980.

In 1991, the City submitted a Report of Waste Discharge in support of a change in operation and an increase in quantity of discharge from its municipal WWTP. The treatment capacity was increased from

0.93 MGD to the current 1.34 MGD. The City completed the rehabilitation of the primary clarifier and aerobic digester, which were removed from service during the previous plant modification. The existing WWTP includes a bar screen, a primary clarifier, an aerobic sludge digester, sludge drying beds, two aerated facultative lagoons each with a surface area of three acres, and three stabilization ponds having a total surface area of 11 acres. Currently, treated effluent is pumped form one of the stabilization ponds to adjacent land, where it percolates into the soil and is used to recharge the groundwater table. By way of this process, the majority of the treated domestic Wastewater is recycled as groundwater recharge.

Stormwater Collection System. The Wastewater System also contains a stormwater collection system that consists of several independent networks of storm drain inlets and pipes that either discharge into four permanent storm drain basins or the Warthan or Los Gatos Creeks. The storm drainage system operates as a gravity flow system and does not require the use of pump stations or lift stations. The existing storm drain system consists of pipes up to 48-inches in diameter and twelve drainage zones. Several portions of the storm drain system are severely undersized, and the system relies on aboveground surface flow through street curbs and gutters as a means of stormwater conveyance.

Wastewater System Service Area
The Wastewater System provides wastewater collection, transmission, treatment, and disposal services for the developed area within the City’s limits. The Wastewater System’s service area comprises the City boundaries, an area of approximately 2.6 square miles with a population of approximately 17,200.

All of the residents and businesses residing within the Wastewater System’s service area are required to connect to the Wastewater System. There are currently no significant industrial users that discharge into the Wastewater System.

Future Growth in the Service Area. The Wastewater System’s service area is contained within the service area for the Water System. For a description of future growth within City and the Wastewater System’s service area, see “THE WASTEWATER SYSTEM—Wastewater System Service Area— Future Growth in Service Area” herein.
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Service Area Map. The Wastewater System’s service area is contained within the service area for the City municipal water system (the “Water System”). For a map of the Water System’s service area, see “THE WASTEWATER SYSTEM—Water System Service Area Map” herein.

Wastewater System Use
The Wastewater System’s average daily flow during the 2019-20 fiscal year was approximately 0.9 MGD. The WWTP has a maximum permitted capacity of 1.32 MGD.

Wastewater System Customers
Wastewater Accounts by Customer Type. The following table shows the number of customer accounts by customer type during the most recent five fiscal years.

Table 1

WASTEWATER SYSTEM

ACCOUNTS BY CUSTOMER TYPE
Fiscal Year Ending June 30,
Customer Type 2020 2021 2022 2023 2024
Residential 3,311 3,365 3,331 3,327 3,329
Non-Residential 222 182 203 201 201
Total Water Use 3,533 3,547 3,534 3,528 3,530
Source: City of Coalinga as compiled by IGService.

Over 75% of Wastewater System revenues are generated from residential customers, with nonresidential customers accounting for the rest of the Wastewater System’s revenues. -24-
Top 10 Wastewater System Customers. The ten largest Wastewater customers for the 2023-24 fiscal year by revenue, accounted for approximately ____% of the Wastewater System’s total revenues. The following table shows the top ten Wastewater customers by revenues for the 2023-24 fiscal year.

Table 2

WASTEWATER SYSTEM

TEN LARGEST CUSTOMERS
For Fiscal Year 2023-24
Customer
Customer
Type
FY2023-24
Revenues
% of Total
Revenues

1. West Hills College Education $71,223 4.3%

2. First Pacific Amandako Mobil Home Park 59.005 3.6

3. Coalinga-Huron Schools Education 45,244 2.7

4. Sequoia Packing Food Processing 38,328 2.3

5. Echo Canyon Apartments Apartments 31,488 1.9

6. Coalinga Station B Apartments 30,354 1.8

7. Westwood Apartments Apartments 29,219 1.8

8. Coalinga Medical Center, LLC Medical 25,751 1.6

9. Warthan Place Apartments Apartments 21,224 1.3

10. Latchkey Pioneers, LLC Commercial 21,988 1.3
Total Top 10 $372,824 22.5%
Total Wastewater System 1,658,000 100.00%
Source: City of Coalinga as compiled by IGService.

Wastewater System Rates
Rate Setting Process and Current Wastewater System Rates. A Proposition 218-compliant notice was sent to all Wastewater System customers as a billing insert with bills at the end of August, 2020. The notice explained the need for rate increases and provided the opportunity for customers to protest and attend the rate hearing on October 15, 2020. Resolution No. 3989, raising water and wastewater rates, was adopted by the City Council at the City Council’s October 15, 2020 meeting by 5-0 vote and became effective as of November 1, 2020. The current rates for service in the Wastewater System, as well as planned increases, are detailed in the table below together with the prior rates that were effective until the new rate structure went in to effect on November 1, 2020. The prior rates had been effective since 2005.

Under the new rate structure, all residential customers are charged a fixed monthly charge regardless of customer flow with multi-family residential customers being charged for each dwelling unit.

Non-residential customers are charged 1) a fixed minimum monthly charge and 2) an additional volumetric rate charge based on that customer’s metered potable water volume purchased from the Water System.

Educational customers are charged a single volumetric variable rate charge based on metered potable water volume purchased from the Water System.
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Table 3

WASTEWATER SYSTEM

RATES AND CHARGES
Prior Rate
Effective Approved Rates
Residential 7/1/2005 11/1/20 11/1/21 11/1/22 11/1/23 11/1/24 Fixed monthly charge for SingleFamily Residential and MultiFamily Residential for each unit$15.68 $21.95 $22.61 $23.29 $23.99 $24.71 Non-Residential
Minimum monthly charge for
non-residential customers
$15.68 $21.95 $22.61 $23.29 $23.99 $24.71
Volumetric charge based on
metered potable water per
thousand gallons (With separate
landscape meter)
$2.59 $4.86 $5.01 $5.16 $5.31 $5.47
Volumetric charge based on
metered potable water per
thousand gallons (Without
separate landscape meter)
$2.32 $4.86 $5.01 $5.16 $5.31 $5.47
Educational Institutions
Monthly charge is fixed based on
the average monthly metered
potable water volume during
December through March each
year

2.59 $4.86 $5.01 $5.16 $5.31 $5.47
Source: City of Coalinga.

Billing Procedures. Bills for wastewater, water and other City utilities and services is done collectively on a single monthly bill with itemized charges for each service. For additional information about the Wastewater System’s billing procedures, see “THE WASTEWATER SYSTEM – Wastewater System Rates – Billing Procedures.”
Wastewater System Financial Statements
The Wastewater System’s audited financial statements for the 2022-23 fiscal year are included in the City’s Audited Financial Statements, attached hereto as APPENDIX B—AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023. -26-
Wastewater System Net Position. The following table presents the audited Statements of Net Position of the Wastewater System for the four most recent fiscal years.

Table 4

WASTEWATER SYSTEM

STATEMENT OF NET POSITION
Fiscal Year Ended June 30,
2020 2021 2022 2023
Audited Audited Audited Audited
ASSETS
Current Assets:

Cash and investments 3,292,326 2,600,350 3,630,226 3,342,163 Cash and investments with fiscal agent 726,828 5 — —
Accounts receivable 78,209 149,872 124,747 101,802
Interest receivable 2,873 635 1,418 5,883
Prepaids — — — 1,818
Due from other governments 3,543 — — 175,803
Due from other funds — 329,557 — —
Total Current Assets 4,103,779 3,080,419 3,756,391 3,627,469 Non-Current Assets:

Net pension asset — — 45,735 —
Property, plant and equipment 5,626,025 5,802,265 5,670,493 6,075,176 Total Non-Current Assets 5,626,025 5,802,265 5,716,228 6,075,176 Total Assets 9,729,804 8,882,684 9,472,619 9,702,645
Deferred Flows of Resources
Deferred flows related to pensions 59,867 58,755 102,255 131,530 Liabilities
Current Liabilities:

Accounts payable 46,119 115,705 81,927 234,882
Accrued liabilities 6,923 — — 22,911
Deposits — — — —
Due to other funds — — — —
Current long-term debt — — — —
Total Current Liabilities 53,042 115,705 81,927 258,793 Non-Current Liabilities:

Advances from other funds 2,940,000 2,335,000 2,335,000 2,265,000 Long-term debt — — — —
Compensated absences 34,647 42,686 47,959 38,247
Net pension liabilities 34,323 51,766 — 89,944
Total Non-Current Liabilities 3,008,970 2,429,452 2,382,959 2,393,191 Total Liabilities 3,062,012 2,545,157 2,464,886 2,651,984 Deferred inflows related to pensions 3,484 4,267 7,437 7,722 Net Position
Net investment in capital assets 5,626,025 5,802,265 5,670,493 6,075,176 Unrestricted/(deficit) 1,098,150 589,750 1,432,058 1,099,293 Total Net Position 6,724,175 6,392,015 7,102,551 7,174,469 Source: City of Coalinga FY2016-19 Audited Financial Statements and City of Coalinga. -27-
Wastewater System Revenues, Expenses, and Changes in Net Position. The following table presents the audited Statement of Revenues, Expenses and Changes in Net Position for the Wastewater System for the three most recent fiscal years, unaudited actuals for fiscal year 2023-24, and budgeted projections for the 2024-25 fiscal year from the City’s fiscal year 2020-21 Budget. See “Wastewater System Historical and Projected Operating Results” for a five-year historical comparison of revenues and expenses of the Wastewater Fund and a projection of the revenues and expenses, including projected debt service coverage.

Table 5

WASTEWATER SYSTEM

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION Fiscal Year Ending June 30,
2021 2022 2023 2024 2025
Audited Audited Audited Unaudited Budgeted

OPERATING REVENUES
Charges for services 1,375,097 1,731,015 1,640,153 1,658,000 1,700,000 Connection charges — — — — 2,000
Total Operating Revenue 1,375,097 1,713,015 1,640,153 1,658,000 1,702,000

OPERATING EXPENSES
Personnel 672,065 516,811 685,565 582,000 775,000
Contractual services and utilities 332,349 399,688 652,432 495,000 555,000 Supplies and materials 286,956 210,199 202,442 260,000 292,000 Bad debt 20,895 23,669 10,504 12,000 12,000
Depreciation(1) 232,749 240,090 250,037 250,037 250,037 Total Operating Expense 1,545,014 1,390,457 1,800,980 1,599,037 1,884,037 OPERATING INCOME/(LOSS) (169,917) 340,558 (160,827) 58,963 (182,037)

NONOPERATING REVENUES
Intergovernmental — 32,680 267,804 138,176 —
Developer impact fees — 365,243 43,704 437,407 —
Interest income 5,199 2,958 17,702 25,000 5,000
Miscellaneous 26,565 34,060 22,700 25,000 25,000
Gain on sale of assets — 4,505 — — —
Interest expense (72,149) (69,468) (67,522) (65,928) (33,156) Total Nonoperating Revenue (40,385) 369,978 284,388 559,655 (3,156)

OPERATING TRANSFERS
IN/(OUT) (121,858) — (51,643) — —
CHANGE IN NET POSITION (332,160) 710,536 71,918 618,618 -185,193 NET POSITION - Beginning of Year 6,724,175 6,392,015 7,102,551 7,174,469 7,793,087 NET POSITION - End of Year 6,392,015 7,102,551 7,174,469 7,793,087 7,607,894 Source: City of Coalinga FY2020-23 Audited Financial Statements and City of Coalinga. (1) Depreciation is preliminary for FY2023-24 and not budgeted for FY2024-25; therefore, for comparison purposes, an estimated value is used based on FY2022-23.
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Wastewater System Historical and Planned Capital Improvements There were no major capital improvements made to the Wastewater System within the last five years and no major capital improvements are expected during the next five years.

Wastewater System Historical and Projected Operating Results and Debt Service Coverage The following table presents the Historical Summary of Gross Revenues, Maintenance and Operation Costs and debt service coverage for the Wastewater System for the five most recent fiscal years.

The data is based on figures from the City’s audited financial statements and fiscal year 2023-24 unaudited actuals.

Table 6

WASTEWATER SYSTEM

HISTORICAL OPERATING RESULTS AND DEBT SERVICE COVERAGE
Fiscal Year Ended June 30,
2020 2021 2022 2023 2024
Audited Audited Audited Audited Unaudited
REVENUES:

Operating Revenue $1,004,633 $1,115,346 $1,375,097 $1,657,871 $1,640,153 Impact Fee Revenue
525,796 34,866 - - -
Investment Earnings 14,694 29,483 5,199 2,958 17,702
Rental Income & Misc 20,918 11,350 26,565 139,884 22,700 Total Revenues $1,566,041 $1,191,045 $1,406,861 $1,800,713 $1,680,555 OPERATION & MAINTENANCE EXPENSES:

Personnel 466,460 579,656 611,712 516,811 589,421
Contractual Services and Utilities 298,288 308,365 470,283 399,688 384,628 Supplies and Material 148,279 103,766 158,252 210,199 202,442 Bad Debt - 24,182 - 23,669 10,504
Total Operating Expenses 913,027 1,015,969 1,240,247 1,150,367 1,186,995 NET REVENUE AVAILABLE FOR DEBT SERVICE 653,014 175,076 166,614 650,346 493,560

DEBT SERVICE
2012 Bonds 197,698 169,235 72,149 - -
2021 Bonds - - - 69,468 135,073
Total Debt Service 197,698 169,235 72,149 69,468 135,073 DEBT SERVICE COVERAGE RATIO 3.30 1.03 2.31 9.36 3.65
NET REVENUES AFTER DEBT SERVICE 455,316 5,841 94,465 580,878 358,488 Source: City of Coalinga
The following table presents the Projected Summary of Gross Revenues, Maintenance and Operation Costs and debt service coverage for the next five most recent fiscal years. Projections for fiscal year 2024-25 are based on projected revenues for the Wastewater System from the City’s 2024-25 Budget, adopted __________, 2024.
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While the City believes that these assumptions are reasonable, the City cannot guarantee that the Wastewater System’s actual results will not differ. The projections in the following table do not include any capital projects planned by the Wastewater System.

Table 7

WASTEWATER SYSTEM

PROJECTED OPERATING RESULTS AND DEBT SERVICE COVERAGE
Fiscal Year Ending June 30,
2025 2026 2027 2028 2029
Budgeted Projected Projected Projected Projected
REVENUES:

Operating Revenue $1,712,000 $1,712,000 $1,712,000 $1,712,000 $1,712,000 Investment Earnings 25,000 25,000 25,000 25,000 25,000
Rental Income & Misc 25,000 25,000 25,000 25,000 25,000 Total Revenues $1,762,000 $1,762,000 $1,762,000 $1,762,000 $1,762,000 OPERATION & MAINTENANCE EXPENSES:

PG&E 243,000 255,000 268,000 281,000 295,000
Solar Contribution — (155,000) (162,000) (170,000) (178,000) Personnel 600,000 618,000 637,000 656,000 676,000
Contractual Services and Utilities 250,000 258,000 266,000 274,000 282,000 Supplies and Material 250,000 258,000 266,000 274,000 282,000 Bad Debt 12,000 12,000 12,000 12,000 12,000
Total Expenses 1,355,000 1,246,000 1,287,000 1,327,000 1,369,000 NET INCOME AVAILABLE FOR DEBT SERVICE 407,000 516,000 475,000 435,000 393,000

DEBT SERVICE
2021A Bonds 134,037 133,190 137,203 135,928 134,503
2024 Bonds (1) - 148,503 155,500 155,500 155,500
Total Debt Service (1) 134,037 281,693 292,703 291,428 290,003 DEBT SERVICE COVERAGE RATIO (1) 3.04x 1.83x 1.62x 1.49x 1.36 NET REVENUE AFTER DEBT SERVICE (1) 272,964 234,308 182,298 143,573 102,998 Source: City of Coalinga
(1) Preliminary, subject to change.
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GENERAL CITY INFORMATION APPLICABLE TO THE WASTEWATER SYSTEM Enterprise Reserve Policies
On January 21, 2021, the City Council of the City approved an Reserve Policy that provides for the establishment of a reserve targets of 6 months of average monthly general fund operating expenditures. On August 1, 2024, the Reserve Policy was amended to provide for a reserve target of 6 months of average monthly Wastewater Fund operating expenditures which is intended to assure adequate reserves for ongoing needs and provide a back-up for revenue shortfalls due to economic uncertainties.

Risk Management
The City is a member of the Public Agency Risk Sharing Authority for California (“PARSAC”), a public entity risk pool in which there is a transferring (sharing) of risk among the pool participants. The City pays an annual premium to PARSAC for its general liability coverage. PARSAC is self-sustaining through member premiums. The City is insured under a retrospectively rated policy in which the initial premium is adjusted based on actual experience during the period of coverage. The City is responsible for all claims up to $25,000 per occurrence for general and auto liability with a coverage limit at June 30, 2014 of $975,000.

The City’s risk management program also includes fire, property and automobile insurance. The coverage includes an all risk-replacement cost blanket. Additionally, the City has property insurance coverage up to $975,000 per occurrence.

The City provides worker’s compensation and employer’s liability coverage on all employees through PARSAC. This insurance is paid entirely by the City. All premiums are paid by the appropriate fund designation for each employee’s salary and benefits. In the risk management program for the City, a proactive approach is taken toward work safety for employees. Various training sessions and inspections are conducted throughout the year. The result has been a continued reduction of work-related injury claims.

See APPENDIX B— AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023, Note 12.

Employee Pension Plans
The Wastewater System pays an allocable portion of the City’s administrative expenses, including employee compensation and benefits from their respective Net Revenues. The table below shows the City’s contribution to the CalPERS Miscellaneous plans (discussed below), and the amounts allocated to the Wastewater System for the years shown:
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CONTRIBUTION TO CALPERS MISCELLANEOUS PLANS

AND ALLOCATION TO WASTEWATER SYSTEM
Fiscal Year
Ended
June 30,
City Contribution
To CalPERS
Misc Plans
Amount Allocated
To Wastewater System
Wastewater
System
Allocation
2020 239,528
2021 224,127
2022 270,740
2023 291,740
2024(1)
Source: City of Coalinga.
(1) Estimated
General Information about the City’s CalPERS Plans. All qualified permanent and probationary employees are eligible to participate in either (1) the City’s Miscellaneous Plan, an agent multiple-employer defined benefit pension plan administered by the California Public Employees’ Retirement System (“CalPERS”), which acts as a common investment and administrative agent for its participating member employers, or (2) the City’s Safety Plan, a cost-sharing multiple employer defined benefit pension plan administered by CalPERS. They may be collectively referred to as the “Plans” or individually as a “Plan”.

Benefit provisions under the Plans are established by State statute and City resolutions. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after five (5) years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

Contributions. Section 20814(c) of the California Public Employees’ Retirement Law (“PERL”) requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The employer is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

Net Pension Liability. The City’s net pension liability for both Plans is measured as the total pension liability, less the plan’s fiduciary net position. As of June 30, 2020, the City reported an estimated net pension liability for its Miscellaneous Plans of $290,630 and an estimated net pension liability for its Safety Plans of $471,246. The Wastewater System’s portion of the City’s total net pension liability as of June 30, 2020, is an estimated $72,047.
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For more information, including actuarial assumptions, a discussion of the discount rate used, and schedules of funding progress for the Wastewater System’s various pension plans, see APPENDIX B— AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023, NOTE 11.

Recent Actions Taken by CalPERS. At its April 17, 2013, meeting, CalPERS’ Board of Administration (the “Board of Administration”) approved a recommendation to change the CalPERS amortization and smoothing policies. Prior to this change, CalPERS employed an amortization and smoothing policy that spread investment returns over a 15-year period with experience gains and losses paid for over a rolling 30-year period. As a result, CalPERS now employs an amortization and smoothing policy that will pay for all gains and losses over a 20-year period with a five-year ramp-up, and five-year rampdown, period. The new amortization and smoothing policy was used for the first time in the June 30, 2013 actuarial valuations in setting employer contribution rates for fiscal year 2015-16.

On February 18, 2014, the Board of Administration approved new demographic actuarial assumptions based on a 2013 study of recent experience. The largest impact, applying to all benefit groups, is a new 20-year mortality projection reflecting longer life expectancies and that longevity will continue to increase. Because retirement benefits will be paid out for more years, the cost of those benefits will increase as a result. The Board of Administration also assumed earlier retirements for Police 3%@50, Fire 3%@55, and Miscellaneous 2.7%@55 and 3%@60, which will increase costs for those groups. As a result of these changes, rates increased beginning in fiscal year 2016-17 (based on the June 30, 2014 valuation) with full impact in fiscal year 2020-21.

On November 18, 2015, the Board of Administration adopted a funding risk mitigation policy intended to incrementally lower its discount rate – its assumed rate of investment return – in years of good investment returns, help pay down the pension fund’s unfunded liability, and provide greater predictability and less volatility in contribution rates for employers. The policy establishes a mechanism to reduce the discount rate by a minimum of 0.05 percentage points to a maximum of 0.25 percentage points in years when investment returns outperform the existing discount rate, currently 7.5%, by at least four percentage points. CalPERS staff modeling anticipates the policy will result in a lowering of the discount rate to 6.5% in about 21 years, improve funding levels gradually over time and cut risk in the pension system by lowering the volatility of investment returns. More information about the funding risk mitigation policy can be accessed through CalPERS’ web site at the following website address:
https://www.calpers.ca.gov/page/newsroom/calpers-news/2015/adopts-funding-risk-mitigation-policy.

The reference to this Internet website is provided for reference and convenience only. The information contained within the website may not be current, has not been reviewed by the City or the Underwriter and is not incorporated in this Official Statement by reference.

On December 21, 2016, the Board of Administration voted to lower its discount rate from the current 7.5% to 7.0% over the next three years according to the following schedule.

Fiscal Year Discount Rate
2017-18 7.375%
2018-19 7.250
2019-20 7.000
For public agencies like the City, the new discount rate took effect on July 1, 2019. As the discount rate is decreased employers that contract with CalPERS to administer their pension plans will see increases in their normal costs and unfunded actuarial liabilities. Active members hired after January 1, 2013, under -33-
the Public Employees’ Pension Reform Act will also see their contribution rates rise. The three-year reduction of the discount rate will result in average employer rate increases of about 1% to 3% of normal cost as a percent of payroll for most miscellaneous retirement plans, and a 2% to 5% increase for most safety plans. Additionally, many CalPERS employers will see a 30 to 40% increase in their current unfunded accrued liability payments. These payments are made to amortize unfunded liabilities over 20 years to bring the pension fund to a fully funded status over the long-term.

PERS Amortization Period Reform. On February 13, 2018 the CalPERS Board voted to shorten the period over which actuarial gains and losses are amortized from 30 years to 20 years for new pension liabilities. The new 20-year amortization period begins with new gains or losses accrued starting with the June 30, 2019 actuarial valuations. The first payments on the new 20-year amortization schedule will take place in 2021.

A shorter amortization period will increase annual Unfunded Accrued Liability (“UAL”) contributions for cities that participate in CalPERS so long as CalPERS remains underfunded. The shortened amortization period will also lead to reductions of periods of negative amortization of the UAL, interest cost savings, and faster recoveries of funded status after market downturns.

Cities that participate in CalPERS will also see additional volatility in their future UAL contributions due to market performance as gains or losses will be amortized faster under the new amortization period.

The City cannot currently estimate the impact the shorter amortization period will have on its required contributions to CalPERS.

COVID-19 Impacts on CalPERS Contributions. The outbreak of COVID-19 has caused volatility in the financial markets in the United States and globally resulting in significant declines and speculation of a national and global recession. The City expects that the impacts of COVID-19 will cause its required CalPERS contributions to increase in future years.

Other Post-Employment Benefits
Plan Description. The City offers medical, dental, vision, chiropractic and prescription insurance coverage, as well as group life insurance coverage, to employees and their dependents. Additionally, the City offers an employee assistance program to assist employees and their families with problem assessment and short-term counseling needs. The City pays a portion of premiums in connection with the insurance coverage offered by the City.

The Wastewater System pays an allocable portion of any City OPEB expenses from Net Revenues.

For additional information about the City’s OPEB, see APPENDIX B— AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023, NOTE 10. -34-

INVESTMENT OF CITY FUNDS
Revenues collected by the City will be held and invested by the City in accordance with the provisions of the Indenture.

Funds held by the City, including Wastewater System moneys, are invested in accordance with the City’s Statement of Investment Policy (the “Investment Policy”) prepared by the Financial Services Director as authorized by section 53601 of the Government Code of California. The Investment Policy is submitted to the City Council annually. The Investment Policy allows for the purchase of a variety of securities and provides for limitations as to exposure, maturity and rating which vary with each security type. The composition of the portfolio will change over time as old investments mature, or are sold, and as new investments are made. Invested funds are managed to insure preservation of capital through high quality investments, maintenance of liquidity and then yield. Further, operating funds may not be invested in any investment with a maturity greater than five years. The City has never invested in derivatives or reverse repurchase agreements and such investments and instruments are not allowed by City policy.

For more information about the City’s investment policy, see APPENDIX C—CITY INVESTMENT POLICY.

CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND FEES
Under the California Constitution, the power of initiative is reserved to the voters for the purpose of enacting statutes and constitutional amendments. In the past, the voters have exercised this power from time to time, including through the adoption of Propositions 13 and 218.

From time to time other State and local initiative measures could be adopted, affecting the ability of the City to increase revenues and to increase appropriations.

Article XIIIA
On June 6, 1978, California voters approved Proposition 13, which added Article XIIIA to the California Constitution (“Article XIIIA”). Article XIIIA limits the maximum ad valorem tax on real property to 1% of full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service on indebtedness approved by voters prior to July 1, 1978 and (as a result of an amendment to Article XIIIA approved by California voters on June 3, 1986) on bonded indebtedness for the acquisition or improvement of real property which has been approved on or after July 1, 1978 by two-thirds of the voters voting on such indebtedness. Article XIIIA defines full cash value to mean “the County Assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or, thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” This full cash value may be increased at a rate not to exceed 2% per year to account for inflation.

Article XIIIA has subsequently been amended to permit reduction of the full cash value based in the event of declining property values caused by damage, destruction, or other factors and to provide that there would be no increase in the full cash value base in the event of reconstruction of property damaged or destroyed in a disaster and in other minor or technical ways. -35-
Article XIIIB
Article XIIIB of the California State Constitution limits the annual appropriations of the State and of any city, county, school district, authority or other political subdivision of the State to the level of appropriations of the particular governmental entity for the prior fiscal year, as adjusted for changes in the cost of living and population. The “base year” for establishing such appropriations limit is the 1978-79 fiscal year and the limit is to be adjusted annually to reflect changes in population and consumer prices.

Adjustments in the appropriations limit of an entity may also be made if (i) the financial responsibility for a service istransferred to another public entity orto a private entity, (ii) the financialsourcesforthe provision of services is transferred from taxes to other revenues, or (iii) the voters of the entity approve a change in the limit for a period of time not to exceed four years.

Appropriations subject to Article XIIIB generally include the proceeds of taxes levied by the State or other entity of local government, exclusive of certain State subventions and refunds of taxes. “Proceeds of taxes” include, but are not limited to, all tax revenues and the proceeds to an entity of government from (i) regulatory licenses, user charges, and user fees (but only to the extent such proceeds exceed the cost of providing the service or regulation), and (ii) the investment of tax revenues. Article XIIIB includes a requirement that if an entity’s revenues in any year exceed the amounts permitted to be spent, the excess would have to be returned by revising tax rates or fee schedules over the subsequent two years. Certain expenditures are excluded from the appropriations limit including payments of indebtedness existing or legally authorized as of January 1, 1979, or of bonded indebtedness thereafter approved by the voters and payments required to comply with court or federal mandates which without discretion require an expenditure for additional services or which unavoidably make the providing of existing services more costly.

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

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

Further, under Article XIIID, revenues derived from a property-related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge. The amount of a propertyrelated fee or charge may not exceed the proportional cost of the service attributable to the parcel, and no -36-
property-related fee or charge may be imposed for a service unless that service is actually used by, or is immediately available to, the owner of the property in question.

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

In Richmond v. Shasta Community Services District (9 Cal. Rptr. 3rd 121), the California Supreme Court addressed the applicability of the notice, hearing and protest provisions of Article XIIID to certain charges related to water service. In Richmond, the Court held that connection charges are not subject to Proposition 218. The Court also indicated in dictum that a fee for ongoing waterservice through an existing connection could, under certain circumstances, constitute a property-related fee and charge, with the result that a local government imposing such a fee and charge must comply with the notice, hearing and protest requirements of Article XIIID.

In Howard Jarvis Taxpayers Association v. City of Fresno (March 23, 2005), the California Court of Appeal, Fifth District, concluded that water, sewer and trash fees are property-related fees subject to Proposition 218 and a municipality must comply withArticle XIIID before imposing orincreasing such fees.

The California Supreme Court denied the City of Fresno’s petition for review of the Court of Appeal’s decision on June 15, 2005.

In July 2006 the California Supreme Court, in Bighorn-Desert View Wastewater Agency v. Verjil (39 Cal. 4th 205), addressed the validity of a local voter initiative measure that would have (a) reduced a water agency’sratesfor water consumption (and other water charges), and (b)required the water agency to obtain voter approval before increasing any existing water rate, fee, or charge, or imposing any new water rate, fee, or charge. The court adopted the position indicated by its statement in Richmond that a public water agency’s charges for ongoing water delivery are “fees and charges” within the meaning of Article XIIID, and went on to hold that charges for ongoing water delivery are also “fees” within the meaning of Article XIIIC’s mandate that the initiative power of the electorate cannot be prohibited or limited in matters of reducing or repealing any local tax, assessment, fee or charge. Therefore, the court held, Article XIIIC authorizes local voters to adopt an initiative measure that would reduce or repeal a public agency’s water rates and other water charges. (However, the court ultimately ruled in favor of the water agency and held that the entire initiative measure was invalid on the grounds that the second part of the initiative measure, whichwould have subjected futurewaterrate increasesto prior voter approval,was notsupported byArticle XIIIC and was therefore invalid.)
The court in Bighorn specifically noted that it was not holding that the initiative power is free of all limitations; the court stated that it was not determining whether the electorate’s initiative power is subject to the statutory provision requiring that water service charges be set at a level that will pay for operating -37-
expenses, provide for repairs and depreciation of works, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due.

Current Practice Regarding Rates and Charges. The City’s practice has been to provide public notice of proposed water rate increases through means that include, among others, holding informational presentations at community group meetings, mailings to residential and commercial customers of public hearings on rate increases, and press releases and media campaigns regarding rate increases, followed by public hearings conducted by the City Council. The most recent rate increase was enacted by the City in strict compliance with the procedures mandated by Proposition 218 and Bighorn.

Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted. Under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness. There can be no assurance that the courts will not further interpret, or the voters will not amend, Article XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for sewer, or to call into question previously adopted sewer rate increases.

Effect of Proposition 218 on the City; Possible Limitations on Enforcement Remedies.

The general financial condition of the City may be affected by provisions of Article XIIIC and Article XIIID. In particular, provisions of Article XIIIC (i) require taxes for general governmental purposes to be approved by a majority vote and taxes for specific purposes, even if deposited into the General Fund, to be approved by two-thirds vote, (ii) require any general purpose tax which the City imposed, extended or increased, without voter approval, after December 31, 1994, to be approved by majority vote on November 5, 1998 and (iii) provide that all taxes, assessments, fees and charges are subject to reduction or repeal at any time through the initiative process, subject to overriding constitutional principles relating to the impairment of contracts. Provisions of Article XIIID that affect the ability of the City to fund certain services or programs that it may be required or choose to fund include (i) adding notice, hearing, protest and, in some cases, voter approval requirementsto impose, increase or extend certain assessments, fees and charges and (ii) adding stricter requirements for finding individualized benefits associated with such levies.

The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenues sufficient to pay the Installment Payments and, therefore, the principal of and interest on the Bonds may be adversely affected by actions and events outside of the control of the City and may be adversely affected by actions taken (or not taken) under Article XIIIC or Article XIIID by voters, property owners, taxpayers or payers of assessments, fees and charges. Furthermore, any remedies available to the owners of the Bonds upon the occurrence of an event of default underthe Installment SaleAgreement are in many respects dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain. In addition to the possible limitations on the ability of the City to comply with its covenants under the Installment Sale Agreement, the rights and obligations under the Bonds and the Indenture may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against cities in the State of California. -38-
Based on the foregoing, in the event the City fails to comply with its covenants under the Installment Sale Agreement, including its covenants to generate sufficient Net Revenues, as a consequence of the application of Article XIIIC and Article XIIID, or to pay principal of or interest on the Bonds, there can be no assurance that available remedies will be adequate to fully protect the interests of the holders of the Bonds.

Proposition 26
On November 2, 2010, State voters approved Proposition 26 which amended certain sections of Article XIIIC. The proposition attempts to define “tax” as used within Article XIIIC as “any levy, charge, or exaction of any kind imposed by a local government, except the following: (1) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable coststo the local government of conferring the benefit or granting the privilege; (2) a charge imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product; (3) a charge imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits, enforcing agricultural marketing orders, and the administrative enforcement and adjudication thereof; (4) a charge imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property; (5) a fine, penalty, or other monetary charge imposed by the judicial branch of government or a local government, as a result of a violation of law; (6) a charge imposed as a condition of property development; and (7) assessments and property-related fees imposed in accordance with the provisions of Article XIII D.” The local government bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.

The foregoing discussion of Proposition 218 and Proposition 26 should not be considered an exhaustive or authoritative treatment of the provisions of such propositions or the possible effects of Proposition 218 and Proposition 26. Interim rulings, final decisions, legislative proposals and legislative enactments affecting Proposition 218 and Proposition 26 may impact the City’s ability to make debt service payments on the Bonds. The City does not expect to be in a position to control the consideration or disposition of these issues and cannot predict the timing or outcome of any judicial or legislative activity related to these issues.

Future Initiatives
Articles XIIIC, XIIID and Proposition 26 were adopted as measures that qualified for the ballot pursuant to California’s initiative process. From time to time other initiatives could be proposed and adopted affecting Net Revenues or the City’s ability to increase itsratesfor waterservice. See “Proposition 218” above. The California constitution, Article XIIID, Section 5(c), specifically recognizes that any assessment existing on the effective date (of Article XIIID) shall be exempt from the procedures and approval processset forth in Article 4, to wit: “….(c) Any assessment the proceeds of which are exclusively used to repay bonded indebtedness of which the failure to pay would violate the Contract Impairment Clause of the Constitution of the United States.”
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RISK FACTORS RELATING TO THE BONDS
Payment by the City of the Installment Payments and, therefore, of principal of and interest on the Bonds, depends primarily upon the Net Revenues derived from operation of the Wastewater System. Some of the events which could affect the revenues received by the Wastewater System are set forth below. The following discussion of risks is not meant to be an exhaustive list of the risks associated with the purchase of the Bonds and the order in which the risks are discussed does not necessarily reflect the relative importance of the various risks.

Limited Obligations
The Installment Payments are limited obligations of the City and are not secured by a legal or equitable pledge or charge or lien upon any property of the City or any of its income or receipts, except the Net Revenues. The obligation of the City to pay debt service on the Bonds from Net Revenues does not constitute an obligation of the City to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation.

The City is obligated under the Installment Sale Agreement to make Installment Payments solely from Net Revenues. There is no assurance that the City can succeed in operating the Wastewater System such that the Net Revenues in the future will be sufficient for that purpose.

Maintenance and Operation Costs
There can be no assurance that the City’s expenses for the Wastewater System will be consistent with the descriptions in this Official Statement. Changes in technology, changes in quality standards, loss of large customers, increased or decreased development, increases in the cost of operation, or other expenses could require increases in rates or charges in order to comply with the City’s rate covenants in the Installment Sale Agreement.

Limited Recourse on Default
Failure by the City to make Installment Payments constitutes an event of default under the Installment Sale Agreement and the Trustee is permitted to pursue remedies at law or in equity to enforce the City’s obligation to make such payments. Although the Trustee has the right to accelerate the total unpaid principal amount of the Installment Payments, there is no assurance that the City would have sufficient funds to pay the accelerated amounts.

Limitations on Remedies
The ability of the City to comply with its covenants under the Installment Sale Agreement and to generate Net Revenuessufficient to pay the Installment Payments and, therefore, of principal of and interest on the Bonds, may be adversely affected by actions and events outside of the control of the City and may be adversely affected by actionstaken (or not taken) by voters, property owners, taxpayers or persons obligated to pay assessments, fees and charges. Furthermore, the remedies available to the owners of the Bonds upon the occurrence of an event of default under the Installment Sale Agreement are in many respects dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time consuming to obtain.
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Initiatives
In recent years several initiative measures have been proposed or adopted which affect the ability of local governments to increase taxes and rates. There is no assurance that the electorate or the State legislature will not at some future time approve additional limitations which could affect the ability of the City to implement rate increases which could reduce Net Revenues and adversely affect the security for the Bonds. See CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND FEES—Proposition 218.”
Bankruptcy
The rights and remedies provided in the Installment Sale Agreement and the Indenture may be limited by and are subject to the provisions of federal bankruptcy laws, to other laws or equitable principles that may affect the enforcement of creditors’rights, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State of California. The various opinions of counsel to be delivered with respect to the Bonds, the Installment Sale Agreement and the Indenture, including the opinions of Bond Counsel, will be similarly qualified. If the City were to file a petition under Chapter 9 of the Bankruptcy Code, the Owners of the Bonds and the City could be prohibited from taking any steps to enforce their rights under the Indenture.

Additional Obligations
The Installment Sale Agreement permits the incurrence of obligations by the City secured by Net Revenues on a parity basis or a subordinate basis to the Installment Sale Agreement. Such additional obligations would increase debt service payable from Net Revenues and could adversely affect debt service coverage with respect to the Bonds. In such event, however, the rate covenant in the Installment Sale Agreement will remain in effect. See “SECURITY FOR THE BONDS—Rates, Fees and Charges.” Seismic Considerations
The City, like much of California, issubject to seismic activity that could result in interference with operation of the Wastewater System. There are several major active fault zonestransecting the County that could cause “strong ground motion” at the site of the variousfacilities constituting the Wastewater System during their useful life. If there were to be an occurrence of severe seismic activity in the area of the City, there could be an interruption in the service provided by the Wastewater System resulting in a temporary reduction in the amount of Net Revenues available to pay the Installment Payments and, therefore, the principal of and interest on the Bonds when due.

Drought and Climate Change
Indications of climate change have been observed over the last several decades throughout California. Statewide average temperatures have increased by about 1.7°F from 1895 to 2011, with the greatest warming in the Sierra Nevada. Although the State’s weather has followed the expected pattern of a largely Mediterranean climate throughout the past century, no consistent trend in the overall amount of precipitation has been detected, except that a larger proportion of total precipitation is falling as rain instead of snow.
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Cybersecurity
The City relies on computers and technology to conduct its operations, including the operation of the Wastewater System. The City and its departments face cyber threats from time to time including, but not limited to, hacking, viruses, malware and other forms of technology attacks. While no network is completely immune from all possible compromise, the City exercisesits due diligence in protecting the data it possesses and the systems it operates. To date, there have been no significant cyber-attacks on the City’s computers and technologies.

While the City isroutinely maintaining itstechnology systems and continuously implementing new information security controls, no assurances can be given that the City’s security and operational control measures will be successful in guarding against all cyber threats and attacks. The results of any attack on the City’s computer and technology could negatively impact the City’s operations and the operation of the Wastewater System, and the costs related to such attacks could be substantial.

Secondary Market
There can be no guarantee that there will be a secondary market for the Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price. Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particularissue,secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.

Risks Relating to the Municipal Bond Insurance Policy
In the event of default of the payment of principal of interest on the Bonds when all or some becomes due, any owner of the Bonds shall have a claim under the Municipal Bond Insurance Policy for such payments. The Municipal Bond Insurance Policy do not insure against redemption premium, if any.

The payment of principal of interest in connection with mandatory sinking fund or optional prepayment of the Bonds by the Authority which is recovered by the Authority from the Owner as a voidable preference under applicable bankruptcy law is covered by the Municipal Bond Insurance Policy, however, such payments will be made by the Municipal Bond Insurer at such time and in such amounts as would have been due absence such prepayment by the Authority unless the Municipal Bond Insurer chooses to pay such amounts at an earlier date.

The Municipal Bond Insurer may direct and must consent to any remedies and the Municipal Bond Insurer’s consent may be required in connection with amendments to any applicable legal documents.

In the event the Municipal Bond Insurer is unable to make payment of principal and interest as such payments become due under the Municipal Bond Insurance Policy, the Bonds are payable solely from the moneys received pursuant to the applicable legal documents. In the event the Municipal Bond Insurer becomes obligated to make payments with respect to the Bonds, no assurance is given that such event will not adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds.

The long-term ratings on the Bonds are dependent in part on the financial strength of the Municipal Bond Insurer and its claim paying ability. The financial strength and claims paying ability of the Municipal Bond Insurer are predicated upon a number of factors which could change over time. No assurance is given that the long-term ratings of the Municipal Bond Insurer and of the ratings on the Bonds will not be subject -42-
to downgrade and such event could adversely affect the market price of the Bonds or the marketability (liquidity) for the Bonds. See “RATINGS.”
The obligations of the Municipal Bond Insurer are general obligations of the Municipal Bond Insurer and in an event of default by the Municipal Bond Insurer, the remedies available may be limited by applicable bankruptcy law or other similar laws related to insolvency.

None of the Authority, the City or the Underwriter has made independent investigation into the claims paying ability of the Municipal Bond Insurer and no assurance or representation regarding the financial strength or projected financial strength of the Municipal Bond Insurer is given. Thus, when making an investment decision, potential investors should carefully consider the ability of the City to make the Installment Payments and the claims paying ability of the Municipal Bond Insurer, particularly over the life of the investment.

LEGAL MATTERS
All legal matters in connection with the issuance, sale and delivery of the Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Bond Counsel’s opinion with respect to the Bonds will be substantially in the form set forth in APPENDIX E— FORM OF FINAL OPINION OF BOND COUNSEL. Certain legal matters will also be passed on for the Authority and the City by Stradling Yocca Carlson & Rauth LLP, Newport Beach, as Disclosure Counsel, and for the Authority and the City by Giswold, LaSalle, Cobb, Dowd & Gin, LLP, Hanford, California, Authority Counsel and City Attorney. Certain matters will be passed upon for the Underwriter by Kutak Rock LLP, Irvine, California. The fees and expenses of Special Counsel, Disclosure Counsel and counsel to the Underwriter are contingent upon the issuance and delivery of the Bonds.

ABSENCE OF LITIGATION
At the time of delivery of and payment for the Bonds, the City and the Authority will certify that there is no action, suit, proceedings, inquiry or investigation, at law or in equity, before or by any court, regulatory agency, public board or body, pending or, to the knowledge of the City and the Authority, threatened against the City or the Authority affecting the existence of the City or the Authority or the titles of its officers to their respective offices or seeking to restrain or to enjoin the sale or delivery of the Bonds, the application of the proceeds thereof in accordance with the Indenture, or in any way contesting or affecting the validity or enforceability of the Bonds, the Indenture, the Installment Sale Agreement, or the pledge of Net Revenues thereunder, or any action of the City or the Authority contemplated by any of said documents, or in any way contesting the completeness or accuracy of this Official Statement or any amendment or supplement thereto, or contesting the powers of the City or the Authority with respect to the Bonds or any action of the City or the Authority contemplated by any of said documents, nor to the knowledge of the City or the Authority, is there any basis therefor.

RATINGS
Moody’s Investors Service (“Moody’s) is expected to assign the rating of “AA” (stable outlook) to the Bonds based on the issuance of the Municipal Bond Insurance Policy by the Municipal Bond Insurer -43-
at the time of delivery of the Bonds. See “MUNICIPAL BOND INSURANCE.” In addition, Moody’s has assigned the underlying rating of “___” to the Bonds without regard to the issuance of the Municipal Bond Insurance Policy. These ratings reflect only the views of Moody’s and an explanation of the significance of such rating may be obtained from Moody’s. There is no assurance that such ratings will continue for any given period of time or that such ratings will not be revised downward or withdrawn entirely by Moody’s, if in the judgment of the Moody’s, circumstances so warrant. Any such downward revision or withdrawal of such rating may have an adverse effect on the market price of the Bonds.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of Bond Owners and beneficial owners of the Bonds to provide certain financial information and operating data relating to the Wastewater System by not later than nine months following the end of the City’s fiscal year (currently ending June 30) (the “Annual Report”), commencingwith the report forthe fiscal year ended June 30, 2024, and to provide notices of the occurrence of certain enumerated events. The Annual Report and the notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board through the Electronic Municipal Access (EMMA) System. The specific nature of the information to be contained in the Annual Report or the notices of material events is summarized below under the caption APPENDIX F—FORM OF CONTINUING DISCLOSURE CERTIFICATE. These covenants have been made in order to assist the Underwriter in complying with the Rule.

In the last five years, the City was obligated to file financial information and operating data with respect to the following issues:

TAX MATTERS
Federal tax law contains a number of requirements and restrictions which apply to the Certificates, including investment restrictions, periodic payments of arbitrage profits to the United States, requirements regarding the proper use of bond proceeds and the facilities financed therewith, and certain other matters.

The City has covenanted to comply with all requirements that must be satisfied in order for the interest with respect to the Certificates to be excludable from gross income for federal income tax purposes. Failure to comply with certain of such covenants could cause interest with respect to the Certificates to become includible in gross income for federal income tax purposes retroactively to the date of delivery of the Certificates.

Subject to compliance by the City with certain covenants, in the opinion of Special Counsel, under present law, interest with respect to the Certificates is excludable from the gross income of the owners thereof for federal income tax purposes and is not included as an item of tax preference in computing the federal alternative minimum tax under the Internal Revenue Code of 1986, as amended (the “Code”).

Interest with respect to the Certificates may affect the corporate alternative minimum tax for certain corporations.
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In rendering its opinion, Special Counsel will rely upon certifications of the City with respect to certain material facts within the City’s knowledge. Special Counsel’s opinion represents its legal judgment based upon its review of the law and the facts that it deems relevant to render such opinion and is not a guarantee of a result.

Ownership of the Certificates may result in collateral federal income tax consequences to certain taxpayers, including, without limitation, corporations subject to the branch profits tax, financial institutions, certain insurance companies, certain S corporations, individual recipients of Social Security or Railroad Retirement benefits and taxpayers who may be deemed to have incurred (or continued) indebtedness to purchase or carry tax-exempt obligations. Prospective purchasers of the Certificates should consult their tax advisors as to applicability of any such collateral consequences.

The issue price for original issue discount (as further discussed below) and market discount purposes (the “OID Issue Price”) for each maturity of the Certificates is the price at which a substantial amount of such maturity of the Certificates is first sold to the public (excluding bond houses and brokers and similar persons or organizations acting in the capacity of underwriters, placement agents or wholesalers). The OID Issue Price of a maturity of the Certificates may be different from the price set forth, or the price corresponding to the yield set forth, on the inside cover page hereof.

If the OID Issue Price of a maturity of the Certificates is less than the principal amount payable at maturity, the difference between the OID Issue Price of each such maturity, if any, of the Certificates (the “OID Certificates”) and the principal amount payable at maturity is original issue discount.

For an investor who purchases an OID Certificate in the initial public offering at the OID Issue Price for such maturity and who holds such OID Certificate to its stated maturity, subject to the condition that the City complies with the covenants discussed above, (a) the full amount of original issue discount with respect to such OID Certificate constitutes interest which is excludable from the gross income of the owner thereof for federal income tax purposes; (b) such owner will not realize taxable capital gain or market discount upon payment of such OID Certificate at its stated maturity; (c) such original issue discount is not included as an item of tax preference in computing the alternative minimum tax for individuals under the Code; and (d) the accretion of original issue discount in each year may result in certain collateral federal income tax consequences in each year even though a corresponding cash payment may not be received until a later year. Owners of OID Certificates should consult their own tax advisors with respect to the state and local tax consequences of original issue discount on such OID Certificates.

Owners of Certificates who dispose of Certificates prior to the stated maturity (whether by sale, redemption or otherwise), purchase Certificates in the initial public offering, but at a price different from the OID Issue Price or purchase Certificates subsequent to the initial public offering should consult their own tax advisors.

If a Certificate is purchased at any time for a price that is less than the Certificate’s stated redemption price at maturity or, in the case of an OID Certificate, its OID Issue Price plus accreted original issue discount reduced by payments of interest included in the computation of original issue discount and previously paid (the “Revised Issue Price”), the purchaser will be treated as having purchased a Certificate with market discount subject to the market discount rules of the Code (unless a statutory de minimis rule applies). Accrued market discount is treated as taxable ordinary income and is recognized when a Certificate is disposed of (to the extent such accrued discount does not exceed gain realized) or, at the purchaser’s election, as it accrues. Such treatment would apply to any purchaser who purchases an OID Certificate for -45-
a price that is less than its Revised Issue Price even if the purchase price exceeds par. The applicability of the market discount rules may adversely affect the liquidity or secondary market price of such Certificate.

Purchasers should consult their own tax advisors regarding the potential implications of market discount with respect to the Certificates.

An investor may purchase a Certificate at a price in excess of its stated principal amount. Such excess is characterized for federal income tax purposes as “bond premium” and must be amortized by an investor on a constant yield basis over the remaining term of the Certificate in a manner that takes into account potential call dates and call prices. An investor cannot deduct amortized bond premium relating to a tax-exempt bond. The amortized bond premium is treated as a reduction in the tax-exempt interest received. As bond premium is amortized, it reduces the investor’s basis in the Certificate. Investors who purchase a Certificate at a premium should consult their own tax advisors regarding the amortization of bond premium and its effect on the Certificate’s basis for purposes of computing gain or loss in connection with the sale, exchange, redemption or early retirement of the Certificate.

There are or may be pending in the Congress of the United States legislative proposals, including some that carry retroactive effective dates, that, if enacted, could alter or amend the federal tax matters referred to above or affect the market value of the Certificates. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, it would apply to Certificates delivered prior to enactment. Prospective purchasers of the Certificates should consult their own tax advisors regarding any pending or proposed federal tax legislation. Special Counsel expresses no opinion regarding any pending or proposed federal tax legislation.

The Internal Revenue Service (the “Service”) has an ongoing program of auditing tax-exempt obligations to determine whether, in the view of the Service, interest on such tax-exempt obligations is includible in the gross income of the owners thereof for federal income tax purposes. It cannot be predicted whether or not the Service will commence an audit of the Certificates. If an audit is commenced, under current procedures the Service may treat the City as a taxpayer and the Owners may have no right to participate in such procedure. The commencement of an audit could adversely affect the market value and liquidity of the Certificates until the audit is concluded, regardless of the ultimate outcome.

Payments of interest on, and proceeds of the sale, redemption or maturity of, tax-exempt obligations, including the Certificates, are in certain cases required to be reported to the Service.

Additionally, backup withholding may apply to any such payments to any Certificate owner who fails to provide an accurate Form W-9 Request for Taxpayer Identification Number and Certification, or a substantially identical form, or to any Certificate owner who is notified by the Service of a failure to report any interest or dividends required to be shown on federal income tax returns. The reporting and backup withholding requirements do not affect the excludability of such interest from gross income for federal tax purposes.

In the further opinion of Special Counsel, interest with respect to the Certificates is exempt from California personal income taxes.

Ownership of the Certificates may result in other State and local tax consequences to certain taxpayers. Special Counsel expresses no opinion regarding any such collateral consequences arising with respect to the Certificates. Prospective purchasers of the Certificates should consult their tax advisors regarding the applicability of any such State and local taxes. -46-
The complete text of the final opinion that Special Counsel expects to deliver upon the delivery of the Certificates is set forth in APPENDIX E—FORM OF OPINION OF SPECIAL COUNSEL.

UNDERWRITING
The Bonds are being purchased by Oppenheimer & Co. Inc. (the “Underwriter”) at a price of $_______ (consisting of the $________ principal amount of the Bonds, plus a net original issue premium of $_______, and less $_______ of Underwriter’s discount). The Underwriter may offer and sell the Bondsto certain dealers and others at prices different from the pricesstated on the inside cover page of this Official Statement. The offering prices may be changed from time to time by the Underwriter.

MUNICIPAL ADVISOR
The City has entered into an agreement with Wulff Hansen & Co. (the “Municipal Advisor”), whereunder the Municipal Advisor is providing municipal advisory services to the City with respect to preparation and sale of the Bonds. The MunicipalAdvisor hasread and participated in the drafting of certain portions of this Official Statement. The Municipal Advisor has not audited, authenticated or otherwise verified the information set forth in the Official Statement, or any other related information available to the City with respect to accuracy and completeness of disclosure of such information, and the Municipal Advisor makes no guaranty, warranty or other representation respecting accuracy and completeness of the Official Statement or any other matterrelated to the Official Statement. The compensation of the Municipal Advisor is contingent upon the sale of the Bonds.

FINANCIAL STATEMENTS
The City’s financial statements for the fiscal year ended June 30, 2023, included in APPENDIX B—AUDITED FINANCIAL STATEMENTS OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2023, have been audited by the City’sAuditor, asstated in itsreports appearing in such appendix.

The City’s auditor has not undertaken to update its reports or to take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the City’s Auditor with respect to any event subsequent to its report.

OTHER INFORMATION
All summaries and explanations of the Act, the Indenture, the Installment Sale Agreement and the other documents referred to herein are qualified in their entirety by reference to the Act and such documents and references herein to the Bonds are qualified in their entirety by reference to the form thereof included in the Indenture.

Any statements in this Official Statement involving matters of opinion are intended assuch and not asrepresentations of fact. This Official Statement is not to be construed as a contract or agreement between the Authority and the purchasers or owners of the Bonds. -47-
Copies of the Indenture and the Installment Sale Agreement are available for inspection at the Principal Corporate Trust Office of the Trustee.

MISCELLANEOUS
So far as any statements made in this Official Statement involve matters of opinion, assumptions, projections, anticipated events or estimates, whether or not expressly stated, they are set forth as such and not asrepresentations of fact, and actual results may differsubstantially from those set forth herein. Neither this Official Statement nor any statementwhich may have been made verbally orinwriting isto be construed as a contract with the owners of the Bonds.

The summaries of certain provisions of the Bonds, statutes and other documents or agreements referred to in this Official Statement do not purport to be complete, and reference is made to each of them for a complete statement of their provisions. Copies are available for review by making requests to the City.

The Appendices are an integral part of this Official Statement and must be read together with all other parts of this Official Statement. The audited financial statements of the City, including a summary of significant accounting policies, for the fiscal year ended June 30, 2023, are contained in Appendix B.

The execution and delivery of this Official Statement have been duly authorized by the Authority and the City.

COALINGA PUBLIC FINANCING

AUTHORITY
By
Executive Director

CITY OF COALINGA
By
City Manager

THIS PAGE INTENTIONALLY LEFT BLANK
Appendix A

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APPENDIX A

GENERAL, ECONOMIC AND DEMOGRAPHIC INFOMRATION RELATING TO

THE CITY AND THE COUNTY
The information in this section of the Official Statement is presented as general background data. The Installment Payments are payable solely from the net revenues of the Wastewater System and other sources as described in the Official Statement. The taxing power of the City of Coalinga (the “City”), the State of California (the “State”), or any political subdivision thereof is not pledged to the payment of the Bonds.

Although reasonable efforts have been made to include up-to-date information in this Appendix A, some of the information is not current due to delays in reporting of information by various sources. It should not be assumed that the trends indicated by the following data would continue beyond the specific periods reflected herein.

Introduction
The City. The City, incorporated on April 3, 1906, is located in Fresno County (the “County”) and the western San Joaquin Valley, in central California. The City is located 52 miles (84 km) southwest of Fresno and sits at an elevation of 673 feet (205 m). The City currently occupies a land area of 6.61 square miles and serves a population of approximately 17,235. The City serves as a gateway to Sequoia National Forest, Giant Sequoia National Monument and Kings Canyon National Park.

The City’s main industries are agriculture, oil and incarceration. The City is home to the Coalinga Oil Field, operated by Chevron and Aera Energy, the Guijarral Hills Oil Field, Pleasant Valley State Prison and Coalinga State Hospital. The City is also home to Harris Ranch, a major local cattle ranch that features a hotel, several restaurants and a gift shop for travelers.

The County. The county seat of the County is the city of Fresno, the fifth-largest city in California.

The County covers an area of over 6,011 square miles. The County serves as a financial, trade, commercial and educational center for central California. The County is one of eight counties in California’s central valley that account for one-half of California’s agricultural production. In addition to an extensive highway and road system, several motor freight carriers and a railway network, the County is also home to Fresno Yosemite International Airport which provides both passenger and cargo services.

The County remained one of the leading agricultural counties in California and the nation. The number one crop in value was almonds followed by grapes. Fruit and nut crops provide approximately half of the gross agricultural production value followed by livestock. Major watercourses in the County are the San Joaquin, Kings River, Delta-Mendota Canal, Big Creek, Friant Kern Canal, Helm Canal and Madera Canal. It is bordered on the west by the Coast Range and on the east by the Sierra Nevada.

Appendix A

Page 2 ends

Population
The table below summarizes population of the City, the County, and the State of California for the last eight years.

CITY OF COALINGA, FRESNO COUNTY, and CALIFORNIA
Population
Year
City of
Coalinga(1)
Fresno
County
State of
California
2016 16,541 984,202 39,131,307
2017 16,793 993,773 39,398,702
2018 16,527 1,003,012 39,519,535
2019 16,946 1,013,007 39,648,938
2020 17,177 1,020,292 39,782,870
2021 17,558 1,007,359 39,286,510
2022 17,327 1,009,790 39,078,674
2023 17,237 1,011,499 38,940,231
Source: California Department of Finance, E-4 Population Estimate for Cities, Counties, and the State, 2015-16 through 2022- 23 with 2020 Census Benchmark.
(1) City of Coalinga population includes the population at the Pleasant Valley State Prison.

Appendix A

Page 3 ends

Employment
The following table summarizes historical employment and unemployment for the County, the State of California and the United States for the years 2015 through 2022:

FRESNO COUNTY, CALIFORNIA, and UNITED STATES
Civilian Labor Force, Employment, and Unemployment
(Annual Averages)
Unemployment
Year Area Labor Force Employment Unemployment Rate (1)
2015 Fresno County 444,200 398,900 45,300 10.2%
California 18,981,800 17,798,600 1,183,200 6.2
United States 157,130,000 148,834,000 8,296,000 5.3
2016 Fresno County 446,200 404,100 42,100 9.4
California 19,102,700 18,065,000 1,037,700 5.4
United States 159,187,000 151,436,000 7,751,000 4.9
2017 Fresno County 449,700 411,600 38,100 8.5
California 19,312,000 18,393,100 918,900 4.8
United States 160,320,000 153,337,000 6,982,000 4.4
2018 Fresno County 448,400 414,900 33,400 7.5
California 19,398,200 18,582,800 815,400 4.2
United States 162,075,000 155,761,000 6,314,000 3.9
2019 Fresno County 450,800 418,100 32,700 7.2
California 19,411,600 18,627,400 784,200 4.0
United States 163,539,000 157,538,000 6,001,000 3.7
2020 Fresno County 445,500 395,300 50,300 11.3
California 18,821,200 16,913,100 1,908,100 10.1
United States 160,742,000 147,795,000 12,947,000 8.1
2021 Fresno County 443,400 402,600 40,700 9.2
California 18,923,200 17,541,900 1,381,200 7.3
United States 161,204,000 152,581,000 8,623,000 5.3
2022(2 Fresno County 453,200 424,300 28,900 6.4
California 19,252,000 18,440,900 811,100 4.2
United States 164,287,000 158,291,000 5,996,000 3.6
Source: California Employment Development Department, Monthly Labor Force Data for Counties, Annual Average 2015-22, and US Department of Labor.
(1) The unemployment rate is computed from unrounded data; therefore, it may differ from rates computed from rounded figures available in this table.
(2) Latest available full-year data.

Appendix A

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Principal Employers in the County
The table below sets forth the ten largest principal employers in the County in 2023.

FRESNO COUNTY
Top 10 Industries
as of June 30, 2019
Employer Employees
% of Total
County
Employment
Fresno Unified School District 14,593 3.18%
Community Medical Centers 10,300 2.25
Fresno County 8,980 1.96
Clovis Unified School District 7,945 1.73
California State University Fresno 5,233 1.14
City of Fresno 5,015 1.09
State Center Community College District 4,469 0.97
Children’s Hospital of Central CA 4,170 0.91
Saint Agnes Medical 3,075 0.67
Kaiser Permanente Medical 2,950 0.51
Total Top 10 66,730 14.56%
Source: Fresno County 2022-23 ACFR.

Appendix A

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Construction Activity
The following tables reflect the five-year history of building permit valuation for the City and the County:

CITY OF COALINGA
Building Permits and Valuation
(Dollars in Thousands)
2018 2019 2020 2021 2022(1)
Permit Valuation:

New Single-family $ 9,696 $ 17,159 — — —
New Multi-family — — — — $16,080
Res. Alterations/Additions 78 1,899 $410 $402 207
Total Residential 9,775 19,059 410 402 16,287
Total Nonresidential 19,749 2,830 429 5,817 2,218
Total All Building 29,524 21,890 839 6,219 18,506
New Dwelling Units:

Single Family 42 70 — — —
Multiple Family — — — — 156
Total 42 70 0 0 156

FRESNO COUNTY
Building Permits and Valuation
(Dollars in Thousands)
2018 2019 2020 2021) 2022(1)
Permit Valuation:

New Single-family $ 703,307 $ 770,423 $769,338 $889,657 $542,870 New Multi-family 67,589 87,818 183,382 53,429 171,092
Res. Alterations/Additions 47,115 41,033 30,839 57,187 39,525 Total Residential 818,012 899,275 983,560 1,000,273 753,488 Total Nonresidential 497,051 499,336 577,313 398,033 473,835 Total All Building 1,315,064 1,398,612 1,560,873 1,398,306 1,227,322 New Dwelling Units:

Single Family 2,560 2,732 2,747 3,337 1,865
Multiple Family 290 689 653 398 1,235
Total 2,850 3,421 3,400 3,735 3,100
Source: Construction Industry Research Board: “Building Permit Summary.” Note: Columns may not sum to totals due to independent rounding. (1) Latest available full year data.

Appendix A

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Median Household Income
The following table summarizes the median household effective buying income for the City, the County, the State of California and the nation for the past five years.

CITY OF COALINGA, FRESNO COUNTY,

STATE OF CALIFORNIA AND UNITED STATES
Median Household Effective Buying Income
2018 2019 2020 2021 2022
City of Coalinga $ 47,528 $ 50,815 $ 53,279 $60,745 $58,875 Fresno County 46,028 48,980 48,681 57,777 58,117
California 62,637 65,870 67,956 77,058 77,175
United States 52,841 55,303 56,790 64,448 65,326
Source: Nielsen, Inc.

Appendix B

APPENDIX B

AUDITED FINANCIAL STATEMENTS OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2023

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Appendix C

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APPENDIX C

CITY INVESTMENT POLICY

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Appendix D

APPENDIX D

SUMMARY OF CERTAIN PROVISIONS OF THE

PRINCIPAL LEGAL DOCUMENTS
[TO COME]

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Appendix E

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APPENDIX E

FORM OF FINAL OPINION OF BOND COUNSEL
[Letterhead of Stradling Yocca Carlson & Rauth LLP]
[Closing Date]
Board of Directors of the
Coalinga Public Financing Authority
155 West Durian
Coalinga, California 93210
OPINION: $__________Coalinga Public Financing Authority Wastewater Revenue Bonds, Series 2024 (Solar Project)
Members of the Board of Directors:

We have acted as bond counsel in connection with the delivery by the Coalinga Public Financing Authority (the “Authority”) of $_________ aggregate principal amount of the bonds of the Authority designated the “Coalinga Public Financing Authority (Fresno County, California) Wastewater Revenue Bonds, Series 2024 (Solar Project)” (the “Bonds”), pursuant to the provisions of Article 4 (commencing with section 6584) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Law”), and pursuant to an indenture of trust, dated as of August 1, 2024 (the “Indenture”), by and between the Authority and Computershare Trust Company, N.A., as trustee, and a resolution of the governing body of the Authority adopted on August 1, 2024. The Bonds are secured by Revenues as defined in the Indenture, including installment payments (the “Installment Payments”) made by the City of Coalinga (the “City”) under an installment sale agreement, dated as of August 1, 2024 (the “Installment Sale Agreement”), by and between the Authority, as seller, and the City, as purchaser. We have examined the Law and such certified proceedings and other papers as we deem necessary to render this opinion.

As to questions of fact material to our opinion, we have relied upon representations of the Authority and the City contained in the Indenture and the Installment Sale Agreement and in the certified proceedings, and upon other certifications furnished to us, without undertaking to verify the same by independent investigation.

Based upon our examination we are of the opinion, under existing law, that:

1. The Authority is a joint exercise of powers entity and public entity duly organized and existing under the laws of the State of California, with power to enter into the Indenture, to perform the agreements on its part contained therein and to issue the Bonds.

2. The Bonds constitute legal, valid and binding special obligations of the Authority enforceable in accordance with their terms and payable solely from the sources provided therefor in the Indenture.

Appendix E

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3. The Indenture has been duly authorized, executed and delivered by the Authority and constitutes a legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms.

4. The Indenture establishes a valid first and exclusive lien on and pledge of the Revenues (as such term is defined in the Indenture) and other funds pledged thereby for the security of the Bonds, in accordance with the terms of the Indenture.

5. The Installment Sale Agreement has been duly approved by the Authority and constitutes the legal, valid and binding obligation of the Authority enforceable against the Authority in accordance with its terms.

6. The City is a municipal corporation duly organized and existing under the laws of the State of California, with power to enter into the Installment Sale Agreement and to perform the agreements on its part contained therein.

7. The Installment Sale Agreement has been duly authorized, executed and delivered by the City and constitutes the legal, valid and binding obligation of the City enforceable against the City in accordance with its terms.

8. The Installment Sale Agreement establishes a valid first and exclusive lien on and pledge of the Net Revenues (as such term is defined in the Indenture) and other funds pledged thereby for the security of the Installment Sale Agreement, in accordance with the terms of the Installment Sale Agreement.

9. Under existing statutes, regulations, rulings and judicial decisions, interest (and original issue discount) on the Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals; however, it should be noted that with respect to applicable corporations as defined in section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), interest (and original issue discount) with respect to the Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed on such corporations.

10. Interest (and original issue discount) on the Bonds is exempt from State personal income tax.

11. The difference between the issue price of a Bond (the first price at which a substantial amount of the Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity with respect to such Bond (to the extent the redemption price at maturity is more than the issue price) constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Bond owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Bond owner will increase the Bond owner’s basis in the applicable Bond. Original issue discount that accrues for the Bond owner is excluded from the gross income of such owner for federal income tax purposes, is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and is exempt from State personal income tax.

12. The amount by which a Bond owner’s original basis for determining loss on sale or exchange in the applicable Bond (generally the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium which must be amortized under section 171 of the Code; Appendix E

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such amortizable bond premium reduces the bond owner’s basis in the applicable Bond (and the amount of tax-exempt interest received), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Bond owner realizing a taxable gain when a Bond is sold by the owner for an amount equal to or less (under certain circumstances) than the original cost of the Bond to the owner.

The opinions expressed in paragraphs 9 and 11 above as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Bonds are subject to the condition that the District complies with all requirements of the Code that must be satisfied subsequent to the issuance of the Bonds to assure that such interest (and original issue discount) will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The District has covenanted to comply with all such requirements. Except as set forth in paragraphs 9, 10, 11 and 12 above, we express no opinion as to any tax consequences related to the Bonds.

Certain agreements, requirements and procedures contained or referred to in the Bond Resolution and the Tax Certificate executed by the District with respect to the Bonds may be changed and certain actions may be taken or omitted, 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. We express no opinion as to the effect on exclusion from gross income for federal income tax purposes of the interest (and original issue discount) on any Bond if any such change occurs or action is taken or omitted upon advice or approval of bond counsel other than Stradling Yocca Carlson & Rauth LLP
The opinions expressed herein and the exclusion of interest on the Bonds from gross income for federal income tax purposes may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. Our engagement as bond counsel to the District terminates upon the issuance of the Bonds.

With respect to the opinions expressed herein, the enforceability of the Installment Sale Agreement is subject to the limitations on the imposition of certain fees and charges by the City related to its municipal water systems under Articles XIIIC and XIIID of the California Constitution. In addition, the rights of the owners of the Bonds and the enforceability of the Bonds and the Indenture may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted and also may be subject to the exercise of judicial discretion in accordance with general principles of equity.

In rendering this opinion, we have relied upon certifications of the Authority, the City and others with respect to certain material facts. Our opinion represents our legal judgment based upon such review of the law and the facts that we deem relevant to render our opinion and is not a guarantee of a result. This opinion is given as of the date hereof and we assume no obligation to revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.

Respectfully submitted,

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Appendix F

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APPENDIX F

FORM OF CONTINUING DISCLOSURE CERTIFICATE
This CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the CITY OF COALINGA (the “City”) in connection with the issuance by the Coalinga Public Financing Authority (the “Authority”) of $_______ aggregate principal amount of Coalinga Public Financing Authority Wastewater Revenue Bonds, Series 2024 (Solar Project) (the “Bonds”). The Bonds are being issued pursuant to an indenture of trust, dated as of August 1, 2024 (the “Indenture”), by and between the Authority and Computershare Trust Company, N.A., as trustee (the “Trustee”). The City covenants and agrees as follows:

Section 1. Definitions. In addition to the definitions set forth above and, in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 1, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means the March 31 after the end of the City’s fiscal year. “Dissemination Agent” shall mean, initially, IGService, or any successor Dissemination Agent designed in writing by the City and which has been filed with the then current Dissemination Agent a written acceptance of such designation.
“Fiscal Year” means any twelve–month period beginning on July 1 in any year and extending to the next succeeding June 30, both dates inclusive, or any other twelve–month period selected and designated by the City as its official fiscal year period under a Certificate of the City filed with the Trustee. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.
“Official Statement” means the final official statement executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” means Oppenheimer & Co. Inc., the original underwriter of the Bonds. “Rule” means Rule 15c2–12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time. “Significant Events” means any of the events listed in Section 5(a) of this Disclosure Certificate.

Section 2. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2025, with the report for fiscal year 2023-24 provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Appendix F

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Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Significant Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City in a timely manner shall provide (or cause the Dissemination Agent to provide) to the MSRB, in an electronic format as prescribed by the MSRB, a notice in substantially the form attached as Exhibit A. (c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then–applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and (ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Unless otherwise provided in the audited financial statements filed on or prior to the annual filing deadline for Annual Reports provided for in Section 3 above, financial information and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the indicated tables in the Official Statement, as follows:
(i) Wastewater System Wastewater Purchases (Table 1);
(ii) Wastewater System Treated Wastewater Supply and Consumption (Table 3); (iii) Wastewater System Consumption by Customer Type (Table 4); (iv) Wastewater System Metered Accounts by Customer Type (Table 5); (v) Wastewater System Ten Largest Users (Table 6); and
(vi) Wastewater System Historical Operating Results and Debt Service Coverage (Table 10). (c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading. (d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s Appendix F

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Internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Significant Events with respect to the Bonds:
(i) Principal and interest payment delinquencies;
(ii) Non–payment related defaults, if material;
(iii) Unscheduled draws on debt service reserves reflecting financial difficulties; (iv) Unscheduled draws on credit enhancements reflecting financial difficulties; (v) Substitution of credit or liquidity providers, or their failure to perform; (vi) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701–TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; (vii) Modifications to rights of security holders, if material; (viii) Bond calls, if material, and tender offers;
(ix) Defeasances;
(x) Release, substitution, or sale of property securing repayment of the securities, if material; (xi) Rating changes;
(xii) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person; (xiii) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; (xiv) Appointment of a successor or additional trustee or the change of name of a trustee, if material;
(xv) The incurrence of a financial obligation of the City or other obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or other obligated person, any of which affect security holders, if material; or
(xvi) A default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City or other obligated person, any of which reflect financial difficulties.
(b) Whenever the City obtains knowledge of the occurrence of a Significant Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Significant Event. Notwithstanding the foregoing, notice of Significant Events described in subsection (a)(viii) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.
(c) The City acknowledges that the events described in subparagraphs (a)(ii), (a)(vii), (a)(viii) (if the event is a bond call), (a)(x), (a)(xiii), (a)(xiv) and (a) (xv) of this Section 5 contain the qualifier “if material.” The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. The City intends that Appendix F

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the words used in paragraphs (xv) and (xvi) and the definition of “financial obligation” to have the meanings ascribed thereto in SEC Release No. 34-83885 (August 20, 2018).
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(xii) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental City has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental City, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental City having supervision or jurisdiction over substantially all of the assets or business of the City.

Section 6. Identifying Information for Filings with the MSRB. All documents provided to the MSRB under this Disclosure Certificate shall be accompanied by identifying information as prescribed by the MSRB.

Section 7. Termination of Reporting Obligation. The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Significant Event under Section 5(b).

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Bond Indenture for amendments to the Bond Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on Appendix F

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the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

The Dissemination Agent shall not be obligated to enter into any amendment increasing or affecting its duties or obligations hereunder.

A notice of any amendment made pursuant to this Section 9 shall be filed in the same manner as for a Significant Event under Section 5(b).

Section 10. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the City from disseminating any other information, using the means of dissemination set forth in this Disclosure Certificate or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Significant Event, in addition to that which is required by this Disclosure Certificate. If the City chooses to include any information in any Annual Report or notice of occurrence of a Significant Event in addition to that which is specifically required by this Disclosure Certificate, the City shall have no obligation under this Disclosure Certificate to update such information or include it in any future Annual Report or notice of occurrence of a Significant Event.

Section 11. Default. If the City fails to comply with any provision of this Disclosure Certificate, the Participating Underwriter or any holder or beneficial owner of the Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Bond Indenture, and the sole remedy under this Disclosure Certificate in the event of any failure of the City to comply with this Disclosure Certificate shall be an action to compel performance.

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) Section 27 of the Bond Indenture is hereby made applicable to this Disclosure Certificate as if this Disclosure Certificate were (solely for this purpose) contained in the Bond Indenture. The Dissemination Agent shall be entitled to the protections and limitations from liability afforded to the Trustee thereunder. The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

Section 13. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the City, the Dissemination Agent, the Participating Underwriter and the holders and beneficial owners from time to time of the Bonds and shall create no rights in any other person or entity.

Appendix F

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Coalinga City CouncilAugust 1, 2024

Coalinga City Council
August 1, 2024