Commerce City Council
August 8, 2023

City of Commerce
Response to RFQ: Financial Advisor for Zero-Emission Bus Operations, Maintenance, and Administration Facility Project
Submitted By: KNN Public Finance, LLC
July 6, 2023
2054 University Avenue, Suite 300 │ Berkeley, CA 94704 │ Main 510-839-8200 5901 West Century Boulevard, Suite 750 │ Los Angeles, CA 90045 │ Main 310-348-2901 A Limited Liability Company

TABLE OF CONTENTS
Page
Cover Letter 1
Experience and Qualifications 3
Approach to Scope of Services 13
Appendix A: TEAM RESUMES
Appendix B: MSRB RULE G-42 ADDITIONAL DISCLOSURES
Qualifications for Financial Advisor | Page 1

COVER L ETTER
July 6, 2023
Claude McFerguson, Director
City of Commerce | Transportation Department
2535 Commerce Way
Commerce, CA 90040
RE: KNN RESPONSE TO RFQ: FINANCIAL ADVISOR FOR ZERO-EMISSION BUS

OPERATIONS, MAINTENANCE, AND ADMINISTRATION FACILITY PROJECT Dear Claude:

KNN Public Finance, LLC (“KNN”) is pleased to submit the enclosed proposal to serve as financial advisor to the City of Commerce (the “City” or “Commerce”) in connection with the delivery of planning and financing services for the Zero-Emission Bus Operations, Maintenance, and Administration Facility project (the “Project”) to be constructed by the City through its Transportation Department for the benefit of its transit operations (“CC Transit”).

KNN is a leading firm in the California public finance market. While nearly all our clients are California agencies, we are a nationally recognized municipal advisory firm and rank among the Top Three California advisory firms in most years. We serve as Municipal Advisor to 33 California cities across the State, providing a range of on-call advisory and transaction services. Combined with our experience with counties, special districts (including transit and transportation agencies), and state agencies, we have a deep and meaningful familiarity with all of the financing instruments used by California cities.

Specific to Commerce, over the last year we have had several conversations regarding the City’s anticipated need to fund a portion of the Project costs through a financing with the balance of the Project costs met by federal and local funding sources. One of the financing alternatives available to the City and CC Transit that we have discussed specifically is the Transportation Infrastructure Finance and Innovation Act (“TIFIA”) credit program provided under the United States Department of Transportation. The TIFIA credit program offers loans to public agency borrowers to advance critical transportation projects, including transit facilities like the City’s proposed Project. Pursuing a loan under the TIFIA program can be an arduous and lengthy process and, thus, the value of the program (in terms of financing cost and financing flexibility) should be carefully evaluated before committing to the borrowing approach.

At this stage in your Project planning process, it is appropriate for the City to begin working with a financial advisor, like KNN, to assist with the development of a plan of finance, evaluation of security structure, and the analysis of borrowing alternatives (which in addition to the TIFIA loan alternative may also include the issuance of tax-exempt municipal bonds).

KNN is well equipped to assist you. We have reviewed the City’s proposed Scope of Services and have a keen understanding of the advisory work to be provided and confirm our ability to assist in all areas. In fact, the type of services you are seeking and the forms of finance you are currently contemplating represent the heart of our business practice. Not only are we familiar with borrowing programs most utilized by California cities and transportation/transit agencies (including TIFIA), but we have extensive experience in plan of finance development, cash flow model analysis, and credit/rating agency strategy for both California cities and transit agencies with various revenue structures and borrowing securities.

Melissa Shick, signatory below, would serve as the “Point of Contact” for the City and CC Transit – taking responsibility for the services listed in “Scope of Services," providing day-to-day advisory, as well as ensuring that the firm’s resources are appropriately directed to the engagement. My colleague Nedko Nedev, Vice President, would be closely involved in the engagement serving alongside me on a day-to-day basis and leading the cash flow modeling and quantitative analysis. Other members of our firm would be involved in engagement providing strategic and day-to-day advisory support as needed.

In closing, I confirm that: i) I have not received any addendum to the RFQ; ii) I have reviewed and understand all elements of the RFQ and stand ready to deliver all elements of the Scope of Services; and iii) I am authorized to bind KNN contractually. Upon review of the attached proposal, please do not hesitate to contact me with any questions.

Qualifications for Financial Advisor | Page 2
Sincerely,
MELISSA SHICK | DIRECTOR
( DESIGNATED REPRESENTATIVE OR POINT OF CONTACT )

KNN PUBLIC FINANCE, LLC
2054 UNIVERSITY AVENUE, SUITE 300
BERKELEY, CA 94704
[email protected] | 510.208.8226
Qualifications for Financial Advisor | Page 3

EXPERIENCE AND QUALIFICATIONS
A. Describe the Respondent, its size and organization, the number and location of offices, and general operational structure, as well as its management and key personnel. Include a discussion demonstrating that the Respondent has the resources (financial, equipment, labor and capacity) available to provide services under this RFP from the first day at the start of the work.

OVERVIEW. KNN Public Finance, LLC (“KNN”) has a long history of providing financial advisory services to a wide array of state and local agencies in the State of California. The firm’s exclusive line of business is providing financial advisory services. Our role, or our Fiduciary Duty, is to provide independent, objective analysis and advice to support informed decision making about debt and capital programs and to protect our clients’ interests throughout the financing process. We sit on the issuer’s “side of the table” throughout the financing process and provide independent analysis and advice to ensure that financial decision making and funding strategies result in the best interest of our clients.

ORGANIZATION HISTORY & STRUCTURE . KNN is structured as a California Limited Liability Company. While the firm has operated under several names and ownership structures over time, KNN’s history providing municipal advisory roots dates back over 40 years. The original firm was first established in 1982. In 1996, Zions Bank acquired the firm and KNN operated as a division of the bank prior to employee acquisition in 2016. KNN is now 100% employee owned. Members of the LLC include seven senior members of the firm, including the lead advisor of our Commerce team – Melissa Shick, Director.

CALIFORNIA LEADERSHIP. Despite KNN’s primarily California focus, we consistently rank among the top financial advisory firms nationally in managing transactions – underscoring the volume of transactions managed in California alone. For 2022, KNN was ranked 12th nationally based on issuance par (The Bond Buyer 2022 in Statistics Annual Review dated February 13, 2023) and ranked 3rd in California based on issuance par (The Bond Buyer Far West Yearend Review dated February 17, 2023).

STAFFING AND LOCATION. Headquartered in Berkeley, California with a Los Angeles office, we currently have a staff of 18, including 15 advisors and 3 administrative support personnel. The size of our staff enables us to assign multiple senior advisors to engagements, ensuring the highest level of service to our clients. The assigned KNN advisors to the Commerce engagement work primarily from KNN’s principal office in Berkeley.

DEPTH OF RESOURCES . As you will read further in our proposal, KNN has assigned a team of highly experienced and senior staff to provide comprehensive financial advisory services to the City and CC Transit from the inception of our engagement. We take a team approach to our financial advisory assignments, which maximizes the quality of our service by drawing on the strengths and specialized expertise of multiple senior advisors, as needed, to meet the range of needs within the City’s Scope of Services, including day-to-day assistance in managing financing and funding objectives, financial and strategic planning, cash flow modeling, and transaction execution.

Furthermore, while our primary resources are the experience, skill, judgment, and integrity of our staff, we invest heavily in technology and information services. Our analytical capabilities supporting planning and pricing activities are supported by access to a broad array of paid subscription services.  DEBT STRUCTURING SOFTWARE. Our debt structuring and analytic capabilities equal or exceed those of the major municipal underwriting firms and financial advisors. We subscribe to De Bois, Brown & Co, (DBC) as KNN’s primary bond sizing software. Our DBC package includes Project Finance, which coordinates interdependent projects under a common plan of financing to optimize complicated financing solutions. In addition to debt structuring, KNN staff are well versed in developing a wide variety of cash flow models customized and optimized to the specific requirements of each of our clients.  MARKET DATA SERVICES. Our access to market information for pricing oversight services also is exceptional. We subscribe to both Bloomberg and Thomson Municipal Market Monitor Services (TM3), investing more than $75,000 per year in these subscription services. We use these resources to monitor markets, prepare market comparables, for interest rate planning assumptions, for evaluating scales and structures during the pricing process, and for gauging relative success in the aftermath of a sale.

F I R M I N F O R M A T I O N
Legal Firm Name:
 KNN Public Finance, LLC (“KNN”)
Principal Office Address:
 2054 University Avenue, Suite 300
Berkeley, CA 94704
Telephone Number:
 510-839-8200
Principal Contact Information:
 Melissa Shick, Director
Berkeley Office | 510.208.8226
Qualifications for Financial Advisor | Page 4
B. At a minimum, Respondent should have at least five (5) years of consecutive experience.

KNN’s history providing municipal advisory to governmental agencies in California dates back over 40 years. Just in the last five years, KNN served as municipal advisor on 423 financings totaling $44.4 billion, of which 68 or $5.6 billion in issuance par were for California cities. We also have wide-ranging experience in pre-transaction and nontransaction support, including developing project-specific long-term plans of finance; evaluating alternative and financing proposals; preparing debt, reserve, and other financial policies; and providing staff training in debt.

KNN advises numerous public agencies in California, including cities, counties, special districts, K-12 school districts, community colleges, and the State of California. The depth and breadth of our client base is underscored by our issuance volume across multiple credit structures as summarized below.

KNN CA LIFORNIA FINANCING EXPERIENCE (J ULY 2018 – JULY 2023)

CITIES ONLY ALL ISSUER TYPES
FINANCING TYPE # OF

TRANSACTIONS
PAR
VALUE
# OF

TRANSACTIONS
PAR
VALUE
Lease Revenue Bonds 20 $ 875,263,733 75 $ 6,711,468,955 Revenue Bonds 14 1,421,635,000 92 14,001,882,400
General Obligation Bonds 3 262,315,000 172 17,513,681,081 Short-Term Borrowings (CP, TRAN, Notes) 11 2,029,370,000 58 5,027,779,000 Other Bonds (CFD, TABs, & POBs) 20 1,016,870,445 26 1,157,921,083 TOTAL 68 $5,605,454,178 423 $44,412,732,519

CALIFORNIA CITY PRACTICE
KNN and the advisor team that would serve Commerce have had the opportunity to serve as municipal advisor to an eclectic mix of small and medium sized cities, located throughout the State, as well as the largest cities in California. We serve as Municipal Advisor to 33 California cities across the State, providing a range of on-call advisory and transaction services.

Not only have the size of these communities and their financings covered the gambit, but so has the level of experience of staff members with whom we have worked, and the specific culture of the organizations. This mix exposes us to the largest array of tools available to municipalities and keeps us focused on providing the services required of our individual clients. Our experience allows us to deliver the level of service demanded by the largest cities to communities of every size.

In the table below, we list KNN’s California city clients – some of which we are actively working with on a financing or consulting assignment, others we serve from time-to-time in a general advisory role or have an as-needed retainer arrangement. We note that we have long history serving some of our city clients over the course of several decades and other of our clients represent newer engagements.

TRANSPORTATION | TRANSIT PRACTICE
KNN has a practice group devoted to the transportation sector with a common team of advisors serving the firm’s transportation and transit clients. We find that clients, particularly in this sector, benefit from the experience of peer agencies – our core transportation advisors can add value in this sharing of knowledge.

CITY CLIENT SINCE CITY CLIENT SINCE CITY CLIENT SINCE
Livermore 1985 San Francisco 2005 Davis 2019
Vacaville 1987 Santa Clara 2007 El Segundo 2020
Los Angeles 1998 Bell 2011 Napa 2020
Fresno 1999 Santa Maria 2011 Benicia 2021
Santa Barbara 1999 Gardena 2014 Redlands 2021
Oakland 2000 Marina 2014 So. San Francisco 2021
San Diego 2002 Long Beach 2015 Woodlake 2021
Lathrop 2003 Manhattan Beach 2015 Bishop 2021
Lompoc 2004 Newport Beach 2017 Emeryville 2022
Mission Viejo 2004 Stockton 2017 San Leandro 2022
Santee 2004 Huntington Beach 2018 West Sacramento 2022
Qualifications for Financial Advisor | Page 5
For most of our transportation clients, KNN provides both financial planning and analysis and debt issuance services. We have the requisite experience assisting transportation agencies in California with revenue measure evaluation, long-term strategic financial planning, debt capacity analysis, and cash flow modeling for large, multiyear construction programs – some of which leads to immediate borrowing needs, while other planning efforts set the stage for a borrowing over a longer-term horizon.

The diversity of the service we have provided to transportation agencies in California is illustrated by the summary table below.

In most instances, but not all, our general advisory services are provided in anticipation of a borrowing need. We are skilled with devising borrowing alternatives and structures and advising on various forms of borrowings for our transportation agency clients summarized in the table below.

TRANSPORTATION AGENCY FINANCING EXPERIENCE (LAST TEN YEARS)

TYPE OF ISSUE
# OF

TRANSACTIONS
TOTAL

PAR VALUE RELATED ISSUERS
Public Bond Offering 19 $ 2,392,030,000 CCTA, LACMTA, SCTA, SFCTA, TCAG Interim Borrowing | CP 3 405,000,000 SFCTA
TIFIA Loan 4 116,447,400 MST, NVTA, SBCAG, SLO RTA
Bank Loan 2 19,100,000 NVTA, SLO RTA
TOTAL 28 $2,932,577,400

TRANSIT MAINTENANCE FACILITY FINANCINGS
Notable to the City and the proposed CC Transit Zero-Emission Bus Operations, Maintenance, and Administration project, is KNN’s specialized expertise in the financing of transit maintenance facility projects as highlighted below.

KNN CALIFORNIA TRANSPORTATION AGENCY EXPERIENCE

TRANSPORTATION SALES TAX AGENCIES
Contra Costa
Transportation Authority 2018-Present X X X X
Los Angeles County MTA 2013-Present X X X X
Madera County
Transportation Commission 2008-Present X X X X
Merced County
Association of Governments 2017-Present X
Council of San Benito
County Governments 2018-Present X X X
San Francisco County
Transportation Authority 2011-Present X X X X
Santa Barbara CAG 2011-Present X X X X
Santa Cruz County RTC 2019-Present X X
Sonoma County
Transportation Authority 2006-Present X X X X X
Stanislaus
Council of Governments 2017-2018 X
Transportation Agency of
Monterey County 2016-Present X X
Tulare County
Transportation Authority 2009-Present X X X

TRANSIT AGENCIES
Alameda-Contra Costa Transit District 2018-Present X X
Napa Valley Transportation Authority 2020-Present X X
Monterey-Salinas Transit District 2019-Present X X X
San Luis Obispo Regional Transit Authority 2018-Present X X X X TIFIA
Evaluation/
Execution
Client Since Cash Flow
Modeling
Strategic
Planning
Borrowing
Alternatives
Bond
Issuances/
Financings
Revenue
Measures

FINANCING DETAILS
» $26.7M Total Project Cost
» $13.1M TIFIA Loan (September 2020)
» Project Funding Mix:
▪ TIFIA Loan: 49%
▪ Federal: 27%
▪ State: 20%
▪ Other Local: 4%
SAN LUIS OBISPO REGIONAL TRANSIT AUTHORITY | BUS O&M FACILITY:

Qualifications for Financial Advisor | Page 6
C. Provide at least five references that received similar services from Respondent at a minimum over the last five years. Include name of organization, contact name, telephone number and email address.

As a department of the City, the evaluation of borrowing approaches and the preparation of a plan of finance for CC Transit should consider various factors: i) the Project being financed; ii) the proposed Measure AA sales tax revenues that would secure and/or repay the debt, and iii) the City’s financial structure. The following references, therefore, are provided in three categories: 1) Transit Agency References; 2) Transportation Sales Tax References; 3) California City References – all of which are relevant to delivering Commerce’s Scope of Services.

TRANS IT AGENCY REFERENCES

MONTEREY - SALINAS TRANSIT DISTRICT (MST)
AGENCY
CONTACT:

LISA RHEINHEIMNER, ASSISTANT GENERAL MANAGER
Phone: (831) 264-5874 | Email: [email protected]

MUNICIPAL
AVISOR(S): Melisa Shick, Nedko Nedev

ENGAGEMENT
TERM: 2020 to Present

SIMILAR
SERVICES:
 Provided initial structuring and analysis related to the Project sources and uses of funds to inform the TIFIA Loan borrowing amount.
 Managed all phases of the TIFIA Loan process: Letter of Interest, Creditworthiness Review, Due Diligence Requests, Term Sheet and Loan Agreement negotiation, Application, and Loan Rating, and Closing.
 Relevant transaction experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
2020 TIFIA Loan 10/29/2020 $8,449,000
MONTEREY-SALINAS TRANSIT DISTRICT | SOUTH COUNTY O&M FACILITY:

FINANCING DETAILS
» $17.2M Total Project Cost
» $8.5M TIFIA Loan (October 2020)
» Project Funding Mix:
▪ TIFIA Loan: 49%
▪ Federal: 25%
▪ State: 23%
▪ Other Local: 3%
NAPA VALLEY TRANSPORTATION AUTHORITY | VINE BUS MAINTENANCE FACILITY

FINANCING DETAILS
» $40.6M Total Project Cost
» $19.9M TIFIA Loan (November 2021)
» Project Funding Mix:
▪ TIFIA Loan: 49%
▪ Federal: 13%
▪ State: 26%
▪ Other Local: 12%
Qualifications for Financial Advisor | Page 7

NAPA VALLEY TRANSPORTATION AUTHORITY (NVTA)
AGENCY
CONTACT:

ANTONIO ONORATO, DIRECTOR OF ADMINISTRATION, FINANCE &
POLICY
Phone: (707) 259-8779 | Email: [email protected]

MUNICIPAL
AVISOR(S): Melisa Shick, Nedko Nedev

ENGAGEMENT
TERM: 2020 to Present

SIMILAR
SERVICES:
 On-call financial advisory activities.
 Assisted NVTA’s transit agency with the execution of TIFIA Loan and Bank Loan financings in connection with the construction of a new bus maintenance facility.  Managed all phases of the TIFIA Loan process: Letter of Interest, Creditworthiness Review, Due Diligence Requests, Term Sheet and Loan Agreement negotiation, Application, and Loan Rating, and Closing.
 Currently engaged to assist with sales tax measure planning and bonding capacity analysis for the new measure Expenditure Plan.
 Relevant transaction experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
TIFIA Loan 11/23/2021 $19,917,401
Bank Loan 11/23/2021 5,000,000

SAN LUIS OBISPO RE GIONAL TRANSIT AUTHORITY (SLO RTA)
AGENCY
CONTACT:

TANIA ARNOLD, DEPUTY DIRECTOR/CHIEF FINANCIAL OFFICER
Phone: (805) 781-4397 | Email: [email protected]

MUNICIPAL
AVISOR(S): Melisa Shick, Nedko Nedev

ENGAGEMENT
TERM: 2019 to Present

SIMILAR
SERVICES:
 Conducted a detailed analysis of borrowing alternatives, including a public borrowing, private placement, federal tax credit bonds, and state and federal loan programs.  Recommended that SLO RTA pursue a TIFIA Loan to finance a bulk of the requirements related to project funding in tandem with a small bank loan borrowing.  Manage all phases of the TIFIA Loan process: Letter of Interest, Creditworthiness Review, Term Sheet and Loan Agreement negotiation, Application, and Loan Rating, and Closing.  Relevant transaction experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
2020 Bank Loan 7/15/2020 $1,020,000
2020 TIFIA Loan 9/3/2020 13,080,000
Qualifications for Financial Advisor | Page 8

TRANSPORTATION SALES TAX REFERENCES

CONTRA COSTA TRANSPORTATION AUTHORITY
AGENCY
CONTACT:

BRIAN KELLEHER, CHIEF FINANCIAL OFFICER
Phone: (925) 256-4733 | Email: [email protected]

MUNICIPAL
AVISOR(S): Melissa Shick

ENGAGEMENT
TERM: 2018 to Present

SIMILAR
SERVICES:
 On-call financial advisory activities. Assist with Strategic Plan efforts and bond program forecasting. Transaction planning and execution
 Relevant experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
Bond Issue: Sales Tax Revenue Bonds (Limited
Tax Bonds), Refunding Bonds, Series 2021A
6/2/2021 $97,240,000
Bond Issue: Sales Tax Revenue Bonds (Limited
Tax Bonds), Taxable Refunding Bonds, Series
2021B
6/2/2021 12,675,000
Bond Issue: Sales Tax Revenue Bonds (Limited
Tax Bonds), Refunding Bonds, Series 2018A (Index
Rate)
8/23/2018 100,000,000
Bond Issue: Sales Tax Revenue Bonds (Limited
Tax Bonds), Refunding Bonds, Series 2018B Fixed
Rate)
8/23/2018 95,030,000

LOS ANGELES COUNTY METROPOLITAN TRANSPORTATION

AUTHORITY
AGENCY
CONTACT:

RODNEY JOHNSON, DEPUTY EXECUTIVE OFFICER, FINANCE
Phone: (213) 922-3417 | Email: [email protected]

MUNICIPAL
AVISOR(S): David Brodsly, Melissa Shick, Nedko Nedev

ENGAGEMENT
TERM: 2013 to Present

SIMILAR
SERVICES:
 General Advisor in 2014-2015 and 2022-2023 across sales tax programs and on multiple transactions. Transaction advisor in 2016, 2017, 2019 and most recently April 2021.  Managed rating process that resulted in Moody's upgrade to all sales tax ratings; double (Moody's) and triple (S&P) upgrades to general revenue bonds.  Relevant experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
Bond Issue: Proposition C Sales Tax Revenue
Bonds, Senior Bonds, Series 2021-A
4/7/2021 $321,905,000
Bond Issue: Proposition A Sales Tax Refunding
Revenue Bonds, Series 2019-A
4/2/2019 57,745,000
Qualifications for Financial Advisor | Page 9

CALIFORNIA CITY REFERENCES

CITY OF MARINA
AGENCY
CONTACT:

JUAN LOPEZ, FINANCE DIRECTOR
Address: 211 Hillcrest Avenue, Marina, CA 93933
Phone: (831) 884-1221 | Email: [email protected]

MUNICIPAL
AVISOR(S): David Brodsly, Nedko Nedev

ENGAGEMENT
TERM: 2014 to Present

SIMILAR
SERVICES:
 KNN began working with the City of Marina in 2014 to assist them issue on what would be one of the first “new money” bonds following the dissolution of redevelopment. Since that time KNN has assisted on both TAB and COP financings in addition to CFD consulting work.  Advised the City on a COP financing for road projects, which was structured in consideration of the City’s local allocation of TAMC Measure X sales tax revenues.  Relevant experience over the last five (5) years:

TRANSACTION TITLE SALE DATE PAR VALUE
Bond Issue: Certificates of Participation (2022
Transportation Infrastructure Financing Project)
6/16/2022 $10,870,000

CITY OF LOS ANGELES
AGENCY
CONTACT:

HA TO, CHIEF DEBT MANAGEMENT
Address: 200 North Main Street, Room 1500, City Hall East, Los Angeles, CA 90012 Phone: (213) 473-7529 | Email: [email protected]

MUNICIPAL
AVISOR(S): David Brodsly, Melisa Shick, Dan Cox, Nedko Nedev

ENGAGEMENT
TERM: 1998 to Present

SIMILAR
SERVICES:
 KNN has worked with the City on a number of debt programs, providing analysis and financing plans over a wide array of topics, and leading the City’s disclosure efforts.  Our work as general advisor to the City has run the spectrum, including financial planning and policy development; and serving as advisors on such transactions as general obligation, judgment obligation, lease revenue, parking revenue, judgment obligation bonds, private placements and commercial paper programs. We are currently advising the City on the issuance of $200 million lease revenue bonds to retire outstanding commercial paper.  Have advised the City on the ability to leverage Measure M sales tax revenues allocated to the City from LACMTA to advance transportation projects in Los Angeles.

Qualifications for Financial Advisor | Page 10
D. Demonstrate the qualifications of all personnel to be assigned to the City, including key personnel, by providing resumes and/or relative experience summaries describing their education, credentials, licensing, training and related experience and their proposed roles for this contract.

EXPERIENCED TEAM TO SERVE COMMERCE
KNN has assigned a team of highly experienced and senior staff to provide the comprehensive financial advisory services the City and CC Transit are seeking to guide funding and financing strategies for the Zero-Emission Bus Operations, Maintenance, and Administration Facility Project. Our team brings extensive experience in transportation, transit and project finance, the analysis and synthesis of various tools to craft solutions to difficult problems, the ability to communicate with a variety of stakeholders in forging such solutions, and a command of the quantitative skills to accurately model the implications of those solutions over time.

MELISSA SHICK, Director, will serve as the City’s and CC Transit’s Designated Contact. She will lead our team in delivering the Scope of Services and providing resources to the engagement. Melissa works on a day-to-day basis with many of the firm’s city clients and most the firm’s transportation clients, including providing strategic planning, bond issuance, and TIFIA Loan execution services. In serving California city clients, she advises on financings of various types and structures and provides non-transaction analysis and planning services. Additionally, as advisor to numerous transportation agencies, Melissa maintains a strong working knowledge of the evolving federal, state and local transportation funding dynamics. Additionally, Melissa leads the firm’s engagements with the US DOT Build America Bureau (“BAB”). She is experienced collaborating with the BAB program office and has positive working relationships with the TIFIA Loan officers.

Among other strengths, Melissa is particularly skilled in leading presentations before councils, boards, and stakeholder groups to provide education, training, and summary of financing alternatives and financial policy decisions. A key part of our initial engagement with most of our transportation agency clients is training sessions for their respective governing bodies and technical advisory committees regarding strategic planning, bond financings and other borrowing alternatives, various financing tools and options available, and the implications they together entail.

NEDKO NEDEV, Vice President, one of the firm’s most senior quantitative experts, will partner with Melissa on most aspects of the engagement, taking the lead in quantitative analytics, cash flow modeling, and debt structuring.

Nedko serves as the lead quantitative advisor to a diverse mix of public agencies, including cities and counties, water/sewer agencies, transportation agencies, and state agencies. Further, Nedko is the lead quantitative advisor on the firm’s TIFIA Loan engagements and is well respected by the BAB team and its financial advisors for his quantitative capabilities and approach.

DAVID BRODSLY, Managing Director, will provide strategic oversight. David offers a unique combination of experience with a history serving as advisor to both city and transportation issuers. In addition, David has a particular expertise in the study and evaluation of the wide range of revenue tools available under California law, and experience in the deployment of those tools. Most recently he advised AC Transit in their evaluation of potential revenue measures to identify the optimum funding strategy to present to voters in November 2020. Because the results of polling suggested that any measure would fail to reach the necessary voter threshold, the District decided to defer the matter. David serves as KNN’s lead advisor to LACMTA.

TIM FRYDENDALL , Associate, will work closely alongside Melissa and Nedko and provide quantitative and transaction execution support.

NAME/TITLE ROLE EXPERIENCE PRIMARY RESPONSIBILITIES

MELISSA SHICK
Director
Designated Contact
Day-to-Day Advisor
18 years Serve as the day-to-day advisor and relationship manager providing leadership on all aspects of the
engagement with Commerce: strategic direction; plan of
finance development and approach; transaction
management & execution; credit strategy and rating
agency outreach; document review; Council and
stakeholder communication.

NEDKO NEDEV
Vice President
Quantitative Advisor 17 years Provide quantitative and analytic expertise regarding borrowing sizing and alternatives. Develops and
maintains models to inform planning and pricing
decisions. Build TIFIA financial model as may be
required for a TIFIA Loan borrowing.

Qualifications for Financial Advisor | Page 11

NAME/TITLE ROLE EXPERIENCE PRIMARY RESPONSIBILITIES

DAVID BRODSLY
Managing Director
Strategic Oversight 42 years Provide strategic oversight on any given transaction or assignment. His focus will be on alternatives analysis, debt and non-debt solutions, as well as the drafting and review of policies.

TIM FRYDENDALL
Associate
Quantitative &
Transaction
Execution Support
5 years Depending on assignment, will provide quantitative and analytical support in addition to conducting research,
preparing presentations, and providing market data and
market updates.

Please see Appendix A for complete resumes of the KNN advisors assigned to the Commerce engagement, providing details regarding individual advisor education, credentials, licensing, and related experience.

E. Provide an organization chart of the proposed team, including a contingency plan should a member of the proposed team be unable to fulfill their responsibilities.

TEAM ORGANIZATIONAL STRUCTURE
In the adjacent chart, we provide the organizational structure of the KNN advisory team that would be dedicated to the CC Transit engagement. As your team of financial advisors, our role is to serve your unique needs and requests. In this capacity, we operate as an extension of staff to address your planning and financing needs. Overall, Melissa Shick will serve as the day-to-day contact for the City and CC Transit staff, mobilizing the team’s resources as appropriate to ensure that Commerce receives the top-level services in an efficient manner. Moreover, KNN has additional resources and can
allocate whatever additional resources are necessary to ensure that all engagements and deadlines are completed on a timely basis.

TEAM ADVISORY APPROACH
We have taken a team approach to staffing KNN’s engagement with Commerce to best meet the City’s advisory needs and to ensure the successful delivery of the Scope of Services.

First, we can draw on the strengths and specialized expertise of multiple senior advisors, as needed, to meet the potential range of needs for your program. We rely on the strengths, complementary skillsets and unique perspectives of our individual advisors to maximize the quality of our service. For the proposed assignment we believe it is important that your municipal advisor be experienced in evaluating the range of possible revenue sources potentially available to fund your capital needs, the quantitative loan structuring and cash flow modeling required to leverage those resources, and the ability to describe the implications of the borrowing strategy to key stakeholders – Council, advisory committees, staff and potentially voters. Although the senior members of our team are all experienced in this area, each of us have exceptional strengths in some of the individual components of your needs; as a team, we can therefore deliver an exceptional level of service.

Second, by having more than one senior advisor actively working the assignment, we ensure that an advisor with knowledge of your activities is available to always meet your needs, regardless of schedule or other conflicts.

Lastly, and perhaps most importantly, our proposed staffing matrix highlights our expectation of the relationship among KNN and the City/CC Transit staff. As your team of municipal advisors, our role is to serve your unique needs and requests – collaboratively and seamlessly. We aim to be inclusive and hands-on and, in all cases, we strive to balance our direct responsibility for developing a plan or approach, while cultivating a culture of cooperation among all team members.

Qualifications for Financial Advisor | Page 12
F. Respondent shall hold the required license(s) to perform the work and provide proof of required license for itself and its personnel.

KNN has the necessary authorization and certificates to conduct business in the State of California and in the national municipal bond market. Our license and registration numbers are provided in the adjacent table.

KNN is in good standing and compliance with all applicable rules and requirements of the Securities and Exchange Commission (SEC) and the Municipal Securities Rule Making Board (MSRB). All KNN advisors have taken and passed the MSRB Series 50 Municipal Advisor Representative exam, while five of our senior staff have the Series 54 Municipal Advisor Principal license.

LICENSES & REGISTRATION
Taxpayer Identification Number:
• 81-0958321
CA Business Entity Number:
 201536310278
CA Small Business Certification:
 2001287
MSRB and SEC Registrations:
 MSRB ID: K1151
 SEC File Number: 867-01996
Qualifications for Financial Advisor | Page 13

APPROACH TO SCOPE OF SERVI CES
A. This section should set forth a comprehensive description of the approach to providing the Scope of Services and should clearly demonstrate an understanding of the City’s requirements, the work to be done and the objectives to be accomplished.

In pursuing a borrowing for the Zero-Emission Bus Operations, Maintenance, and Administration Facility Project, the City’s requires the guidance and expertise of an experienced financial advisor. KNN, in tandem with legal advisors appointed by the City to serve on the Project, stands ready to assist not only with the preliminary planning needs but also to deliver the City’s Scope of Services in connection with a bond issuance or TIFIA Loan borrowing.

In the section that follows, we provide a comprehensive description of our general approach to each task area detailed in the City’s Scope of Services in addition to highlighting key plan of finance task areas that would be required prior to delivering transaction execution services. In this introductory section, however, we discuss characteristics of the KNN advisory approach and our knowledge and understanding of the Project to date that would together ensure that the City’s objectives and the requirements of the financial advisory engagement are met.

ADVISORY APPROACH DRIVEN BY KEY VALUES
KNN is committed to providing superior service under all its financial advisory contracts. To this end, our advisory approach is rooted in the following service delivery values:

1. MANAGEMENT : KNN has a track record of effectively managing projects under our financial advisory contracts by overseeing personnel, resources, budget, and schedule to ensure the highest level of service is consistently provided. We maintain appropriate documentation to support effective and efficient delivery of services – including staffing assignments, detailed hourly tracking sheets, and budget to actual summaries by assignment.

2. TIMLINESS & PROGRESS: KNN carefully monitors timelines for deliverables and meets established milestones and completion dates for individual tasks. We are accustomed to providing timely completion of tasks, including reviews, revisions, and intermediate and final deliverables. As may be needed, we can adjust resources in response to changes in the required delivery schedule or project objectives.

3. QUALITY OF WORK: KNN produces accurate and complete deliverables, including written and quantitative analyses and reports.

4. AVAILABILITY OF PERSONNEL: KNN commits sufficient staff and technical resources throughout our engagements to meet the demands of the contract. Assigned employees are qualified and possess appropriate technical knowledge skills and abilities for the assignment(s).

PROJECT KNOWLEDGE AND UNDERSTANDING
Over the last year we have had several conversations with CC Transit leadership regarding the City’s anticipated need to fund a portion of the Project costs through a financing or borrowing with the balance of the Project costs met by federal and local funding sources. Since our initial conversation, the City and CC Transit have made important progress on the planning, design, and implementation requirements for the Project. In addition to this background and understanding of the Project we are also familiar with the City’s desired funding and financing approach to close the Project funding gap. At this stage in your process, we stand ready to assist you in fine-tuning the details of the Project funding and financing approach.

PROJECT FUNDING REVIEW. The Project is being implemented to ensure the continued operation and expansion of CC Transit's transportation services and enable a transition to an all-ZEB bus fleet. The Project scope of work includes the following: i) Administration and Operations Facility; ii) Maintenance Facility; iii) BEB Charging Infrastructure; iv) Bus Wash System and Fuel Island; v) Covered Bus Fleet / Agency Vehicle Parking; vi) Employee and Visitor Parking; vii) Landscaping and Climate Resiliency Features; and viii) Solar Power Generation.  Project Understanding: We understand that total Project costs could total up to $115 million and are expected to be funded by the federal, state, and local resources, including a federal grant funding, local Measure AA sales taxes, and an anticipated borrowing in the form of bonds, TIFIA Loan, or other alternative.

Additionally, the Project has completed many critical milestones – environmental and design – with the expectation of the commencement of construction in October 2024 and construction completion in April 2026. Borrowing proceeds would be necessary in the late fall 2024 and available through construction.

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 Areas for Review and Discussion: KNN would expect to review each Project funding source with CC Transit and assist with the evaluation of the potential borrowing need. Given the nature of the project, its EV objectives, and the solar power generation, we would expect to explore possible grant and other funding opportunities available under the Inflation Reduction Act (“IRA”). For example, provisions within the IRA now allow tax-exempt issuers to directly “claim” clean energy tax credits, reducing project costs for school districts, universities, airports and general governments who want to own renewable generation (i.e. solar) or storage (i.e. batteries).

PROJECT FINANCING APPROACH. We would expect to devote a significant amount of time evaluating the optimal credit structure and financing approach for the anticipated borrowing. We understand that the City intends “leverage” a portion of its Measure AA sales tax revenues to secure and/or repay the borrowing.  Measure AA Understanding: On November 6, 2012, Measure AA was approved by the voters of the City of Commerce. The Measure AA funds are generated by the City's one-half of one percent (½%) transactions and use tax within the City. The use of the City's Measure AA sales tax revenue is consistent with the following criteria: 70% is used for one-time infrastructure/capital items; 10% is maintained as reserves; 10% is used for economic development activities/project; 5% is used to cover Administration costs in connection with the implementation of Measure AA and the projects paid for by the Measure; 2.5% is used for City beautification activities and/or projects; and 2.5% is used for public safety activities.  Areas for Review and Discussion: KNN will take a comprehensive review of the Measure AA program and its funding requirements. Key to the Measure AA review will be its ability to provide upfront, available resources to the Project in addition to the ongoing support of debt service on the Project borrowing – we expect that these commitments to the Project will need to remain in adherence with Measure AA criteria.

As done with many of our transportation sales tax revenue clients, KNN can model the Measure AA sales tax revenue allocation requirements and determine debt capacity and the ongoing ability to support the Project debt service in the context of other program allocations.

In addition to evaluating the ability of Measure AA
revenues to support the Project, we will need to
determine if Measure AA revenues can legally
serve as the security pledge on the borrowing
pursuant to California Constitution and the City’s
voter approval threshold on the ballot measure.

Despite receiving strong voter approval, if Measure
AA was considered a “general tax” with a majority
approval threshold when placed on the ballot, then
it likely will not be legally available to serve as a
direct security pledge on a borrowing. To directly
pledge the Measure AA revenues in the form of
sales tax revenue bonds, the Measure AA would
need to be a “special tax” receiving two-third voter
approval.

Thus, a key component of our initial review and analysis will be determining the optimal means to leverage the Measure AA sale tax revenues based on guidance from the City Attorney and from the City’s Bond Counsel. If the Measure AA sale tax revenues cannot legally be pledged to the borrowing, the City could finance the Project through the issuance of lease revenue bonds whereby the General Fund would serve as the security, but the Measure AA special fund revenues would reimburse the General Fund for annual debt service (budget neutral). However, under this approach, the City would need to pledge the Project or an available City-owned asset. Further, the TIFIA credit program may not accept the lease security.

Alternatively, if it is determined that the Measure AA sales tax is a “special tax” then the City may pursue the issuance of sales tax revenue bonds. The issuance of sales tax revenue bonds would require key structuring features required of bondholders and the TIFIA lender, including debt service “coverage” requirement. That said, even if deemed a “special tax”, there may be reasons the City may wish to consider the issuance of lease revenue bonds with debt service paid by the Measure AA sales tax.

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B. Provide a description of the work plan for the services describing how each task under the Scope of Services will be accomplished.

KNN’s approach and work plan in delivering the City’s Scope of Services encompasses various activities specific to two primary areas: 1) plan of finance development and analysis of borrowing alternatives for the financing of all or a portion of the Zero-Emission Bus Operations, Maintenance, and Administration Facility Project and 2) transaction execution related to a borrowing, including the issuance of municipal bonds or the execution of a TIFIA Loan, among other available alternatives. The Scope of Services in the City’s RFQ details specific activities to be performed in delivering transaction execution services; however, to best serve the City, KNN expects to first provide various Scope of Service tasks related to the evaluation of financing alternatives and the development of a plan of finance.

PLAN OF FINANCE DEVELOPMENT
Supporting staff in the day-to-day tasks of financial management and decision making is one of the areas in which we believe we distinguish ourselves. Because our practice spans issuers of several sectors and sizes, we have broad exposure and experience in a variety of areas that are not typical of the municipal advisor. Importantly, we bring a combination of extensive experience and intellectual rigor to our assignments, which is especially apparent when designing and developing financing plans, evaluating proposals or financing structures, and crafting solutions.

Overall, our role as municipal advisors is far from a one-size fits all service and we would expect to tailor our approach to meet the needs specific to Commerce.

As KNN works with the City and CC Transit to devise a plan of finance approach for the Project, we expect to focus our collective efforts in the following areas:

DEVELOP CREDIT AND SECURITY STRUCTURE. We have a broad knowledge of available financing and credit mechanisms—be they methods for raising revenues or methods for leveraging those revenues. When we evaluate such approaches, we seek to understand the underlying forces that support the use of such a mechanism. We make sure we evaluate both the potential benefits, but also the known costs and, perhaps most importantly, the risks. We are, frankly, often skeptical of new financing mechanisms, being suspicious of shiny objects. On the other hand, we have a long record of innovation, when innovation helps a client best meet their needs. Our goal is to help the client find the appropriate balance of risk and reward, making informed recommendations to decision makers.

PREPARE FINANCIAL MODELS. Having strong resources in quantitative analytics and financial planning is of paramount importance in delivering success, and we have staffed our Commerce team accordingly. Strong analytics guide sound financing recommendations and support long-term financial performance.

An important component of our technical competence is our staff’s ability to build, improve, and manage custom financial models. For many of our revenue bond clients (including numerous transportation sales tax clients), we have created and maintain cash flow models that they continue to use to manage their programs. In the adjacent table we summarize some of the more typical advisory products and services provided to our clients to support their planning and analysis efforts across city departments, capital program areas, and debt structures.

EVALUATE BORROWING APPROACHES. Over recent years, local governments and municipal agencies have increasingly executed various forms of borrowings in addition to the issuing public bonds in the municipal market.

In California, we have seen an increased use of state and federal loan programs to finance infrastructure needs and Commerce is no exception to exploring other modes of borrowing for its Project.  MUNICIPAL BONDS. Municipalities are accustomed to the issuance of municipal bonds in the public municipal market as the financing of public infrastructure projects primarily carry a lower cost, tax-exempt borrowing rate. Furthermore, as the common mode of financing for public agencies, the borrowing approach and execution can lead to the most effective and efficient process. This approach therefore tends to serve as the “Base Case” approach in the evaluation of financing alternatives.  STATE LOAN PROGRAMS. The California Infrastructure Bank (I-Bank) and other state loan programs can provide an attractive cost of borrowing and structuring features relative to public municipal bonds.

FINANCIAL PLANNING & ANALYSIS

KNN PRODUCTS AND RESOURCES

ANALYSIS AND MODELING
 Cash flow & capital planning
 Financial forecasting
 Debt capacity & affordability
 Tax rate analysis & GO Bond capacity
 Financing alternatives & structure analysis

PLANNING AND DECISION MAKING
 Topic white papers and research assignments
 Revenue study (existing & new) and feasibility analysis  Ballot measures and initiatives
 Financing alternatives analysis
 Staff reports and Council presentations
 Policy review and development (reserve, capital, debt) Qualifications for Financial Advisor | Page 16
 FEDERAL LOAN PROGRAMS. As the City is familiar there are several federal loan programs that can also offer public agencies borrowing efficiencies from both structure and cost of borrowing perspectives – including the TIFIA Loan program for transportation infrastructure projects. However, execution of federal loan programs can be more challenging to predict. While the execution of a TIFIA Loan can be time consuming, there are several factors of the loan program that provide value to public borrowers:
1) Term: Since the relative advantage of tax-exempt bonds relative to TIFIA rates, which key off of taxable US Treasuries, dwindles as one goes longer out on the yield curve, the longer the life of a loan, the more compelling the TIFIA advantage is. It is very typical for large capital projects like your new maintenance facility to be financed over 25-30 years, sometimes more (TIFIA allows amortization of up to 35 years beyond the projected project completion at the same rate as a 30-year term). The tradeoff is obviously that quicker repayment minimizes interest costs, though at the expense of higher annual payments. In our experience, the latter dynamic tends to carry the day in favor of lengthier repayment periods.
2) Drawdown Feature: Unlike a bond offering where you borrow all proceeds at closing (or, at best, in a phased approach across two or three issuances), and start racking up interest on the entire par amount, TIFIA loans are effectively drawdown instruments – you only pay interest on the amounts that have been disbursed.
3) Prepayment: TIFIA offers somewhat more flexible prepayment provisions – loans can be prepaid any time at no penalty (should CC Transit secure additional funding, say, through a grant) or should the project come in under budget, any unused portion can be simply extinguished. Bonds are typically callable with no penalty only after a certain period (typically, 10 years – shorter calls can be structured but at a cost), so there is greater pressure to ‘right-size’ the borrowing (tax rule compliance will also naturally dictate some discipline on this front).
 DIRECT BORROWINGS. In addition to bonds sold in the public municipal market, there are a number of national, regional, and local commercial banks that can provide alternative borrowing approaches through direct lending products.

SUPPORT INFORMED DECISION MAKING. A key part of the planning and analysis process is the development of a working consensus among staff, management, council members, and stakeholders. Such planning requires an iterative process. To be affective, the planning assumptions should be transparent and comprehensive to the various stakeholders. Our effectiveness in helping to develop consensus among various parties derives from our deep respect for the public process, and our years of working in and with public agencies.

Based on the initial plan of finance determination, we would then be able to assist the City and CC Transit with the best path forward in terms of your overall financing execution for the Project. Upon having a clear sense of the borrowing/legal framework and approach, it is then where you would be best positioned to proceed with transaction execution in the form of a TIFIA loan or other approaches such as the issuance of municipal bonds.

BORROWING EXECUTION | MUNICIPAL BONDS
The financing process for the issuance of a bond offering in the municipal market can take up to 4 to 5 months. We would expect transaction activities to follow the broader development of a comprehensive financial plan, which could take upwards of 3 to 6 months, depending on complexity of financing and project delivery needs. For Commerce, we have laid out the critical path pre-transaction items above, including establishing the legal framework for the borrowing.

Overall, our approach to ensure a successful bond transaction process begins well ahead of the day of issuing and pricing the City’s bonds. As your partner from beginning to end of the financing process, our role is to ensure that your credit optimally approaches the market at pricing. In this context, we discuss the areas that we would work closely with you in preparation for your bond issuance with the overall objective of ensuring the lowest cost of borrowing on the day of sale.
 MONTHS 0-2: I) Finalize plan of finance; II) assemble financing team; III) prepare Time and Responsibility Schedule; and IV) draft and review initial financing documents.  FINALIZE PLAN OF FINANCE
At the start of any bond offering, we will begin by working with City staff to review your financing needs and objectives. We would expect to update financial data and planning models, as well as conduct meetings and Qualifications for Financial Advisor | Page 17
conference calls with staff to receive updates on Project costs and timelines. Upon the conclusion of the review, we would work with you to finalize the plan of finance for your offering.

PLANNING AND CASH FLOW MODELS. During the plan of finance development phase we will work with CC Transit to model the department and project cash flows to inform borrowing needs and repayment sources. Throughout the transaction process, however, we would expect to update model projections to ensure the sizing of the borrowing will appropriately address the Project funding needs.

CREDIT AND BORROWING STRUCTURE. Whether a proposed offering involves the issuance of new debt or the refinancing of existing debt, there are decisions to be made regarding credit features and bond repayment structure. For example, we evaluate the use of a debt service reserve fund and other refinements to credit structure. We will also review and analyze various bond structures in the context of the financing objectives, including the term of the debt, repayment and savings structure and financing vehicle.  ASSEMBLE FINANCING TEAM
KNN assists with the RFP process to complete the staffing of financing or project teams, including the necessary due diligence and selection of underwriter(s) for a negotiated sale as well as obtaining any proposals required to select bond and/or disclosure counsel firms, bond insurers, trustee banks, feasibility consultants, verification agents, and printers.

We help you review not only the qualifications and experience of the proposals you may receive but also are accustomed to assisting with fee negotiations – most notably for underwriters and bond insurers. As an active municipal advisory firm, we have direct knowledge of relevant fee comparables and utilize such information to ensure proposed fees are consistent with market comparables and assist with fee negotiation as may be needed.  TRANSACTION MANAGEMENT AND LEADERSHIP
On any given transaction, our role is to serve as the overall project manager, keeping the rest of the team accountable and making sure that all the key requirements of the project are met on time. We are not just the schedule keepers. As managers, we prefer a collegial working style that aims at eliciting the best from all financing team members and facilitating a smooth transaction that meets the client’s objectives. We take ownership of the financing schedule and distribution list in an effort to make sure that your required milestones are met and that all members of the team understand their assignments and deadlines.  MONTHS 2-3: I) Comment on and finalize financing documents, including POS, for Council submittal; II) update bond structures and finalize structuring and sizing approach; and III) draft rating presentation.  DOCUMENT DEVELOPMENT AND REVIEW
The issuance of municipal bonds will require the development and execution of legal documents and a marketing document that summarizes the structure and security of the offering (the Official Statement). While the City’s Bond Counsel and Disclosure Counsel will be responsible for the preparation of the required documentation, KNN will take an active role in the process.

We actually read all the documents, making sure that the covenants appropriately balance the investor’s needs in order to provide the lowest cost of funds, with a structure that fits the client’s needs and provides flexibility. We focus on the official statement, as that is the document that most exposes the issuer to regulatory risk. We make substantive suggestions for improving disclosure.

As a firm, we are particularly focused on helping clients meet their disclosure requirements. We work in tandem to thoroughly review any “canned” language to make sure it properly characterizes the current facts and circumstances of a given issuer, undertake due diligence of disclosure facts, and draft accurate updates of evolving disclosures items. We also remain active as members of the California Society of Municipal Analysts and the National Federation of Municipal Analysts, giving us insight into the needs of investors in producing disclosure and continuing disclosure requirements.
 BOND STRUCTURE ANALYSIS
DEBT SIZING. Our in-house team of quantitative experts routinely perform all of the bond structuring, pricing analysis, and quantitative analysis in connection with a financing engagement. We subscribe to DBC Finance, the same software used by the major underwriting firms, which serves as KNN’s primary bond sizing analytic Qualifications for Financial Advisor | Page 18
software. Our DBC package includes Project Finance, which coordinates interdependent projects under a common plan of financing to optimize financing solutions.

STRUCTURE FEATURES. In the course of the financing, there will be decisions that are not intuitive, but require disciplined analysis to reveal the implications. Often these will involve bond structure, such as call features and couponing. We prepare memos that reveal the trade-offs of imbedded in these structuring decisions, so that the decisions benefits and costs/risks are revealed for more informed decision-making.  MONTHS 3-4: I) Present to rating agencies; II) receive transaction ratings; III) present and receive Council approval of financing; and IV) post Preliminary Official Statement.  CREDIT STRATEGY AND PRESENTATION
KNN is before the rating agencies virtually every week, ensuring that our clients remain current on evolving rating methodologies and new approaches that may have implications for existing debt programs. We bring particular skill to the rating process, taking the lead in developing rating strategies, which in many ways is an extension of our focus on disclosure.

RATING STRATEGY. We manage the credit rating strategy and approach for most of our clients. We have helped numerous clients prepare successful rating presentations to all four rating agencies and have assisted many clients in obtaining rating upgrades. We are familiar with and closely monitor changes to the rating methodologies of the agencies and have modeled their “scorecard” approach to the rating assessment in both the local governmental (general fund) and water/utility sectors. With a keen understanding of the rating drivers and we “score” our clients credit metrics to produce an expected rating outcome. We do so in advance of rating meetings so that areas that may be subject to rating pressure can be addressed head-on in the rating discussion.

RATING PRESENTATION. We will lead and assemble the most effective presentation materials to communicate the strengths of your credit, rehearse the presentations and accompany City and CC Transit officials in presentations to rating agency analysts.
 FINANCING APPROVALS
We work hand-in-hand with our clients in the financing approval process. We commonly assist clients in the preparation of staff reports, sometimes preparing a first draft, often reviewing the draft prepared by staff. Such staff report provide background and context of the financing as well as provide a description of the documents for review and approval by Council.

We are accustomed to coordinating with City Attorney’s Office, Bond Counsel, and Disclosure Counsel to ensure that all documents are prepared and are in near final form for the Council agenda date ahead of the meeting date. We participate in Council meetings in connection with the approval of a financing and often join staff in presenting the financing objectives and estimated results to council members prior to their approval.  MONTHS 4-5: I) Market and price Bonds; II) close Bonds; and III) deliver post sale analysis  ISSUANCE TIMING & MARKET ENVIRONMENT
MONITOR INTEREST RATE ENVIRONMENT. We provide our clients with weekly market updates, economic and interest rate data points and update bond structures consistently throughout the transaction process. We are active in adapting bond structures and transaction sizing based on evolving market conditions to ensure that there are no “surprises” closer to the pricing date.

TARGET ISSUANCE TIMING. Utilizing TM3, Bloomberg, and our personal relationships with underwriting desks, we compile a complete schedule of upcoming transactions and key economic releases to avoid busy supply slates, or market-moving economic data. We typically recommend staying attentive to macro-market factors and supply calendars to optimize your market timing.

MARKET COMMUNICATION. Because of the number of transactions we complete in California, we are in frequent contact with all of the active underwriting desks and maintain multiple databases of new issue sales and secondary market trades, with spreads to comparable indices. We generate a weekly market update, used both internally by our advisory staff and shared with clients.

METHOD OF SALE. The issue of whether to sell debt through the competitive versus negotiated process has generated considerable debate and analysis over the years. The trend over the past thirty years has certainly Qualifications for Financial Advisor | Page 19
been toward negotiated sales, although competitive sale remains a viable option in many circumstances. Both methods of sale have their advantages and risks, and the final decision must weigh those factors in light of the particulars of the agency, the transaction, and the market.  COMPETITIVE SALE APPROACH
KNN manages the bidding process so that our clients receive the maximum number of bids possible, which typically leads to a lower cost of funds. We assist in drafting the Notice of Sale, with pricing parameters and terms designed to provide bidders with maximum flexibility. We evaluate supply calendars and economic releases to select an optimal pricing date.

Once the Preliminary Official Statement and Notice of Sale are posted, we then contact bidding underwriters in advance of sale to focus their attention and to clarify credit or continuing disclosure questions preceding the bid.

We perform all of our competitive sales via an internet platform, which provides maximum transparency.

Immediately after a sale, we evaluate bids for conformance with the Notice of Sale and confirm the calculation of all of the bids independently to help determine the winning bidder. We then re-size the bonds, as necessary, confirming final bond insurance or surety bond premiums, if any, and generating final debt service (or savings) numbers.
 NEGOTIATED SALE APPROACH
With our access to market information from information services and direct relations, combined with our frequent pricing of California paper and strong analytical skills, we are recognized among underwriting desks as “tough but fair” because our pricing negotiations are based on a sound understanding of the market and verifiable market information. To be most effective in monitoring pricings and underwriter performance we:
 DEVELOP…Benchmark pricing scales based on recent sales of comparable credits and secondary market trades, all examined as spreads to MMD (or BVAL or MMA as preferred) and taking into account intra-day movements when appropriate.
 EVALUATE…Use of call provisions, serial and term bonds, and couponing by comparing both the yields to call and yields to maturity for premium callable bonds.
 ANALYZE…The underwriter’s proposed scale against our internal benchmarks and play a proactive role in informing the pre-marketing, pricing, and re-pricing scales based on data.  MONITOR…Investor demand by maturity through the order book and advise regarding any adjustments to the scale based on the number and quality of orders.
 NEGOTIATE…Take into account tone of the market and relative depth of demand for the issue to suggest lower yields and provide a specific rationale why. It’s not unusual for us to have information the underwriter doesn’t, which when shared prompts a downward adjustment to a proposal before even asking for one.  ASSIST WITH BOND CLOSING
Once the sale has been completed, the client wants to see a smooth, quick bond closing to ensure that bond proceeds are available as planned. KNN assists in all bond closings by reviewing closing documents and providing feedback to both disclosure and bond counsel, and preparing the flow of funds memorandum to ensure bond proceeds are correctly delivered and deposited in the correct accounts at close.

Our standard policy is to prepare a post-sale report and closing book to document the financing process. Among other topics, the “Final Pricing Book” aims to summarize the key aspects of the transaction decision points and resulting debt structure and evaluates pricing performance with the delivery of final order book and pricing adjustments (assuming a negotiated sale) and pricing comparable sheets.

TRANSACTION EXECUTION | TIFIA LOAN
The TIFIA Loan process, is comprised of many of the same steps that are required for the issuance of municipal bonds; however, the requirements and detailed diligence of the US DOT Build America Bureau can lead to an arduous and protracted execution process. With TIFIA as a component of any funding plan, the execution timing of this borrowing tool must be carefully considered and planned for.

Qualifications for Financial Advisor | Page 20
Factors that lead to a longer TIFIA Loan
execution process include the Letter of
Interest, due diligence, Loan Agreement
negotiations, Application, and closing
procedures required by the U.S. Department
of Transportation. Below we discuss our
approach to securing a TIFIA Loan in two
primary areas: i) TIFIA Project Development
and ii) TIFIA Execution.

TIFIA PROJECT DEVELOPMENT
KNN offers CC Transit a working knowledge and understanding of the Build America Bureau and the process and requirements under the TIFIA Loan program. Specifically, in order for the Build America Bureau to closely consider a loan, the following will be initially requested by the U.S. DOT i) Letter of Interest; ii) Preliminary Rating Opinion Letter; iii) Financial Model; iv) Analysis/Study of Pledged Revenue(s); and v) Financial Plan.

I) LETTER OF INTEREST. Each potential applicant must submit a Letter of Interest (LOI) to the US DOT to initiate the TIFIA Loan process. KNN has assisted with drafting the LOIs associated with the San Luis Obispo Transit, Monterey-Salinas Transit, Napa Valley Transportation Authority, and SBCAG and we would be prepared to do so for CC Transit. We recognize that CC Transit has a working draft of a LOI for the Project, but there are several key areas where KNN would expect to assist including the discussion of the credit and security source, the Project funding sources and TIFIA Loan percentage of the overall funding mix, and the preparation of the proposed amortization on the borrowing.

II) PRELIMINARY RATING OPINION LETTER(S). As a transit department with no outstanding debt, an inaugural relationship with at least one of the rating agencies will need to be established and the process for seeking an indicative rating will need to be implemented. KNN will lead all outreach and communication with the rating agencies and assemble the information required for the credit assessment process. Because the security structure is still to be determined (general fund lease or sales tax revenue bonds) we do not have specific recommendation on which rating agency to engage; however, we would expect that Standard & Poor’s to be a likely candidate for preparing the preliminary rating opinion for the Project.

III) FINANCIAL MODEL AND V) FINANCIAL PLAN. A cash flow model will serve as the basis for estimating the timing and quantifying the amount of the required TIFIA Loan proceeds for the Project. An important component here is that the estimated Measure AA contribution amount to the Project will be just one component of CC Transit’s overall Financial Plan (estimated funding sources and uses) for the Project. The Financial Plan would be originally presented in the Letter of Interest; however, an important initial deliverable for the Project will be the development of a Financial Model that project Measure AA sales tax revenues with the Project cash flows and other funding sources – meeting requirements under the TIFIA Loan program.

IV) ANALYSIS/STUDY OF THE PLEDGED REVENUES. As the security on the TIFIA Loan borrowing is likely to be either the direct pledge of the City’s Measure AA sales tax or a lease obligation with the Measure AA sales tax directed to debt service, we will assist you presenting a historical analysis of the performance of Measure AA sales tax receipts as well as highlight the underlying economic and demographics supporting a generally stable and growing revenue stream. We will also detail the impact of the COVID-19 pandemic on Measure AA sales taxes and any anticipated near-term or longer-term impact on projected sales tax receipts. The City may also work with a company like HdL where their efforts would help inform longer term projections over the life of the tax.

TIFIA EXECUTION
Following the above immediate deliverables provided through the Project Development phase, CC Transit’s Project would move into the Execution Phase or “Creditworthiness” of the TIFIA Loan process. This phase begins with preparing and presenting the Project to the BAB internal team and its outside legal and financial advisors and is followed by developing the TIFIA Loan documentation and receiving a formal invitation to “apply” for the TIFIA Loan.

We discuss each of these areas below.
 PROJECT PRESENTATION AND DUE DILIGENCE
Upon approval of the City’s Letter of Interest and receipt of key deliverables such as an indicative rating, the BAB will initiate the formal project presentation and due diligence process to better understand the Project and request detailed information that may not have been requested as part of the Letter of Interest review.

Outreach Project
Development
Underwriting Portfolio
Management
Initial Engagement Project Development Creditworthiness Review Financial Oversight
TIFIA Loan Process
TIFIA-specific execution could take up to 12 months
Qualifications for Financial Advisor | Page 21
PROJECT PRESENTATION. Upon invitation from BAB and with NVTA insight, we will prepare the Project Presentation for the initial “kick-off” discussion with BAB and their outside legal and financial team. The presentation will include the following: 1. Overview of NVTA: i) history, ii) organizational/legal structure, and iii) financial profile, including sources of revenue and any existing commitments; 2. Overview of the Project: i) purpose, ii) basic design features with maps/diagrams, iii) overview of procurement process, iv) schedule of major milestones, and v) status of NEPA, permits, and approvals; 3. Financial Plan: i) Project detailed sources and uses for budget and status of funding commitments, and ii) cash flows and debt service profile; 4. Security Structure: i) pledged and available Revenues for TIFIA Loan repayment, ii) flow of funds, and iii) proposed covenant; 5. Economic and Demographic Information: i) unemployment rate, ii) median household income, iii) gross regional product, iv) key employment sectors, and v) any economic forecasts.

ADDITIONAL CREDIT INFORMATION AND DUE DILIGENCE. Following or in tandem with the invitation to provide a Project Presentation, the outside financial and legal advisors to BAB will prepare a list of financial and legal due diligence questions that require a number of deliverables from the City and CC Transit. Due diligence topics have consistently covered governance, service area economics, project procurement documentation, construction contracts, evidence of state, federal, and other project funding sources, TDA funding and countywide allocation methodology, documentation of outstanding debt and fixed obligations, among others. It is KNN’s role to assist in drafting the response to detailed question lists as well as facilitate the organization and delivery of the requested information.
 LOAN DOCUMENTATION AND NEGOTIATION
Following the formal presentation of the CC Transit Project and any follow-up financial due diligence required from the discussion, CC Transit’s Project will move into the Execution Phase of the TIFIA Loan process. This phase is primarily focused on developing and negotiating the TIFIA Loan documentation as follows:

PROPOSED TERM SHEET: Following the negotiation between parities and mutual agreement, this document serves as the summary of key credit terms that will be included in the Loan Agreement.

LOAN AGREEMENT: TIFIA has a form of Loan Agreement that will be revised to incorporate the credit, security, and business terms agreed upon between the U.S. DOT and the City and CC Transit, including but not limited to the term of the borrowing; repayment structure (i.e. principal and interest dates, interest deferral period, amortization); provisions for additional debt; covenants and remedies. Careful attention should and will be given to this document to ensure financial, reporting, and other covenants under the agreement do not overly restrict the City and CC Transit and its ongoing ability to operate its transit system.

COLLATERAL ACCOUNTS AND SECURITY AGREEMENT: Upon establishing the security of the TIFIA Loan repayment and the definition of Revenues, this document will govern the application of Revenues to the TIFIA Loan repayment accounts. The timing and flow of Revenues through this document will require careful consideration to ensure ongoing financial flexibility to operate the CC Transit system.  TIFIA LOAN APPLICATION AND CLOSING
APPLICATION: Upon formally negotiating all TIFIA Loan documentation and the completion of the Project and Financial due diligence requirements, CC Transit will be formally “invited” to apply for the TIFIA Loan. Because of statutory requirements, the Secretary of Transportation has 60 days to review and approve the TIFIA application, ALL of the initial planning, negotiation, and documentation work is required to be complete prior to a borrower being invited to submit an Application. The TIFIA Loan Application is similar to the LOI process but requires a number of Project and financial details that are not requested as part of the LOI. KNN would work closely with the CC Transit in preparing, assembling, and submitting the Application.

CLOSING: The TIFIA Loan process has an extensive closing process requiring pages of requested documentation. KNN would work hand-in-hand with the City and its counsel to ensure a successful closing of the TIFIA Loan.

C. Provide any other information or tasks that Respondent believes necessary to complete the Scope of Services.

There are various reasons why KNN is uniquely suited to meet the City’s financial advisory needs in support of the successful implementation of CC Transit’s proposed Project – relevant experience inclusive of City, transportation sales tax, and transit; knowledge of California transit agencies, complexities related to transit funding; understanding of transit facility projects; and California municipal market leadership – however, perhaps the most appropriate rationale of why KNN would best serve the City is that we offer an approach guided by values that will ensure City Qualifications for Financial Advisor | Page 22
staff is armed with trusted, thoughtful, and committed advisors in evaluating trade-offs, providing recommendations, and forming decisions.

HOLISTIC ADVISORY APPROACH. We view finance and debt issuance as just one component of meeting public agency goals. We are strategic in making sure a potential transaction fits within longer-term operational, financial, and policy objectives. A robust plan of finance will evaluate alternatives in terms of cost, legal constraints, credit, investor concerns, and public policy to support balanced recommendations. We carefully evaluate and articulate the numerous tradeoffs in the development of financing, capital, and strategic plans and are committed to supporting staff in making informed decisions.

FISCAL RESPONSIBILITY: We take our fiduciary responsibilities – Duty of Care and Duty of Loyalty –very seriously.

We provide independent, objective analysis and advice to assist our clients in making informed decisions.

Importantly, we recommend financing vehicles that are suitable to your organization’s financial framework and avoid products that introduce risk. We work closely with staff, recognizing that one of our objectives is to make your job easier and to help you meet your responsibilities to the City.

TRANSPARENCY, INTEGRITY: We believe it is essential to clearly articulate the public policy and financial implications of each alternative considered, so that City staff and Council are positioned to make informed decisions.

In support of this value, we commonly prepare short memos that inform decision-making. We support our clients in advancing their strategic priorities with a commitment to transparency, accountability, and integrity.

COLLABORATION: KNN brings a unique set of experiences in building collaboration between financing professionals, issuers, and when appropriate, customers and other stakeholders, owing in large part to our senior advisors long-tenure in the industry. We have worked with a diverse mix of advisors, underwriters and counsel in the industry, and we strive to foster a collaborative approach to our client’s needs and objectives.

Qualifications for Finance Advisor | Page A-1
APPENDIX A: TEAM RESUMES
MELISSA SHICK, DIRECTOR | KNN BERKELEY OFFICE

TEAM ROLE EDUCATIONAL

BACKGROUND

PROFESSIONAL LICENSES &

CERTIFICATIONS

YEARS IN

PUBLIC FINANCE
Engagement Manager;
Day-to-Day Advisor
B.A. Univ. of Washington
M.P.P. Univ. of Chicago
Series 50 18
Melissa joined KNN Public Finance as a municipal advisor in May 2016 following a public finance banking career for more than a decade at both JP Morgan and RBC Capital Markets.

She is experienced in structuring and leading financings for various special districts and credits including water and utility revenue bonds and special tax revenue bonds, notably, transportation sales tax bonds.

Melissa maintains a strong working knowledge of the evolving state and local transportation funding dynamics as well as closely follows the changing rating agency landscape and implications for our transportation clients.

Melissa provided leadership and identified the TIFIA Loan / Rural Project Initiative program for the San Luis Obispo Regional Transit Authority’s New Bus Maintenance Facility project – the inaugural project to meet the RPI eligibility criteria. Working with the BAB project development and loan teams, she helped “pave the way” for other project sponsors under the RPI program, including Monterey-Salinas Transit and Napa Valley Transportation Authority. She also served as the lead advisor to the Santa Barbara County Association of Governments on their execution of a sale tax revenue TIFIA Loan Borrowing.

In her role at KNN, Melissa works on a day-to-day basis with the majority of the firm’s transportation clients listed below assisting with cashflow modeling, strategic planning, staff and Council/Board training, and bond issuance/TIFIA Loan execution:
 AC Transit  San Benito Council of Governments
 Contra Costa Transportation Authority  San Francisco County Transportation Authority  Los Angeles County MTA  San Luis Obispo Regional Transit Authority  Napa Valley Transportation Authority – Transit  Santa Cruz County Regional Transportation Comm  Napa Valley Transportation Authority – Measure T  Santa Barbara County Association of Governments  Merced County Association of Governments  Sonoma County Transportation Authority  Monterey-Salinas Transit  Transportation Agency of Monterey County NEDKO NEDEV, VICE PRESIDENT | KNN BERKELEY OFFICE

TEAM ROLE EDUCATIONAL

BACKGROUND

PROFESSIONAL LICENSES &

CERTIFICATIONS

YEARS IN

PUBLIC FINANCE
Day-to-Day Advisor;
Quantitative Analysis B.A U.C. Davis Series 50 17
Nedko joined KNN in the summer of 2006 as an analyst. Armed with a strong mathematical background, he is one of the firm’s quantitative and analytic experts, as well as managing several client relationships.

Nedko’s experience spans a wide range of transactions, including sales tax, enterprise revenue, lease revenue, general obligation and tax increment financings, for clients such as the cities of Davis, Fresno, Los Angeles, Marina, Oakland, San Diego, San Francisco, and Santa Barbara, the Kern County Water Agency and the California State University system.

Qualifications for Finance Advisor | Page A-2
Of interest to CC Transit, Nedko has worked with a number of local transit and transportation agencies throughout the California and brings TIFIA-specific expertise as well. Some of his noteworthy recent transportation engagements are highlighted below:
 working closely with Melissa to facilitate the San Luis Obispo Regional Transit Authority’s TIFIA borrowing (the first under the Rural Project Initiative) to fund, together with a supplemental/interim bank loan, their new Operations and Maintenance Facility. Nedko was responsible for managing SLO RTA’s comprehensive cashflow model, negotiating the security structure, reviewing documentation.  co-lead advisor to the Monterey Salinas Transit District and Napa Valley Transportation Authority, which leveraged our successful efforts for SLO RTA to secure TIFIA funding for each agency’s bus maintenance and administrative facility project. Nedko led the development of MST’s and NVTA’s comprehensive cashflow model, and worked closely with Melissa on negotiating the security structure, reviewing documentation, coordinating the rating process.
 co-lead advisor on our work with the Los Angeles County Metropolitan Transportation Authority described in the proposal, including the day-to-day execution of several series of sales tax revenue bonds, implementing Metro’s Green Bond Framework in connection with their inaugural ‘green’ issuance, instituting an interim funding mechanism for their newest sales tax program despite onerous provisions in existing TIFIA loan agreements, arranging bank products to support other variable rate/synthetic fixed debt.

DAVID BRODSLY, MANAGING DIRECTOR | KNN BERKELEY OFFICE

TEAM ROLE EDUCATIONAL

BACKGROUND

PROFESSIONAL LICENSES &

CERTIFICATIONS

YEARS IN

PUBLIC FINANCE
Strategic Oversight UC Santa Cruz Series 50 42
David Brodsly has over 42 years’ experience in municipal finance. He joined KNN early in 1998 to head up KNN’s city consulting practice, and he serves as financial advisor to several cities throughout the State. David’s clients have included the cities of Los Angeles, San Diego, San José, San Francisco, Oakland and Fresno, numerous other small and medium-sized cities, Alameda, Los Angeles and Orange counties, and numerous special districts.

David is our lead advisor at Los Angeles County Municipal Transportation Authority, serving as the General Advisor between 2013-2015 and currently during 2022-2024 (as part of a two-year planned rotation) and Transaction Advisor on several long-term and short-term borrowings.

He was responsible for our recent work for the Alameda-Contra Costa Transportation District in considering alternatives for financing support infrastructure and seeking voter approval for its funding. David also guided the City of Los Angeles in obtaining voter-approval for a special tax district for financing a downtown streetcar.

For nearly six years, Mr. Brodsly was a Vice President and Senior Credit Officer with Moody’s Investors Service. He served as a senior member of the analytic and management team responsible for all types of local government bond and note ratings on the Pacific Coast, and was a member of Moody’s national rating committee.

David’s work in transportation predates his municipal career, as the author of L.A. Freeway: An Appreciative Essay, published by UC Press in 1981.

Qualifications for Finance Advisor | Page A-3
TIM FRYDENDALL, ASSOCIATE | KNN BERKELEY OFFICE

TEAM ROLE EDUCATIONAL

BACKGROUND

PROFESSIONAL LICENSES &

CERTIFICATIONS

YEARS IN

PUBLIC FINANCE
Quantitative Analysis B.S. CSU Long Beach Series 50 5
Tim serves as an Associate at KNN Public Finance. He joined KNN in 2022 and has over 5 years of municipal advisory experience.

Tim began his career in public accounting serving as an auditor for Vasquez & Co. After two years in public accounting, Tim moved to public finance in 2018 where he served as an associate at Urban Futures, Inc.

Tim is experienced in quantitative and execution support for various credits including pension obligation, water revenue, tax allocation, certificates of participation, and charter school revenue bonds. In his role at KNN, Tim works with a diverse local government client base including cities and counties such as Livermore, the counties of Mendocino, Merced, Monterey, and San Luis Obispo. He also serves the firm’s water utility and transportation and transit special district clients.

Qualifications for Finance Advisor | Page B-1
APPENDIX B: MSRB RULE G- 42

ADDITIONAL DISCLOSURES
MSRB Rule G-42
Disclosure of Conflicts of Interest and Legal or Disciplinary Events Pursuant to Municipal Securities Rulemaking Board (“MSRB”) Rule G-42, on Duties of Non-Solicitor Municipal Advisors, Municipal Advisors are required to make certain written disclosures to clients which include, amongst other things, Conflicts of Interest and any Legal or Disciplinary events of KNN Public Finance, LLC (“KNN Public Finance”) and its associated persons.

CONFLICTS OF INTEREST
OTHER MUNICIPAL ADVISOR RELATIONSHIPS. KNN serves a wide variety of other clients that may from time to time have interests that could have a direct or indirect impact on the interests of another KNN client. For example, KNN serves as municipal advisor to other municipal advisory clients and, in such cases, owes a regulatory duty to such other clients just as it will to your entity, if hired. These other clients may, from time to time and depending on the specific circumstances, have competing interests. In acting in the interests of its various clients, KNN could potentially face a conflict of interest arising from these competing client interests. KNN fulfills its regulatory duty and mitigates such conflicts through dealing honestly and with the utmost good faith with its clients.

COMPENSATION. KNN Public Finance represents that in connection with the issuance of municipal securities, KNN Public Finance may receive compensation from an Issuer or Obligated Person for services rendered, which compensation is contingent upon the successful closing of a transaction and/or is based on the size of a transaction.

Consistent with the requirements of MSRB Rule G-42, KNN Public Finance hereby discloses that such contingent and/or transactional compensation may present a potential conflict of interest regarding KNN Public Finance’s ability to provide unbiased advice to enter into such transaction. This conflict of interest will not impair KNN Public Finance’s ability to render unbiased and competent advice or to fulfill its fiduciary duty to the Issuer.

If KNN Public Finance becomes aware of any additional potential or actual conflict of interest after this disclosure, KNN Public Finance will disclose the detailed information in writing to the Issuer in a timely manner.

LEGAL OR DISCIPLINARY EVENTS
KNN Public Finance, LLC, has never been subject to any legal, disciplinary or regulatory actions nor was it ever subject to any legal, disciplinary or regulatory actions previously, when it was a division of Zions First National Bank or Zions Public Finance, Inc.

A regulatory action disclosure has been made on Form MA-I for one of KNN Public Finance municipal advisory personnel relating to a 1998 U.S. Securities and Exchange Commission (“SEC”) order that was filed while the municipal advisor was employed with a prior firm, (not KNN Public Finance). The details of which are available in Item 9; C(1), C(2), C(4), C(5) and the corresponding regulatory action DRP section on Form MA and Item 6C; (1), (2), (4), (5) and the corresponding regulatory action DRP section on Form MA-I. Issuers may electronically access KNN Public Finance’s most recent Form MA and each most recent Form MA-I filed with the Commission at the following website: www.sec.gov/edgar/searchedgar/companysearch.html.

The SEC permits certain items of information required on Form MA and Form MA-I to be provided by reference to such required information already filed on a regulatory system (e.g., FINRA CRD). The above noted regulatory action has been referenced on both Form MA and MA-I due to the information already filed on FINRA’s CRD system and is publicly accessible through BrokerCheck at http://brokercheck.finra.org. For purposes of accessing such BrokerCheck information, the Municipal Advisor’s CRD number is 4457537.

There has been no change to any legal or disciplinary event that has been disclosed on KNN Public Finance’s original SEC registration Form MA filed on February 8, 2016 or Form MA-I’s filed on January 22, 2016.