Corona City Council
September 17, 2025

11 agency shall be made or proposed, the effect of any or all of which would be to alter, directly or indirectly, federal income taxation upon interest received on obligations of the general character of the Bonds, or the interest on the Bonds as described in the Official Statement, or other action or events shall have transpired which may have the purpose or effect, directly or indirectly, of changing the federal income tax consequences of any of the transactions contemplated herein; or
(iii) Legislation introduced in or enacted (or resolution passed) by the Congress or an order, decree, or injunction issued by any court of competent jurisdiction, or an order, ruling, regulation (final, temporary, or proposed), press release or other form of notice issued or made by or on behalf of the SEC, or any other governmental agency having jurisdiction of the subject matter, to the effect that obligations of the general character of the Bonds are not exempt from registration under or other requirements of the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under or other requirements of the Trust Indenture Act of 1939, as amended, or that the issuance, offering, or sale of obligations of the general character of the Bonds, as contemplated hereby or by the Official Statement or otherwise, is or would be in violation of the federal securities law as amended and then in effect; or
(iv) A general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; or
(v) The declaration of a general banking moratorium by federal, New York or State authorities or a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or (vi) Establishment of any new restrictions in securities materially affecting the free market for securities of the same nature as the Bonds (including the imposition of any limitations on interest rates) or the charge to the net capital requirements of the Underwriter established by the New York Stock Exchange, the SEC, any other Federal or state agency or the Congress of the United States, or by Executive Order; or
(vii) The occurrence of an adverse event in the affairs of the Authority which, in the reasonable judgement of the Underwriter, materially impairs the investment quality of the Bonds; or
(viii) Any amendment to the federal or California Constitution or action by any federal or California court, legislative body, regulatory body or other authority materially adversely affecting the tax status of the Authority, its property, income or securities (or interest thereon), or the ability of the

12 Authority to issue the Bonds and pledge the Net Revenues as contemplated by the Indenture and the Official Statement; or
(ix) There shall have occurred (1) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (2) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or (x) There shall have occurred since the date of this Purchase Contract any materially adverse change in the affairs or financial position, results of operations or condition, financial or otherwise, of the Authority, other than changes in the ordinary course of business or activity or in the normal operation of the Authority, except as described in the Official Statement; or
(xi) Any proceeding shall have been commenced or be
threatened in writing by the SEC against the Authority or the suspension by the SEC of trading in the outstanding securities of the Authority; or (xii) An event described in Section 7(k) hereof shall have occurred which, in the reasonable professional judgment of the Underwriter, requires the preparation and publication of a supplement or amendment to the Official Statement;
(xiii) The marketability of the Bonds or the market price thereof, in the opinion of the Underwriter, has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets;
(xiv) The purchase of and payment for the Bonds by the
Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission;
(xv) Any rating of the Bonds or other obligations of the Authority by a national rating agency shall have been withdrawn or downgraded or placed on negative outlook or negative watch by any major credit rating agency; or
(xvi) A decision by a court of the United States shall be rendered, or a stop order, release, regulation or no-action letter by or on behalf of the SEC or any other governmental agency having jurisdiction of the subject matter shall have been issued or made, to the effect that the issuance, offering or sale of the Securities, including the underlying obligations as contemplated by this Agreement or by the Official Statement, or any document relating to the issuance, offering or sale of the Securities, is or would be in violation of any provision of the federal securities laws at the Closing Date, including the Securities Act, the Exchange Act and the Trust Indenture Act.

13 (e) Closing Documents. At or prior to the Closing, the Underwriter shall receive with respect to the Bonds (unless the context otherwise indicates) the following documents:
(1) Bond Opinion. The approving opinion of Bond Counsel dated the date of the Closing and substantially in the form included as APPENDIX C to the Official Statement, together with a letter from such counsel, dated the date of the Closing and addressed to the Underwriter and the Trustee to the effect that the foregoing opinion may be relied upon by the Underwriter to the same extent as if such opinion was addressed to them. (2) Supplemental Opinion. A supplemental opinion or opinions of Bond Counsel addressed to the Underwriter, in substantially the form and to the following effect:
(a) The statements and information contained in the Official Statement on the cover page relating to tax exemption, the description of the Bonds, and security for the Bonds, and under the captions “THE 2025 BONDS” (except for the information under the caption “Book-Entry Only System”), “SECURITY FOR THE 2025 BONDS” and “TAX MATTERS,” and in APPENDICES B and C, are true and accurate in all material respects; and
(b) The Bonds are exempt from registration under Section 3(a)(2) of the Securities Act of 1933, as amended, and the Indenture is exempt from qualification as an indenture pursuant to the Trust Indenture Act of 1939, as amended; (c) The Purchase Contract has been duly authorized, executed and delivered by the Authority, and, assuming due authorization, execution and delivery by the other party thereto, constitutes legal, valid and binding agreement of the Authority enforceable against the Authority in accordance with its terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and equitable remedies if equitable remedies are sought, and except no opinion need be expressed as to the enforceability of the indemnification, waiver, choice of law or contributions provisions contained therein.
(3) Authority Counsel Opinion. An opinion of the Authority’s General Counsel, dated as of the Closing and addressed to the Authority, the Trustee and the Underwriter, in form and substance acceptable to Bond Counsel and counsel for the Underwriter, to the following effect:
(i) the Authority is a joint exercise of powers agency, duly organized and validly existing under the Constitution and the laws of the State of California;
(ii) the preparation and distribution of the Preliminary Official Statement, the Official Statement and this Purchase Contract have been duly approved by the Authority;
(iii) the resolution of the Authority approving and authorizing the execution and delivery of the Official Statement, this Purchase Contract and the Authority Documents has been duly adopted at a meeting of the governing body of the

14 Authority which was called and held pursuant to law, and with all public notice required by law and at which a quorum was present and acting throughout; (iv) there is no action, suit, proceeding or investigation at law or in equity before or by any court, public board or body, pending or, to the best knowledge of such counsel, threatened against or affecting the Authority, which would adversely impact the Authority’s ability to complete the transactions described in and contemplated by the Official Statement, to restrain or enjoin the payments under, or in any way contesting or affecting the validity of the Authority Documents, or the transactions described and defined in the Official Statement wherein an unfavorable decision, ruling or finding would adversely affect the validity and enforceability of the Authority Documents;
(v) the execution and delivery of the Authority Documents and the approval of the Official Statement, and compliance with the provisions thereof and hereof, under the circumstances contemplated thereby, do not and will not in any material respect conflict with or constitute on the part of the Authority a breach of or default under any agreement or other instrument to which the Authority is a party or by which it is bound or any existing law, regulation, court order or consent decree to which the Authority is subject;
(vi) the Authority Documents have been duly authorized, executed and delivered by the Authority, and, assuming due authorization, execution and delivery by the other parties thereto, as applicable, constitute legal, valid and binding agreements of the Authority enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency or other laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles if sought and by the limitations on legal remedies imposed on actions against public agencies in the State of California; (vii) no authorization, approval, consent, or other order of the State of California or any other governmental authority or agency within the State of California is required for the valid authorization, execution and delivery of the Authority Documents and the approval of the Official Statement; and (viii) without having undertaken any independent inquiry, nothing has come to their attention which would lead them to believe that the information contained in the Official Statement in the Sections “THE UTILITY AUTHORITY,” “THE CITY,” “THE WATER ENTERPRISE” and “LITIGATION” contains an untrue statement or omits to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (4) Trustee Counsel Opinion. The opinion of counsel to the Trustee, dated the date of the Closing, addressed to the Authority and the Underwriter, in form and substance acceptable to Bond Counsel and counsel for the Underwriter. (5) Negative Assurance Letter of Disclosure Counsel. A letter from Stradling Yocca Carlson & Rauth LLP, disclosure counsel to the Authority (“Disclosure Counsel”), dated the Closing Date, addressed to the Underwriter and the Authority, to the effect that, based upon

15 its participation in the preparation of the Official Statement as counsel to the Authority and without having undertaken to determine independently the fairness, accuracy, or completeness of the statements contained in the Official Statement, such counsel has no reason to believe that the Preliminary Official Statement (except for the completion of pricing information and any other matters or terms of the Bonds relating thereto) as of its date or as of the date of this Purchase Contract or the Official Statement as of its date or as of the date of the Closing (excluding therefrom (i) the expressions of opinion, the assumptions, the projections, estimates and forecasts, the charts, the financial statements or other financial, numerical, economic, demographic or statistical data, or assessed valuations contained in the Official Statement; (ii) any CUSIP numbers or information relating thereto; (iii) any information with respect to The Depository Trust Company and its bookentry system; (iv) any information contained in the appendices to the Official Statement; (v) any information incorporated by reference into the Official Statement; (vi) any information with respect to the underwriters or underwriting matters with respect to the Bonds; (vii) information under the caption “LITIGATION”; and (viii) any information with respect to the ratings on the Bonds and the rating agencies referenced therein, including but not limited to information under the caption “RATING”) contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(6) Authority Certificate. A certificate, dated the date of the Closing, signed by a duly authorized official of the Authority satisfactory in form and substance to the Underwriter, (a) confirming as of such date the representations and warranties of the Authority contained in this Purchase Contract; (b) certifying that the Authority has complied with all agreements, covenants and conditions to be complied with by the Authority at or prior to the Closing under the Authority Documents; (c) certifying that to the best of such official’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which either makes untrue or incorrect in any material respect as of the Closing the statements or information contained in the Official Statement or is not reflected in the Official Statement but should be reflected therein in order to make the statements and information therein not misleading in any material respect; (d) certifying that, except as described in the Preliminary Official Statement as of its date and as of the date hereof and the Official Statement, no litigation is pending or, to his or her knowledge, threatened (i) seeking to restrain or enjoin the issuance or delivery of any of the Bonds, (ii) in any way contesting or affecting any authority for the issuance of the Bonds or the validity of the Bonds, the Authority Document, (iii) in any way contesting the creation, existence or powers of the Authority or the application of the proceeds of the Bonds, or (iv) which, if adversely determined, could materially adversely affect the financial position or operating condition of the Authority or the City or the transactions contemplated by the Preliminary Official Statement as of its date and as of the date hereof and the Official Statement as of its date and as of the Closing Date or any Authority Document and (e) certifying that the Authority has authorized and consented to the inclusion in the Official Statement of the City’s financial report and accountant’s opinion for the year ended June 30, 2024, and no further consent of any party is required for such inclusion. (7) Trustee’s Certificate. A Certificate of the Trustee, dated the date of Closing, addressed to the Authority and the Underwriter, in form and substance acceptable to counsel for the Underwriter to the following effect:
(i) The Trustee is duly organized and existing as a national banking association in good standing under the laws of the United States, having the full power and authority to accept and perform its duties under the Indenture;

16 (ii) Subject to the provisions of the Indenture, the Trustee will apply the proceeds from the Bonds to the purposes specified in the Indenture; and (iii) The Trustee has duly authorized and executed the Indenture and authenticated the Bonds.
(8) Official Statement. The Official Statement and each supplement or amendment, if any, thereto, executed on behalf of the Authority by a duly authorized officer of the Authority.
(9) Authority Documents. An original executed copy of each of the Authority Documents.
(10) Authority Resolution. A certified copy of the Resolution. (11) IRS Form 8038-G. Evidence that the federal tax information form 8038-G has been prepared for filing.
(12) Nonarbitrage Certificate. A tax and nonarbitrage certificate in form satisfactory to Bond Counsel.
(13) Rating. Evidence that the Bonds have been rated as set forth in the Official Statement and that such rating continues in effect as of the Closing. (14) CDIAC Statement. A copy of the Notice of Sale required to be delivered to the California Debt and Investment Advisory Commission pursuant to Section 53583 of the Government Code and Section 8855(g) of the Government Code. (15) Underwriter’s Counsel Opinion. An opinion, dated the date of the Closing and addressed to the Underwriter, of Anzel Galvan LLP, counsel to the Underwriter, in such form as may be acceptable to the Underwriter.
(16) City Certificate. A certificate, dated the Closing Date, signed by the City Manager of the City, in form and substance satisfactory to the Underwriter, to the effect that (i) the financial statements of the City as of June 30, 2024, fairly represent the receipts, expenditures, assets, liabilities and cash balances of such amounts and, insofar as presented, other funds of the Authority as of the dates and for the periods therein set forth and (ii) except as disclosed in the Preliminary Official Statement and the Official Statement, since June 30, 2024, no materially adverse change has occurred, or any development involving a prospective material change, in the financial position or results of operations of the City and the City has not incurred since June 30, 2024, any material liabilities other than in the ordinary course of business or as set forth in or contemplated by the Official Statement.
(17) DTC Blanket Letter of Representations. A copy of the Authority’s executed Blanket Letter of Representation to The Depository Trust Company (18). Additional Documents. Such additional legal opinions, certificates, proceedings, instruments and other documents as the Underwriter, counsel for the Underwriter or

17 Bond Counsel may reasonably request to evidence compliance by the Authority with legal requirements, the truth and accuracy, as of the time of Closing, of the representations of the Authority herein contained and the due performance or satisfaction by the Authority at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the Authority and all conditions precedent to the issuance of additional Bonds pursuant to the Indenture shall have been fulfilled.

If the Authority shall be unable to satisfy the conditions contained in this Purchase Contract, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Purchase Contract, this Purchase Contract may be terminated by the Underwriter, and neither the Underwriter nor the Authority shall be under any further obligation hereunder.

10. Expenses. Whether or not the Bonds are sold to the Underwriter, the Underwriter shall be under no obligation to pay, and the Authority shall pay or cause to be paid, the expenses incident to the performance of the obligations of the Authority hereunder including but not limited to:
(a) the costs of the preparation and printing, or other reproduction (for distribution on or prior to the date hereof) of the Authority Documents and the cost of preparing, printing, issuing and delivering the Bonds;
(b) the fees and disbursements of any counsel, financial advisors, accountants or other experts or consultants retained by the Authority; (c) the fees and disbursements of Bond Counsel and Disclosure Counsel; (d) the cost of preparation and printing the Preliminary Official Statement and any supplements and amendments thereto and the cost of preparation and printing of the Official Statement, including a reasonable number of copies thereof for distribution by the Underwriter; (e) charges of rating agencies for the rating of the Bonds; and (f) the expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds.

The Underwriter shall pay: (i) the cost of preparation and printing of any “blue sky” filings; (ii) all “blue sky” filing fees in connection with the public offering of the Bonds; (iii) fees, if any, payable to the California Debt and Investment Advisory Commission, the MSRB, the fees associated with obtaining CUSIP numbers for the Bonds, and fees of the Public Securities Association and the California Public Securities Association in connection with the execution and delivery of the Bonds; (iv) the fees, expenses and disbursements of Underwriter’s Counsel; and (v) all other expenses incurred by them in connection with the public offering of the Bonds not outlined in (a) through (f) above, including any advertising expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds. Any meals in connection with or adjacent to meetings, rating agency presentations, pricing activities or other transaction-related activities shall be considered an expense of the transaction and included in the expense component of the Underwriter’s discount.

Some or all of the expenses to be paid by the Underwriter may be included as part of the expense component of the underwriting discount or commission or may be reimbursed to the Underwriter as out-of-pocket expenses.

18 11. Notice. Any notice or other communication to be given to the Underwriter may be given by delivering the same to Stifel, Nicolaus & Company, Incorporated, One Montgomery Street, 35th Floor, San Francisco, California 94104, Attention: Public Finance. Any notice or other communication to be given to the Authority pursuant to this Purchase Contract may be given by delivering the same in writing to such entity, at the address set forth on the first page hereof.

12. Entire Agreement. This Purchase Contract, when accepted by the Authority, shall constitute the entire agreement between the Authority and the Underwriter and is made solely for the benefit of the Authority and the Underwriter (including the successors or assigns of any Underwriter). No other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the Authority’s representations, warranties and agreements in this Purchase Contract shall remain operative and in full force and effect, regardless of any investigation made by or on behalf of the Underwriter, until the earlier of (a) delivery of and payment for the Bonds hereunder, and (b) any termination of this Purchase Contract.

13. Counterparts. This Purchase Contract may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.

14. Severability. In case any one or more of the provisions contained herein shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof.

15. State of California Law Governs. The validity, interpretation and performance of the Authority Documents shall be governed by the laws of the State.

16. No Assignment. The rights and obligations created by this Purchase Contract shall not be subject to assignment by the Underwriter or the Authority without the prior written consent of the other parties hereto.

19 16. Definitions. Capitalized terms not otherwise defined herein shall have the same meaning as used in the Indenture.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Managing Director
The foregoing is hereby agreed to and accepted as of the date first above written:

CORONA UTILITY AUTHORITY
By:

Treasurer
Time of Execution: _____________ p.m. California time
[EXECUTION PAGE OF PURCHASE CONTRACT]

A-1

EXHIBIT A

CORONA UTILITY AUTHORITY
2025 WATER REVENUE BONDS
(WATER PROJECTS)
Maturity
(September 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
(marked if
used)
_______________
* At the time of execution of this Purchase Contract and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Contract.

B-1

EXHIBIT B

FORM OF ISSUE PRICE CERTIFICATE
$[Par Amount]

CORONA UTILITY AUTHORITY
2025 WATER REVENUE BONDS
(WATER PROJECTS)
The undersigned, on behalf of Stifel, Nicolaus & Company, Incorporated (“Stifel”), hereby certifies as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”) by the Corona Utility Authority (the “Issuer”).

1. Sale of the Bonds. Stifel offered each Maturity of the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule B. As of the date of this certificate, for each Maturity of the Bonds identified under the column in Exhibit A entitled “10% Test Satisfied,” the first price at which at least 10% of such Maturity of the Bonds was sold to the Public is the respective price listed in Schedule A. [For each remaining Maturity of the Bonds, Stifel agrees to promptly report to the Issuer the prices at which it sells the unsold Bonds of that Maturity to the Public. That reporting obligation shall continue, until either (i) Stifel has sold all the Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity.]

2. Defined Terms.
(a) Issuer means the Corona Utility Authority.
(b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter.

The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [Pricing Date]. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

B-2
The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents Stifel’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder.

The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Best Best & Krieger LLP in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

STIFEL, NICOLAUS & COMPANY,

INCORPORATED
By:

Name:

By:

Name:

Dated: [Closing Date]

B-2

SCHEDULE A

SALE PRICES
[BOND PRICING TO BE ATTACHED]

B-2

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
(Attached)

Stradling Yocca Carlson & Rauth
Draft of 9/2/25
Error! Unknown document property name.

PRELIMINARY OFFICIAL STATEMENT DATED __________, 2025
NEW ISSUE – BOOK-ENTRY ONLY RATING: S&P: “__”
See the caption “RATING”
In the opinion of Best Best & Krieger LLP, Riverside, California, Bond Counsel, subject to certain qualifications described herein, under existing statutes, regulations, rules and court decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the 2025 Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals and corporations; however, interest is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the 2025 Bonds is exempt from California personal income taxes. See the caption “TAX MATTERS.”
$__________*

CORONA UTILITY AUTHORITY
2025 WATER REVENUE BONDS
(WATER PROJECTS)
Dated: Date of Issuance Due: September 1, as set forth on the inside front cover page The 2025 Bonds are being issued in fully registered form and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York. Purchasers of the 2025 Bonds will not receive securities representing their beneficial ownership in the 2025 Bonds purchased. Interest on the 2025 Bonds is payable on March 1, 2026 and each March 1 and September 1 thereafter, until their maturity. The principal of and interest on the 2025 Bonds are payable by the Trustee to Cede & Co. and such interest and principal payments are to be disbursed to the Beneficial Owners of the 2025 Bonds through their nominees.

The 2025 Bonds are subject to optional redemption and mandatory sinking fund redemption, all as more fully described in this Official Statement. See the caption “THE 2025 BONDS—Redemption.” The 2025 Bonds are being issued to provide moneys to (i) finance the acquisition, construction and equipping of certain improvements to the City of Corona’s Water Enterprise; and (ii) pay costs of issuance of the 2025 Bonds, all as more fully described in this Official Statement.

The 2025 Bonds are being issued pursuant to that certain Indenture of Trust, dated as of September 1, 2025, by and between the Utility Authority and The Bank of New York Mellon Trust Company, N.A., as trustee. The 2025 Bonds are special limited obligations of the Utility Authority payable solely from Net Revenues of the Water Enterprise on a parity with certain outstanding obligations of the Water Enterprise and from certain other funds and accounts held by the Trustee pursuant to the Indenture. The Water Enterprise is operated by the City of Corona Utilities Department on behalf of the Utility Authority, which leases the Water Enterprise from the City pursuant to the Water Enterprise Lease Agreement. Neither the full faith and credit nor any other revenues or funds of the Utility Authority are pledged to or available for the payment of debt service on the 2025 Bonds. The obligation of the Utility Authority to make payments of principal and interest on the 2025 Bonds does not constitute an obligation for which the Utility Authority is obligated to levy or pledge any form of taxation or for which the Utility Authority has levied or pledged any form of taxation. The Utility Authority has no taxing power.

The 2025 Bonds are not a debt of the City of Corona, the County of Riverside, the State of California or any of its political subdivisions in contravention of any constitutional or statutory limitations, and none of the City, said County, said State nor any of its political subdivisions are liable on the 2025 Bonds, nor in any event will the 2025 Bonds be payable out of any funds or properties of the Utility Authority other than the Net Revenues.

No debt service reserve fund or account has been established in connection with the issuance of the 2025 Bonds.

The Utility Authority may incur additional obligations payable from Net Revenues on a parity with the obligation to pay principal of and interest on the 2025 Bonds in the future, subject to the terms and conditions of the Indenture, as more fully described in this Official Statement.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR REFERENCE ONLY. IT IS NOT A SUMMARY OF THIS ISSUE. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO THE MAKING OF AN INFORMED INVESTMENT DECISION.
____________________________________
MATURITY SCHEDULE – See Inside Front Cover Page
____________________________________
The 2025 Bonds are offered when, as and if issued and received by the Underwriter, subject to the approval of the valid, legal and binding nature of the 2025 Bonds by Best Best & Krieger LLP, Bond Counsel, and certain other conditions. Certain legal matters will be passed upon for the Utility Authority by Stradling Yocca Carlson & Rauth LLP, as Disclosure Counsel, and by the City Attorney, for the Underwriter by its counsel, Anzel Galvan LLP, and for the Trustee by its counsel. It is anticipated that the 2025 Bonds will be available for delivery through the facilities of The Depository Trust Company on or about ______, 2025. [Stifel Logo]
Dated: ______, 2025
*
Preliminary, subject to change. This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold, nor may offers to buy them be accepted, prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of, these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. Page 625 of 953 Error! Unknown document property name.
$__________*

CORONA UTILITY AUTHORITY
2025 WATER REVENUE BONDS
(WATER PROJECTS)

MATURITY SCHEDULE
BASE CUSIP®† 219707
Maturity Date
(September 1) Principal Amount Interest Rate Yield Price CUSIP®†
Suffix
$ % %
$_______ _____% Term Bonds Due September 1, 20__ – Yield _____% CUSIP† ____ *
Preliminary, subject to change.
†
CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CGS. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the Utility Authority, the City, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.

Error! Unknown document property name.

CITY OF CORONA

COUNTY OF RIVERSIDE

STATE OF CALIFORNIA
Jim Steiner, Mayor, District 4
Jacque Casillas, Vice Mayor, District 1
Tony Daddario, Council Member, District 2
Tom Richins, Council Member, District 3
Wes Speake, Council Member, District 5
STAFF
Jacob Ellis, City Manager
Chad Willardson, City Treasurer
Kim Sitton, Finance Director
Tom Moody, Utilities Director
Dean Derleth, Esq., City Attorney

SPECIAL SERVICES
Bond Counsel
Best Best & Krieger LLP
Riverside, California
Disclosure Counsel
Stradling Yocca Carlson & Rauth LLP,
Newport Beach, California
Municipal Advisor
CSG Advisors Incorporated
San Francisco, California
Trustee
The Bank of New York Mellon Trust Company, N.A.

Los Angeles, California

Error! Unknown document property name.

No dealer, broker, salesperson or other person has been authorized by the Utility Authority, the City or the Underwriter to give any information or to make any representations other than those contained in this Official Statement in connection with the offering made hereby and, if given or made, such other information or representations must not be relied upon as having been authorized by the Utility Authority, the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the 2025 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 2025 Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as a representation of facts.

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 a 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.

The information set forth herein has been obtained from official sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness and is not to be construed as a representation by the Underwriter.

The information and expression of opinions herein are subject to change without notice and neither 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 Utility Authority or the City since the date hereof.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE 2025 BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL THE 2025 BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING

AS AGENT AND OTHERS AT PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE

COVER PAGE HEREOF AND SAID PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.

CERTAIN STATEMENTS CONTAINED IN THIS OFFICIAL STATEMENT REFLECT NOT HISTORICAL FACTS BUT FORECASTS AND “FORWARD-LOOKING STATEMENTS.” NO ASSURANCE

CAN BE GIVEN THAT THE FUTURE RESULTS DISCUSSED HEREIN WILL BE ACHIEVED, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE FORECASTS DESCRIBED HEREIN. IN THIS RESPECT, THE WORDS “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “EXPECT,” “INTEND,” “BELIEVE” AND

SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF THE 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. ALL PROJECTIONS, FORECASTS,

ASSUMPTIONS, EXPRESSIONS OF OPINIONS, ESTIMATES AND OTHER FORWARD-LOOKING

STATEMENTS ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

The 2025 Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon an exemption contained in such act. The 2025 Bonds have not been registered or qualified under the securities laws of any state. The Indenture has not been qualified under the Trust Indenture Act of 1939, as amended, in reliance upon an exemption contained in such act.

The City maintains a website and certain social media accounts. The information presented there, however, is for informational purposes only, is not part of this Official Statement, and must not be relied upon in making an investment decision with respect to the 2025 Bonds.

TABLE OF CONTENTS
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SUMMARY STATEMENT ...................................i
INTRODUCTION ................................................. 1 PLAN OF FINANCE ............................................. 2 The 2025 Project ................................................ 2 Estimated Sources And Uses Of Funds .............. 3
THE 2025 BONDS ................................................ 3 General Provisions ............................................. 3 Transfers and Exchanges Upon Termination
of Book-Entry Only System ............................ 4 Redemption ........................................................ 4 Book-Entry Only System ................................... 6 DEBT SERVICE PAYMENT SCHEDULE ......... 6
SECURITY FOR THE 2025 BONDS ................... 6
General ............................................................... 6 Net Revenues Consist of Gross Revenues
Minus Direct Costs and Allocated Costs ........ 8
Rate Covenant .................................................... 9 No Reserve Fund ................................................ 9 Additional Indebtedness ..................................... 9 THE UTILITY AUTHORITY ............................. 10
THE CITY ........................................................... 11 General ............................................................. 11 Land Use and Service Area .............................. 11 Governance and Management .......................... 12 Employees ........................................................ 14 Budget Process ................................................. 14 Water Enterprise Insurance .............................. 15 Other Obligations ............................................. 15 Financial Statements ......................................... 16 THE WATER ENTERPRISE .............................. 17
General ............................................................. 17 Water Supply .................................................... 19 Water Quality ................................................... 23 Drought Declarations ....................................... 26 Historical Water Enterprise Supply .................. 28 Historical Water Enterprise Deliveries ............. 29 Historical Water Enterprise Connections ......... 29
Historical Water Enterprise Sales Revenues .... 30
Largest Water Enterprise Customers ................ 31
Water Enterprise Rates and Charges ................ 31
Water Enterprise Collection Procedures........... 35
The 2025 Project and Future Water
Enterprise Improvements .............................. 36 Projected Water Enterprise Supply................... 36 Projected Water Enterprise Deliveries ............. 37
Projected Water Enterprise Connections .......... 37
Projected Water Enterprise Sales Revenues ..... 38

WATER ENTERPRISE FINANCIAL
INFORMATION ................................................. 38 Available Cash ................................................. 38 Historical Operating Results and Debt
Service Coverage .......................................... 39 Projected Operating Results and Debt
Service Coverage .......................................... 40 Employee Benefits ........................................... 41

CONSTITUTIONAL LIMITATIONS ON
APPROPRIATIONS AND CHARGES .............. 48
Article XIIIB .................................................... 48 Proposition 218 ................................................ 49 Proposition 26 .................................................. 50 Future Initiatives .............................................. 51 CERTAIN RISKS TO BONDHOLDERS .......... 51
Limited Obligations ......................................... 51 Accuracy of Assumptions ................................ 51 System Demand ............................................... 51 System Expenses .............................................. 51 Limited Recourse on Default ........................... 52 Rate-Setting Process under Proposition 218 .... 52
Statutory and Regulatory Compliance ............. 52
Natural Disasters .............................................. 52 Cybersecurity ................................................... 54 Limitations on Remedies ................................. 54 Secondary Market ............................................ 55 Parity Obligations ............................................ 55 Climate Change ................................................ 55 Rate Covenant Not a Guarantee ....................... 56 Loss of Tax Exemption .................................... 56 APPROVAL OF LEGAL PROCEEDINGS ....... 56
LITIGATION ...................................................... 56 TAX MATTERS ................................................. 57 RATING .............................................................. 58 MUNICIPAL ADVISOR .................................... 59 UNDERWRITING .............................................. 59 CONTINUING DISCLOSURE .......................... 60
FINANCIAL INTERESTS ................................. 60 MISCELLANEOUS ............................................ 61 APPENDIX A - FINANCIAL STATEMENTS A-1

APPENDIX B - SUMMARY OF CERTAIN
PROVISIONS OF THE INDENTURE ...... B-1

APPENDIX C - FORM OF OPINION OF
BOND COUNSEL ..................................... C-1

APPENDIX D - INFORMATION
CONCERNING DTC ................................. D-1

TABLE OF CONTENTS
(continued)
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APPENDIX E - FORM OF CONTINUING
DISCLOSURE CERTIFICATE ................. E-1

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SUMMARY STATEMENT
This Summary Statement is subject in all respects to the more complete information contained in this Official Statement, and the offering of the 2025 Bonds to potential investors is made only by means of the entire Official Statement. Capitalized terms that are used and not otherwise defined in this Summary Statement have the meanings ascribed to them in this Official Statement.

Purpose. The 2025 Bonds are being issued to provide moneys to (i) finance the acquisition, construction and equipping of certain improvements to the City of Corona’s Water Enterprise; and (ii) pay costs of issuance of the 2025 Bonds, all as more fully described herein. See the caption “PLAN OF FINANCE.” Security for the 2025 Bonds. The 2025 Bonds are special limited obligation of the Utility Authority payable solely from Net Revenues of the Water Enterprise on a parity with certain outstanding obligations of the Water Enterprise and from certain other funds and accounts held by the Trustee pursuant to the Indenture.

Neither the full faith and credit nor any other revenues or funds of the Utility Authority are pledged to or available for the payment of debt service on the 2025 Bonds. The obligation of the Utility Authority to make payments of principal and interest on the 2025 Bonds does not constitute an obligation for which the Utility Authority is obligated to levy or pledge any form of taxation or for which the Utility Authority has levied or pledged any form of taxation. The Utility Authority has no taxing power.

The 2025 Bonds are not a debt of the City of Corona, the County of Riverside, the State of California or any of its political subdivisions in contravention of any constitutional or statutory limitations, and none of the City, said County, said State nor any of its political subdivisions is liable on the 2025 Bonds, nor in any event will the 2025 Bonds be payable out of any funds or properties of the Utility Authority other than the Net Revenues.

See the caption “SECURITY FOR THE 2025 BONDS.”
Rate Covenant. The Utility Authority will fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water Enterprise, or cause the City to do so, during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 125% of Debt Service (including the payments of principal of and interest on the 2025 Bonds) becoming due and payable during such Fiscal Year. See the caption “SECURITY FOR THE 2025 BONDS—Rate Covenant.”
Outstanding Parity Obligations. The obligation of the Utility Authority to pay the 2025 Bonds from Net Revenues is on a parity with the obligation of the Utility Authority to make payments on a loan contract with the State Water Resources Control Board which was outstanding in the principal amount of $1,897,557 as of June 30, 2025 and has a final payment due on September 30, 2025. The obligation of the Utility Authority to pay the 2025 Bonds from Net Revenues is also on a parity with the obligation of the 2023 Bonds were issued in the initial principal amount of $20,085,000, of which $16,605,000 was outstanding as of June 30, 2025.

Additional Indebtedness. The Indenture does not permit the Utility Authority to issue or incur any bond, note, warrant evidence of indebtedness, contract, instrument or other agreement payable from Net Revenues the payment of which is prior to and senior to the payment of principal of and interest on the 2025 Bonds. The Indenture permits the Utility Authority to incur Parity Obligations payable on a parity with the payments of principal of and interest on the 2025 Bonds provided that certain conditions are satisfied as described in the Indenture. See the caption “SECURITY FOR THE 2025 BONDS—Additional Indebtedness.” No Reserve Fund. No debt service reserve fund or account has been established in connection with the issuance of the 2025 Bonds.

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Redemption. The 2025 Bonds are subject to optional redemption and mandatory sinking fund redemption, all as more fully described under the caption “THE 2025 BONDS—Redemption.” The Water Enterprise. The Water Enterprise supplies (i) potable water to approximately 37,792 single family residential customers, 4,119 multi-family residential customers and 4,674 commercial, industrial, public agency, agricultural and other customers; and (ii) reclaimed water to approximately 417 commercial, industrial, public agency, irrigation, agricultural and other customers.

The City has three sources of water: (a) treated and untreated water that is purchased from Western Municipal Water District (“WMWD”), a member agency of The Metropolitan Water District of Southern California (“MWD”); (b) well and treatment facilities that pump and treat groundwater for City use; and (c) reclaimed water that is produced from treated wastewater of the City’s wastewater system. See the caption “THE WATER ENTERPRISE—Water Supply.”
The potable water system of the Water Enterprise includes 21 well sites, four water treatment plants, 851 miles of transmission and distribution pipelines, 17 potable water storage tanks, 21 booster pump stations and 37 pressure reducing stations. The reclaimed water system of the Water Enterprise includes 55 miles of transmission pipelines, four water storage tanks, two non-potable wells and six booster pump stations.

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$__________*

CORONA UTILITY AUTHORITY
2025 WATER REVENUE BONDS
(WATER PROJECTS)

INTRODUCTION
This Official Statement, including the front cover page, the inside front cover page and all appendices, provides certain information concerning the sale and delivery of the Corona Utility Authority 2025 Water Revenue Bonds (Water Projects) (the “2025 Bonds”). The 2025 Bonds are being issued pursuant to Articles 10 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California and that certain Indenture of Trust, dated as of September 1, 2025 (the “Indenture”), by and between the Corona Utility Authority (the “Utility Authority”) and The Bank of New York Mellon Trust Company, N.A., Los Angeles, California, as trustee (the “Trustee”).

The 2025 Bonds are being issued to provide moneys to (i) finance the acquisition, construction and equipping of certain improvements (the “2025 Project”) to the City of Corona’s water system (the “Water Enterprise”); and (ii) pay costs of issuance of the 2025 Bonds. See the caption “PLAN OF FINANCE.” The 2025 Bonds are limited obligations of the Utility Authority payable solely from Net Revenues of the Water Enterprise, consisting of all of the Gross Revenues of the Water Enterprise minus the amount required to pay all Direct Costs and Allocated Costs of the Water Enterprise, and from certain other funds and accounts held by the Trustee pursuant to the Indenture, as such terms are defined herein. The Water Enterprise is operated by the City of Corona (the “City”) Utilities Department (the “Utilities Department”) on behalf of the Utility Authority, which leases the Water Enterprise from the City pursuant to the Water Enterprise Lease Agreement described under the caption “SECURITY FOR THE 2025 BONDS—Net Revenues Consist of Gross Revenues Minus Direct Costs and Allocated Costs.”
The obligation of the Utility Authority to pay principal of and interest on the 2025 Bonds is payable from Net Revenues on a parity with payments under State Revolving Fund Loan Contract No. C-06-4802-110, dated June 10, 2003 (the “SRF Loan”), with the State Water Resources Control Board (the “SWRCB”), and from Net Revenues on a parity with payments under the Utility Authority’s 2023 Water Revenue Refunding Bonds (Water Projects) (the “2023 Bonds”). Neither the full faith and credit nor any other revenues or funds of the Utility Authority are pledged to or available for the payment of debt service on the 2025 Bonds. The obligation of the Utility Authority to make payments of principal and interest on the 2025 Bonds does not constitute an obligation for which the Utility Authority is obligated to levy or pledge any form of taxation or for which the Utility Authority has levied or pledged any form of taxation. The Utility Authority has no taxing power. See the caption “SECURITY FOR THE 2025 BONDS.”
The 2025 Bonds are not a debt of the City, the County of Riverside (the “County”), the State of California (the “State”) or any of its political subdivisions in contravention of any constitutional or statutory limitations, and none of the City, said County, said State nor any of its political subdivisions is liable on the 2025 Bonds, nor in any event will the 2025 Bonds be payable out of any funds or properties of the Utility Authority other than the Net Revenues.

No debt service reserve fund or account has been established in connection with the issuance of the 2025 Bonds.

The Indenture permits the Utility Authority to incur additional Parity Obligations payable on a parity with the payments of principal of and interest on the 2025 Bonds provided that certain conditions are satisfied *
Preliminary, subject to change.

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as described in the Indenture. See the caption “SECURITY FOR THE 2025 BONDS—Additional Indebtedness.”
The 2025 Bonds are subject to optional redemption and mandatory sinking fund redemption, all as more fully described under the caption “THE 2025 BONDS—Redemption.” The summaries and references to the Indenture and all documents, statutes, reports and other instruments that are referred to herein do not purport to be complete, comprehensive or definitive, and each such summary or reference is qualified in its entirety by reference to the full Indenture or the respective document, statute, report or instrument, copies of which are available for inspection at the offices of the City in Corona, California or from the Trustee upon request and payment of duplication cost. The capitalization of any word that is not conventionally capitalized or otherwise defined herein indicates that such word is defined in the Indenture and, as used herein, has the meaning that is given to it in the Indenture. See Appendix B for a summary of the Indenture. Unless otherwise indicated, all financial and statistical information herein has been provided by the City.

The City regularly prepares a variety of reports, including audits, budgets and related documents. Any registered owner of the 2025 Bonds may obtain a copy of such reports, as available, from the Trustee or the City.

Additional information regarding the Official Statement may be obtained by contacting the Trustee or the City, 400 S. Vicentia Avenue Corona, California 92882, Attention: Finance Department.

Pursuant to Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”), the Utility Authority has undertaken to provide annual reports and notice of certain enumerated events to the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System (“EMMA”) pursuant to a continuing disclosure certificate. See the caption “CONTINUING DISCLOSURE” and Appendix E.

PLAN OF FINANCE
The 2025 Project
A portion of the proceeds of the 2025 Bonds are expected to be used by the City, as agent of the Utility Authority pursuant to that certain Agency Agreement, dated as of September 1, 2025 (the “Agency Agreement”), by and between the City and the Utility Authority, to finance a portion of the costs of the following capital improvements (collectively, the “2025 Project”): (i) the citywide direct read water meter replacement with advanced metering infrastructure meters; (ii) the construction of the Glen Ivy Water Treatment Plant; (iii) improvements to the Lester Backwash Basin; (iv) the Hidden Springs Road waterline construction; and (v) the waterline replacement at Sherman Avenue. The total cost of the 2025 Project is currently estimated at approximately $43 million. The City expects to apply Water Enterprise reserves to pay the portion of such costs that are not financed from proceeds of the 2025 Bonds.

Pursuant to the terms of the Agency Agreement, the City, as agent of the Utility Authority, has the right to make any changes to the description of the 2025 Project or of any project component, whenever the City deems such changes to be necessary and appropriate; provided, however, that any such change may not alter (except as otherwise provided in the Indenture) the essential nature of the 2025 Project, and that an increase in construction costs will not result from such change, unless the City confirms that funds with the Utility Authority are sufficient to pay such increase.

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Estimated Sources And Uses Of Funds
The following table sets forth the estimated sources and uses of funds relating to the 2025 Bonds and other moneys:

Sources:

Principal Amount $
Plus/Less Net Original Issue Premium/Discount
Other Moneys
Total Sources $
Uses:

Project Fund $
Costs of Issuance(1)
Total Uses $

(1) Includes Underwriter’s discount and certain legal, municipal advisory, rating agency, printing and other financing-related costs.

Source: Underwriter.

THE 2025 BONDS
General Provisions
The 2025 Bonds will be dated as of their date of initial issuance, will bear interest from such date at the rates per annum set forth on the inside front cover page hereof, payable on March 1, 2026 and each March 1 and September 1 thereafter (each, an “Interest Payment Date”), and will mature on the dates set forth on the inside front cover page hereof. Interest on the 2025 Bonds will be computed on the basis of a 360 day year composed of twelve 30-day months.

The 2025 Bonds will be issued only in fully registered form and, when issued, 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 for the 2025 Bonds. Ownership interests in the 2025 Bonds may be purchased in book-entry form, in any integral multiple of $5,000. See the caption “—Book-Entry Only System” below and Appendix D.

Interest on the 2025 Bonds will be payable semi-annually calculated based on a 360-day year of twelve thirty-day months on each 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 preceding 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 Owner on the Interest Payment Date at the address of such Owner as its appears on the Registration Books; provided however, that payment of interest may be by wire transfer in immediately available funds to an account in the continental United States of America to any Owner of 2025 Bonds in the aggregate principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee prior to the applicable Record Date. Principal of any 2025 Bond and any premium upon redemption will be paid by check of the Trustee upon presentation and surrender thereof at the Trust Office. Principal of and interest and premium (if any) on the 2025 Bonds will be payable in lawful money of the United States of America.

Each 2025 Bond will be dated as of the Closing Date and will bear interest from the Interest Payment Date next preceding the 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) unless it is authenticated on or before February 15, 2026, in which event it will bear interest from its Date of Delivery; provided, however, that if, as of the date of authentication of any 2025 Bond, interest

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thereon is in default, such 2025 Bond will bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Transfers and Exchanges Upon Termination of Book-Entry Only System In the event that the book-entry system that is described herein is discontinued, the 2025 Bonds will be printed and delivered as provided in the Indenture. Thereafter, any 2025 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 2025 Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form acceptable to the Trustee. Whenever any 2025 Bond or Bonds is surrendered for transfer, the Utility Authority will execute and the Trustee will authenticate and deliver a new 2025 Bond or Bonds for a like aggregate principal amount and of like maturity. The Trustee may require the 2025 Bond Owner requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer. The cost of printing 2025 Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer will be paid by the Utility Authority. The cost of printing 2025 Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange will be paid by the Utility Authority.

Any 2025 Bond may be exchanged at the Trust Office for a like aggregate principal amount of 2025 Bonds of other authorized denominations and of like maturity. The Trustee will require the 2025 Bond Owner requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange.

Redemption
Optional Redemption. The 2025 Bonds maturing on or before September 1, 20__ are not subject to optional redemption prior to maturity. The 2025 Bonds maturing on September 1, 20__ and thereafter are subject to redemption prior to their stated maturity at the option of the Utility Authority, as a whole or in part on any date, by such maturities as are selected by the Utility Authority from any available source of funds on or after September 1, 20__ at a redemption price equal to the principal amount of the 2025 Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption.

Mandatory Sinking Fund Redemption. The Term Bonds are subject to mandatory redemption, in part by lot, from Sinking Account payments set forth in the following schedule on September 1, 20__ with respect to Term Bonds maturing September 1, 20__, and on September 1 each year thereafter, at a redemption price equal to the principal amount thereof to be redeemed (without premium), together with interest accrued thereon to the date fixed for redemption; provided, however, that if some but not all of the 2025 Bonds have been redeemed pursuant to the optional redemption provisions of the Indenture, the total amount of Sinking Account payments to be made subsequent to such redemption will be reduced in an amount equal to the principal amount of the 2025 Bonds so redeemed by reducing each such future Sinking Account payment on a pro rata basis (as nearly as practicable) in integral multiples of $5,000, as will be designated pursuant to written notice filed by the Utility Authority with the Trustee:

Redemption Date
(September 1)
Principal
Amount

* Final Maturity.

In lieu of such redemption, the Trustee may apply amounts in the Sinking Account to the purchase of Term Bonds at public or private sale for cancellation, as and when and at such prices (including brokerage and other charges, but excluding accrued interest, which is payable from the Interest Account) as may be directed by

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the Utility Authority, except that the purchase price (exclusive of accrued interest) may not exceed the redemption price then applicable to the Term Bonds, as set forth in a Written Request of the Utility Authority and subsequently cancelled or surrendered to the Trustee for cancellation. The par amount of any Term Bonds so purchased by the Utility Authority in any twelve-month period immediately preceding any August 15 in the table above will be credited towards and will reduce the principal amount of Term Bonds required to be redeemed on the succeeding September 1.

Partial Redemption of Bonds. Upon surrender of any Bonds redeemed in part only, the Utility Authority will execute and the Trustee will authenticate and deliver to the Owner thereof, at the expense of the Utility Authority, a new Bond or Bonds of authorized denominations equal in aggregate principal amount to the unredeemed portion of the 2025 Bonds surrendered.

Selection of Bonds for Redemption
Whenever provision is made in the Indenture for the redemption of less than all of the 2025 Bonds, (other than mandatory sinking fund redemption of Term Bonds) the Trustee will select the 2025 Bonds to be redeemed from all Bonds or such given portion of the 2025 Bonds not previously called for redemption, among maturities as directed by the Utility Authority and within each maturity in a manner selected by the Trustee; provided, however, that if less than all of the 2025 Bonds are called for redemption at any one time, upon the written direction of the Utility Authority, the Utility Authority will specify a reduction in any pending Sinking Account payments required to be made under the Indenture which, to the extent practicable, results in substantially level Debt Service on the 2025 Bonds. For purposes of such selection, the Trustee will treat each Bond as consisting of separate $5,000 portions and each such portion will be subject to redemption as if such portion were a separate Bond.

Notice of Redemption
Notice of redemption will be mailed by first class mail, postage prepaid, not less than 30 nor more than 60 days before any redemption date, to 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 must state the date of the notice, the redemption date, the place or places of redemption, whether less than all of the 2025 Bonds (or all Bonds of a single maturity) are to be redeemed, the CUSIP numbers and (if less than all Bonds are redeemed) Bond numbers of the 2025 Bonds to be redeemed, the maturity or maturities of the 2025 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 will also state that on the redemption date there will become due and payable on each of said Bonds the redemption price, and that from and after such redemption date interest thereon will cease to accrue, and will require that such Bonds be then surrendered. Neither the failure to receive any notice nor any defect therein will affect the proceedings for such redemption or the cessation of accrual of interest from and after the redemption date. Notice of redemption of Bonds will be given by the Trustee, at the expense of the Utility Authority, for and on behalf of the Utility Authority.

With respect to any notice of optional redemption of the 2025 Bonds, such notice will state that such redemption will be conditional upon the receipt by the Trustee on or prior to the date fixed for such redemption of moneys sufficient to pay the principal of, premium, if any, and interest on such Bonds to be redeemed and that, if such moneys have not been so received, said notice will be of no force and effect and the Trustee will not be required to redeem such Bonds. In the event that such notice of redemption contains such a condition and such moneys are not so received, the redemption will not be made, and the Trustee will within a reasonable time thereafter give notice in the manner in which the notice of redemption was given, that such moneys were not so received.

Effect of Redemption
Notice of redemption having been duly given as set forth under the caption “—Notice of Redemption,” the 2025 Bonds (or related portions) so called for redemption will become due and payable, interest on the 2025

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Bonds so called for redemption will cease to accrue, said Bonds (or related portions) will cease to be entitled to any benefit or security under the Indenture, and the Owners of said Bonds will 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 will be canceled by the Trustee upon surrender thereof and destroyed.

Book-Entry Only System
One fully-registered 2025 Bond of each maturity will be issued in the principal amount of the 2025 Bonds of such maturity. Such 2025 Bond will be registered in the name of Cede & Co. and will be deposited with DTC. As long as the ownership of the 2025 Bonds is registered in the name of Cede & Co., the term “Owner” as used in this Official Statement will refer to Cede & Co. and not to the actual purchasers of the 2025 Bonds (the “Beneficial Owners”).

The Utility Authority may decide to discontinue use of the system of book-entry transfers through DTC (or a successor securities depository). In that event, the 2025 Bonds will be printed and delivered and will be governed by the provisions of the Indenture with respect to payment of principal and interest and rights of exchange and transfer. See the caption “—Transfers and Exchanges Upon Termination of Book-Entry Only System.”
The Utility Authority cannot and does not give any assurances that DTC Participants or others will distribute payments of principal of and interest on the 2025 Bonds received by DTC or its Nominee as the registered Owner, or any redemption or other notices, to the Beneficial Owners (as such term is defined in Appendix D), or that they will do so on a timely basis, or that DTC will serve and act in the manner described in this Official Statement. See Appendix D for additional information concerning DTC.

DEBT SERVICE PAYMENT SCHEDULE
Set forth below is an annualized schedule of principal of and interest on the 2025 Bonds for the period ending June 30 in each of the years indicated.
2025 Bonds
Period Ending
June 30
Parity Obligation
Debt Service Principal*
Interest* Debt Service*
Total Debt
Service*
TOTAL

* Preliminary, subject to change.

SECURITY FOR THE 2025 BONDS
General
The 2025 Bonds are special limited obligations of the Utility Authority payable solely from Net Revenues of the Water Enterprise on a parity with payments under the SRF Loan, the 2023 Bonds and any future Parity Obligations, as well as from certain other funds and accounts held by the Trustee pursuant to the Indenture.

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Neither the full faith and credit nor any other revenues or funds of the Utility Authority are pledged to or available for the payment of debt service on the 2025 Bonds. The obligation of the Utility Authority to make payments of principal of and interest on the 2025 Bonds does not constitute an obligation for which the Utility Authority is obligated to levy or pledge any form of taxation or for which the Utility Authority has levied or pledged any form of taxation. The Utility Authority has no taxing power.

The 2025 Bonds are not a debt of the City, the County, the State or any of its political subdivisions in contravention of any constitutional or statutory limitations, and none of the City, the County, the State nor any of its political subdivisions are liable on the 2025 Bonds, nor in any event will the 2025 Bonds be payable out of any funds or properties of the Utility Authority other than the Net Revenues.

Subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth therein, all of the Net Revenues and any other amounts (including proceeds of the sale of the 2025 Bonds) held in any fund or account established pursuant to the Indenture have been pledged to secure the payment of the principal of and interest on the 2025 Bonds in accordance with their terms and the provisions of the Indenture. Such pledge, charge and assignment constitutes a first lien on and security interest in the Net Revenues and will attach, be perfected and be valid and binding from and after the date of issuance of the 2025 Bonds, without any physical delivery thereof or further act.

In order to secure the payment of principal of and interest on the 2025 Bonds, the Utility Authority will cause the City to deposit all of the Gross Revenues immediately upon receipt in the Water Enterprise Fund. The Water Enterprise Fund will be held by the City on behalf of the Utility Authority. On or after the first day of each month, amounts deposited in the Water Enterprise Fund will be disbursed in the following order of priority:
(i) payment of Direct Costs and Allocated Costs for the preceding month; and (ii) payment of debt service coming due on any bonds, notes or obligations of the Utility Authority relating to the Water Enterprise, including the 2025 Bonds, the 2023 Bonds, the SRF Loan and any future Parity Obligations. See the caption “—Net Revenues Consist of Gross Revenues Minus Direct Costs and Allocated Costs.” Amounts remaining in the Water Enterprise Fund immediately after making the transfers required to be made pursuant to the Indenture will be used by the Utility Authority for any lawful purpose of the Utility Authority, including making lease payments under the Water Enterprise Lease Agreement (as such term is defined under the caption “—Net Revenues Consist of Gross Revenues Minus Direct Costs and Allocated Costs”).

The Utility Authority has transferred in trust, granted a security interest in and assigned to the Trustee, for the benefit of the Owners from time to time of the 2025 Bonds, all of the Net Revenues and all of the rights of the Utility Authority under the Indenture (but none of its duties or obligations thereunder). The Trustee is entitled to and will, subject to the provisions of the Indenture, take all steps, actions and proceedings which the Trustee determines to be reasonably necessary in its judgment to enforce, all of the rights of the Trustee under the Indenture.

All Net Revenues disbursed from the Water Enterprise Fund with respect to the 2025 Bonds as described above will be promptly deposited by the Trustee upon receipt in a special fund designated as the “Bond Fund” which the Trustee will establish, maintain and hold in trust; except that all moneys received by the Trustee and required under the Indenture to be deposited in the Redemption Fund will be promptly deposited in such fund.

All Net Revenues deposited with the Trustee will be held, disbursed, allocated and applied by the Trustee only as provided in the Indenture.

Not later than the first Business Day preceding each date on which principal of or interest on the 2025 Bonds becomes due and payable, the Trustee will transfer from the Bond Fund and deposit into the following respective accounts (each of which the Trustee will establish and maintain within the Bond Fund), the following amounts in the following order of priority, the requirements of each such account at the time of deposit to be satisfied before any transfer is made to any account subsequent in priority:

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(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 2025 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 2025 Bonds coming due and payable on such date.

All amounts in the Interest Account will be used and withdrawn by the Trustee solely for the purpose of paying interest on the 2025 Bonds as it becomes due and payable (including accrued interest on any 2025 Bonds purchased or redeemed prior to maturity pursuant to the Indenture). All amounts in the Principal Account will be used and withdrawn by the Trustee solely to pay the principal amount of the 2025 Bonds at their respective maturity dates.

Nothing contained in the Indenture or in the 2025 Bonds affects or impairs the obligation of the Utility Authority, which is absolute and unconditional, to pay the principal of and interest and premium (if any) on the 2025 Bonds to the respective Owners of the 2025 Bonds at their respective dates of maturity, or upon call for redemption, if any, as provided in the Indenture, but only out of the Net Revenues and other assets pledged therefor in the Indenture, or affects or impairs the right of such Owners, which is also absolute and unconditional, to enforce such payment by virtue of the contract embodied in the 2025 Bonds.

Net Revenues Consist of Gross Revenues Minus Direct Costs and Allocated Costs In 2002, the Utility Authority leased the Water Enterprise from the City pursuant to that certain Water Enterprise Lease Agreement, dated as of February 6, 2002 (the “Water Enterprise Lease Agreement”). The Utility Authority also leased the City’s wastewater system from the City pursuant to that certain Wastewater Enterprise Lease Agreement, dated as of February 6, 2002 (the “Wastewater Enterprise Lease Agreement”).

The City, through the Utilities Department, continues to operate the Water Enterprise and the wastewater system pursuant to two Management Agreements, each dated as of February 6, 2002, by and between the City and the Utility Authority.

Pursuant to the Water Enterprise Lease Agreement, the Utility Authority makes annual lease payments to the City equal to 8% of water sales revenues of the Water Enterprise. Such lease payments are payable on a subordinate basis to the payments of principal of and interest on the 2025 Bonds from surplus revenues of the Water Enterprise remaining after paying Direct Costs and Allocated Costs, the 2025 Bonds, the 2023 Bonds, the SRF Loan and future Parity Obligations. Similarly, pursuant to the Wastewater Enterprise Lease Agreement, the Utility Authority makes annual lease payments to the City equal to 8% of wastewater system revenues from moneys remaining after the payment of operation and maintenance expenses and debt service attributable to the wastewater system.

The obligation of the Utility Authority to pay the principal of and interest on the 2025 Bonds is payable from Net Revenues of the Water Enterprise on a parity with payments under the SRF Loan and the 2023 Bonds. “Net Revenues” means, for any Fiscal Year of the Utility Authority ending June 30 (each, a “Fiscal Year”), an amount equal to all of the Gross Revenues received with respect to such Fiscal Year, minus the amount required to pay all Direct Costs and Allocated Costs becoming payable with respect to such Fiscal Year. “Gross Revenues” means, for any Fiscal Year, the sum of all gross charges received for, and all other gross income and receipts derived by the Utility Authority from the lease and operation of the Water Enterprise or otherwise arising from the Water Enterprise, including but not limited to investment earnings, including Water Capital Impact Fees (as such term is defined in Appendix B), including any fees levied with respect to reclaimed water, to the extent that such fees are allocable to the Water Projects (as such term is defined in Appendix B), and any operational participation revenues received. Gross Revenues do not include reimbursements from the

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United States of America pursuant to Section 54AA of the Code (Section 1531 of Title I of Division B of the American Recovery and Reinvestment Act of 2009 (Pub. L. No. 111-5, 23 Stat. 115 (2009), enacted February 17, 2009)), or any future similar program.
“Direct Costs” means the reasonable and necessary costs, expenses and water purchases paid for maintaining and operating the Water Enterprise, including but not limited to: (a) cost of electricity and other forms of energy supplied to the Water Enterprise; (b) the reasonable expenses of management and repair and other costs and expenses necessary to maintain and preserve the Water Enterprise in good repair and working order; and (c) the reasonable administrative costs of the Utility Authority attributable to the operation and maintenance of the Water Enterprise, but in all cases excluding: (i) debt service payable on obligations incurred by the Utility Authority with respect to the Water Enterprise; (ii) depreciation, replacement and obsolescence charges or reserves therefor; and (iii) amortization of intangibles or other bookkeeping entries of a similar nature. “Allocated Costs” means an amount payable by the Utility Authority to the City based on an allocation of City overhead to the Water Enterprise.

In order to secure the payment of the principal of and interest on the 2025 Bonds, all of the Net Revenues will be pledged as described under the caption “—General.” Rate Covenant
The Indenture requires the Utility Authority to fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water Enterprise, or cause the City to do so, during each Fiscal Year which (together with other funds accumulated from Gross Revenues and which are lawfully available to the Utility Authority for payment of any of the following amounts during such Fiscal Year) are at least sufficient, after making allowances for contingencies and errors in estimates, to pay the following amounts in the following order:
(i) all Direct Costs and Allocated Costs of the Water Enterprise estimated by the Utility Authority to become due and payable in such Fiscal Year;
(ii) all Debt Service becoming due and payable in such Fiscal Year; and (iii) all payments required to meet any other obligations of Utility Authority which are charges, liens or encumbrances upon, or payable from, the Net Revenues.

The Utility Authority will fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water Enterprise, or cause the City to do so, during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 125% of the amounts payable under clause (ii) above in such Fiscal Year.

No Reserve Fund
The Indenture does not establish a reserve fund or account for the 2025 Bonds. As discussed under the caption “—Additional Indebtedness—Parity Obligations,” any debt service reserve fund established in connection with Parity Obligations will not be available to support payment of the 2025 Bonds.

Additional Indebtedness
No Senior Obligations. After the issuance of the 2025 Bonds, as long as any 2025 Bonds are outstanding and payable, the Utility Authority will not issue or incur any bond, note, warrant, evidence of indebtedness, contract, instrument or other agreement payable from Net Revenues the payment of which is prior and senior to the payment of the 2025 Bonds.

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Parity Obligations. The Utility Authority may issue or incur any bond, note, warrant, evidence of indebtedness, contract, instrument or other agreement secured by a pledge of and lien on Net Revenues equally and ratably with the 2025 Bonds (referred to as “Parity Obligations”) subject to the following provisions:
(a) The Utility Authority is not in default under the terms of the Indenture; (b) (i) Net Revenues, as certified by the Utility Authority, for the most recent audited Fiscal Year preceding the date of execution of the Parity Obligations; plus (ii) projected Net Revenues (as described below) are at least equal to 125% of Aggregate Maximum Annual Debt Service (as such term is defined in Appendix B).

The projections described in clause (b)(ii) above may take into account the following: (1) increases in the charges made for service from the Water Enterprise which have been adopted by the Utility Authority prior to the date of issuance or incurrence of such Parity Obligations, but which were not in effect for all or part of such preceding Fiscal Year, and which are scheduled to be effective in the period of Debt Service shown for such Parity Obligations; and (2) an allowance for estimated additional average annual Net Revenues from any additions or connections to or improvements or extensions of the Water Enterprise which have occurred from the end of the Fiscal Year preceding the date of execution of the Parity Obligations. (c) Notwithstanding the requirements described above, Parity Obligations may be issued or incurred to refund outstanding Parity Obligations if, after giving effect to the application of the proceeds thereof, total Debt Service will not be increased in any Fiscal Year in which Parity Obligations (outstanding on the date of issuance or incurrence of such refunding Parity Obligations, but excluding such refunding Parity Obligations) not being refunded are outstanding.
(d) The Utility Authority may but is not required to fund a reserve fund or obtain a reserve fund surety or instrument with respect to any Parity Obligations. If a reserve fund is funded for any Parity Obligations or a qualified reserve fund surety or instrument is obtained with respect to any Parity Obligations, such funded reserve fund or qualified reserve fund surety or instrument will secure only the related Parity Obligations and will not support the 2025 Bonds or any other Parity Obligations.

Subordinate Obligations. The Utility Authority has covenanted that the Utility Authority will not issue or incur any obligations that are payable from Net Revenues on a subordinate basis to the payments of principal of and interest on the 2025 Bonds (“Subordinate Obligations”) unless Net Revenues or projected Net Revenues, calculated in the same manner as described in clause (b) above under the subcaption “—Parity Obligations,” are equal to at least 100% of the sum of Debt Service on all Parity Obligations and Subordinate Obligations outstanding immediately subsequent to the incurring of such additional obligations.

THE UTILITY AUTHORITY
The Utility Authority is a joint powers authority of the State organized and existing under and by virtue of Article 1, Chapter 5, Division 7, Title 1 (commencing with Section 6500) of the California Government Code, as amended (the “JPA Law”). The Utility Authority was originally established under a joint exercise of powers agreement that was entered into in 2002 and amended and restated pursuant to that certain Amended and Restated Joint Exercise of Powers Agreement, dated February 6, 2013, by and among the City, the Successor Agency to the Redevelopment Agency of the City of Corona, and the Housing Authority of the City of Corona. The Utility Authority is governed by a five-member Board of Directors comprised of the same individuals who comprise the City Council of the City. The Utility Authority was created for the purpose of leasing, owning, operating, managing and maintaining the Water Enterprise and the City’s wastewater system and providing financing for public capital improvements for its members. Under the JPA Law, the Utility Authority is authorized to issue bonds to pay the costs of any public capital improvements.

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THE CITY
General
The City is located in northwestern Riverside County, approximately 45 miles southeast of downtown Los Angeles, near the County’s border with the Counties of Orange and Los Angeles. The City was incorporated in 1896 and is a general law city operating under a council/manager form of government. The City had a population of approximately 159,157 as of January 2025 and covers approximately 39 square miles. Land use in the City is primarily residential, with areas of commercial and industrial development. See the caption “— Land Use and Service Area.”
The City provides police protection, fire protection, animal control, building safety regulation and inspection, street lighting, beautification, water and wastewater service, land use planning, zoning, housing and community services, maintenance and improvement of streets and related structures, traffic safety maintenance and improvement and recreational and cultural programs for citizen participation.

As discussed under the caption “SECURITY FOR THE 2025 BONDS—Net Revenues Consist of Gross Revenues Minus Direct Costs and Allocated Costs,” the City leases the Water Enterprise to the Utility Authority, and the Utilities Department operates the Water Enterprise on behalf of the Utility Authority. The Water Enterprise supplies: (i) potable water to approximately 37,792 single family residential customers, 4,119 multifamily residential customers and 4,674 commercial, industrial, public agency, agricultural and other customers; and (ii) reclaimed water to approximately 417 commercial, industrial, public agency, irrigation, agricultural and other customers.

The City has three sources of water: (a) treated and untreated water that is purchased from Western Municipal Water District (“WMWD”), a member agency of The Metropolitan Water District of Southern California (“MWD”); (b) well and treatment facilities that pump and treat groundwater for City use; and (c) reclaimed water that is produced from treated wastewater of the City’s wastewater system. See the caption “THE WATER ENTERPRISE—Water Supply.”
The potable water system of the Water Enterprise includes 21 well sites, four water treatment plants, 851 miles of transmission and distribution pipelines, 17 potable water storage tanks, 21 booster pump stations and 37 pressure reducing stations. The reclaimed water system of the Water Enterprise includes 55 miles of transmission pipelines, four water storage tanks, two non-potable wells and six booster pump stations.

Land Use and Service Area
The service area of the Water Enterprise encompasses approximately 48 square miles, including all of the City and certain unincorporated areas of the County that are located adjacent to City boundaries, including Coronita, Temescal Canyon and El Cerrito. The total population of the service area is estimated to be approximately 172,900. The City is highly connected to job centers in the County and the Counties of Orange and Los Angeles, with State Route 91 traversing the City east to west, providing access to the City of Riverside to the east and the City of Los Angeles to the west, and Interstate 15 traversing the City north to south.

The service area has elevations varying from 430 feet in the Green River area to over 1,600 feet in the South Corona area. The Water Enterprise includes six primary service zones with five secondary service zones.

These service zones serve elevations ranging from 430 feet to 1,520 feet.

The Water Enterprise service area is approximately 90% built out and includes single family residences, multi-family residential units, industrial and commercial properties. Approximately 9% of the land within the Water Enterprise service area is undeveloped. The City currently expects the Water Enterprise service area to be fully built out in 2045 with an estimated population of 185,600.

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Governance and Management
General. The City operates under a council-manager form of government. Councilmembers are elected by district for four-year alternating terms. The City Manager, appointed by the City Council, serves as the City’s chief administrative officer and is responsible for overseeing the daily operations of City departments and efficient management of all City business. Functions of the City Manager’s Office include implementation and administration of City Council policies and programs and providing direction to the departments that administer City programs and services.

City Manager. Jacob Ellis has over 15 years of local government experience and has served as the City Manager since November 2019. Prior to coming to the City, Mr. Ellis served as the Deputy Town Manager and Assistant to the Town Manager for the City of Gilbert, Arizona, and in various management capacities for the municipality of North Cowichan, British Columbia. Mr. Ellis has a Bachelor’s degree in Political Science from Brigham Young University and a Master’s degree in Public Administration and Juris Doctor degree from Cleveland State University.

Other key personnel responsible for management of the Water Enterprise include the City Treasurer, the Finance Director and the Utilities Director. In addition, the City Attorney provides legal services to the City and the Utility Authority.

City Treasurer. Chad Willardson was elected as the City Treasurer in 2016 and re-elected in 2020 and 2024. Mr. Willardson is the President and Founder of Pacific Capital, a financial management business based in the City. Mr. Willardson has a Bachelor’s degree in Economics from Brigham Young University. He is a certified member of the National Ethics Association and serves clients as a Certified Financial Fiduciary®.

He is also an Accredited Wealth Management Advisor and a Chartered Retirement Planning Counselor.

Finance Director. Kim Sitton is the Finance Director of the City, overseeing the City’s budget, accounting and purchasing functions. Ms. Sitton has been with the City for over 30 years and has served as the City’s Finance Director since 2019. Ms. Sitton has a Bachelor’s degree in Business Administration from California State University, San Bernardino.

Utilities Director. Tom Moody has been with the City since 1995 and has served as the Utilities Director since September 2016. Mr. Moody is responsible for all operations of the Utilities Department, which provides water, reclaimed water, wastewater, and electric service to residents and businesses within the Utilities Department’s service area. Mr. Moody has a Bachelor’s degree in Business Administration from American InterContinental University and a Master’s degree in Business Administration from California Coast University.

He also holds a Water Operator Certification for Distribution Grade V from the SWRCB’s Division of Drinking Water (the “Division”).

City Attorney. Dean Derleth has over 30 years of experience serving as counsel to local agencies. He has served as the City Attorney since December 2012. Prior to coming to the City, Mr. Derleth was an attorney in private practice and served as the City’s contract City Attorney. Mr. Derleth has a Bachelor’s degree in Economics from the University of California, Irvine, and a Juris Doctor degree from the University of the Pacific McGeorge School of Law.

Management Policies. The City has adopted several policies which are designed to ensure the prudent and effective management of City operations, including a Debt Management Policy, an Investment Policy, a Reserve Policy for Utilities Department Operating Funds, and a Pension Stabilization Trust Investment Policy.

Further information about these policies is set forth below. With the exception of the Reserve Policy for Utilities Department Operating Funds, which was adopted in 2023 and the reserve under which is still being accumulated, the City is in compliance with each of these policies.

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Debt Management Policy. The City has adopted a Debt Management Policy in accordance with California Government Code Section 8855 to establish guidelines and parameters for the effective governance, management and administration of debt issued by the City and its related entities and to ensure compliance with legislation, statutes and laws that place regulations on local agency debt. The 2025 Bonds are consistent with the Debt Management Policy. The following elements have been incorporated into this policy:
 The purposes for which debt may be incurred;
 The types of debt that may be issued;
 The relationship of the debt to, and integration with, the City’s capital improvement program or budget;
 Policy goals related to the City’s planning goals and objectives;  Debt management practices, including the investment of proceeds and post-issuance compliance; and
 Policies governing initial and continuing disclosure to investors.

Investment Policy. The City invests its funds in accordance with the City’s investment policy (the “Investment Policy”), which was most recently reviewed and revised by the City Council on June 18, 2025.

The Investment Policy: (a) describes the policies and procedures to be utilized in the City’s investment management system; (b) establishes guidelines for the prudent investment of the City’s funds, and (c) lists and describes suitable investments. The goals of the City’s investment policy are to meet the City’s short and longterm cash flow demands in a manner which will provide for the safety of principal and sufficient liquidity, while providing a suitable investment return.

In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. Eligible investments include the Local Agency Investment Fund which is operated by the California State Treasurer, local agency bonds rated “A” or better (limited to 25% of the portfolio), money market mutual funds (limited to 20% of the portfolio), federal agency or government-sponsored enterprise securities (limited to 5-year maximum maturities and 75% of the portfolio), United States Treasury obligations (limited to 5-year maximum maturities), medium-term corporate notes (limited to 5-year maximum maturities and 30% of the portfolio), negotiable certificates of deposit (limited to 3-year maximum maturities and 20% of the portfolio), banker’s acceptances (limited to 180-day maximum maturities and 20% of the portfolio) and commercial paper (limited to 270-day maximum maturities and 25% of the portfolio). Funds are invested in the following order of priority:
 Safety of Principal;
 Liquidity; and
 Return on Investment.

The Treasurer is required to provide a monthly report to the City Council showing the type of investment, date of maturity, amount invested, current market value, rate of interest and other such information as may be requested by the City Council.

Approximately $45 million (8.1%) of the City’s total investment portfolio as of June 30, 2024 was attributed to the Water Enterprise.

Water Utility Fund Reserve Policy (Reserve Policy for Utilities Department Operating Funds).

The City’s Water Utility Fund Reserve Policy was originally established in 2023. The policy establishes a target reserve amount for the Water Utility Fund equal to 90 days of operating expenses plus the current annual depreciation amount. To build the target reserve amount, the Utilities Department will annually contribute 10% of the difference between the Water Utility Fund’s actual operating revenues and actual operating expenses until the target reserve amount is met. Amounts in the reserve may be used in the following manner: (i) as needed in the event of a local, state or federal emergency declaration; (ii) for emergency projects; (iii) to fulfill debt

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obligations; (iv) to phase in the impact of unforeseen cost increases, such as significant increases in imported water costs, energy costs and other significant expense fluctuations; and (v) to address unexpected revenue shortfalls. As of June 30, 2024, $3,319,216 was held in the Water Utility Fund reserve and the City estimates approximately $4,075,956 was held in the Water Utility Fund reserve as of June 30, 2025.

Pension Stabilization Trust Investment Policy. The City Council has adopted a Pension Stabilization Trust Policy (the “Pension Policy”), which was most recently reviewed and revised by the City Council on June 18, 2025. The Pension Policy is intended to provide guidelines for the investment of funds in the City’s Pension Benefits Trust. See the caption “WATER ENTERPRISE FINANCIAL INFORMATION— Employee Benefits—Pension Obligations.”
Under the Pension Policy, the City Treasurer, City Manager, Assistant City Manager, Finance Director, and Accounting Manager annually review changes in the demographics of participants in its pension plans, amendments to plan provisions that may have a material effect on cash flow needs or the investment horizon, proposed changes in asset allocations and pension plan actuarial reports, in order to determine whether to adjust investments in the Pension Benefits Trust while ensuring the long-term growth of assets therein, the safety of principal and liquidity. The Pension Policy also establishes guidelines for the retention of an Investment Manager.

Funds in the Pension Benefits Trust must be invested as follows: (i) no more than 5% of the portfolio may be invested in any single security; and (ii) cash and fixed income securities may comprise 10%-30% of the portfolio, while global equities may comprise 50%-80% of the portfolio. Certain investments, including margin purchases, non-United States dollar denominated securities, hedge funds and direct investments in commodities futures contracts, are prohibited. As of June 30, 2024, the City held $46,483,830 in the Pension Benefits Trust and the City estimates approximately $54,892,853 was held in the Pension Benefits Trust as of June 30, 2025.

Employees
As of June 30, 2024, the City had 908.60 full-time equivalent employees (“FTEs”). 35.86 FTEs were assigned to the finance functions of the Finance Department, with responsibility for the finances of the Water Enterprise and other public works functions. In addition, 120.65 FTEs worked in the Utilities Department, with responsibility for the Water Enterprise and other public works functions (including 65.40 FTEs who worked exclusively on behalf of the Water Enterprise).

City employees who work on behalf of the Water Enterprise are represented by the Corona Public Service Employees Association, which represents approximately 328 employees Citywide, and the Corona Supervisors Association, which represents approximately 45 employees Citywide. Relations between the City and these employee associations are governed by memoranda of understanding that expire on December 31, 2027. A total of approximately 92 management and confidential employees are exempt from collective bargaining. Salaries for exempt employees are set by the City Council. The City has never experienced a strike, slowdown or work stoppage.

Budget Process
The City prepares and adopts a balanced budget for each Fiscal Year which includes proposed expenditures and the means of financing such expenditures. The Corona Municipal Code requires the City Manager to prepare and submit an annual budget to the City Council for approval. Under policy directive and guidance, the budget is developed based upon (i) guidance and policy direction provided by the City Council through the City Manager; (ii) a long-term financial plan which reviews at least three years of actual results with a 5-year economic and financial outlook; (iii) the 2021-2026 Citywide Strategic Plan; and (iv) federal, State, and local law and emerging issues.

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The budget process begins in January of each year. Finance staff works in cooperation with all City departments to formulate revenue projections for the upcoming Fiscal Year. From this information, the individual departments use the projected revenues and existing fund balance information to prioritize and recommend departmental budgets to meet the next Fiscal Year’s objectives. The City Manager and Finance staff review each budget proposal, revenue assumptions and all current financial obligations before presenting the proposed budget to the City Council. Prior to approval of the budget, the City Council generally conducts public workshops to obtain comments from residents and ratepayers.

Budget amendments within departments are approved by department directors as long as the amendment does not increase the department’s overall spending authority as dictated by the current budget. Any amendment which increases spending authority must obtain City Council approval by majority vote. Amendments in the Capital Budget may be approved by department directors, within the same funding source and for similar projects, not exceeding 10% of the transferring project budget. Amendments that increase the City’s Capital Budget also require City Council approval.

The City Council adopted the budget for Fiscal Year 2026 on June 4, 2025.

Water Enterprise Insurance
Insurance for the Water Enterprise is maintained by the City through Joint Powers Insurance Agencies and/or commercial carriers as follows:

Property Damage. Coverage is maintained for losses of up to $1,250,000,000, subject to policy exclusions, sub-limits and various deductibles of up to $5,000,000, including an “all-risk” deductible of $50,000 and a $500,000 deductible for wildfires. Coverage for vehicles is provided at actual cash value (as opposed to replacement value) and coverage off-premises is provided only for vehicles with a value of $100,000 or more.

The City does not maintain coverage for earthquake or flood damage. Also, certain portions of the Water Enterprise are excluded from coverage, including, but not limited to, pipelines not in the vicinity of above-ground infrastructure.

General Liability. The City is self-insured up to $1,000,000 and maintains excess coverage for losses between $1,000,000 to $25,000,000, subject to certain exclusions. The general liability policy includes automobile liability and public officials errors and omissions coverage.

Workers Compensation. The City is self-insured up to $1,000,000 and has purchased excess insurance for claims between $1,000,000 and the statutorily required maximum.

Other Insurance Coverage. The City also currently maintains coverage for: (1) Master Government Crime up to $25,000,000 per occurrence, with a deductible of $2,500 per occurrence; (2) Enhanced Pollution Liability up to $10,000,000 per pollution condition, with a self-insured retention of $250,000 per pollution condition; and (3) enhanced cybersecurity insurance. The City has not settled any claims that exceeded its insurance coverage in the past three years.

No assurance can be given as to the adequacy of the insurance maintained now or in the future by the City to fund necessary repairs or replacement of any portion of the Water Enterprise, and the City does not have any obligation under the Indenture to maintain earthquake or flood coverage or to maintain any insurance in the current coverage amounts. Significant damage to the Water Enterprise could affect the City’s ability to generate sufficient Net Revenues to pay the 2025 Bonds.

Other Obligations
No Senior Obligations. The Utility Authority has no obligations that are payable from Net Revenues on a senior basis to the 2025 Bonds.

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Parity Obligations. In October 2004, the City and the SWRCB entered into the SRF Loan to finance the construction of certain reclaimed water facilities. The SRF Loan was entered into in the initial principal amount of $29,940,000, of which $1,897,557 was outstanding as of June 30, 2025. The SRF Loan bears interest at the rate of 2.50% per annum and is payable in annual installments of approximately $1,944,995, with a final payment due on September 30, 2025. Payments under the SRF Loan are payable from Net Revenues on a parity with the 2025 Bonds.

In May 2023, the Utility Authority issued its 2023 Water Revenue Refunding Bonds (Water Projects) (the “2023 Bonds”) to refund all of the outstanding Utility Authority 2012 Water Revenue Bonds (Water Projects). The 2023 Bonds were issued in the initial principal amount of $20,085,000, of which $16,605,000 was outstanding as of June 30, 2025. The 2023 Bonds bears interest at the rate of 5.000% per annum, with a final payment in 2032.

The Utility Authority is permitted to incur additional obligations that are payable from Net Revenues on a parity with the 2025 Bonds in the future upon satisfaction of the conditions that are described under the caption “SECURITY FOR THE 2025 BONDS—Additional Indebtedness.” In April 2024, the City submitted an application to the SWRCB for an approximately $12 million loan for the purpose of paying for a portion of the costs of treatment of TCP and PFAS (as such terms are defined under the caption “THE WATER ENTERPRISE—Water Quality”). If the City obtains such loan from the SWRCB, the payments are expected to be Parity Obligations payable from Net Revenues on a parity with the SRF Loan, the 2023 Bonds and the 2025 Bonds. Furthermore, the Utility Authority currently expects that approximately 50% of the expected $12 million loan would be forgiven as a grant. The Utility Authority, however, can provide no assurances with respect to whether the City will obtain such SWRCB loan, the timing for obtaining any such SWRCB Loan, or the principal amount, repayment terms or annual payments for such SWRCB Loan. The projected operating results set forth under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” do not include any payments under any such SWRCB Loan.

Direct Costs and Allocated Costs. While the Utility Authority does not have any obligations payable from Net Revenues on a senior basis to the 2025 Bonds, as described under the caption “SECURITY FOR THE 2025 BONDS,” the Utility Authority does have certain obligations which are payable as either Direct Costs or Allocated Costs of the Water Enterprise, which are deducted from Gross Revenues prior to the payment of debt service on the 2025 Bonds, the 2023 Bonds and the SRF Loan, and may incur additional Direct Costs or Allocated Costs in the future.

Other Payments. In 2014, the City entered into an in an installment purchase agreement (the “Brine Line Installment Purchase Agreement”) to acquire discharge rights from the City of Norco to the Santa Ana Regional Interceptor or Inland Empire Brine Line for a total amount of $9,864,561. Under the Brine Line Installment Purchase Agreement, the Water Enterprise makes annual payments of $600,000 through 2035. Such payments are not secured by a pledge of Net Revenues and are therefore payable from revenues of the Water Enterprise on a subordinate basis to the 2025 Bonds, the 2023 Bonds, the SRF Loan and any future Parity Obligations.

Financial Statements
A copy of the most recent audited financial statements of the City prepared by the Pun Group, Santa Ana, California (the “Auditor”) is set forth in Appendix A. The Auditor’s letter dated December 4, 2024 is located at the beginning of the Financial Section therein.

The summary operating results that are contained under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Historical Operating Results and Debt Service Coverage” are derived from these financial statements and audited financial statements for prior Fiscal Years (excluding certain non-cash

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items and after certain other adjustments), and are qualified in their entirety by reference to such statements, including the notes thereto.

The City accounts for moneys received and expenses paid in accordance with Generally Accepted Accounting Principles applicable to governmental agencies (“GAAP”). Generally, the City recognizes revenues and expenses on the full accrual basis of accounting, meaning that revenues are recognized in the accounting period in which they are earned and expenses are recognized in the period in which they are incurred, regardless of when the related cash flows take place. In certain cases, however, GAAP requires or permits moneys that are collected in one Fiscal Year to be recognized as revenue in a subsequent Fiscal Year and requires or permits expenses that are paid or incurred in one Fiscal Year to be recognized as expenses in a subsequent Fiscal Year.

See Note 1.B to the financial statements that are set forth in Appendix A. Except as otherwise expressly noted herein, all financial information that has been derived from the City’s audited financial statements reflects the application of GAAP.

The Water Enterprise Fund of the City has a separate set of self-balancing accounts and is accounted for as a proprietary fund type (enterprise fund) using the economic resources measurement focus. In governmental accounting, enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent is that the costs (expenses, including depreciation) of providing goods or services to the general public on a continuing basis are to be financed or recovered primarily through user charges, or where periodic determination of revenues earned, expenses incurred and/or net income is deemed appropriate for capital maintenance, public policy, management control, accountability or other purposes.

THE WATER ENTERPRISE
General
The Water Enterprise supplies (i) potable water to approximately 37,792 single family residential customers, 4,119 multi-family residential customers and 4,674 commercial, industrial, public agency, agricultural and other customers; and (ii) reclaimed water to approximately 417 commercial, industrial, public agency, irrigation, agricultural and other customers. All water service connections are metered.

The City has three sources of water: (a) treated and untreated water that is purchased from WMWD, a member agency of MWD; (b) well and treatment facilities that pump and treat groundwater for City use; and (c) reclaimed water that is produced from treated wastewater of the City’s wastewater system. See the caption “— Water Supply” for a detailed description of the City’s various water sources.

The potable water system of the Water Enterprise includes 21 well sites, four water treatment plants, 851 miles of transmission and distribution pipelines, 17 potable water storage tanks, 21 booster pump stations and 37 pressure reducing stations. The reclaimed water system of the Water Enterprise includes 55 miles of transmission pipelines, four water storage tanks, two non potable wells and six booster pump stations.

The City maintains interties with the City of Norco, WMWD, the City of Riverside and Temescal Valley Water District, which can help to ensure a temporary source of water in the event of a major emergency or Water Enterprise failure.

Wells. The Water Enterprise currently includes 21 well sites. The City’s wells are located in the Temescal Basin (a sub-basin of the Upper Santa Ana River Groundwater Basin) and the Coldwater and Bedford Basins (sub-basins of the Elsinore Groundwater Basin). Water extracted from the Temescal Basin has a high mineral and nitrate content and must be treated at the Temescal Desalter in order to meet water quality standards.

See the subcaption “—Water Treatment Plants.” Water extracted from the Coldwater Basin has historically been used for additional potable water supplies, while water extracted from the Beford Basin is primarily used to supplement reclaimed and non-potable water supplies. See the subcaption “—Reclaimed Water Facilities.”

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Further information with respect to extraction of groundwater from the City’s wells is set forth under the caption “—Water Supply—Groundwater.”
Water Treatment Plants. The Water Enterprise operates four water treatment plants: (i) the 30 million gallon per day (“mgd”) Lester Water Treatment Plant; (ii) the 9.1 mgd Sierra del Oro Treatment Plant; (iii) the 15 mgd Temescal Desalter; and (iv) the 5.76 mgd City Park Granular Activated Carbon Treatment Plant. The Lester Water Treatment Plant and the Sierra del Oro Treatment Plant treat imported raw Colorado River water from MWD’s Lower Feeder, which traverses the City.

The Lester Water Treatment Plant was originally constructed in 1966 as an in-line filtration plant with an initial capacity of 5 mgd. The capacity of the Lester Water Treatment Plant was increased to 10 mgd in the 1970s with a change to dual media filters. In 1991, two additional dual media filters along with other operational improvements were added, increasing the Lester Water Treatment Plant’s capacity to 20 mgd. In 1994, the City constructed additional process units at the Lester Water Treatment Plant to bring the plant into compliance with surface water treatment regulations. Additional filters were added in 1994 and 2006, increasing the Lester Water Treatment Plant’s capacity to 25 mgd and 30 mgd, respectively. The City treats untreated water purchases from WMWD to potable water standards at the Lester Water Treatment Plant prior to delivery to potable water customers.

The Sierra del Oro Treatment Plant was constructed in 1988 and utilizes conventional treatment processes, including flocculation and sedimentation basins ahead of filters. The City treats untreated water purchases from WMWD to potable water standards at the Lester Water Treatment Plant and the Sierra del Oro Treatment Plant prior to delivery to potable water customers.

The Temescal Desalter was placed in service in October 2001 with an initial capacity of 10 mgd. The Temescal Desalter uses membrane filtration reverse osmosis treatment technology to remove dissolved solids (salts) from groundwater having a moderately high total dissolved solids (“TDS”) level. This technology also removes PFAS from groundwater. See the caption “—Water Quality—PFAS.” This allows the Water Enterprise to produce additional potable water while complying with water quality standards for both drinking water and wastewater discharge after use. The Temescal Desalter also treats local groundwater to applicable water quality standards by, among other things, removing TDS and 1,2,3-Trichloropropane (“TCP”), an industrial chemical that is present in groundwater in the Temescal Basin as a result of past agricultural and manufacturing processes.

Permeate from the Temescal Desalter’s membranes is mixed with a well water bypass stream before being pumped to various points in the water distribution system for delivery to the water customers. The TDS that are removed in the treatment process are disposed of via the Santa Ana Regional Interceptor Pipeline operated by the Santa Ana Watershed Project Authority. The City completed expansion of the Temescal Desalter’s maximum capacity to 15 mgd in 2004.

The City Park Granular Activated Carbon Treatment Plant, was constructed in 2018 and used anion resin filters to remove nitrates, perchlorates and TCP from groundwater produced in the eastern area of the City.

The plant was upgraded into a Granular Activated Carbon Treatment Plant in 2023 that is comprised of two cartridge vessels, three lead granular activated carbon (GAC) vessels, four lag GAC vessels, and a chemical feed system.

The City is currently designing the Glen Ivy Water Treatment Plant, which is a treatment facility that would allow the City to recommence pumping from the Coldwater Basin. The Glen Ivy Water Treatment Plant is expected to be constructed beginning in 2026 with an anticipated cost of approximately $11 million, which is expected to be financed with a portion of the proceeds of the Series 2025 Bonds. See the captions “—The 2025 Project and Future Water Enterprise Improvements” and “PLAN OF FINANCE—The 2025 Project.” Pipelines. The Water Enterprise includes approximately 851 miles of transmission and distribution pipelines. The Water Enterprise service zones described under the caption “THE CITY—Land Use and Service

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Area” are interconnected between storage tanks and supply sources by 4 transmission pipelines which range in size from 12 to 36 inches in diameter.

Water distribution pipelines generally range in size from 6 to 10 inches in diameter. In certain sections of the Water Enterprise that were developed prior to 1950, however, distribution pipelines range in size from 2 to 4 inches in diameter. The City is replacing such pipelines over time with pipelines of between 6 to 8 inches as a result of development and as part of its capital improvement plan for the Water Enterprise.

Potable Water Storage Tanks. The Water Enterprise includes 17 potable water storage tanks ranging in size from approximately 500,000 gallons to approximately 6,000,000 gallons, with a total capacity of approximately 43,300,000 gallons. The Water Enterprise’s potable water storage tanks are composed of steel reinforced concrete or circular post tensioned construction.

Booster Pump Stations. The Water Enterprise includes 21 booster pump stations which range in capacity from 50 gallons per minute to over 7,000 gallons per minute. Seventeen booster pump stations pump water from service zones at lower elevations to service zones at higher elevations. See the caption “—Land Use and Service Area.” Two booster pump stations pump untreated Colorado River water from MWD’s Lower Feeder to the Lester Water Treatment Plant and the Sierra del Oro Treatment Plant. See the subcaption “— Water Treatment Plants.”
Pressure-Reducing Stations. The Water Enterprise includes 37 pressure-reducing stations which transfer water from higher elevation water service zones to lower elevation water service zones. See the caption “THE CITY—Land Use and Service Area.”
Reclaimed Water Facilities. The Utilities Department has provided reclaimed water to customers since 2006. The Water Enterprise’s reclaimed water facilities consist of three water reclamation plants, approximately 55 miles of pipelines, three service zones, two non potable wells, six booster pump stations and 4 storage tanks that can hold up to 7,000,000 gallons. The Utilities Department provides reclaimed water for irrigation purposes to approximately 417 accounts, including local schools, parks, golf courses, homeowners’ associations and landscape management districts. In Fiscal Year 2024, the Utilities Department delivered approximately 3,368 acre feet of reclaimed water to such customers.

Reclaimed water provided to Water Enterprise customers is produced by the Utilities Department at three water reclamation plants which are part of the City’s wastewater system. The plants have a combined capacity of up to 15.5 mgd of reclaimed water. The reclaimed water produced at the Utilities Department’s water reclamation plants undergoes tertiary treatment and meets health standards for irrigation use pursuant to Chapter 3 of Division 4 of Title 22 of the California Code of Regulations. The wastewater system does not charge the Utilities Department’s reclaimed water system (part of the Water Enterprise) for such water because, by delivering tertiary treated wastewater to the reclaimed water system, the wastewater system avoids costs associated with dechlorinating the water and discharging it into local waterways. The Utilities Department delivers this water to reclaimed water customers, with any excess purchased by the potable water system (by means of an internal Water Enterprise fund transfer to the reclaimed water system) and deposited into spreading grounds in local groundwater basins. See the caption “—Historical Water Enterprise Connections.” The delivery of reclaimed water reduces demand for potable water.

Water Supply
The City has three sources of water: (a) treated and untreated water that is purchased from WMWD, a member agency of MWD, as discussed under the subcaption “—Imported Water” below; (b) well and treatment facilities that pump and treat groundwater for City use, as discussed under the subcaption “—Groundwater” below; and (c) reclaimed water that is produced from treated wastewater of the City’s wastewater system, as discussed under the subcaption “—Reclaimed Water” below.

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See the captions “—Historical Water Enterprise Supply” and “—Projected Water Enterprise Supply” for historical and projected information with respect to the City’s sources of water supply.

Imported Water. Approximately 47% (15,606 acre feet) of the Water Enterprise’s total water supply in Fiscal Year 2024 consisted of imported water that the City purchased from WMWD.

WMWD water supplies include (i) untreated water purchased from MWD; (ii) treated water purchased from MWD after treatment at the Henry J. Mills Filtration Plant in Riverside, California; and (iii) desalinated brackish groundwater treated by WMWD at the Arlington Desalter.

WMWD is a member agency of MWD. The imported water that is delivered to WMWD by MWD consists primarily of untreated Colorado River water from Lake Mathews, which is located southeast of the City and serves as the western terminus of the Colorado River Aqueduct. See the caption “—Drought Declarations— State and Federal Orders” for a discussion of certain orders relating to the availability of Colorado River supplies.

In addition, WMWD’s supply includes untreated State Water Project water from northern California.

The City is entitled but not obligated to purchase water from WMWD when available at rates that are determined by WMWD’s governing board. WMWD’s rates are designed to recover WMWD’s water supply, storage and conveyance costs, as well as WMWD’s debt service payments. WMWD’s rates are largely determined by WMWD’s own costs to purchase water from MWD. Currently, WMWD’s charge to the Water Enterprise consists of three components: (a) WMWD’s actual cost to purchase water from MWD; (b) a surcharge in the current amount of $26.29 per acre foot for WMWD’s administrative costs; and (c) a fixed capacity charge in the current amount of $45,066.67 per month.

The City’s practice is to recover the costs of water purchased from WMWD through the rates that the City charges Water Enterprise customers. See the caption “—Water Enterprise Rates and Charges—General.” In the event of prolonged drought conditions, supply constraints could result in restrictions on water available to be purchased by the City, with resulting impacts on Net Revenues.

MWD was created in 1928 by vote of the electorates of a number of Southern California cities to provide a supplemental supply of water for domestic and municipal uses at wholesale to its member agencies. The MWD service area comprises approximately 5,200 square miles and includes portions of the six counties of Los Angeles, Orange, San Diego, San Bernardino, Riverside and Ventura. There are 26 member agencies of MWD, consisting of 14 cities, 11 municipal water districts (including WMWD) and one county water authority. MWD is governed by a Board of Directors (the “MWD Board”), which currently has 38 members. Each member agency has at least one representative on the MWD Board. Representation and voting rights are based upon each member agency’s assessed valuation. WMWD has one representative on the MWD Board. The total population of the MWD service area is approximately 19 million.

MWD member agencies request water from MWD at various delivery points within MWD’s service area and pay for such water at uniform rates that are established by the MWD Board for each class of service.

For planning purposes, each MWD member agency advises MWD annually in December of its anticipated delivery requirements for each of the five following fiscal years. Charges for water delivered are billed monthly and payable by the end of the second month following delivery.

MWD’s principal sources of water are Colorado River supplies which are imported through the Colorado River Aqueduct and supplies from the Lake Oroville watershed in northern California which are imported through the State Water Project. The same water rate is charged for water provided from each source.

MWD’s water rates are established by majority vote of the MWD Board and are not subject to regulation by the California Public Utilities Commission or any other local, State or federal agency. Rates must be uniform for any class of service, and no water may be provided free of charge. Under the Metropolitan Water District Act, California Statutes 1969, Chapter 209, as amended (the “MWD Act”), MWD is required, so far as

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practicable, to fix such rate or rates for water as will result in revenue which, together with revenue from any water standby or availability charge or assessment, will pay the operating expenses of MWD, provide for repairs and maintenance, provide for payment of the purchase price or other charges for property or services or other rights acquired by MWD and provide for the payment of the interest and principal of the bonded debt of MWD, subject to the applicable provisions of the MWD Act authorizing the issuance and retirement of such bonds.

MWD and WMWD face various challenges in the continued supply of imported water to the City, including reductions in water deliveries through the State Water Project. In April 2025, the State of California Department of Water Resources (“DWR”), which operates the State Water Project, announced that allocations for water year 2025 would be equal to 50% of requested supplies. Allocations represent the amount of State Water Project water that DWR will deliver for the year. Allocations are reviewed monthly based on several factors, including water in storage, environmental requirements and rain and snow runoff projections. Such allocation increases or decreases by DWR have historically varied dramatically from a 5% allocation as recently as 2022 to a 100% allocation in 2023. There can be no assurance that MWD or WMWD will not announce supply cutbacks in future years, or that the City Council will not consider imposing restrictions on water use by Water Enterprise customers, based on hydrological conditions.

A description of the supply challenges faced by MWD and WMWD, as well as a variety of other operating information with respect to MWD and WMWD, is included in certain disclosure documents prepared by MWD and WMWD, respectively. MWD and WMWD periodically prepare official statements and other disclosure documents in connection with their respective bonds and other obligations. MWD and WMWD have also entered into certain continuing disclosure agreements pursuant to which they are contractually obligated for the benefit of owners of certain of their outstanding obligations to file certain annual reports, including audited financial statements and notice of certain events, pursuant to Rule 15c2-12. Such official statements, other disclosure documents, annual reports and notices are filed with EMMA. Such information is not incorporated herein by reference thereto, and the City and the Utility Authority make no representation as to the accuracy or completeness of such information. NEITHER MWD NOR WMWD HAVE ENTERED INTO ANY

CONTRACTUAL COMMITMENT WITH THE CITY, THE UTILITY AUTHORITY, THE TRUSTEE OR THE OWNERS OF THE 2025 BONDS TO PROVIDE INFORMATION TO THE CITY, THE UTILITY AUTHORITY OR THE OWNERS OF THE 2025 BONDS.

MWD AND WMWD HAVE NOT REVIEWED THIS OFFICIAL STATEMENT AND HAVE NOT

MADE REPRESENTATIONS OR WARRANTIES WITH RESPECT TO THE ACCURACY OR

COMPLETENESS OF THE INFORMATION THAT IS CONTAINED OR INCORPORATED HEREIN, INCLUDING INFORMATION WITH REGARD TO MWD OR WMWD. MWD AND WMWD ARE NOT

CONTRACTUALLY OBLIGATED, AND HAVE NOT UNDERTAKEN, TO UPDATE SUCH

INFORMATION FOR THE BENEFIT OF THE CITY, THE UTILITY AUTHORITY OR THE OWNERS OF THE 2025 BONDS UNDER RULE 15c2-12.

Groundwater. Approximately 43% (14,376 acre feet) of the Water Enterprise’s total water supply (including potable and reclaimed water) in Fiscal Year 2024 consisted of groundwater that was extracted from the City’s wells in the Temescal, Coldwater and Bedford Basins.

The Water Enterprise pumps groundwater from 21 well sites which are located in the 23,500 acre Temescal Basin. According to the 2022 Temescal Basin groundwater sustainability plan (discussed below), the baseline estimated sustainable yield for the Temescal Basin is 15,572 acre feet per year. As discussed below, the City also maintains wells in the Coldwater and Bedford Basins, which have a combined overlying surface area of 8,320 acres, including three wells from which it does not currently pump groundwater.

Total maximum daily production from the City’s wells is approximately 14,600 gallons per minute, which is sufficient to supply approximately 46% of the average daily demand within the Water Enterprise service area. In previous years, groundwater was not replenished after rainfalls because of a highly efficient stormwater management system that prevented stormwater runoff from seeping into the ground. As a result, the City’s

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groundwater basins have been in a state of overdraft in recent decades. In order to recharge these basins, the Utilities Department blends groundwater with imported water from MWD and extracts a lesser amount of groundwater than in previous years. In addition, the City has modified its stormwater management system to increase groundwater recharge after rainfall. The City’s goal is to manage its groundwater basins so that groundwater provides approximately 50% of the Water Enterprise’s potable water supply on a long-term basis.

The City prepared a Recharge Master Plan for the Temescal Basin in 2013 with a goal of ensuring sustainable production through management of pumping and artificial recharge. The City has implemented the plan and projects are underway to increase the volume of tertiary treated reclaimed water available for recharge and to increase the number and capacity of recharge basins. According to the Recharge Master Plan, the Temescal Basin is currently in overdraft; however, the rate of overdraft is decreasing as a result of plan implementation.

The City maintains three wells in the Coldwater Basin from which it does not currently pump groundwater. In 2008, the City entered into an agreement (the “Trilogy Well Agreement”) with the Elsinore Valley Municipal Water District (“EVMWD”) affecting its rights in the Coldwater Basin. An operating committee comprised of representatives of the City and EVMWD has been appointed to manage the extraction of groundwater from this basin. Pursuant to the Trilogy Well Agreement, the Water Enterprise is entitled to take delivery of up to 2,112 acre feet of groundwater per year (subject to periodic adjustments approved by the parties) from a well operated by EVMWD in the Coldwater Basin, although the City does not currently take water from this well. The Trilogy Well Agreement states that, in the event that the City takes water produced by EVMWD from the Coldwater Basin, which it does not currently do, the City will pay EVMWD fixed costs equal to approximately $40,000 per year plus variable rate costs in proportion to the amount of water taken in each year.

In addition, the Trilogy Well Agreement permits the Water Enterprise to store up to 21,120 acre feet of any unused production rights in the Coldwater Basin. Based on the most recent available figures (which are from Fiscal Year 2018), the City had accumulated approximately 4,425 acre feet of stored water in the Coldwater Basin. The Water Enterprise may request delivery of such stored water at any time.

The City is not currently pumping groundwater from its three wells in the Coldwater Basin because the basin has been determined by the State to be under the influence of surface water, which requires groundwater which is extracted to undergo additional treatment. The City is currently designing the Glen Ivy Water Treatment Plant, which is a treatment facility that would allow the City to recommence pumping from the Coldwater Basin.

The Glen Ivy Water Treatment Plant is expected to be constructed beginning in 2026 with an anticipated cost of approximately $11 million, which is expected to be financed with a portion of the proceeds of the Series 2025 Bonds. See the captions “—The 2025 Project and Future Water Enterprise Improvements” and “PLAN OF FINANCE—The 2025 Project.”
The City maintains two wells in the Bedford Basin that are primarily used to produce non-potable water for agricultural, irrigation and other customers, and to supplement reclaimed water supplies during peak demand months in the summer. In the past five years, the City has produced an average of approximately 142 million gallons (436 acre feet) per year of non-potable water from the Bedford Basin.

As unadjudicated groundwater basins, the Temescal, Coldwater and Bedford Basins are subject to the provisions of Assembly Bill No. 1739 and Senate Bill Nos. 1168 and 1319 (collectively, the Sustainable Groundwater Management Act, or “SGMA”), which was enacted on September 16, 2014. SGMA constitutes a Statewide legislative structure for local agencies to manage groundwater with the potential for State intervention if local efforts fail to meet prescribed requirements.

DWR has designated the Temescal Basin as a medium priority basin for purposes of groundwater management. In 2017, in accordance with the requirements of SGMA, the City, the City of Norco and Home Gardens County Water District (the public agencies which extract groundwater from the Temescal Basin) entered into a memorandum of understanding relating to the formation of a groundwater sustainability agency

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(the “Temescal Basin GSA”) to undertake the joint management of the Temescal Basin. The City agreed to provide staff to manage the Temescal Basin GSA’s operations. The Temescal Basin GSA submitted a groundwater sustainability plan for DWR’s approval in 2022, and the groundwater sustainability plan was approved by DWR in January 2024. Groundwater levels and water quality is monitored routinely, data is submitted to DWR on an annual basis. To date no exceedances of minimum thresholds have been identified in the Temescal Basin.

DWR has designated the Coldwater and Bedford Basins as a very low priority basin for purposes of groundwater management, so a groundwater sustainability plan is not required to be prepared under SGMA. In 2017, however, the City, the Temescal Valley Water District and EVMWD entered into a memorandum of understanding relating to the formation of a groundwater sustainability agency (the “Bedford-Coldwater Basin GSA” and, together with the Temescal Basin GSA, the “GSAs”) to undertake the joint management of the Coldwater and Bedford Basins. The Bedford-Coldwater GSA submitted a groundwater sustainability plan for DWR’s approval in 2021, and the groundwater sustainability plan was approved by DWR in April 2025.

Groundwater levels and water quality is monitored routinely, data is submitted to DWR on an annual basis. To date no exceedances of minimum thresholds have been identified in the Bedford-Coldwater Basin.

Under SGMA, the GSAs must consider the interests of all groundwater users in the applicable basin and may require registration of groundwater users, the installation of flow meters to measure groundwater extractions and annual reporting of extractions. In addition, the GSAs are authorized to impose spacing requirements on new wells, monitor, regulate and limit or condition groundwater production and establish production allocations among groundwater producers, among other powers. The GSAs are also authorized to impose fees to fund such activities and to fine or issue cease and desist orders against producers that violate the GSA’s regulations. Groundwater sustainability plans must include sustainability goals and a plan to implement such goals within 20 years.

The City has been an active participant in the development of the groundwater sustainability plans for the Temescal, Coldwater and Bedford Basins and does not currently expect its groundwater extraction rights or costs in such basins to change significantly as a result of the enactment of SGMA and the establishment of the GSAs, nor does the City currently expect the enactment of SGMA to have a material adverse effect on the Utility Authority’s ability to pay the 2025 Bonds.

Reclaimed Water. Approximately 9% (3,368 acre feet) of the Water Enterprise’s total water supply (including potable and reclaimed water) in Fiscal Year 2024 consisted of reclaimed water. The Utilities Department treats wastewater from its wastewater system to produce reclaimed water for sale to approximately 411 accounts as of Fiscal Year 2024. Non-potable groundwater pumped from the Bedford Basin can also be used to supplement reclaimed water supplies during peak demand months in the summer. See the caption “— General—Reclaimed Water Facilities” for a description of the reclaimed water system’s physical facilities.

Water Quality
General. The City’s water supplies are treated to applicable regulatory standards prior to delivery to potable water customers, either by the City at City-owned water treatment plants or by WMWD. See the caption “—General—Water Treatment Plants.” In particular, water extracted from the Temescal Basin has a high mineral and nitrate content and must be treated at the Temescal Desalter in order to meet water quality standards.

In addition, the City’s treatment facilities at the Temescal Desalter and the City Park Granular Activated Carbon Treatment Plant remove TCP.

In December 2020, the City and the Utility Authority filed a complaint against Dow Chemical Company, Shell USA Inc. and Nutrien AG Solutions in the United States District Court for the Central District of California.

The complaint alleged that the defendants manufactured TCP and/or discharged TCP into the Temescal Basin, which caused groundwater produced from four of the Utility Authority’s wells to be contaminated with TCP at levels above regulatory limits. In 2022, the City and the Utility Authority settled the foregoing claims pursuant

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to a settlement agreement in consideration for certain defendants’ payment of a net amount of $19,142,652.

Under the settlement agreement, the City and the Utility Authority retain the right to bring additional claims against the defendants in the event that future sampling reveals TCP levels in excess of regulatory standards in wells other than the four wells to which the settlement relates.

The City’s reclaimed water supplies, which are produced at the City’s water reclamation plants (part of the City’s wastewater system), are suitable for landscape irrigation under Title 22 of the California Code of Regulations.

PFAS. Perfluorooctanoic acid (“PFOA”) and Perfluorooctanesulfonic acid (“PFOS”) are fluorinated organic chemicals which are part of a family of synthetic compounds referred to as per- and polyfluoroalkyl substances (“PFAS”). PFAS are water- and lipid-resistant substances that were previously used in a variety of manufacturing processes and industrial applications. They are often present in water supplies which are impacted by wastewater treatment plant effluent or associated with active or former military installations. The City understands that recent technological advances have enabled water agencies to detect PFAS compounds at very low concentrations.

In 2019, the Division lowered the Notification Levels (the “NLs”) for PFOA and PFOS to 5.1 and 6.5 parts per trillion (“PPT”), respectively. NLs are non-regulatory, precautionary health-based measures for concentrations of chemicals in drinking water that warrant notification and further monitoring and assessment.

In 2020, the Division lowered the Response Level (the “RL”) for PFOA and PFOS from 70 PPT, combined, to 10 and 40 PPT, respectively. RLs are non-regulatory, precautionary health-based measures that are set at higher levels than NLs and represent thresholds at which the Division recommends that water systems remove a water source from use or treat it.

In addition, on March 14, 2023, Maximum Contaminant Levels of 4 PPT for PFOA and PFOS and cumulative limits for certain other chemicals which are described below were proposed by the United States Environmental Protection Agency (the “EPA”). The EPA proposal is currently subject to public comment and there can be no assurance as to the timing or substance of any final EPA rule with respect to PFOA and PFOS.

The City is currently conducting trials of its treatment process pursuant to which it is assessing the Water Enterprise’s ability to meet the Maximum Contaminant Levels set forth in the EPA proposal.

In addition to PFOS and PFOA, the Division tasked the California Office of Environmental Health Hazard Assessment with evaluating and recommending NLs for the following additional PFAS compounds on February 6, 2020: perfluorohexane sulfonic acid (known as PFHxS), perfluorobutane sulfonic acid (known as PFBS), perfluorohexanoic acid (known as PFHxA), perfluoroheptanoic acid (known as PFHpA), perfluorononanoic acid (known as PFNA), perfluorodecanoic acid (known as PFDA) and 4,8-dioxia-3Hperfluorononanoic acid (known as ADONA). There can be no assurance as to the timing of the release of such recommendations. The establishment of a Hazard Index (a tool that assesses the cumulative health effect) for aggregate levels of the foregoing compounds other than ADONA is also included in the EPA’s March 14, 2023 regulatory proposal, which is described above.

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In April 2024, the United States Environmental Protection Agency (“USEPA”) adopted the Final PFAS National Primary Drinking Water Regulation. Specific Maximum Contaminant Levels (“MCLs”) adopted pursuant to the Safe Drinking Water Act are listed as follows for six PFAS compounds:

PFAS Compound Final MCL Goal Final MCL (Enforceable Levels) PFOA Zero

4.0 parts per trillion (ppt) (also
expressed as ng/L)
PFOS Zero 4.0 ppt
PFHxS 10 ppt 10 ppt
PFNA 10 ppt 10 ppt

HFPO-DA
(commonly known as GenX Chemicals) 10 ppt 10 ppt
Mixtures containing two or more of
PFHxS, PFNA, HFPO-DA, and PFBS
1 (unitless)
Hazard Index
1 (unitless)
Hazard Index
The final USEPA PFAS rule requires:

1. Public water systems must monitor for these PFAS and have three years to complete initial monitoring (by 2027), followed by ongoing compliance monitoring. Water systems must also provide the public with information on the levels of these PFAS in their drinking water beginning in 2027.

2. Public water systems have five years (by 2029) to implement solutions that reduce these PFAS if monitoring shows that drinking water levels exceed these MCLs.

3. Beginning in five years (2029), public water systems that have PFAS in drinking water which violates one or more of these MCLs must take action to reduce levels of these PFAS in their drinking water and must provide notification to the public of the violation.

On May 14, 2025, the USEPA announced its intention to extend the timelines for public water systems to comply with the MCLs for PFOA and PFOS to 2029. The USEPA also announced its intention to rescind the regulations and reconsider the regulatory determinations for PFHxS, PFNA, HFPO-DA and the Hazard Index mixture of these three PFAs plus PFBS to ensure that the determinations and any resulting drinking water regulation follow the legal process laid out in the Safe Drinking Water Act. According to the USEPA, the USEPA plans to issue a proposed rule in the fall of 2025 and finalize the new rule in the spring of 2026.

The City’s goal is to ensure that all drinking water served to customers meets or exceeds all applicable State and federal water quality standards, including those related to PFAS. The Utilities Department treats the Water Enterprise’s groundwater supplies for PFAS in accordance with State mandates, with PFAS levels shown to be below the applicable RLs after treatment and blending is undertaken. See the caption “—General—Water Treatment Plants” for a description of the City’s water treatment facilities.

The City does not currently anticipate that implementation of the lowered PFAS RL by the Division will compel it to construct significant additional PFAS treatment facilities or otherwise result in a material adverse effect on the operation of the Water Enterprise or the costs thereof. The projected operating results which are set forth under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” do not assume significant increases in water treatment or other Water Enterprise operating costs to meet State regulations relating to PFAS.

The City, together with the Utility Authority, has initiated litigation against certain PFAS manufacturers and users (the “PFAS Lawsuit”), to recover the costs of designing, constructing and operating and maintaining treatment facilities to address PFAS contamination in the City’s groundwater basins, and to recover other damages arising out of PFAS contamination in groundwater wells, including the additional costs of importing substitute water. There are three concurrent settlement agreements in process now with 3M, DuPont, and

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Tyco/BASF. In the 3M case, the City’s expected settlement is $20,917,833.68 in total less costs and fees. The 3M settlement funds will be disbursed in installments over time. The DuPont and Tyco/BASF settlement amounts are undetermined at this time. These settlement funds could be used to construct, operate and maintain PFAS treatment facilities for its groundwater supplies and other associated costs, including the additional costs of importing substitute water. The projected operating results set forth under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” do not reflect the receipt of any monetary award to the City or the Utility Authority as a result of the PFAS Lawsuit.

Drought Declarations
State and Federal Orders. In 2018, the California Governor signed Senate Bill 606 and Assembly Bill 1668 into law. These bills relate to water conservation and drought planning and empower DWR and the SWRCB to adopt long-term standards for the following: (i) indoor residential water use; (ii) outdoor residential water use; (iii) commercial, industrial and institutional water use for landscape irrigation; and (iv) water loss.

The indoor water use standard has been defined as 47 gallons per person per day (“GPCD”) beginning January 2025; the standard will decrease over time to 42 GPCD in January 2030. Standards for outdoor residential water use and commercial, industrial and institutional water use for landscape irrigation are still being developed.

Urban water suppliers will be required to stay within annual water budgets, based on these standards, for their service areas.

The City is unable to predict the effect on the Water Enterprise of the implementation of Senate Bill 606 and Assembly Bill 1668 or any future legislation with respect to water conservation. The City, however, is meeting and believes that it will be continue to be able to meet the 47 GPCD standard for indoor water use, along with annual State-mandated water use efficiency standards, based on the City’s current water demands and ongoing efforts to encourage conservation, as described below under the subcaption “—City Response to Drought.” The City also has a tiered rate structure for residential customers that further promotes water use efficiency by charging a higher rate for water use in excess of maximum amounts within each tier. See the caption “—Water Enterprise Rates and Charges—Current Rates and Charges.” Hydrological conditions in California can vary widely, both in location and from year to year. The water years 2020 through 2022 combined ranked as the three driest years in California’s statewide precipitation record. Beginning in April 2021, the Governor issued a series of drought emergency proclamations affecting various counties throughout the State, culminating in an October 19, 2021 proclamation declaring a drought state of emergency to be in effect statewide and directing local water suppliers to implement water shortage contingency plans at a level appropriate to local conditions. On March 28, 2022, the Governor issued an executive order directing the SWRCB to consider adopting regulations by May 25, 2022 that require urban water suppliers with water shortage contingency plans to implement, at a minimum, shortage response actions for a shortage level of up to 20 percent (a “Level 2” shortage). On May 24, 2022, in response to the executive order, the SWRCB adopted a new emergency water conservation regulation. The new regulation bans irrigating turf at commercial, industrial, and institutional properties, such as grass in front of or next to large industrial or commercial buildings. The ban does not include watering turf that is used for recreation or other community purposes, water used on residential lawns, or water used to maintain trees. The regulation also requires all urban water suppliers to implement conservation actions under Level 2 of their water shortage contingency.

The dry hydrology turned wet in winter 2022-23 as precipitation fell throughout the State replenishing reservoirs and causing flooding and requiring state of emergency declarations. Snowfall also covered many mountain ranges at unexpected levels adding water supply for later in the year. On May 24, 2023, the Governor issued an executive order easing water restrictions that were no longer necessary following a series of storms that ended the drought. The final SWP allocation for 2023 was 100%, which had not been seen in 17 years.

In alignment with the SWRCB’s 2022 adoption of long-term water use efficiency standards pursuant to AB 1668 and SB 606, the City is currently implementing Stage 2 of its Water Shortage Contingency Plan to proactively reduce demand, enhance drought resilience, and support compliance with California’s urban water

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use objectives. The City believes that it has significant water supplies and storage and is well positioned to respond to both drought and regulatory requirements. At this time, the City does not foresee a water supply shortage. See the subcaption “—Water Shortage Contingency Plan.” In August 2021, the federal government declared a water shortage at Lake Mead, which is a major storage reservoir on the Colorado River. As discussed under the caption “—Water Supply—Imported Water,” Colorado River supplies are among the water sources for MWD, which provides water to the City’s water wholesaler, WMWD. The water shortage declaration triggered cuts in water allocations for water users in Arizona and Nevada, although not for MWD or other users in California. Notwithstanding the foregoing, in December 2021, water users in California (including MWD), Arizona and Nevada agreed to voluntary cuts of 500,000 acre feet of water from the Colorado River in both 2022 and 2023, and MWD agreed to pay up to $20 million to certain agricultural rights holders that leave their land fallow. In March 2024, the United States Department of the Interior released a final supplemental environmental impact statement (the “EIS”) which proposes three alternatives for reducing Colorado River allocations in the American Southwest, including one alternative that could reduce California’s allocation by up to one quarter. There can be no assurance that subsequent declarations with respect to the Colorado River will not require mandatory water cuts to MWD should dry conditions persist future years.

Water Shortage Contingency Plan. The City’s water shortage contingency plan, which meets State guidelines for such plans, calls for the City to respond to a water shortage in stages as follows:
• Stage 1 is intended to reflect normal supply conditions and voluntary water conservation and is always in effect unless a higher stage has been implemented by the City Council. Under Stage 1, all normal water efficiency programs and water conservation regulations, including the City’s landscape design guidelines for commercial and industrial developments, are in effect. • Stage 2 is intended to effect a reduction in water use of 10% - 15%. Under Stage 2, the Stage 1 restrictions are in place and a base annual consumption amount is set for each customer, with the objective of reducing consumption by 10% - 15% below that amount. Under Stage 2, landscaping may be irrigated no more than three days per week between the hours of 8:00 p.m. and 10:00 a.m., hoses must be equipped with automatic shut-off nozzles, swimming pools and ornamental water features must be equipped with recirculating pumps, water may not be used to wash paved surfaces and restaurants may not serve water unless requested. • Stage 3 is intended to effect a reduction in water use of 16% - 20%. Under Stage 3, the Stage 1 and 2 restrictions are in place, customers must reduce consumption by 16% - 20% from the base annual consumption amount, landscaping may be irrigated no more than two days per week between the hours of 8:00 p.m. and 10:00 a.m., the operation of any ornamental water feature is prohibited and construction meters may only be issued when previously issued meters are returned. • Stage 4 is intended to effect a reduction in water use of 21% - 40%. Under Stage 4, the Stage 1, 2 and 3 restrictions are in place, customers must reduce consumption by 21% - 40% from the base annual consumption amount, landscape irrigation is limited to one day a week in the minimum amount that is necessary to support the survival of trees and shrubs, the washing of automobiles is prohibited except at commercial car washes and no new construction meters will be issued.
• Stage 5 is intended to effect a reduction in water use of over 40%. Under Stage 5, the Stage 1, 2, 3 and 4 restrictions are in place, customers must reduce consumption by over 40% from the base annual consumption amount, landscape irrigation is prohibited and no new connections to the Water Enterprise are permitted.

For planning purposes under the City’s water shortage contingency plan, demand is assumed to be 38,351 acre feet per year, the projected normal year demand in 2045.

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The City is empowered to enforce its water shortage contingency plan with successively increasing fines, the installation of flow restriction devices and the termination of water service.

Water consumption under Stages 3, 4 and 5 of the City’s water shortage contingency plan is subject to a temporary revenue stability charge in addition to normal water rates in order to ensure that the City has adequate revenues to cover fixed operating costs of the Water Enterprise. See the caption “—Water Enterprise Rates and Charges—Adopted Rates and Charges.”
The projected Water Enterprise operating results that are set forth under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” reflect the continued implementation of Stage 2 of the City’s water shortage contingency plan. The City does not currently expect that the implementation of the water shortage contingency plan in the future will have a material adverse effect on its ability to pay the 2025 Bonds from Net Revenues. As discussed under the caption “—Water Enterprise Rates and Charges,” the City’s rate structure consists of variable and fixed rate components.

Decreased water consumption is partially offset by a decrease in related variable costs, while fixed water charges largely cover the Water Enterprise’s fixed operating and maintenance costs. In addition, the City has covenanted to set Water Enterprise rates and charges in amounts that it expects to be sufficient to pay the 2025 Bonds from Net Revenues. See the caption “SECURITY FOR THE 2025 BONDS—Rate Covenant.” If a water shortage should arise again in the future, legal issues exist as to whether different California Water Code provisions or State regulations will be invoked to manage the allocation of water. Any curtailment pursuant to State orders could necessitate an increase in the City’s water rates to Water Enterprise customers.

See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES— Proposition 218” for a discussion of certain restrictions on the City’s ability to raise water rates.

Historical Water Enterprise Supply
The following table shows sources of water supply for the Water Enterprise for Fiscal Years 2020 through 2024.

Table 1
City of Corona
Historical Water Supply in Acre Feet
Fiscal Year
Ended June 30 Groundwater
Imported
Water
Reclaimed
Water Total
Percentage
Increase/
(Decrease)
2020 16,446 16,539 3,959 36,944 N/A%
2021 16,228 18,717 4,186 39,131 5.91
2022(1) 15,562 18,404 4,030 37,996 (2.90)
2023(2) 14,423 15,323 3,609 33,355 (12.21)
2024 14,376 15,606 3,368 33,350 0.00

(1) Decrease reflects conservation by customers in light of Statewide drought. See the caption “—Drought Declarations.” (2) Decrease reflects wet hydrological year.

Source: City.

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Historical Water Enterprise Deliveries
The following table shows potable and reclaimed water deliveries to Water Enterprise customers for Fiscal Years 2020 through 2024.

Table 2
City of Corona
Historical Water Enterprise Deliveries in Acre Feet(1)
Fiscal Year
Ended
June 30
Residential
Customers
Commercial
Customers
Other
Customers(2)
Reclaimed
Water
Customers(3) Total
Percentage
Increase/
(Decrease)
2020 21,340 2,645 3,287 3,959 32,604 N/A%
2021 22,864 2,630 3,670 4,186 34,766 6.63
2022(4) 22,125 2,773 3,594 4,030 33,926 (2.42)
2023(5) 19,474 2,547 2,866 3,609 29,694 (12.47)
2024 19,452 2,358 3,059 3,368 29,416 (0.94)

(1) Differences between water deliveries and water supplies set forth under the caption “—Historical Water Enterprise Supply” reflect unaccounted for water, including water losses and inaccuracies in water meter readings. (2) Reflects potable water deliveries to industrial, public agency, irrigation, agricultural and other customers. Reclaimed water deliveries to such customers are reflected in the Reclaimed Water Customers column. (3) Non-potable water is periodically added to recycled water deliveries to meet the demands of the City’s customers during peak summer months. As such, deliveries to recycled water customers shown in the table exceed recycled water supplies set forth in Table 2 in certain Fiscal Years. See the captions “—Water Supply—Recycled Water.” (4) Decrease reflects conservation by customers in light of Statewide drought. See the caption “—Drought Declarations.” (5) Decrease reflects wet hydrological year.

Source: City.

Historical water deliveries reflect connections to the Water Enterprise as well as water demand, which can be affected by weather conditions, State mandates and other factors.

Historical Water Enterprise Connections
The following table shows the number of connections to the Water Enterprise for Fiscal Years 2020 through 2024.

Table 3
City of Corona
Historical Water Enterprise Connections
Connection Type
Fiscal Year
2020
Fiscal Year
2021
Fiscal Year
2022
Fiscal Year
2023
Fiscal Year
2024
Residential 40,428 41,005 41,221 41,323 41,687
Commercial 2,971 3,027 3,104 3,111 3,145
Other(1) 1,499 1,513 1,535 1,538 1,534
Reclaimed Water 390 403 396 430 410
TOTAL 45,288 45,948 46,256 46,402 46,776
Percentage Increase/(Decrease) 0.9% 1.5% 0.7% 0.3% 0.8%

(1) Includes industrial, public agency, irrigation, agricultural and other customers.

Source: City.

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Historical Water Enterprise Sales Revenues
The following table shows the sales revenues of the Water Enterprise for Fiscal Years 2020 through 2024. Connection fees are not included in the below numbers.

Table 4
City of Corona
Historical Water Enterprise Sales Revenues
Fiscal
Year
Ended
June 30
Residential
Customers
Commercial
Customers
Other
Customers(1)
Reclaimed
Water
Customers(2) Total
Percentage
Increase/
(Decrease)
2020 $34,983,946 $5,451,317 $ 8,177,929 $3,067,417 $51,680,609 N/A 2021 39,371,891 5,434,933 9,946,563 3,733,562 58,486,949 13.17% 2022 40,118,327 5,880,322 10,019,496 4,007,260 60,025,405 2.63 2023(3) 38,507,836 5,753,165 8,406,768 3,829,043 56,496,812 (5.89) 2024 41,812,463 6,147,463 9,093,456 3,947,047 61,000,429 7.97

(1) Reflects potable water sales revenues from industrial, public agency, irrigation, agricultural and other customers. Reclaimed water sales revenues from such customers are reflected in the Reclaimed Water Customers column. (2) These amounts differ from the amounts in Table 15 under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Historical Operating Results and Debt Service Coverage” because the above amounts do not include revenues from wholesale water sales.
(3) Decrease reflects wet hydrological year.

Source: City.

Water Enterprise sales revenues reflect water deliveries as well as adopted rates and charges. See the captions “—Historical Water Enterprise Deliveries” and “—Water Enterprise Rates and Charges.”

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Largest Water Enterprise Customers
The following table shows the largest Water Enterprise customers for Fiscal Year 2025, as determined by annual payments. The below table reflects information for both potable and recycled water customers of the Water Enterprise.

Table 5
City of Corona
Ten Largest Water Enterprise Customers
Customer Customer Type
Annual
Payment
Percentage of Total Water
Enterprise Sales Revenues
City of Corona Governmental $ 4,187,657 6.19%
Corona-Norco USD Public Agency 1,053,575 1.56
Eagle Glen Master HOA Commercial 472,751 0.70
Eagle Glen County Club, LLC Commercial 377,227 0.56
Raintree Corona Pointe, LLC Multi-Family Residential 361,036 0.53 AMFP VI Ashton LLC Multi-Family Residential 257,383 0.38 Bedford Master Association Commercial 204,039 0.30
City of Corona WRF 3 Governmental 194,563 0.29
Owner LLC 173,723 0.26
INL Via Pacifica 2015, LLC Multi-Family 173,079 0.26
Total $ 7,455,033 11.02%

Source: City.

These customers accounted for approximately 11.02% of total Water Enterprise sales revenues and service charges in Fiscal Year 2025.

Water Enterprise Rates and Charges
General. The Water Enterprise’s rates and charges are set by the City Council and are not subject to the jurisdiction of, or regulation by, the California Public Utilities Commission or any other regulatory body.

The City is, however, required to comply with the notice, hearing and majority protest provisions of Article XIIID of the State Constitution, which is popularly known as Proposition 218, as to Water Enterprise rates and charges. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES—Proposition 218” for further information with respect to Proposition 218.

The City Council sets water rates and charges at a level that it determines is sufficient to pay all Direct Costs of groundwater pumping and imported water purchases, to recover Allocated Costs and other operating expenses for the Water Enterprise, to make debt service payments and to maintain appropriate reserves for the Water Enterprise.

On December 4, 2024, the City Council adopted potable and reclaimed water rates effective January 3, 2025 and each January 1 thereafter through January 1, 2029 (the “Adopted Rate Plan”) in accordance with the provisions of Proposition 218. The projected operating results which are set forth under the caption “WATER ENTERPRISE FINANCIAL INFORMATION—Projected Operating Results and Debt Service Coverage” assume Water Enterprise rate increases in accordance with the Adopted Rate Plan through January 1, 2029.

There can be no assurance, however, that the City Council will not repeal or modify the rates that are set forth in the Adopted Rate Plan in the future or that the City’s ratepayers will not approve an initiative to repeal or modify any increase in water rates and charges approved by the City Council.

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The Utility Authority is subject to certain covenants with respect to the 2025 Bonds which require the Utility Authority to fix, prescribe, revise and collect rates and charges for the services and facilities furnished by the Water Enterprise, or cause the City to do so, during each Fiscal Year which are sufficient to yield Net Revenues at least equal to 125% of debt service of the Water Enterprise in such Fiscal Year. See the caption “SECURITY FOR THE 2025 BONDS—Rate Covenant.”
Adopted Rates and Charges. The City’s water rates and charges include the following: (1) a monthly commodity rate based on water usage; and (2) a fixed monthly service charge based on meter size, which is referred to as a Readiness-to-Serve Charge (the “RTS Charge”). (1) Commodity Rates. The City imposes commodity rates on a tiered basis per hundred cubic feet of water (“CCF”) used in each billing cycle. Adopted commodity rates under the Adopted Rate Plan are set forth below.

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Table 6
City of Corona
Water Commodity Rates per CCF
Tier Tier Description 1/3/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 Residential Customers
1 Water use up to efficient indoor water budget $1.96 $2.13 $2.32 $2.53 $2.76 2 Water use up to efficient outdoor water budget 3.31 3.60 3.93 4.28 4.67 3 Water use 1% - 50% over water budget (indoor + outdoor) 4.38 4.77 5.20 5.67 6.18 4 Water use greater than 50% over water budget (indoor + outdoor) 5.22 5.69 6.20 6.76 7.36
Non-Residential Customers
1 Water use up to efficient water budget $3.31 $3.60 $3.93 $4.28 $4.67 2 Water use 1% - 50% over water budget 4.38 4.77 5.20 5.67 6.18 3 Water use greater than 50% over water budget 5.22 5.69 6.20 6.76 7.36 Non-Residential Customers with Dedicated Irrigation Meters 1 Water use up to efficient outdoor water budget $3.31 $3.60 $3.93 $4.28 $4.67 2 Water use 1% - 50% over outdoor water budget 4.38 4.77 5.20 5.67 6.18 3 Water use greater than 50% over outdoor water budget 5.22 5.69 6.20 6.76 7.36 Reclaimed Water
1 Water use up to efficient water budget $2.37 $2.46 $2.56 $2.66 $2.77 2 Water use over water budget 2.60 2.71 2.82 2.93 3.05

Source: City.

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(2) Fixed Monthly RTS Charge. Fixed monthly RTS charges based on water meter size under the Adopted Rate Plan are set forth below.

Table 7
City of Corona
RTS Charges
Potable Water
Meter Size 1/3/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 5/8” $ 32.79 $ 35.75 $ 38.96 $ 42.47 $ 46.29
3/4” 42.94 46.80 51.02 55.61 60.61
1” 63.23 68.92 75.12 81.88 89.25
1½” 113.94 124.20 135.38 147.56 160.84
2” 174.81 190.54 207.69 226.38 246.75
3” 367.54 400.62 436.67 475.97 518.81
4” 651.56 710.20 774.12 843.79 919.74
6” 1,635.51 1,782.70 1,943.15 2,118.03 2,308.65
8” 2,852.76 3,109.51 3,389.36 3,694.40 4,026.90
10” 4,272.88 4,657.44 5,076.61 5,533.51 6,031.52

Source: City.

Reclaimed Water
Meter Size 1/3/2025 1/1/2026 1/1/2027 1/1/2028 1/1/2029 5/8” $ 26.64 $ 27.70 $ 28.81 $ 29.96 $ 31.16
3/4” 35.95 37.38 38.88 40.43 42.05
1” 54.57 56.75 59.02 61.38 63.84
1½” 101.12 105.16 109.37 113.75 118.30
2” 156.98 163.26 169.79 176.58 183.65
3” 333.88 347.24 361.13 375.57 390.60
4” 594.58 618.36 643.10 668.82 695.57
6” 1,497.70 1,557.61 1,619.91 1,684.71 1,752.10
8” 2,614.96 2,719.56 2,828.34 2,941.48 3,059.14
10” 3,918.44 4,075.17 4,238.18 4,407.71 4,584.02

Source: City.

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Capacity Fees. The City charges a fee to customers for connecting to the Water Enterprise. Current capacity fees are as follows:

Table 9
City of Corona
Water Enterprise Capacity Fees
Meter Size Capacity Fee
1/2” $ 5,024.00
1/2” High Density 2,512.00
5/8” 6,699.00
5/8” High Density 3,350.00
3/4” 10,048.00
3/4” High Density 5,024.00
1” 15,072.00
1½” 25,121.00
2” 50,241.00
3” 80,386.00
4” 150,724.00
6” 251,207.00

Source: City.

Comparison to Nearby Service Providers. The table below sets forth a comparison of the City’s typical water bill (monthly equivalent) for a single family residential user to those of certain nearby water purveyors.

Information for agencies other than the City is as of calendar year 2024 where available, while information for the City is as of the date of this Official Statement.

Table 10
City of Corona
Water Rate Comparison
Community
1” Meter Monthly
Fixed Rate Rate per Unit(1)
Western Municipal Water District – Murrieta Division $78.70 $2.43 City of Norco 71.01 2.70
Elsinore Valley Municipal Water District 61.07 3.13
City of Corona 55.18 1.93
City of Riverside 46.17 1.34

(1) One unit is equivalent to 100 cubic feet (748 gallons) of water.

Source: City.

Water Enterprise Collection Procedures
The Utilities Department is on a monthly billing cycle for water, wastewater, electric and emergency management system service, as applicable. A consolidated bill is sent out every month to Utilities Department customers. Payment is due by the 20th day after the billing date and is considered delinquent if not paid by that date. If payment is not received, a delinquency message appears on a reminder bill, with a 10% penalty assessment. Approximately 15 days prior to service disconnection, a notice of shutoff of service will be mailed to the billing address of the customer. A processing charge will be assessed on that notice, which informs the customer that service will be discontinued if the bill is not paid in full within 80 days of the original billing date.

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Accounts that have been shut off may be reconnected upon payment in full of outstanding balances and a reconnection fee of $53.

The suspension of water shutoffs through December 31, 2021 due to COVID-19 prevented the City from shutting off delinquent accounts. On February 28, 2022, the City re-instituted its standard collection procedures which were in place prior to the pandemic. Furthermore, the City also delayed shutting off delinquent accounts during the period from August 2022 through February 2023 due to staffing levels.

Delinquent Water Enterprise receivables totaled approximately $1,371,407.51 as of June 30, 2024.

Approximately 4,173 accounts are currently more than 60 days delinquent, of which 1,520 have entered into payment plans. The City reports that nearly all customers pay their bills in full, including late charges, prior to shutoff.

The 2025 Project and Future Water Enterprise Improvements The City projects total capital improvements to the Water Enterprise of approximately $106.0 million during Fiscal Years 2026 through 2029, including: (i) the construction of a 2.5 million gallon new water storage tank (approximately $14.5 million); (ii) the construction of the Glen Ivy Water Treatment Plant (approximately $11.0 million); (iii) advanced metering infrastructure upgrade (approximately $21.1 million); (iv) waterline replacements (approximately $38.7 million); (v) wellhead treatment facilities and other projects to remediate TCP and PFAS (approximately $6.5 million); (vi) well and pump rehabilitations (approximately $1.4 million); (vii) the construction of a new reclaimed waterline (approximately $3.5 million); (viii) the construction of a new pump station for the reclaimed water system (approximately $2.5 million); and (ix) other miscellaneous Water Enterprise improvements (approximately $6.9 million).

Such capital improvements are expected to be financed by a combination of the proceeds of the Series 2025 Bonds, Water Enterprise reserves, State and federal grants and Net Revenues remaining after the payment of debt service on the 2025 Bonds and Parity Obligations. As described under the caption “PLAN OF FINANCE,” approximately $43 million of the proceeds of the Series 2025 Bonds are expected to be used to finance certain of the capital projects described above. Furthermore, as described further under the caption “THE CITY—Other Obligations,” the Utility Authority is currently in the process of applying for an SWRCB state revolving fund loan to finance certain costs of the wellhead treatment facilities and other projects to remediate TCP and PFAS.

Projected Water Enterprise Supply
The following table shows the sources of water supply for the Water Enterprise projected by the City for Fiscal Years 2025 through 2029.

Table 11
City of Corona
Projected Water Supply in Acre Feet
Fiscal Year
Ending June 30 Groundwater
Imported
Water
Reclaimed
Water Total
Percentage
Increase/
(Decrease)
2025 14,852 18,337 4,012 37,201 11.5%
2026 14,550 18,400 4,213 37,163 (0.1)
2027 14,550 18,400 4,213 37,163 --
2028 14,550 18,400 4,213 37,163 --
2029 14,550 18,400 4,213 37,163 --

Source: City.

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Projected Water Enterprise Deliveries
The following table shows Water Enterprise deliveries projected by the City for Fiscal Years 2025 through 2029.

Table 12
City of Corona
Projected Water Enterprise Deliveries in Acre Feet
Fiscal Year
Ending
June 30
Residential
Customers
Commercial
Customers
Other
Customers(1)
Reclaimed
Water
Customers Total
Percentage
Increase/
(Decrease)
2025 21,124 2,613 3,738 3,927 32,582 .110%
2026 21,230 2,627 3,757 3,946 32,745 .005
2027 21,336 2,640 3,776 3,966 32,909 .005
2028 21,443 2,653 3,795 3,986 33,073 .005
2029 21,550 2,666 3,814 4,006 33,238 .005

(1) Reflects projected potable water deliveries to industrial, public agency, irrigation, agricultural and other customers. Projected reclaimed water deliveries to such customers are reflected in the Reclaimed Water Customers column.

Source: City.

Water Enterprise deliveries can be affected by a number of factors, including connections to the Water Enterprise, State mandates and weather conditions. See the caption “—Projected Water Enterprise Connections” below.

Projected Water Enterprise Connections
The following table shows the number of retail connections to the Water Enterprise projected by the City for Fiscal Years 2025 through 2029.

Table 13
City of Corona
Projected Water Enterprise Connections
Connection Type
Fiscal Year
2025
Fiscal Year
2026
Fiscal Year
2027
Fiscal Year
2028
Fiscal Year
2029
Residential 41,958 42,168 42,379 42,591 42,803
Commercial 3,138 3,154 3,169 3,185 3,201
Other(1) 1,536 1,544 1,551 1,559 1,567
Reclaimed Water 417 419 421 423 425
TOTAL 47,049 47,285 47,520 47,758 47,996
Percentage Increase/(Decrease) .58% .50% .50% .50% .50%

(1) Includes industrial, public agency, irrigation, agricultural and other customers.

Source: City.

Projected increases in connections reflect expectations of development within the Water Enterprise service area.

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Projected Water Enterprise Sales Revenues
The following table shows the sales revenues of the Water Enterprise projected by the City for Fiscal Years 2025 through 2029. The projections: (i) are based on the increases in projected water deliveries that are described under the caption “—Projected Water Enterprise Deliveries;” and (ii) assume Water Enterprise rate increases in accordance with the Adopted Rate Plan “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES—Proposition 218.”
Table 14
City of Corona
Projected Water Enterprise Sales Revenues
Fiscal Year
Ending
June 30
Potable Water
Customers(1)
Reclaimed Water
Customers Total
Percentage
Increase/
(Decrease)
2025 $58,417,134 $5,468,066 $63,885,200 0.67%
2026(2) 66,978,154 5,582,438 72,560,592 13.58
2027 73,341,967 5,781,149 79,123,116 9.04
2028 80,311,960 5,988,329 86,300,289 9.07
2029 87,945,531 6,204,338 94,149,869 9.10

(1) Reflects projected potable water sales revenues from residential, commercial industrial, public agency, irrigation, agricultural and other customers. Projected reclaimed water sales revenues from such customers are reflected in the Reclaimed Water Customers column.
(2) As described under the caption “THE WATER ENTERPRISE—Water Enterprise Rates and Changes,” the City Council adopted increases to the potable and reclaimed water rates which were effective January 3, 2025 and provide for rate increases on January 1 of each year through January 1, 2029.

Source: City.

WATER ENTERPRISE FINANCIAL INFORMATION
Available Cash
As of June 30, 2024, the Water Enterprise maintained approximately $44,277,995 in cash on hand, capital replacement reserves, operating reserves and other available moneys, which is equivalent to approximately 216 days’ operating expenses of the Water Enterprise. See Notes 1.C and 3 to the financial statements set forth in Appendix A for further information with respect to the City’s reserves and investment policies. See the caption “THE CITY—Governance and Management—Management Policies—Water Utility Fund Reserve Policy” for a discussion of the Water Utility Fund reserve policy. As of June 30, 2024, $3,319,216 was held in the Water Utility Fund reserve. Such amount is included in the $44,277,995 cash on hand amount that is discussed above. As of June 30, 2025, the Water Enterprise maintained approximately $41,654,286 in cash on hand.

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Historical Operating Results and Debt Service Coverage
The following table is a summary of operating results of the Water Enterprise for Fiscal Years 2019-20 through Fiscal Years 2024, which are the five most recent audited Fiscal Years. These results have been derived from the audited financial statements of the City but exclude certain receipts which are not included as Gross Revenues under the Indenture and certain non-cash items and include certain other adjustments. Projections for Fiscal Year 2025 are provided in Table 16 and are based on unaudited estimated results for Fiscal Year 2025.

Table 15
City of Corona
Historical Water Enterprise Operating Results and Debt Service Coverage Fiscal Year Ended June 30
2020 2021 2022 2023 2024
Revenues
Water Sales(1) $ 47,810,060 $ 53,667,203 $ 55,566,534 $ 52,117,002 $ 55,415,204 Reclaimed Water Sales(1) 3,870,549 4,819,746 4,458,871 4,379,810 5,585,225 Fees and Permits(2) 4,596,531 4,241,960 3,734,857 3,132,080 2,716,422 Fines and Penalties(3) 412,308 (2,271) 231,125 627,664 536,855 Other(4) 2,333,812 2,055,449 2,215,013 21,712,011 4,761,124 Total Revenues $ 59,023,260 $ 64,782,086 $ 66,206,399 $ 81,968,568 $ 69,014,829 Operation and Maintenance Costs
Personnel Services(5) $ 10,381,887 $ 8,351,899 $ 8,747,754 $ 8,829,560 $ 10,016,032 Contractual(6) 4,294,314 3,860,424 3,876,272 3,744,961 14,204,491 Water Purchases 14,032,237 17,627,566 16,833,727 13,541,888 17,466,594 Material and Supplies(6) 13,136,476 14,292,736 14,136,601 13,968,015 5,316,153 Utilities 4,794,237 5,797,380 6,037,175 6,015,132 6,221,747 Total Operation and Maintenance Costs $ 46,639,151 $ 49,930,006 $ 49,631,529 $ 46,099,556 $ 53,225,017 Net Revenues $ 12,384,109 $ 14,852,080 $ 16,574,871 $ 35,869,012 $ 15,789,812 Debt Service
SRF Loan $ 1,915,133 $ 1,912,901 $ 1,912,851 $ 1,912,046 $ 1,911,480 2012 Bonds 2,861,651 2,716,212 2,717,850 2,614,439
2023 Bonds -- 2,508,160
Total Debt Service $ 4,776,784 $ 4,629,113 $ 4,630,700 $ 4,526,485 $ 4,419,640 Debt Service Coverage 2.59 3.21 3.58 7.92 3.57
Remaining Net Revenues $ 7,607,325 $ 10,222,968 $ 11,944,171 $ 31,342,527 $ 11,370,172

(1) Decreases in Fiscal Year 2023 reflect wet hydrological year. These amounts differ from the amounts in Table 4 under the caption “THE WATER ENTERPRISE—Historical Water Enterprise Sales Revenues” because the above amounts include revenues from wholesale reclaimed water sales.
(2) Decreases in each Fiscal Year due to lower Development Impact Fee from CFD, as significant development concluded in 2022. (3) Decreases in Fiscal Years 2021 through 2022 reflect moratorium on collection of late fees and penalties during COVID-19 pandemic. See the caption “THE WATER ENTERPRISE—Water Enterprise Collection Procedures.” (4) Includes investment earnings, lease income and MWD Local Resources Program funding. Increase in Fiscal Year 2023 due to $19.1 million of settlement funds related to TCP. See the caption “THE WATER ENTERPRISE—Water Quality.” (5) Decreased amounts in Fiscal Years 2021 through 2023 reflect combined effect of adjustments arising from the implementation of GASB 68 (as discussed under the caption “—Employee Benefits—Pension Obligations”) and reorganization of Utilities Department under which certain employees were allocated to the City’s General Fund and not replaced by additional Utilities Department hires. Increase in Fiscal Year 2024 due to increase in pension costs, medical costs and additional full-time employees. (6) Increase in Fiscal Year 2024 for “Contractual” due to reclassification of certain capital costs/asset categorization, and fluctuations in materials costs related to chemicals, from “Materials and Supplies.” Source: City.

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Projected Operating Results and Debt Service Coverage
Projected operating results for the Water Enterprise for Fiscal Years 2025 through 2029, reflecting certain significant assumptions concerning future events and circumstances (including those set forth in the footnotes to the table), are set forth below. All of such assumptions are material in the development of the City’s financial projections, and variations in the assumptions may produce substantially different financial results.

Actual operating results achieved during the projection period may vary from those presented in the forecast and such variations may be material.

Table 16
City of Corona
Projected Water Enterprise Operating Results and Debt Service Coverage Fiscal Year Ending June 30
2025(1) 2026(1) 2027 2028 2029
Revenues
Water Sales(2) $58,417,134 $ 66,978,154 $ 73,341,967 $80,311,960 $ 87,945,531 Reclaimed Water Sales(2) 5,468,066 5,582,438 5,781,149 5,988,329 6,204,338 Fees and Permits(3) 5,112,506 4,899,184 4,923,680 4,948,298 4,973,040 Fines and Penalties(4) 600,008 588,310 591,252 594,208 597,179 Other(5) 2,792,985 2,494,628 3,075,600 2,688,667 2,793,753 Total Revenues $72,390,699 $ 80,542,714 $ 87,713,648 $94,531,462 $ 102,513,840 Operation and Maintenance Costs
Personnel Services(6) $ 9,610,751 $ 10,998,479 $ 11,878,357 $12,353,491 $ 12,847,631 Contractual(7) 4,230,964 4,053,436 4,164,905 4,279,440 4,397,125 Water Purchases(8) 20,965,880 18,726,816 20,142,564 21,665,342 23,303,241 Material and Supplies(9) 17,657,723 18,069,521 19,008,119 19,902,449 20,798,429 Utilities(10) 7,122,129 7,136,084 7,380,852 7,634,015 7,895,862 Total Operation and Maintenance Costs $59,587,447 $ 58,984,336 $ 62,574,797 $65,834,737 $ 69,242,288 Net Revenues $12,803,253 $ 21,558,378 $ 25,138,851 $28,696,725 $ 33,271,553 Debt Service
SRF Loan(11) $ 1,944,995 $ 1,944,995 -- -- --
2023 Bonds 2,531,750 2,521,875 $ 2,518,000 $ 2,519,625 $ 2,521,375 2025 Bonds(12)-- 1,899,931 2,743,000 2,744,750 2,744,750 Total Debt Service $ 4,476,746 $ 6,365,931 $ 5,261,000 $5,264,375 $ 5,266,125 Debt Service Coverage 2.86 3.39 4.78 5.45 6.32
Remaining Net Revenues $ 8,326,507 $ 15,191,577 $19,877,851 $23,432,350 $ 28,005,428

(1) Based on budgeted amounts for Fiscal Years 2025 and 2026. (2) Includes projected revenues from commodity rates and RTS Charges based on the Adopted Rate Plan (3) Reflects projected development within the City.
(4) Project to year over year trends. The decrease in penalty revenues resulting from the availability of payment plans that reduce account delinquency.
(5) Includes investment earnings and lease income.
(6) Projected to decrease by approximately 8% in Fiscal Year 2027 (reflecting changes in allocation of personnel to Utilities Department and other adjustments in the City’s memoranda of understanding with Utilities Department personnel) and to increase by approximately 4% per annum thereafter.
(7) Projected to increase by approximately 2.75% per annum beginning Fiscal Year 2027 (reflecting projected cost increases resulting from inflation)
(8) Projected to increase by approximately 7.56% per annum beginning Fiscal Year 2027 (reflecting pass-through of rate increases from WMWD, the City’s wholesale supplier). See the caption “THE WATER ENTERPRISE—Water Supply—Imported Water.” (9) Projected to increase by approximately 5.3% per annum beginning Fiscal Year 2027 (reflecting cost increases resulting from inflation) (10) Projected to increase by approximately 3.43% per annum beginning in Fiscal Year 2027 (reflecting increase in energy costs) (11) The final payment on the SRF Loan is due on September 30, 2025. (12) Preliminary, subject to change.

Source: City.

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Employee Benefits
Pension Obligations. Accounting and financial reporting by state and local government employers for defined benefit pension plans is governed by GASB Statement No. 68 (“GASB 68”). GASB 68 includes the following components: (i) unfunded pension liabilities are included on the employer’s balance sheet; (ii) pension expense incorporates rapid recognition of actuarial experience and investment returns and is not based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates are required to be used for underfunded plans in certain cases for purposes of the financial statements; (iv) closed amortization periods for unfunded liabilities are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns will be recognized over a closed five-year smoothing period.

GASB 68 affects the City’s accounting and reporting requirements, but it does not change the City’s pension plan funding obligations.

The City participates in a Miscellaneous Plan to fund pension benefits for employees that serve the Water Enterprise. The City’s pension plan is administered by the California Public Employees’ Retirement System (“CalPERS”). CalPERS administers agent multiple-employer public employee defined benefit pension plans for all of the City’s full-time and certain part-time employees. CalPERS provides retirement, disability and death benefits to plan members and beneficiaries and acts as a common investment and administrative agent for participating public entities within the State, including the City. CalPERS plan benefit provisions and all other requirements are established by State statute and the City Council.

City employees are subject to different benefit levels based on their hire date. Current benefit provisions for City employees are set forth below.

Table 17
City of Corona
CalPERS Miscellaneous Plan – Summary of Benefit Provisions Employees Hired
Before January
1, 2013
Employees Hired On or
After January 1, 2013 (Not
Prior CalPERS Members)
Benefit Formula 2.7% @ age 55 2.0% @ age 62
Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments Monthly for life Monthly for life
Minimum Retirement Age 50 50
Monthly Benefits as % of
Eligible Compensation

2.0% - 2.7% 1.0% - 2.5%
Employee Normal Cost 8.0%(1) 6.5%(1)
Employer Normal Cost Rate 11.53%(2) 11.53%(2)

(1) Employees are required to make the full employee contribution themselves. The City does not make any portion of the employee contribution.
(2) The Employer Normal Cost Rate shown is a blended rate for all benefit groups in the plan. For a breakout of the normal cost by benefit group, refer to the most recent actuarial valuation.

Source: City, CalPERS Actuarial Valuation as of June 30, 2024.

Contributions to the City’s pension plan consist of: (a) contributions from plan participants (i.e., employees); and (b) contributions by the City.

City employees who were hired on or after January 1, 2013 and who were not previously CalPERS members receive benefits based on 2.0% at age 62 formula. Such employees are required to make the full amount of required employee contributions themselves under the California Public Employees’ Pension Reform Act of 2013 (“AB 340”), which was signed by the State Governor on September 12, 2012. AB 340 established

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a new pension tier for such employees. Benefits for such participants are calculated on the highest average annual compensation over a consecutive 36-month period. Employees are required to pay at least 50% of the total normal cost rate. AB 340 also capped pensionable income as noted below. Amounts are set annually, subject to Consumer Price Index increases, and retroactive benefits increases are prohibited, as are contribution holidays and purchases of additional non-qualified service credit.

Table 18
City of Corona
Pensionable Income Caps for Calendar Year 2025 (AB 340 and Non-AB 340 Employees) Employees Hired Before
January 1, 2013
(Non-AB 340 Employees)
Employees Hired On or After
January 1, 2013
(AB 340 Employees)
Maximum Pensionable Income $350,000 $186,096
Maximum Pensionable Income if
also Participating in Social Security N/A $155,081

Source: CalPERS Circulation Letter 200-001-25 for 2025.

Additional employee contributions, limits on pensionable compensation and higher retirement ages for new members as a result of the passage of AB 340 are expected to reduce the City’s unfunded pension lability and potentially reduce City contribution levels in the long term.

The City is also required to contribute the actuarially determined remaining amounts necessary to fund benefits for its members. Employer contribution rates for all public employers are determined on an annual basis by the CalPERS actuary and are effective on the July 1 following notice of a change in the rate. Total plan contributions are determined through the CalPERS annual actuarial valuation process. The total minimum required employer contribution is the sum of: (i) the plan’s employer normal cost rate, which funds pension benefits for current employees for the upcoming Fiscal Year (expressed as a percentage of payroll); plus (ii) the employer unfunded accrued liability contribution amount, which funds pension benefits that were previously earned by current and former employees (billed monthly).

For Fiscal Year 2023, required employer normal cost rates as a percentage of payroll were 10.88% for Miscellaneous Plan employees. For Fiscal Year 2024, required employer normal cost rates as a percentage of payroll are 12.03% for Miscellaneous Plan employees.

For Fiscal Year 2023, the total required employer payment of the unfunded accrued liability for the City’s Miscellaneous Plan was $9,471,994, of which $1,699,138 was allocable to the Water Enterprise. For Fiscal Year 2024, there was no required employer payment of the unfunded accrued liability for the City’s Miscellaneous Plan due to the City having paid off the balance with pension obligation bond proceeds in 2021.

In addition to amounts that are required to be funded by CalPERS’ actuary, the City has elected to fund additional amounts to a trust that was established in 2022 under Internal Revenue Code Section 115 (the “Pension Benefits Trust”). The Pension Benefits Trust and investment earnings on the deposits therein are irrevocable and constitute funding contributions of the City that will be remitted to CalPERS at a later date. The City’s total pension assets include funds held by both CalPERS and the Pension Benefits Trust. The funds held in the Pension Benefits Trust are legally protected from the claims of the general creditors of the City. As of June 30, 2025, the City held $54,892,853 in the Pension Benefits Trust.

Beginning in Fiscal Year 2018, CalPERS began collecting employer contributions toward a pension plan’s unfunded liability as dollar amounts instead of the prior method of a percentage of payroll. According to CalPERS, this change was intended to address potential funding issues that could arise from a declining payroll or a reduction in the number of active members in the plan. Funding the unfunded liability as a percentage of

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payroll could lead to underfunding of pension plans. Due to stakeholder feedback regarding internal needs for total contributions expressed as an estimated percentage of payroll, the CalPERS reports include such results in the contribution projection for informational purposes only. Contributions toward a pension plan’s unfunded liability will continue to be collected as set dollar amounts.

The City’s required contributions to CalPERS fluctuate each year and, as noted, include a normal cost component and a component that is equal to an amortized amount of the unfunded liability. Many assumptions are used to estimate the ultimate liability of pensions and the contributions that will be required to meet those obligations. The CalPERS Board of Administration has adjusted and may in the future further adjust certain assumptions used in the CalPERS actuarial valuations, which adjustments may increase the City’s required contributions to CalPERS in future years. Accordingly, the City cannot provide any assurances that the City’s required contributions to CalPERS in future years will not significantly increase (or otherwise vary) from any past or current projected levels of contributions. CalPERS earnings reports for Fiscal Years 2013 through 2024 report investment gains (and losses) of approximately 13.2%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%, 4.7%,

21.3%, (6.1%), 5.8% and 9.3%, respectively. CalPERS preliminary earnings report for Fiscal Year 2024-25 reported investment gains of approximately 11.6%. Future earnings performance may increase or decrease future contribution rates for plan participants, including the City. The City notes that CalPERS’ earnings in Fiscal Year 2020 were below its investment targets as a result of stock market declines in the wake of the COVID-19 outbreak, which could increase future contribution rates for plan participants, including the City.

On December 21, 2016, the CalPERS Board of Administration voted to lower its discount rate from

7.50% to 7.00% over a three period. For public agencies such as the City, the new discount rate took effect July 1, 2017. Lowering the discount rate means that employers which 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 will also see their contribution rates rise under AB 340. The reduction of the discount rate will result in average employer rate increases of approximately 1% to 3% of normal cost as a percentage of payroll for most retirement plans such as the City’s plans. Additionally, many employers will see a 30% to 40% increase in their current unfunded accrued liability payments (relative to the unfunded accrued liability payments projected in the June 30, 2015 valuation report) for pension plans. These payments are made to amortize unfunded liabilities over 20 years to bring pension funds to a fully funded status over the long-term.

The announcement on July 12, 2021 that CalPERS achieved investment returns of 21.3% in Fiscal Year 2021 caused the CalPERS Board of Administration to lower CalPERS’ discount rate from 7.00% to 6.80% in fall 2021 in accordance with a risk mitigation policy that was adopted in 2015, which calls for the discount rate to be lowered if returns exceed the then-current discount rate by two or more percentage points. Lowering the discount rate means that 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 who were not previously CalPERS members will also see their contribution rates rise under AB 340.

The table below is derived from CalPERS’ annual valuation report as of June 30, 2024 for the City’s Miscellaneous Plan, which was completed in July 2025, and shows the required and projected employer contributions (before cost sharing) for the next six fiscal years. Projected results reflect the adopted changes to the discount rate described in the CalPERS annual valuation reports. Such projections also assume that all actuarial assumptions will be realized and that no further changes to assumptions, contributions, benefits, or funding will occur during the projection period. The projected normal cost percentages in the projections below does not reflect that the normal cost will decline over the time as new employees are hired into lower cost benefit tiers after the passage of AB 340.

The following projections assumed the investment return for fiscal year 2024-25 would be 6.8%. As described above, CalPERS announced preliminary investment returns of 11.6% for Fiscal Year 2025. As a result, the actual contribution requirements for Fiscal Year 2028 and the following years shown below can be expected to differ from such projections.

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Table 19
City of Corona
Projected Future Employer Contributions – CalPERS Miscellaneous Plan Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2024-25 and Beyond) Fiscal Year 2026-27 2027-28 2028-29 2029-30 2030-31 2031-32 Normal Cost % 11.24% 11.1% 10.9% 10.7% 10.5% 10.3%
UAL Payment $3,795,268 $4,208,000 $4,621,000 $4,445,000 $4,188,000 $4,188,000 Total as a % of Payroll 20.42% 21.0% 21.5% 20.6% 19.6% 19.1% Projected Payroll $41,343,287 $42,500,899 $43,690,925 $44,914,270 $46,171,870 $47,464,683

Source: CalPERS’ Annual Valuation Report as of June 30, 2024.

No assurance can be provided that the City’s CalPERS plan expenses will not increase significantly in the future.

The Schedule of Funding Progress below shows the City’s total pension liability for its Miscellaneous CalPERS plan, CalPERS assets and the relationship of the total pension liability to such assets. Moneys held in the Pension Benefits Trust are excluded from the below figures.

Table 20
City of Corona
Schedule of Funding Progress – CalPERS Miscellaneous Plan Valuation
Date(1) Accrued Liability
Market Value
of Assets(2)
Unfunded
Accrued Liability
Funded
Ratio
Annual
Covered
Payroll
6/30/20 $387,945,232 $264,290,618 $123,654,614 68.1% $24,269,621 6/30/21 409,759,952 320,651,806 89,108,146 78.3 26,963,410 6/30/22 429,922,074 398,716,612 31,205,462 92.7 29,431,217 6/30/23 452,809,072 405,944,864 46,864,208 89.7 34,398,956 6/30/24 470,489,454 427,602,502 42,886,952 90.9 38,056,221

(1) Figures are as of the measurement dates of June 30 of the years 2020 through 2024, which apply to the Fiscal Years ended June 30, 2020 through 2024, respectively.
(2) Excludes moneys held in Pension Benefits Trust.

Source: CalPERS Annual Valuation Report as of June 30, 2024.

Portions of the above disclosures are primarily derived from information that has been produced by CalPERS, its independent accountants and its actuaries. The City and the Utility Authority have not independently verified such information and neither makes any representations nor expresses any opinion as to the accuracy of the information that has been provided by CalPERS.

The comprehensive annual financial reports of CalPERS are available on CalPERS’ Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information that concerns benefits and other matters. The textual reference to such Internet website is provided for convenience only. None of the information on such Internet website is incorporated by reference herein. The City, the Utility Authority and the Underwriter cannot guarantee the accuracy of such information.

Actuarial assessments are “forward-looking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future.

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The City’s Miscellaneous Plan had a total net pension liability of $30,791,658 for Fiscal Year 2024 (as of the measurement date of June 30, 2023), of which approximately $4,079,895 was attributable to the Water Enterprise. The net pension liability is the difference between the total pension liability and the fair market value of pension assets. The City’s total pension assets include funds that are held by CalPERS, and its net pension asset or liability is based on such amounts. For Fiscal Years 2024 and 2023, the City incurred Miscellaneous Plan pension expenses of $13,941,526 and $13,494,623, respectively.

A summary of principal assumptions and methods used to determine the total pension liability for the City’s Miscellaneous pension plan for Fiscal Year 2023 is shown below.

Table 21
City of Corona
Actuarial Assumptions for CalPERS Miscellaneous Plan
Actuarial Cost Method Entry Age Normal in accordance with the requirements of GASB 68 Asset Valuation Method Market Value of Assets
Actuarial Assumptions:

Accounting Discount Rate 6.90%
Inflation 2.30%
Salary Increases Varies by entry age and service
Mortality Rate Table(1) Derived using CalPERS’ membership data for all funds Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter

(1) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Postretirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.

Source: City.

Changes in the net pension liability for the City’s Miscellaneous pension plan in Fiscal Year 2023 were as follows:

Table 22
City of Corona
Changes in CalPERS Miscellaneous Plan Net Pension Liability Increase / (Decrease)
Total
Pension Liability
Plan Fiduciary
Net Position
Net Pension
Liability / (Asset)
Balance at June 30, 2022 $ 416,786,666 $ 398,723,741 $ 18,062,925 Balance at June 30, 2023 436,846,507 406,054,849 30,791,658 Net Changes for period from
July 1, 2022 through June 30,
2023 $ 20,059,841 $ 7,331,108 $ 12,728,733

Source: City.

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The table below presents the net pension liability of the City’s Miscellaneous pension plan, calculated using the discount rate applicable to Fiscal Year 2023 (6.90%), as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.90%) or 1 percentage point higher (7.90%) than the Fiscal Year 2023 rate:

Table 23
City of Corona
Sensitivity of CalPERS Miscellaneous Plan Net Pension Liability to Changes in the Discount Rate
Plan’s Net Pension
Liability/(Asset)
Discount Rate – 1%
(5.90%)
Applicable Discount
Rate (6.90%)
Discount Rate + 1%
(7.90%)
Miscellaneous Plan $91,306,327 $30,791,658 $(18,603,887)

Source: City.

For additional information relating to the City’s CalPERS Miscellaneous pension plan, see Note 13 to the City’s audited financial statements set forth in Appendix A.

Issuance of Pension Obligation Bonds. On October 14, 2021, the City issued pension obligation bonds in the aggregate principal amount of $276,710,000, the proceeds of which were applied to pay a portion of the City’s CalPERS Miscellaneous pension plan liability, among other things. The pension obligation bonds are not secured by a pledge and lien on or payable from Net Revenues of the Water Enterprise. The issuance of the pension obligation bonds, however, is expected to reduce the pension plan liability that is attributable to the Water Enterprise over the long term.

For Fiscal Year 2024, the debt service payment for the pension obligation bonds totaled $22,605,269 of which $1,771,873 was allocable to the Water Enterprise. For Fiscal Year 2025, the debt service payment for the Pension Obligation Bonds totaled $23,543,737, of which $1,837,558 was allocable to the Water Enterprise.

Other Post-Employment Benefits. In addition to the pension benefits that are described under the subcaption “—Pension Obligations,” the City provides certain health care and life insurance benefits (“OPEB”) for retired employees and eligible dependents. OPEB is provided for retired employees who are age 50 or over (52 for AB 340 members), have a minimum of 5 years of service with the City.

The contribution requirements of OPEB plan members and the City are established under memoranda of understanding with the City’s employee associations. See the caption “THE CITY—Employees.” Currently, contributions are not required from plan members. The annual contribution amount is based on the actuarially determined employer contribution. The City elected to prefund its OPEB obligation through the California Employers’ Retiree Benefit Trust Program (“CERBT”), a trust fund established under Internal Revenue Code Section 115 which is dedicated to prefunding OPEB for eligible California public agencies. CERBT is administered by CalPERS’ Board. In Fiscal Years 2023 and 2024, the City’s cash contribution to its OPEB plan was $9,994,224 and $10,203,431, respectively, of which $1,304,638 and $1,063,005, respectively, was made to CERBT, with the remainder consisting of either direct payment to service providers or reimbursement to retirees.

The City has budgeted to contribute $13,757,764 to its OPEB plan, including $3,302,434 to CERBT, in Fiscal Year 2025. CERBT assets are irrevocable and may not be used for any purpose other than funding OPEB.

Governmental Accounting Standards Board Statement No. 75 (“GASB 75”) requires governmental agencies to account for and report the outstanding obligations and commitments related to OPEB in essentially the same manner as for pensions. While requiring the City to disclose the unfunded actuarial accrued liability and the Actuarially Determined Contribution (the actuarial value of benefits earned during a Fiscal Year plus costs to amortize the unfunded actuarial accrued liability, or “OPEB ADC”) in its financial statements, GASB 75 does not require the City to fund the OPEB ADC. The OPEB ADC represents a level of funding that, if paid

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on an ongoing basis, is projected to cover normal cost each year and to amortize any unfunded liabilities of the plan over a period not to exceed thirty years.

The City’s OPEB contributions for the last five Fiscal Years were as follows:

Table 24
City of Corona
OPEB Contributions
Fiscal Year
Ended June 30
Actuarially Determined
Contribution City OPEB Contribution
Deficiency/
(Excess) Covered Payroll
2020 $11,087,025 $11,847,476 $(760,451) $67,841,626
2021 10,481,185 10,489,894 (8,709) 68,613,350
2022 10,744,736 10,744,736 (1,051,688) 74,680,408
2023 9,983,374 9,994,224 (10,850) 84,958,125
2024 10,282,357 10,203,431 78,952 89,487,961

Source: City.

As of the June 30, 2023 measurement date, the City OPEB plan was 41.37% funded. The actuarial accrued liability for benefits was $160,302,881 and the actuarial value of assets was $66,319,740, resulting in an unfunded actuarial accrued liability (the “OPEB UAL”) of $93,983,141. The covered payroll (annual payroll of active employees covered by the plan) was $84,958,125 and the ratio of the OPEB UAL to the covered payroll was 110.62%.

Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about rates of employee turnover, retirement and mortality, as well as economic assumptions regarding claim costs per retiree, healthcare inflation and interest rates. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.

Changes in the net liability for the City’s OPEB plan were as follows.

Table 25
City of Corona
Changes in OPEB Liability
Increase / (Decrease)
Total
OPEB Plan Liability
Plan Fiduciary
Net Position
Net OPEB Plan
Liability / (Asset)
Balance at June 30, 2022 $ 155,068,194 $ 61,086,162 $ 93,982,032 Balance at June 30, 2023 160,302,881 66,319,740 93,983,141 Net Changes for period from July
1, 2022 through June 30, 2023 $ 5,234,687 $ 5,233,578 $ 1,109

Source: City.

The following table presents the net liability of the City’s OPEB plan, calculated using the discount rate applicable to Fiscal Year 2023 (6.05%), as well as what the net OPEB liability would be if it were calculated using a discount rate that is 1 percentage point lower (5.05%) or 1 percentage point higher (7.05%) than the Fiscal Year 2023 rate:

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Table 26
City of Corona
Sensitivity of OPEB Plan Net Liability to Changes in the Discount Rate Discount Rate – 1%
(5.05%)
Applicable Discount
Rate (6.05%)
Discount Rate + 1%
(7.05%)
Plan’s Net Liability/(Asset) $112,994,843 $93,983,141 $78,186,021

Source: City.

The City’s projections of operating expenses shown under the caption “—Projected Operating Results and Debt Service Coverage” do not assume further unusual increases in OPEB funding expenses. Future changes in OPEB funding policies and assumptions, however, including those related to assumed rates of investment return and inflation, could trigger increases in the City’s annual required contributions, and such increases could be material to the finances of the Water Enterprise. No assurance can be provided that such expenses will not increase significantly in the future. The City does not expect that any increased funding of OPEB will have a material adverse effect on the ability of the City to pay the 2025 Bonds.

For additional information relating to the City’s OPEB plan, see Note 14 to the City’s audited financial statements set forth in Appendix A.

CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES Article XIIIB
Article XIIIB of the State Constitution limits the annual appropriations of the State and of any city, county, school district, authority, special district 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 appropriation limit is the 1978-79 State 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: (a) the financial responsibility for a service is transferred to another public entity or to a private entity; (b) the financial source for the provision of services is transferred from taxes to other revenues; or (c) the voters of the entity approve a change in the limit for a period of time not to exceed four years.

Appropriations that are subject to Article XIIIB generally include the proceeds of taxes levied by or for the State or other entity of local government, exclusive of certain State subventions, refunds of taxes and benefit payments from retirement, unemployment, insurance and disability insurance funds. “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 that such proceeds exceed the cost reasonably borne by the entity in 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 that are 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 that were existing or legally authorized as of January 1, 1979, or of bonded indebtedness thereafter approved by the voters, and payments that are required to comply with court or federal mandates which without discretion require an expenditure for additional services or which unavoidably make the provision of existing services more costly.

The City is of the opinion that its charges for water service do not exceed the costs that it reasonably bears in providing such service and therefore are not subject to the limits of Article XIIIB. See the caption

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“SECURITY FOR THE 2025 BONDS—Rate Covenant” for a description of the City’s covenant to set rates and charges for water service.

Proposition 218
General. An initiative measure entitled the “Right to Vote on Taxes Act” (the “Initiative”) was approved by the voters of the State at the November 5, 1996 general election. The Initiative added Articles XIIIC and XIIID to the State Constitution. According to the “Title and Summary” of the Initiative prepared by the State Attorney General, the Initiative limits “the authority of local governments to impose taxes and property-related assessments, fees and charges.”
Article XIIID. Article XIIID defines the terms “fee” and “charge” to mean “any levy other than an ad valorem tax, a special tax or an assessment, imposed by an agency upon a parcel or upon a person as an incident of property ownership, including user fees or charges for a property-related service.” A “property-related service” is defined as “a public service having a direct relationship to property ownership.” Article XIIID further provides that reliance by an agency on any parcel map (including an assessor’s parcel map) may be considered a significant factor in determining whether a fee or charge is imposed as an incident of property ownership.

Article XIIID requires that any agency which imposes or increases any property-related fee or charge must provide written notice thereof to the record owner of each identified parcel upon which such fee or charge is to be imposed and must conduct a public hearing with respect thereto. The proposed fee or charge may not be imposed or increased if a majority of owners of the identified parcels file written protests against it. As a result, because fees for water service are a “fee” or “charge” as defined in Article XIIID, the local government’s ability to increase such fees or charges may be limited by a majority protest.

In addition, Article XIIID includes a number of limitations that are applicable to existing fees and charges, including provisions to the effect that: (a) revenues that are derived from the fee or charge may not exceed the funds which are required to provide the property-related service; (b) such revenues may not be used for any purpose other than that for which the fee or charge was imposed; (c) the amount of a fee or charge that is imposed upon any parcel or person as an incident of property ownership may not exceed the proportional cost of the service attributable to the parcel; and (d) no such fee or charge may be imposed for a service unless that service is actually used by, or immediately available to, the owner of the property in question. Property-related fees or charges based on potential or future use of a service are not permitted.

Based upon the California Court of Appeal decision in Howard Jarvis Taxpayers Association v. City of Los Angeles, 85 Cal. App. 4th 79 (2000), which was denied review by the State Supreme Court, it was generally believed that Article XIIID did not apply to charges for water and wastewater services that are “primarily based on the amount consumed” (i.e., metered water or wastewater rates), which had been held to be commodity charges related to consumption of the service, not property ownership. The State Supreme Court ruled in Bighorn-Desert View Water Agency v. Verjil, 39 Cal. 4th 205 (2006) (the “Bighorn Case”), however, that fees for ongoing water service through an existing connection were property-related fees and charges. The State Supreme Court specifically disapproved the holding in Howard Jarvis Taxpayers Association v. City of Los Angeles that metered water rates are not subject to Proposition 218. The City has complied with the notice and public hearing requirements of Article XIIID in determining whether to change Water Enterprise rates and charges since at least 2007.

On April 20, 2015, the California Court of Appeal, Fourth District, issued an opinion in Capistrano Taxpayers Association, Inc. v. City of San Juan Capistrano, 235 Cal. App. 4th 1493 (2015) (the “SJC Case”) upholding tiered water rates under Proposition 218 provided that the tiers correspond to the actual cost of furnishing service at a given level of usage, including the capital costs of improvements to provide additional increments of water. The opinion included a finding that the City of San Juan Capistrano did not make any attempt to calculate the actual costs of providing water at various tier levels. The City’s current residential water rate structure includes tiered rates based on usage. The City has reviewed the SJC Case decision and does not

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expect the decision to affect its rate structure. The City believes that its current water rates comply with the requirements of Proposition 218 because they are tied to the cost of service and capital improvements, and expects that any future water rate increases will comply with Proposition 218’s procedural and substantive requirements to the extent applicable thereto.

Article XIIIC. Article XIIIC provides that the initiative power may not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge and that the power of initiative to affect local taxes, assessments, fees and charges is applicable to all local governments. Article XIIIC does not define the terms “local tax,” “assessment,” “fee” or “charge,” so it was unclear whether the definitions set forth in Article XIIID referred to above are applicable to Article XIIIC. Moreover, the provisions of Article XIIIC are not expressly limited to local taxes, assessments, fees and charges imposed after November 6, 1996.

On July 24, 2006, the State Supreme Court held in the Bighorn Case that the provisions of Article XIIIC applied to rates and fees charged for domestic water use. In the decision, the Court noted that the decision did not address whether an initiative to reduce fees and charges could override statutory rate setting obligations.

On August 3, 2020, the State Supreme Court issued an opinion in Wilde v. City of Dunsmuir (2020) 9 Cal.5th 1105 holding that taxpayers do not have the right under Proposition 218 to challenge water rates by referendum, and the City does not believe that Article XIIIC grants to the voters within the City the power (whether by initiative under Article XIIIC or otherwise, or by referendum, which is not authorized under Article XIIIC) to repeal or reduce rates and charges for water service in a manner that would interfere with the contractual obligations of the City or the Utility Authority or the obligation of the City and the Utility Authority to maintain and operate the Water Enterprise. However, there can be no assurance as to the availability of particular remedies adequate to protect the Beneficial Owners of the 2025 Bonds. Remedies that are available to Beneficial Owners of the 2025 Bonds in the event of a default by the Utility Authority are dependent upon judicial actions which are often subject to discretion and delay and could prove both expensive and time-consuming to obtain. So long as the 2025 Bonds are held in book-entry form, DTC (or its nominee) will be the sole registered owner of the 2025 Bonds and the rights and remedies of the 2025 Bond Owners will be exercised through the procedures of DTC.

Proposition 26
On November 2, 2010, voters in the State approved Proposition 26. Proposition 26 amends Article XIIIC of the State Constitution to expand the definition of “tax” to include “any levy, charge, or exaction of any kind imposed by a local government” except the following: (a) a charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege; (b) 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; (c) 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; (d) a charge imposed for entrance to or use of local government property, or the purchase, rental or lease of local government property; (e) 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; (f) a charge imposed as a condition of property development; and (g) assessments and property-related fees imposed in accordance with the provisions of Article XIIID. Proposition 26 applies to charges imposed or increased after November 2, 2010 and provides that 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 City believes that its water rates and charges meet the exception that is described in clause (g) above and are not taxes under Proposition 26.

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Future Initiatives
Articles XIIIB, XIIIC and XIIID and Proposition 26 were adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiatives could be proposed and adopted affecting the Utility Authority’s revenues or ability to increase revenues.

CERTAIN RISKS TO BONDHOLDERS
The following information, in addition to the other matters that are described in this Official Statement, should be considered by prospective investors in evaluating the 2025 Bonds. The following does, however, not purport to be comprehensive, definitive or an exhaustive listing of risks and other considerations that may be relevant to making an investment decision with respect to the 2025 Bonds. In addition, the order in which the following information is presented is not intended to reflect the relative importance of any such risks. If any risk factor materializes to a sufficient degree, it alone could delay or preclude payment of principal of or interest on the 2025 Bonds.

Limited Obligations
The obligation of the Utility Authority to pay the 2025 Bonds is a limited obligation of the Utility Authority and is not secured by a legal or equitable pledge or charge or lien upon any property of the Utility Authority, the City or any of their respective incomes or receipts, except the Net Revenues. The obligation of the Utility Authority to pay the 2025 Bonds does not constitute an obligation for which the general credit or taxing power of the Utility Authority or the City is pledged.

Accuracy of Assumptions
To estimate the revenues that will be available to pay debt service on the 2025 Bonds, the Utility Authority has made certain assumptions with regard to the rates and charges to be imposed in future years, the expenses associated with operating the Water Enterprise and the interest rate at which funds will be invested.

The Utility Authority believes these assumptions to be reasonable, but to the extent that any of these assumptions fail to materialize, the Net Revenues available to pay debt service on the 2025 Bonds will, in all likelihood, be less than those projected herein. See the caption “WATER ENTERPRISE FINANCIAL INFORMATION— Projected Operating Results and Debt Service Coverage.” The Utility Authority may choose, however, to maintain compliance with the rate covenant that is set forth in the Indenture in part by means of contributions from other available reserves or resources. In such event, Net Revenues may generate amounts which are less than 125% of Debt Service in any given Fiscal Year. See the caption “SECURITY FOR THE 2025 BONDS— Rate Covenant.”
System Demand
There can be no assurance that the demand for potable or recycled water services will occur as described in this Official Statement. Reductions in demand could require an increase in rates or charges in order to comply with the rate covenant. Demand for potable or recycled water services could be reduced as a result of hydrological conditions, conservation efforts (including in response to drought), an economic downturn or other factors. See the captions “THE WATER ENTERPRISE—Water Enterprise Rates and Charges” and “— Accuracy of Assumptions.”
System Expenses
There can be no assurance that the City’s expenses will be consistent with the descriptions in this Official Statement. Operation and maintenance costs may vary with labor costs (including costs related to pension liabilities and the costs of retaining qualified personnel with the proper certifications to operate Water Enterprise treatment and other facilities), treatment costs, energy costs, regulatory compliance costs, increased

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costs to access groundwater due to land subsidence or falling water tables, increased imported water purchase costs and other factors. Increases in expenses could require an increase in rates or charges in order to comply with the rate covenant. See the caption “SECURITY FOR THE 2025 BONDS—Rate Covenant.” Rate increases are subject to the provisions of Proposition 218 and there can be no assurance that the City will be able to increase rates as needed to address increases in Water Enterprise expenses. See the caption “—Rate-Setting Process under Proposition 218.”
Limited Recourse on Default
If the Utility Authority defaults on its obligation to pay the principal of and interest on the 2025 Bonds, the Trustee has the right to declare the total unpaid principal of the 2025 Bonds, together with the accrued interest thereon to be immediately due and payable. However, in the event of a default and such acceleration, there can be no assurance that the Utility Authority will have sufficient funds to pay the accelerated amounts due on the 2025 Bonds from Net Revenues.

Rate-Setting Process under Proposition 218
Proposition 218, which added Articles XIIIC and XIIID to the State Constitution, affects the City’s ability to maintain existing rates and impose rate increases, and no assurance can be given that future rate increases will not encounter majority protest opposition or be challenged by initiative action authorized under Proposition 218. In the event that future proposed rate increases cannot be imposed as a result of majority protest or initiative, the Utility Authority might thereafter be unable to generate Net Revenues in the amounts required by the Indenture to pay the 2025 Bonds. The City believes that its current water rates approved by the City Council were effected in compliance with the notice, public hearing and majority protest provisions of Proposition 218. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES—Proposition 218.”
Statutory and Regulatory Compliance
Laws and regulations governing the treatment and distribution of water are enacted and promulgated by federal, State and local government agencies. Compliance with these laws and regulations is and will continue to be costly, and, as more stringent standards are developed, such costs will likely increase.

Claims against the Water Enterprise for failure to comply with applicable laws and regulations could be significant. Such claims may be payable from assets of the Water Enterprise or from other legally available sources. In addition to claims by private parties, changes in the standards for public agency water systems such as that operated by the Utility Authority may also lead to administrative orders issued by federal or State regulators. Future compliance with such orders could also impose substantial additional costs on the Utility Authority. No assurance can be given that the cost of compliance with such laws, regulations and orders would not adversely affect the ability of the Utility Authority to generate Net Revenues sufficient to pay the 2025 Bonds.

Natural Disasters
General. The occurrence of any natural disaster in the City, including, without limitation, fire, earthquake, landslide, land subsidence, high winds, drought or flood, could have an adverse material impact on the economy within the City, the Water Enterprise and the revenues available for the payment of the 2025 Bonds.

In the event of a severe earthquake, wildfire, drought, windstorm, landslide, flood or other natural disaster, there may be significant damage to both property and infrastructure in the City, including to the Water Enterprise.

The occurrence of natural disasters in the City’s service area could result in substantial damage to the Water Enterprise which, in turn, could substantially reduce revenue generated by the Water Enterprise and affect the ability of the Utility Authority to pay the 2025 Bonds.

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The City maintains liability insurance for the Water Enterprise and property casualty insurance for certain portions of the Water Enterprise. However, there can be no assurance that specific losses will be covered by insurance or, if covered, that claims will be paid in full by the applicable insurers. Furthermore, as described under the caption “THE CITY—Water Enterprise Insurance,” portions of the Water Enterprise, including subsurface pipelines, are not covered by property casualty insurance. Damage to such portions of the Water Enterprise as a result of natural disasters would result in uninsured losses to the City.

Earthquakes. The City is located in a seismically active region. Significant known faults near the City include the Elsinore and Newport-Inglewood faults. There is potential for destructive ground shaking during the occurrence of a major seismic event. In addition, land along fault lines may be subject to liquefaction during the occurrence of such an event. In the event of a severe earthquake, there may be significant damage to both property and infrastructure within the City, including the Water Enterprise. The City has an emergency operations center that would be activated under such circumstances.

The City does not maintain earthquake insurance coverage for the Water Enterprise, as discussed under the caption “THE CITY—Water Enterprise Insurance.” There can be no assurance that the Water Enterprise will not be susceptible to damage in the event of an earthquake. Such damage is not expected to be covered by insurance, and seismic activity could result in damage to or destruction of the Water Enterprise.

The City addresses seismic risk and vulnerability through the City of Corona Local Hazard Mitigation Plan, which was last updated in 2023, and the Riverside County Operational Area Multi-Jurisdictional Local Hazard Mitigation Plan. Newer Water Enterprise facilities are designed to withstand earthquakes with minimal damage, as earthquake loads are taken into consideration in the design of project structures. The City has also undertaken a vulnerability assessment of critical Water Enterprise facilities. The vulnerability assessment ranks Water Enterprise infrastructure by importance, builds redundancy into existing operations and includes contingency plans in the event of damage to City assets and succession plans for critical staff. There are currently no significant seismic enhancement projects that are required to be undertaken by the Utilities Department. The impact of lesser magnitude seismic events is expected by the City to be temporary, localized and repairable. The Water Enterprise has never sustained major damage to its facilities or experienced extended incidences of service interruptions as a result of seismic disturbances.

Wildfires. In recent years, wildfires have caused extensive damage throughout the State, including within the County. In some cases, these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. Several fires which occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events. Some commentators believe that climate change will lead to even more frequent and damaging wildfires in the future. The California Department of Forestry and Fire Protection (“Cal Fire”) periodically prepares maps which evaluate fire hazard, which is defined as the likelihood and expected fire behavior over a 30 to 50-year period without considering mitigation measures such as home hardening, recent wildfire or fuel reduction efforts, as opposed to risk, which is the potential damage a fire can do to the area under existing conditions, accounting for any modifications such as fuel reduction projects, defensible space, and ignition resistant building construction. In March 2025, Cal Fire released an updated Fire Hazard Severity Zone map for the Southern California region and portions of the City are located within areas classified as “Moderate,” “High” or “Very High” Fire Hazard Severity Zones by Cal Fire.

Approximately 17% of the Water Enterprise customer connections are located within either “High” or “Very High” Fire Hazard Severity Zones, as well as certain of the Water Enterprise facilities, including the Water Enterprises reservoirs and the Sierra del Oro Water Treatment Plant. Water Enterprise facilities located in areas of increased wildfire risk are constructed with concrete block, concrete roof tiles, hardened facias and soffits, and screened vents. The Utilities Department also has emergency interconnections with the City of Riverside, Temescal Valley Water District, and WMWD. The Utilities Department also has emergency trailer mounted backup boosters that are able to serve critical fire zone booster stations in the case of wildfires. The

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Utilities Department also has the ability to boost and drop water within the Water Enterprise, and all site boosters and drop valves are tested monthly to ensure proper operation of equipment.

In September 2017, the Canyon Fire impacted portions of the City and caused approximately $1 million in damage to the Water Enterprise’s Sierra del Oro Water Treatment Plant. While the main structures of the Sierra del Oro Water Treatment Plant remained intact, there was substantial damage to the landscaping, roof and communication site equipment. In January 2020, the City awarded a contract to rehabilitate approximately 70,000 square feet of the Sierra del Oro Water Treatment Plant site, including the existing irrigation system and installing cobble hardscape, removing and replacing a failing retaining wall, and installing plant materials to act as a fire break to help reduce the potential for fire damage in the future.

Cybersecurity
The City relies on computers and technology to conduct its operations. 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. Recently, there have been significant cybersecurity incidents affecting municipal agencies, including ransomware attacks targeting Los Angeles Unified School District and the San Bernardino County Sheriff’s Department, a freeze affecting computer systems of the City of Atlanta, an attack on the City of Baltimore’s 911 system, an attack on the Colorado Department of Transportation’s computers, an attack that resulted in the temporary closure of the Port of Los Angeles’ largest terminal and an attack on a water treatment facility in Oldsmar, Florida.

The City’s Information Technology Department employs a multi-level cyber protection strategy that includes firewalls, anti-virus software, anti-spam/malware software, intrusion protection, intrusion detection, identity management, lateral movement detection, log monitoring and other security measures. The City contracts with third-party vendors to perform external audits of its network and to perform similar internal audits.

The City has also established a Security Operations Center with third-party vendors to monitor and augment internal and external monitoring of the City’s computer systems 24 hours per day, 7 days per week. The City conducts cybersecurity training for all staff and regular simulated phishing campaigns. Email is inspected inbound and outbound by a cloud email filtering service, and measures are in place to protect against spoofing internal addresses. The City also employs domain name system filtering and endpoint protection on its servers and desktops to catch and prevent cyberattacks. The City practices the principle of least privilege across all of its systems. It maintains regular, redundant, online and offline backups to minimize damage and allow for quick recovery in the event of an attack.

To date, the City has not experienced a successful attack against its network and servers. However, there can be no assurance that a future attack or attempted attack would not result in disruption of City operations.

The City expects that any such disruptions would be temporary in nature due to its backup/restore procedures, utilization of third-party incident response teams and disaster recovery planning.

Limitations on Remedies
The ability of the Utility Authority to comply with its covenants under the Indenture and to generate Net Revenues in amounts that are sufficient to pay principal of and interest on the 2025 Bonds may be adversely affected by actions and events outside of the control of the City or the Utility Authority or actions taken (or not taken) by voters, property owners, taxpayers or persons obligated to pay assessments, fees and charges. See the caption “CONSTITUTIONAL LIMITATIONS ON APPROPRIATIONS AND CHARGES—Proposition 218.” Furthermore, the remedies available to the owners of the 2025 Bonds upon the occurrence of an event of default under the Indenture 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 the event that the Utility Authority fails to comply with its covenants under the Indenture or fails to pay principal of and interest on the 2025 Bonds, there can be no assurance as to the availability of remedies adequate to protect the interest of the holders of the 2025 Bonds.

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In addition to the limitations on remedies contained in the Indenture, the rights and obligations under 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. The opinion to be delivered by Bond Counsel concurrently with the issuance of the 2025 Bonds will be subject to such limitations, and the various other legal opinions to be delivered concurrently with the issuance of the 2025 Bonds will be similarly qualified. See Appendix C.

In addition, usual equity principles may limit the specific enforcement under State law of certain remedies, as may the exercise by the United States of America of the powers delegated to it by the federal Constitution, and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of serving a significant and legitimate public purpose. Bankruptcy proceedings, or the exercise of powers by the federal or state government, if initiated, could subject the owners of the 2025 Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise, and consequently may entail risks of delay, limitations or modification of their rights.

Remedies may be limited because the Water Enterprise serves an essential public purpose.

Secondary Market
There can be no guarantee that there will be a secondary market for the 2025 Bonds or, if a secondary market exists, that the 2025 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 particular issue, secondary marketing practices 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.

Parity Obligations
The Indenture permits the Utility Authority to enter into additional Parity Obligations which are payable from Net Revenues on a parity with the 2025 Bonds, subject to the terms and conditions set forth therein. The entry into additional Parity Obligations could result in reduced Net Revenues available to pay the 2025 Bonds.

The Utility Authority has covenanted to maintain Debt Service coverage of 125%, as further described under the caption “SECURITY FOR THE 2025 BONDS—Additional Indebtedness.” Climate Change
The State has historically been susceptible to wildfires and hydrologic variability. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic activity, climate change is expected to intensify, increasing the frequency, severity and timing of extreme weather events such as coastal storm surges, drought, wildfires, floods and heat waves, and raising sea levels. The future fiscal impact of climate change on the City is difficult to predict, but it could be significant and it could have a material adverse effect on the Water Enterprise’s finances by requiring greater expenditures to counteract the effects of climate change, by changing the business and activities of Water Enterprise customers or by increasing the cost or decreasing the availability of water supplies from MWD and/or WMWD. See the captions “—System Expenses” and “THE WATER ENTERPRISE—Drought Declarations.”
In March 2019, the City adopted an updated Climate Action Plan (the “CAP”), which has four primary goals: (i) to measure the City’s greenhouse gas (“GHG”) emissions; (ii) to establish GHG emissions reduction targets within designated timeframes; (iii) to undertake actions to meet the GHG emissions reduction targets; and (iv) to develop adaptive strategies to cope with the effects of climate change. The CAP is intended to keep dollars in the local economy, create new green jobs and improve the community’s health, safety, and welfare by addressing climate change.

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The City’s target is to reduce GHG emissions 49% below 2008 levels by 2030 and 66% below 2008 levels by 2040. In order to achieve these targets, the City intends to increase energy and water efficiency in residences and commercial buildings through training, education, renovations and offering rebates in partnership with energy providers, promote the planting of trees throughout the City, utilize light reflecting technology on roofs and paved surfaces, reduce vehicle miles traveled and solid waste generation and promote clean energy such as solar panels, among other efforts. Adaptive strategies include creating cooling centers at public spaces, encouraging development that has a lower demand for water and energy, prioritizing infrastructure improvements, encouraging buffer space between development and wildfire-prone areas and ensuring that the City has adequate staff and funding to implement the foregoing efforts.

Rate Covenant Not a Guarantee
The 2025 Bonds are payable from Net Revenues of the Water Enterprise. See the caption “SECURITY FOR THE 2025 BONDS.” The Utility Authority’s ability to pay debt service on the 2025 Bonds depends on its ability to generate Net Revenues at the levels required by the Indenture. Although the Utility Authority has covenanted in the Indenture to impose rates and charges, or cause the City to do so, as more particularly described under the caption “SECURITY FOR THE 2025 BONDS—Rate Covenant,” and although the Utility Authority expects that sufficient Net Revenues will be generated through the imposition and collection of such rates and charges, there is no assurance that the imposition and collection of such rates and charges will result in the generation of Net Revenues in amounts that are sufficient to pay the 2025 Bonds. Among other matters, the availability of and demand for water and changes in law and government regulations could adversely affect the amount of Net Revenues realized by the Utility Authority.

Loss of Tax Exemption
In order to maintain the exclusion from gross income for federal income tax purposes of interest on the 2025 Bonds, the Utility Authority has covenanted in the Indenture to comply with the applicable requirements of the Internal Revenue Code of 1986, as amended (the “Code”), and not to take any action or fail to take any action if such action or failure to take such action would adversely affect the exclusion from gross income of interest on the 2025 Bonds under Section 103 of the Code. Interest on the 2025 Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date of issuance of such 2025 Bonds as a result of acts or omissions of the Utility Authority in violation of this or other covenants in the Indenture applicable to the 2025 Bonds. The 2025 Bonds are not subject to redemption or any increase in interest rates should an event of taxability occur and will remain outstanding until maturity or prior redemption in accordance with the provisions contained in the Indenture. See the caption “TAX MATTERS.”

APPROVAL OF LEGAL PROCEEDINGS
The valid, legal and binding nature of the 2025 Bonds is subject to the approval of Best Best & Krieger LLP, acting as Bond Counsel. The form of such legal opinion is attached hereto as Appendix C, and such legal opinion will be attached to each 2025 Bond. Certain legal matters will be passed upon for the Utility Authority by Stradling Yocca Carlson & Rauth LLP, as Disclosure Counsel, and by the City Attorney, for the Underwriter by its counsel, Anzel Galvan LLP, and for the Trustee by its counsel.

LITIGATION
At the time of delivery of and payment for the 2025 Bonds, the Utility Authority will certify substantially to the effect that there is no action, suit, proceeding, 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 Utility Authority, threatened against the Utility Authority affecting the existence of the Utility Authority or the titles of its directors or officers to their respective offices or seeking to restrain or to enjoin the sale or delivery of the 2025 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 2025 Bonds, the Indenture, or any action of the Utility Authority

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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 Utility Authority or its authority with respect to the 2025 Bonds or any action of the Utility Authority contemplated by any of said documents, nor to the knowledge of the Utility Authority, is there any basis therefor.

TAX MATTERS
In the opinion of Best Best & Krieger LLP, Riverside, California, subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants, the interest on the 2025 Bonds is excluded from gross income for federal income tax purposes, and interest on the 2025 Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations; however, interest on the 2025 Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the 2025 Bonds is exempt from California personal income tax.

The opinions set forth in the preceding paragraph are subject to the condition that the Utility Authority and City comply with all requirements of the Internal Revenue Code of 1986, as amended (“Tax Code”) that must be satisfied subsequent to the issuance of the 2025 Bonds. The Utility Authority and City have made certain representations and covenanted to comply with each such requirement. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the 2025 Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the 2025 Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants. Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the 2025 Bonds may adversely affect the value of, or the tax status of interest on, the 2025 Bonds.

Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events, or matters.

If the initial offering price to the public (excluding bond houses and brokers) at which a 2025 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a 2025 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes and State of California personal income taxes. De minimis original issue discount and original issue premium is disregarded.

Under the Tax Code, original issue discount is treated as interest excluded from federal gross income and exempt from State of California personal income taxes to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2025 Bonds to determine taxable gain upon disposition (including sale, prepayment, or payment on maturity) of such 2025 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2025 Bonds who purchase the 2025 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2025 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2025 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such 2025 Bonds under federal individual alternative minimum taxes.

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Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2025 Bond (said term being the shorter of the bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2025 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a 2025 Bond is amortized each year over the term to maturity of the 2025 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized 2025 Bond premium is not deductible for federal income tax purposes. Owners of premium 2025 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of California personal income tax and federal income tax consequences of owning such 2025 Bonds.

Current and future legislative proposals, if enacted into law, clarification of the Tax Code, or court decisions may cause interest with respect to the 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code, or court decisions may also affect the market price for, or marketability of, the 2025 Bonds. Prospective purchasers of the 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the 2025 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts.

Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the Utility Authority and City or about the effect of future changes in the Tax Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS. The Utility Authority and City have covenanted, however, to comply with the requirements of the Tax Code.

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

Owners of the 2025 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 2025 Bonds may have federal or state tax consequences other than as described above.

Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the 2025 Bonds other than as expressly described above.

The opinions expressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2025 Bonds, or as to the consequences of owning or receiving interest on the 2025 Bonds, as of any future date.

Prospective purchasers of the 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

RATING
The Utility Authority expects that S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”), will assign the 2025 Bonds the rating of “__”. Future events could have an adverse impact on the rating of the 2025 Bonds, and there is no assurance that any credit rating that is given to the 2025 Bonds will be maintained for any period of time or that the rating may not be qualified, downgraded, lowered or withdrawn entirely by S&P if, in the judgment of S&P, circumstances so warrant. Any such qualification, downgrade, lowering or withdrawal of the rating may have an adverse effect on the market price of the 2025 Bonds. The rating reflects only the views of S&P (which views and criteria could change at any time), and an explanation of the significance of such rating may be obtained from S&P. Generally, a rating agency bases its ratings on the information and materials furnished to it (which may include information and material from the

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City or the Utility Authority that is not included in this Official Statement) and on investigations, studies and assumptions of its own.

The Utility Authority has covenanted in a Continuing Disclosure Certificate to file notices of any rating changes on the 2025 Bonds with EMMA. See the caption “CONTINUING DISCLOSURE” and Appendix E.

Notwithstanding such covenant, information relating to rating changes on the 2025 Bonds may be publicly available from the rating agencies prior to the time that such information is provided to the City or the Utility Authority and prior to the date by which the Utility Authority is obligated to file a notice of rating change.

Purchasers of the 2025 Bonds are directed to the rating agencies and their respective websites and official media outlets for the most current ratings with respect to the 2025 Bonds after the initial issuance of the 2025 Bonds.

In providing a rating on the 2025 Bonds, S&P may have performed independent calculations of coverage ratios using its own internal formulas and methodology, which may not reflect the provisions of the Indenture.

The Utility Authority makes no representations as to any such calculations, and such calculations should not be construed as a representation by the Utility Authority or the City as to past or future compliance with any financial covenants, the availability of particular revenues for the payment of debt service or for any other purpose.

MUNICIPAL ADVISOR
The City has retained CSG Advisors Incorporated, San Francisco, California, as municipal advisor (the “Municipal Advisor”) in connection with the issuance of the 2025 Bonds. The Municipal Advisor has not undertaken to make an independent verification or to assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal or other public securities.

UNDERWRITING
The 2025 Bonds will be purchased by Stifel, Nicolaus & Company, Incorporated (the “Underwriter”), pursuant to a purchase contract, dated the date hereof (the “Purchase Contract”), by and between the Utility Authority and the Underwriter. Under the Purchase Contract, the Underwriter has agreed to purchase all, but not less than all, of the 2025 Bonds for an aggregate purchase price of $______ (representing the principal amount of the 2025 Bonds, [plus/less] an original issue [premium/discount] of $_____, and less an Underwriter’s discount of $_____). The Purchase Contract provides that the Underwriter will purchase all of the 2025 Bonds if any are purchased, the obligation to make such a purchase being subject to certain terms and conditions set forth in the Purchase Contract, the approval of certain legal matters by counsel and certain other conditions.

The initial public offering prices stated on the inside cover page of this Official Statement may be changed from time to time by the Underwriter. The Underwriter may offer and sell the 2025 Bonds to certain dealers (including dealers depositing 2025 Bonds into investment trusts), dealer banks, banks acting as agents and others at prices lower than said public offering prices.

The Underwriter and its affiliates comprise a full service financial institution engaged in activities which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and nonfinancial activities and services. The Underwriter and its affiliates may have provided, and may in the future provide, a variety of these services to the Utility Authority and to persons and entities with relationships with the Utility Authority, for which they received or will receive customary fees and expenses.

In the ordinary course of these business activities, the Underwriter and its affiliates may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans and other financial instruments for their own account and for the accounts of their customers, and such investment and trading

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activities may involve or relate to assets, securities and/or instruments of the Utility Authority (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the Utility Authority.

The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire such assets, securities and instruments. Such investment and securities activities may involve securities and instruments of the Utility Authority.

CONTINUING DISCLOSURE
The Utility Authority has covenanted in a Continuing Disclosure Certificate, dated the date of issuance of the 2025 Bonds, for the benefit of the holders and Beneficial Owners of the 2025 Bonds to provide certain financial information and operating data relating to the Water Enterprise by not later than April 1 following the end of the City’s Fiscal Year (currently its Fiscal Year ends on June 30) (the “Annual Report”), commencing on April 1, 2026 with the report for the Fiscal Year ended June 30, 2025, 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 Utility Authority with EMMA, which is maintained on the Internet at http://emma.msrb.org/. The specific nature of the information to be contained in the Annual Report and the notices of enumerated events are set forth in Appendix E. These covenants have been made in order to assist the Underwriter in complying with subsection (b)(5) of Rule 15c2-12.
[The City’s audited financial statements for Fiscal Year 2021, as well as certain information required to be updated for Fiscal Years 2021 and 2022, was not properly linked to all CUSIPs for one series of bonds issued by the City’s former redevelopment agency. In addition, certain Fiscal Year 2022 information required to be updated under continuing disclosure undertakings for the 2012 Bonds and wastewater revenue bonds issued by the Utility Authority was filed one day after the date when such information was due. Except as set forth in this paragraph, the City, the Utility Authority and their related entities have not failed to comply in all material respects with their continuing disclosure undertakings in the last five years.] In order to assure compliance with its continuing disclosure obligations going forward, the City has adopted continuing disclosure compliance policies and procedures as part of its debt management policy. See the caption “THE CITY—Governance and Management—Management Policies—Debt Management Policy.” In addition, the City retains third party consultants (Willdan Financial Services and Spicer Consulting) to assist with its continuing disclosure obligations.

FINANCIAL INTERESTS
The fees being paid to the Underwriter, Bond Counsel, Disclosure Counsel and counsel to the Underwriter are contingent upon the issuance and delivery of the 2025 Bonds.

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MISCELLANEOUS
Insofar as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact. No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the Owners of the 2025 Bonds.

The execution and delivery of this Official Statement has been duly authorized by the Utility Authority.

CORONA UTILITY AUTHORITY
By:

Executive Director

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APPENDIX A

FINANCIAL STATEMENTS

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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE
The following is a summary of certain provisions of the Indenture which are not described elsewhere.

This summary does not purport to be comprehensive and reference should be made to the Indenture for a full and complete statement of the provisions thereof.

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL

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APPENDIX D

INFORMATION CONCERNING DTC
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the Utility Authority and the City believe to be reliable, but the Utility Authority and the City take no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the 2025 Bonds, payment of principal, premium, if any, accreted value, if any, and interest on the 2025 Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the 2025 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC.

The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the 2025 Bonds. The 2025 Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC.

One fully-registered 2025 Bond will be issued for each annual maturity of the 2025 Bonds, each in the aggregate principal amount of such annual maturity, and will be deposited with DTC.

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

Purchases of 2025 Bonds under the DTC system must be made by or through Direct Participants, which will receive a credit for the 2025 Bonds on DTC’s records. The ownership interest of each actual purchaser of each 2025 Bonds (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records.

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the 2025 Bonds are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive bonds representing their ownership interests in 2025 Bonds, except in the event that use of the bookentry system for the 2025 Bonds is discontinued.

To facilitate subsequent transfers, all 2025 Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of 2025 Bonds with DTC and their registration in the name

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of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the 2025 Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such 2025 Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of 2025 Bonds may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the 2025 Bonds, such as redemptions, tenders, defaults, and proposed amendments to the 2025 Bonds documents. For example, Beneficial Owners of 2025 Bonds may wish to ascertain that the nominee holding the 2025 Bonds for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

Redemption notices shall be sent to DTC. If less than all of the 2025 Bonds within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to 2025 Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Utility Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts 2025 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

Redemption proceeds, distributions, and dividend payments on the 2025 Bonds will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Utility Authority or the Trustee, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, the Trustee or the Utility Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Utility Authority or the Trustee, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

A 2025 Bond Owner shall give notice to elect to have its 2025 Bonds purchased or tendered, through its Participant, to the Trustee, and shall effect delivery of such 2025 Bond by causing the Direct Participant to transfer the Participant’s interest in the 2025 Bonds, on DTC’s records, to the Trustee. The requirement for physical delivery of 2025 Bond in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the 2025 Bond are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered 2025 Bond to the Trustee’s DTC account.

DTC may discontinue providing its services as depository with respect to the 2025 Bonds at any time by giving reasonable notice to the Utility Authority or the Trustee. Under such circumstances, in the event that a successor depository is not obtained, physical certificates are required to be printed and delivered.

The Utility Authority may decide to discontinue use of the system of book-entry only transfers through DTC (or a successor securities depository). In that event, 2025 Bonds will be printed and delivered to DTC.

THE TRUSTEE, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE 2025

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO

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DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC PARTICIPANT

TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT OR EFFECT WILL

NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS RELATING TO THE REDEMPTION OF THE 2025 BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
Upon issuance of the 2025 Bonds, the Utility Authority proposes to enter into a Continuing Disclosure Certificate in substantially the following form:

This Continuing Disclosure Certificate (the “Disclosure Certificate”) is executed and delivered by the Corona Utility Authority (the “Utility Authority”) in connection with the issuance of the $_____ Corona Utility Authority 2025 Water Revenue Bonds (Water Projects) (the “Bonds”). The Bonds are being issued pursuant to that certain Indenture of Trust, dated as of September 1, 2025 (the “Indenture”), by and between The Bank of New York Mellon Trust Company, N.A., as trustee, and the Utility Authority. The Utility Authority covenants and agrees as follows:

1. Purpose of this Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Utility Authority 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.

2. Definitions. In addition to the definitions set forth in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:

Annual Report. The term “Annual Report” means any Annual Report provided by the Utility Authority pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.

Beneficial Owner. The term “Beneficial Owner” means any person which: (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bonds (including persons holding Bonds through nominees, depositories or other intermediaries); or (b) is treated as the owner of any Bonds for federal income tax purposes.

EMMA. The term “EMMA” means the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System for municipal securities disclosures, maintained on the Internet at http://emma.msrb.org/.

Financial Obligation. The term “Financial Obligation” means a: (a) debt obligation; (b) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (c) guarantee of (a) or (b). The term “Financial Obligation” does not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

Fiscal Year. The term “Fiscal Year” means the one-year period ending on the last day of June of each year.

Holder. The term “Holder” means a registered owner of the Bonds.

Listed Events. The term “Listed Events” means any of the events listed in Sections 5(a) and (b) of this Disclosure Certificate.

Official Statement. The term “Official Statement” means the Official Statement dated ______, 2025 relating to the Bonds.

Participating Underwriter. The term “Participating Underwriter” means any of the original underwriters of the Bonds required to comply with the Rule in connection with offering of the Bonds.

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Rule. The term “Rule” means Rule 15c2-12 adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

3. Provision of Annual Reports.
(a) The Utility Authority shall provide not later than each April 1 following the end of its Fiscal Year (commencing April 1, 2026 with a report for Fiscal Year 2025) to EMMA an Annual Report relating to the immediately preceding Fiscal Year which is consistent with the requirements of Section 4 of this Disclosure Certificate, which Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Disclosure Certificate.
(b) If the Utility Authority is unable to provide to EMMA an Annual Report by the date required in subsection (a), the Utility Authority, in a timely manner, shall send to EMMA a notice in the manner prescribed by the Municipal Securities Rulemaking Board.

4. Content of Annual Reports. The Annual Report shall contain or incorporate by reference the following:
(a) The combined audited financial statements of the City of Corona (the “City”) and the Utility Authority for the prior Fiscal Year 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 audited annual financial statements are not available by the time specified in Section 3(a) above, unaudited financial statements will be provided as part of the Disclosure Report and audited financial statements will be provided when and if available; and
(b) To the extent not contained in the audited financial statements, updates of the belowlisted financial information and operating data relating to the Bonds and the Water Enterprise substantially similar to the information and data contained in the Official Statement; provided that such information shall be updated only for the last completed Fiscal Year prior to the filing of the Annual Report:

1. Principal amount of the Bonds outstanding.

2. An update of the information in the following tables in the Official Statement:
(a) Historical Water Supply in Acre Feet;
(b) Historical Water Enterprise Deliveries in Acre Feet; (c) Historical Water Enterprise Connections;
(d) Ten Largest Water Enterprise Customers; and
(e) Historical Water Enterprise Operating Results and Debt Service Coverage (Fiscal Year Ended June 30).

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 the Utility Authority or related public entities, which have been submitted to EMMA; provided, that if any document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board; and provided further, that the Utility Authority shall clearly identify each such document so included by reference.

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5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Utility Authority shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not more than ten (10) Business Days after the event:

1. principal and interest payment delinquencies;

2. unscheduled draws on debt service reserves reflecting financial difficulties;

3. unscheduled draws on credit enhancements reflecting financial difficulties;

4. substitution of credit or liquidity providers, or their failure to perform;

5. adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability or Notices of Proposed Issue (IRS Form 5701 TEB);

6. tender offers;

7. defeasances;

8. ratings changes;

9. bankruptcy, insolvency, receivership or similar proceedings of the Utility Authority; Note: For the purposes of the event identified in subparagraph (9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for an obligated person in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the obligated person, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the obligated person; and

10. default, event of acceleration, termination event, modification of terms or other similar events under the terms of a Financial Obligation of the Utility Authority, any of which reflect financial difficulties.
(b) Pursuant to the provisions of this Section 5, the Utility Authority shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material, in a timely manner not more than ten (10) Business Days after the event:

1. unless described in Section 5(a)(5), other notices or determinations by the Internal Revenue Service with respect to the tax status of the Bonds or other events affecting the tax status of the Bonds;

2. modifications to the rights of Bond Holders;

3. Bond redemptions;

4. release, substitution or sale of property securing repayment of the Bonds;

5. non-payment related defaults;