Agenda packet — Fontana City Council, September 9, 2025 (part 4 of 5)

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Idilio Sanchez
Chair
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ATTACHMENT NO. 7

NOTICE OF PUBLIC HEARING
SI DESEA INFORMACION EN ESPAÑOL REFERENTE A ESTA NOTIFICACION O PROYECTO, FAVOR DE COMUNICARSE AL (909) 350-6728.

In compliance with Section 202 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12132) and the federal rules and regulations adopted in implementation thereof, the Agenda will be made available in appropriate alternative formats to persons with a disability. Should you need special assistance to participate in this meeting, please contact the City Clerk’s Department by calling (909) 350-7602. Notification 48 hours prior to the meeting will enable the City to make reasonable arrangements to ensure accessibility to this meeting.

A PUBLIC HEARING HAS BEEN SCHEDULED BEFORE THE CITY COUNCIL OF THE CITY OF FONTANA FOR THE FOLLOWING:

Appeal (APL) No. 25-0001/ Master Case No. 22-00104
A request by Golden State Environmental Justice Alliance (“The Appellant) to appeal the Planning Commission’s decision on June 3, 2025, which approved Master Case No. 22-0104 for Tentative Parcel Map No. 22-0025 (TPM No. 20611) and Design Review No. 22-0051 along with the certification of an Final Environmental Report (FEIR) State Clearinghouse Number (SCH No. 2023030788), Monitoring, and Reporting Program, (MMRP) to facilitate the consolidation of six (6) parcels into one parcel, vacation of Windflower Avenue and the development of an industrial warehouse building totaling approximately 398,514 square feet on approximately 18.3 acres (APNs: 1119-241-10, -13, -18, -25, -26, and -27).

Environmental Determination: On June 3, 2025, the Planning Commission certified a Final Environmental Impact Report (FEIR) that analyzed potential environmental impacts associated with the development of the property for Master Case No. 22-000104: Tentative Parcel Map No. 22-0025 (TPM No. 20611) and Design Review No. 22-0051 in accordance with the California Environmental Quality Act Guidelines. This document can be reviewed at City Hall (8353 Sierra Avenue Fontana, CA 92335) and online at
https://www.fontanaca.gov/2137/Environmental-Documents .

Location of Property: The project site is located east of Sierra Avenue, west of Mango Avenue, and south of Summit Ave (APNs: 1119-241-10, -13, - 18, -25, -26, and -27)
Date of Hearing: September 9, 2025
Place of Hearing: City Hall Council Chambers
8353 Sierra Avenue
Fontana, CA 92335
Time of Hearing: 2:00 PM
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Should you have any questions concerning this project, please contact Salvador Quintanilla, Senior Planner, at (909) 350-6656, e-mail: [email protected].

ANY INTERESTED PARTY MAY PROVIDE INFORMATION BY LETTER OR EMAIL WHICH MAY BE OF ASSISTANCE TO THE CITY COUNCIL. A COPY OF THE APPLICATION AND ENVIRONMENTAL DOCUMENTATION IS AVAILABLE FOR INSPECTION. PLEASE CONTACT THE PLANNER LISTED ABOVE.

IF YOU CHALLENGE IN COURT ANY ACTION TAKEN CONCERNING A PUBLIC HEARING ITEM, YOU

MAY BE LIMITED TO RAISING ONLY THOSE ISSUES YOU OR SOMEONE ELSE RAISED AT THE

PUBLIC HEARING DESCRIBED IN THIS NOTICE, OR IN WRITTEN CORRESPONDENCE TO THE CITY AT, OR PRIOR TO, THE PUBLIC HEARING.

Publish date: August 29, 2025
Project Site
Sumit Avenue
Sierra Avenue
Mango Avenue
707
City of Fontana
Action Report
City Council Meeting
8353 Sierra Avenue
Fontana, CA 92335
File #: 25-0488 Agenda Date: 9/9/2025
Agenda #: B. Category: Public Hearing
FROM:

Finance
SUBJECT:

Conduct a public hearing and approval of resolutions (i) authorizing issuance of the Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A (the “Bonds”); (ii) approving related documents, including the Preliminary Official Statement; and (iii) directing related actions by each of the City of Fontana and the Fontana Public Facilities Financing Authority to finance certain public improvements, including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (the “2025 Project”), and refinance all or a portion of its previously issued Lease Revenue Refunding Bonds, Series 2014A (the “2014 Bonds).

RECOMMENDATION:

Conduct a Public Hearing and Adopt Resolution No. 2025-091 of the City Council of the City of Fontana authorizing the execution and delivery by the City of a Ground Lease, Lease Agreement, Indenture, Escrow Agreement, Continuing Disclosure Certificate and Bond Purchase Agreement in connection with the issuance of Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A, approving the issuance of such Bonds in an aggregate principal amount of not to exceed $150,000,000, authorizing the distribution of an Official Statement in connection with the offering and sale of such Bonds and authorizing the execution of necessary documents and certificates and related actions.

COUNCIL GOALS:
⦁ Practice sound fiscal management by living within our means while investing in the future. 1 Practice sound fiscal management by developing long-term funding and debt management plans.
2 Practice sound fiscal management by emphasizing capital formation. · Invest in the City’s infrastructure (streets, sewers, parks, etc.) by maintaining and improving the city's existing infrastructure.
· Invest in the City’s infrastructure (streets, sewers, parks, etc.) by providing for the development of new infrastructure.

DISCUSSION:

Plan of Finance. The City contemplates issuance of the Bonds to fund the 2025 Project consisting of:

Public Improvements City Hall Parking
Structure Other Capital Improvements of the City
Total
Total Approximate Cost
$70 million $27 million
$23 million $120 million
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Public Improvements City Hall Parking
Structure Other Capital Improvements of the City
Total
Total Approximate Cost
$70 million $27 million
$23 million $120 million
Currently, the City of Fontana has two outstanding bond financings including the 2014 Lease Revenue Refunding Bonds and the 2021A Lease Revenue Bonds. The 2025A Lease Revenue Bonds are structured similar to the City’s existing bond financings and will refinance the 2014 Bonds to achieve annual savings and release the leased assets from the 2014 Lease, together with other City assets, for use under the 2025 Lease, as described below.

Lease Financings Generally . California cities commonly use lease financing to pay for capital improvements through their general fund without first holding a city-wide election. Lease financings are commonly structured as lease revenue bonds issued by a joint exercise of powers authority (a separate public agency formed to provide assistance with financings under State law). Under a lease revenue bond financing, the city is obligated to make lease payments to the joint powers authority for the right to use and occupy a public building, and the joint powers authority assigns its right to receive the lease payments to a bond trustee; the bond trustee uses the lease payments to pay debt service on lease revenue bonds that are sold to investors. In lease financing structures, cities covenant to annually budget and appropriate from the general fund for the lease payments.

Fontana Public Facilities Financing Authority . The Fontana Public Facilities Financing Authority (the “Authority”) is a joint exercise of powers authority organized and existing pursuant to the Joint Exercise of Powers Act (Government Code §6500 et seq., the “Joint Powers Law”) for the purpose of providing assistance to the City with its financing programs, and for any other purposes authorized under Article 4 of the Joint Powers Law (the “Bond Law”), and a Joint Exercise of Powers Agreement, dated as of September 1, 2014. The members of the Authority are the City and the Fontana Fire Protection District (the “Fire Protection District”).

Proposed Bonds. Staff recommends the following actions:

Public Hearing. Pursuant to Government Code Section 6585.5, the City must make a finding of significant benefit before the Authority’s issuance of the Bonds, after the noticed public hearing.

Notice of the public hearing was published on Thursday, September 4, 2025. In accordance with such requirement, staff recommends that the Council hold the public hearing to make a finding of significant public benefit related to the issuance of the Bonds.

Financing Documents. Staff recommends that the City Council adopt a resolution approving issuance of the bonds and execution and delivery of certain documents as listed below:

City Council Resolution: By adopting the Resolution (Attachment A) the City Council will authorize the issuance of the Bonds and approve the execution and delivery of the following documents. Each of the documents are presented in substantially final form and will be completed after the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined).
(i) Ground Lease,
(ii) Lease Agreement,
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(iii) Continuing Disclosure Certificate,
(iv) Preliminary Official Statement,
(v) Bond Purchase Agreement,
(vi) Escrow Agreement, and
(vii) Indenture
Below are brief descriptions of these documents:
(i) Ground Lease: (Attachment B)
Under the Ground Lease, the City will lease the Leased Properties listed below to the Authority in consideration for the application of the bond proceeds for the Project (including the 2025 Project and the refunding of the Series 2014 Bonds).
(ii) Lease Agreement: (Attachment C)
Under the Lease Agreement, the City will lease the Leased Properties back from the Authority. In consideration for the Lease Agreement, the City will pay annual Lease Payments to the Authority, which the Authority will assign to the Trustee for payment of debt service on the Bonds.

Under the provisions of the Lease Agreement and the Ground Lease, the “Leased Properties” are identified as the Lewis Library (which was subject to the 2014 Lease), the City Hall/Development Services Building (which was also subject to the 2014 Lease); Parking Structure #1 located at 16948 Arrow Boulevard; the Fire District Administration Building and related property thereto; and the Fontana Park (collectively, the “Leased Properties”). Upon completion of the 2025 Project, the Lease provides the City with the ability to release the Lewis Library, and upon the last lease payment attributable to refinancing of the 2014 Bonds coming due in 2037, the Lease Agreement and Ground Lease will terminate with respect to Fontana Park.
(iii) Continuing Disclosure Certificate: (Attached to the Preliminary Official Statement as Appendix E)
Under the Continuing Disclosure Certificate, the City will agree to provide a copy of its audited financial statements and a report of other information relevant to the security of the Bonds for filing each year, to make this information available to the investors. The City will also agree to disclose and make filings upon the occurrence of certain enumerated events (such as material default by the City on its financial obligations).
(iv) Preliminary Official Statement:( Attachment D)
In connection with a public offering, the Preliminary Official Statement (the “POS”) will be distributed by the Underwriter (as described below) for the Underwriter’s use in marketing the Bonds to potential investors. The POS provides a summary of the proposed terms of the Bonds, the sources of repayment and certain risks relating to the investment in the Bonds. As permitted by federal securities laws, some of the terms relating to the Bonds (such as interest rates and redemption schedule), will appear as blanks or be footnoted as “preliminary; subject to change” in the POS and will not be determined until the pricing of the Bonds. After the pricing of the Bonds, these terms will be inserted, and the POS will be converted into a final Official Statement. The Underwriter will then City of Fontana Page 3 of 5 Printed on 9/4/2025
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be inserted, and the POS will be converted into a final Official Statement. The Underwriter will then distribute the Official Statement to buyers of the Bonds and cause it to be uploaded onto the Electronic Municipal Market Access website (known as EMMA), the official repository for information pertaining municipal securities issued in the United States.

The Official Statement is the “offering document” for the Bonds, required to be made available to investors pursuant to federal securities laws. The Official Statement must include all information that would be material to a prospective investor’s decision whether to purchase the Bonds. While the various members of the financing team have contributed to the preparation of the POS and the Official Statement, the City and the Authority are ultimately responsible for ensuring that the POS is accurate, contains no misleading information and does not omit any information necessary to make the POS not misleading to investors.
(v) Bond Purchase Agreement: (Attachment E)
In connection with a public offering, this agreement will be executed on the day that the Bonds are priced (i.e., when the principal amount of the Bonds, the interest rates and the original issue premium or discount will be determined, a few weeks before the closing date). Under this agreement, Samuel A. Ramirez & Co. Incorporated (the “Underwriter”) will agree to buy the Bonds from the Authority on the issuance date of the Bonds upon satisfaction of the closing conditions specified in the Bond Purchase Agreement, including the execution and delivery of applicable documents by the Authority and the City.
(vi) Escrow Agreement (Attachment F)
The Escrow Agreement provides for the transfer of a portion of the proceeds of the Bonds to the Trustee to pay off the remaining balance of the 2014 Bonds. (vii) Indenture: (Attachment G)
The Indenture contains provisions pertaining to the terms of the Bonds, including maturity schedule, interest rates and redemption provisions. It also provides for the establishment and maintenance of certain funds and accounts and the rights and duties of the Trustee. Under the Indenture, the Authority will pledge “Base Rental Payments” (i.e., Lease Payments) made by the City to the payment of debt service on the Bonds.

Authorization Parameters. Under the Authority Resolution, the Executive Director is authorized to act on behalf of the Authority within the following parameters: (i) the principal amount of the Bonds shall not exceed $150,000,000; (ii) the true interest cost of the Bonds shall not exceed 6.00%; and (iii) the Underwriter’s discount (excluding any original issue discount) shall not exceed 0.30% of the principal amount of the Bonds.

Financing Team Engagements. The Authority Resolution also approves the engagement of Stradling Yocca Carlson & Rauth LLP as Bond Counsel; Jones Hall LLP as Disclosure Counsel, and CSG Advisors Incorporated as Municipal Advisor, and US Bank Trust Company, National Association as Trustee for the Bonds
Additional Actions. Each Resolution also authorizes Authorized Officers of the City and the Authority City of Fontana Page 4 of 5 Printed on 9/4/2025
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Additional Actions. Each Resolution also authorizes Authorized Officers of the City and the Authority as needed to effectuate bond closing, including the provision of bond insurance and/or a reserve fund surety as needed.

FISCAL IMPACT:

In accordance with the Good Faith Estimates outlined in Exhibit A of the City and Authority Resolutions, the portion of annual lease payments related to the 2025 Project are estimated to average approximately $7,621,400 per year on a fiscal year basis through June 30, 2056, and the portion that would be related to the refinancing of the 2014 Bonds are estimated to average $2,480,000 per year on a fiscal year basis through June 30, 2038. Based on current interest rates, net present value savings related to the refinancing of the 2014 Bonds is approximately $1.2 million.

Lease payments would be paid from available general fund revenues. Actual annual average lease payments and savings attributable to the refinancing of the 2014 Bonds will not be determined until the Bonds price in late September or early October.

The fees and expenses of the financing team, including Bond Counsel, Disclosure Counsel, Underwriter and Municipal Advisor, Rating Agency, and any bond insurance or reserve fund surety, if applicable, are paid from proceeds of the Bonds.

MOTION:

Approve - A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA AUTHORIZING

THE EXECUTION AND DELIVERY BY THE CITY OF A GROUND LEASE, LEASE AGREEMENT,

INDENTURE, ESCROW AGREEMENT, CONTINUING DISCLOSURE CERTIFICATE AND BOND

PURCHASE AGREEMENT IN CONNECTION WITH THE ISSUANCE OF FONTANA PUBLIC FACILITIES FINANCING AUTHORITY LEASE REVENUE BONDS, SERIES 2025A, APPROVING

THE ISSUANCE OF SUCH BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $150,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL STATEMENT IN

CONNECTION WITH THE OFFERING AND SALE OF SUCH BONDS AND AUTHORIZING THE

EXECUTION OF NECESSARY DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS ATTACHMENTS:

1. City Resolution

2. Ground Lease

3. Lease Agreement

4. Preliminary Official Statement (including Continuing Disclosure Certificate)

5. Bond Purchase Agreement

6. Escrow Agreement

7. Indenture
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RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FONTANA

AUTHORIZING THE EXECUTION AND DELIVERY BY THE CITY OF A

GROUND LEASE, LEASE AGREEMENT, INDENTURE, ESCROW

AGREEMENT, CONTINUING DISCLOSURE CERTIFICATE AND BOND

PURCHASE AGREEMENT IN CONNECTION WITH THE ISSUANCE OF

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY LEASE
REVENUE BONDS, SERIES 2025A, APPROVING THE ISSUANCE OF SUCH

BONDS IN AN AGGREGATE PRINCIPAL AMOUNT OF NOT TO EXCEED $150,000,000, AUTHORIZING THE DISTRIBUTION OF AN OFFICIAL

STATEMENT IN CONNECTION WITH THE OFFERING AND SALE OF

SUCH BONDS AND AUTHORIZING THE EXECUTION OF NECESSARY

DOCUMENTS AND CERTIFICATES AND RELATED ACTIONS
WHEREAS, the City of Fontana, California (the “City”) is a municipal corporation and general law city duly organized and existing under and pursuant to the Constitution and laws of the State of California (the “State”);
WHEREAS, the City previously financed a portion of the costs of the acquisition, construction and installation of certain public capital improvements in the City, as more fully described in the proceedings for the issuance of the 2007 Bonds (defined below) (the “2007 Project”); WHEREAS, in order to accomplish such financing, the City determined to provide the funds necessary to finance the acquisition, construction and installation of the 2007 Project through issuance by the Fontana Public Financing Authority (the “Financing Authority”) of its 2007 Lease Revenue Bonds (the “2007 Bonds”), payable from certain lease payments to be made by the City under a lease agreement (the “2007 Lease”);
WHEREAS, the City and the Fontana Public Facilities Financing Authority (the “Authority”) refinanced the 2007 Bonds and the City’s lease obligations in connection therewith through the issuance of the Fontana Public Facilities Financing Authority Lease Revenue Refunding Bonds, Series 2014A (the “Series 2014A Bonds”);
WHEREAS, the City desires to finance the acquisition, construction, and installation of certain public capital improvements in the City, including capital improvements located in the City including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (collectively, the “2025 Project”; and, together with the 2007 Project, the “Project”);
WHEREAS, the City desires to refinance all or a portion of the Series 2014A Bonds and finance all or a portion of the 2025 Project;
WHEREAS, the City is a member of the Authority and the Project is located within the boundaries of the City;
WHEREAS, the City has, prior to the consideration of this Resolution, held a public hearing on the refinancing of the Series 2014A Bonds and the financing of the 2025 Project in accordance with 713
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Section 6586.5 of the Act, which hearing was held at 8353 Sierra Avenue, Fontana, California 92335 on September 9, 2025;
WHEREAS, in accordance with Section 6586.5 of the Act, notice of such hearing was published once at least five days prior to the hearing in the Fontana Herald News, a newspaper of general circulation in the City;
WHEREAS, the Authority and the City have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A” (the “Bonds”) for the purpose of refinancing the Series 2014A Bonds and financing the 2025 Project; WHEREAS, in order to facilitate the issuance of the Bonds, the City and the Authority desire to enter into a Ground Lease between the City and the Authority (the “Ground Lease”) pursuant to which the City will lease certain real property (which real property shall consist of property generally known as the City’s City Hall building, Development Services Office building, Library, Fire Protection District Administration Building, Parking Garage located at 16948 Arrow Boulevard, and Fontana Park, subject to adjustment as described in Section 2 below (the “Leased Assets”)) to the Authority, and a Lease Agreement between the City and the Authority (the “Lease Agreement”), pursuant to which the City will lease the Leased Assets back from the Authority, and pay certain Base Rental Payments (as defined in the Lease Agreement), which are pledged to the owners of the Bonds by the Authority pursuant to an Indenture by and among U.S. Bank Trust Company, National Association (the “Trustee”), the City and the Authority (the “Indenture”); WHEREAS, the City and the Authority have determined that debt service savings can be achieved by the redemption and defeasance of the Series 2014A Bonds and that significant public benefits will be achieved by the financing of the 2025 Project through the issuance of the Bonds by enabling the City to undertake the 2025 Project on a timely basis and provide a more efficient delivery of municipal services to the community;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to refinance all or a portion of the Series 2014A Bonds and finance all or a portion of the 2025 Project through the offering and sale of the Bonds;
WHEREAS, the defeasance of the Series 2014A Bonds will be accomplished by means of an Escrow Agreement (the “Escrow Agreement”) by and among U.S. Bank Trust Company, National Association, as escrow agent (“Escrow Agent”), the City and the Authority, the form of which has been presented to this City Council at the meeting at which this Resolution is being adopted; WHEREAS, the Bonds will be issued pursuant to the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”); WHEREAS, the City and the Authority desire to provide for the negotiated sale of the Bonds; WHEREAS, the City and the Authority have selected Samuel A. Ramirez & Co., Inc. to act as underwriter (the “Underwriter”) to purchase the Bonds from the Authority pursuant to a Bond Purchase Agreement (the “Bond Purchase Agreement”);
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WHEREAS, Rule 15c2-12 promulgated under the Securities Exchange Act of 1934 (“Rule 15c2-12”) requires that, in order to be able to purchase or sell the Bonds, the underwriter thereof must have reasonably determined that the City has undertaken in a written agreement or contract for the benefit of the holders of the Bonds to provide disclosure of certain financial information and certain events on an ongoing basis;
WHEREAS, in order to cause such requirement to be satisfied, the City desires to execute and deliver a Continuing Disclosure Certificate (the “Continuing Disclosure Certificate”); WHEREAS, a form of the Preliminary Official Statement (the “Preliminary Official Statement”) has been prepared;
WHEREAS, good faith estimates of certain information relating to the Lease Agreement and the Bonds are disclosed and set forth in Exhibit A attached to this Resolution as required by California Government Code Section 5852.1; such estimates were provided by CSG Advisors Incorporated (the “Municipal Advisor”) based on preliminary bond pricing information provided by the Underwriter; WHEREAS, the City Council has been presented with the form of each document referred to herein relating to the refinancing contemplated hereby, and the City Council has examined and approved each document and desires to authorize and direct the execution of such documents and the consummation of such refinancing; and
WHEREAS, all acts, conditions and things required by the laws of the State of California to exist, to have happened and to have been performed precedent to and in connection with the consummation of such refinancing authorized hereby do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the City is now duly authorized and empowered, pursuant to each and every requirement of law, to consummate such refinancing for the purpose, in the manner and upon the terms herein provided; NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Fontana that:

Section 1. Each of the above recitals is true and correct. Following a duly noticed public hearing, the City Council hereby approves the financing and refinancing of the Project described in this Resolution and further finds and determines that there are significant public benefits to the citizens of the City through the issuance of the Bonds and execution and delivery of the Ground Lease and Lease Agreement pursuant to the Act and otherwise hereunder within the meaning of Section 6586(a) through (d), inclusive, of the Act, in that the delivery of the Bonds and related transactions will result in demonstrable savings in effective interest rate to the City and enable the City to undertake the 2025 Project on a timely basis, and provide a more efficient delivery of municipal services to the community.

Section 2. The forms of the Ground Lease and Lease Agreement, on file with the City Clerk, are hereby approved, and the Mayor, the Mayor Pro Tem, the City Manager, the Treasurer, the Chief Financial Officer, and the City Clerk (the “Authorized Officers”), are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Ground Lease and Lease Agreement in substantially said forms, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the term of the Ground Lease and Lease Agreement shall terminate no later than November 1, 2057 (provided that such term may be extended as provided therein) and the all-in true interest cost applicable to the Bonds shall not exceed 715
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6.00% per annum. In the event that it is determined by the City Manager, or his designee, that there are limitations or restrictions on the ability of the City to lease or sublease any portion of the Leased Assets as contemplated by the Ground Lease and Lease Agreement, the City Manager, or his designee, may designate other or additional real property of the City to be leased or subleased pursuant to the Ground Lease and Lease Agreement, with such designation to be conclusively evidenced by the execution and delivery of the Ground Lease and Lease Agreement by one or more of the Authorized Officers. The Authorized Officers are each hereby authorized to execute and deliver a certificate accepting fee title to any real property as necessary or appropriate to facilitate the use of such property as a Leased Asset.

Section 3. The form of Indenture, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Indenture in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof; provided, however, that the aggregate principal amount of the Bonds shall not exceed $150,000,000, the final maturity date of the Bonds shall be no later than November 1, 2057 and the all-in true interest cost applicable to the Bonds shall not exceed 6.00% per annum, and, provided, further, that such changes, insertions and omissions shall be consistent with the terms of the Bonds established at negotiated sale pursuant to the Bond Purchase Agreement.

Section 4. The Bond Purchase Agreement, on file with the City Clerk, is hereby approved and the Authorized Officers are each hereby authorized and directed, for and in the name of the City, to execute and deliver the acceptance thereof set forth in the Bond Purchase Agreement, with such changes, insertions and omissions as the Authorized Officer executing the same may require or approve, such requirement or approval to be conclusively evidenced by the execution of the Bond Purchase Agreement by such Authorized Officer; provided, however, that such changes, insertions and omissions shall not result in an aggregate underwriter’s discount (not including any original issue discount paid by the Underwriter) from the principal amount of the Bonds in excess of 0.30% of the aggregate principal amount of the Bonds.

Section 5. The issuance of not to exceed $150,000,000 aggregate principal amount of the Bonds, in the principal amounts, bearing interest at the rates and maturing on the dates as specified in the Indenture as finally executed, is hereby approved.

The sale and issuance of the Bonds and execution and delivery of the Lease Agreement is hereby determined to be consistent with the City’s Debt Management Policy and to the extent the sale and issuance of the Bonds is not in compliance with the City’s Debt Management Policy, such noncompliance is waived in accordance with the terms of the City’s Debt Management Policy. The City’s Debt Management Policy complies with Government Code Section 8855(i) and the Lease Agreement and the Bonds comply with such policy. Stradling Yocca Carlson & Rauth LLP, Bond Counsel to the City, is hereby authorized and directed to check the appropriate box on the Preliminary and Final Reports of Debt Issuance submitted to the California Debt and Investment Advisory Commission with respect to the Lease Agreement and the Bonds.

Section 6. The form of Preliminary Official Statement, on file with the City Clerk, with such changes, insertions and omissions therein as may be approved by an Authorized Officer, is hereby approved, and the use of the Preliminary Official Statement in connection with the offering and sale of the Bonds is hereby authorized and approved. The Authorized Officers are each hereby authorized to 716
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certify on behalf of the City that the Preliminary Official Statement is deemed final as of its date, within the meaning of Rule 15c2-12 (except for the omission of certain final pricing, rating and related information as permitted by Rule 15c2-12).

The Authorized Officers are each hereby authorized and directed to furnish, or cause to be furnished, to prospective bidders for the Bonds a reasonable number of copies of the Preliminary Official Statement.

Section 7. The preparation and delivery of an Official Statement, and its use in connection with the offering and sale of the Bonds, is hereby authorized and approved. The Official Statement shall be in substantially the form of the Preliminary Official Statement with such changes, insertions and omissions as may be approved by an Authorized Officer, such approval to be conclusively evidenced by the execution and delivery thereof. The Authorized Officers are each hereby authorized and directed, for and in the name of and on behalf of the City, to execute the final Official Statement and any amendment or supplement thereto for and in the name and on behalf of the City.

Section 8. The form of Escrow Agreement, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Escrow Agreement in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 9. The form of Continuing Disclosure Certificate, on file with the City Clerk, is hereby approved, and the Authorized Officers are each hereby authorized and directed, for and in the name and on behalf of the City, to execute and deliver the Continuing Disclosure Certificate in substantially said form, with such changes, insertions and omissions therein as the Authorized Officer executing the same may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof.

Section 10. Stradling Yocca Carlson & Rauth LLP, is hereby approved and appointed as Bond Counsel, Jones Hall LLP, is hereby approved and appointed as Disclosure Counsel, CSG Advisors Incorporated is hereby approved and appointed as Municipal Advisor, and U.S. Bank Trust Company, National Association is hereby appointed as Trustee, each to provide such services to the City and any other related services as may be required to issue the Bonds and to defease and/or refinance the Series 2014A Bonds and prepay the City’s lease payments in connection therewith.

Section 11. The officers, employees and agents of the City are hereby authorized and directed, jointly and severally, to do any and all things which they may deem necessary or advisable in order to consummate the transactions herein authorized and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution, including, but not limited to, the execution and delivery of agreements terminating the leasehold and subleasehold interests of the Financing Authority securing the Series 2014A Bonds (including, but not limited to, the Termination of Lease Agreement (2014) substantially in the form on file with the City Clerk). Anything to the contrary herein notwithstanding, in the event the Chief Financial Officer determines in consultation with the Municipal Advisor that the cost efficient marketing of the Bonds requires creation of a funded reserve under the Indenture, each of the Indenture, Lease Agreement and other documents approved herein may be revised to reflect the funding of such a reserve. Specifically and without limiting the foregoing, the City Manager is authorized and directed to solicit and accept bids for bond insurance and, if applicable, a reserve account insurance policy, for the Bonds, provided he determines acceptance of 717
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the best bid will result in further debt service savings, and appropriate changes to each of the documents referenced herein to evidence such bond insurance, and, if applicable, a reserve account insurance policy, and the terms thereof, are hereby authorized and approved. All actions heretofore taken by the officers, employees and agents of the City with respect to the transactions set forth above are hereby approved, confirmed and ratified.

Section 12. This Resolution will take effect from and after its date of adoption.

PASSED AND ADOPTED this 9th day of September, 2025.

Mayor of the City of Fontana
ATTEST:

City Clerk of the City of Fontana
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STATE OF CALIFORNIA )
) ss.

COUNTY OF SAN BERNARDINO )
I, Germaine Key, City Clerk of said City, do hereby certify that the foregoing Resolution was duly adopted by the City Council of said City and was signed by the Mayor of said City at an adjourned regular meeting of said City Council held on the 9th day of September, 2025 and was approved by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

CITY CLERK
BY:

City Clerk of the City of Fontana
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EXHIBIT A

GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Bonds in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by its Municipal Advisor, CSG Advisors Incorporated, in consultation with Samuel A.

Ramirez & Co., Inc., the Underwriter of the Bonds.

Principal Amount. The Municipal Advisor has informed the City that, based on the City’s financing plan (which includes refinancing of the Series 2014A Bonds) and current market conditions, its good faith estimate of the aggregate principal amount of the Bonds to be issued and sold is $138,635,000 (the “Estimated Principal Amount”), which excludes approximately $6,558,000 of net premium estimated to be generated based on current market conditions. Net premium is generated when, on a net aggregate basis for a single issuance of bonds, the price paid for such bonds is higher than the face value of such bonds. The Estimated Principal Amount plus the net premium represent the total estimated proceeds available in the aggregate amount of $145,193,000.

True Interest Cost of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Bonds, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Bonds, is 3.42% allocable to refinancing the Series 2014A Bonds, 4.86% allocable to financing the 2025 Project, and 4.73% on an aggregate weighted average basis.

Finance Charge of the Bonds. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate and expectation to purchase bond insurance at a net beneficial cost to the City (meaning the cost of the insurance premium will be less than the reduced interest cost to the City), its good faith estimate of the finance charge for the Bonds, which means the sum of all fees and charges paid to third parties (or costs associated with the Bonds), is $746,000 on an aggregate basis.

Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for sale of the Bonds, less the finance charge of the Bonds, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Bonds, is $24,467,000 allocable to refinancing the Series 2014A Bonds, and $120,000,000 allocable to the 2025 Project.

Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Bonds is issued and sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Bonds, plus the finance charge for the Bonds, as described above, not paid with the proceeds of the Bonds, calculated to the final maturity of the Bonds, is $262,414,000 on an aggregate basis, which 720
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excludes any reserves or capitalized interest paid or funded with proceeds of the Bonds (which may offset such total payment amount).

The foregoing estimates constitute good faith estimates only and are based on market conditions prevailing at the time of preparation of such estimates. The actual principal amount of the Bonds issued and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Bonds being different than the date assumed for purposes of such estimates, (b) the actual principal amount of Bonds issued and sold being different from the Estimated Principal Amount, (c) the actual amortization of the Bonds being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Bonds being different than those estimated for purposes of such estimates, (e) other market conditions, (f) alterations to the City’s financing plan, or a combination of such factors. 721
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RECORDING REQUESTED BY:

Fontana Public Facilities Financing Authority
AND WHEN RECORDED RETURN TO:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attention: Vanessa S. Legbandt, Esq.
[Space above for Recorder’s use.]

THIS TRANSACTION IS EXEMPT FROM CALIFORNIA DOCUMENTARY TRANSFER TAX PURSUANT TO SECTION 11921 OF THE CALIFORNIA REVENUE AND TAXATION CODE. THIS DOCUMENT IS EXEMPT FROM RECORDING FEES PURSUANT TO SECTION 27383 OF THE CALIFORNIA GOVERNMENT CODE.

THE GRANTOR AND THE GRANTEE ARE GOVERNMENTAL AGENCIES.

GROUND LEASE
by and between

CITY OF FONTANA
and

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
Dated as of October 1, 2025
Relating to
$________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A
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GROUND LEASE
THIS GROUND LEASE (this “Ground Lease”), executed and entered into as of October 1, 2025, is by and between the CITY OF FONTANA (the “City”), a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessor, and the FONTANA PUBLIC FACILITIES FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity duly organized and existing under the laws of the State of California, as lessee.

WITNESSETH:

WHEREAS, the City previously financed a portion of the costs of the acquisition, construction and installation of certain public capital improvements in the City, as more fully described in the proceedings for the issuance of the 2007 Bonds (defined below) (the “2007 Project”); WHEREAS, the City determined to provide the funds necessary to finance the 2007 Project through issuance by the Fontana Public Financing Authority of its Fontana Public Financing Authority 2007 Lease Revenue Bonds (the “2007 Bonds”), payable from certain lease payments to be made by the City under a lease agreement;
WHEREAS, the City and the Authority refinanced the 2007 Bonds and the City’s lease obligations in connection therewith, through the issuance by the Authority of its Lease Revenue Refunding Bonds, Series 2014A (the “Series 2014A Bonds”); WHEREAS, the City and the Authority now desire to finance the acquisition, construction, and installation of certain public capital improvements in the City, including capital improvements located in the City including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (collectively, the “2025 Project”; and, together with the 2007 Project, the “Project”);
WHEREAS, the City and Authority desire to refinance all or a portion of the Series 2014A Bonds and finance all or a portion of the 2025 Project; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A” (the “Series 2025A Bonds”) for the purpose of refinancing the Series 2014A Bonds and the City’s related lease payments and financing the 2025 Project;
WHEREAS, in order to facilitate the issuance of the Series 2025A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to this Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to the Lease Agreement (the “Lease Agreement”); WHEREAS, the Property is more particularly described in Exhibit A hereto; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide the funds necessary to refinance all or a portion of the Series 723
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2014A Bonds and finance all or a portion of the 2025 Project through the issuance by the Authority of the Series 2025A Bonds payable from the base rental payments (the “Base Rental Payments”) to be made by the City under the Lease Agreement;
WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and the Authority to provide for the issuance of such bonds payable from the Base Rental Payments pursuant to an Indenture, dated as of the date hereof (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof (the “Assignment Agreement”);
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Ground Lease do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Ground Lease;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS
Except as otherwise defined herein, or unless the context clearly otherwise requires, words and phrases defined in Article I of the Lease Agreement shall have the same meaning in this Ground Lease.

ARTICLE II
LEASE OF THE PROPERTY; RENTAL
Section 2.01 Lease of Property. The City hereby leases to the Authority, and the Authority hereby leases from the City, for the benefit of the Owners of the Bonds, the Property, subject only to Permitted Encumbrances, to have and to hold for the term of this Ground Lease.

Section 2.02 Rental. The Authority shall pay to the City as and for rental of the Property hereunder, the sum of $1.00, the receipt of which is hereby acknowledged.

ARTICLE III

QUIET ENJOYMENT
The parties intend that the Property will be leased back to the City pursuant to the Lease Agreement for the term thereof. It is further intended that, to the extent provided herein and in the Lease Agreement, if an event of default occurs under the Lease Agreement, the Authority, or its assignee, will have the right, for the then remaining term of this Ground Lease to (a) take possession of the Property, (b) if it deems it appropriate, cause an appraisal of the Property and a study of the then reasonable use thereof to be undertaken, and (c) relet the Property. Subject to any rights the City may 724
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have under the Lease Agreement (in the absence of an event of default) to possession and enjoyment of the Property, the City hereby covenants and agrees that it will not take any action to prevent the Authority from having quiet and peaceable possession and enjoyment of the Property during the term hereof and will, at the request of the Authority and at the City’s cost, to the extent that it may lawfully do so, join in any legal action in which the Authority asserts its right to such possession and enjoyment.

ARTICLE IV

SPECIAL COVENANTS AND PROVISIONS
Section 4.01 Waste. The Authority agrees that at all times that it is in possession of the Property, it will not commit, suffer or permit any waste on the Property, and that it will not willfully or knowingly use or permit the use of the Property for any illegal purpose or act.

Section 4.02 Further Assurances and Corrective Instruments. The City and the Authority agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Ground Lease, the Indenture and the Lease Agreement.

Section 4.03 Waiver of Personal Liability. All liabilities under this Ground Lease on the part of the Authority shall be solely liabilities of the Authority as a joint exercise of powers entity, and the City hereby releases each and every director, officer and employee of the Authority of and from any personal or individual liability under this Ground Lease. No director, officer or employee of the Authority shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the City or to any other party whomsoever for anything done or omitted to be done by the Authority hereunder.

All liabilities under this Ground Lease on the part of the City shall be solely liabilities of the City as a public corporation, and the Authority hereby releases each and every member, officer and employee of the City of and from any personal or individual liability under this Ground Lease. No member, officer or employee of the City shall at any time or under any circumstances be individually or personally liable under this Ground Lease to the Authority or to any other party whomsoever for anything done or omitted to be done by the City hereunder.

Section 4.04 Taxes. The City covenants and agrees to pay any and all assessments of any kind or character and also all taxes, including possessory interest taxes, levied or assessed upon the Property.

Section 4.05 Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same.

Section 4.06 Representations of the City. The City represents and warrants to the Authority and the Trustee as follows:
(a) the City has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution of this Ground Lease;
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(b) except for Permitted Encumbrances, the Property is not subject to any dedication, easement, right of way, reservation in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially interfere with the use of the Property for governmental purposes as contemplated by the City;
(c) all taxes, assessments or impositions of any kind with respect to the Property, except current taxes, have been paid in full; and
(d) the Property is necessary to the City in order for the City to perform its governmental functions.

Section 4.07 Representations of the Authority. The Authority represents and warrants to the City and the Trustee that the Authority has the full power and authority to enter into, to execute and to deliver this Ground Lease, and to perform all of its duties and obligations hereunder, and has duly authorized the execution and delivery of this Ground Lease.

ARTICLE V

ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 5.01 Assignment and Subleasing. This Ground Lease may be sold or assigned and the Property subleased, as a whole or in part, by the Authority without the necessity of obtaining the consent of the City, if an event of default occurs under the Lease Agreement. The Authority shall, within 30 days after such an assignment, sale or sublease, furnish or cause to be furnished to the City a true and correct copy of such assignment, sale or sublease, as the case may be.

Section 5.02 Restrictions on City. The City agrees that, except with respect to Permitted Encumbrances, it will not mortgage, sell, encumber, assign, transfer or convey the Property or any portion thereof during the term of this Ground Lease.

ARTICLE VI
TERM; TERMINATION
Section 6.01 Term. The term of this Ground Lease shall commence as of the date of commencement of the term of the Lease Agreement and shall remain in full force and effect from such date to and including November 1, 20[55], unless such term is extended or sooner terminated as hereinafter provided. Notwithstanding the foregoing, the term of this Ground Lease shall automatically terminate on November 1, 20[37] with respect to the portion of the Property designated as the Jessie Turner Park Site on Exhibit A hereto.

Section 6.02 Extension; Early Termination. If, on November 1, 20[55], the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments payable under the Lease Agreement shall have been abated at any time, then the term of this Ground Lease shall be automatically extended until the date upon which all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, and the Indenture shall be discharged by its terms, except that the term of this Ground Lease shall in no event be extended more than ten years. If, prior to November 1, 20[55], all Bonds shall be fully paid, or provisions therefor made in accordance with 726
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Article X of the Indenture, and the Indenture shall be discharged by its terms, the term of this Ground Lease shall end simultaneously therewith.

ARTICLE VII

MISCELLANEOUS
Section 7.01 Binding Effect. This Ground Lease shall inure to the benefit of and shall be binding upon the City, the Authority and their respective successors and assigns.

Section 7.02 Severability. In the event any provision of this Ground Lease shall be held invalid or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render unenforceable any other provision hereof.

Section 7.03 Amendments, Changes and Modifications. This Ground Lease may be amended, changed, modified, altered or terminated only in accordance with the provisions of the Lease Agreement.

Section 7.04 Assignment to Trustee. The Authority and City acknowledge that the Authority has assigned its right, title and interest in and to this Ground Lease (but none of its obligations and none of its rights to provide consents or approvals hereunder) to the Trustee pursuant to certain provisions of the Assignment Agreement. The City consents to such assignment.

Section 7.05 Execution In Counterparts. This Ground Lease may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.

Section 7.06 Applicable Law. This Ground Lease shall be governed by and construed in accordance with the laws of the State of California.

Section 7.07 [2025 Insurer as Third Party Beneficiary. The 2025 Insurer is recognized as and shall be deemed to be a third party beneficiary of this Ground Lease and may enforce the provisions of this Ground Lease as if it were a party hereto.] Section 7.08 Captions. The captions or headings in this Ground Lease are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Ground Lease.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the Authority and the City have caused this Ground Lease to be executed by their respective officers hereunto duly authorized, all as of the day and year first above written.

CITY OF FONTANA
By:

Mathew Ballantyne
City Manager
ATTEST:

Germaine Key
City Clerk

FONTANA PUBLIC FACILITIES FINANCING

AUTHORITY
By:

Mathew Ballantyne
Executive Director
ATTEST:

Germaine Key
Secretary
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CERTIFICATE OF ACCEPTANCE
This is to certify that the interest in the Property conveyed under the foregoing to the Fontana Public Facilities Financing Authority, a joint exercise of powers authority duly organized and existing under the laws of the State of California, is hereby accepted by the undersigned officer or agent on behalf of the Board of Directors of the Fontana Public Facilities Financing Authority, pursuant to authority conferred by resolution of the said Board of Directors adopted on September 9, 2025, and the grantee consents to recordation thereof by its duly authorized officer.

Dated: _____________ , 2025 CITY OF FONTANA
By:

Mathew Ballantyne
Executive Director
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

COUNTY OF SAN BERNARDINO )
On ___________________ before me, ____________________________________, Notary Public, personally appeared _____________________________________________________, who proved to me on the basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
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A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

STATE OF CALIFORNIA )
) ss.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
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EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
[TO COME]
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LEASE AGREEMENT
by and between

CITY OF FONTANA
and

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
Dated as of October 1, 2025
Relating to
$______

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A
733

TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS ....................................................................................................... 2 Section 1.01 Definitions.............................................................................................................. 2 ARTICLE II LEASE OF PROPERTY; TERM........................................................................... 5 Section 2.01 Lease of Property.................................................................................................... 5 Section 2.02 Term; Occupancy.................................................................................................... 5 ARTICLE III RENTAL PAYMENTS.......................................................................................... 6 Section 3.01 Base Rental Payments............................................................................................. 6 Section 3.02 Additional Rental Payments................................................................................... 6 Section 3.03 Fair Rental Value.................................................................................................... 7 Section 3.04 Payment Provisions ................................................................................................ 7 Section 3.05 Appropriations Covenant........................................................................................ 8 Section 3.06 Rental Abatement ................................................................................................... 8

ARTICLE IV ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE 2025 PROJECT ...................................................................................................... 8 Section 4.01 Deposit of Bond Proceeds; City Deposit................................................................ 8 Section 4.02 Acquisition, Construction and Improvement of the 2025 Project .......................... 8 Section 4.03 Compliance with Law............................................................................................. 9 Section 4.04 Payment of Costs.................................................................................................... 9 Section 4.05 Time of Completion and Liquidated Damages....................................................... 9 Section 4.06 Construction and Acquisition of the 2025 Project.................................................. 9 Section 4.07 Completion Date; Certification.............................................................................10 ARTICLE V MAINTENANCE, ALTERATIONS AND ADDITIONS ................................... 10 Section 5.01 Modification of the Property ................................................................................ 10 Section 5.02 Maintenance and Utilities.....................................................................................11 Section 5.03 Installation of City’s Equipment........................................................................... 11 ARTICLE VI INSURANCE ....................................................................................................... 11 Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance....................................................................................... 11 Section 6.02 Title Insurance ...................................................................................................... 12 Section 6.03 Additional Insurance Provision; Form of Policies................................................ 13 Section 6.04 Self-Insurance ....................................................................................................... 13 ARTICLE VII DEFAULTS AND REMEDIES ........................................................................... 13 Section 7.01 Defaults and Remedies.........................................................................................13 Section 7.02 Waiver...................................................................................................................16 ARTICLE VIII EMINENT DOMAIN; PREPAYMENT .............................................................. 17 Section 8.01 Eminent Domain................................................................................................... 17 Section 8.02 Prepayment ........................................................................................................... 17 ARTICLE IX COVENANTS ...................................................................................................... 18 Section 9.01 Right of Entry ....................................................................................................... 18 Section 9.02 Liens .....................................................................................................................18 734

TABLE OF CONTENTS
(continued)
Page
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Section 9.03 Quiet Enjoyment................................................................................................... 18 Section 9.04 Authority Not Liable............................................................................................. 18 Section 9.05 Assignment and Subleasing.................................................................................. 19 Section 9.06 Title to Property.................................................................................................... 20 Section 9.07 Authority’s Purpose .............................................................................................. 20 Section 9.08 Representations of the City...................................................................................20 Section 9.09 Representation of the Authority............................................................................ 20 ARTICLE X NO CONSEQUENTIAL DAMAGES; USE OF THE PROPERTY; SUBSTITUTION OR RELEASE......................................................................... 20 Section 10.01 No Consequential Damages.................................................................................. 20 Section 10.02 Use of the Property ............................................................................................... 20 Section 10.03 Substitution or Release of the Property ................................................................ 20 Section 10.04 Release of Library Site After Completion of City Hall Building .........................21 ARTICLE XI MISCELLANEOUS............................................................................................. 22 Section 11.01 Law Governing ..................................................................................................... 22 Section 11.02 Notices.................................................................................................................. 22 Section 11.03 Validity and Severability ...................................................................................... 22 Section 11.04 Net-Net-Net Lease ................................................................................................ 23 Section 11.05 Taxes.....................................................................................................................23 Section 11.06 Section Headings.................................................................................................. 23 Section 11.07 Amendments......................................................................................................... 23 Section 11.08 Assignment ........................................................................................................... 24 Section 11.09 [2025 Insurer as Third Party Beneficiary ............................................................. 24 Section 11.10 [2025 Insurer as Owner of Insured Series 2025A Bonds ..................................... 24 Section 11.11 Execution .............................................................................................................. 25 Signatures ................................................................................................................................... S-1 EXHIBIT A LEGAL DESCRIPTION OF THE PROPERTY ......................................................A-1 EXHIBIT B BASE RENTAL PAYMENT SCHEDULE .............................................................B-1 735
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LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”) executed and entered into as of October 1, 2025, is by and between the CITY OF FONTANA (the “City”), a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California, as lessee, and the FONTANA PUBLIC FACILITIES FINANCING AUTHORITY (the “Authority”), a joint exercise of powers entity duly organized and existing under and by virtue of the laws of the State of California, as lessor.

RECITALS
WHEREAS, the City previously financed a portion of the costs of the acquisition, construction and installation of certain public capital improvements in the City, as more fully described in the proceedings for the issuance of the 2007 Bonds (defined below) (the “2007 Project”);
WHEREAS, the City determined to provide the funds necessary to finance the 2007 Project through issuance by the Fontana Public Financing Authority of its Fontana Public Financing Authority 2007 Lease Revenue Bonds (the “2007 Bonds”), payable from certain lease payments to be made by the City under a lease agreement;
WHEREAS, the City and the Authority refinanced the 2007 Bonds and the City’s lease obligations in connection therewith, through the issuance by the Authority of its Lease Revenue Refunding Bonds, Series 2014A (the “Series 2014A Bonds”); WHEREAS, the City and the Authority now desire to finance the acquisition, construction, and installation of certain public capital improvements in the City, including capital improvements located in the City including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (collectively, the “2025 Project”; and, together with the 2007 Project, the “Project”);
WHEREAS, the City and Authority desire to refinance all or a portion of the Series 2014A Bonds and finance all or a portion of the 2025 Project; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A” (the “Series 2025A Bonds”) for the purpose of refinancing the Series 2014A Bonds and the City’s related lease payments and financing the 2025 Project;
WHEREAS, in order to facilitate the issuance of the Series 2025A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to this Lease Agreement;
WHEREAS, the City and the Authority desire to provide for the issuance of the Series 2025A Bonds pursuant to an Indenture, dated as of the date hereof, by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”); 736
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WHEREAS, the Series 2025A Bonds are payable from base rental payments (the “Base Rental Payments”) to be made by the City hereunder;
WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof; and
WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into of this Lease Agreement do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the parties hereto are now duly authorized to execute and enter into this Lease Agreement;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained, the parties hereto agree as follows:

ARTICLE I

DEFINITIONS
Section 1.01 Definitions. Unless the context otherwise requires, the terms defined in this Section shall, for all purposes of this Lease Agreement, have the meanings herein specified, which meanings shall be equally applicable to both the singular and plural forms of any of the terms herein defined. Capitalized terms not otherwise defined herein shall have the meanings assigned to such terms in the Indenture.
“Additional Bonds” means bonds other than the Series 2025A Bonds issued under the Indenture in accordance with the provisions thereof
“Additional Rental Payments” means all amounts payable by the City as Additional Rental Payments pursuant to Section 3.02 hereof.
“Authority” means the Fontana Public Facilities Financing Authority, a joint exercise of powers authority organized and existing under the laws of the State of California. “Base Rental Deposit Date” means the third (3rd) Business Day next preceding each Interest Payment Date.
“Base Rental Payments” means all amounts payable to the Authority from the City as Base Rental Payments pursuant to Section 3.01 hereof.
“Base Rental Payment Schedule” means the schedule of Base Rental Payments payable to the Authority from the City pursuant to Section 3.01 hereof and attached hereto as Exhibit B. “Bonds” means the Fontana Public Facilities Financing Authority Lease Revenue Bonds Series 2025A issued under the Indenture, and any Additional Bonds. “City” means the City of Fontana, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California. 737
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“City Hall and DSO Building Site” means the real property described as the City Hall and DSO Building Site in Exhibit A hereto and the improvements located thereon. “Completion Certificate” means a certificate of an Authorized City Representative delivered pursuant to Section 4.07 hereof to the effect that the 2025 Project, or the portion thereof to which such certificate relates, has been completed substantially in conformity with the plans and specifications for the 2025 Project or such portion thereof. “Costs” “means, with respect to the 2025 Project, together with any other proper item of cost not specifically mentioned herein, (a) costs of payment of, or reimbursement for, acquisition, design, construction, rehabilitation, installation, delivery and financing of the 2025 Project, including, but not limited to, the payment of real property rental, administrative costs and capital expenditures relating to acquisition, construction and installation, inspection costs, filing and recording costs, printing costs, reproduction and binding costs, fees and charges of the Trustee pursuant to the Indenture and other financing documents, legal fees and charges, financial, accounting and other professional consultant fees, costs of rating agencies or credit ratings, fees for the printing, execution, transportation and safekeeping of the Series 2025A Bonds; (b) all other costs which the City shall be required to pay under the terms of any contract or contracts for the acquisition, construction, delivery and installation of the 2025 Project, including, but not limited to, the cost of insurance; (c) any sums required to reimburse the City for advances made for any of the above items, or for any other costs incurred and for work done, which is properly chargeable to the 2025 Project; (d) any costs paid from the Net Proceeds to repair, restore or replace the 2025 Project; and (e) such other expenses not specified herein as may be necessary or incidental to the acquisition, construction, delivery and installation of the 2025 Project, the financing thereof and the placing of the same in use and operation. Costs, as defined herein, shall be deemed to include the cost and expenses incurred by any agent of the City for any of the above mentioned items. “Delivery Date” means October ___, 2025.
“Final Termination Date” means November 1, 20[55], unless extended or sooner terminated as provided in Section 2.02 hereof.
“Fire District Administration Building Site” means the real property described as the Fire District Administration Building Site in Exhibit A hereto and the improvements located thereon. “Fire District Sublease” is defined in Section 9.05.
“Fontana Park Site” means the real property described as Fontana Park Site in Exhibit A hereto and the improvement located thereon.
“Grant Contract and the Deed Restriction” means, collectively, that certain grant agreement between the City of Fontana, as grantee, and the State of California, Department of Parks and Recreation (“DPR”), referred to as Contract Number C9801546, and that certain Deed Restriction dated as of November 28, 2023, recorded against a portion of the Fontana Park Site in the Official Records of San Bernardino County on December 11, 2023 as Instrument No. 2023-0305221. “Ground Lease” means the Ground Lease, dated as of the date hereof, by and between the City and the Authority, as originally executed and as it may from time to time be amended in accordance with to the provisions thereof and hereof.
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“Indenture” means the Indenture, dated as of the date hereof, by and among the Authority, the City and the Trustee, as originally executed and as it may from time to time be amended or supplemented in accordance with the provisions thereof. “Joint Powers Agreement” means the Joint Exercise of Powers Agreement, dated as of September 1, 2014, by and between the City and the Fontana Fire Protection District, as originally executed and as it may from time to time be amended in accordance with the provisions thereof. “Lease Agreement” means this Lease Agreement, as originally executed and as it may from time to time be amended in accordance with the provisions hereof. “Library Site” means the real property described as the Library Site in Exhibit A hereto and the improvements locked thereon.
“Net Insurance Proceeds” means any insurance proceeds or condemnation award in excess of $50,000, paid with respect to any of the Property, remaining after payment therefrom of all reasonable expenses incurred in the collection thereof. “Parking Deed Restriction” means the provisions of that certain deed from First National Bank and Trust Company to the City of Fontana relating to a portion of the Library Site (which portion is used for surface parking), which deed restricts the use of the subject property to the parking of automobiles and other vehicles in perpetuity. “Parking Garage Site” means the real property described as the Parking Garage Site in Exhibit A hereto and the improvements located thereon.
“Permitted Encumbrances” means, with respect to the Property, as of any particular time, (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may, pursuant to provisions of Article VI hereof, permit to remain unpaid, (b) the Assignment Agreement, (c) this Lease Agreement, (d) the Ground Lease, (e) the Solar Energy System Lease Agreement, (f) the Grant Contract and the Deed Restriction, (g) the Parking Deed Restriction, (h) the Fire District Sublease, (i) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law as normally exist with respect to properties similar to the Property for the purposes for which it was acquired or is held by the City, (j) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record as of the Delivery Date which the City certifies in writing will not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the 2025 Insurer, the Authority and the City consent in writing, and (k) easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions established following the Delivery Date which the City certifies in writing do not affect the intended use of the Property or impair the security granted to the Trustee for the benefit of the Owners of the Bonds by the Indenture and the Assignment Agreement and to which the 2025 Insurer, the Authority and the City consent in writing.
“Property” means the 20[55] Termination Parcels and, until November 1, [2037], the Fontana Park Site.
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“Rental Payments” means, collectively, the Base Rental Payments and the Additional Rental Payments.
“Rental Period” means the twelve-month period commencing on November 1 of each year during the term of the Lease Agreement.
“Solar Energy System Lease Agreement” means the Solar Energy System Lease Agreement, dated January 11, 2019 by and between the City, as lessor, and General Electric International, Inc., a Delaware corporation, as lessee, relating to certain solar equipment installed on the rooftops and carports at the City Hall and DSO Building Site. “Series 2025A Bonds” means the Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A issued under the Indenture. “Termination Date” means (i) November 1, [2037] with respect to the Fontana Park Site, and (ii) the Final Termination Date with respect to the 20[55] Termination Parcels, unless extended or sooner terminated as provided in Section 2.02 hereof. “Trustee” means the trustee appointed under the Indenture and referred to therein as the Trustee.
“20[55] Termination Parcels” means the City Hall and DSO Building Site, the Fire District Administration Building Site, the Parking Garage Site, the Library Site and the improvements located thereon.

ARTICLE II
LEASE OF PROPERTY; TERM
Section 2.01 Lease of Property.
(a) The Authority hereby leases to the City and the City hereby leases from the Authority the Property, on the terms and conditions hereinafter set forth, subject to all Permitted Encumbrances.
(b) The leasing of the Property by the City to the Authority pursuant to the Ground Lease shall not effect or result in a merger of the City’s leasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Ground Lease, and the Authority shall continue to have a leasehold estate in the Property pursuant to the Ground Lease throughout the term thereof and hereof. The leasehold interest granted by the City to the Authority pursuant to the Ground Lease is and shall be independent of this Lease Agreement; this Lease Agreement shall not be an assignment or surrender of the leasehold interest granted to the Authority under the Ground Lease.

Section 2.02 Term; Occupancy. The term of this Lease Agreement shall commence on the Delivery Date and shall end on the applicable Termination Date, unless such term is extended or sooner terminated as hereinafter provided. If on the applicable Termination Date the Bonds shall not be fully paid, or provision therefor made in accordance with Article X of the Indenture, or the Indenture shall not be discharged by its terms, or if the Rental Payments shall remain due and 740
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payable or shall have been abated at any time and for any reason, or amounts shall be due and owing hereunder or under the Indenture to the 2025 Insurer, then the term of this Lease Agreement shall be extended until the date upon which (i) all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, (ii) the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full or (iii) all amounts due and owing to the 2025 Insurer hereunder or under the Indenture shall be fully paid. Notwithstanding the foregoing, the term of this Lease Agreement shall in no event be extended more than ten years beyond the applicable Termination Date, such extended date being the “Maximum Lease Term.” If prior to the Final Termination Date, all Bonds shall be fully paid, or provision therefor made in accordance with Article X of the Indenture, the Indenture shall be discharged by its terms and all Rental Payments shall have been paid in full, then the term of this Lease Agreement shall end simultaneously therewith.

ARTICLE III

RENTAL PAYMENTS
Section 3.01 Base Rental Payments.
(a) Subject to the provisions hereof relating to a revision of the Base Rental Payment Schedule pursuant to subsection (b) of this Section, the City shall pay to the Authority, as Base Rental Payments (subject to the provisions of Section 3.06 and Article VIII hereof) the amount at the times specified in the Base Rental Payment Schedule, a portion of which Base Rental Payments shall constitute principal, and a portion of which shall constitute interest. Rental Payments, including Base Rental Payments, shall be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid.

The obligation of the City to make the Base Rental Payments does not constitute a debt of the City or of the State of California, or of any political subdivision thereof, within the meaning of any constitutional or statutory debt limit or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. (b) If the term of this Lease Agreement shall have been extended pursuant to Section 2.02 hereof, the obligation of the City to pay Rental Payments shall continue to and including the Base Rental Deposit Date preceding the date of termination of this Lease Agreement (as so extended pursuant to Section 2.02 hereof). Upon such extension, the Base Rental Payments shall be established so that they will be sufficient to pay all extended and unpaid Base Rental Payments; provided, however, that the Rental Payments payable in any Rental Period shall not exceed the annual fair rental value of the Property.

Section 3.02 Additional Rental Payments. The City shall also pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
(a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein;
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(b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees;
(c) insurance premiums for all insurance required pursuant to Article VI hereof; (d) any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with Section 148(f) of the Code; (e) all amounts due to the 2025 Insurer under the Indenture; and (f) all other payments required to be paid by the City under the provisions of this Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Section 3.03 Fair Rental Value. The parties hereto have agreed and determined that the annual fair rental value of the Property is not less than the maximum annual Rental Payments due in any year. In making such determination of fair rental value, consideration has been given to the uses and purposes that may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.

Section 3.04 Payment Provisions. Each installment of Base Rental Payments payable hereunder shall be paid in lawful money of the United States of America to or upon the order of the Authority at the principal office of the Trustee in Los Angeles, California, or such other place or entity as the Authority or Trustee shall designate. Each Base Rental Payment shall be deposited with the Trustee no later than the Base Rental Deposit Date preceding the Interest Payment Date on which such Base Rental Payment is due. Any Base Rental Payment which shall not be paid by the City when due and payable under the terms of this Lease Agreement shall bear interest from the date when the same is due hereunder until the same shall be paid at the rate equal to the highest rate of interest on any of the Outstanding Bonds. Notwithstanding any dispute between the Authority and the City, the City shall make all Rental Payments when due without deduction or offset of any kind and shall not withhold any Rental Payments pending the final resolution of such dispute. In the event of a determination that the City was not liable for said Rental Payments or any portion thereof, said payments or excess of payments, as the case may be, shall be credited against subsequent Rental Payments due hereunder or refunded at the time of such determination. Amounts required to be deposited by the City with the Trustee pursuant to this Section on any date shall be reduced to the extent of available amounts on deposit in the Base Rental Payment Fund, the Interest Fund or the Principal Fund.
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Section 3.05 Appropriations Covenant. The City covenants to take such action as may be necessary to include all Rental Payments due hereunder as a separate line item in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The City will deliver to the Authority and the Trustee a Certificate of the City stating that its final annual budget includes all Base Rental Payments due in such fiscal year within ten days after the filing or adoption thereof. The covenants on the part of the City herein contained shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City.

Section 3.06 Rental Abatement. Except as otherwise specifically provided in this Section, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. The City and the Authority shall calculate such abatement and shall provide the Trustee with a certificate setting forth such calculation and the basis therefor. Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of this Lease Agreement shall be extended as provided in Section 2.02 hereof, except that the term shall in no event be extended beyond the Maximum Lease Term.

Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture or proceeds of the rental interruption insurance required by section 6.01(d) hereof are available, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds, accounts, and proceeds.

ARTICLE IV
ACQUISITION, CONSTRUCTION AND IMPROVEMENT OF THE 2025 PROJECT Section 4.01 Deposit of Bond Proceeds; City Deposit. Upon the issuance of the Series 2025A Bonds, the Authority agrees that all proceeds of the Series 2025A Bonds shall be paid to the Trustee and that such moneys shall be deposited with the Trustee and be applied as provided in Section 3.02 of the Indenture
Section 4.02 Acquisition, Construction and Improvement of the 2025 Project. The City agrees to acquire, construct, deliver and install any portion of the 2025 Project to be financed with the proceeds of the Series 2025A Bonds, or to cause such portion to be acquired, constructed, 743
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delivered and installed, with the proceeds of the Series 2025A Bonds paid to the City by the Authority pursuant to Section 4.01 above and the Authority shall have no responsibility with respect thereto.

Section 4.03 Compliance with Law. The City shall comply with all applicable provisions for bids and contracts prescribed by law with respect to the 2025 Project, including, without limitation, any applicable environmental review and approvals, Sections 20110 et seq. of the Public Contracts Code and Article 42 (commencing with Section 20670) of Part 3 of Division 2 of the Public Contracts Code. The City acknowledges and agrees that specific expenditures for all or any portion of the 2025 Project, as now or hereafter designated, are expressly subject to compliance with such requirements.

Section 4.04 Payment of Costs. Payment of Costs shall be made from the moneys deposited with the Trustee in the Project Fund as provided in Section 4.01 hereof and Section 3.05 of the Indenture, which shall be disbursed from the Project Fund in accordance and upon compliance with Section 3.05 of the Indenture.

Section 4.05 Time of Completion and Liquidated Damages. The construction and equipping of the 2025 Project shall be completed on or prior to [October 1, 2028], subject to excused delays pursuant to standard City procedures. Each construction contractor hired by the City shall be required to provide payment and performance bonds in amounts equal to the maximum price under its contract.

Section 4.06 Construction and Acquisition of the 2025 Project. The City agrees to oversee the construction, acquisition, delivery and installation of the 2025 Project in accordance with the following terms:
(a) Construction and Completion. The City agrees to proceed with all due diligence to complete the construction, acquisition, delivery and installation of the 2025 Project, all in accordance with the plans and specifications for the 2025 Project (the “Plans and Specifications”) approved by the City Engineer. The City shall comply with all statutes and laws applicable to the performance of its obligations hereunder, including all public laws applicable thereto and all laws regarding the approval, acquisition and construction of public projects by cities in the State of California. The City shall make certain that each contract relating to the 2025 Project is awarded in accordance with applicable law and contains a scheduled completion date which requires completion on or before the scheduled completion date referred to in Section 4.05 above; (b) Change Orders. Subject to any other restrictions imposed upon the City, the City may approve any changes to the Plans and Specifications so long as any change does not, and all such changes as a whole do not, (i) substantially alter the nature of the 2025 Project, (ii) delay the completion of the 2025 Project beyond [October 1, 2028], (iii) reduce the fair rental value of the 2025 Project, or (iv) increase the total Costs of the 2025 Project to an amount in excess of the amount in the Project Fund unless there has been deposited with the City an amount equal to such excess or unless there has been deposited with the City a certificate of an Authorized Representative of the City, together with a revised construction budget demonstrating that the total amount on deposit to pay for the Project is adequate to allow the completion of the Project as planned; (c) Payment of Costs of the 2025 Project. Payment of the portion of the Costs of the Project being financed by the City shall be made from moneys deposited in the Project Fund, and 744
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shall be disbursed for such purpose in accordance and upon compliance with the Indenture. Neither the Authority nor the City shall be liable for the payment of Costs of the 2025 Project other than from amounts on deposit in the Project Fund; and
(d) Unexpended Monies. The City agrees that unexpended moneys remaining in the Project Fund shall, upon payment in full of all Costs of the 2025 Project, be applied solely in accordance with the provisions of the Indenture.

Section 4.07 Completion Date; Certification. Upon the completion of acquisition, construction, delivery and installation of the portion of the 2025 Project to be financed with each issue of Bonds, the City shall deliver to the Trustee a Completion Certificate with respect thereto.

On the date of filing a Completion Certificate concerning that portion of the 2025 Project financed with proceeds of the Series 2025A Bonds, all excess moneys remaining in the Project Fund for the Series 2025A Bonds for which such Completion Certificate is delivered shall be applied in accordance with the provisions of Section 3.05 of the Indenture.

ARTICLE V

MAINTENANCE, ALTERATIONS AND ADDITIONS
Section 5.01 Modification of the Property.
(a) Subject to Section 9.02 hereof, the City and any sublessee shall, at its own expense, or with the proceeds of Additional Bonds, have the right to make additions, modifications, and improvements to any portion of the Property if such improvements are necessary or beneficial for the use of such portion of the Property. All such additions, modifications and improvements shall thereafter comprise part of the Property and be subject to the provisions of this Lease. Such additions, modifications and improvements shall not in any way cause an abatement of Rental Payments with respect to the Property or cause it to be used for purposes other than those authorized under the provisions of State and federal law or in any way which would impair the State tax-exempt status or the exclusion from gross income for federal income tax purposes of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds); and the Property, upon completion of any additions, modifications and improvements made pursuant to this Section, shall have an annual fair rental value which is not less than the annual Rental Payments.
(b) Subject to Section 9.02 hereof, the City and any sublessee shall, at its own expense, or with the proceeds of Additional Bonds, have the right to make replacements, redevelopment or renovation of all or a portion of the Property if the following conditions precedent are satisfied:
(i) The City receives an opinion of Bond Counsel, a copy of which the City shall furnish to the Authority and the Trustee, that (1) such replacement does not adversely affect the federal income tax exclusion or the State tax-exempt status of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds), and (2) this Lease will remain the legal, valid, binding and enforceable obligation of the City; (ii) In the event such replacement, redevelopment or renovation would result in the temporary abatement of Rental Payments as provided in Section 3.06 hereof the City 745
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shall have notified any rating agency then providing a rating on the Bonds and shall deposit moneys with the Trustee in advance for payment of Rental Payments from the proceeds of Additional Bonds or from special funds of the City or other moneys, the application of which would not, in the opinion of Bond Counsel (a copy of which shall have been delivered to the Trustee), result in such Rental Payments constituting indebtedness of the City in contravention of the Constitution and laws of the State; and
(iii) The City shall certify to the Trustee that it has sufficient funds to complete such replacement, redevelopment or renovation.

Section 5.02 Maintenance and Utilities. Throughout the term of this Lease Agreement, as part of the consideration for rental of the Property, all improvement, repair and maintenance of the Property shall be the responsibility of the City, and the City shall pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power gas, telephone, light, heating, ventilation, air conditioning, water and all other utility services, and shall pay for or otherwise arrange for payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Rental Payments, the Authority agrees to provide only the Property.

Section 5.03 Installation of City’s Equipment. The City and any sublessee may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City or such sublessee, and neither the Authority nor the Trustee shall have any interest therein. The City or such sublessee may remove or modify such equipment or other personal property at any time, provided that such party shall repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement shall prevent the City or any sublessee from purchasing items to be installed pursuant to this Section under a conditional sale or lease purchase contract, or subject to a vendor’s lien or security agreement as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest shall attach to any part of the Property.

ARTICLE VI

INSURANCE
Section 6.01 Commercial General Liability and Property Damage Insurance; Workers’ Compensation Insurance.
(a) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies shall provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such commercial general liability and property 746
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damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City provided such self-insurance complies with the provisions of Section 6.04 hereof. The Net Insurance Proceeds of such liability insurance shall be applied toward extinguishment or satisfaction of the liability with respect to which the Net Insurance Proceeds of such insurance shall have been paid. (b) The City shall maintain or cause to be maintained, throughout the term of this Lease Agreement, workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers’ compensation insurance to cover all persons employed by the City in connection with the Property and to cover full liability for compensation under any such act; provided, however, that the City’s obligations under this subsection may be satisfied by self-insurance, provided such selfinsurance complies with the provisions of Section 6.04 hereof. (c) The City shall maintain or cause to be maintained, fire, lightning and special extended coverage insurance (which shall include coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. The City has an insurance policy which provides replacement cost coverage. All insurance required to be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed $500,000. The City’s obligations under this subsection may be satisfied by self-insurance, provided such self-insurance complies with the provisions of Section 6.04 hereof.
(d) The City shall maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to subsection (c) of this Section in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period. The City’s obligations under this subsection may be satisfied by self-isurance, provided such self-insurance complies with the provisions of Section 6.04 hereof. (e) The insurance required by this Section shall be provided by reputable insurance companies with claims paying abilities determined, in the reasonable opinion of a professionally certified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.

Section 6.02 Title Insurance. The City shall provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, the form of which policy or policies shall be acceptable to the 2025 Insurer, in the aggregate amount of not less than the initial aggregate principal amount of the Series 2025A Bonds and the initial aggregate principal amount of any Additional Bonds issued after the Closing Date. Such policy or policies shall insure (a) the fee interest of the City in the Property, (b) the Authority’s ground leasehold estate in the Property under the Ground Lease, and (c) the City’s leasehold estate hereunder in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies shall be deposited with the Trustee and applied as provided in Section 5.03 of the Indenture. So long as any of the 747
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Bonds remain Outstanding, each policy of title insurance obtained pursuant to the Indenture or this Lease Agreement or required thereby or hereby shall provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.

Section 6.03 Additional Insurance Provision; Form of Policies. The City shall pay or cause to be paid when due the premiums for all insurance policies required by Section 6.01 hereof, and shall promptly furnish or cause to be furnished evidence of such payments to the Trustee. All such policies shall provide that the Trustee shall be given 30 days’ notice of the expiration thereof or any intended cancellation thereof. The Trustee shall be fully protected in accepting payment on account of such insurance or any adjustment, compromise or settlement of any loss agreed to by the Trustee.

The City shall cause to be delivered to the Trustee on or before November 1 each year, commencing November 1, 2026, a Certificate of the City stating that such policies are in full force and effect and that the City is in full compliance with the requirements of this Article. The Trustee shall be entitled to rely upon said Certificate of the City as to the City’s compliance with this Article.

The Trustee shall not be responsible for the sufficiency of coverage or amounts of such policies.

Section 6.04 Self-Insurance. Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance shall be deemed to be self-insurance for purposes hereof and may be utilized by the City to satisfy the requirements of this Article without the consent of the 2025 Insurer. The City must obtain the prior written consent of the 2025 Insurer to utilize other self-insurance to satisfy the requirements of this Article. Any self-insurance maintained by the City pursuant to this Article shall comply with the following terms:
(a) the self-insurance program shall be approved in writing by the City’s Risk Manager, a professionally certified risk manager, or an independent insurance consultant; (b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the City’s Risk Management Department, a professionally certified risk manager or by an independent insurance consultant and any deficiencies in any self-insured claims reserve fund shall be remedied in accordance with the recommendation of the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant, as applicable; and
(c) in the event that the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by a professionally certified risk manager or by an independent insurance consultant, shall be maintained.

ARTICLE VII

DEFAULTS AND REMEDIES
Section 7.01 Defaults and Remedies.
(a) (i) If the City shall fail (A) to pay any Rental Payment payable hereunder when the same becomes due and payable, time being expressly declared to be of the essence in this 748
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Lease Agreement, or (B) to keep, observe or perform any other term, covenant or condition contained herein or in the Indenture to be kept or performed by the City, or (ii) upon the happening of any of the events specified in this subsection or in subsection (b) of this Section, the City shall be deemed to be in default hereunder and it shall be lawful for the Authority, upon the direction of the 2025 Insurer, to exercise any and all remedies available pursuant to law or granted pursuant to this Lease Agreement. The City shall in no event be in default in the observance or performance of any covenant, condition or agreement in this Lease Agreement on its part to be observed or performed, other than as referred to in clause (i)(A) or (ii) of the preceding sentence, unless the City shall have failed, for a period of 30 days or, with the prior written consent of the 2025 Insurer, such additional time as is reasonably required to correct any such default after notice by the Authority to the 2025 Insurer and the City properly specifying wherein the City has failed to perform any such covenant, condition or agreement. Upon any such default, the Authority, in addition to all other rights and remedies it may have at law, shall have the option to do any of the following:
(1) To terminate this Lease Agreement in the manner hereinafter provided on account of default by the City, notwithstanding any re-entry or re-letting of the Property as hereinafter provided for in subparagraph (2) hereof, and to re-enter the Property and remove all persons in possession thereof and all personal property whatsoever situated upon the Property and place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City. In the event of such termination, the City agrees to surrender immediately possession of the Property, without let or hindrance, and to pay the Authority all damages recoverable at law that the Authority may incur by reason of default by the City, including, without limitation, any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. Neither notice to pay Rental Payments or to deliver up possession of the Property given pursuant to law nor any entry or re-entry by the Authority nor any proceeding in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property nor the appointment of a receiver upon initiative of the Authority to protect the Authority’s interest under this Lease Agreement shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law or acts of the parties hereto, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property or of the remainder of the term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated by the Authority by such written notice. (2) Without terminating this Lease Agreement, (x) to collect each installment of Rental Payments as the same become due and enforce any other terms or provisions hereof to be kept or performed by the City, regardless of whether or not the City has abandoned the Property, or (y) to exercise any and all rights of entry and re-entry upon the Property. In the event the Authority, at the direction of the 2025 Insurer, does not elect to terminate this Lease Agreement in the manner provided for in subparagraph (1) hereof, the City shall remain liable and agrees to keep or perform all covenants and conditions herein contained to be kept or performed by the City and, if the Property is not re-let, to pay the full amount of the Rental Payments to the end of the term of this Lease Agreement or, in the event that the Property is re-let, to pay any deficiency in Rental Payments that results therefrom; and further agrees to pay said Rental Payments and/or Rental Payment deficiency punctually at the same time and in the same manner as hereinabove provided for the payment of Rental Payments hereunder, notwithstanding the fact that the Authority may have 749
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received in previous years or may receive thereafter in subsequent years Rental Payments in excess of the Rental Payments herein specified, and notwithstanding any entry or re-entry by the Authority or suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property. Should the Authority elect to re-enter as herein provided, the City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to re-let the Property, or any part thereof, from time to time, either in the Authority’s name or otherwise, upon such terms and conditions and for such use and period as the Authority may deem advisable and to remove all persons in possession thereof and all personal property whatsoever situated upon the Property and to place such personal property in storage in any warehouse or other suitable place, for the account of and at the expense of the City, and the City hereby indemnifies and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising out of, in connection with, or incident to any such re-entry upon and re-letting of the Property and removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-let the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-letting shall constitute a surrender or termination of this Lease Agreement irrespective of the use or the term for which such re-letting is made or the terms and conditions of such re-letting, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner provided for in subparagraph (1) hereof. The City further agrees to pay the Authority the cost of any alterations or additions to the Property necessary to place the Property in condition for re-letting immediately upon notice to the City of the completion and installation of such additions or alterations.

The City hereby waives any and all claims for damages caused or which may be caused by the Authority in re-entering and taking possession of the Property as herein provided and all claims for damages that may result from the destruction of or injury to the Property and all claims for damages to or loss of any property belonging to the City, or any other person, that may be in or upon the Property.
(b) If (i) the City’s interest in this Lease Agreement or any part thereof is assigned or transferred, either voluntarily or by operation of law or otherwise, without the written consent of the Authority and, as hereinafter provided for, or (ii) the City or any assignee shall file any petition or institute any proceeding under any act or acts, state or federal, dealing with or relating to the subject or subjects of bankruptcy or insolvency, or under any amendment of such act or acts, either as a bankrupt or as an insolvent, or as a debtor, or in any similar capacity, wherein or whereby the City asks or seeks or prays to be adjudicated a bankrupt, or is to be discharged from any or all of the City’s debts or obligations, or offers to the City’s creditors to elect a composition or extension of time to pay the City’s debts or asks, seeks or prays for reorganization or to effect a plan of reorganization, or for a readjustment of the City’s debts, or for any other similar relief, or if any such petition or any such proceedings of the same or similar kind or character be filed or be instituted or taken against the City, or if a receiver of the business or of the property or assets of the City shall be appointed by any court, except a receiver appointed at the instance or request of the Authority, or if the City shall make a general assignment for the benefit of the City’s creditors, or (iii) the City shall abandon or vacate the Property, then the City shall be deemed to be in default hereunder. (c) In addition to the other remedies set forth in this Section, upon the occurrence of an event of default, the Authority and its assignee shall be entitled to proceed to protect and 750
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enforce the rights vested in the Authority and its assignee by the Lease Agreement or by law. The provisions of the Lease Agreement and the duties of the City and of its city council, officers or employees shall be enforceable by the Authority or its assignee by mandamus or other appropriate suit, action or proceeding in any court of competent jurisdiction. Without limiting the generality of the foregoing, the Authority and its assignee shall have the right to bring the following actions:
(i) Accounting. By action or suit in equity to require the City and its city council, officers and employees and its assigns to account as the trustee of an express trust. (ii) Injunction. By action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the Authority or its assignee. (iii) Mandamus. By mandamus or other suit, action or proceeding at law or in equity to enforce the Authority’s or its assignee’s rights against the City (and its city council, officers and employees) and to compel the City to perform and carry out its duties and obligations under the law and its covenants and agreements with the City as provided herein.

Each and all of the remedies given to the Authority hereunder or by any law now or hereafter enacted are cumulative and the single or partial exercise of any right, power or privilege hereunder shall not impair the right of the Authority to the further exercise thereof or the exercise of any or all other rights, powers or privileges. The term “re-let” or “re-letting” as used in this Section shall include, but not be limited to, re-letting by means of the operation by the Authority of the Property. If any statute or rule of law validly shall limit the remedies given to the Authority hereunder, the Authority nevertheless shall be entitled to whatever remedies are allowable under any statute or rule of law.

In the event the Authority shall prevail in any action brought to enforce any of the terms and provisions of this Lease Agreement, the City agrees to pay a reasonable amount as and for attorney’s fees incurred by the Authority in attempting to enforce any of the remedies available to the Authority hereunder.

Notwithstanding anything to the contrary contained in this Lease Agreement, the Authority shall have no right upon a default hereunder by the City to accelerate Rental Payments. (d) Notwithstanding anything to the contrary contained in this Lease Agreement, the termination of this Lease Agreement by the Authority and its assignees on account of a default by the City under this Section shall not effect or result in a termination of the Ground Lease.

Section 7.02 Waiver. Failure of the Authority to take advantage of any default on the part of the City shall not be, or be construed as, a waiver thereof, nor shall any custom or practice which may grow up between the parties in the course of administering this instrument be construed to waive or to lessen the right of the Authority to insist upon performance by the City of any term, covenant or condition hereof, or to exercise any rights given the Authority on account of such default. A waiver of a particular default shall not be deemed to be a waiver of any other default or of the same default subsequently occurring. The acceptance of Rental Payments hereunder shall not be, or be construed to be, a waiver of any term, covenant or condition of this Lease Agreement. 751
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ARTICLE VIII
EMINENT DOMAIN; PREPAYMENT
Section 8.01 Eminent Domain. If all of the Property (or portions thereof such that the remainder is not usable for public purposes by the City) shall be taken under the power of eminent domain, the term hereof shall cease as of the day that possession shall be so taken. If less than all of the Property shall be taken under the power of eminent domain and the remainder is usable for public purposes by the City at the time of such taking, then the Lease Agreement shall continue in full force and effect as to such remainder, and the parties waive the benefits of any law to the contrary, and in such event there shall be a partial abatement of the Rental Payments in accordance with the provisions of Section 3.06 hereof. So long as any Bonds shall be Outstanding, any award made in eminent domain proceedings for the taking of the Property, or any portion thereof, shall be paid to the Trustee and applied to the redemption of Bonds as provided in subsection (a) of Section 4.01 of the Indenture, in the corresponding provisions of any Supplemental Indenture pursuant to which Additional Bonds are issued and in Section 5.03 of the Indenture. Any such award made after all of the Bonds, and all other amounts due under the Indenture and hereunder, have been fully paid, shall be paid to the Authority and to the City as their respective interests may appear.

Section 8.02 Prepayment.
(a) The City may prepay all or a portion of the Base Rental Payments attributable to the Series 2025A Bonds which are payable after November 1, 20__ from any source of available funds, on any date on or after November 1, 20__, by paying (i) all or a portion, as selected by the City, of the principal components of such Base Rental Payments, and (ii) the accrued but unpaid interest component of such Base Rental Payments to be prepaid to the date of such prepayment. (b) The City may prepay, from any source of available funds, all or any portion of the Base Rental Payments attributable to the Series 2025A Bonds by depositing with the Trustee moneys or securities as provided, and subject to the terms and conditions set forth, in Article X of the Indenture sufficient to make such Base Rental Payments when due or to make such Base Rental Payments through a specified date on which the City has a right to prepay such Base Rental Payments pursuant to subsection (a) of this Section, and to prepay such Base Rental Payments on such prepayment date, at a prepayment price determined in accordance with subsection (a) of this Section.
(c) If less than all of the Base Rental Payments attributable to the Series 2025A Bonds are prepaid pursuant to this Section then, as of the date of such prepayment pursuant to subsection (a) of this Section, or the date of a deposit pursuant to subsection (b) of this Section, the principal and interest components of such Base Rental Payments shall be recalculated by the City and transmitted to the Trustee in order to take such prepayment into account. The City agrees that if, following a partial prepayment of such Base Rental Payments, the Property is damaged or destroyed or taken by eminent domain, or a defect in title to the Property is discovered, the City shall not be entitled to, and by such prepayment waives the right of, abatement of such prepaid Base Rental Payments and the City shall not be entitled to any reimbursement of such Base Rental Payments. (d) If all of the Base Rental Payments are prepaid in accordance with the provisions of this Lease Agreement then, as of the date of such prepayment pursuant to subsection (a) of this Section and, if applicable, the corresponding provisions hereof relating to the prepayment of 752
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Base Rental Payments attributable to Additional Bonds, or deposit pursuant to subsection (b) of this Section and, if applicable, such corresponding provisions, and payment of all other amounts owed under this Lease Agreement, the term of this Lease Agreement shall be terminated. (e) Prepayments of Base Rental Payments attributable to the Series 2025A Bonds made pursuant to this Section shall be applied to the redemption of the Series 2025A Bonds as directed by the City and as provided in Section 4.01 of the Indenture. (f) Before making any prepayment pursuant to this Article, the City shall give written notice to the Authority and the Trustee specifying the date on which the prepayment will be made (conditionally or otherwise), which date shall be not less than 20 nor more than 60 days from the date such notice is given to the Authority.

ARTICLE IX

COVENANTS
Section 9.01 Right of Entry. The Authority and its assignees shall have the right to enter upon and to examine and inspect the Property during reasonable business hours (and in emergencies at all times) for any purpose connected with the Authority’s rights or obligations under this Lease Agreement, and for all other lawful purposes.

Section 9.02 Liens. In the event the City shall at any time during the term of this Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contestment is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.

Section 9.03 Quiet Enjoyment. The parties hereto mutually covenant that the City, by keeping and performing the covenants and agreements herein contained, shall at all times during the term of this Lease Agreement peaceably and quietly have, hold and enjoy the Property without suit, trouble or hindrance from the Authority.

Section 9.04 Authority Not Liable. The Authority and its directors, officers, agents and employees, shall not be liable to the City or to any other party whomsoever for any death, injury or damage that may result to any person or property by or from any cause whatsoever in, on or about the Property. To the extent permitted by law, the City shall, at its expense, indemnify and hold the Authority and the Trustee and all directors, members, officers and employees thereof harmless against and from any and all claims by or on behalf of any person, firm, corporation or governmental authority arising from the acquisition, construction, occupation, use, operation, maintenance, possession, conduct or management of or from any work done in or about the Property or from the subletting of any part thereof, including any liability for violation of conditions, agreements, 753
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restrictions, laws, ordinances, or regulations affecting the Property or the occupancy or use thereof, but excepting the negligence or willful misconduct of the persons or entity seeking indemnity. The City also covenants and agrees, at its expense, to pay and indemnify and save the Authority and the Trustee and all directors, officers and employees thereof harmless against and from any and all claims arising from (a) any condition of the Property and the adjoining sidewalks and passageways, (b) any breach or default on the part of the City in the performance of any covenant or agreement to be performed by the City pursuant to this Lease Agreement, (c) any act or negligence of licensees in connection with their use, occupancy or Operation of the Property, or (d) any accident, injury or damage whatsoever caused to any person, firm or corporation in or about the Property or upon or under the sidewalks and from and against all costs, reasonable counsel fees, expenses and liabilities incurred in any action or proceeding brought by reason of any claim referred to in this Section, but excepting the negligence or willful misconduct of the person or entity seeking indemnity. In the event that any action or proceeding is brought against the Authority or the Trustee or any director, member, officer or employee thereof, by reason of any such claim, the City, upon notice from the Authority or the Trustee or such director, member, officer employee thereof, covenants to resist or defend such action or proceeding by counsel reasonably satisfactory to the Authority or the Trustee or such director, member, officer or employee thereof.

Section 9.05 Assignment and Subleasing. This Lease Agreement may not be assigned by the City. The City may sublease the Fire District Administration Building Site or any portion thereof to the Fontana Fire Protection District and the Fontana Fire Protection District may sublease the Fire District Administration Building Site or any portion thereof back to the City (collectively, the “Fire District Sublease”), so long as the City remains fully liable for all obligations under this Lease Agreement and the sublease is subordinate in all respects to the rights of the Authority and the Trustee hereunder. The City may sublease the Property or any portion thereof to any other person or entity for any other purpose, subject to the satisfaction of all of the following conditions (a) through (d) below:
(a) this Lease Agreement and the obligation of the City to make all Rental Payments hereunder shall remain the primary obligation of the City; (b) the City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority and the Trustee a true and complete copy of such sublease; (c) any sublease of the Property by the City shall explicitly provide that such sublease is subject to all rights of the Authority under the Lease Agreement, including, the right to re-enter and re-let the Property or terminate the Lease Agreement upon a default by the City; and (d) the City shall furnish the Authority and the Trustee with an Opinion of Counsel to the effect that such sublease will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes.

Notwithstanding any other provision of this Lease Agreement so long as (a) the Insured Series 2025A Bonds are Outstanding or any amounts are due and payable to the 2025 Insurer and (b) so long as the Policy is in effect and the 2025 Insurer is not in default in respect of its payment obligations thereunder, and (c) except for the Fire District Sublease as permitted by this Section, no sublease, release, sale, disposition or substitution of the Property shall occur without the prior written consent of the 2025 Insurer.
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Section 9.06 Title to Property. Upon the termination or expiration of this Lease Agreement (other than as provided in Section 7.01 and Section 8.01 hereof), and the first date upon which the Bonds are no longer Outstanding, all right, title and interest in and to the Property shall vest in the City. Upon any such termination or expiration, the Authority shall execute such conveyances, deeds and other documents as may be necessary to effect such vesting of record.

Section 9.07 Authority’s Purpose. The Authority covenants that, prior to the discharge of this Lease Agreement and the Bonds, it will not engage in any activities inconsistent with the purposes for which the Authority is organized, as set forth in the Joint Powers Agreement.

Section 9.08 Representations of the City. The City represents and warrants to the Authority that (a) the City has the full power and authority to enter into, to execute and to deliver this Lease Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement and the Indenture, and (b) the Property will be used in the performance of essential governmental functions.

Section 9.09 Representation of the Authority. The Authority represents and warrants to the City that the Authority has the full power and authority to enter into, to execute and to deliver this Lease Agreement, the Assignment Agreement and the Indenture, and to perform all of its duties and obligations hereunder and thereunder, and has duly authorized the execution and delivery of this Lease Agreement, the Assignment Agreement and the Indenture.

ARTICLE X
NO CONSEQUENTIAL DAMAGES;
USE OF THE PROPERTY; SUBSTITUTION OR RELEASE
Section 10.01 No Consequential Damages. In no event shall the Authority or the Trustee be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Lease Agreement or the City’s use of the Property.

Section 10.02 Use of the Property. The City will not use, operate or maintain the Property improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated by this Lease Agreement. In addition, the City agrees to comply in all respects (including, without limitation, with respect to the use, maintenance and operation of the Property) with all laws of the jurisdictions in which its operations may extend and any legislative, executive, administrative or judicial body exercising any power or jurisdiction over the Property; provided, however, that the City may contest in good faith the validity or application of any such law or rule in any reasonable manner which does not, in the opinion of the Authority, adversely affect the estate of the Authority in and to any of the Property or its interest or rights under this Lease Agreement.

Section 10.03 Substitution or Release of the Property. The City shall have the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from this Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property pursuant to this subsection, there shall be no reduction in or abatement of the Base Rental Payments due from the City hereunder as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following specific conditions, which are hereby made conditions precedent to such substitution or release:
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(a) the City shall have found (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release, (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds; (b) the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in Section 6.02 hereof;
(c) the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes; (d) the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the San Bernardino County Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained herein and in the Ground Lease; (e) the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
(f) no event of default (as described in Article VII hereof) has occurred and is continuing;
(g) the City will give, or cause to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate; (h) the City will certify to the Trustee that the City has a current need for the substituted real property;
(i) the City shall certify to the Trustee that any substitution shall not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement; and
(j) the 2025 Insurer shall have consented in writing to such substitution or release.

Section 10.04 Release of Library Site After Completion of City Hall Building. Without regard to the requirements of Section 10.03 above, the Authority may provide for release and deletion of the Library Site portion of the Property from the Property, provided that the City shall satisfy conditions (a), (b), and (c), below, compliance with each of which requirements is hereby declared to be a condition precedent to such release:
(a) The City shall file with the Authority and the Trustee a copy of a Lease Supplement which deletes the Library Site from the Lease Agreement (and, at the election of the City, from the Ground Lease); and
(b) The City shall have delivered the Completion Certificate to the Trustee; and 756
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(c) no event of default (as described in Article VII hereof) has occurred and is continuing.

Upon the satisfaction of all such conditions under this Section 10.04, this Lease Agreement shall thereupon end as to the Library Site and shall thereupon continue as to the remaining portion of the Property, and the Library Site shall be released from the Lease Agreement and no longer form part of the Property hereunder without further act or deed of the City, the Authority, or the Trustee, provided the Authority and the Trustee shall execute any such instruments evidencing such release as may be reasonably requested by the City from time to time. The City shall not be entitled to any reduction, diminution, extension or other modification of the Base Rental Payments whatsoever as a result of such deletion.

ARTICLE XI

MISCELLANEOUS
Section 11.01 Law Governing. THIS LEASE AGREEMENT SHALL BE GOVERNED

EXCLUSIVELY BY THE PROVISIONS HEREOF AND BY THE LAWS OF THE STATE OF CALIFORNIA AS THE SAME FROM TIME TO TIME EXIST.

Section 11.02 Notices. All written notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder shall be given to the party entitled thereto at its address set forth below, or at such other address as such party may provide to the other parties in writing from time to time, namely:

If to the City: City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: City Manager
If to the Authority: Fontana Public Facilities Financing Authority c/o City of Fontana
8353 Sierra Avenue
Fontana, California 92335
Attention: Executive Director
Each such notice, statement, demand, consent, approval, authorization, offer, designation, request or other communication hereunder shall be deemed delivered to the party to whom it is addressed (a) if personally served or delivered, upon delivery, (b) if given by electronic communication, whether by telex, telegram or telecopier, upon the sender’s receipt of an appropriate answerback or other written acknowledgment, (c) if given by registered or certified mail, return receipt requested, deposited with the United States mail postage prepaid, 72 hours after such notice is deposited with the United States mail, (d) if given by overnight courier, with courier charges prepaid, 24 hours after delivery to said overnight courier, or (e) if given by any other means, upon delivery at the address specified in this Section.

Section 11.03 Validity and Severability. If for any reason this Lease Agreement shall be held by a court of competent jurisdiction to be void, voidable or unenforceable by the Authority or by the City, or if for any reason it is held by such a court that any of the covenants and conditions of the 757
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City hereunder, including the covenant to pay Rental Payments, is unenforceable for the full term hereof; then and in such event this Lease Agreement is and shall be deemed to be a Lease Agreement under which the Rental Payments are to be paid by the City annually in consideration of the right of the City to possess, occupy and use the Property, and all of the terms, provisions and conditions of this Lease Agreement, except to the extent that such terms, provisions and conditions are contrary to or inconsistent with such holding, shall remain in full force and effect.

Section 11.04 Net-Net-Net Lease. This Lease Agreement shall be deemed and construed to be a “net-net-net lease” and the City hereby agrees that the Rental Payments shall be an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever and notwithstanding any dispute between the City and the Authority.

Section 11.05 Taxes. The City shall pay or cause to be paid all taxes and assessments of any type or nature charged to the Authority or affecting the Property or the respective interests or estates therein; provided, however, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City shall be obligated to pay only such installments as are required to be paid during the term of this Lease Agreement as and when the same become due.

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

Section 11.06 Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Lease Agreement.

Section 11.07 Amendments.
(a) This Lease Agreement and the Ground Lease may be amended and the rights and obligations of the 2025 Insurer, the Authority and the City hereunder and thereunder may be amended at any time by an amendment hereto or thereto which shall become binding upon execution and delivery by the Authority and the City, but only with the prior written consent of the 2025 Insurer and the Owners of a majority of the principal amount of the Bonds then Outstanding pursuant to the Indenture, provided that no such amendment shall (i) extend the payment date of any Base Rental Payments, reduce the interest component or principal component of any Base Rental Payments or change the prepayment terms and provisions, without the prior written consent of the 2025 Insurer and the Owner of each Bond so affected, or (ii) reduce the percentage of the principal amount of the Bonds the consent of the Owners of which is required for the execution of any amendment of this Lease Agreement or the Ground Lease. For purposes of this Section, the 2025 Insurer shall be deemed to be the Owner of all Insured Series 2025A Bonds. 758
24 4916-4030-1648v10/022777-0046
(b) This Lease Agreement and the Ground Lease and the rights and obligations of the Authority and the City hereunder and thereunder may also be amended at any time by an amendment hereto or thereto which shall become binding upon execution by the Authority and the City, without the written consents of any Owners or the 2025 Insurer, but only to the extent permitted by law and only for any one or more of the following purposes:
(i) to add to the agreements, conditions, covenants and terms required by the Authority or the City to be observed or performed herein or therein other agreements, conditions, covenants and terms thereafter to be observed or performed by the Authority or the City, or to surrender any right or power reserved herein or therein to or conferred herein or therein on the Authority or the City, and which in either case shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (ii) to make such provisions for the purpose of curing any ambiguity or of correcting, curing or supplementing any defective provision contained herein or therein or in regard to questions arising hereunder or thereunder which the Authority or the City may deem desirable or necessary and not inconsistent herewith or therewith, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel; (iii) to make such additions, deletions or modifications as may be necessary or appropriate to assure the exclusion from gross income for federal income tax purposes of the interest on the Bonds;
(iv) to provide for the substitution or release of a portion of the Property in accordance with the provisions of Sections 10.03 or 10.04 hereof; (v) to provide for the issuance of Additional Bonds in accordance with Article III of the Indenture; or
(vi) to make such other changes herein or therein or modifications hereto or thereto as the Authority or the City may deem desirable or necessary, and which shall not materially adversely affect the interests of the Owners, as evidenced by an Opinion of Bond Counsel.

Section 11.08 Assignment. The City and the Authority hereby acknowledge the assignment of this Lease Agreement (except for the Authority’s obligations and its rights to give consents or approvals hereunder), and the Base Rental Payments payable hereunder, to the Trustee pursuant to the Assignment Agreement. To the extent that this Lease Agreement confers upon or gives or grants the Trustee any right, remedy or claim under or by reason of this Lease Agreement, the Trustee is hereby explicitly recognized as being a third-party beneficiary hereunder and may enforce any such right, remedy or claim conferred, given or granted hereunder.

Section 11.09 [2025 Insurer as Third Party Beneficiary. The 2025 Insurer is recognized as and shall be deemed to be a third party beneficiary of this Lease Agreement and may enforce the provisions of this Lease Agreement as if it were a party hereto.] Section 11.10 [2025 Insurer as Owner of Insured Series 2025A Bonds. So long as the Policy is in effect and the 2025 Insurer is not in default in respect of its payment obligations thereunder, the 2025 Insurer shall be (i) deemed to be the sole and exclusive Owner of the Insured Series 2025A Bonds for purposes of all approvals, consents, waivers, institution of any action, and 759
25 4916-4030-1648v10/022777-0046
the direction of all remedies and (ii) entitled to direct and control the enforcement of all remedies granted under this Lease Agreement on behalf of the Owners of Insured Series 2025A Bonds.] Section 11.11 Execution. This Lease Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all together shall constitute but one and the same Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
760
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IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.

CITY OF FONTANA
By:

City Manager
ATTEST:

City Clerk

FONTANA PUBLIC FACILITIES FINANCING

AUTHORITY
By:

Executive Director
ATTEST:

Secretary
761
A-1
4916-4030-1648v10/022777-0046

EXHIBIT A

LEGAL DESCRIPTION OF THE PROPERTY

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
[TO COME
762
B-1
4916-4030-1648v10/022777-0046

EXHIBIT B

BASE RENTAL PAYMENT SCHEDULE
Base Rental Deposit
Date
(Third Business Day
Prior to) Principal Component Interest Component
Total Base Rental
Payment
763
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 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 a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

PRELIMINARY OFFICIAL STATEMENT DATED [_], 2025
NEW ISSUE - FULL BOOK-ENTRY S&P: “[AA-]”
See “RATING” herein.

In the opinion of Stradling Yocca Carlson & Rauth LLP, Bond Counsel (“Bond Counsel”), under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described in this Official Statement, interest (and original issue discount) on the Series 2025A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2025A Bonds is exempt from State of California personal income tax. See the caption “TAX MATTERS” herein with respect to tax consequences relating to the Series 2025A Bonds, including with respect to the alternative minimum tax imposed on certain large corporations. $138,635,000*

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A
Dated: Date of Delivery Due: November1, as shown on inside cover Authority for Issuance. The bonds captioned above (the “Series 2025A Bonds”) are being issued by the Fontana Public Facilities Financing Authority (the “Authority”) pursuant to the Marks-Roos Local Bond Pooling Act of 1985 and an Indenture dated as of October 1, 2025 (the “Indenture”), by and among the Authority, the City of Fontana (the “City”), and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

Purpose. The proceeds of the Series 2025A Bonds will be used to (i) refinance all of the outstanding Fontana Public Facilities Public Financing Authority Lease Revenue Refunding Bonds, Series 2014A, (ii) finance the acquisition, construction, and installation of certain public capital improvements in the City, and (iii) pay the costs of issuing the Series 2025A Bonds. See “FINANCING PLAN.” Security. Under the Indenture, the Series 2025A Bonds are secured by a pledge and first lien on base rental payments (“Base Rental Payments”) to be made by the City for the lease of property under a Lease Agreement dated as of October 1, 2025, between the Authority, as lessor, and the City, as lessee, concerning the leaseback of certain real property, as described in this Official Statement. The Series 2025A Bonds are also secured by certain funds held under the Indenture. The City has covenanted under the Lease Agreement to make all scheduled Base Rental Payments, to include all such payments as a separate line item in its annual budgets, and to make all the necessary annual appropriations for such Base Rental Payments. The City’s obligation to make Base Rental Payments is subject to abatement during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defects in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property. No debt service reserve fund or account will be established by the Authority or the City in connection with the issuance of the Series 2025A Bonds. The Series 2025A Bonds are not subject to acceleration in the event of a payment default. See “SECURITY FOR THE SERIES 2025A BONDS” and “BOND OWNERS’ RISKS – Abatement.”
Bond Terms; Book-Entry Only. The Series 2025A Bonds will bear interest at the rates shown on the inside cover page, payable semiannually on May 1 and November 1 of each year, commencing on [May 1, 2026], and will be issued in fully-registered form without coupons in integral multiples of $5,000. The Series 2025A Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers of the Series 2025A Bonds will not receive certificates representing their interests in the Series 2025A Bonds. Payments of the principal of, premium, if any, and interest on the Series 2025A Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the beneficial owners of the Series 2025A Bonds. See “THE SERIES 2025A BONDS − General Provisions.” Redemption. The Bonds are subject to optional, mandatory sinking fund and extraordinary redemption prior to maturity. See “THE SERIES 2025A BONDS– Redemption.”
Bond Insurance. The Authority has applied for a municipal bond insurance policy guaranteeing the scheduled payment of principal of and interest on some or all of the maturities of the Series 2025A Bonds when due. The Authority will determine whether to purchase such policies in connection with the pricing of the Series 2025A Bonds.

The Series 2025A Bonds are special obligations of the Authority, payable solely from and secured by a pledge of the Base Rental Payments and other assets pledged therefor under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Series 2025A Bonds. The obligation of the City to pay Base Rental Payments does not constitute an indebtedness of the City, the State of California, or any of its political subdivisions within the meaning of any constitutional or statutory debt limitation or restriction, and does not constitute an obligation for which the City or the State of California is obligated to levy or pledge any form of taxation or for which the City or the State of California has levied or pledged any form of taxation. The Authority has no power to tax.

THIS COVER PAGE CONTAINS CERTAIN INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT A SUMMARY OF ALL THE PROVISIONS OF THE SERIES 2025A BONDS. PROSPECTIVE INVESTORS MUST READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION.

The Series 2025A Bonds are offered when, as and if issued, subject to approval as to their legality by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, Bond Counsel. Certain legal matters will also be passed upon for the Authority and the City by Jones Hall LLP, San Francisco, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Authority and the City by Best Best & Krieger LLP, as City Attorney. Certain legal matters will be passed on for the Underwriter by Kutak Rock LLP. It is anticipated that the Series 2025A Bonds will be delivered in book-entry form through the facilities of DTC on or about [October 2], 2025.

Ramirez & Co. Inc.

The date of this Official Statement is: _______, 2025
* Preliminary; subject to change.
764
$138,635,000*

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

MATURITY SCHEDULE
(Base CUSIP:† ______)
$___________ Serial Bonds
Maturity Date
(November 1)
Principal
Amount
Interest
Rate Yield Price CUSIP†
$________ – _____% Term Bonds due November 1, 20__; Yield _____%; Price ____; CUSIP†: ___
$________ – _____% Term Bonds due November 1, 20__; Yield _____%; Price ____; CUSIP†: ___
* Preliminary; subject to change.

C Priced to first optional redemption date of November 1, 20__, at par † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by S&P Global Market Intelligence. Copyright© CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Authority, the Underwriter or their agents or counsel assume responsibility for the accuracy of such numbers.
765
[Insert location map from 2021 OS]
766

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY

BOARD OF DIRECTORS
Acquanetta Warren, Authority Chair
Peter Garcia, Authority Vice-Chair
John Roberts, Authority Member
Jesus “Jesse” Sandoval, Authority Member
Phillip Cothran, Authority Member
Matthew Ballantyne, Executive Director
Germaine McClellan Key, City Clerk/Authority Secretary
Jessica Brown, City Treasurer
_______________________

CITY OF FONTANA

CITY COUNCIL
Acquanetta Warren, Mayor
Peter Garcia, Mayor Pro Tem
John Roberts, Council Member
Jesus “Jesse” Sandoval, Council Member
Phillip Cothran, Authority Member
STAFF
Matthew Ballantyne, City Manager
Jessica Brown, Chief Financial Officer
Janet Koehler-Brooks, City Treasurer
Germaine McClellan Key, City Clerk
Best Best & Krieger LLP, City Attorney

PROFESSIONAL SERVICES

BOND COUNSEL
Stradling Yocca Carlson & Rauth LLP,
Newport Beach, California

DISCLOSURE COUNSEL
Jones Hall LLP
San Francisco, California

MUNICIPAL ADVISOR
CSG Advisors Incorporated
San Francisco, California

TRUSTEE AND ESCROW BANK
U.S. Bank Trust Company, National Association
Los Angeles, California
767

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT
Use of Official Statement. This Official Statement is submitted in connection with the sale of the Series 2025A Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract between any bond owner and the Authority, the City or the Underwriter.

No Offering Except by This Official Statement. No dealer, broker, salesperson or other person has been authorized by the Authority, the City or the Underwriter to give any information or to make any representations other than those contained in this Official Statement and, if given or made, such other information or representation must not be relied upon as having been authorized by the Authority, the City or the Underwriter.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor may there be any sale of the Series 2025A Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

Preparation of Official Statement. The information set forth in this Official Statement has been furnished by the Authority, the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness.

The Underwriter has provided the following sentence for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information.

Estimates and Forecasts. When used in this Official Statement and in any continuing disclosure by the Authority in any press release and in any oral statement made with the approval of an authorized officer of the City or the Authority or any other entity described or referenced herein, the words or phrases “will likely result,” “are expected to”, “will continue”, “is anticipated”, “estimate”, “project”, “forecast”, “expect”, “intend” and similar expressions identify “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements. Any forecast is subject to such uncertainties. Inevitably, some assumptions used to develop the forecasts will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between forecasts and actual results, and those differences may be material. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, give rise to any implication that there has been no change in the affairs of the Authority, the City or any other entity described or referenced herein since the date hereof.

Stabilization of Prices. In connection with this offering, the Underwriter may overallot or effect transactions which stabilize or maintain the market price of the Series 2025A 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 Series 2025A Bonds to certain securities dealers, dealer banks and banks acting as agent at prices lower than the public offering prices stated on the inside cover page of this Official Statement, and those public offering prices may be changed from time to time by the Underwriter.

Document Summaries. All summaries of the Indenture or other documents referred to in this Official Statement are made subject to the provisions of such documents and qualified in their entirety to reference to such documents, and do not purport to be complete statements of any or all of such provisions.

No Securities Laws Registration. The Series 2025A Bonds have not been registered under the Securities Act of 1933, as amended, in reliance upon exceptions therein for the issuance and sale of municipal securities. The Series 2025A Bonds have not been registered or qualified under the securities laws of any state.

Effective Date. This Official Statement speaks only as of its date, and the information and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the Series 2025A Bonds will, under any circumstances, give rise to any implication that there has been no change in the affairs of the Authority, the City, the other parties described in this Official Statement, or the condition of the property within the City since the date of this Official Statement.

Website. The City maintains a website. However, the information presented on the website is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Series 2025A Bonds.
768
-iTABLE OF CONTENTS
INTRODUCTION................................................1 General...........................................................1 Security for the Series 2025A Bonds; Base
Rental Payments........................................2 No Reserve Fund ...........................................3 Application for Bond Insurance ......................3
Additional Bonds; Other Obligations ..............3
The Authority..................................................3 The City; The Fire Protection District .............4
Professionals Involved in the Offering ...........4
Forward-Looking Statements .........................4
Risk Factors ...................................................5 Summaries Not Definitive...............................5 FINANCING PLAN .............................................5 Refinancing of 2014 Bonds ............................5 The 2025 Project............................................6 Estimated Sources and Uses of Funds..........6
Debt service schedule........................................7 THE PROPERTY ...............................................7 Description and Location................................7 Modification of Property .................................9 Substitution or Release of the Property .......10
THE SERIES 2025A BONDS...........................12
General.........................................................12 Registration, Transfers and Exchanges .......12
Redemption ..................................................12 Book-Entry Only System ..............................14 SECURITY FOR THE SERIES 2025A
BONDS.........................................................15 Pledge of Base Rental Payments ................15
Additional Bonds ..........................................15 Base Rental Payments.................................17 Additional Rental Payments .........................17
Abatement....................................................18 Action on Default..........................................19 No Reserve Fund .........................................19 Insurance......................................................19 Self Insurance ..............................................21 THE CITY.........................................................22 General.........................................................22 City Government and Administration ...........22
Recent Developments affecting City
General Fund ...........................................23 CITY FINANCIAL INFORMATION...................23
Accounting Policies and Financial
Reporting..................................................23 Reserve Policy .............................................24 Budget Procedure, Current Budget and
Historical Budget Information...................26
City Financial Statements ............................32 General Fund Major Revenues By Source ..35
Sales and Use Taxes ...................................36 Property Taxes .............................................39 Charges for Services....................................44 Franchise Taxes...........................................45 Business License Taxes .............................. 46 Long-Term General Fund Obligations ......... 46
Overlapping Debt Statement ....................... 46
Employee Retirement System ..................... 48
Other Post-Employment Benefits ................ 53
Employee Relations ..................................... 54 Capital Improvement Program..................... 55
Risk Management ........................................ 55 Investment Policies and Procedures ........... 56
State Budget ................................................ 57 THE AUTHORITY............................................ 57

CONSTITUTIONAL AND STATUTORY

LIMITATIONS ON TAXES AND
APPROPRIATIONS..................................... 58
Limitations on Revenues.............................. 58 Statutory Revenue Limitations -
Proposition 62.......................................... 61 Proposition 1A.............................................. 61 Proposition 22 .............................................. 62 Unitary Property ........................................... 62 Possible Future Initiatives ............................ 62 BOND OWNERS’ RISKS................................. 64
Limited Obligations ...................................... 64 Abatement of Lease..................................... 64 Limitation on Remedies ............................... 65 Limitation on Trustee’s Obligations under
the Indentures.......................................... 65 Release of Property; Additional Bonds ........ 65
Insurance on the Property............................ 66 Condemnation of the Property..................... 66
Value of Property ......................................... 66 No Acceleration Upon Default ..................... 67
Early Prepayment Risk ................................ 67 Bankruptcy Risks ......................................... 67 State Law Limitations on Appropriations ..... 68
Limitations on Taxes and Fees.................... 68
Additional Obligations of the City................. 69
Property Taxes............................................. 69 Public Health Emergencies.......................... 70
Certain Risks Associated with Sales Tax
and Other Local Tax Revenues ............... 70
Increasing Retirement Related Costs .......... 71
Hazardous Substances................................ 71 Natural Hazards ........................................... 71 Climate Change ........................................... 73 Cyber Security ............................................. 73 Litigation....................................................... 74 Secondary Market for Bonds ....................... 74
TAX MATTERS................................................ 75 CERTAIN LEGAL MATTERS .......................... 77
LITIGATION..................................................... 77 RATING ........................................................... 77 CONTINUING DISCLOSURE.......................... 78
UNDERWRITING............................................. 79 MUNICIPAL ADVISOR .................................... 79 769
-iiEXECUTION ....................................................80

TABLE OF CONTENTS
(continued)

APPENDIX A - DEMOGRAPHIC AND ECONOMIC INFORMATION FOR THE CITY OF FONTANA

AND COUNTY OF SAN BERNARDINO

APPENDIX B - SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS

APPENDIX C - COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2024

APPENDIX D - PROPOSED FORM OF OPINION OF BOND COUNSEL

APPENDIX E - FORM OF CONTINUING DISCLOSURE CERTIFICATE

APPENDIX F - DTC AND THE BOOK-ENTRY ONLY SYSTEM
770
1 __________________________________

OFFICIAL STATEMENT
__________________________________
$[_]*

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

INTRODUCTION
The purpose of this Official Statement, which includes the cover page, inside cover page and attached appendices, is to set forth certain information concerning the sale and delivery of the bonds captioned above (the “Series 2025A Bonds”) by the Fontana Public Facilities Financing Authority (the “Authority”). All capitalized terms used in this Official Statement, unless noted otherwise, have the meanings set forth in the Indenture (as defined below).

This introduction is not a summary of this Official Statement. It is only a brief description of and guide to, and is qualified by, more complete and detailed information contained in the entire Official Statement and the documents summarized or described herein. A full review should be made of the entire Official Statement. The offering of the Series 2025A Bonds to potential investors is made only by means of the entire Official Statement.

General
The Authority will issue the Series 2025A Bonds pursuant to the Marks-Roos Local Bond Pooling Act of 1985, commencing with Section 6584 of the California Government Code (the “Act”), and an Indenture (the “Indenture”) dated as October 1, 2025, by and among the Authority, the City of Fontana (the “City”) and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”). Capitalized terms not defined elsewhere in this Official Statement have the meanings assigned to such terms in Appendix B – “SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
The Series 2025A Bonds are being issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”). Purchasers will not receive certificates representing their interest in the Series 2025A Bonds. Individual purchases will be in integral multiples of $5,000. Principal of and interest on the Series 2025A Bonds will be paid by the Trustee to DTC for subsequent disbursement to DTC Participants who are obligated to remit such payments to the beneficial owners of the Series 2025A Bonds. See the caption “THE SERIES 2025A BONDS – Book-Entry Only System.” The Series 2025A Bonds are subject to optional, mandatory sinking fund and extraordinary redemption prior to maturity as described in this Official Statement. See the caption “THE SERIES 2025A BONDS – Redemption.”

* Preliminary; subject to change.
771
2 The Series 2025A Bonds are being issued to provide funds to: (i) refinance all of the outstanding Fontana Public Facilities Public Financing Authority Lease Revenue Refunding Bonds, Series 2014A (the “2014 Bonds”), which are outstanding in the aggregate principal amount of $24,375,000; (ii) finance the acquisition, construction, and installation of certain public capital improvements in the City, including capital improvements located in the City including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (the “2025 Project”) and (ii) to pay the costs of issuing the Series 2025A Bonds. See “FINANCING PLAN.”
Security for the Series 2025A Bonds; Base Rental Payments Under the Indenture, the Series 2025A Bonds are secured by a pledge and first lien on base rental payments (the “Base Rental Payments”) to be made by the City for the right to use certain real property and improvements (the “Property”) pursuant to a Lease Agreement dated as of October 1, 2025 (the “Lease Agreement”), between the City, as lessee, and the Authority, as lessor.

Pursuant to a Ground Lease, dated as of October 1, 2025 (the “Ground Lease”), the City will lease the Property to the Authority. The Authority will sublease the Property to the City under the Lease Agreement. The Lease Agreement obligates the City to make Base Rental Payments to the Authority.

The Trustee and the Authority will enter into an Assignment Agreement, dated as of October 1, 2025 (the “Assignment Agreement”), pursuant to which the Authority will assign to the Trustee for the benefit of the Bond Owners substantially all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including its right to receive the Base Rental Payments due under the Lease Agreement and to enforce any remedies in the event of a default by the City.

The City covenants under the Lease Agreement to take such action as may be necessary to include all Rental Payments, which are comprised of Base Rental Payments and Additional Rental Payments (which include taxes and assessments affecting the Property, administrative costs of the Authority relating to the Property, fees and expenses of the Trustee and other amounts payable under the Lease Agreement), due under the Lease Agreement as a separate line item in its annual budgets and to make the necessary annual appropriations therefor, subject to abatement as described in this Official Statement.

Base Rental Payments are subject to complete or partial abatement in the event and to the extent that there is substantial interference with the City’s right to use and occupy the Property or any portion thereof. See “SECURITY FOR THE SERIES 2025A BONDS – Abatement” and “BOND OWNERS’ RISKS – Abatement.” Abatement of Base Rental Payments under the Lease Agreement, to the extent payment is not made from alternative sources as set forth below, would result in all Bond Owners receiving less than the full amount of principal of and interest on the Series 2025A Bonds. To the extent that moneys in any of the funds and accounts established under the Indenture or proceeds of insurance are available, Base Rental Payments (or a portion thereof) may be made during periods of abatement.
772
3 No Reserve Fund
The Authority will not establish a debt service reserve fund for the Series 2025A Bonds.

Application for Bond Insurance
The Authority has applied for a municipal bond insurance policy guaranteeing the scheduled payment of principal of and interest on some or all of the maturities of the Series 2025A Bonds when due. The Authority will determine whether to purchase such policies in connection with the pricing of the Series 2025A Bonds. Should the Authority select a provider for such policies, then the Authority will include a summary of the terms of such policies in the final Official Statement.

Limited Obligation
THE SERIES 2025A BONDS ARE SPECIAL OBLIGATIONS OF THE AUTHORITY,

PAYABLE SOLELY FROM AND SECURED BY A PLEDGE OF THE BASE RENTAL PAYMENTS AND OTHER ASSETS PLEDGED THEREFOR UNDER THE INDENTURE. NEITHER THE

FAITH AND CREDIT NOR THE TAXING POWER OF THE AUTHORITY, THE CITY OR THE

STATE OF CALIFORNIA, OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE SERIES 2025A BONDS.

THE OBLIGATION OF THE CITY TO PAY BASE RENTAL PAYMENTS DOES NOT

CONSTITUTE AN INDEBTEDNESS OF THE CITY, THE STATE OF CALIFORNIA, OR ANY OF

ITS POLITICAL SUBDIVISIONS WITHIN THE MEANING OF ANY CONSTITUTIONAL OR

STATUTORY DEBT LIMITATION OR RESTRICTION, AND DOES NOT CONSTITUTE AN

OBLIGATION FOR WHICH THE CITY OR THE STATE OF CALIFORNIA IS OBLIGATED TO

LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY OR THE STATE OF CALIFORNIA HAS LEVIED OR PLEDGED ANY FORM OF TAXATION. THE AUTHORITY HAS NO POWER TO TAX.

Additional Bonds; Other Obligations
Under the Lease Agreement, the Authority may issue additional bonds (the “Additional Bonds”) payable from Base Rental Payments on a parity basis with the Series 2025A Bonds.

The Series 2025A Bonds and any Additional Bonds are collectively referred to in this Official Statement as the “Bonds.” See the caption “SECURITY FOR THE SERIES 2025A BONDS – Additional Bonds.” The Lease Agreement does not limit the City’s right to incur additional obligations payable from its General Fund. The City has existing obligations payable from its General Fund. See “CITY FINANCIAL INFORMATION – Long-Term General Fund Obligations” for a description of such obligations.

The Authority
The Authority is a joint exercise of powers authority organized and existing pursuant to the Act and a Joint Exercise of Powers Agreement, dated as of September 1, 2014. Its members are the City and the Fontana Fire Protection District (the “Fire Protection District”). See “THE AUTHORITY.”
773
4 The City; The Fire Protection District
The City was incorporated on June 25, 1952 under the General Laws of the State of California (the “State”) in the County of San Bernardino (the “County”). The City is located approximately 50 miles east of Los Angeles, and approximately 10 miles west of the cities of Riverside and San Bernardino and encompasses approximately 42.4 square miles. The City currently has an estimated population of approximately 219,172 persons.

The Fire Protection District serves the City and its sphere of influence. It was created effective July 1, 2008 to provide fire suppression, emergency medical, fire prevention and education services within the City limits and unincorporated area within the City’s sphere of influence. The members of the City Council serve as the governing board of the Fire Protection District. All obligations of the Authority under the Indenture are special obligations of the Authority, payable solely from Rental Payments and the other assets pledged under the Indenture, as described herein. The Fire Protection District is not contractually obligated to make any such payments nor are any of its assets pledged as security for the Series 2025A Bonds under the Indenture. However, the City expects that the Fire Protection District will reimburse the City for Rental Payments on an annual basis. See “SECURITY FOR THE SERIES 2025A BONDS.” Professionals Involved in the Offering
CSG Advisors Incorporated, San Francisco, California, has acted as municipal advisor to the Authority and the City (the “Municipal Advisor”). U.S. Bank Trust Company, National Association, Los Angeles, California, will act as Trustee with respect to the Series 2025A Bonds and as Escrow Bank with respect to the 2014 Bonds and as Escrow Bank with respect to the 2014 Bonds. Samuel A. Ramirez & Co., Inc, (the “Underwriter”), is underwriting the Series 2025A Bonds.

All proceedings in connection with the issuance of the Series 2025A Bonds are subject to the approval of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California, as Bond Counsel. Certain legal matters will be passed upon for the Authority and the City by Best Best & Krieger LLP, Riverside, California, in its capacity as City Attorney, and by Jones Hall LLP, San Francisco, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, as Underwriter’s Counsel. Payment of the fees and expenses of Bond Counsel, Disclosure Counsel, the Municipal Advisor and Underwriter’s Counsel is contingent upon the sale and delivery of the Series 2025A Bonds.

Forward-Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements.” Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words. The achievement of certain results or other expectations contained in such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements described to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements.

Although such expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The City is not obligated to issue any updates or revisions to the forward-looking statements if, or when, its expectations, or events, conditions or circumstances on which such statements are based change. 774
5 Risk Factors
Certain events could affect the ability of the City to make the Base Rental Payments when due. See the caption “BOND OWNERS’ RISKS” for a discussion of certain factors that should be considered, in addition to other matters that are set forth in this Official Statement, in evaluating an investment in the Series 2025A Bonds.

Summaries Not Definitive
The summaries of and references to documents, statutes, reports and other instruments in this Official Statement do not purport to be complete, comprehensive or definitive, and each such summary and reference is qualified in its entirety by the complete document, statute, report or instrument. Copies of the documents described in this Official Statement will be available at the office of the Chief Financial Officer, City of Fontana, 8353 Sierra Avenue, Fontana, California 92335.

FINANCING PLAN
Refinancing of 2014 Bonds
The Authority issued the 2014 Bonds, which are currently outstanding in the aggregate principal amount of $24,375,000, pursuant to an Indenture of Trust, dated as of October 1, 2014 (the “2014 Indenture”), by and between the Authority and U.S. Bank National Association, as trustee (the “2014 Trustee”). The 2014 Bonds are payable from lease payments made under a Lease Agreement, dated as of October 1, 2014 (the “2014 Lease”), by and between the City and the Authority. The City plans to apply a portion of the proceeds of the Series 2025A Bonds to refund all of the outstanding 2014 Bonds on or about [November 3], 2025 (the “Redemption Date”) at a redemption price equal to the outstanding principal amount of the 2014 Bonds, plus accrued interest to such date, without premium.
2014 Bonds to be Refunded
Maturity Date
(September 1)
Amount
Refunded
Interest
Rate CUSIP*
2026 $1,555,000 5.000% 34461BAM8
2027 1,630,000 5.000 34461BAN6
2028 1,000,000 3.875 34461BAP1
2028 715,000 5.000 34461BAU0
2029 1,790,000 5.000 34461BAQ9
2032 5,915,000 5.000 34461BAT3
2037 11,770,000 4.000 34461BAV8

* CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services (CGS), which is managed on behalf of the American Bankers Association by FactSet Research Systems, Inc. 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 have been assigned by an independent company not affiliated with the Authority or the City and are included solely for the convenience of the registered owners of the applicable 2014 Bonds. None of the City, the Authority, Bond Counsel, Disclosure Counsel, the Underwriter or the 775
6 Under an Escrow Agreement (2014 Bonds), dated as of October 1, 2025 (the “2014 Escrow Agreement”), by and among the City, the Authority and the U.S. Bank National Association, as escrow bank (the “Escrow Bank”) and as 2014 Trustee, the City will deliver a portion of the proceeds of the Series 2025A Bonds to the Escrow Bank for deposit in the escrow fund established under the 2014 Escrow Agreement (the “2014 Escrow Fund”). The Escrow Bank will invest amounts so deposited in the 2014 Escrow Fund in Federal Securities as set out in the 2014 Escrow Agreement. From the moneys on deposit in the 2014 Escrow Fund, the Escrow Bank will pay on the Redemption Date the principal of the outstanding 2014 Bonds, plus interest accrued to such date, without premium. The moneys delivered to the Escrow Bank to redeem the 2014 Bonds are pledged solely to the redemption of such 2014 Bonds. Neither such moneys nor any related interest will be available for the payments of principal of and interest on the Series 2025A Bonds.

The 2025 Project
The 2025 Project consists of the acquisition, construction, and installation of certain public capital improvements in the City, including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements.

The existing City Hall building is being demolished and will be replaced with a two-story structure consisting of approximately 42,000 square feet of office and related spaces. The new building will include administrative and executive offices, meeting rooms, public services areas, and the City Council Chambers, as well as 42 parking spaces within a secured employee only parking garage. Construction of the new City Hall is projected to begin in January 2026 and be completed by December 2027. The new parking garage will be located downtown and will have over 300 parking spaces.

The expected cost of the 2025 Project is approximately $120 million, with any additional costs to be paid from currently available City funds.

Estimated Sources and Uses of Funds
The estimated sources and uses of funds relating to the Series 2025A Bonds are as follows:

Sources: Amount
Principal $
Plus: Available Funds Relating to 2014 Bonds
Less: Underwriter’s Discount
TOTAL SOURCES $
Uses:

Deposit to 2014 Escrow Fund (1) $
Project Fund (2) $
Costs of Issuance (3)

Municipal Advisor are responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable 2014 Bonds or as included herein. 776
7 TOTAL USES $
(1) To be used to refinance the outstanding 2014 Bonds pursuant to the terms of the 2014 Escrow Agreement. See “FINANCING PLAN – Refinancing of 2014 Bonds.” (2) To be used to finance the 2025 Project. See “FINANCING PLAN – The 2025 Project.” (3) Includes, among other things, the fees and expenses of Bond Counsel, Disclosure Counsel, the Trustee, Escrow Bank, the Municipal Advisor, rating agency fees, and printing the preliminary and final Official Statements.

DEBT SERVICE SCHEDULE
Set forth below is a schedule of annual debt service on the Series 2025A Bonds, assuming no optional or extraordinary prepayments.

Year Ending
November 1 Principal Interest
Total
Debt Service
Total:

THE PROPERTY
Description and Location
777
8 Base Rental Payments will be made by the City under the Lease Agreement for the use and occupancy of the Property. The Property will initially consist of five components: (i) the Lewis Library and Technology Center located adjacent to City Hall (the “Library Component”), (ii) the City Hall/Development Services Building (the “City Hall/DSB Component”, (iii) the parking structure adjacent to City Hall on Arrow Boulevard (the “Parking Structure No. 1 Component”), (iv) the Fire District Administration Building (the “Fire District Administration Component”) and (v) Fontana Park (the “Fontana Park Component”).

Library Component. The Library Component is a two-story, 93,000-square- foot building completed in April 2008, and is the largest branch in the San Bernardino County Library system.

It includes a 330-seat auditorium, a coffee bar and bookstore. The facility has received a “silver” LEED rating from the U.S. Green Building Council. The City received an approximately $14.9 million grant from the State of California in connection with development of the Library Component (the “State Grant”). The City has also entered into a Joint Use Cooperative Agreement, dated as of December 1, 2003 (the “Joint Use Agreement”), with the County of San Bernardino and the Fontana Unified School District, pursuant to which the parties have agreed to operate the Library Component as a public library for a period of 20 years. While the Joint Use Agreement does not prohibit the lease of the Library Component pursuant to the Lease Agreement, in the event the Library Component was not operated as a public library facility at some point in the future the City could be obligated to repay a portion of the State Grant and be subject to other liabilities with respect to the Joint Use Agreement or the State Grant. As described under “– Substitution or Release of the Property” below, the City may provide for the release of the Library Component following the completion of improvements at the City Hall/DSB Component.

City Hall/DSB Component. The City Hall/DSB Component is located on two contiguous parcels encompassing 4.20 acres of land and includes the City administrative building (City Hall), built in 1961 which is located on both of the contiguous parcels. The site also includes the Development Services Building, which is approximately 27,050 square feet and completed in 2007. As described under “FINANCING PLAN--The 2025 Project”, the existing City Hall building is being demolished and will be fully rebuilt. Until the completion of the 2025 Project, the City Hall/DSB Component will be treated as having $0 value for purposes of determining the property values of the Property for purposes of the Lease Agreement.

Parking Structure No. 1 Component. The Parking Structure No. 1 Component is located at 16948 Arrow Boulevard. Construction began in March of 2024 and was completed in July of 2025 and includes 323 parking spaces. Parking Structure No. 1 is expected to serve the expansion of the downtown entertainment revitalization project.

Fire District Administration Component. The Fire District Administration Component is located at 17001 Upland Avenue. Construction began in February 2024 and was completed in August of 2025. The property consists of a 27,000 square foot administrative office building with offices constructed on the second level and parking for 38 vehicles in an open garage on the first level. The building will house the Fontana Fire Protection District, as well as the City’s Human Resources, Community Services, and Code Compliance departments. The City may sublease the Fire District Administration Building Component or any portion thereof to the Fontana Fire Protection District, so long as the City remains fully liable for all obligations under the Lease Agreement and the sublease is subordinate in all respects to the rights of the Authority and the Trustee under the Lease Agreement.

Fontana Park Component. The Fontana Park Component is a 33-acre park generally located northeast of Summit Avenue and Lytle Creek Road in north Fontana. The Fontana Park 778
9 Component features the Jessie Turner Community Center, an approximately 43,000 square foot community services building that includes various sized multi-purpose rooms for public gatherings and events, a 5,000 square foot banquet room and commercial catering kitchen, aerobics / dance studios, supporting staff offices, as well as a fully apportioned health and fitness center. In addition to the Jessie Turner Community Center, the Fontana Park Component includes the Fontana Aquatics Center, which features an event building and amphitheater, an Olympic size pool, a children’s pool, and water slides. The Fontana Park Component also includes a STEAM inspired playground, a dog park, a covered hockey arena, and a 2-acre skate park along with more than 15 acres of open space as well as more than 5 acres of parking. The improvements at the Fontana Park Component were completed by the City from ______ to _______. The Fontana Park Component will have an earlier Termination Date than the other components, in line with declining debt service obligations.

See “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
Under the Lease Agreement, remedies available to the Authority and the Trustee to collect amounts due from the City do not include the right to accelerate the Base Rental Payments or otherwise declare any Base Rental Payments not then in default to be immediately due and payable. See “SECURITY FOR THE SERIES 2025A BONDS – Default; Remedies” below and “BOND OWNERS’ RISKS – Limitation on Remedies.”
Modification of Property
General. Under the Lease Agreement, subject to covenant relating to liens in the Lease Agreement as described in the subcaption “– Covenant Regarding Liens” below, the City and any sublessee, at its own expense, or with the proceeds of Additional Bonds, have the right to make additions, modifications, and improvements to any portion of the Property if such improvements are necessary or beneficial for the use of such portion of the Property. All such additions, modifications and improvements shall thereafter comprise part of the Property and be subject to the provisions of the Lease Agreement. Such additions, modifications and improvements shall not in any way cause an abatement of Rental Payments with respect to the Property or cause it to be used for purposes other than those authorized under the provisions of State and federal law or in any way which would impair the State tax-exempt status or the exclusion from gross income for federal income tax purposes of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds); and the Property, upon completion of any additions, modifications and improvements made pursuant to the Lease Agreement, shall have an annual fair rental value which is not less than the annual Rental Payments.

Subject to covenant relating to liens in the Lease Agreement as described in the subcaption “– Covenant Regarding Liens” below, the City and any sublessee, at its own expense, or with the proceeds of Additional Bonds, have the right to make replacements, redevelopment or renovation of all or a portion of the Property if the following conditions precedent are satisfied:
(i) The City receives an opinion of Bond Counsel, a copy of which the City shall furnish to the Authority and the Trustee, that (1) such replacement does not adversely affect the federal income tax exclusion or the State tax-exempt status of the interest on the Bonds and Additional Bonds (to the extent such Additional Bonds were issued as tax exempt Bonds), and (2) the Lease Agreement will remain the legal, valid, binding and enforceable obligation of the City; 779
10 (ii) In the event such replacement, redevelopment or renovation would result in the temporary abatement of Rental Payments as provided in the Lease Agreement the City shall have notified any rating agency then providing a rating on the Bonds and shall deposit moneys with the Trustee in advance for payment of Rental Payments from the proceeds of Additional Bonds or from special funds of the City or other moneys, the application of which would not, in the opinion of Bond Counsel (a copy of which shall have been delivered to the Trustee), result in such Rental Payments constituting indebtedness of the City in contravention of the Constitution and laws of the State; and
(iii) The City shall certify to the Trustee that it has sufficient funds to complete such replacement, redevelopment or renovation.

Covenant Regarding Liens. In the event the City shall at any time during the term of the Lease Agreement cause any changes, alterations, additions, improvements, or other work to be done or performed or materials to be supplied, in or upon the Property, the City shall pay, when due, all sums of money that may become due for, or purporting to be for, any labor, services, materials, supplies or equipment furnished or alleged to have been furnished to or for the City in, upon or about the Property and which may be secured by a mechanics’, materialmen’s or other lien against the Property or the Authority’s interest therein, and will cause each such lien to be fully discharged and released at the time the performance of any obligation secured by any such lien matures or becomes due, except that, if the City desires to contest any such lien, it may do so as long as such contestment is in good faith. If any such lien shall be reduced to final judgment and such judgment or such process as may be issued for the enforcement thereof is not promptly stayed, or if so stayed and said stay thereafter expires, the City shall forthwith pay and discharge said judgment.

Substitution or Release of the Property
Under the Lease Agreement, the City has the right to substitute alternate real property for any portion of the Property or to release a portion of the Property from the Lease Agreement. All costs and expenses incurred in connection with such substitution or release shall be borne by the City. Notwithstanding any substitution or release of Property, there shall be no reduction in or abatement of the Base Rental Payments due from the City under the Lease Agreement as a result of such substitution or release. Any such substitution or release of any portion of the Property shall be subject to the following conditions precedent:
 the City shall have found (as set forth in a certificate delivered by the City to the Trustee) that the Property, as constituted after such substitution or release, (i) has an annual fair rental value at least equal to the maximum Base Rental Payments payable by the City in any Rental Period, and (ii) has a useful life in excess of the final maturity of any Outstanding Bonds;
 the City shall have obtained or caused to be obtained a CLTA or ALTA title insurance policy or policies with respect to any substituted property in the amount at least equal to the aggregate principal amount of any Outstanding Bonds of the type and with the endorsements described in the Lease Agreement; 780
11  the City shall have provided the Trustee with an Opinion of Counsel to the effect that such substitution or release will not, in and of itself, cause the interest on the Bonds to be included in gross income for federal income tax purposes;  the City, the Authority and the Trustee shall have executed, and the City shall have caused to be recorded with the San Bernardino County Recorder, any document necessary to reconvey to the City the portion of the Property being released and to include any substituted real property in the description of the Property contained in the Lease Agreement and in the Ground Lease;
 the City shall have provided notice of such substitution to each rating agency then rating the Bonds;
 no Event of Default (within the meaning of the Lease Agreement) has occurred and is continuing;
 the City will give, or cause to be given, any notice of the occurrence of such substitution required to be given pursuant to the Continuing Disclosure Certificate;  the City will certify to the Trustee that the City has a current need for the substituted real property;
 the City shall certify to the Trustee that any substitution shall not cause the City to violate any of its covenants, representations and warranties made in the Lease Agreement; and
 [the 2025 Insurer shall have consented in writing to such substitution or release.] Without regard to the requirements described above, the Authority may provide for release and deletion of the Library Component of the Property from the Property, provided that the City shall satisfy each of the conditions below prior to such release:
 The City shall file with the Authority and the Trustee a copy of a Lease Supplement which deletes the Library Component from the Lease Agreement (and, at the election of the City, from the Ground Lease); and
 The City shall have delivered the certificate to the Trustee confirming that the construction of the new City Hall has been completed substantially in conformity with the plans and specifications for such project; and  no event of default (as described in the Lease Agreement) has occurred and is continuing.

See “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
781
12 THE SERIES 2025A BONDS
General
The Series 2025A Bonds will be issued in fully registered form without coupons in denominations of integral multiples of $5,000. The Series 2025A Bonds will be dated as of and bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) from the dated date thereof at the rates set forth on the inside cover page. Interest on the Series 2025A Bonds will be paid semiannually on [May 1, 2026] and each November 1 and May 1 thereafter (each, an “Interest Payment Date”).

Interest on the Series 2025A Bonds will be payable from the Interest Payment Date next preceding the date of authentication thereof unless (i) a Series 2025A Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Record Date, in which event it shall bear interest from such Interest Payment Date, (ii) a Series 2025A Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the dated date thereof, or (iii) interest on any Series 2025A Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date. Interest will be paid in lawful money of the United States on each Interest Payment Date to the Persons in whose names the ownership of the Series 2025A Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below. Except when the Series 2025A Bonds are held in book-entry form, interest shall be paid by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Series 2025A Bond Owners at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date.

The principal and premium, if any, of the Series 2025A Bonds shall be payable in lawful money of the United States of America upon presentation and surrender thereof upon maturity or earlier redemption at the Office of the Trustee.

Registration, Transfers and Exchanges
The Series 2025A Bonds will be issued as fully registered bonds, registered in the name of Cede & Co. as nominee of DTC, and will be available to actual purchasers of the Series 2025A Bonds (the “Beneficial Owners”) in the denominations set forth above, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants (as defined in Appendix F) as described in this Official Statement. Beneficial Owners will not be entitled to receive physical delivery of the Series 2025A Bonds. See “– Book-Entry Only System” below.

Redemption*
Optional Redemption. The Series 2025A Bonds maturing on or after November 1, 20__, shall be subject to optional redemption, in whole or in part, on any date on or after November 1, 20__, in Authorized Denominations, from and to the extent of prepaid Base Rental Payments paid

* Preliminary; subject to change.
782
13 pursuant to the Lease Agreement, at a Redemption Price equal to the principal amount of the Series 2025A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Extraordinary Redemption from Condemnation Award or Insurance Proceeds. The Series 2025A Bonds shall be subject to redemption, in whole or in part, on any date, in Authorized Denominations, from and to the extent of any Net Insurance Proceeds received with respect to all or a portion of the Property, deposited by the Trustee in the Redemption Fund, at a Redemption Price equal to the principal amount of the Series 2025A Bonds to be redeemed, plus accrued interest thereon to the date of redemption, without premium.

Sinking Fund Redemption. The Series 2025A Bonds maturing on November 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each November 1 on and after November 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(November 1)
Principal Amount
To Be Redeemed
$________
(maturity)
The Series 2025A Bonds maturing on November 1, 20__ are subject to mandatory sinking fund redemption in part (by lot) on each November 1 on and after November 1, 20__, in integral multiples of $5,000 at a Redemption Price of the principal amount thereof plus accrued interest to the date fixed for redemption, without premium, in accordance with the following schedule:

Sinking Fund Redemption Date
(November 1)
Principal Amount
To Be Redeemed
$________
(maturity)
Selection of Bonds for Redemption. Whenever provision is made in the Indenture for the redemption of less than all of the Bonds, the Trustee shall select the Bonds to be redeemed from all Bonds not previously called for redemption (a) with respect to any optional redemption of Bonds of a Series, among maturities of Bonds of such Series as directed in a Written Request of the Authority, (b) with respect to any redemption pursuant to the Indenture and the corresponding provision of any Supplemental Indenture pursuant to which Additional Bonds are issued, among maturities of all Series of Bonds on a pro rata basis as nearly as practicable, and (c) with respect to any other redemption of Additional Bonds, among maturities as provided in the Supplemental Indenture pursuant to which such Additional Bonds are issued, and by lot among Bonds of the same Series with the same maturity in any manner which the Trustee in its sole discretion shall deem appropriate and fair. For purposes of such selection, all Bonds shall be deemed to be comprised of separate $5,000 denominations and such separate denominations shall be treated as separate Bonds which may be separately redeemed.

Notice of Redemption. The Trustee on behalf and at the expense of the Authority shall mail (by first class mail) notice of any redemption to the respective Owners of any Bonds 783
14 designated for redemption at their respective addresses appearing on the Registration Books, to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption. Such notice shall state the date of the notice, the redemption date, the redemption place and the Redemption Price and shall designate the CUSIP numbers, the Bond numbers and the maturity or maturities (except in the event of redemption of all of the Bonds of such maturity or maturities in whole) of the Bonds to be redeemed, and shall require that such Bonds be then surrendered at the Office of the Trustee for redemption at the Redemption Price, giving notice also that further interest on such Bonds will not accrue from and after the date fixed for redemption. Such notice may state that such redemption is conditioned upon sufficient funds being on deposit on the redemption date to redeem the Bonds so called for redemption. Such notice of redemption may also state that no representation is made as to the accuracy or correctness of the CUSIP numbers printed therein or on the Bonds. Neither the failure to receive any notice so mailed, nor any defect in such notice, shall affect the validity of the proceedings for the redemption of the Bonds or the cessation of accrual of interest thereon from and after the date fixed for redemption.

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

Effect of Redemption. Notice having been mailed as described above, and moneys for the Redemption Price, and the interest to the applicable date fixed for redemption, having been set aside in the Redemption Fund, the Bonds shall become due and payable on said date, and, upon presentation and surrender thereof at the Office of the Trustee, said Bonds shall be paid at the Redemption Price thereof, together with interest accrued and unpaid to said date.

If, on said date fixed for redemption, moneys for the Redemption Price of all the Bonds to be redeemed, together with interest to said date, shall be held by the Trustee so as to be available therefor on such date, and, if notice of redemption thereof shall have been mailed as aforesaid and not canceled, then, from and after said date, interest on said Bonds shall cease to accrue and become payable. All moneys held by or on behalf of the Trustee for the redemption of Bonds shall be held in trust for the account of the Owners of the Bonds so to be redeemed without liability to such Owners for interest thereon.

Book-Entry Only System
The Series 2025A Bonds are registered in the name of Cede & Co., as nominee of DTC.

DTC will act as securities depository for the Series 2025A Bonds. Ownership interests in the Series 2025A Bonds may be purchased in book-entry form only. So long as DTC, or Cede & Co. as its nominee, is the registered owner of all Series 2025A Bonds, all payments on the Series 2025A Bonds will be made directly to DTC, and disbursement of such payments to the DTC Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of the Participants, as more fully described in Appendix F.

As long as Cede & Co. is the registered owner of the Series 2025A Bonds, references herein to the Owners of the Series 2025A Bonds will refer to Cede & Co. and not to the Beneficial Owners. Neither the Authority nor the City gives any assurance that DTC, DTC Participants nor others will distribute payments with respect to the Series 2025A Bonds nor notices concerning 784
15 the Series 2025A Bonds to the Beneficial Owners or that DTC will otherwise serve and act in the manner described in this Official Statement. See Appendix F for a further description of DTC and its book-entry system. The information presented therein is based solely on information provided by DTC.

See “APPENDIX F – DTC AND THE BOOK-ENTRY ONLY SYSTEM” for further information regarding DTC and the book-entry system.

SECURITY FOR THE SERIES 2025A BONDS
Pledge of Base Rental Payments
The Series 2025A Bonds are payable from and secured by the Base Rental Payments and certain amounts on deposit in the funds and accounts established under the Indenture. Base Rental Payments will be paid by the City from any and all legally available funds.

The Authority, pursuant to the Assignment Agreement, has assigned to the Trustee for the benefit of the Series 2025A Bond Owners all of the Authority’s right, title and interest in and to the Ground Lease and the Lease Agreement, including, without limitation, its right to receive the Base Rental Payments to be paid by the City under and pursuant to the Lease Agreement; provided that the Authority will retain the rights to indemnification and to payment of reimbursement of its reasonable costs and expenses under the Lease Agreement. The City will pay Base Rental Payments directly to the Trustee, as assignee of the Authority. See the caption “– Base Rental Payments.”
Pursuant to the Indenture, the Authority may issue Additional Bonds payable from the Base Rental Payments on parity with the Series 2025A Bonds. See the caption “– Additional Bonds.”
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 Base Rental Payments and any other amounts (including proceeds of the sale of the Bonds) held in the Base Rental Payment Fund, the Interest Fund, the Principal Fund and the Redemption Fund are pledged to secure the payment of the principal of, premium, if any, and interest on the Bonds in accordance with their terms, the provisions of the Indenture and the Act. Said pledge constitutes a first lien on such assets.

All obligations of the Authority under the Indenture are special obligations of the Authority, payable solely from Rental Payments and the other assets pledged under the Indenture; provided, however, that all obligations of the Authority under the Bonds are special obligations of the Authority, payable solely from Base Rental Payments and the other assets pledged under the Indenture. Neither the faith and credit nor the taxing power of the Authority, the City or the State of California, or any political subdivision thereof, is pledged to the payment of the Bonds.

Additional Bonds
The Authority may at any time issue one or more Series of Additional Bonds (in addition to the Series 2025A Bonds) payable from Base Rental Payments on a parity with all other Bonds issued under the Indenture, but only subject to the following conditions precedent:
785
16 (a) The issuance of such Additional Bonds shall have been authorized under and pursuant to the Indenture and shall have been provided for by a Supplemental Indenture which shall specify the following: (1) the application of the proceeds of the sale of such Additional Bonds; (2) the principal amount and designation of such Series of Additional Bonds and the denomination or denominations of the Additional Bonds; (3) the date, the maturity date or dates, the interest payment dates and the dates on which mandatory sinking fund redemptions, if any, are to be made for such Additional Bonds; provided, however, that (i) the serial Bonds of such Series of Additional Bonds shall be payable as to principal annually on November 1 of each year in which principal falls due, and the term Bonds of such Series of Additional Bonds shall have annual mandatory sinking fund redemptions on November 1, (ii) the Additional Bonds shall be payable as to interest semiannually on May 1 and November 1 of each year, except that the first installment of interest may be payable on either May 1 or November 1 and shall be for a period of not longer than twelve months and the interest shall be payable thereafter semiannually on May 1 and November 1, (iii) all Additional Bonds of a Series of like maturity shall be identical in all respects, except as to number or denomination (except that Additional Bonds of a Series and like maturity may have different interest rates), and (iv) serial maturities of serial Bonds or mandatory sinking fund redemptions for term Bonds, or any combination thereof, shall be established to provide for the redemption or payment of such Additional Bonds on or before their respective maturity dates; (4) the redemption premiums and terms, if any, for such Additional Bonds; (5) the form of such Additional Bonds; and (6) if a reserve fund is to be established and maintained for such Series of Additional Bonds, the applicable reserve requirement and the amount, if any, to be deposited from the proceeds of sale of such Additional Bonds in such reserve fund to be held as separate security for such Series of Additional Bonds; (7) designate accounts in the Interest Fund, the Principal Fund, the Redemption Fund, the Rebate Fund and the reserve fund (if any) to be applicable to such Additional Bonds; and (8) such other provisions that are appropriate or necessary and are not inconsistent with the provisions hereof, including the establishment of a capitalized interest fund for the Additional Bonds, if appropriate; (b) The Authority shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture, in the Lease Agreement and in the Ground Lease required to be observed or performed by it;
(c) The City shall be in compliance with all agreements, conditions, covenants and terms contained in the Indenture, in the Lease Agreement and in the Ground Lease required to be observed or performed by it; and
(d) The Ground Lease shall have been amended, to the extent necessary, and the Lease Agreement shall have been amended so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount equal to the principal of and interest on such Additional Bonds, payable at such times and in such manner as may be necessary to provide for the timely payment of the principal of and interest on such Additional Bonds; provided, however, that no such amendment shall be made such that the sum of Base Rental Payments, including any increase in the Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Rental Period shall be in excess of the annual fair rental value of the Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith (evidence of the satisfaction of such condition shall be made by a Written Certificate of the City).

Nothing in the Indenture limits the issuance of any bonds or other obligations payable from Base Rental Payments if, after the issuance and delivery of such bonds or other obligations, none of the Bonds theretofore issued under the Indenture will be Outstanding. 786
17 Base Rental Payments
General. Rental Payments, including Base Rental Payments, will be paid by the City to the Authority for and in consideration of the right to use and occupy the Property and in consideration of the continued right to the quiet use and enjoyment thereof during each Rental Period for which such Rental Payments are to be paid. Each Base Rental Payment will be deposited with the Trustee no later than third day Business Day next preceding each Interest Payment Date (the “Base Rental Deposit Date”). All Base Rental Payments will be paid directly by the City to the Trustee, and if received by the Authority at any time shall be transferred by the Authority with the Trustee within one Business Day after the receipt thereof. All Base Rental Payments received by the Trustee shall be deposited by the Trustee in the Base Rental Payment Fund.

Pursuant to the Indenture, on the Business Day immediately preceding each Interest Payment Date, the Trustee will transfer amounts in the Base Rental Payment Fund to the Interest Fund and the Principal Fund as necessary to provide for the payment of the interest on and principal of the Series 2025A Bonds.

Fair Rental Value. The Authority and the City have agreed and determined that the annual fair rental value of the Property is not less than the maximum annual Rental Payments due in any year. In making such determination of fair rental value, consideration has been given to the uses and purposes that may be served by the Property and the benefits therefrom which will accrue to the City and the general public. Payments of the Rental Payments for the Property during each Rental Period shall constitute the total rental for said Rental Period.

Covenant to Budget and Appropriate. The City covenants in the Lease Agreement to take such action as may be necessary to include all Rental Payments due thereunder as a separate line item in its annual budgets and to make necessary annual appropriations for all such Rental Payments. The City will deliver to the Authority and the Trustee a Certificate of the City stating that its final annual budget includes all Base Rental Payments due in such fiscal year within ten days after the filing or adoption thereof. The Lease Agreement declares that these covenants shall be deemed to be and shall be construed to be duties imposed by law and it shall be the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in the Lease Agreement agreed to be carried out and performed by the City.

Limited Obligation. THE OBLIGATION OF THE CITY TO MAKE THE BASE RENTAL

PAYMENTS DOES NOT CONSTITUTE A DEBT OF THE CITY OR OF THE STATE, OR OF ANY

POLITICAL SUBDIVISION THEREOF, WITHIN THE MEANING OF ANY CONSTITUTIONAL OR

STATUTORY DEBT LIMIT OR RESTRICTION, AND DOES NOT CONSTITUTE AN

OBLIGATION FOR WHICH THE CITY OR THE STATE OF CALIFORNIA IS OBLIGATED TO

LEVY OR PLEDGE ANY FORM OF TAXATION OR FOR WHICH THE CITY OR THE STATE OF CALIFORNIA HAS LEVIED OR PLEDGED ANY FORM OF TAXATION.

Additional Rental Payments
Under the Lease Agreement, the City is also required to pay, as Additional Rental Payments, such amounts as shall be required for the payment of the following:
787
18 (a) all taxes and assessments of any type or nature charged to the Authority or the City or affecting the Property or the respective interests or estates of the Authority or the City therein;
(b) all reasonable administrative costs of the Authority relating to the Property including, but without limiting the generality of the foregoing, salaries, wages, fees and expenses, compensation and indemnification of the Trustee payable by the Authority under the Indenture, fees of auditors, accountants, attorneys or engineers, and all other necessary and reasonable administrative costs of the Authority or charges required to be paid by it in order to maintain its existence or to comply with the terms of the Indenture or the Lease Agreement or to defend the Authority and its members, officers, agents and employees; (c) insurance premiums for all insurance required pursuant to the Lease Agreement; (d) any amounts with respect to the Lease Agreement or the Bonds required to be rebated to the federal government in accordance with Section 148(f) of the Code; (e) all amounts due to the [2025 Insurer] under the Indenture; and (f) all other payments required to be paid by the City under the provisions of the Lease Agreement or the Indenture.

Amounts constituting Additional Rental Payments payable under the Lease Agreement will be paid by the City directly to the person or persons to whom such amounts shall be payable.

The City will pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 60 days after notice in writing from the Trustee to the City stating the amount of Additional Rental Payments then due and payable and the purpose thereof.

Abatement
Base Rental Payments and Additional Rental Payments are paid by the City in each Rental Period for and in consideration of the right to use and occupy the Property. Except as otherwise specifically provided in the Lease Agreement, during any period in which, by reason of material damage to, or destruction or condemnation of, the Property, or any defect in title to the Property, there is substantial interference with the City’s right to use and occupy any portion of the Property, Rental Payments shall be abated proportionately, and the City waives the benefits of Civil Code Sections 1932(1), 1932(2) and 1933(4) and any and all other rights to terminate the Lease Agreement by virtue of any such interference, and the Lease Agreement shall continue in full force and effect. The amount of such abatement shall be agreed upon by the City and the Authority; provided, however, that the Rental Payments due for any Rental Period shall not exceed the annual fair rental value of that portion of the Property available for use and occupancy by the City during such Rental Period. The City and the Authority shall calculate such abatement and shall provide the Trustee with a certificate setting forth such calculation and the basis therefor.

Such abatement shall continue for the period commencing with the date of interference resulting from such damage, destruction, condemnation or title defect and, with respect to damage to or destruction of the Property, ending with the substantial completion of the work of repair or replacement of the Property, or the portion thereof so damaged or destroyed; and the term of the Lease Agreement will be extended as provided in the Lease Agreement, except that the term shall in no event be extended beyond the Maximum Lease Term. 788
19 Notwithstanding the foregoing, to the extent that moneys are available for the payment of Rental Payments in any of the funds and accounts established under the Indenture, Rental Payments shall not be abated as provided above but, rather, shall be payable by the City as a special obligation payable solely from said funds, accounts and proceeds. The City is permitted to apply Net Insurance Proceeds: (a) together with other legally available funds that the City elects to contribute, to the repair, reconstruction or replacement of the damaged or destroyed portions of the Property; (b) to redeem Series 2025A Bonds; and/or (c) if the annual fair rental value of the Property is at least equal to 100% of the Base Rental Payments, to any other lawful purpose, including Base Rental Payments. See the captions “THE SERIES 2025A BONDS – Redemption – Extraordinary Redemption from Condemnation Award or Insurance Proceeds,” “RISK FACTORS – Abatement” and Appendix B.

Action on Default
Should the City default under the Lease Agreement, the Trustee, as assignee of the Authority under the Lease Agreement, may terminate the Lease Agreement and recover certain damages from the City, or may retain the Lease Agreement and hold the City liable for all Base Rental Payments thereunder on an annual basis, and will have the right to re-enter and re-let the Property. Base Rental Payments may not be accelerated upon a default under the Lease Agreement. See the caption “BOND OWNERS’ RISKS – No Acceleration Upon Default.” For purposes of certain actions of Bond Owners of a series under the Indenture and Lease Agreement, such as certain consents and amendments and the direction of remedies following default, such Bond Owners do not act alone and may not control such matters to the extent that such matters are not supported by the requisite number of the Owners of all Bonds and Additional Bonds, if any, of such series.

For a description of the events of default and permitted remedies of the Trustee (as assignee of the Authority) contained in the Lease Agreement and the Indenture, see Appendix B.

No Reserve Fund
No debt service reserve fund or account will be established by the Authority or the City in connection with the issuance of the Series 2025A Bonds.

Insurance
The Lease Agreement requires:
(1) The City to maintain or cause to be maintained, throughout the term of the Lease Agreement, a standard commercial general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents and employees. Said policy or policies will provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or ownership of the Property. Said policy or policies must provide coverage in the minimum liability limits of $1,000,000 for personal injury or death of each person and $3,000,000 for personal injury or deaths of two or more persons in a single accident or event, and in a minimum amount of $500,000 for damage to property (subject to a deductible clause of not to exceed $100,000) resulting from a single accident or event. Such commercial general liability 789
20 and property damage insurance may, however, be in the form of a single limit policy in the amount of $3,000,000 covering all such risks. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried or required to be carried by the City, and may be maintained in whole or in part in the form of self-insurance by the City provided such self-insurance complies with the provisions of the Lease Agreement. The Net Insurance Proceeds of such liability insurance will be applied toward extinguishment or satisfaction of the liability with respect to which the Net Insurance Proceeds of such insurance shall have been paid; (2) The City to maintain or cause to be maintained, throughout the term of the Lease Agreement, a workers’ compensation insurance issued by a responsible carrier authorized under the laws of the State of California to insure employers against liability for compensation under the California Labor Code, or any act enacted as an amendment or supplement thereto or in lieu thereof, such workers’ compensation insurance to cover all persons employed by the City in connection with the Property and to cover full liability for compensation under any such act; provided, however, that the City’s obligations to carry workers’ compensation insurance may be satisfied by self-insurance, provided such self-insurance complies with the provisions of the Lease Agreement.
(3) The City to maintain or cause to be maintained, throughout the term of the Lease Agreement, a fire, lightning and special extended coverage insurance (which shall include coverage for vandalism and malicious mischief, but need not include coverage for earthquake damage) on all improvements constituting any part of the Property in an amount equal to the greater of 100% of the replacement cost of such improvements or 100% of the outstanding principal amount of the Bonds. The City has an insurance policy which provides replacement cost coverage. All insurance required to be maintained pursuant to this subsection may be subject to a deductible in an amount not to exceed $500,000. The City’s obligations under this subsection may be satisfied by self-insurance, provided such self-insurance complies with the provisions of the Lease Agreement.
(4) The City will maintain rental interruption insurance to cover the Authority’s loss, total or partial, of Base Rental Payments under the Lease Agreement resulting from the loss, total or partial, of the use of any part of the Property as a result of any of the hazards required to be covered pursuant to clause (3) above in an amount sufficient at all times to pay an amount not less than the product of two times the maximum amount of Base Rental Payments scheduled to be paid during any Rental Period. The City’s obligation to carry rental interruption insurance may be satisfied by self-insurance, provided such self-insurance complies with the provisions described under “--Self Insurance” below.

The insurance required to be maintained by the Lease Agreement must be provided by reputable insurance companies with claims-paying abilities determined, in the reasonable opinion of a professionally certified risk manager or an independent insurance consultant, to be adequate for the purposes hereof.

The City will provide, at its own expense, one or more CLTA or ALTA title insurance policies for the Property, the form of which policy or policies shall be acceptable to the [2025 Insurer], in the aggregate amount of not less than the aggregate principal amount of the Bonds.

Such policy or policies will insure: (a) the fee interest of the City in the Property; (b) the Authority’s ground leasehold estate in the Property under the Ground Lease; and (c) the City’s leasehold estate under the Lease Agreement in the Property, subject only to Permitted Encumbrances. All Net Insurance Proceeds received under said policy or policies will be deposited with the Trustee and applied as provided in the Indenture. So long as any of the Bonds remain Outstanding, each 790
21 policy of title insurance obtained pursuant to the Indenture or Lease Agreement or required thereby must provide that all proceeds thereunder shall be payable to the Trustee for the benefit of the Bond Owners.

Self Insurance
Insurance provided through a California joint powers authority of which the City is a member or with which the City contracts for insurance is deemed by the Lease Agreement to be self-insurance and may be utilized by the City to satisfy the requirements set forth above without the consent of the 2025 Insurer. The City must obtain the prior written consent of the 2025 Insurer to utilize other self-insurance to satisfy the requirements described above. Any self-insurance maintained by the City pursuant to this Article shall comply with the following terms:
(a) the self-insurance program shall be approved in writing by the City’s Risk Manager, a professionally certified risk manager, or an independent insurance consultant; (b) the self-insurance program shall include an actuarially sound claims reserve fund out of which each self-insured claim shall be paid, the adequacy of each such fund shall be evaluated on an annual basis by the City’s Risk Management Department, a professionally certified risk manager or by an independent insurance consultant and any deficiencies in any selfinsured claims reserve fund shall be remedied in accordance with the recommendation of the City’s Risk Management Department, a professionally certified risk manager or an independent insurance consultant, as applicable; and
(c) in the event that the self-insurance program shall be discontinued, the actuarial soundness of its claims reserve fund, as determined by a professionally certified risk manager or by an independent insurance consultant, shall be maintained. 791
22 THE CITY
General
The City encompasses approximately 42.2 square mile and has an estimated population of 219,172 as of January 1, 2025. It is located 50 miles east of Los Angeles and is approximately 10 miles west of the cities of Riverside and San Bernardino. Founded in 1913, Fontana is the second largest city in San Bernardino County, and the 20th largest in the State. The RiversideSan Bernardino area is often referred to as Southern California’s “Inland Empire.” As one of the cities in the Inland Empire, Fontana is part of a region whose population base exceeds 4.6 million people.

The City was first developed as an organized rural community through the vision of Mr. A.

B. Miller. Although self-sufficient, the farming community was abruptly reshaped to accommodate the industrial revolution in 1942 with the transformation of Mr. Miller’s farm into a steel mill by Henry J. Kaiser. The area became Southern California’s leading producer of steel and steelrelated products. The steel industry dominated the City’s economy until 1984 when the steel mill closed. Today, Fontana has emerged as an affordable suburb, attracting both residents and businesses.

Residential development continues to play a significant role in the City’s growth. According to a July 2025 Ryness Report, there were ten new home residential communities actively selling within the City. With the ever-increasing demand for housing and ongoing addition of new residential units in the City, [Southern California Association of Governments projected] that the City’s population will exceed 280,900 by the year 2040.

The City is a major transportation hub with convenient access to Interstates 10, 15 and the 210 freeway. Rail service available from Union Pacific Railroad and MetroLink to the greater Los Angeles area runs through the center of town. [The City is approximately] 10 minutes away from Ontario International Airport.

The City is also home to the Kaiser Permanente Medical Center, one of the largest hospitals in the Inland Empire, providing comprehensive inpatient and outpatient services and continuing to expand to meet regional demand.

City Government and Administration
The City was incorporated as a general law city in 1952 and is governed by a Mayor and four council members elected at large to serve four-year terms. The City operates under a Council-Manager form of government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City.

The City provides police protection, street sweeping, park maintenance, building inspection, library, sewer, storm drain and sanitation services. The City contracts with the County for fire protection services. Numerous hospitals and health care facilities are located in or near the City. The current City Council members and their respective term expiration dates are as follows:
792
23 Name and Office Term Expires
Acquanetta Warren, Mayor November, 2026
Peter Garcia, Mayor Pro Tem November, 2028
John Roberts, Council Member November, 2026
Jesus “Jesse” Sandoval, Council Member November, 2028
Phillip Cothran, Council Member November, 2026
The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, City Clerk, and City Attorney. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the City, and for appointing the heads of the various departments.

Recent Developments affecting City General Fund
In recent years, the City has attracted a variety of new development. In 2024, over 500 single family housing units and over 900 multi-family housing units were entitled. Residential development is primarily occurring in the northern portion of the City with the adoption of the Arboretum Specific Plan, which allows for the development of up to 3,532 residential units. The master planned community in this area is called the Arboretum, and its first residential community called the Meadows has been developed with 585 residential units. The second residential community called the Gardens is planned for 585 residential units and is under development. The City is also proceeding with the development of a downtown entertainment district called the Forge District, which is supported by the State of California's SB2 Grant to increase housing and create a walkable community with retail, services, and entertainment for residents and visitors.

In January 2025, ZM Trucks, a manufacturer of zero-emission commercial trucks, leased a 210,000 square foot facility in Fontana to support the production of a diverse portfolio of zeroemission products including electric commercial trucks, terminal tractors, and airport ground service equipment. This will be ZM Trucks’ first North American manufacturing plant.

CITY FINANCIAL INFORMATION
Accounting Policies and Financial Reporting
The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by the Governmental Accounting Standards Board (“GASB”). Combined financial statements of the City and its component units are produced following the close of each fiscal year of the City ended June 30 (each, a “Fiscal Year”).

The City Council employs an independent certified public accountant who examines at least annually the financial statements of the City in accordance with GAAP, including tests of the accounting records and other auditing procedures as such accountant considers necessary. As soon as practicable, after the end of the Fiscal Year, a final audit and report is submitted by the independent accountant to the City Council. The accounts of the City are organized on the basis of funds and account groups. The operations of each fund are accounted for with a separate set 793
24 of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures or expenses, as appropriate.

Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The budget is adopted in accordance with GAAP. Revenues are recognized on the accrual basis (i.e., when they are earned). Expenditures are recorded when the related fund liability is incurred. See “APPENDIX C – Comprehensive Annual Financial Report of the City for the Fiscal Year Ended June 30, 2024 – Note (1)” for a description of the significant accounting policies of the City. See the caption “– City Financial Statements” for a discussion of the City’s audited financial statements for Fiscal Year 2023-24.

The General Fund is the general operating fund of the City. It is used to account for all financial resources except those that are required to be accounted for in another fund because there are legal restrictions on their use. It is expected that debt service on the Series 2025A Bonds will be paid from amounts in the General Fund. Information on the remaining governmental funds of the City as of June 30, 2024, is set forth in Appendix B.

Reserve Policy
General Fund Reserves. The City maintains a reserve policy (the “Reserve Policy”).

Under the Reserve Policy, it is the responsibility of the City Council to maintain a sufficient level of reserve funds to provide for the orderly provision of services to the citizens of the City. The City Council has the authority to decide the circumstances under which the reserves can be used.

The City Manager and the Chief Financial Officer may, from time to time, make recommendations as to the level of reserve funds necessary for prudent fiscal management. Reserve levels are reviewed annually during the budget process as well as quarterly if any budget adjustments are requested to ensure that they are consistent with the conditions faced by the City.

Under the Reserve Policy, the City maintains the following three categories of General Fund reserves as part of the General Fund:

Contingency Reserve. In February 2025, the City Council adopted revisions to the Reserve Policy which included an increase in the minimum contingency reserve from 25% to 40% of the appropriated operating expenditures (excluding transfers out) adopted at the beginning of the fiscal year, which would be sufficient to finance operations for a period of over four and a half months (the “Contingency Reserve”). The primary purpose of this reserve is to protect the City’s ability to provide ongoing services to its citizens in the case of an unanticipated event. The balance in the Contingency Reserve was approximately $33.09 million as of June 30, 2024, or 25% of operating expenditures adopted at the beginning of Fiscal Year 2023-24. The City estimates that the balance in the Contingency Reserve was approximately $43.7 million as of June 30, 2025, or 32% of operating expenditures adopted at the beginning of Fiscal Year 2024-25. With the increase in the contingency reserve to 40%, the minimum threshold for 2025-26 increased by $23.0 million from $38.4 million to $61.4 million. Per the Reserve Policy, at the end of each fiscal year, the year-end operating surplus shall be contributed to the contingency reserve fund balance until the minimum threshold is met. It is the goal of the City to meet the minimum threshold within the next five years.

Operating Contingencies Reserve. The City will maintain an operating reserve to provide one-time funding for unexpected or unprogrammed operational needs that may 794
25 be used if authorized by a majority vote of the City Council. The balance in the operating reserve was $3.0 million as of June 30, 2024 and the City estimates that the balance in the Operating Reserve was $3.0 million as of June 30, 2025.

CalPERS Rate Stability Reserve. The City has established a Retirement Section 115 Trust with the purpose of stabilizing future pension costs through the prefunding of future liabilities. The balance in the CalPERS Rate Stability Reserve was approximately $12.2 million as of June 30, 2024. The City estimates that the balance in the CalPERS Rate Stability Reserve was approximately $13.6 million as of June 30, 2025.

In addition to the reserves listed above, the City also maintains an Other Post Employment Benefits (OPEB) reserves in a Section 115 Trust to offset the future costs. As of June 30, 2025, the estimated balance was $29.2 million.

In addition to the three reserves the City maintains, the Reserve Policy also addresses new ongoing revenue allocations and unassigned fund balance.

New Ongoing Revenue. The City’s updated Reserve Policy calls for New Ongoing Revenue to be allocated 50/50 to infrastructure and general government services. “New Ongoing Revenue” is defined as a new general tax, an increase in the rate of an existing tax, a new lease of City property, or a new, clearly identifiable unrestricted revenue source not previously included in the City’s budget at the time of adoption of the City’s updated Reserve Policy on February 25, 2025], which generates at least $100,000 per year in revenue and which is expected to continue for at least a period of 20 years. Revenues attributable to Measure T will be subject to this allocation policy.

Unassigned Fund Balance. Unassigned fund balance results from when fund balance exceeds the combined total of non-spendable, restricted, committed and assigned fund balances and all reserves have been fully funded. As the City is committed to prudent fiscal practices, upon final close of the fiscal year, any unassigned fund balance, less any encumbrances and budget being carried forward to the next fiscal year, shall be appropriated 50/50 between the prefunding of the City’s pension unfunded liability and road improvements.

Other General Funds. The City maintains certain funds that the City generally refers to as “Other General Funds.” Similar to reserves, Other General Funds have been established by the City to set aside financial resources for specific purposes and are funded by transfers from the General Fund based on need, including for facility maintenance, self-insurance, and City technology. Other General Funds are not maintained within the City’s General Fund. However, Other General Funds are consolidated with the City’s General Fund for financial reporting purposes.

The following table shows the balances of the General Fund reserves and Other General Funds as of June 30 of the years 2021 through 2024 based on the City’s audited financial statements, and the estimated balances of such reserves and funds as of June 30, 2025.

CITY OF FONTANA

GENERAL FUND AND OTHER GENERAL FUNDS RESERVES
795
26 Fiscal Year Ended June 30
2021 2022 2023 2024 2025*
General Fund Reserves
Contingency Reserve (1) $15,884,000 $16,505,000 $22,941,910 $33,087,836 $43,650,473 Economic Uncertainty Reserve (1) 8,514,643 9,469,586 - - - CalPERS Rate Stability Reserve
(2)
5,869,393 10,886,393 10,694,317 12,204,822 13,644,923
Operating Contingencies - - - 3,000,000 3,000,000
Future Projects and Reserves - - - 750,000 -
Animal Shelter JPA - - - 800,000 582,570
Total General Fund Reserves $30,268,036 $36,860,979 $33,636,227 $49,842,658 $60,877,966 Other General Funds (3)
City Technology $4,150,041 $775,360 $4,266,840 $3,508,359 $3,459,248 Facility Maintenance 834,832 222,747 185,028 11,177 977,681 Office of Emergency Services 1,099,864 1,062,474 1,481,986 1,291,877 1,290,307 Government Access/KFON 1,375,818 1,646,164 1,703,897 1,832,888 1,902,471 Self Insurance 8,189,755 9,626,636 8,219,502 3,872,719 21,510,555 Retiree Medical Benefits 25,572,792 23,549,549 2,042,332 2,395,853 2,654,762 Supplemental Retirement Plan 1,617 1,615 (302) 32,517 38,483 General Fund Operating Projects 494,558 477,535 1,101,781 1,292,256 545,580 Lease-Fire 0 0 2,406,545 15,898 3
Storm Water Compliance 265,860 457,269 564,680 578,674 469,509 Total Other General Funds $41,985,137 $37,819,349 $21,972,289 $14,832,218 $32,848,599 Total General Fund Reserves and
Other General Funds
$72,253,173 $74,680,328 $55,878,516 $64,674,876 $93,726,565 (1) Maintained as part of unassigned fund balance of the General Fund. (2) Maintained as part of the committed fund balance of the General Fund. (3) Other General Funds are not maintained within the General Fund.

Source: City of Fontana.
* Estimated; subject to change.

Budget Procedure, Current Budget and Historical Budget Information General. The annual budget serves as the foundation for the City’s financial planning and is an important policy document serving as the annual financial plan that identifies the spending priorities for the organization. The budget is prepared according to fund, function (e.g., public safety), and department (e.g., police). The City operates under a two-year budget process. As such, the City Council adopts a budget biennially which begins in the first fiscal year and covers a two-year period beginning on July 1 and running through June 30 for two years. Beginning July 1, the budget process approves operating appropriations at the department and fund level and allows the City to make resource allocation decisions as well as determining which program priorities will be addressed in the coming Fiscal Year. Although the City Council deliberates the proposed budget in June, the budget process occurs throughout the year, as described below.

Budget Timeline. In preparing the two-year budget, several key meetings are held and documents produced that significantly affect its development. The following is a description of each of these along with a calendar of key dates in the preparation process. 796
27 The Finance Department is responsible for preparing the budget documents. The process begins in January with the budget “kick-off” meeting and citywide departmental training on yearend estimates, revenue and expenditure budgeting, and fund balance analysis, followed by the opening of the on-line budget system to departments.

In February of each year, the City Council is provided with a detailed update and review of the City’s financial condition at the mid-point of the fiscal year along with year-end fund balance projections.

Departments enter revenue projections by January 31 of each year directly into the budget system. Departments enter expenditure requests by March 31 of each year, with the exception of personnel, directly into the budget system. The Finance Department calculates and provides to each department personnel costs and General Fund operating target numbers. Departments identify which Budget Units should be charged for the personnel costs by position number.

Departments are required to enter operating expenditures equal to or less than their target numbers. Requests for new funding are entered into the budget system with specific documentation provided to Finance.

Before requests are submitted to the City Manager, the Finance Department reviews and analyzes all supporting documentation. Then, in April of each year, the City Manager and Finance staff hold meetings with each department and/or organization to discuss the budget requests and obtain additional information if necessary. Following these meetings, line item requests are adjusted in accordance with the City Manager’s funding decisions. The Proposed Budget is then presented to the City Council for consideration and approval. Changes made by the City Council during the budget deliberation process will be incorporated into the adopted budget.

On or before June 30, the City Council votes to adopt the budget, including any amendments to the proposed budget that may occur, by an affirmative vote of the majority of the City Council. At any meeting after the adoption of the budget, the City Council may amend or supplement the budget by a majority vote of the City Council.

Upon final adoption, the budget becomes the legal authorization for the various departments to expend appropriations, subject to any controls established by the City Manager, City Council and internal audit requirements. The budget is also published and distributed to interested parties.

Once the budget is adopted by the City Council, the responsibility of implementing each departmental budget lies with each department head, with ultimate responsibility resting with the City Manager. Department directors are expected to operate their departments within the appropriations established in the budget. In certain cases, however, amendment requests are considered where unforeseen events have occurred. In such cases, the department head and Chief Financial Officer may approve transfers within the same fund, division and expenditure category. Transfers moving funds from one division or department to another or one category to another within the same fund requires the approval of the department head, Chief Financial Officer, and City Manager. To amend or supplement the budget by the transfer of all or any part of unused and unencumbered balances appropriated for one purpose to another purpose, to appropriate available funds not included in the budget, or to cancel in whole or in part any appropriation not expended or encumbered or to move funds from one fund to another fund requires an affirmative vote of the City Council.
797
28 To ensure the highest levels of fiscal oversight by fostering transparency, accountability, and proactive budget management across all departments, citywide departmental budget meetings are held monthly. Additionally, monthly budget status reports are developed internally and quarterly budget status reports are developed and presented to the City Council to assist City departments in communicating their financial operations throughout the fiscal year including any program changes and significant impacts to their annual budgets, as well as gauging the City’s budget plan as compared to actual revenue and expenditures. This information provides the City Council with the most current information on the financial activities of the City upon which to base decisions.

Budget Policy. Budgetary control is set at the department level by fund to ensure compliance with the budget as approved by the City Council. The City’s budget policy requires the following:
• All appropriations lapse at fiscal year end. Outstanding encumbrance balances at fiscal year end require re-approval by the City Council, typically as part of the First Quarter Budget Review.
• City Council approval for all new appropriations and increases to estimated revenues. • City Council approval for budgetary changes between funds. • City Council approval for any changes to staffing levels. • City Manager approval for project changes within the same fund. • Departments may transfer budget between divisions in the same department and fund.
• Budget Reviews to be prepared on a quarterly basis and submitted to City Council for approval.

Adopted Budget for Fiscal Years 2023-25. The City Council adopted the City’s operating budget for Fiscal Years 2023-24 and 2024-25 (the “2023-25 Adopted Budget”) on June 13, 2023.

The 2023-25 Adopted Budget is fiscally balanced and continues to support the City’s core services, maintenance, facilities and infrastructure in line with the priorities of the City Council. In the 2023-25 Adopted Budget, General Fund revenues for Fiscal Year 2024-25 are projected to increase by approximately $3.2 million, or 2.2%, when compared to estimated General Fund revenues for Fiscal Year 2023-24. This $3.2 million increase is due primarily to increases when compared to estimated General Fund revenues for Fiscal Year 2023-24 in sales tax revenues of approximately $1.2 million, property tax revenues of approximately $1.2 million and recreation revenues of approximately $0.1 million.

With respect to expenditures, in the 2023-25 Adopted Budget, total General Fund expenditures are projected to decrease approximately $1.0 million, or 0.8% when compared to estimated General Fund expenditures for Fiscal Year 2023-24.

Adopted Budget for Fiscal Years 2025-27. The City Council adopted the City’s operating budget for Fiscal Years 2025-26 and 2026-27 (the “2025-27 Adopted Budget”) on June 10, 2025. 798
29 The 2025-27 Adopted Budget is fiscally balanced and continues to support the City’s core services, maintenance, facilities and infrastructure in line with the priorities of the City Council. In the 2025-27 Adopted Budget, General Fund revenues for Fiscal Year 2025-26 are projected to increase by approximately $28.9 million, or 16.9%, when compared to estimated General Fund revenues for Fiscal Year 2024-25. This $28.9 million increase is due primarily to the impact of the passage of Measure T, effective as of April 1, 2025, with a projected increase in transactional use tax revenue of $42.7 million, along with increases when compared to estimated General Fund revenues for Fiscal Year 2024-25 in property tax revenues of approximately $3.4 million and revenues from other agencies of approximately $2.6 million.

With respect to expenditures, in the 2025-27 Adopted Budget, total General Fund expenditures are projected to increase approximately $22.5 million, or 13.6% when compared to estimated General Fund expenditures for Fiscal Year 2024-25.

Comparison of Budget to Actual Performance. The following table shows (i) the City’s final budget and actual results for General Fund revenues and expenditures for the two most recently completed Fiscal Years, (ii) the City’s final budget for such Fiscal Years, Fiscal Year 2024-25 and Fiscal Year 2025-26, and (iii) estimated results for General Fund revenues and expenditures for Fiscal Year 2024-25. During the course of each Fiscal Year, the budget may be amended and revised as necessary by the City Council; budgeted amounts shown reflect such amendments and revisions in certain Fiscal Years.
799
30 Table 1

CITY OF FONTANA
General Fund Budget Summary
Fiscal Years 2022-23 through 2025-26
Final Budget
2022-23 Audited
2022-23
Final Budget
2023-24 Audited
2023-24
Final Budget
2024-25
Estimated
Actuals
2024-25(1)
Adopted
Budget
2025-26
Revenues:

Taxes(2) $105,986,750 $116,384,679 $119,877,473 $121,079,308 134,739,326 131,559,463 $166,856,560 Licenses and permits 8,390,123 7,872,926 5,544,930 5,799,129 6,207,550 5,311,407 5,400,640 Intergovernmental 1,531,915 1,283,694 870,200 1,042,245 927,260 1,085,274 1,015,400 Charges for services 16,657,367 16,174,908 19,147,259 18,353,240 21,122,661 19,039,955 19,589,090 Fines and forfeitures 503,200 703,886 627,510 702,670 558,110 738,208 640,600 Investment earnings 3,418,880 4,381,331 2,907,850 6,544,409 3,776,145 5,069,935 2,959,670 Other revenue(3) 5,137,669 4,737,365 3,939,282 4,280,869 4,738,854 8,078,121 3,277 020 Total Revenues $141,625,904 $151,538,789 $152,914,504 $157,801,870 $172,069,906 170,882,363 $199,738,980 Expenditures:

Current:

General government:

City Council and Commissions $1,443,936 $1,339,208 $1,254,490 $1,217,194 2,027,335 1,680,264 $1,561,790 City Administration 4,418,402 3,936,406 6,539,237 5,226,815 3,511,738 3,248,441 4,646,200 Finance 4,497,719 3,804,859 5,833,427 5,270,108 6,417,923 4,903,352 6,197,800 Information Technology 13,202,856 9,114,829 15,868,884 13,601,739 16,142,099 12,396,911 14,073,640 Human Resources 13,051,521 11,485,046 26,007,610 24,219,245 17,420,286 16,148,000 15,640,620 Public safety:

Police 75,917,229 72,166,973 80,292,104 74,862,832 83,257,026 81,167,935 87,733,460 Public works(4) 15,696,216 14,972,455 24,197,718 - - - - Engineering(4) 5,299,304 4,319,998 - - - - -
Public Works & Engineering(4)- - - 22,543,555 26,930,071 24,658,562 26,734,860 Community Development 8,434,836 7,676,951 12,018,096 9,640,724 13,269,432 10,374,411 15,873,660 Community services 15,043,195 12,845,952 15,127,000 13,703,338 15,351,267 14,176,914 15,876,460 Debt service:

Principal 163,994 58,822 77,418 979,425 102,066 98,583 69,740 Interest 200 1,567 - 19,958 19 (308) -
Total Expenditures $157,169,408 $141,723,066 $187,215,984 $171,143,830 184,429,263 168,653,065 188,338,490 Revenues over (under expenditures) (15,543,504) 9,815,723 (34,301,480) (13,341,960) (12,359,357) 2,029,295 11,400,490 Other Financing Sources (uses)
Transfers in $34,623,944 $18,272,319 $50,380,267 $22,819,661 35,430,600 34,430,601 27,402,950 Transfers out (29,625,330) (13,380,541) (51,424,867) (25,319,815) (24,500,406) (24,500,406) (29,412,860) Leases issued (as lessee) - - - 161,022 - - -
Other financing sources - SBITA - - - 2,459,222 - - -
Sale of capital assets 1,500 45,946 - 9,513 - 4,574 -
Total other sources (uses) $5,000,114 $4,937,724 $(1,044,600) $129,603 10,930,194 9,934,769 $2,009,910 Net Change in Fund Balance (10,543,390) 14,753,447 (35,346,080) (13,212,357) (1,429,163) 12,164,064 9,390,580 800
31 Fund Balance-beginning of year 102,507,937 102,507,937 117,261,384 117,261,384 104,049,027 104,049,027 116,213,091 Fund Balance-end of year $91,964,547 $117,261,384 $81,915,304 $104,049,027 $102,620,507 116,213,091 $103,844,231 (1) Estimated; subject to change.
(2) Fiscal Year 2025-26 Adopted Budget includes the first fiscal year of the City’s new transaction use tax revenue, otherwise referred to Measure T, that was voted in by voters in November 2024 and effective April 1, 2025.
(3) Includes code enforcement fines, animal licenses, passport fees and other miscellaneous revenues. Fiscal Year 2024-25 Estimated Actuals reflect a one-time increase due to a settlement reimbursement received.
(4) Beginning in Fiscal Year 2023-24, Engineering and Public Works were combined into the Public Works & Engineering Department due to a reorganization.

Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Years 2022-23 and 2023-24; City of Fontana Adopted Budgets for Fiscal Years 2022-23, 2023-24, 2024-25 and 2025-26; and City of Fontana for estimated actuals for Fiscal Year 2024-25. 801
32 City Financial Statements
A copy of the most recent audited financial statements of the City (the “Financial Statements”) for the Fiscal Year ended June 30, 2024, prepared by Eide Bailly LLP, (the “Auditor”), is included as Appendix C to this Official Statement. The Auditor’s letter dated March 31, 2025 is set forth therein. The Financial Statements are public documents and are included within this Official Statement without the prior approval of the Auditor. Accordingly, the Auditor has not performed any post-audit analysis of the financial condition of the City, nor has the Auditor reviewed or audited this Official Statement.

Certain financial information that is set forth in this Official Statement is derived from the Financial Statements and the City’s audited financial statements for prior years (excluding certain non-cash items and after certain other adjustments) and is qualified in their entirety by reference to such statements, including the notes thereto. The Auditor has not reviewed or audited such financial information or any other portion of this Official Statement.

In the Financial Statements, data relating to governmental funds such as the General Fund focus on current financial resources, which emphasize near-term inflows and outflows of expendable resources as well as balances of expendable resources at the end of each Fiscal Year.

The City’s accounting and budgeting records for general governmental operations are maintained on a modified accrual basis, with the revenues being recorded when available and measurable and the expenditures being recorded when the services or goods are received or the liabilities incurred, in each case regardless of the timing of related cash flows. As examples, property taxes, franchise fees, investment income and charges for services are considered to be susceptible to accruals and recognized as revenues in the year for which they are levied. For these purposes, the City considers revenues as available if they are collected within 60 days of the end of the current fiscal period Expenditures generally are recorded when a liability is incurred, as under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.

The following table shows the City’s audited General Fund balance sheets for Fiscal Years 2019-20 through 2023-24 and unaudited balance sheets for Fiscal Year 2024-25. 802
33 Table 2

CITY OF FONTANA
General Fund Balance Sheets
Fiscal Years 2020-21 through 2024-25
Audited
2020-21
Audited
2021-22
Audited
2022-23
Audited
2023-24
Estimated
Actuals
2024-25(1)
Assets:

Cash and investments $86,853,608 $56,667,510 $58,277,222 $46,225,376 $53,963,930 Receivables:

Accounts 3,121,607 3,610,035 3,861,306 4,694,548 3,670,730 Interest 73,969 177,025 428,870 434,814 584,234
Due from custodial funds 161,888 - - - -
Loans to Successor Agency 26,208,993 24,978,218 23,599,749 22,555,864 21,076,713 Allowance for doubtful accounts (205,532) (207,433) (207,573) - - Leases - 10,876,556 10,220,102 9,264,282 8,523,139
Due from other funds 5,332,412 10,688,518 24,075,880 25,526,416 30,576,796 Due from other governments 9,655,979 10,595,299 11,503,386 9,982,515 8,352,473 Inventories 253,533 375,878 407,053 512,764 656,337
Deposits 69,025 7,877 100,384 44,090 57,745
Restricted assets: - - - - -
Cash with fiscal agent 376,900 31,698,881 11,071,217 12,712,521 14,539,424 Total Assets $131,902,382
222
$149,468,364 $143,337,596 $131,953,190 $142,001,52
1 Liabilities, Deferred Inflow of
Resources and Fund Balance
Liabilities:

Accounts payable $6,122,349 $7,399,606 $7,804,236 $8,885,217 $7,953,530 Deposits payable 4,425,394 5,090,294 5,923,999 7,219,058 7,405,210 Retentions payable - - - 52,587 11,034.53
Due to other funds 672,192 1,177 - - -
Due to other governments 967 967 - - -
Unearned revenue 2,018,966 - 150,200 111,831 10,000
Total Liabilities $13,239,868 $12,492,044 $13,878,435 $16,268,693 $15,379,775 Deferred Inflows of Resources
Unavailable Revenue $1,606,602 $2,323,515 $2,494,088 $2,936,954 $2,497,810 Leases - 10,591,369 9,703,689 8,698,516 7,910,845
Total Deferred Inflows of Resources $1,606,602 $12,914,884 $12,197,777 $11,635,470 10,408,655 Fund Balances
Nonspendable $322,558 $383,755 $24,107,186 $23,112,718 $21,790,795 Restricted 1,510,351 1,510,351 12,398,214 1,832,888 1,902,471 Committed 6,038,085 10,886,393 32,411,496 47,182,993 57,387,510 Assigned 33,944,406 33,944,406 3,143,811 6,428,514 13,644,923 Unassigned 75,240,512 77,336,531 45,200,677 25,491,914 21,487,392 Total Fund Balances $117,055,912 $124,061,436 $117,261,384 $104,049,027 $116,213,09 1 Total Liabilities, Deferred Inflow of
Resources and Fund Balances
$131,902,382 $149,468,364 $143,337,596 $131,953,190 $142,001,52 1 (1) Estimated; subject to change.

Source: City of Fontana Comprehensive Annual Financial Report for Fiscal Years 2020-21 through 2023-24. 803
34 The following table shows the City’s audited General Fund statements of revenues, expenditures and changes in fund balance for Fiscal Years 2020-21 through 2023-24 and estimated statements of revenues, expenditures and changes in fund balance for Fiscal Year 2024-25.

Table 3

CITY OF FONTANA
Statements of Revenues, Expenditures and Changes in General Fund Balance Fiscal Years 2020-21 through 2024-25
Audited
2020-21
Audited
2021-22
Audited
2022-23
Audited
2023-24
Estimated
Actuals
2024-25
(1)
Revenues:

Taxes(2) $98,300,476 $108,183,439 $116,384,679 $121,079,308 $131,559,463 Licenses and permits 7,983,843 7,218,687 7,872,926 5,799,129 5,311,407 Intergovernmental 12,658,140 2,780,614 1,283,694 1,042,245 1,085,274 Charges for services 11,750,773 15,407,066 16,174,908 18,353,240 19,039,955 Fines and forfeitures 625,043 696,245 703,886 702,670 738,208 Investment earnings (Loss) 3,821,817 (1,966,368) 4,381,331 6,544,409 5,069,935 Contribution from other governments - 400,300 - - -
Other revenue(3) 6,485,232 3,132,185 4,737,365 4,280,869 8,078,121 Total Revenues $141,625,324 $135,852,168 $151,538,789 $157,801,870 $170,882,363 Expenditures:

Current:

General Government:

City Council and Commissions $347,084 $1,194,130 $1,339,208 $1,217,194 $1,680,264 City Administration 6,194,147 5,628,870 3,936,406 5,226,815 3,248,441 Finance 11,254,438 3,373,760 3,804,859 5,270,108 4,903,352 Information Technology 7,954,151 8,691,404 9,114,829 13,601,739 12,396,911 Human Resources(4) 11,033,395 9,160,752 11,485,046 24,219,245 16,148,000 Public safety:

Police 64,954,148 70,200,864 72,166,973 74,862,832 81,167,935 Public works(5) 12,467,593 14,807,433 14,972,455 -
Engineering(5) 3,611,950 3,925,533 4,319,998 - -
Public Works & Engineering(5)- - - 22,402,452 24,658,562 Community Development 4,494,154 6,997,587 7,676,951 9,640,724 10,374,411 Community Services 7,742,424 11,414,027 12,845,952 13,703,338 14,176,914 Capital Outlay - - - - -
Debt Service:

Principal - 2,474 58,822 979,425 98,583
Interest - 192 1,567 19,958 (308)
Total Expenditures $130,053,484 $135,397,026 $141,723,066 $171,143,830 $168,653,065 Other Financing Sources (uses)
Transfers In(6) $14,694,059 $15,945,288 $18,272,319 $22,819,661 $34,430,601 Transfers out(6)(7,839,502) (9,555,877) (13,380,541) (25,319,815) (24,500,406) 804
35 Leases - 108,141 - 161,022 -
Other financing sources - SBITA - - - 2,459,222 -
Sale of capital assets 153,669 52,830 45,946 9,513 4,574 Total other sources (uses) $7,008,226 $6,550,382 $4,937,724 $129,603 $9,934,769 Net Change in Fund Balance 18,580,066 7,005,524 14,753,447 (13,212,357) 12,164,064 Fund Balance-beginning of year(7) 98,475,846 117,055,912 102,507,937 117,261,384 104,049,027 Fund Balance-end of year(7) $117,055,912 $124,061,436 $117,261,384 $104,049,027 $116,213,091 (1) Estimated; subject to change.
(2) Fiscal Year 2024-25 Estimated Actuals include the City’s new transaction use tax revenue, otherwise referred to Measure T, that was voted in by voters in November 2024 and effective April 1, 2025. (3) Includes code enforcement fines, animal licenses, passport fees and other miscellaneous revenues. Fiscal Year 2024-25 Estimated Actuals reflect a one-time increase due to a settlement reimbursement received. (4) Fiscal Year 2023-24 reflects a one-time increase in expenditure due to legal settlements. (5) Beginning in Fiscal Year 2023-24, Engineering and Public Works were combined into the Public Works & Engineering Department due to a reorganization.
(6) The main categories of “Transfers in” are for cost allocation for central services, repayment to the General Fund for past-year advances and lease revenues from the Fire District. The main categories of “Transfers out” are capital improvements and minor amounts to community facilities districts.
(7) The difference in “Fund Balance-end of year” in Fiscal Year 2021-22 and Fiscal Year 2022-23 is due to a restatement of prior year’s expenditures for contributions to the City’s Section 115 trust.

Source: City of Fontana Comprehensive Annual Financial Report for Fiscal Years 2020-21 through 2023-24.

General Fund Major Revenues By Source
A summary of the primary General Fund revenues received by the City in the last five Fiscal Years, and budgeted General Fund revenues for Fiscal Year 2024-25, is set forth in the following table. Certain general fund taxes currently imposed by the City are affected by Proposition 218. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 218 – Article XIIIC and Article XIIID.” Table 4

CITY OF FONTANA
General Fund Major Tax Revenues by Source
(000’s)
Revenue Source
Audited
FY 2020-21
Audited
FY 2021-22
Audited
FY 2022-23
Audited
FY 2023-24
% of
Total(1)
Estimated
FY 2024-25(2)
Adopted
Budget
2025-26
Sales Taxes 51,408,188 56,726,526 59,102,489 55,887,448 35.42% 54,154,214 54,914,670 Measure T(3)
N/A N/A N/A N/A N/A 10,300,000 42,740,750
Property Taxes 30,768,978 33,306,316 37,020,598 41,365,516 26.21% 44,826,907 46,948,270 Business license taxes 6,753,437 7,569,458 8,384,750 11,932,231 7.56% 10,425,570 10,150,820 Transient occupancy taxes 1,132,091 1,374,182 1,302,569 1,144,605 .73% 1,030,166 1,023,750 Franchise Taxes 8,237,783 9,206,958 10,574,272 10,749,509 6.81% 10,822,606 11,078,300 Charges for Services 11,750,773 15,407,066 16,174,908 18,353,240 11.63% 19,039,955 19,589,090 Investment earnings 3,821,817 (1,966,368) 4,381,331 6,544,409 4.15% 5,069,935 2,959,670 Other Revenue Sources(4) 27,752,258 14,228,031 14,597,871 11,824,913 7.49% 15,213,010 10,333,660 Total 141,625,324 135,852,168 151,538,789 157,801,870 100.00% 170,882,363 199,738,980 (1) Reflects percentage of total Fiscal Year 2023-24 General Fund revenues. (2) Estimated; subject to change.
805
36 (3) City’s new transaction use tax revenue, otherwise referred to Measure T, that was voted in by voters in November 2024 and effective April 1, 2025. Fiscal Year 2024-25 includes two months of the anticipated new revenue with 2025-26 being the first full year the revenue will be collected.
(4) “Other Revenues Sources” consist of license and permit fees, intergovernmental revenues, fines and forfeitures, contribution from other governments and other revenues. Fiscal Year 2024-25 Estimated Actuals reflect a one-time increase due to a settlement reimbursement received. See Table 1.

Source: City of Fontana.

Sales and Use Taxes
General. A sales tax, and effective April 1, 2025, a use tax (“Measure T”) is imposed on retail sales or consumption of personal property. Voters approved Measure T in November 2024, and it became effective on April 1, 2025. Measure T is a 1% general tax, and there are no legal constraints on the use of revenues attributable to Measure T. Measure T will remain in place unless voters rescind it in a future election.

As shown in Table 4, sales and use tax revenues represented the largest source of tax revenues for the City’s General Fund in each of Fiscal Years 2020-21 through 2023-24, comprising approximately 35.42% of the City’s total General Fund revenues for Fiscal Year 2023-

24. In Fiscal Year 2023-24, the City’s sales tax revenues totaled approximately $55.9 million, a $3.2 million decrease of approximately 5.4% compared to sales tax revenues of approximately $59.1 in Fiscal Year 2022-23. The City estimates sales tax and Measure T revenues will total approximately $64.5 million in Fiscal Year 2024-25, which will include only two months of Measure T revenues due to its effective date.

Based on the 2025-27 Adopted Budget, the City’s sales and use tax revenues are projected at $97.7 million for Fiscal Year 2025-26. This represents a substantial increase from revenues for Fiscal Year 2024-25, primarily due to the impact of Measure T.

The City’s sales and use tax revenue represents the City’s share of the sales and use tax imposed on taxable transactions occurring within the City’s boundaries. The sales tax is governed by the Bradley-Burns Uniform Local Sales and Use Tax Law, set forth in California Revenue and Taxation Code Section 7200 et seq. As of April 1, 2025, local sales tax rate in the City is 8.75%, of which the City is allocated 2%. The State collects and administers the tax, and makes distributions on taxes collected within the City as follows:

Table 5

CITY OF FONTANA
Sales Tax Rates
Rate
State 6.00%
County of San Bernardino 0.75
City Sales Tax 1.00
Measure T local tax 1.00
Total 8.75%
Source: California Department of Tax and Fee Administration.

The State’s actual administrative costs with respect to the portion of sales taxes allocable to the City are deducted before distribution and are determined on a quarterly basis. Sales tax revenue collected by the State is directly deposited monthly to the City’s General Fund. For a summary of historical taxable transactions in the City, see “– History of Taxable Transactions.” 806
37 Certain transactions are exempt from the State sales tax, including sales of the following products:
• food products for home consumption;
• prescription medicine;
• newspapers and periodicals;
• edible livestock and their feed;
• seed and fertilizer used in raising food for human consumption; and • gas, electricity and water when delivered to consumers through mains, lines and pipes.

This is not an exhaustive list of exempt transactions. A comprehensive list can be found in the CDTFA’s March 2018 publication entitled “Sales and Use Taxes: Exemptions and Exclusions,” which can be found on the CDTFA’s website at http://www.cdtfa.ca.gov. The reference to this Internet website is shown for reference and convenience only; the information contained within the website may not be current and has not been reviewed by the City and is not incorporated in this Official Statement by reference.

In June 2018, the United States Supreme Court published its decision in South Dakota v.

Wayfair (the “Wayfair Decision”), in which the Supreme Court held that sales to a customer in a particular state alone are sufficient to create a nexus for purposes of determining whether a seller is required to collect sales taxes of the applicable state. Prior to the Wayfair Decision, courts had interpreted the dormant Commerce Clause of the United States Constitution to require that a company have physical nexus in a state in order for the seller to be liable for the collection of that state’s sales tax. Physical nexus is defined as having either property or payroll in the state, including a resident employee working from home or inventory stored in that state. The State of California has issued guidance in response to the Wayfair Decision. Under such guidance, beginning April 1, 2019, retailers located outside of the State are required to register with the California Department of Tax and Fee Administration (the “CDTFA”), collect the California use tax, and pay the tax to the CDTFA based on the amount of their sales into California, even if they do not have a physical presence in the state. The new collection requirements apply to retailers if during the preceding or current calendar year certain sales thresholds are met. The new collection requirements apply to taxable sales of tangible personal property to California consumers on and after April 1, 2019, and are not retroactive. Additionally, the State’s passage of Assembly Bill 147, signed by the Governor on April 25, 2019, provides the implementation rules for the Wayfair Decision in California. The City is unable to predict the impact that the Wayfair Decision will have on its sales tax revenues.

Sales Tax Collection Procedures. Collection of the sales and use tax is administered by the CDTFA. This process was formerly administered by the State Board of Equalization. The Taxpayer Transparency and Fairness Act of 2017, which took effect July 1, 2017, restructured the State Board of Equalization and separated its functions among three separate entities: the State Board of Equalization, the CDTFA, and the Office of Tax Appeals. The State Board of Equalization will continue to perform the duties assigned to it by the state Constitution, while all other duties will be transferred to the newly established CDTFA and the Office of Tax Appeals.

CDTFA will handle most of the taxes and fees previously collected by the State Board of Equalization, including sales and use tax.
807
38 Under the Sales and Use Tax Law, all sales and use taxes collected by the CDTFA under a contract with any city, city and county, or county are required to be transmitted by the CDTFA to such city, city and county, or county periodically as promptly as feasible. These transmittals are required to be made at least twice in each calendar quarter.

Under its procedures, the CDTFA projects receipts of the sales and use tax on a quarterly basis and remits an advance of the receipts of the sales and use tax to the City on a monthly basis. The amount of each monthly advance is based upon the CDTFA’s quarterly projection.

During the last month of each quarter, the CDTFA adjusts the amount remitted to reflect the actual receipts of the sales and use tax for the previous quarter.

According to the CDTFA, it distributes quarterly tax revenues to cities, counties, and special districts using the following method. Using the prior year’s quarterly tax allocation as a starting point, the CDTFA first eliminates nonrecurring transactions such as fund transfers, audit payments, and refunds, and then adjusts for growth, to establish the estimated base amount. The CDTFA disburses 90% to each local jurisdiction in three monthly installments (advances) prior to the final computation of the quarter’s actual receipts. Ten percent is withheld as a reserve against unexpected occurrences that can affect tax collections (such as earthquakes, fire, or other natural disaster) or distributions of revenue such as unusually large refunds or negative fund transfers.

The first and second advances each represent 30% of the 90% distribution, while the third advance represents 40%. One advance payment is made each month, and the quarterly reconciliation payment (clean-up) is distributed in conjunction with the first advance for the subsequent quarter. Statements showing total collections, administrative costs, prior advances, and the current advance are provided with each quarterly clean-up payment.

History of Taxable Transactions. A summary of historic taxable sales within the City for calendar years 2020 through 2024 is shown in the following table.

Table 6

CITY OF FONTANA
Taxable Sales by Category
(in thousands)
Business 2020 2021 2022 2023 2024
Motor Vehicle and Parts Dealers $952,097 $1,144,571 $1,125,709 $1,166,201 $1,132,610 Home Furnishings and Appliance Stores 56,200 61,817 71,486 71,596 34,185 Building Material, Garden Equip & Supplies 300,895 314,009 298,306 222,194 225,216 Food and Beverage Stores 159,406 165,007 173,417 177,660 168,529 Gasoline Stations 293,760 474,023 633,123 562,464 517,572 Clothing and Clothing Accessories Stores 103,093 165,403 161,135 163,477 167,125 General Merchandise Stores 338,935 392,781 414,044 390,789 371,373 Food Services and Drinking Places 318,157 397,533 417,610 433,690 448,282 Other Retail Group 245,737 277,944 274,768 270,957 216,053 Total Retail and Food Services 2,768,279 3,393,088 3,569,600 3,459,027 3,280,945 All Other Outlets 868,856 981,271 1,235,018 1,224,063 1,178,342 Total All Outlets $3,637,135 4,374,359 $4,804,618 $4,683,090 $4,459,287 Source: State Department of Tax and Fee Administration. 808
39 Property Taxes
General. As shown in Table 4, property tax revenues represented the second largest source of tax revenues for the City’s General Fund in each of Fiscal Years 2020-21 through 2023- 24, comprising approximately 26.21% of the City’s total General Fund revenues for Fiscal Year 2023-24. The figures shown in Table 4 for property tax revenues include property tax that the City received in lieu of vehicle license tax (see “– Vehicle License Fees” below). The City’s property tax revenues are estimated at approximately $44.8 million for Fiscal Year 2024-25.

Based on the 2025-27 Adopted Budget, the City’s property tax revenues are projected at $46.9 million for Fiscal Year 2025-26.

Property taxes have been the primary revenue source affected by voter initiatives and legislative actions. With approval of Proposition 13, property tax revenues were first curtailed over 35 years ago when they were reduced by two-thirds and thereafter limited to 2% annual increases or the consumer price index, whichever was less. and property tax assessment appeals could depress property tax revenue growth over time.

Vehicle License Fees. The State imposes a Vehicle License Fee (the “VLF”), which is the portion of the fees paid in lieu of personal property taxes on a vehicle. The VLF is based on vehicle value and declines as the vehicle ages. Prior to the adoption of the State Budget for Fiscal Year 2004-05, the VLF was 2% of the value of a vehicle. Through legislation in prior Fiscal Years, the State enacted VLF reductions under which the State was required to “backfill” local governments for their revenue losses resulting from the lowered fee. The State Budget for Fiscal Year 2004-05 permanently reduced the VLF from 2% to 0.65% of the value of a vehicle and removed the requirement for backfill payments, providing instead that the amount of the backfill requirement will be met by an increase in the property tax allocation to cities and counties. 100% of the VLF revenues the City receives from the State can be used for City general purposes. See “– State Budget.”
In Fiscal Year 2023-24, the City received VLF revenues and property tax revenues in lieu of VLF totaling approximately $31.2 million, representing approximately 18.3% percent of the City’s General Fund revenues for Fiscal Year 2023-24. Based on the 2024-25 Adopted Budget, the City’s VLF revenues are estimated at $34.2 million, representing approximately 20.0% of the City’s total budgeted General Fund revenues for Fiscal Year 2024-25.

Levy and Collection. Property taxes are levied for each fiscal year on taxable real and personal property as of the preceding January 1. For assessment and collection purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing Stateassessed public utilities property and real property the taxes on which are a lien sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each fiscal year, and become delinquent on December 10 and April 10, respectively.

A penalty of 10% attaches immediately to all delinquent payments. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on or about June 30 of the fiscal year. Such property may thereafter be redeemed by payment of a penalty of 1% per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is deeded to the State of California and may be sold at public auction. 809
40 Property taxes on the unsecured roll are due as of the January 1 lien dates and become delinquent on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at 5:00 p.m. on October 31, an additional penalty of 1% attaches to them on the first day of each month until paid. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a judgment in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. Beginning in 1978- 79, Proposition 13 and its implementing legislation shifted the function of property tax allocation to the counties, except for levies to support prior voted debt, and prescribed how levies on countywide property values are to be shared with local taxing entities within each county.

ERAF Shift Legislation. Certain property taxes have been shifted from local government agencies to schools by the State Legislature for deposit in the Education Revenue Augmentation Fund (“ERAF”), a shift that has resulted in diversion of City property taxes since Fiscal Year 1992-

93. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 1A” and “– Proposition 22.” There can be no assurance that the State will not undertake future ERAF shifts.

Assessed Valuation. All property is assessed using full cash value as defined by Article XIIIA of the State Constitution. State law provides exemptions from ad valorem property taxation for certain classes of property such as churches, colleges, non-profit hospitals, and charitable institutions. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.”
Future assessed valuation growth allowed under Article XIIIA (new construction, certain changes of ownership, 2% inflation) will be allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools will share the growth of “base” revenues from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation in the following year.

Assessed Valuation History. The following table shows the City’s assessed valuation for Fiscal Years 2016-17 through 2025-26, which reflects a 112% increase in value since 2016-

17. Table 7

CITY OF FONTANA
Assessed Value of Taxable Property
Fiscal Years 2016-17 through 2025-26
Fiscal
Year
Secured Property Secured
Utility
Unsecured
Property
Total Taxable
Assessed Value
%
Change
2016-17 $16,070,268,385 $10,141 $748,882,833 $16,819,161,359 -- 2017-18 16,955,778,326 0 765,457,641 17,721,235,967 5.09% 2018-19 18,862,239,266 10,141 804,180,873 19,666,430,280 10.98% 2019-20 20,266,174,605 0 893,910,903 21,160,085,508 7.59% 2020-21 21,549,068,307 0 954,475,194 22,503,543,501 6.35% 2021-22 23,070,587,354 0 955,113,724 24,025,701,078 6.76% 810
41 2022-23 26,048,285,962 0 970,981,590 27,019,267,552 12.46% 2023-24 29,019,307,925 0 1,153,500,322 30,172,808,247 11.67% 2024-25 31,737,468,027 0 1,329,297,356 33,066,765,383 9.59% 2025-26* 34,307,337,928 0 1,431,742,965 35,739,080,893 8.1% *2025-26 values provided by the County Assessor
Source: California Municipal Statistics.

Proposition 13 and Proposition 8 Property Value Adjustments. Proposition 13, passed in 1978, established the base year value concept for property tax assessments. Under Proposition 13, the 1975-76 fiscal year serves as the original base year used in determining the assessment for real property. Thereafter, annual increases to the base year value are limited to the inflation rate, as measured by the California Consumer Price Index, or 2%, whichever is less.

A new base year value, however, is established whenever a property, or portion thereof, has had a change in ownership or has been newly constructed.

Proposition 8, enacted in 1978, allows for a temporary reduction in assessed value when a property suffers a “decline-in-value.” As of the January 1st (lien date) each year, the Assessor must enroll either a property’s Proposition 13 value (adjusted annually for inflation by no more than 2%) or its current market value, whichever is less. When the current market value replaces the higher Proposition 13 value, the lower value is commonly referred to as a “Proposition 8 Value.” “Proposition 8 values” are temporary and, once enrolled, must be reviewed annually by the assessor until the Proposition 13 adjusted base year value is enrolled.

No Teeter Plan. The County has implemented the Alternative Method of Distribution of Tax Levies and Collections and of Tax Sale Proceeds (known as the “Teeter Plan”), as provided for in Section 4701 et seq. of the Revenue and Taxation Code of the State. However, the City has elected not to participate in the County’s Teeter Plan and the City is therefore exposed to the risk of delinquencies in the payment of property taxes. However, the City also receives penalties and interest when property taxes are paid late. Substantial delinquencies in the payment of property taxes in the City could have an adverse effect on the City’s ability to make timely payments on the Series 2025A Bonds.

Property Tax Levies and Collections. The following table shows secured property tax levies and tax collections for Fiscal Years 2019-20 through 2024-25. The amounts shown are for City property taxes only.

Table 8

CITY OF FONTANA
811
42 Secured Property Tax Levies and Collections (1)
Collected within
Fiscal Year of Levy Collections in
Subsequent
Years(2)
Tax Collections to Date
Fiscal
Year
Total
Tax Levy
Amount Percent
of Levy Amount
Percent
of Levy
2019-20 $155,079,893 $150,276,972 96.90% N/A $160,025,650 103.19% 2020-21 165,790,631 163,224,145 98.45% N/A 172,050,509 103.78% 2021-22 177,815,170 154,626,525 86.96% N/A 188,891,255 106.23% 2022-23 200,945,869 205,420,805 102.23% N/A 215,154,745 107.07% 2023-24 225,258,107 230,646,962 102.39% N/A 245,790,595 109.12 % 2024-25 [_] [_] [_]% [_] [_] [_]%
(1) Includes property taxes collected in the former project areas of the City’s former redevelopment agency. Also includes amounts collected by the City and Redevelopment Agency that were passed-through to other agencies (2) Data provided by the San Bernardino County Assessor's Office for collection of prior year taxes does not segregate the information by fiscal year. Therefore, the City is not able to provide this information in the above schedule.

Source: San Bernardino’s Auditor-Controller’s Office.
812
43 Major Property Taxpayers. The top ten property taxpayers, based on assessed values of taxable property in the City, as shown on the 2024-25 tax roll, are set forth in the following table.

Table 9

CITY OF FONTANA
Top Ten Taxpayers Based on Assessed Value
Fiscal Year 2024-25
Property Owner
Taxable
Assessed Value
%
of Total

1. Prologis Inc. $817,934,606 2.58%

2. Rexford Industrial LP 641,700,969 2.02

3. GLC Fontana LLC 241,434,234 0.76

4. San Gabriel Valley Water Co 213,224,373 0.67

5. Lit Industrial LP 177,654,815 0.56

6. Fontana Foothills Commerce Center LP 167,292,848 0.53

7. I-15 Logistics LLC 148,598,730 0.47

8. Vintage Park East LLC 143,828,027 0.45

9. IDIL West Valley Logistics Center LLC 130,978,354 0.41

10. Fontana Fulfillment Center ILP LLC 129,540,000 0.41 TOTAL $2,812,186,956 8.86
Source: San Bernardino County Assessor. California Municipal Statistics.

Redevelopment Dissolution Act. The State’s Community Redevelopment Law (codified in Part 1 of Division 24 of the California Health and Safety Code) authorized the redevelopment agency of any city or county to receive an allocation of tax revenues resulting from increases in assessed values of properties within designated redevelopment project areas (the “incremental value”) occurring after the year the project area is formed. In effect, local taxing agencies, such as the City, realize tax revenues only in the assessed value of such property at the time the redevelopment project is created for the duration of such redevelopment project. Although Assembly Bill No. 26 (“AB X1 26”), enacted on June 29, 2011 as Chapter 5 of Statutes of 2011, statutorily dissolved redevelopment agencies as of February 1, 2012, the enforceable obligations of dissolved redevelopment agencies, continue to be paid from property taxes derived from such incremental value until the enforceable obligations are paid in full in accordance with Parts 1.8 (commencing with Section 34161) and 1.85 (commencing with Section 34170) of Division 24 of the Health and Safety Code of the State, as amended on June 27, 2012 by Assembly Bill No. 1484 (“AB 1484”), enacted as Chapter 26, Statutes of 2012, and as such statutory provisions have and may further be amended from time to time (as amended, the “Dissolution Act”).

Pursuant to the Dissolution Act, the City’s former redevelopment agency, the Fontana Redevelopment Agency (the “Former Agency”) was dissolved and succeeded by the Successor Agency to the Fontana Redevelopment Agency (the “Successor Agency”).

Under the Dissolution Act, taxing entities, such as the City, are to receive distributions (in proportion to such taxing entity’s share of property tax revenues in the tax rate area for the applicable fiscal year) of residual amounts of property taxes attributable to incremental value on each June 1 and January 2, commencing June 1, 2012, after payment of (i) tax sharing obligations established previously pursuant to the Community Redevelopment Law, (ii) enforceable obligations of the successor agency to the former redevelopment agency, and (iii) an administrative cost allowance to such successor agency. As enforceable obligations of the former 813
44 redevelopment agency and its successor agency are paid and retired, residual amounts of property tax revenues attributable to redevelopment project area incremental value are expected to increase over time.

In 2014, in accordance with the Dissolution Act, the State Controller’s Office reviewed all asset transfers made by the Former Agency to the City and any other public agency after January 1, 2011. Based on its review the State Controller’s Office concluded that the Former Agency made unallowable transfers to the City totaling approximately $7.1 million. In response, the State Controller’s Office issued an order directing the City to turn over such funds to the Successor Agency. As of the date hereof, no such funds have been turned over by the City to the Successor Agency.

The City believes, in consultation with legal counsel, that the obligations of the former redevelopment agency due to the City are valid enforceable obligations payable by the successor agency trust under the requirements of the Dissolution Act. The City’s position on this issue is not a position of settled law and there is considerable legal uncertainty regarding this issue. It is reasonably possible that a legal determination may be made at a later date by an appropriate judicial authority that would resolve this issue unfavorably to the City. In the event that this issue is resolved unfavorably to the City, the City does not believe it will materially adversely affect its ability to make Base Rental Payments under the Lease Agreement as scheduled.

Charges for Services
The City provides various services which generate revenue for the General Fund.

Services provided by the City include building construction and planning fees, engineering encroachment inspections, police fees such as fingerprinting, police reports, and towing, ambulance services and the administration of local assessment districts, as well as recreation fees including class registrations, center rentals, sports, pool, field and court revenues. As shown in Table 4, charges for services represented the third largest source of tax revenues for the City’s General Fund in each of Fiscal Years 2020-21 through 2023-24, comprising approximately

11.63% of the City’s total General Fund revenues for Fiscal Year 2023-24. The City’s charges for services are estimated to total $19.0 million for Fiscal Year 2024-25, an increase of approximately $686,715 (or less than 3.74%) when compared to Fiscal Year 2023-24. Based on the 2025-27 Adopted Budget, the City’s charges for services revenues are projected at $19.6 million for Fiscal Year 2025-26.

Not included in the Fiscal Year 2025-26 Adopted Budget charges for services revenue figures are fee increases that were approved by the City Council on July 22, 2025, with an effective date of January 1, 2026. A summary of the fee increases by department are as follows:

Department Average Fee Increase
Building & Safety 69%
Code Compliance 3%
Environmental 53%
Engineering 29%
Police 3%
Planning 11%
814
45 Franchise Taxes
The City levies a franchise fee on its cable television, trash collection, utility franchises, taxi cabs, and natural gas piping. As shown in Table 4, franchise taxes represented the sixth largest source of tax revenues for the City’s General Fund in each of Fiscal Years 2020-21 through 2023-24, comprising approximately 6.81% of the City’s total General Fund revenues for Fiscal Year 2023-24. The City’s franchise taxes are estimated to total $10.8 million for Fiscal Year 2024-

25. Based on the 2025-27 Adopted Budget, the City’s franchise taxes are projected to remain at $11.1 million for Fiscal Year 2025-26.
815
46 Business License Taxes
The City levies a business license tax based principally on gross receipts and on number of employees. The tax was not approved by majority vote of the electorate, although the current tax was approved prior to the passage of Proposition 62 and has not been increased. As shown in Table 4, business license taxes represented the fourth largest source of tax revenues for the City’s General Fund in each of Fiscal Years 2020-21 through 2023-24, comprising approximately

7.56% of the City’s total General Fund revenues for Fiscal Year 2023-24. The City’s business license taxes are estimated to total $10.4 million for Fiscal Year 2024-25.

Long-Term General Fund Obligations
In addition to the Series 2025A Bonds, the City makes scheduled periodic payments pursuant to certain other outstanding long term agreements. Below are descriptions of the City’s outstanding long-term agreements, in connection with which General Fund appropriations are made annually. This excludes bonds payable by the City or its related entities from special revenues, such as special tax bonds and tax allocation bonds. For additional information, see the notes to the City’s 2023-24 audited financial statements included in Appendix C. 2014 Bonds. In November 2014, the Authority issued its Lease Revenue Refunding Bonds, Series 2014A (the “2014 Bonds”), in the original principal amount of $37,675,000. The 2014 Bonds are outstanding in the aggregate principal amount of $24,375,000. A portion of the proceeds of the Series 2025A Bonds will be used to refinance all of the outstanding 2014 Bonds.

See “FINANCING PLAN – Refinancing of 2014 Bonds.”
2021 Bonds. In November 2021, the Authority issued its Lease Revenue Refunding Bonds, Series 2021A (the “2021 Bonds”), in the original principal amount of $23,125,000. The 2021 Bonds are outstanding in the aggregate principal amount of $21,655,000. The 2021 Bonds pay interest semi-annually at a rate of 4.000% and mature from November 2022 through November 2051.

SANBAG Loan. In 2020, the City entered in a project funding agreement (the “SANBAG Agreement”) with the San Bernardino Associated Governments (“SANBAG”) for the Interstate 15 Duncan Canyon Interchange Project. Under the SANBAG Agreement, SANBAG contributed $12 million of State Proposition 1B Corridor Mobility Improvement funds to the project. Under the SANBAG Agreement, the City agreed to reimburse SANBAG for approximately $4.1 million of such funding (the “SANBAG Loan”). The SANBAG Loan matures in 2030, bears 0% interest, and had an outstanding balance of $1,629,608 million as of June 30, 2025.

Overlapping Debt Statement
Set forth below is a direct and overlapping debt report (the “Debt Report”) prepared by California Municipal Statistics, Inc. and dated August 5, 2025. This Debt Report is included for general information purposes only. The City has not reviewed the Debt Report for completeness or accuracy.
816
47 Table 10

CITY OF FONTANA
Direct and Overlapping Debt
City FY 2024-25 Assessed Valuation: $33,066,765,383
OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 9/1/25 Metropolitan Water District 0.657% $112,708
Chaffey Community College District 16.807 74,048,281
San Bernardino Community College District 3.669 36,807,216 Chaffey Joint Union High School District 7.072 44,210,270 Colton Joint Unified School District 16.409 31,820,042
Fontana Unified School District 77.827 297,664,803
Rialto Unified School District 8.00 9,895,616
Etiwanda School District 29.789 32,814,050
Colton Joint Unified School District Community Facilities District No. 3 100 4,740,000 Etiwanda School District Community Facilities District No. 4 100 - Etiwanda School District Community Facilities District No. 7 30.10 1,476,405 Etiwanda School District Community Facilities District No. 8 21.998 632,443 Etiwanda School District Community Facilities District No. 9 29.069 1,603,155 Etiwanda School District Community Facilities District No. 2001-1 100 1,820,000 Etiwanda School District Community Facilities District No. 2004-1 I.A. No. 1 & 2 100 14,750,000 City of Fontana Community Facilities Districts 100 234,250,000 California Statewide Community Facilities District Assessment District No. 2020-3 100 790,000 TOTAL OVERLAPPING TAX AND ASSESSMENT DEBT $787,434,989
DIRECT AND OVERLAPPING GENERAL FUND DEBT:

San Bernardino County General Fund Obligations 9.678% $9,752,037 San Bernardino County Flood Control District General Fund Obligations 9.678 3,609,410 Chaffey Community College District General Fund Obligations 16.807 3,658,884 Colton Joint Unified School District General Fund Obligations 16.409 892,306 Fontana Unified School District Certificates of Participation 77.827 10,518,319 Rialto Unified School District Certificates of Participation 8.000 3,897,555 Cucamonga School District Certificates of Participation 4.908 44,368 City of Fontana General Fund Obligations 100 46,030,000(1) TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $78,402,879 OVERLAPPING TAX INCREMENT DEBT (Successor Agencies):

6.003 - 100% $167,256,007
COMBINED TOTAL DEBT $1,033,093,875(2)
Ratios to 2024-25 Assessed Valuation:

Total Overlapping Tax and Assessment Debt 2.38%
Total Direct Debt ($46,030,000) 0.14%
Combined Total Debt 3.12%
Ratios to Redevelopment Successor Agency Incremental Valuation ($23,643,716,856):

Total Overlapping Tax Increment Debt 0.71%
(1) Excludes the Series 2025A Bonds.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.
817
48 Employee Retirement System
This section contains certain information relating to the California Public Employees’ Retirement System (“CalPERS”). The information is primarily derived from information produced by CalPERS, its independent accountants and actuaries. The City has not independently verified the information provided by CalPERS and makes no representations and expresses no opinion as to the accuracy of the information provided by CalPERS.

The Comprehensive Annual financial reports of CalPERS are available on its Internet website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference in this Official Statement. Neither the City nor the Underwriter can 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 may be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

Description of Plans. All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) (the “Safety Plan”) and Miscellaneous (all other) Plans (the “Miscellaneous Plan” and together with the Safety Plan, the “Plans”), an agent multiple-employer defined benefit pension plan administered by CalPERS.

Benefits Provided. CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. The provisions and benefits of each Plan that were in effect as of June 30, 2024, are summarized as follows:

Miscellaneous Plan
Hire Date Prior to July 1, 2011 On or after July 1, 2011 Benefit formula 2.5% @ 55 2% @ 62
Final Average Compensation Period Highest 1-year salary Final 3-year average Benefit vesting schedule 5 yrs credited service 5 yrs credited service Benefit payments Monthly Monthly
Retirement age 55 and above 55 and above
Monthly benefit basis Benefit factor, years of Benefit factor, years of Required employee contribution rates 8.00% 7.00%
To be paid by employee 3.00% 7.00%
To be paid by the city 5.00% 0%
Required employer contribution rates 10.21% 10.21%
Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024. 818
49 Safety Plan
Tier I Tier II Tier III
Hire Date Prior to July 1, 2011 On or after July 1, 2011 After January 1, 2013 Benefit formula 3% @ 50 3% @ 55 2.7% @ 57
Final Average Compensation Period Highest 1-year salary Final 3-year average Final 3-year average Benefit vesting schedule 5 yrs credited service 5 yrs credited service 5 yrs credited service Benefit payments Monthly Monthly Monthly
Retirement age 50 and above 50 and above 50 and above
Monthly benefit basis Benefit factor, years of Benefit factor, years of Benefit factor, years of Required employee contribution rates 9.00% 9.00% 12.5%
To be paid by employee 0% 9.00% 12.5%
To be paid by the city 9.00% 0% 0%
Required employer contribution rates 21.51% 21.51% 21.51% Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

Employees Covered. As of the June 30, 2023 measurement date, the following employees were covered by the benefit terms of each Plan:

Miscellaneous
Plan
Safety
Inactive employees or beneficiaries currently receiving benefits 557 Plan208 Inactive employees entitled to but not yet receiving benefits 1013 73 Active employees 502 189
Total 2,072 470
Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

California Public Employees’ Pension Reform Act of 2013. Employees hired prior to January 1, 2013 and have remained under continuous employment with a CalPERS agency are considered “Classic” employees. California Public Employees’ Pension Reform Act of 2013 (“PEPRA”), which was signed by the State Governor on September 12, 2012, established a new pension benefit tier for employees who were hired on and after January 1, 2013, who were not previously CalPERS members or have left employment with a CalPERS agency for more than 6 months.

PEPRA adjusted the benefit formulas, required employee contribution, calculation of benefits and maximum pay, as well as other benefits. PEPRA employees receive the following benefit formulas: (i) 2.0% at age 62 formula for Miscellaneous employees; and (ii) 2.7% at age 57 for Safety employees. Employees are required to pay at least 50% of the total (annual) normal cost rate, and are required to make the full amount of required employee contributions themselves under PEPRA. Retirement benefits for such employees are calculated on the highest average annual compensation over a consecutive 36-month period. Accordingly, retirement benefits for PEPRA miscellaneous employees are calculated as 2% of the average final 36 months compensation and retirement benefits for PEPRA safety employees are calculated as 2.7% of the average final 36 months of compensation. Retirement benefits for Classic miscellaneous employees are calculated as 2% of the average final 12 months of compensation and retirement benefits for Classic safety employees are calculated as 3% of the average final 12 months compensation. Retroactive benefits increases are also prohibited, as are contribution holidays, and purchases of additional non-qualified service credit. PEPRA also capped pensionable income 819
50 as noted below. Maximum amounts are set annually, subject to adjustment in accord with the Consumer Price Index.

CalPERS Pension Compensation Limits for
Calendar Year 2025 (Classic and PEPRA members)
Classic PEPRA
Maximum Pensionable Income $350,000 $186,0961(1)
(1) The Maximum Pensionable income for PEPRA members employed at agencies that participate in Social Security is $155,081.

Source: CalPERS Payroll Circular Letter dated January 2, 2025.

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

Required Contributions. Section 20814(c) of the Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of the employees. The City contribution rates may change if plan contracts are amended. Beginning in Fiscal Year 2017-18, CalPERS collects employer contributions for each plan as a percentage of payroll for the normal cost portion and as a dollar amount for contributions toward the UAL. The dollar amounts are billed on an annual basis. The actuarially determined normal cost rates and UAL contribution amounts for each Plan for Fiscal Years 2023-24, 2024-25 and 2025-26 are as follows:

Fiscal Year 2023-24 Fiscal Year 2024-25 Fiscal Year 2025-26 Employer
Normal
Cost Rate
Employer
Payment of
UAL
Employer
Normal
Cost Rate
Employer
Payment
of UAL
Employer
Normal
Cost Rate
Employer
Payment
of UAL
Miscellaneous Plan 10.21% $5,915,042 9.91% $7,023,903 9.62% $7,455,333 Safety 20.212 7,560,381 19.78 9,161,493 19.40 10,112,558 Source: CalPERS Actuarial Reports dated June 2022 and June 2023.

The City’s estimated total contribution amounts (including the required normal cost and UAL contributions) and as a percentage of estimated covered payroll for the Plans in Fiscal Years 2023-24, 2024-25 and 2025-26 are as follows:

Fiscal Year 2023-24 Fiscal Year 2024-25 Fiscal Year 2025-26 Total
Employer
Contribution
% of
Covered
Payroll
Total Employer
Contribution
% of
Covered
Payroll
Total
Employer
Contribution
% of
Covered
Payroll
Miscellaneous Plan $9,194,356 28.63% $10,393,288 230.57% $11,240,548 28.57% Safety 16,072,286 62.28 16,038,189 61.52 17,249,381 62.89 Source: CalPERS Actuarial Reports dated June 2022 and June 2023. 820
51 Projected Employer Contributions. The following tables show the City’s actuariallydetermined required employer contribution for Fiscal Year 2025-26 and projected employer contributions (before cost sharing) for Fiscal Years 2026-27 through 2030-31 for each Plan by normal cost (expressed as a percentage of total active payroll) and amortization of the unfunded accrued liability (expressed as a dollar amount). The projections assume a 6.80% annual rate of return for Fiscal Year 2023-24 and beyond but do not include any reductions in the normal cost that will occur over time as new employees are hired into PEPRA or other lower cost benefit tiers.

Miscellaneous Plan
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2023-24 and
Beyond)
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 Normal Cost % 9.62% 9.5% 9.4% 9.3% 9.2% 9.1%
UAL Payment $7,455,333 $7,613,000 $8,056,000 $8,998,000 $9,203,000 $9,377,000 Safety Plan
Required
Contribution
Projected Future Employer Contributions
(Assumes 6.80% Return for Fiscal Year 2023-24 and
Beyond)
Fiscal Year 2025-26 2026-27 2027-28 2028-29 2029-30 2030-31 Normal Cost % 20.68% 10.1% 19.7% 19.3% 18.7% 18.3%
UAL Payment $11,577,571 $12,343,000 $12,974,000 $14,125,000 $14,447,000 $14,735,000 Source: CalPERS Actuarial Reports dated June 2023.

As previously described, the City maintains the CalPERS Rate Stability Reserve to smooth out fluctuations in contribution rates to the Plans. The City estimates that the balance in the CalPERS Rate Stability Reserve was approximately $13.6 million as of June 30, 2025. See “CITY FINANCIAL INFORMATION – Reserve Policy” for additional information regarding the CalPERS Rate Stability Reserve.

Funded Status. The following table sets forth the schedule of funding for the Plans for the actuarial valuations as of June 30 of the years 2020 through 2023.

Valuation Date
Ended June 30
Accrued
Liability
Market Value of
Assets (MVA)
Unfunded
Accrued
Liability
Funded
Ratio
Annual Covered
Payroll
Miscellaneous Plan
2020 $237,405,409 $170,257,751 $67,147,658 71.7% $30,257,878 2021 256,320,214 208,934,061 47,386,153 81.5 29,565,008 2022 271,275,805 191,842,864 79,432,941 70.7 31,296,639 2023 288,385,182 202,649,655 85,735,527 70.3 36,218,969 Safety Plan
2020 $308,930,382 $187,000,928 $121,929,454 60.5% $22,720,292 2021 335,797,625 231,632,698 104,164,927 69.0 23,756,074 2022 353,791,485 215,433,365 138,358,120 60.9 23,996,101 2023 374,555,279 231,252,951 143,302,328 61.7 25,245,954 821
52 (1) Based on the market value of assets.

Source: CalPERS Actuarial Reports Dated June 2023.

There is a two-year lag between the valuation date and the start of the contribution Fiscal Year. The UAL was determined in the June 30, 2023 actuarial valuation, but the corresponding UAL payments commence two years after the valuation date in Fiscal Year 2025-26. This twoyear lag is necessary due to the amount of time needed to extract and test the membership and financial data, and the need to provide public agencies with their required employer contribution well in advance of the start of the Fiscal Year.

Net Pension Liability. The City’s net pension liability for the Miscellaneous Plan and the Safety Plan totaled approximately $76,408,744 million and $134,002,270 million, respectively, measured as of June 30, 2023, using an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. For the year ended June 30, 2024, the City recognized pension expense of $13,975,274 for the Miscellaneous Plan and $21,061,913 for the Safety Plan.

Sensitivity to Changes in Discount Rate. The discount rate used to measure the total pension liability as of June 30, 2024 with respect to the Plans was 6.90%. The following tables present the City’s proportionate share of the net pension liability for the Miscellaneous Plan and the Safety Plan, calculated using the discount rate for the Plans, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 100 basis points higher or 100 basis points lower than the current rate:

Miscellaneous Plan
1% Decrease (5.90%) Discount Rate (6.90%) 1% Increase (7.90%) Net Pension Liability $116,810,263 $76,408,744 $43,510,074 Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

Safety Plan
1% Decrease (5.90%) Discount Rate (6.90%) 1% Increase (7.90%) Net Pension Liability $187,272,573 $134,002,270 $90,676,816 Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

Potential Impacts on Future Required Contributions. 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.

Change in Assumptions/Discount Rate. The prescribed discount rate assumption, adopted by the CalPERS board on November 17, 2021, is 6.80% compounded annually (net of investment and administrative expenses) as of June 30, 2023. On April 16, 2024, the CalPERS board took action to modify the Funding Risk Mitigation Policy to remove the automatic change to the discount rate when the investment return exceeds various thresholds. Rather than an automatic change to the discount rate, a CalPERS board discussion would be placed on the calendar.
822
53 Investment Performance. CalPERS earnings reports for Fiscal Years 2013 through 2024 report investment gains of approximately 12.5%, 18.4%, 2.4%, 0.6%, 11.2%, 8.6%, 6.7%, 4.7%,

21.3%, -6.1%, 5.8%, and 9.3% respectively. The CalPERS Fiscal Year 2023-24 investment gain of 9.3% is not included as an amortization base in the most recent CalPERS valuation report and is not reflected in the numbers included herein. Future earnings performance may increase or decrease future contribution rates for plan participants, including the City. CalPERS has preliminarily reported a 11.6% investment return for Fiscal Year 2024-25.

The CalPERS website contains the most recent actuarial valuation reports for the City’s Miscellaneous Plan and Safety Plan and other information that concerns benefits and other matters. The Comprehensive Annual financial reports of CalPERS are also available on CalPERS’ Internet website at www.calpers.ca.gov. 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. Neither the City nor the Underwriter guarantee the accuracy of such information.

See “APPENDIX C – COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2024 – Note (12)” for additional information regarding the Plans, including a description of the actuarial methods and assumptions used to measure the City’s net pension liability as of the June 30, 2023 measurement date.

Other Post-Employment Benefits
Plan Description. The City provides post-retirement health care benefits (the “OPEB Plan”) in accordance with City Council approval to all employees who retire from the City on or after reaching age 50 or over with at least five years of CalPERS-credited service. The postretirement health care benefits are provided to eligible retirees by the City, as a single-employer plan. Additional requirements are set forth in the individual contracts for executive positions or in the Memorandum of Understanding (“MOUs”) for the five bargaining units operating within the City. The amount the City provides on the behalf of retirees is dictated in the MOUs. As of June 30, 2023, there were 234 inactive employees or beneficiaries currently receiving benefits and 572 active employees.

Contributions. The required contribution is based on projected pay-as-you-go financing requirements. For the fiscal year ending June 30, 2024, the City’s cash contributions were $2,355,211 in the form of current premiums, which is funded through the General Fund, and the estimated implied subsidy was $678,629 resulting in total payments of $3,043,840.

As previously described, the City maintains the OPEB reserve to smooth out future fluctuations in associated costs. The City estimates that the balance in the OPEB Reserve was approximately $29.2 million as of June 30, 2025.

Total OPEB Liability. As of the June 30, 2023 measurement date, the City’s total OPEB liability was approximately $43.5 million. The City’s net OPEB liability was approximately $[_] million.

The following presents the OPEB liability of the City if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:
823
54 Discount Rate – 1%

5.80%
Current Discount Rate

6.80%
Discount Rate + 1%

7.80%
Net OPEB Liability $13,005,703 $17,181,931 $22,063,778
Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

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 future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual requires 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.

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB. For the fiscal year ended June 30, 2024, the City recognized OPEB expense of $555,099. As of fiscal year ended June 30, 2024, the City reported deferred outflows of resources related to OPEB from the following sources:

Deferred Outflows of
Resources
Deferred inflows of
Resources
OPEB contributions subsequent to
measurement date $3,524,890 $--
Changes of assumptions 7,529,782 20,685,607
Net difference between projected
and actual earnings on OPEB plan
investments 1,886,709 --
Differences between expected and
actual experience 6,277,017 11,064,549
Total $19,218,398 $31,750,156
Source: City of Fontana Comprehensive Annual Financial Report for the Fiscal Year Ended June 30, 2024.

The $3,524,890 reported as deferred outflows of resources related to contributions subsequent to the June 30, 2023 measurement date will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2025.

See “APPENDIX C – COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY FOR THE FISCAL YEAR ENDED JUNE 30, 2024 – Note (11)” for additional information regarding the Healthcare Plan, including a description of the actuarial methods and assumptions used to measure the City’s net OPEB liability as of the June 30, 2024 measurement date.

Employee Relations
The City had 657 authorized positions at the beginning of Fiscal Year 2024-25. The City’s employees are represented by the following labor groups. In the previous five years, there have not been any work stoppages by City employees.
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55 Table 11

CITY OF FONTANA
City Employee Labor Groups
Labor Group
Number of
Budgeted
Employees
Contract
Expiration
Date
Management Confidential 117 6/30/27
Police Management 34 6/30/24(1)
Police Officers 182 6/30/28
City Hall 167 6/30/27
City Yard 74 6/30/27
Police Benefit 88 6/30/27
(1) The City and the respective labor groups are currently engaged in discussions regarding new collective bargaining agreements.

Source: City of Fontana.

Capital Improvement Program
The City prepares a seven-year Capital Improvement Program (“CIP”) as part of its biennial operating budget. The CIP is used as a planning tool and identifies the City’s capital improvement needs. The 2025-27 Adopted Budget includes a CIP budget for Fiscal Years 2025- 26 through 2031-32 (as so adopted, the “2026-2032 CIP Budget”). The 2026-32 CIP Budget is $1.29 billion and includes more than 165 projects. Of such total, the 2026-32 CIP Budget includes $22.7 million in capital projects for Fiscal Year 2025-26 and $20.4 million for Fiscal Year 2026-

27. The greatest funding needs in the 2026-32 CIP Budget relate to street improvements, representing approximately 53% of the total funding needs. Nearly all such street improvement projects are slated as future projects.

The City has no plans to issue Additional Bonds or other General Fund supported debt to finance additional projects in the CIP. However, there is no guarantee that the City’s plans will not change.

Risk Management
The City established risk management programs for workers’ compensation in 1978-79 and for general liability in 1983-84, which are accounted for in the City’s General Fund. The programs are supported by contributions from the other principal City funds and intra-fund transfers.

Effective with an excess coverage insurance policy on July 1, 1992, the workers’ compensation program provides for self-insurance up to a maximum of $1,000,000 per incident.

The claims which exceed the limit are insured up to a maximum per incident of $45,000,000.

Under the City’s excess insurance policy for general liability, all claims incurred after October 1, 1992, are self-insured up to a maximum of $1,000,000 per incident. The claims which exceed the limit are insured up to a maximum per incident of $25,000,000. The City is self-insured for general liability claims incurred prior to October 1, 1992. There have been no significant changes in insurance coverage in the last three years. The amount of settlements has not exceeded the amount of insurance coverage for each of the past three fiscal years. 825
56 As previously described, the City maintains reserves to offset future liability costs. The City estimates that the balance in the Self Insurance reserve was approximately $21.5 million as of June 30, 2025.

Investment Policies and Procedures
The City’s current investment policy (the “Investment Policy”), rendered annually to the City Council by the City Treasurer pursuant to Section 53646 of the Government Code of the State was approved by the City Council on June 30, 2025. The Investment Policy provides guidelines for the prudent investment of the unexpended cash in the City’s treasury and outline policies for maximizing the efficiency of the City's cash management system. The ultimate goal is to enhance the economic status of the City while protecting its pooled cash. The City's cash management system is designed to accurately monitor and forecast expenditures and revenues, thus enabling the City to invest funds to the fullest extent possible. The City attempts to obtain the highest yield obtainable as long as investments meet the criteria established for safety and liquidity.

Cash management and investment transactions are the responsibility of the Chief Financial Officer or designee. At least quarterly, the Investment Review Committee, consisting of the City Treasurer, Chief Financial Officer/Deputy City Treasurer, City Manager, Mayor, Mayor Pro Tem, and the City’s Financial Advisor shall meet to discuss the status of current investments, strategies for future investments, and other matters deemed relevant, and shall report to the City Council as necessary.

Investment of City funds is governed by the California Government Code Sections 16429.1 and 53601. Investments may not have a term or maturity at the time of investment of longer than that authorized by Section 53601 or five years (measured by settlement date) unless the City Council has granted express authority, no less than 3 months prior to the investment, for a specific investment to exceed such limit.

It should be noted that while the Government Code specifies the maximum percentage of the portfolio which may be held in each type of investment at any one time, fluctuations in the portfolio balance will prevent strict adherence to such restrictions. Therefore, percentage limitations in the Investment Policy apply to investments at the time of purchase.

The par value, market value, costs basis, and percent of total investments by market value for each category of the City’s investments, as June 30, 2025, are set forth in the following table:
826
57 Table 12

CITY OF FONTANA
Investment Portfolio as of June 30, 2025
Investment Type Cost Basis Market Value
% of
Total Market
Value
Sweep Account MM $7,648,201 $7,648,201 1.33%
U.S. Treasuries 163,520,143 164,800,152 29.28%
Agency Securities 36,079,763 37,284,048 6.62%
Corporates 77,316,026 79,075,201 14.05%
Asset Backed Securities 31,948,427 31,833,575 5.87%
115 Trust - Pension 11,727,594 13,644,923 2.42%
115 Trust - OPEB 25,693,100 29,185,553 5.18%
CA Class 199,450,387 199,450,387 35.43%
Local Agency Investment Fund 201,420 201,661 .03%
Total $553,396,242 $562,934,882 100%
Source: City of Fontana.

State Budget
Although the City does not receive a significant portion of its annual revenues directly from the State, the State’s financial condition and budget policies affect communities and local public agencies throughout the State. At various times, the State has experienced significant financial and budgetary stress.

In recent years, State budgets have been balanced. To the extent that the State budget process results in reduced revenues to the City in the future, the City could be required to make adjustments to its budget.

THE AUTHORITY
The Authority is a joint exercise of powers authority, duly organized and validly existing under and pursuant to a Joint Exercise of Powers Agreement, dated September 1, 2014 (the “Joint Powers Agreement”), by and between the City and the Fire Protection District (collectively, the “Members”). The Joint Powers Agreement was entered into pursuant to the provisions of Articles 1 through 4 (commencing with Section 6500) of Chapter 5 of Division 7 of Title 1 of the California Government Code (the “Joint Exercise of Power Act”). The governing body of the Authority consists of the same individuals who comprise the members of the City Council.

The Authority was created for the purpose of assisting the Members with the financing of capital projects. The Authority is authorized to provide financing or refinancing of Public Capital Improvements (within the meaning of the Joint Exercise of Powers Act) for the City. Pursuant to the Joint Exercise of Powers Act, the Authority has the power to issue bonds to pay the cost of any public capital improvement.
827
58 CONSTITUTIONAL AND STATUTORY

LIMITATIONS ON TAXES AND APPROPRIATIONS
The constitutional and statutory provisions discussed in this section have the potential to affect the ability of the City to levy taxes and spend tax proceeds for operating and other purposes.

Limitations on Revenues
Article XIIIA of the California Constitution. Article XIIIA of the State Constitution, adopted and known as Proposition 13, was approved by the voters in June 1978 and has been amended on occasions, including most recently on November 7, 2000 to reduce the voting percentage required for the passage of school bonds. Section 1(a) of Article XIIIA limits the maximum ad valorem tax on real property to one percent of “full cash value,” and provides that such tax shall be collected by the counties and apportioned according to State statutes. Section 1(b) of Article XIIIA provides that the one-percent limitation does not apply to ad valorem taxes levied to pay interest and redemption charges on (i) indebtedness approved by the voters prior to July 1, 1978, or (ii) bonded indebtedness for the acquisition or improvement of real property approved on or after July 1, 1978, by two-thirds of the votes cast by the voters voting on the proposition, or (iii) bonded indebtedness incurred by a school district or community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55% of the voters voting on the proposition.

Section 2 of Article XIIIA defines “full cash value” to mean the county assessor’s valuation of real property as shown on the 1975-76 fiscal year tax bill, or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred. The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation implementing Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above. Such legislation further provides that each county will levy the maximum tax permitted by Article XIIIA, which is $1.00 per $100 of assessed market value.

Since its adoption, Article XIIIA has been amended a number of times. These amendments have created a number of exceptions to the requirement that property be reassessed when it is purchased, newly constructed or undergoes a change in ownership has occurred. These exceptions include certain transfers of real property between family members, certain purchases of replacement dwellings for persons over age 55 and by property owners whose original property has been destroyed in a declared disaster, and certain improvements to accommodate disabled persons and for seismic upgrades to property. These amendments have resulted in marginal reductions in the property tax revenues of the City.

Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA.
828
59 Articles XIIIC and XIIID of the California Constitution.

General. On November 5, 1996, the voters of the State approved Proposition 218, known as the “Right to Vote on Taxes Act.” Proposition 218 adds Articles XIIIC and XIIID to the California Constitution and contains a number of interrelated provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges.

On November 2, 2010, California voters approved Proposition 26, entitled the “Supermajority Vote to Pass New Taxes and Fees Act.” Section 1 of Proposition 26 declares that Proposition 26 is intended to limit the ability of the State Legislature and local government to circumvent existing restrictions on increasing taxes by defining the new or expanded taxes as “fees.” Proposition 26 amended Articles XIIIA and XIIIC of the State Constitution. The amendments to Article XIIIA limit the ability of the State Legislature to impose higher taxes (as defined in Proposition 26) without a two-thirds vote of the Legislature. The amendments to Article XIIIC define “taxes” that are subject to voter approval as “any levy, charge, or exaction of any kind imposed by a local government,” with certain exceptions.

Taxes. Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective. Taxes for general governmental purposes of the City (“general taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited into the City’s General Fund, require a two-thirds vote. The voter approval requirements of Article XIIIC reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase such taxes in the future to meet increased expenditure needs.

Property-Related Fees, Charges and Assessments. Article XIIID also adds several provisions making it generally more difficult for local agencies to levy and maintain propertyrelated fees, charges, and assessments for municipal services and programs. These provisions include, among other things, (i) a prohibition against assessments which exceed the reasonable cost of the proportional special benefit conferred on a parcel, (ii) a requirement that assessments must confer a “special benefit,” as defined in Article XIIID, over and above any general benefits conferred, (iii) a majority protest procedure for assessments which involves the mailing of notice and a ballot to the record owner of each affected parcel, a public hearing and the tabulation of ballots weighted according to the proportional financial obligation of the affected party, and (iv) a prohibition against fees and charges which are used for general governmental services, including police, fire or library services, where the service is available to the public at large in substantially the same manner as it is to property owners.

Reduction or Repeal of Taxes, Fees and Charges. Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund. If such repeal or reduction occurs, the City’s ability to pay debt service on the Bonds could be adversely affected.

Burden of Proof. Article XIIIC provides that 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.” 829
60 Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.

Impact on City’s General Fund. The approval requirements of Articles XIIIC and XIIID reduce the flexibility of the City to raise revenues for the General Fund, and no assurance can be given that the City will be able to impose, extend or increase the taxes, fees, charges or taxes in the future that it may need to meet increased expenditure needs.

The City does not believe that any material source of General Fund revenue is subject to challenge under Proposition 218 or Proposition 26.

Judicial Interpretation. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts with respect to a number of the matters discussed below, and it is not possible at this time to predict with certainty the outcome of such determination.

Expenditures and Appropriations. In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and local governments are subject to an annual “appropriations limit” or “Gann Limit” imposed by Article XIIIB of the State Constitution, which effectively limits the amount of such revenues that government entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, state subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” exclude tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds.

Article XIIIB also does not limit appropriation of local revenues to pay debt service on bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in cases of emergency; however, the appropriations limit for the three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Each school district is required to establish an appropriations limit each year.

In the event that a school district’s revenues exceed its spending limit, the district may increase its appropriations limit to equal its spending by taking appropriations limit from the State.

Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years. If the aggregate “proceeds of taxes” for the preceding two-year period exceed the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.
830
61 Statutory Revenue Limitations - Proposition 62
Proposition 62 was adopted by the voters at the November 4, 1986, general election and (a) requires that any new or higher taxes for general governmental purposes imposed by local governmental entities such as the City be approved by a two-thirds vote of the governmental entity’s legislative body and by a majority vote of the voters of the governmental entity voting in an election on the tax, (b) requires that any special tax (defined as taxes levied for other than general governmental purposes) imposed by a local governmental entity be approved by a twothirds vote of the voters of the governmental entity voting in an election on the tax, (c) restricts the use of revenues from a special tax to the purposes or for the service for which the special tax was imposed, (d) prohibits the imposition of ad valorem taxes on real property by local governmental entities except as permitted by Article XIIIA, (e) prohibits the imposition of transaction taxes and sales taxes on the sale of real property by local governmental entities, and (f) requires that any tax imposed by a local governmental entity on or after August 1, 1985, be ratified by a majority vote of the voters voting in an election on the tax within two years of the adoption of the initiative or be terminated by November 15, 1988.

Following its adoption by the voters, various provisions of Proposition 62 were declared unconstitutional at the appellate court level. On September 28, 1995, however, the California Supreme Court, in Santa Clara City Local Transportation Authority v. Guardino, upheld the constitutionality of the portion of Proposition 62 requiring a two–thirds vote in order for a local government or district to impose a special tax and, by implication, upheld a parallel provision requiring a majority vote in order for a local government or district to impose any general tax. The Guardino decision did not address whether it should be applied retroactively. In response to Guardino, the California Legislature adopted Assembly Bill 1362, which provided that Guardino should apply only prospectively to any tax that was imposed or increased by an ordinance or resolution adopted after December 14, 1995. Assembly Bill 1362 was vetoed by the Governor; hence the application of the Guardino decision on a retroactive basis remains unclear.

Proposition 62, as an initiative statute, does not have the same level of authority as a constitutional initiative. It is analogous to legislation adopted by the State Legislature, except that it may be amended only by a vote of the State’s electorate. However, Proposition 218, as a constitutional amendment, is applicable to charter cities and supersedes many of the provisions of Proposition 62.

Proposition 1A
Proposition 1A, proposed by the Legislature in connection with the State's fiscal year 2004-2005 Budget, approved by the voters in November 2004 and generally effective in fiscal year 2006-2007, provides that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibits the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any fiscal year, as set forth under the laws in effect as of November 3, 2004.

Any change in the allocation of property tax revenues among local governments within a county must be approved by two-thirds of both houses of the Legislature. Proposition 1A provides, however, that beginning in fiscal year 2008-2009, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaims that the shift is needed due to a severe state 831
62 financial hardship, the shift is approved by two-thirds of both houses and certain other conditions are met. The State may also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Proposition 1A also provides that if the State reduces the motor vehicle license fee rate currently in effect, the State must provide local governments with equal replacement revenues. Further, Proposition 1A requires the State, beginning July 1, 2005, to suspend State mandates affecting cities, counties and special districts, excepting mandates relating to employee rights, schools or community colleges, in any year that the State does not fully reimburse local governments for their costs to comply with such mandates.

Proposition 1A may result in increased and more stable City revenues. The magnitude of such increase and stability is unknown and would depend on future actions by the State.

However, Proposition 1A could also result in decreased resources being available for State programs. This reduction, in turn, could affect actions taken by the State to resolve budget difficulties. Such actions could include increasing State taxes, decreasing spending on other State programs or other action, some of which could be adverse to the City.

Proposition 22
Proposition 22, entitled “The Local Taxpayer, Public Safety and Transportation Protection Act,” was approved by the voters of the State in November 2010. Proposition 22 amended the state Constitution to eliminate or reduce the State’s authority to (i) temporarily shift property taxes from cities, counties and special districts to schools, (ii) use vehicle license fee revenues to reimburse local governments for State-mandated costs (the State will have to use other revenues to reimburse local governments), (iii) redirect property tax increment from redevelopment agencies to any other local government, (iv) use State fuel tax revenues to pay debt service on State transportation bonds, or (v) borrow or change the distribution of State fuel tax revenues.

This Proposition was intended to, among other things, stabilize local government revenue sources by restricting the State’s control over local property taxes.

Unitary Property
AB 454 (Chapter 921, Statutes of 1986) provides that revenues derived from most utility property assessed by the State Board of Equalization (“Unitary Property”), commencing with fiscal year 1988-89, are allocated as follows: (i) each jurisdiction will receive up to 102% of its prior year State–assessed revenue; and (ii) if county–wide revenues generated from Unitary Property are less than the previous year’s revenues or greater than 102% of the previous year’s revenues, each jurisdiction will share the burden of the shortfall or benefit of the excess revenues by a specified formula. This provision applies to all Unitary Property except railroads, whose valuation will continue to be allocated to individual tax rate areas.

The provisions of AB 454 constitute neither an elimination of the assessment of any State– assessed properties nor a revision of the methods of assessing utilities by the State Board of Equalization. Generally, AB 454 allows valuation growth or decline of Unitary Property to be shared by all jurisdictions in a county.

Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or 832
63 the City’s ability to expend revenues. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations. 833
64 BOND OWNERS’ RISKS
The following describes certain special considerations and risk factors affecting the payment of and security for the Series 2025A Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with the purchase of any Series 2025A Bonds and does not necessarily reflect the relative importance of the various risks. Potential investors in the Series 2025A Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the Series 2025A Bonds. There can be no assurance that other considerations will not materialize in the future.

Limited Obligations
The Series 2025A Bonds are limited obligations of the Authority payable solely from and secured solely by the Base Rental Payments pledged therefor under the Indenture, together with amounts on deposit from time to time in certain funds and accounts held by the Trustee. If for any of the reasons described below, or for any other reason, the Authority does not receive sufficient Base Rental Payments to pay debt service on the Series 2025A Bonds, the Authority will not be obligated to utilize any other of its funds, other than amounts on deposit in certain funds and accounts established under the Indenture, to pay debt service on the Series 2025A Bonds.

The Base Rental Payments are not secured by any pledge of or lien on taxes or other revenue of the City, but are payable from all funds lawfully available to the City. The City has the capacity to enter into other obligations that may constitute additional obligations against its revenues, including any Additional Bonds. In the event the City’s revenue sources are less than its total obligations, the City could choose to fund other obligations before making Base Rental Payments; in that case, the failure to pay Base Rental Payments in full would constitute a default under the Lease Agreement (see “– Additional Obligations of the City” below). The same result could occur if, because of State constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues; in that case, the failure to pay Base Rental Payments in full would constitute a default under the Lease Agreement. The City must adopt a balanced Budget each year, and has covenanted in the Lease Agreement to budget for, appropriate and make the Base Rental Payments in each year that it has possession and use of the Property.

Abatement of Lease
Under California law, the obligation of the City to make Base Rental Payments is contingent upon the availability of the Property for use and occupancy by the City. The Base Rental Payments will be abated proportionately during any period in which by reason of material damage or destruction, there is substantial interference with the use and occupancy of any portion of the Property by the City, and such abatement will continue until substantial completion of the work of repair or replacement of the portion of the Property damaged or destroyed; provided that, in determining the amount of abatement. Any abatement of Base Rental Payments could affect the Authority’s ability to pay debt service on the Series 2025A Bonds. However, there will be no abatement of Base Rental Payments under the Lease Agreement to the extent that the proceeds of property insurance or rental interruption insurance are available to pay Base Rental Payments that would otherwise be abated.

In the event Base Rental Payments are abated, no assurances can be given that the proceeds of property insurance (which is not expected to be available to cover earthquake 834
65 damage) or rental interruption insurance will be sufficient to pay the debt service on the Series 2025A Bonds during the period of such abatement. See “SECURITY FOR THE SERIES 2025A BONDS − Abatement” and “APPENDIX B − SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
Notwithstanding the provisions of the Lease Agreement specifying the extent of abatement in the event of the City’s failure to have full use and occupancy of the Property, such provisions may be superseded by operation of law, and, in such event, the resulting Base Rental Payments of the City may not be sufficient to pay all of the remaining principal and interest with respect to the Series 2025A Bonds.

Limitation on Remedies
The enforcement of any remedies provided for in the Lease Agreement and in the Indenture could prove to be both expensive and time-consuming. Although the Lease Agreement provides that upon the occurrence and during the continuance of an Event of Default the Trustee may take possession of and re-let the Property, no assurance can be given that the amounts received from such reletting would be sufficient to pay the principal of and interest with respect to the Series 2025A Bonds when due. See “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
In addition to the limitations on remedies contained in the Lease Agreement and the Indenture, the rights and remedies provided in those documents may be limited by and are subject to provisions of federal bankruptcy laws, as now or hereafter enacted, and to other laws or equitable principles that may affect creditors’ rights generally. The various legal opinions to be delivered concurrently with the issuance of the Series 2025A Bonds will be qualified as to the enforceability of the various legal instruments by limitations imposed by State and federal laws, rulings and decisions affecting remedies, and by bankruptcy, reorganization or other laws of general application affecting the enforcement of creditors’ rights, including equitable principles.

See “– Bankruptcy Risks” below.

Limitation on Trustee’s Obligations under the Indentures The Trustee has no obligation to advance its own funds to pursue any remedies. As a consequence, the Trustee’s willingness and ability to pursue any of the remedies provided in the Indenture, Lease Agreement or Assignment Agreement may be dependent upon the availability of funds from an interested party. Additionally, the Trustee is not required to acquire possession of the Property if doing so subjects it to potential liability. There can be no assurance that the Trustee will be willing and able to perform its duties under the Indenture.

Release of Property; Additional Bonds
The Authority and the City may amend the Lease Agreement to substitute or release a portion of the Property upon compliance with all of the conditions set forth in the Lease Agreement. After a substitution or release, the portion of the Property for which the substitution or release has been effected will be released from the leasehold encumbrance of the Lease Agreement. Moreover, the City may issue Additional Bonds secured by Base Rental Payments which are increased above current levels. See the captions “THE PROPERTY – Substitution or Release of the Property” and “SECURITY FOR THE SERIES 2025A BONDS – Additional Bonds.” 835
66 Although the Lease Agreement requires, among other things, that the Property, as constituted after such substitution or release, have an annual fair rental value at least equal to the maximum Base Rental Payments for the Property coming due in the then-current Fiscal Year or in any subsequent Fiscal Year, it does not require that the Property have an annual fair rental value equal to the annual fair rental value of the Property prior to the substitution release of any portion thereof. Thus, a portion of the Property could be replaced with less valuable real property, or could be released altogether. Such a substitution or release could have an adverse impact on the security for the Series 2025A Bonds, particularly if an event requiring abatement of the Base Rental Payments were to occur subsequent to such substitution or release.

The Indenture requires, among other things, that upon the issuance of Additional Bonds, the Lease Agreement will be amended, to the extent necessary, so as to increase the Base Rental Payments payable by the City thereunder by an aggregate amount that is sufficient to pay the principal of and interest on such Additional Bonds; provided, however, that no such amendment may be made such that the sum of such Base Rental Payments, including any increase in Base Rental Payments as a result of such amendment, plus Additional Rental Payments, in any Fiscal Year is in excess of the annual fair rental value of the applicable Property after taking into account the use of the proceeds of any Additional Bonds issued in connection therewith. See the caption “SECURITY FOR THE SERIES 2025A BONDS – Additional Bonds” for a full description of the requirements that must be met in order for the Authority to deliver Additional Bonds.

Insurance on the Property
Under the Lease Agreement, the City is required to maintain through the term of the Lease Agreement policies of insurance covering loss or damage to the Property up to replacement costs and covering title defects. If the Property is damaged or destroyed, there can be no assurance that the insurance proceeds will be sufficient to repair or restore the Property, or to redeem or defease all of the then-Outstanding Series 2025A Bonds. In addition, neither the Authority nor the City can provide any assurance as to whether the provider of an insurance policy will pay under such policy. See the caption “SECURITY FOR THE SERIES 2025A BONDS – Insurance” for a description of the insurance coverages that are required by the Lease Agreement. See the caption “THE CITY – Risk Management” for a description of the City’s current insurance coverages. Certain risks, such as earthquakes and floods, are not required to be covered under the Lease Agreement and the City is not required to maintain such coverage during the term of the Lease Agreement.

Condemnation of the Property
If all or a portion of the Property were condemned, there can be no assurance that any such award or payment will be sufficient at the time to prepay or defease all of the thenOutstanding Series 2025A Bonds. If the award is less than the amounts remaining on such Outstanding Series 2025A Bonds, then the Owners will be paid less than the amounts remaining on such Outstanding Series 2025A Bonds.

Value of Property
In the event that the Trustee re-enters or re-lets the Property upon the occurrence of an Event of Default, there can be no assurance such actions will provide funds in an amount that is sufficient to pay the principal of and interest on the Series 2025A Bonds. The security under the Lease Agreement extends only to the Authority’s leasehold interest in the Property granted under 836
67 the Ground Lease and is subject to the restrictions of the Ground Lease. The Property has not been appraised in connection with the issuance of the Series 2025A Bonds.

No Acceleration Upon Default
In the event of a default, there is no remedy of acceleration of the total Base Rental Payments for the term of the Lease. Any suit for money damages would be subject to the legal limitations on remedies against cities and counties in the State, including a limitation on enforcement of judgments against funds needed to serve the public welfare and interest. See “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS.”
Early Prepayment Risk
Early payment of the Base Rental Payments and early prepayment of the Series 2025A Bonds may occur in whole or in part, without premium, from the proceeds of title insurance, on any date, if the Property, or a portion thereof, is lost, destroyed or damaged beyond repair or taken by eminent domain and if the City exercises it right to prepay the Base Rental Payments in whole or in part pursuant to the provisions of the Lease Agreement and the Indenture.

Bankruptcy Risks
The rights of the owners of the Series 2025A Bonds and the enforceability of the Authority’s obligation to make payments on the Series 2025A Bonds may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights under currently existing law or laws enacted in the future, and may also be subject to the exercise of judicial discretion under certain circumstances.

Under existing law, the City is eligible to file for bankruptcy. Should the City file for bankruptcy, there could be adverse effects on the holders of the Series 2025A Bonds. In a bankruptcy of the City, the Authority or the Trustee as its assignee and the owners of the Series 2025A Bonds may be prohibited from taking any action against the City, any official of the City, or any property of the City (including the Property) to enforce the terms of the Lease Agreement, unless the consent of the bankruptcy court is first obtained. The bankruptcy court is not required to give its consent. This prohibition on action may even prohibit the Trustee from using funds in its possession to make payments on the Series 2025A Bonds. As a result, Owners may experience temporary or permanent delays in the payment of the Series 2025A Bonds.

In a bankruptcy case, a plan of adjustment for the City could be confirmed that would allow for enforcement of the Lease Agreement, but the priority, interest rate, payment terms, collateral, maturity dates, payment sources, covenants and other terms or provisions of the Lease Agreement and the Series 2025A Bonds may be altered by the bankruptcy court. Such a plan could be confirmed even over the objections of the Authority or the Trustee as its assignee and the owners of the Series 2025A Bonds, and without their consent. Additionally, the resulting plan could adjust some or all of the City's financial obligations, which include the City's lease payment obligations under the Lease Agreement to and the City's obligation to fund certain retirement benefits.

The adjustment plans approved by the Bankruptcy Courts in connection with the bankruptcies of the cities of Vallejo, San Bernardino and Stockton resulted in significant 837
68 reductions in the amounts payable by the cities under lease revenue obligations substantially identical or similar to the Series 2025A Bonds. The City can provide no assurance about the outcome of the bankruptcy cases of other California municipalities of the nature of any adjustment plan it if were to file for bankruptcy.

In addition, if the Lease Agreement is determined to constitute a “true lease” by the bankruptcy court (rather than a financing lease providing for the extension of credit), the City could choose not to perform under the Lease Agreement and the claim of the owners of the Series 2025A Bonds could be substantially limited. An allowable claim could be substantially less than the amount of the Series 2025A Bonds outstanding, resulting in the owners of the Series 2025A Bonds suffering a substantial loss.

The opinions of counsel, including Bond Counsel, delivered in connection with the issuance and delivery of the Series 2025A Bonds will be so qualified. Bankruptcy proceedings, or the exercising of powers by the federal or state government, if initiated, could subject the owners of the Series 2025A Bonds to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.

State Law Limitations on Appropriations
Article XIIIB of the California Constitution limits the amount that local governments can appropriate annually. The ability of the City to make Base Rental Payments may be affected if the City should exceed its appropriations limit. The State may increase the appropriation limit of cities in the State by decreasing the State’s own appropriation limit. The City does not anticipate exceeding its appropriations limit in the foreseeable future. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY REVENUES AND APPROPRIATIONS – Limitations on Revenues – Expenditures and Appropriations.” Limitations on Taxes and Fees
Limitations on Taxes and Fees. Certain taxes, assessments, fees and charges presently imposed by the City could be subject to the voter approval requirements of Article XIIIC and Article XIIID of the State Constitution. Based upon the outcome of an election by the voters, such fees, charges, assessments and taxes might no longer be permitted to be imposed, or may be reduced or eliminated and new taxes, assessments fees and charges may not be approved.

The City has assessed the potential impact on its financial condition of the provisions of Article XIIIC and Article XIIID of the State Constitution respecting the imposition and increase of taxes, fees, charges and assessments and does not believe that an election by the voters to reduce or eliminate the imposition of certain existing fees, charges, assessments and taxes would substantially affect its financial condition. However, the City believes that if the initiative power was exercised so that all local taxes, assessments, fees and charges that may be subject to Article XIIIC and Article XIIID of the State Constitution are eliminated or substantially reduced, the financial condition of the City, including its General Fund, could be materially adversely affected.

Although the City does not currently anticipate that the provisions of Article XIIIC and Article XIIID of the State Constitution would adversely affect its ability to pay Base Rental Payments and its other obligations payable from the General Fund, no assurance can be given regarding the ultimate interpretation or effect of Article XIIIC and Article XIIID of the State 838
69 Constitution on the City’s finances. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.”
Additional Obligations of the City
The City has existing obligations payable from its General Fund. The City is permitted to enter into other obligations which constitute additional charges against its revenues, including Additional Bonds payable from a lease of the Property, without the consent of Owners of the Series 2025A Bonds. To the extent that additional obligations are incurred by the City, the funds available to pay Base Rental Payments to the Owners of the Series 2025A Bonds may decline.

See “CITY FINANCIAL INFORMATION – Long-Term General Fund Obligations” and “SECURITY FOR THE SERIES 2025A BONDS – Additional Bonds.”
The Base Rental Payments and other payments due under the Lease Agreement (including payment of costs of repair and maintenance of the Property, taxes and other governmental charges levied against the Property) are payable from funds lawfully available to the City. If the amounts that the City is obligated to pay in a fiscal year exceed the City’s revenues for such year, the City may choose to make some payments rather than making other payments, including Base Rental Payments and Additional Rental Payments, based on the perceived needs of the City. The same result could occur if, because of California Constitutional limits on expenditures, the City is not permitted to appropriate and spend all of its available revenues or is required to expend available revenues to preserve the public health, safety and welfare.

Property Taxes
Levy and Collection. Any reduction in the tax rate or the implementation of any constitutional or legislative property tax decrease could reduce the City’s property tax revenues, and accordingly, could have an adverse impact on the ability of the City to make Base Rental Payments. Likewise, delinquencies in the payment of property taxes could have an adverse effect on the City’s ability to pay principal of and interest on the Series 2025A Bonds when due.

Reduction in Inflationary Rate. Article XIIIA of the California Constitution provides that the full cash value base of real property used in determining assessed value may be adjusted from year to year to reflect the inflationary rate, not to exceed a 2% increase for any given year, or may be reduced to reflect a reduction in the consumer price index or comparable local data.

See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS.” Such measure is computed on a calendar year basis. Because Article XIIIA limits inflationary assessed value adjustments to the lesser of the actual inflationary rate or 2%, there have been years in which the assessed values were adjusted by actual inflationary rates, which were less than 2%. Since Article XIIIA was approved, the annual adjustment for inflation has fallen below the 2% limitation a limited number of times.

The City is unable to predict if any adjustments to the full cash value base of real property within the City, whether an increase or a reduction, will be realized in the future.

Appeals of Assessed Values. There are two types of appeals of assessed values that could adversely impact property tax revenues:

Proposition 8 Appeals. Most of the appeals that might be filed in the City would be based on Section 51 of the Revenue and Taxation Code, which requires that for each lien date 839
70 the value of real property must be the lesser of its base year value annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value.

Under California law, property owners may apply for a reduction of their property tax assessment by filing a written application, in form prescribed by the State Board of Equalization, with the appropriate county board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. These market-driven appeals are known as “Proposition 8” appeals.

Any reduction in the assessment ultimately granted as a Proposition 8 appeal applies to the year for which application is made and during which the written application was filed.

These reductions are often temporary and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA.

Base Year Appeals. A second type of assessment appeal is called a base year appeal, where the property owners challenge the original (basis) value of their property. Appeals for reduction in the “base year” value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date.

No assurance can be given that property tax appeals in the future will not significantly reduce the City’s property tax revenues.

Public Health Emergencies
In recent years, public health authorities have warned of threats posed by outbreaks of disease and other public health threats. For example, in 2020 the WHO announced that COVID19, an upper respiratory tract illness, was a pandemic as it spread across the globe, having significant adverse health and financial impacts throughout the world. The spread of the COVID19 coronavirus pandemic, and responses intended to slow its spread, resulted in negative health and economic impacts to various communities, including the City (on a temporary basis).

Future pandemics may arise in the future with similar or more adverse economic impacts.

Uncertain too are the actions that may be taken by federal, State and local governmental authorities to contain or mitigate the effects of any such future outbreak.

Certain Risks Associated with Sales Tax and Other Local Tax Revenues For fiscal year 2023-24, sales tax revenues were the largest source of revenue to the City. See “CITY FINANCIAL INFORMATION – Sales and Use Taxes.” Sales tax revenues are based upon the gross receipts of retail sales of tangible goods and products by retailers with taxable transactions in the City, which could be impacted by a variety of factors. For example, in 840
71 times of economic recession, the gross receipts of retailers often decline, and such a decline would cause the sales tax revenues received by the City to also decline. See “BOND OWNERS’ RISKS – Public Health Emergencies – Collection of Taxes” above for a discussion of Executive Order N-40-20.

In addition, changes or amendments in the laws applicable to the City’s receipt of sales tax revenues or other local taxes, whether implemented by State legislative action or voter initiative, could have an adverse effect on sales tax revenues received by the City. See “CONSTITUTIONAL AND STATUTORY LIMITATIONS ON TAXES AND APPROPRIATIONS – Proposition 218 – Article XIIIC and Article XIIID.”
For example, many categories of transactions are exempt from the statewide sales tax, and additional categories could be added in the future. Currently, most sales of food products for human consumption are exempt; this exemption, however, does not apply to liquor or to restaurant meals. The rate of sales tax levied on taxable transactions in the City or the fee charged by the California Department of Tax and Fee Administration for administering the City’s sales tax could also be changed. See “CITY FINANCIAL INFORMATION.” Increasing Retirement Related Costs
The City is required to make contributions to CalPERS and to the OPEB Plan for City employees and retirees. Such obligations are a significant financial obligation of the City and could increase in the future. Actual contribution rates will depend on a variety of factors, including but not limited to actual investment returns and future changes to benefits or actuarial assumptions. The City notes that pension contributions in future years may increase as a result of investment losses in CalPERS’ portfolio. There can be no assurances that actual increases in required contributions will not be higher than the amounts which are currently projected by the City. See “CITY FINANCIAL INFORMATION – Employee Retirement System.” Hazardous Substances
Owners and operators of real property may be required by law to remedy conditions of the property relating to releases or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most well-known and widely applicable of these laws, but California laws with regard to hazardous substances area also stringent and similar. Under many of these laws, the owner (or operator) is obligated to remedy a hazardous substance condition of property whether or not the owner (or operator) has anything to do with creating or handling the hazardous substance. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method of handling it. All of these possibilities could significantly and adversely affect assessed values of property in the City and the operations and finances of the City.

Natural Hazards
The value of the Property, and the financial stability of the City, can be adversely affected by a variety of factors, particularly those which may affect infrastructure and other public improvements and private improvements and the continued habitability and enjoyment of such improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides and floods and climatic 841
72 conditions such as droughts. In the event that one or more of such conditions occur, such occurrence could cause damages of varying seriousness to the land and improvements and the value of property in the City could be diminished in the aftermath of such events. A substantial reduction of the value of such properties could affect the ability or willingness of the property owners to pay their property taxes. The Property is not within a flood plain designated by the Federal Emergency Management Administration.

Seismic. There are several identified faults within close proximity to or within the boundaries of the City that could potentially result in damage to buildings, roads, bridges, and property within the City, including the Property, in the event of an earthquake. In addition, there may be other as yet unidentified faults in the area. The four nearest known faults within close proximity to the City are the San Andreas Fault (7.5 miles to the northeast), the Cucamonga Fault (2.5 miles to the northeast), the San Ysidro Fault (5.5 miles to the northeast) and the North Lytle Creek Fault (5 miles to the northeast). While past experiences have resulted in minimal damage to the infrastructure and property within the City there is significant potential for destructive ground-shaking during the occurrence of a major seismic event. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such an event. While certain of the property within the City has been developed in conformity with the 1988 Uniform Building Code standards, such compliance is no guarantee that such buildings will not be severely damaged in an earthquake.

If there were to be an occurrence of severe seismic activity in the City, there could be an abatement or adverse impact on the City’s ability to pay the Base Rental Payments. The Lease Agreement does not require that the City maintain earthquake insurance with respect to the Property.

Building codes require that some of these factors be taken into account, to a limited extent, in the design of improvements. Some of these factors may also be taken into account, to a limited extent, in the design of other infrastructure and public improvements neither designed nor subject to design approval by the City. Design criteria in any of these circumstances are established upon the basis of a variety of considerations and may change, leaving previously-designed improvements unaffected by more stringent subsequently established criteria. In general, design criteria reflect a balance at the time of protection and the future costs of lack of protection, based in part upon a present perception of the probability that the condition will occur and the seriousness of the condition should it occur. Conditions may occur and may result in damage to improvements of varying seriousness, such that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the actual value of the Property, as well as public and private improvements within the City in general, may well depreciate or disappear, notwithstanding the establishment of design criteria for any such condition. See “– Abatement of Lease” above.

Wildfires. In recent years, wildfires have caused extensive damage throughout the State.

In some instances, entire neighborhoods have been destroyed. Several of the fires that occurred in recent years damaged or destroyed property in areas that were not previously considered to be at risk from such events.

Certain portions of the City are located in areas identified by Cal Fire’s 2025 Local Responsibility Area Fire Hazard Severity Zones as being in “high” or “very high” severity zones. While certain City parks and community buildings are located with these areas, the 842
73 only essential mechanical facilities within the high severity fire zones are sewer lift stations. If rendered inoperable, sewer service would be impaired for the immediate local area. These structures are built within buildings constructed of concrete and masonry. The last major wildfire in the vicinity of the City was the Grand Prix Fire in October 2003. There have been smaller fires, such as the 147-acre Sierra Fire that burned in November 2018 and the 277-acre Karen Fire in July of 2020.

The northwestern corner of the City has high hazard chaparral vegetation and steep slopes. This area is also subject to high, hot Santa Ana winds that blow from the north-northeast down the Cajon Pass. The Jurupa Mountains also have high grasses and locally steep slopes.

Residential developments located next to high fire hazard areas are at high risk of being impacted by fire, especially if the structures are not properly protected and there is inadequate vegetation management. Fire models indicate that a fire in these areas can also have a major impact on the fire-fighting forces in the City and neighboring communities. Since 1986, all new homes in the City are required to be equipped with fire sprinkler systems and smoke detectors.

Some commentators believe that climate change will lead to even more frequent and more damaging wildfires in the future. Property damage due to wildfire could result in a significant decrease in the market value of property in City and in the ability or willingness of property owners to pay property taxes.

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 General Fund by requiring greater expenditures to counteract the effects of climate change or by changing the operations and activities of City residents and business establishments.

Droughts
California is subject to droughts from time to time. Most recently, in October, 2021, the Governor declared a Statewide drought state of emergency and requested that all water users voluntarily reduce water use by 15%. The declaration encouraged water agencies to draw upon supplies other than groundwater and to implement their water shortage contingency plans and authorized the State Water Resources Control Board to adopt regulations that prohibit wasteful water use. While some drought-related water restrictions were eased in May 2023, no assurance can be given that drought conditions will not return in the future.

Cyber Security
The City, like many other public and private entities, relies on a large and complex technology environment to conduct its operations. As a recipient and provider of personal, private, or sensitive information, the City is subject to multiple cyber threats including, but not limited to, hacking, viruses, malware and other attacks on computer and other sensitive digital networks and systems. Entities or individuals may attempt to gain unauthorized access to the 843
74 City’s digital systems for the purposes of misappropriating assets or information or causing operational disruption and damage.

To strengthen cyber security, the City has deployed managed detection and response services, along with advanced data security and threat detection systems. These tools provide 24/7 monitoring and rapid response to potential risks, ensuring that taxpayer dollars and sensitive information remain protected. In addition, the City has invested in a best-in-class email management platform that defends against phishing, spam, and other threats while supporting efficient communication across departments.

The City is also advancing community engagement and service delivery. The City has invested in a robust customer relationship management (CRM) system, which powers the City’s 311 platform. This tool centralizes access to City services, making it easier for residents to connect with departments, submit requests, and receive timely updates. By streamlining how residents interact with their local government, the system enhances responsiveness and accountability.

To support these initiatives, the City has adopted a cloud-first strategy when evaluating technology solutions. This approach provides flexibility, scalability, and cost savings while ensuring that critical systems are reliable and secure.

The City is finalizing a project to connect all City facilities through a dedicated fiber backbone network. This major step will improve reliability, reduce long-term costs, and allow the City to deliver services more efficiently and securely across every center.

Notwithstanding the foregoing, no assurance can be given that the City and the other entities the City relies on will not be affected by cyber threats and attacks in a manner that may affect the Series 2025A Bond owners.

Litigation
The City is and may become a party to litigation that has the potential to have an impact on the City’s General Fund. Although the City maintains certain insurance policies that provide coverage under certain circumstances and with respect to certain types of incidents, the City cannot predict what types of liabilities may arise in the future and whether these may adversely affect the ability of the City to pay Base Rental Payments under the Lease Agreement when due.

Secondary Market for Bonds
There can be no guarantee that there will be a secondary market for the Series 2025A Bonds or, if a secondary market exists, that any Bonds can be sold for any particular price.

Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.
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75 TAX MATTERS
In the opinion of Bond Counsel, under existing statutes, regulations, rulings and judicial decisions, and assuming the accuracy of certain representations and compliance with certain covenants and requirements described herein, interest (and original issue discount) on the Series 2025A Bonds is excluded from gross income for federal income tax purposes and is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals. However, it should be noted that with respect to applicable corporations as defined in Section 59(k) of the Internal Revenue Code of 1986, as amended (the “Code”), generally certain corporations with more than $1,000,000,000 of average annual adjusted financial statement income, interest (and original issue discount) with respect to the Series 2025A Bonds might be taken into account in determining adjusted financial statement income for purposes of computing the alternative minimum tax imposed by Section 55 of the Code on such corporations.

In the further opinion of Bond Counsel, interest (and original issue discount) on the Series 2025A Bonds is exempt from State personal income tax.

Bond Counsel’s opinion as to the exclusion from gross income for federal income tax purposes of interest (and original issue discount) on the Series 2025A Bonds is based upon certain representations of fact and certifications made by the Authority and others and is subject to the condition that the Authority comply with all requirements of the Code that must be satisfied subsequent to the issuance of the Series 2025A Bonds to assure that interest (and original issue discount) on the Series 2025A Bonds will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest (and original issue discount) on the Series 2025A Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Series 2025A Bonds. The Authority has covenanted to comply with all such requirements.

In the opinion of Bond Counsel, the difference between the issue price of a Series 2025A Bond (the first price at which a substantial amount of the Series 2025A Bonds of a maturity is to be sold to the public) and the stated redemption price at maturity of such Series 2025A Bond constitutes original issue discount. Original issue discount accrues under a constant yield method, and original issue discount will accrue to a Beneficial Owner before receipt of cash attributable to such excludable income. The amount of original issue discount deemed received by a Beneficial Owner will increase the Beneficial Owner’s basis in the applicable Series 2025A Bond. The amount of original issue discount that accrues to the Beneficial Owner of a Series 2025A Bond is excluded from the gross income of such Beneficial Owner for federal income tax purposes, is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals, and is exempt from State personal income tax.

The amount by which a Series 2025A Bond Owner’s original basis for determining loss on sale or exchange in the applicable Series 2025A Bond (generally, the purchase price) exceeds the amount payable on maturity (or on an earlier call date) constitutes amortizable bond premium, which must be amortized under Section 171 of the Code; such amortizable bond premium reduces the Series 2025A Bond Owner’s basis in the applicable Series 2025A Bond (and the amount of tax-exempt interest received with respect to the Series 2025A Bonds), and is not deductible for federal income tax purposes. The basis reduction as a result of the amortization of bond premium may result in a Series 2025A Bond Owner realizing a taxable gain when a Series 2025A Bond is sold by the Owner for an amount equal to or less (under certain circumstances) than the original cost of the Series 2025A Bond to the Owner. Purchasers of the Series 2025A Bonds should consult their own tax advisors as to the treatment, computation and collateral consequences of amortizable bond premium.
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76 The IRS has initiated an expanded program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Series 2025A Bonds will be selected for audit by the IRS. It is also possible that the market value of the Series 2025A Bonds might be affected as a result of such an audit of the Series 2025A Bonds (or by an audit of similar municipal obligations). No assurance can be given that in the course of an audit, as a result of an audit, or otherwise, Congress or the IRS might not change the Code (or interpretation thereof) subsequent to the issuance of the Series 2025A Bonds to the extent that it adversely affects the exclusion from gross income of interest (and original issue discount) on the Series 2025A Bonds or their market value.

SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2025A BONDS THERE MIGHT

BE FEDERAL, STATE OR LOCAL STATUTORY CHANGES (OR JUDICIAL OR REGULATORY

CHANGES TO OR INTERPRETATIONS OF FEDERAL, STATE OR LOCAL LAW) THAT AFFECT THE FEDERAL, STATE OR LOCAL TAX TREATMENT OF THE SERIES 2025A

BONDS, INCLUDING THE IMPOSITION OF ADDITIONAL FEDERAL INCOME OR STATE

TAXES BEING IMPOSED ON OWNERS OF TAX-EXEMPT STATE OR LOCAL OBLIGATIONS, SUCH AS THE SERIES 2025A BONDS. THESE CHANGES COULD ADVERSELY AFFECT THE MARKET VALUE OR LIQUIDITY OF THE SERIES 2025A BONDS. NO ASSURANCE CAN BE GIVEN THAT SUBSEQUENT TO THE ISSUANCE OF THE SERIES 2025A BONDS

STATUTORY CHANGES WILL NOT BE INTRODUCED OR ENACTED OR JUDICIAL OR

REGULATORY INTERPRETATIONS WILL NOT OCCUR HAVING THE EFFECTS DESCRIBED ABOVE. BEFORE PURCHASING ANY OF THE SERIES 2025A BONDS, ALL POTENTIAL

PURCHASERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING POSSIBLE

STATUTORY CHANGES OR JUDICIAL OR REGULATORY CHANGES OR

INTERPRETATIONS, AND THEIR COLLATERAL TAX CONSEQUENCES RELATING TO THE SERIES 2025A BONDS.

Bond Counsel’s opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. Bond Counsel has not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Indenture and the Tax Certificate relating to the Series 2025A Bonds permit certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto. Bond Counsel expresses no opinion as to the effect on the exclusion from gross income of interest (and original issue discount) for federal income tax purposes with respect to any Series 2025A Bond if any such action is taken or omitted based upon the advice of counsel other than Stradling Yocca Carlson & Rauth LLP.

Although Bond Counsel has rendered an opinion that interest (and original issue discount) on the Series 2025A Bonds is excluded from gross income for federal income tax purposes provided that the Authority continues to comply with certain requirements of the Code, the ownership of the Series 2025A Bonds and the accrual or receipt of interest (and original issue discount) on the Series 2025A Bonds may otherwise affect the tax liability of certain persons.

Bond Counsel expresses no opinion regarding any such tax consequences. Accordingly, before purchasing any of Series 2025A Bonds, all potential purchasers should consult their tax advisors with respect to collateral tax consequences relating to the Series 2025A Bonds.

Should interest (and original issue discount) on the Series 2025A Bonds become includable in gross income for federal income tax purposes, the Series 2025A Bonds are not subject to early redemption and will remain outstanding until maturity or until redeemed in accordance with the Indenture.
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77 A complete copy of the proposed form of opinion of Bond Counsel is attached hereto as Appendix D.

CERTAIN LEGAL MATTERS
The validity of the Series 2025A Bonds and certain other legal matters are subject to the approving opinions of Stradling Yocca Carlson & Rauth LLP, as Bond Counsel. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D. Bond Counsel will receive compensation from the City contingent upon the sale and delivery of the Series 2025A Bonds.

Certain legal matters will be passed upon for the City and the Authority by Best Best & Krieger LLP, Riverside, California, as City Attorney and by Jones Hall LLP, San Francisco, California, as Disclosure Counsel. Certain legal matters will be passed upon for the Underwriter by Kutak Rock LLP, Irvine, California (“Underwriter’s Counsel”), and for the Trustee by its counsel. The fees payable to Disclosure Counsel and Underwriter’s Counsel are contingent upon the sale and delivery of the Series 2025A Bonds.

Furthermore, from time to time Bond Counsel and Disclosure Counsel serve as counsel to the Underwriter with respect to transactions other than the issuance of the Series 2025A Bonds.

LITIGATION
To the best knowledge of the City, there is no action, suit, proceeding, inquiry or investigation before or by any court or federal, state, municipal or other governmental authority pending and notice of which has been served on and received by the City or, to the knowledge of the City, threatened against or affecting the City or the assets, properties or operations of the City which, if determined adversely to the City or its interests, would have a material and adverse effect upon the consummation of the transactions contemplated by or the validity of the Lease Agreement, the Ground Lease or the Indenture, or upon the financial condition, assets, properties or operations of the City.

Neither the City nor the Authority is in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental authority, which default might have consequences that would materially adversely affect the consummation of the transactions contemplated by the Lease Agreement, the Ground Lease or the Indenture, or the financial conditions, assets, properties or operations of the City, including but not limited to the payment and performance of the City’s obligations under the Lease Agreement.

RATING
S&P Global Ratings (“S&P”) has assigned a rating of “[AA-]” to the Series 2025A Bonds.

A rating is not a recommendation to buy, sell or hold securities. Future events could have an adverse impact on the rating of the Series 2025A Bonds, and there is no assurance that any credit rating that is given to the Series 2025A Bonds will be maintained for any period of time or that a rating may not be qualified, downgraded, lowered or withdrawn entirely by S&P if, in the judgment of S&P circumstances so warrant, nor can there be any assurance that the criteria required to achieve the rating on the Series 2025A Bonds will not change during the period that the Series 2025A Bonds remain outstanding.
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78 Any qualification, downward revision, lowering or withdrawal of the ratings on the Series 2025A Bonds may have an adverse effect on the market price of the Series 2025A Bonds. Such rating reflects only the current view of S&P (which could change at any time), and an explanation of the significance of such ratings may be obtained from S&P. Generally, S&P bases its ratings on information and materials furnished to them (which may include information and material from the City that is not included in this Official Statement) and on investigations, studies and assumptions by S&P.

The City has covenanted in the Continuing Disclosure Certificate to file notices of any rating changes on the Series 2025A Bonds with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access System. See the caption “CONTINUING DISCLOSURE” and Appendix E. Notwithstanding such covenant, information relating to rating changes on the Series 2025A Bonds may be publicly available from S&P prior to such information being provided to the City and prior to the date by which the City is obligated to file a notice of rating change. Purchasers of the Series 2025A Bonds are directed to S&P and its website and official media outlets for the most current ratings with respect to the Series 2025A Bonds after the initial issuance of the Series 2025A Bonds.

CONTINUING DISCLOSURE
The City (on behalf of the Authority and itself) will covenant for the benefit of owners of the Series 2025A Bonds to provide certain financial information and operating data relating to the City (the “Annual Report”), by not later than February 1 of each year and commencing February 1, 2026 with the report for the fiscal year ending June 30, 2025, and to provide notices of the occurrence of certain listed events. The Annual Report and the notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board through Electronic Municipal Access System (“EMMA”). The specific nature of the information to be contained in the Annual Report or the notices of enumerated events is summarized below under the caption “APPENDIX F – FORM OF CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with Securities Exchange Commission Rule 15c2- 12(b)(5) (the “Rule”).

The City, as well as the Authority, the Financing Authority, the Successor Agency to the Fontana Redevelopment Agency (the “Successor Agency”) and various community facilities districts within the City (each, a “CFD”), all of which are entities with the City Council as the legislative body, have entered into numerous continuing disclosure undertakings.

Within the last five years, the City complied in all material respects with its undertakings under the Rule, except that the City failed to file its financial statements for Fiscal Year 2019-20 on or before the deadline therefor in its undertakings for the 2014 Bonds and the 2014 Bonds.

The Authority and the Financing Authority have timely filed all regular annual reports pursuant to such undertakings. However, the Successor Agency, as successor to the undertakings of the former Fontana Redevelopment Agency (the “Former Agency”), failed to file one annual report for one issue of the Former Agency’s bonds and failed to link one annual report to the relevant CUSIPs for one issue of the Former Agency’s bonds.

In addition, within the last five years, a CFD failed to file one annual report for one issue of bonds for which the official statement relating to such bonds contained all of the information required to be contained in such report.
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79 Further, the City and the Authority are aware that not all of the required information was included with respect to a number of annual report filings by the Financing Authority, the Successor Agency and several CFDs, including required tabular information.

Additionally, the Financing Authority and two CFDs failed to timely file certain notices of ratings changes. The City has since made filings on behalf of its related entities to correct material omissions with respect to the filings that were required to have been made within the past five years, and has adopted written procedures to ensure future compliance with the City’s disclosure undertakings and those of its related entities.

Finally, although the CFDs do not prepare audited financial statements, the City has voluntarily filed the audited financial statements of the City for the last five years for the respective bonds of the CFDs. For one fiscal year, the City’s audited financial statements were not available when the CFDs timely filed operating data for their respective bonds. For such fiscal year, the City caused its unaudited financial statements to be filed where undertakings required the City’s financial statements to be included in annual reports. However, the City did not file its unaudited financial statements on behalf of the CFDs for such fiscal year.

Except as disclosed in this Official Statement, within the last five years, the City, the Authority, the Successor Agency, the Financing Authority and the CFDs have not failed to timely comply with their respective prior continuing disclosure obligations under the Rule in all material respects.

UNDERWRITING
The Series 2025A Bonds are being purchased pursuant a bond purchase agreement by and among the Authority, the City, and the Underwriter. The Underwriter has agreed to purchase the Series 2025A Bonds at a purchase price of $________ (which is equal to the par amount of the Series 2025A Bonds, less an underwriter’s discount of $__________).

The Underwriter may offer the Series 2025A Bonds to the public at the offering prices set forth on the cover page of this Official Statement. The Underwriter may offer and sell to certain dealers and others at a price lower than the offering prices stated on the cover page hereof. The offering price may be changed from time to time by the Underwriter.

MUNICIPAL ADVISOR
The Authority and the City have retained CSG Advisors Incorporated, San Francisco, California, as Municipal Advisor in connection with the preparation of this Official Statement and with respect to the issuance of the Series 2025A Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or assume responsibility for the accuracy, completeness, or fairness of the information contained in this Official Statement. The Municipal Advisor is an independent registered municipal advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities. The Municipal Advisor’s compensation is contingent upon the delivery of the Series 2025A Bonds.
849
80 EXECUTION
The execution of this Official Statement and its delivery have been authorized by the Board of the Authority and the City Council of the City.

FONTANA PUBLIC FACILITIES

FINANCING AUTHORITY
By:

Executive Director

CITY OF FONTANA
By:

City Manager
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APPENDIX A

DEMOGRAPHIC AND ECONOMIC INFORMATION FOR THE CITY OF FONTANA AND

COUNTY OF SAN BERNARDINO
The following information concerning the County of San Bernardino (the “County”) and the City of Fontana (the “City”) is presented as general background data. The Series 2025A Bonds are payable solely from moneys of the City as described in the Official Statement. The taxing power of the City, the County, the State of California (the “State”) or any political subdivision thereof is not pledged to the payment of the Series 2025A Bonds.

General
Founded in 1913, the City is the second largest city in the County by population and encompasses approximately 42.4 square miles of land. The City has experienced significant growth in population. The City is located 50 miles east of Los Angeles, and approximately 10 miles west of the cities of Riverside and San Bernardino.

The County is located in Southern California and was established by an act of the State Legislature on May 23, 1853, separating the County from the eastern part of the County of Los Angeles. The County encompasses an area of over 22,000 square miles, making it geographically the largest county in the nation, and includes twenty-four incorporated communities. The County is bordered on the west by the Counties of Los Angeles and Kern, on the north by the County of Inyo, and on the south by the County of Riverside.

City Government
The City was incorporated as a general law city in 1952 and is governed by a Mayor and four council members elected at large to serve four-year terms. The City operates under the Council - Manager form of government. The City Council appoints the City Manager who is responsible for the day-to-day administration of City business and the coordination of all departments of the City.

The population in Fontana increased approximately 6.8% from 2016 to 2025. The population growth in the City, County and State is shown on the following table.

POPULATION ESTIMATES
City of Fontana, County of San Bernardino and State of California Calendar Years 2016-2025
Year(1) City of Fontana
County of San
Bernardino State of California
2016 205,180 2,122,579 39,103,587
2017 208,003 2,139,520 39,352,398
2018 209,113 2,150,017 39,519,535
2019 211,123 2,165,876 39,605,361
2020 211,519 2,175,424 39,648,938
2021 210,507 2,179,941 39,369,530
2022 213,147 2,183,077 39,179,680
2023 214,671 2,182,351 39,228,444
2024 217,084 2,200,351 39,420,683
2025 219,172 2,207,424 39,529,101
(1) January 1 estimate.

Source: California State Department of Finance, Demographic Research Unit.

Transportation
The City of Fontana is strategically located in the hub of surface, rail and air transportation facilities. Union Pacific and Burlington Northern/Santa Fe rail lines provide rail service to Fontana.

Switch yards and multi-modal terminals are located nearby.

Major interstate freeways and state highways provide direct access to the City, making shipping and transportation to and from sea ports, North American Free Trade Agreement ports of entry, and the rest of the nation highly dependable. Interstate 10 traverses the southern section of the City, Interstate 15 borders the western portion of the City, and Interstate 210, which is the extension of Route 30, opened in November 2002, links the San Bernardino Valley with the San Fernando Valley and traverses the northern portion of the City. State freeways 57, 60 and 91 are minutes from Fontana.

The Ontario International Airport is a medium-hub, full-service airport, which offers more than 70 daily flights to cities in the U.S., Mexico and Taiwan and is served by nine commercial carriers. The airport is owned and operated by Ontario International Airport Authority, a joint powers agency, and is served by Alaska Airlines, American Airlines, Avianca El Salvador, China Airlines, Delta Air Lines, Frontier Airlines, JetBlue Airways, Southwest Airlines, STARLUX Airlines, United Airlines, and Volaris. Various airlines provide freight services at Ontario International Airport.
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With the completion of its twin terminals, it is able to handle approximately 10 million passengers annually. When passenger traffic reaches 10 million in two consecutive years, a third terminal will be constructed. Ontario International Airport is the Western States Regional Terminal for United Parcel Service. It is a member of the Los Angeles World Airports system and is ideally situated as an airfreight center for Pacific Rim and European cargo. Over 7.0 million passengers used the airport in 2024, 10.2% more than the same period in 2023, and over 793,000 tons of air freight were shipped, an increase of 5.5% over the same period last year.

Transit services are provided by Metrolink commuter rail service to Los Angeles with connections to the numerous surrounding cities provided by Omnitrans bus service, Dial-a-Ride, Yellow Cab Company and Bell Cab Company.

Education
Five school district serve students in the City of Fontana. There are thirty public elementary schools, seven middle schools, five high schools, three alternative high schools, seven private elementary/middle schools, one School of Language Development and one adult school. Local colleges and universities include: Universal Technical Institute of California Inc., Chaffey College, San Bernardino Valley College, California State University-San Bernardino, Riverside Community College, Westech College and the University of California-Riverside. 853
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Employment and Industry
The City is located in the Riverside-San Bernardino-Ontario Metropolitan Statistical Area (“MSA”), which includes the County and San Bernardino County. The unemployment rate in the MSA was 4.9% in April 2025, down from a revised 5.0% in March 2025, and above the year-ago estimate of 4.6%. This compares with an unadjusted unemployment rate of 5.0% for the State and 3.9 % for the nation during the same period. The unemployment rate was 4.9% in Riverside County, and 4.8% in the County.

The City’s unemployment rate was 4.50% in April 2025, down from 4.60% in March 2025.

The following table summarizes the civilian labor force, employment and unemployment in the MSA for the calendar years 2020 through 2024. These figures are MSA-wide statistics and may not necessarily accurately reflect employment trends in the City.

RIVERSIDE-SAN BERNARDINO-ONTARIO METROPOLITAN STATISTICAL AREA (Riverside and San Bernardino Counties)
Civilian Labor Force, Employment and Unemployment
(Annual Averages)
March 2024 Benchmark
2020 2021 2022 2023 2024
Civilian Labor Force (1) 2,073,400 2,108,400 2,140,500 2,180,300 2,209,100 Employment 1,868,300 1,951,600 2,049,900 2,078,100 2,093,800 Unemployment 205,100 156,700 90,700 102,300 115,300
Unemployment Rate 9.9% 7.4% 4.2% 4.7% 5.2%
Wage and Salary Employment: (2)
Agriculture 14,100 13,700 13,800 13,200 13,700
Mining and Logging 1,300 1,400 1,500 1,500 1,600
Construction 104,900 110,100 114,700 115,400 116,200
Manufacturing 96,000 96,100 100,000 98,500 95,200
Wholesale Trade 65,600 67,400 69,500 68,900 68,600
Retail Trade 168,800 177,000 181,000 183,000 182,600
Transportation, Warehousing and Utilities 172,500 198,800 214,400 206,000 205,200 Information 12,400 12,500 13,000 13,300 13,000
Finance and Insurance 24,600 24,400 23,800 22,300 21,700 Real Estate and Rental and Leasing 19,500 20,700 22,200 22,700 22,400 Professional and Business Services 152,100 166,600 173,900 164,400 161,800 Educational and Health Services 248,800 254,300 267,900 287,800 306,000 Leisure and Hospitality 141,300 160,200 180,900 187,600 185,300 Other Services 40,200 43,600 47,400 49,400 50,700
Federal Government 22,100 21,100 20,900 21,200 21,500
State Government 31,300 30,400 28,400 28,600 28,000
Local Government 194,600 190,500 200,700 210,400 220,700 Total All Industries(3) 1,509,900 1,588,800 1,674,000 1,694,100 1,714,100 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department. 854
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Principal Employers
The following table shows the principal employers in the City, listed from greatest to fewest number of employees, as shown in the City’s Annual Comprehensive Financial Report for Fiscal Year ending June 30, 2024.

CITY OF FONTANA
Principal Employers
As June 30, 2024
Employer
Number of
Employees
Percent of Total
Employment
Kaiser Permanente 10,550 10.13%
Fontana Unified School District 4,067 3.90
Amazon.Com Services LLC 3,637 3.49
St Bernardine Medical Center 1,775 1.70
Target Stores T 553 1,323 1.27
City of Fontana (includes part-time
employees)
1,183 1.14
Walmart #6060 DC Drop Yard 1,125 1.08
Walmart D C #6060 1,125 1.08
Reyes Coca-Cola Bottling, LLC 425 0.41
Saia Motor Freight Line LLC 421 0.40
Total Employment Listed(1) 25,631 24.61%
(1) “Total Employment” as used above represents the total employment of all employers located within the City limits.

Source: City of Fontana, as shown in the Annual Comprehensive Financial Report for the Fiscal Year ended June 30, 2024.
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The following table lists, in alphabetical order, the largest manufacturing and nonmanufacturing employers within the County as of June 2025.

COUNTY OF SAN BERNARDINO
Major Employers
As of June 2025
(In Alphabetical Order)
Employer Name Location Industry
Amazon Fulfillment Ctr Redlands Mail Order Fulfillment Service Amazon Fulfillment Ctr San Bernardino Mail Order Fulfillment Service Arrowhead Regional Medical Ctr Colton Hospitals
Bear Mountain Big Bear Lake Skiing Centers & Resorts
Burlington Distribution Ctr San Bernardino Distribution Centers (whls) California State Univ Sn San Bernardino Schools-Universities & Colleges Academic Dignity Health Cmnty Hosp-Sn San Bernardino Hospitals
Dignity Health-St Bernardine San Bernardino Hospitals
Environmental Systems Research Redlands Geographics Information Systems Fedex Ground Bloomington Delivery Service
Inland Empire Health Plan Rancho Cucamonga Health Plans Kaiser Permanente Fontana Med Fontana Hospitals
Loma Linda Univ Health Board Loma Linda Univ/Clg-Governing Body/Regent/Trustee Loma Linda University Med Ctr Loma Linda Hospitals
Mountain High Ski Resort Wrightwood Skiing Centers & Resorts Ontario International Airport Ontario Airports
Ontario-Montclair School Dist Ontario School Districts
Patton State Hospital Patton Hospitals
Primary Care Assoc Med Group Ontario Physicians & Surgeons Radial Rialto Mail Order Fulfillment Service
Redlands Community Hospital Redlands Hospitals
San Antonio Regional Hospital Upland Hospitals
San Bernardino County Sch Supt San Bernardino Schools & Educational Services NEC San Bernardino County Sheriff San Bernardino General Justice Public Order & Safety Activit Snowline Joint Unified Sch Dst Phelan Schools
Source: State of California Employment Development Department, extracted from the America’s Labor Market Information System (ALMIS) Employer Database, 2025 1st Edition.
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Effective Buying Income
“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after-tax” income. Personal income is the aggregate of wages and salaries, other labor-related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner-occupants of non-farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance).

Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance. According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.” The following table summarizes the total effective buying income and median household effective buying income for the City, the County, the State and the United States for the period 2021 through 2025.

CITY OF FONTANA, COUNTY OF SAN BERNARDINO

STATE OF CALIFORNIA AND THE UNITED STATES
Effective Buying Income
2021 through 2025
Year Area
Total Effective
Buying Income
(000’s Omitted)
Median Household
Effective Buying
Income
2021 City of Fontana $4,372,087 $68,404
County of San Bernardino 48,859,973 59,285
California 1,290,894,604 67,956
United States 9,809,944,764 56,790
2022 City of Fontana $4,935,901 $75,776
County of San Bernardino 54,797,008 66,785
California 1,452,426,153 77,058
United States 11,208,582,541 64,448
2023 City of Fontana $5,186,857 $76,415
County of San Bernardino 57,619,256 67,680
California 1,461,799,662 77,175
United States 11,454,846,397 65,326
2024 City of Fontana $5,569,728 $83,116
County of San Bernardino 61,583,897 72,724
California 1,510,708,521 80,973
United States 11,987,185,826 67,876
2025 City of Fontana $5,768,154 $85,648
County of San Bernardino 61,385,031 72,440
California 1,557,429,767 82,725
United States 12,525,577,707 69,687
Source: Claritas, LLC.
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Home Sales Value History
The following table summarizes sale information for detached single family homes in the City of Fontana for calendar years 2016 through 2025.

CITY OF FONTANA
Sales Value History
2016 through 2025
Year
Full
Value
Sales Average Price Median Price Median % Change
2016 2,084 $361,836 $360,000 -
2017 2,058 $403,732 $375,000 4.17%
2018 1,869 $423,364 $411,000 9.60%
2019 1,938 $439,801 $436,500 6.20%
2020 1,713 $484,656 $470,000 7.67%
2021 1,823 $567,315 $545,000 15.96%
2022 1,389 $627,167 $620,000 13.76%
2023 1,035 $617,927 $620,000 0.00%
2024 989 $673,076 $650,000 4.84%
2025 526 $671,842 $657,500 1.15%
Source: HDL, Coren & Cone
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Commercial Activity
Summaries of the historic taxable sales within the City and the County during the past five years in which data is available are shown in the following tables.

Total taxable sales during calendar year 2024 in the City were reported to be $4,459,287,283, a 4.78% decrease from the total taxable sales of $4,683,090,015 reported during calendar year 2023.

CITY OF FONTANA
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 4,467 $2,768,279 6,543 $3,637,135
2021 3,997 3,393,088 5,969 3,374,359
2022 4,209 3,569,600 6,197 4,804,618
2023 4,170 3,459,027 6,183 4,683,090
2024 4,393 3,280,945 6,559 4,459,287
Source: State Department of Tax and Fee Administration.

Total taxable sales during calendar year 2024 in the County were reported to be $58,382,923,442, a 0.78% increase over the total taxable sales of $57,933,854,583 reported during calendar year 2023.

COUNTY OF SAN BERNARDINO
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 44,330 $28,745,277 71,145 $43,265,512
2021 40,801 38,345,912 66,585 55,378,097
2022 41,690 40,048,059 68,480 59,992,846
2023 40,632 38,293,705 67,336 57,933,855
2024 41,239 38,460,625 68,447 58,382,923
Source: State Department of Tax and Fee Administration. 859
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Construction Activity
The following tables show a five-year summary of the valuation of building permits issued in the City and the County.

CITY OF FONTANA
Building Permit Valuation
(Valuation in Thousands of Dollars)
2020 2021 2022 2023 2024
Permit Valuation
Residential $311,547 $216,978 $211,710 $349,920 $310,571 Non-Residential 149,761 126,814 363,353 111,182 64,364
Total Valuation $461,308 $343,792 $575,063 $461,102 $374,935 New Dwelling Units
Single Family 848 670 509 1,068 449
Multiple Family 234 382 562 678 498
TOTAL 1,082 1,052 1,071 1,746 947
Source: Construction Industry Research Board, Building Permit Summary.

COUNTY OF SAN BERNARDINO
Building Permit Valuation
(Valuation in Thousands of Dollars)
2020 2021 2022 2023 2024
Permit Valuation
Residential 1,139,459 $2,610,755 $1,373,908 $1,304,363 $1,248,442 Non-Residential 1,064,695 1,165,646 2,083,951 1,395,790 1,379,223 Total Valuation $2,204,154 $3,776,401 $3,457,859 $2,700,153 $2,627,665 New Dwelling Units
Single Family 3,631 4,376 3,701 3,937 2,875
Multiple Family 910 2,636 2,852 2,239 997
TOTAL 4,541 7,012 6,553 6,176 3,872
Source: Construction Industry Research Board, Building Permit Summary. 860
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APPENDIX B

SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS 861
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APPENDIX C

COMPREHENSIVE ANNUAL FINANCIAL REPORT OF THE CITY
FOR THE FISCAL YEAR ENDED JUNE 30, 2024
862
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APPENDIX D

PROPOSED FORM OF OPINION OF BOND COUNSEL
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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$____________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A
This Continuing Disclosure Certificate (this “Disclosure Certificate”) is executed and delivered by the City of Fontana (the “City”) in connection with the issuance by the Fontana Public Facilities Financing Authority (the “Authority”) of the bonds captioned above (the “Bonds”). The Bonds are being issued under an Indenture dated as of October 1, 2025 (the “Indenture”), by and among the Authority, the City and U.S. Bank Trust Company, National Association, as trustee (the “Trustee”).

The City hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City on behalf of itself and the Authority for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with S.E.C. Rule 15c2-12(b)(5).

Section 2. Definitions. In addition to the definitions set forth above and in the Indenture, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate.
“Annual Report Date” means [February 1] after the end of the City’s fiscal year. “Dissemination Agent” means, initially, U.S. Bank Trust Company, National Association, and any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.
“Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement dated ___________, 2025, executed by the City and the Authority in connection with the issuance of the Bonds. “Participating Underwriter” means Samuel A. Ramirez & Co., Inc, the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time. 864
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Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing [February 1, 2026], with the report for fiscal year [2024-25], provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s Fiscal Year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written statement with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.
(b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) a notice to the MSRB in a timely manner, in an electronic format as prescribed by the MSRB.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) Financial Statements. Audited financial statements of the City for the preceding fiscal year, prepared in accordance generally accepted accounting principles. If the City’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. (b) Other Annual Information. To the extent not included in the audited financial statements of the City, the Annual Report shall also include financial and operating data with respect to the City for preceding fiscal year, substantially similar to that provided in the corresponding tables and charts in the Official Statement, as follows:
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(i) information concerning the actual revenues, expenditures and beginning and ending fund balances relating to the General Fund of the City for the most recent completed Fiscal Year, including information showing tax revenue collections by source; (ii) information showing the aggregate principal amount of long-term bonds, leases and other obligations of the City which are payable out of the General Fund of the City, as of the close of the most recent completed Fiscal Year;
(iii) information concerning the assessed valuation of properties within the City for the most recent completed Fiscal Year, showing the valuation for secured, public utility and unsecured property;
(iv) information regarding the ten largest property taxpayers in the City for the Fiscal Year;
(v) information showing the total secured property tax levy and actual amounts collected for the most recent completed Fiscal Year; and (vi) information showing the balance sheet of the General Fund of the City as of the close of the most recent completed Fiscal Year, including categorized assets, liabilities and reserved and unreserved fund balances.
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public through the MSRB. The City shall clearly identify each such other document so included by reference. If the document included by reference is a final official statement, it must be available from the MSRB.

Section 5. Reporting of Listed Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with 866
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respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds.
(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes (without any obligation to provide any notices of changes in the outlook assigned to or associated with any rating). (12) Bankruptcy, insolvency, receivership or similar event of the City. (13) The consummation of a merger, consolidation, or acquisition involving the City, or the sale of all or substantially all of the assets of the City (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional Trustee or the change of name of the Trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material.
(16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.
(b) Upon the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 Business Days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsection (a)(8) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture. (c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14), and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds. The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is 867
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determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above.
(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental 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 City.
(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Municipal Securities Rulemaking Board consistent with the Rule.

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

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

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any such Agent, with or without appointing a successor Dissemination Agent.

The initial Dissemination Agent will be the City. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

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

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

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

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

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

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

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys fees) of defending against any 869
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claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it hereunder and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond owners or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

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

Section 14. Counterparts. This Disclosure Certificate may be executed in several counterparts, each of which shall be regarded as an original, and all of which shall constitute one and the same instrument.

Date: _______, 2025

CITY OF FONTANA
By:

U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Dissemination Agent
By:

Authorized Officer
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APPENDIX F

DTC AND THE BOOK-ENTRY ONLY SYSTEM
The following description of the Depository Trust Company (“DTC”), the procedures and record keeping with respect to beneficial ownership interests in the Series 2025A Bonds, payment of principal, interest and other payments on the Series 2025A Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial ownership interest in the Series 2025A Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and neither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the Fontana Public Facilities Financing Authority (the “Issuer”) nor U.S. Bank National Association (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Series 2025A Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Series 2025A Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Series 2025A Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix. The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities 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 Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. 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 871
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company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has an S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“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 Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities 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 Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities 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.

5. 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 Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities 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.

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

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

Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct 872
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Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Redemption proceeds, distributions, and dividend payments on the Securities 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 Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, 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 Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

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

12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
873
1 $____________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

BOND PURCHASE AGREEMENT
_________, 2025
Fontana Public Facilities Financing Authority
8353 Sierra Avenue
Fontana, CA 92335
Attention: Executive Director
City of Fontana
8353 Sierra Avenue
Fontana, CA 92335
Attention: City Manager
Ladies and Gentlemen:

Samuel A. Ramirez & Co., Inc. (the “Underwriter”), hereby offers to enter into this Bond Purchase Agreement with you, the City of Fontana (the “City”) and the Fontana Public Facilities Financing Authority (the “Authority”), for the purchase by the Underwriter and the delivery by you of the Authority’s Lease Revenue Bonds, Series 2025A (the “Bonds”). The Bonds are being issued to (i) refinance all of the outstanding Fontana Public Facilities Public Financing Authority Lease Revenue Refunding Bonds, Series 2014A, (ii) finance the acquisition, construction, and installation of certain public capital improvements in the City, and (iii) pay the costs of issuing the Bonds. This offer is made subject to acceptance by you prior to 11:59 p.m., Los Angeles time, on the date hereof. Upon such acceptance, this Bond Purchase Agreement shall be in full force and effect in accordance with its terms and shall be binding upon you and the Underwriter.

1. Purchase and Sale. Upon the terms and conditions and upon the basis of the representations, warranties and agreements hereinafter set forth, the Underwriter agrees to purchase from the Authority all (but not less than all) of the $____________ aggregate principal amount of the Bonds.

The purchase price for the Bonds shall be $_______ (being the principal amount of the Bonds, plus original issue premium in the amount of $_______ and less an Underwriter’s discount in the amount of $_________).

The Bonds will be dated the date of delivery thereof and will have the maturities and bear interest at the rates set forth on Exhibit A hereto. The Bonds will be subject to redemption as set forth in the Indenture and Official Statement herein described. The Bonds will be issued in book-entry form only. It is anticipated that CUSIP identification numbers will be inserted on the Bonds, but neither the failure to provide such numbers nor any error with respect thereto shall constitute a cause for failure or refusal by the Underwriter to accept delivery of the Bonds in accordance with the terms of this Bond Purchase Agreement.
874
2 The scheduled payment of principal of and interest on [certain maturities of the Bonds indicated on Exhibit A hereto] [the Bonds] when due will be guaranteed under a municipal bond insurance policy (the “Policy”) to be issued concurrently with the delivery of the Bonds by ________ (the “Insurer”).

As an accommodation to the Authority and City, the Underwriter will wire from the Purchase Price the premium for the Policy in the amount of $_______ on the date of Closing (defined below).

2. Authorizing Instruments and Law. The Bonds shall be issued pursuant to the provisions of a resolution (the “Resolution”) adopted by the Authority on ________, 2025 authorizing the issuance of the Bonds and the Marks-Roos Local Bond Pooling Act of 1985, constituting Section 6584, et seq. of the California Government Code (the “JPA Act”). The Bonds are issued pursuant to an Indenture, dated as of October 1, 2025 (the “Indenture”), among the Authority, the City and U.S.

Bank Trust Company, National Association, as trustee (the “Trustee”), and shall be as described in the Indenture.

The Bonds are limited obligations of the Authority payable primarily from and secured by certain base rental payments (the “Base Rental Payments”) to be paid by the City pursuant to a Lease Agreement, dated as of October 1, 2025, between the City and the Authority (the “Lease”), for certain real property and the improvements thereon (the “Leased Property”).

3. Offering the Bonds. The Underwriter agrees to offer all the Bonds to the public initially at the prices (or yields) set forth on the cover pages of the Official Statement of the Authority pertaining to the Bonds, dated [BPA Date] (the Official Statement, together with all appendices thereto, and with such changes therein and supplements thereto, are herein called the “Official Statement”).

Subsequent to the initial public offering of the Bonds, the Underwriter reserves the right to change the public offering prices (or yields) as they deem necessary in connection with the marketing of the Bonds.

The Bonds may be offered and sold to certain dealers at prices lower than such initial public offering prices. “Public Offering” shall include an offering to a number of institutional investors or registered investment companies, regardless of the number of such investors to which the Bonds are sold.

The City and the Authority acknowledge and agree that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the City, the Authority and the Underwriter, and that the Underwriter has financial and other interests that differ from those of the City and the Authority, (ii) in connection with such transaction the Underwriter is not acting as a municipal advisor, financial advisor or fiduciary to the City and the Authority or any other person or entity and have not assumed a fiduciary responsibility in favor of the City or the Authority with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter has advised or is currently advising the City or the Authority on other matters), (iii) the only contractual obligations the Underwriter has to the City and the Authority with respect to the transaction contemplated hereby expressly are set forth in this Bond Purchase Agreement, except as otherwise provided by applicable rules and regulations of the SEC or the rules of the Municipal Securities Rulemaking Board (the “MSRB”) and (iv) the City and the Authority have consulted with their own legal and other professional advisors to the extent they deemed appropriate in connection with the offering of the Bonds. The City and the Authority acknowledge that they have previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the MSRB relating to disclosures concerning the Underwriter’s role in the transaction, disclosures concerning the Underwriter’s compensation, conflict disclosures, if any, and disclosures concerning complex municipal securities financing, if any. 875
3 4. Delivery of Official Statement. If requested by the Underwriter, the Authority shall deliver to the Underwriter two (2) copies of the Official Statement manually executed on behalf of the Authority and the City. The Authority shall also deliver copies of the Official Statement in such quantities as the Underwriter may reasonably request in order to enable the Underwriter to distribute a single copy of each Official Statement to any potential customer of the Underwriter requesting an Official Statement during the time period beginning when the Official Statement becomes available and ending on the End Date (defined below). The Authority shall deliver these copies to the Underwriter within seven (7) business days after the execution of this Bond Purchase Agreement and in sufficient time to accompany or precede any sales confirmation that requests payment from any customer of the Underwriter. The Authority and the Underwriter hereby agree that the end of the underwriting period shall be the date of Closing (as defined below) unless the Underwriter informs the Authority in writing of a different end of the underwriting period. “End Date” as used herein is that date which is the earlier of:
(a) twenty-five (25) days after the end of the underwriting period, as defined in SEC Rule 15c2-12 originally adopted by the Securities and Exchange Commission on June 28, 1989, as amended (“Rule 15c2-12”); or
(b) the time when the Official Statement becomes available from the MSRB, but in no event less than twenty-five (25) days after the underwriting period (as defined in Rule 15c2-12) ends.

The Underwriter acknowledges that the “End Date” will be the date of Closing unless the Underwriter otherwise notifies the Authority and the City in writing that the Underwriter still owns some or all of the Bonds.

The Authority and the City have authorized the use of the Official Statement in connection with the public offering of the Bonds. The Authority and the City also have consented to the use by the Underwriter prior to the date hereof of the Preliminary Official Statement dated [POS Date], relating to the Bonds in connection with the public offering of the Bonds, (which, together with all appendices thereto, is herein called the “Preliminary Official Statement”). Authorized officers of the City and the Authority have certified to the Underwriter that such Preliminary Official Statement was deemed to be final as of its date for purposes of Rule 15c2-12, with the exception of certain final pricing and related information referred to in Rule 15c2-12. The Underwriter has distributed a copy of each Preliminary Official Statement to potential customers on request.

5. The Closing. At 9:00 A.M., California time, on [Closing Date], or at such other time or on such earlier or later business day as shall have been mutually agreed upon by the Authority, the City and the Underwriter, the Authority, upon receipt of the purchase price thereof, will deliver (i) the Bonds in book-entry form through the facilities of The Depository Trust Company (“DTC”), and (ii) the closing documents hereinafter mentioned at the offices of Stradling Yocca Carlson & Rauth LLP, Newport Beach, California (“Bond Counsel”), or another place to be mutually agreed upon by the Authority, the City and the Underwriter. The Underwriter will accept such delivery from the Authority. The Underwriter will pay the purchase price of the Bonds as set forth in Section 1 hereof by wire transfer of immediately available funds. This payment and delivery, together with the delivery of the aforementioned documents, is herein called the “Closing.” 876
4 6. City Representations, Warranties and Covenants. The City represents, warrants and covenants to the Underwriter that:
(a) The City is a general law city organized and operating pursuant to the laws of the State of California (the “State”) with power and authority to enter into and perform its duties under the Lease, the Continuing Disclosure Certificate, dated the date of Closing (the “Continuing Disclosure Certificate”), the Ground Lease, dated as of October 1, 2025 (the “Ground Lease”), between the City and the Authority, the Indenture, the Official Statement, the Escrow Agreement (2014 Bonds) (the “Escrow Agreement”) among the City, the Authority and U.S. Bank Trust Company, National Association, as escrow agent (the “Escrow Agent”) and this Bond Purchase Agreement (collectively, the “City Documents”).
(b) To the best knowledge of the City, neither the approval, execution and delivery of the City Documents, and compliance with the provisions on the City’s part contained therein, nor the consummation of any other of the transactions herein and therein contemplated, nor the fulfillment of the terms hereof and thereof, materially conflicts with or constitutes a material breach of or default under nor materially contravenes any law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject, nor does any such execution, delivery, adoption or compliance result in a security interest or encumbrance of any nature whatsoever upon any of the properties or assets of the City under the terms of any such law, administrative regulation, judgment, decree, loan agreement, indenture, bond, note, resolution, agreement or other instrument, except as provided by the City Documents. (c) The City Documents have been duly authorized, executed and delivered by the City, and, assuming due authorization, execution and delivery by the other parties thereto, constitute legal, valid and binding agreements of the City enforceable in accordance with their respective terms, except as the enforcement thereof may be limited by bankruptcy, insolvency, moratorium, reorganization, fraudulent conveyance or other laws affecting the enforcement of creditors’ rights generally, and by the application of equitable principles if sought, by the exercise of judicial discretion, and by the limitations on legal remedies imposed on actions against cities in the State. (d) Except as may be required under blue sky or other securities laws of any state, there is no material consent, approval, authorization or other order of, or filing with, or certification by, any regulatory agency having jurisdiction over the City required for the execution and delivery of the Bonds or the consummation by the City of the other transactions contemplated by the Official Statement and this Bond Purchase Agreement.
(e) To the best of the knowledge of the City, there is, and on the Closing there will be, no action, suit, proceeding or investigation at law or in equity before or by any court or governmental agency or body pending (notice of which has been received by the City) or threatened against the City to restrain or enjoin the delivery of any of the Bonds, or the payments to be made pursuant to the Lease, or in any way contesting or affecting the validity of the City Documents or the Bonds or the authority of the City to approve this Bond Purchase Agreement, or enter into the City Documents or contesting the powers of the City to enter into or perform its obligations under any of the foregoing or in any way contesting the powers of the City in connection with any action contemplated by this Bond Purchase Agreement or to restrain or enjoin the execution, sale and delivery of the Bonds, contesting the completeness or accuracy of the Preliminary Official Statement as of its date or the Official Statement or any supplement or amendment thereto wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the City 877
5 Documents to be executed by it or asserting that the Preliminary Official Statement as of its date or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of all the circumstances under which they were made, not misleading, or, except as described in the Preliminary Official Statement and the Official Statement, nor is there any basis for any such action, suit, proceeding or investigation.
(f) The Preliminary Official Statement provided to the Underwriter has been deemed final by the City, as required by Rule 15c2-12. As of the date thereof and at all times subsequent thereto up to and including the Closing, the information relating to the City, the Bonds, the Leased Property and the City Documents contained in the Official Statement was and will be materially complete for its intended purposes. The information relating to the City, the Bonds, the Leased Property and the City Documents contained in the Official Statement as of the date hereof is true and correct in all material respects and such information does not contain any untrue or misleading statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in any material respect. (g) The City agrees to cooperate with the Underwriter in endeavoring to qualify the Bonds for offering and sale under the securities or blue sky laws of such jurisdictions of the United States as the Underwriter may request; provided, however, that the City will not be required to execute a special or general consent to service of process in any jurisdiction in which it is not now so subject or to qualify to do business as a foreign corporation in any jurisdiction where it is not so qualified. The Underwriter shall be responsible for all costs relating to such qualification of the Bonds under blue sky or similar laws.
(h) By official action of the City prior to or concurrently with the execution hereof, the City has duly approved the distribution of the Official Statement, and has duly authorized and approved the execution and delivery of, and the performance by the City of the obligations on its part contained in the City Documents and the consummation by it of all other transactions contemplated by the Official Statement and this Bond Purchase Agreement. (i) To the best knowledge of the City, it is not in any material respect in breach of or default under any material applicable law or administrative regulation of the State or the United States or any material applicable judgment or decree or any loan agreement, indenture, bond, note, resolution, agreement or other instrument to which the City is a party or is otherwise subject and in connection with which the City is obligated to make payments from its own funds, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or an event of default under any such instrument the consequence of which could materially and adversely affect the performance of the City under the City Documents. (j) If between the date of this Bond Purchase Agreement and the End Date an event occurs, of which the City has knowledge, which might or would cause the information relating to the City, the City’s finances, the Leased Property, or the City’s functions, duties and responsibilities contained in the Official Statement, as then supplemented or amended, to contain an untrue statement of a material fact or to omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading in any material respect, the City will notify the Underwriter, and if, in the opinion of the Underwriter, the City or their respective legal counsel, such event requires the preparation and publication of a supplement or amendment to the Official Statement, the City will cooperate with the Underwriter in 878
6 the preparation of an amendment or supplement to the Official Statement and all expenses thereof will be paid for by the City.
(k) If the information relating to the Leased Property, the City, its functions, duties and responsibilities contained in the Official Statement is amended or supplemented pursuant to the immediately preceding subparagraph, at the time of each supplement or amendment thereto and (unless subsequently again supplemented or amended pursuant to such subparagraph) at all times subsequent thereto up to and including the date of the Closing, the portions of the Official Statement so supplemented or amended (including any financial and statistical data contained therein) will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make such information therein, in the light of the circumstances under which it was presented, not misleading in any material respect.
(l) Any certificate signed by a duly authorized official of the City and delivered to the Underwriter shall be deemed a representation and warranty by the City to the Underwriter as to the statements made therein.
(m) As of the time of acceptance hereof and as of the Closing, the City does not and will not have outstanding any material indebtedness which is payable from the City’s general fund except as disclosed in the Official Statement.
(n) Between the date of this Bond Purchase Agreement and the date of Closing, the City will not, except as disclosed in the Official Statement, offer or issue any certificates, notes or other obligations for borrowed money in a material amount, or, other than in the normal course of its operations, incur any material liabilities, direct or contingent, secured by or payable from the City’s general fund.
(o) The City will undertake, pursuant to the Continuing Disclosure Certificate, to provide or cause to be provided annual financial reports and notices of certain events; a description of this undertaking is set forth in the Official Statement. Except as disclosed in the Preliminary Official Statement and Official Statement, the City and its related entities have not failed to comply in any material respect with a continuing disclosure undertaking under Rule 15c2-12 during the previous five years.
(p) The City is the owner in fee of title of the Leased Property and no other governmental authority, person, firm or corporation can claim ownership to the Leased Property. (q) As of the time of acceptance hereof and as of the Closing, the fair rental value of the Leased Property is not less than the annual scheduled Base Rental Payments due under the Lease. (r) The financial statements of, and other financial information regarding the City in the Official Statement fairly present the financial position and results of the operations of the City as of the dates and for the periods therein set forth and the audited financial statements have been prepared in accordance with generally accepted accounting principles applicable to cities.

7. Authority Representations, Warranties and Covenants. The Authority represents, warrants and covenants to the City and the Underwriter that:
879
7 (a) The Authority is a joint powers authority, duly organized and existing under the Constitution (the “Constitution”) and laws of the State, including the JPA Act, with full right, power and authority to enter into, execute and deliver the Authority Documents (defined below) and to perform its obligations hereunder.
(b) By all necessary official action, the Authority has duly authorized and approved the execution and delivery of, and the performance by the Authority of the obligations on its part contained in the Bond Purchase Agreement, the Bonds, the Indenture, the Lease, the Ground Lease, the Escrow Agreement and the Assignment Agreement, dated as of October 1, 2025 (the “Assignment Agreement”), between the Authority and the Trustee (collectively, the “Authority Documents”), and has approved the use by the Underwriter of the Preliminary Official Statement, and the Official Statement and, as of the date hereof, such authorizations and approvals are in full force and effect and have not been amended, modified or rescinded. When executed and delivered by the parties hereto, the Authority Documents will constitute the legally valid and binding obligations of the Authority enforceable upon the Authority in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or affecting creditors rights generally, to the exercise of judicial discretion and to the limitations on legal remedies against joint powers authorities in California. The Authority has complied and will at the Closing, be in compliance in all material respects, with the terms of the Authority Documents.
(c) The Bonds, when issued in accordance with the Indenture, will be valid and binding limited obligations of the Authority, entitled to the benefits of the Indenture and enforceable in accordance with their terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable principles relating to or limiting creditors’ rights generally, to the exercise of judicial discretion and to the limitations on legal remedies against joint powers authorities in California.
(d) As of the time of acceptance hereof and as of the time of the Closing, except as otherwise disclosed in the Official Statement, to the best knowledge of the Authority, the Authority is not and will not be in any material respect in breach of or in default under any law or administrative rule or regulation of the State or the United States, or any applicable judgment or decree or any trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is a party or is otherwise subject, and no event has occurred and is continuing which, with the passage of time or the giving of notice, or both, would constitute a default or event of default under any such instrument which breach, default or event could have an adverse effect on the Authority’s ability to perform its obligations under the Authority Documents; and, as of such times, except as disclosed in the Official Statement, the authorization, execution and delivery of the Authority Documents and compliance by the Authority with the provisions thereof do not and will not conflict with or constitute a breach of or default under any applicable constitutional provision, law or administrative rule or regulation of the State or the United States or any applicable judgment, decree, license, permit, trust agreement, loan agreement, bond, note, resolution, ordinance, agreement or other instrument to which the Authority is subject, or by which it or any of its properties is bound, nor will any such authorization, execution, delivery or compliance result in the creation or imposition of any lien, charge or other security interest or encumbrance of any nature whatsoever upon any of its assets or properties under the terms of any such law, regulation or instrument except as provided in the Authority Documents.
880
8 (e) As of the time of acceptance hereof and the Closing, except as disclosed in the Official Statement, there is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, government agency, public board or body, pending (notice of which has been received by the Authority), or to the best knowledge of the Authority threatened against the Authority in any material respect:
(i) affecting the existence of the Authority or the titles of the officers of the Authority to their respective offices;
(ii) affecting, contesting or seeking to prohibit, restrain or enjoin the issuance or delivery of any of the Bonds, or the payment or collection of any amounts pledged or to be pledged to pay the principal of and interest on the Bonds, or in any way contesting or affecting the validity of the Authority Documents or the consummation of the transactions on the part of the Authority contemplated thereby, or contesting the exclusion of the interest on the Bonds from Federal or State taxation, as applicable, or contesting the powers of the Authority or its authority to enter into the Lease and to pledge the Base Rental Payments for repayment of the Bonds; (iii) which may result in any material adverse change relating to the financial condition of the Authority;
(iv) contesting the completeness or accuracy of the Preliminary Official Statement as of its date or the Official Statement or any supplement or amendment thereto or asserting that the Preliminary Official Statement as of its date or the Official Statement contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of all the circumstances under which they were made, not misleading; or
(v) challenging the ability of the Authority to sell the Bonds to the Underwriter.
(f) The Authority will furnish such information, execute such instruments and take such other action in cooperation with the Underwriter as the Underwriter may reasonably request in order to qualify the Bonds for offer and sale under the blue sky laws or other securities laws and regulations of such states and other jurisdictions of the United States as the Underwriter may designate and will use its best efforts to continue such qualification in effect so long as required for distribution of the Bonds; provided however, that in no event shall the Authority be required to take any action which would subject it to general or unlimited service of process in any jurisdiction in which it is not now so subject.
(g) Any certificate signed by a duly authorized officer of the Authority and delivered to the Underwriter shall be deemed to be a representation and warranty by the Authority to the Underwriter as to the statements made therein.
(h) As of the time of acceptance hereof and as of the date of Closing, except as otherwise disclosed in the Official Statement, the Authority has complied with the filing requirements of the JPA Act.
(i) The Authority will advise the Underwriter promptly of any proposal to amend or supplement the Official Statement from the delivery of the Official Statement to the End Date. The 881
9 Authority will advise the Underwriter promptly of the institution of any proceedings known to it by any governmental agency prohibiting or otherwise affecting the use of the Official Statement in connection with the offering, sale or distribution of the Bonds. (j) Substantially all the proceeds from the sale of the Bonds (after deducting the expenses of issuance and sale of the Bonds paid for from such proceeds) will be used as set forth in the Indenture and as described in the Official Statement, and the Authority will not take or omit to take any action which action or omission will in any way cause the proceeds from the sale of the Bonds to be applied in a manner contrary to that provided in the Indenture and the Lease, as amended from time to time.
(k) For a period beginning on the date hereof and continuing until the End Date, (a) the Authority will not adopt any amendment of, or supplement to, the Official Statement without prior consultation with the Underwriter and Kutak Rock LLP, counsel to the Underwriter (“Underwriter’s Counsel”) and (b) if any event relating to or affecting the Authority shall occur as a result of which it is necessary, in the opinion of the Underwriter, the City, or their respective legal counsel, to amend or supplement the Official Statement in order to make the Official Statement not misleading in the light of the circumstances existing at the time it is delivered to a purchaser of the Bonds, the Authority will cooperate with the Underwriter in the preparation of an amendment of, or supplement to, the Official Statement which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser of the Bonds, not misleading.

8. Establishment of Issue Price.
(a) The Underwriter agrees to assist the Authority in establishing the issue price of the Bonds and shall execute and deliver to the Authority at Closing an “issue price” or similar certificate, together with the supporting pricing wires or equivalent communications, substantially in the form attached hereto as Exhibit B, with such modifications as may be appropriate or necessary, in the reasonable judgment of the Underwriter, the Authority and Bond Counsel, to accurately reflect, as applicable, the sales price or prices or the initial offering price or prices to the public of the Bonds. (b) Except as otherwise set forth in Exhibit A attached hereto, the Authority will treat the first price at which 10% of each maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. At or promptly after the execution of this Bond Purchase Agreement, the Underwriter shall report to the Authority the price or prices at which it has sold to the public each maturity of Bonds. If at that time the 10% test has not been satisfied as to any maturity of the Bonds, the Underwriter agrees to promptly report to the Authority the prices at which it sells the unsold Bonds of that maturity to the public. That reporting obligation shall continue, whether or not the Closing Date has occurred, until either (i) the Underwriter has sold all Bonds of that maturity or (ii) the 10% test has been satisfied as to the Bonds of that maturity, provided that, the Underwriter’s reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Authority or Bond Counsel. For purposes of this Section, if Bonds mature on the same date but have different interest rates, each separate CUSIP number within that maturity will be treated as a separate maturity of the Bonds.
(c) The Underwriter confirms that it has offered the Bonds to the public on or before the date of this Bond Purchase Agreement at the offering price or prices (the “initial offering 882
10 price”), or at the corresponding yield or yields, set forth in Exhibit A attached hereto. Exhibit A also sets forth, as of the date of this Bond Purchase Agreement, the maturities, if any, of the Bonds for which the Underwriter represents that (i) the 10% test has been satisfied (assuming orders are confirmed by the close of the business day immediately following the date of this Bond Purchase Agreement) and (ii) the 10% test has not been satisfied and for which the Authority and the Underwriter agree that the restrictions set forth in the next sentence shall apply, which will allow the Authority to treat the initial offering price to the public of each such maturity as of the sale date as the issue price of that maturity (the “hold-the-offering-price rule”). So long as the hold-the-offering-price rule remains applicable to any maturity of the Bonds, the Underwriter will neither offer nor sell unsold Bonds of that maturity to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:
(A) the close of the fifth (5th) business day after the sale date; or (B) the date on which the Underwriter has sold at least 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public.

The Underwriter will advise the Authority promptly after the close of the fifth (5th) business day after the sale date whether it has sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public. (d) The Underwriter confirms that:
(i) any selling group agreement and any third-party distribution agreement relating to the initial sale of the Bondsto the public, together with the related pricing wires, contains or will contain language obligating each dealer who is a member of the selling group and each broker-dealer that is a party to such third-party distribution agreement, as applicable:
(A)(i) to report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have been sold or it is notified by the Underwriter that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be reasonable periodic intervals or otherwise upon request of the Underwriter and (ii) to comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter, (B) to promptly notify the Underwriter of any sales of Bonds that, to its knowledge, are made to a purchaser who is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below), and (C) to acknowledge that, unless otherwise advised by the dealer or broker-dealer, the Underwriter shall assume that each order submitted by the dealer or broker-dealer is a sale to the public. (ii) any selling group agreement relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each dealer that is a party to a third-party distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such third-party distribution agreement to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allocated to it, whether or not the Closing Date has occurred, until either all Bonds of that maturity allocated to it have 883
11 been sold or it is notified by the Underwriter or the dealer that the 10% test has been satisfied as to the Bonds of that maturity, provided that, the reporting obligation after the Closing Date may be at reasonable periodic intervals or otherwise upon request of the Underwriter or the dealer, and (B) comply with the hold-the-offering-price rule, if applicable, if and for so long as directed by the Underwriter or the dealer and as set forth in the related pricing wires. (e) The Authority acknowledges that, in making the representation set forth in this section, the Underwriter will rely on (i) in the event a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in a selling group agreement and the related pricing wires, and (ii) in the event that a thirdparty distribution agreement was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds, as set forth in the third-party distribution agreement and the related pricing wires. The Authority further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
a. “public” means any person other than an underwriter or a related party;
b. “underwriter” means (A) any person that agrees pursuant to a written contract with the Authority (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); c. a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other); and 884
12 d. “sale date” means the date of execution of this Bond Purchase Agreement by all parties.

9. Closing Conditions. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations, warranties and covenants herein and the performance by the Authority and the City of their respective obligations hereunder, both as of the date hereof and as of the date of the Closing. The Underwriter’s obligations hereunder are and shall be subject to the following additional conditions:
(a) Bring-Down Representation. The representations, warranties and covenants of the Authority and the City contained herein shall be true and correct at the date hereof and at the time of the Closing, as if made on the date of the Closing.
(b) Executed Agreements and Performance Thereunder. At the time of the Closing:
(i) the City Documents and the Authority Documents shall be in full force and effect, and shall not have been amended, modified or supplemented except with the prior written consent of the Underwriter;
(ii) there shall be in full force and effect such resolutions (the “Authorizing Resolutions”) as, in the opinion of Bond Counsel, shall be necessary in connection with the transactions on the part of the Authority and the City contemplated by the City Documents and the Authority Documents;
(iii) the Authority shall perform or have performed its obligations required or specified in the Authority Documents to be performed at or prior to Closing; (iv) the City shall perform or have performed its obligations required as specified in the City Documents to be performed at or prior to Closing; and (v) the Official Statement shall not have been supplemented or amended, except pursuant to Paragraph 6(j) or 7(i), or as otherwise may have been agreed to in writing by the Underwriter.
(c) No Default. At the time of the Closing, no default shall have occurred or be existing under the Authority Documents or the City Documents and neither the Authority nor the City shall be in default in the payment of principal or interest on any of its bonded indebtedness or other obligations payable from the City’s general fund which default shall adversely impact the ability of the Authority to make payments on the Bonds or the City to make payments pursuant to the Lease. (d) Termination Events. The Underwriter shall have the right to terminate this Bond Purchase Agreement, without liability therefor, by written notification to the Authority and the City if at any time at or prior to the Closing the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall have been materially adversely affected in the reasonable judgment of the Underwriter (evidenced by a written notice to the City and the Authority terminating the obligation of the Underwriter to accept delivery of and pay for the Bonds) by reason of any of the following:
885
13 (i) an amendment to the Constitution of the United States or by any legislation in or by the Congress of the United States or by the State, or the amendment of legislation pending as of the date of the Authority Documents or the City Documents in the Congress of the United States, or the recommendation to Congress or endorsement for passage (by press release, other form of notice or otherwise) of legislation by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or the proposal for consideration of legislation by either such Committee, or the presentment of legislation for consideration as an option by either such Committee, or by the staff of the Joint Committee on Taxation of the Congress of the United States, or the favorable reporting for passage of legislation to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or any decision of any Federal or State court or any ruling or regulation (final, temporary or proposed) or official statement on behalf of the United States Treasury Department, the Internal Revenue Service or other Federal or State authority materially adversely affecting the Federal or State tax status of the Authority or the City, or the interest on bonds or notes or obligations of the general character of the Bonds; or (ii) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the States or a decision by any court of competent jurisdiction within the State or any court of the United States shall be rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds; or
(iii) legislation shall be enacted by the Congress of the United States, or a decision by a court of the United States shall be rendered, or a stop order, ruling, regulation or official statement by, or on behalf of, the Securities and Exchange Commission or any other governmental agency having jurisdiction of the subject matter shall be issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including all underlying obligations, as contemplated hereby or by the Official Statement, is in violation or would be in violation of, or that obligations of the general character of the Bonds, or the Bonds, are not exempt from registration under, any provision of the federal securities laws, including the Securities Act of 1933, as amended and as then in effect, or that the Indenture needs to be qualified under the Trust Indenture Act of 1939, as amended and as then in effect; or (iv) the New York Stock Exchange or other national securities exchange, or any governmental or regulatory authority, shall impose, as to the Bonds or obligations of the general character of the Bonds, any material restrictions not now in force, or increase materially those now in force, with respect to the extension of credit by, or the charge to the net capital requirements of the Underwriter; or
(v) a general banking moratorium shall have been established by federal or State authorities; or
(vi) there shall have occurred (i) an outbreak or escalation of hostilities or the declaration by the United States of a national emergency or war or (ii) any other calamity or crisis in the financial markets of the United States or elsewhere or the escalation of such calamity or crisis; or
886
14 (vii) the commencement of any action, suit or proceeding described in Paragraphs 6(e) or 7(e) hereof; or
(viii) 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 Securities and Exchange Commission or any other governmental authority having jurisdiction; or (ix) any event occurring or information becoming known which, in the reasonable judgment of the Underwriter, makes untrue or incorrect in any material respect any statement or information contained in the Preliminary Official Statement or in the Official Statement or has the effect that the Preliminary Official Statement or the Official Statement contains any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; or
(x) any rating of the Bonds or other obligations of the City shall have been downgraded, suspended or withdrawn or placed on negative outlook or negative watch by a national rating service, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or
(xi) any rating of the Insurer shall have been downgraded, suspended or withdrawn or placed on negative outlook or negative watch by a national rating service, which, in the Underwriter’s reasonable opinion, materially adversely affects the marketability or market price of the Bonds or the ability of the Underwriter to enforce contracts for the sale of the Bonds; or (xii) any proceeding shall be pending or threatened by the Securities and Exchange Commission against the Authority or the City; or (xiii) any fact or event shall exist or have existed that requires or has required an amendment of or supplement to the Official Statement in which the market price or marketability of the Bonds, or the ability of the Underwriter to enforce contracts for the sale of the Bonds, shall have been materially adversely affected in the reasonable judgment of the Underwriter; or (xiv) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred; or
(xv) 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; 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 Bonds, including the underlying obligations as contemplated by this Bond Purchase Agreement or by the Official Statement, or any document relating to the issuance, 887
15 offering or sale of the Bonds, 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. (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 Closing and substantially in the form included as APPENDIX D to the Official Statement and a reliance letter(s) thereon dated the date of Closing addressed to the Underwriter and the Trustee. (2) Supplemental Opinion. A supplemental opinion of Bond Counsel dated the date of Closing, addressed to the Underwriter, in substantially the form attached hereto as Exhibit C.
(3) Negative Assurance Letter of Disclosure Counsel. A letter of Jones Hall LLP, Disclosure Counsel to the Authority and the City, dated the date of Closing and addressed to the Authority, the City, and the Underwriter to the effect that based upon their participation in the preparation of the Official Statement as Disclosure Counsel to the Authority and without having undertaken to determine independently the accuracy or completeness of the contents 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 Agreement or the Official Statement as of its date or as of the date of the Closing (except that no opinion need be expressed as to any financial, statistical, economic, engineering or demographic data or forecasts, numbers, charts, tables, graphs, maps, estimates, projections, assumptions or expressions of opinion, any information about feasibility, valuation, appraisals, assessed values, market absorption, real estate, ownership, environmental or archaeological matters, the appendices thereto, or any information about the Insurer, the Policy, bookentry, The Depository Trust Company, debt service requirements or tax exemption included or referred to therein, which may be expressly excluded from the scope of the opinions), contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. (4) Municipal Advisor Certificate. A certificate of CSG Advisors Incorporated (“CSG Advisors”), dated the Closing Date and addressed to the Authority, the City and the Underwriter, to the effect that (i) CSG Advisors has reviewed the Preliminary Official Statement and the Official Statement and (ii) no information has come to its attention which would lead it to believe that the information contained in the Preliminary Official Statement, as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date and the Closing Date, is not true or correct in all material respects, or that the Preliminary Official Statement, as of its date and as of the date of this Purchase Agreement and the Official Statement, as of its date and the Closing Date contains any untrue statement of a material fact or omits to state a material fact where necessary to make a statement not misleading.
(5) Opinion of City Attorney. An opinion of the City Attorney, dated the date of the Closing and addressed to the City, the Trustee and the Underwriter, to the effect that:
(A) the City is a general law city duly organized and validly existing under the Constitution and laws of the State of California; 888
16 (B) the resolution of the City approving and authorizing the execution and delivery of the City Documents and approving and authorizing the issuance of the Bonds and the delivery of the Official Statement and other actions of the City was duly adopted at a meeting of the governing body of the City 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, and the resolution is now in full force and effect and has not been amended or superseded in any way; (C) the City Documents have been duly authorized, executed and delivered by the City, and (assuming due execution and delivery by parties other than the City) are valid, legal and binding agreements of the City enforceable in accordance with their terms, except that the rights and obligations under the City Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State; (D) the authorization, execution and delivery of the Bonds, the Official Statement, and the City Documents by the City and compliance with the provisions thereof by the City of its obligations thereunder, will not conflict with, or constitute a breach or default under, in any material respect, any law, administrative regulation, court decree, resolution, ordinance or other agreement to which the City is subject or by which it is bound; and (E) to such counsel’s knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the City has been served or, to such counsel’s knowledge, threatened against or affecting the City, except as may be disclosed in the Official Statement, which would materially adversely impact the City’s ability to complete the transactions contemplated by the City Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease, or in any way contesting or affecting the validity of the Bonds, the Official Statement or the City Documents. (6) Authority Counsel Opinion. An opinion of counsel to the Authority, dated the date of the Closing and addressed to the Authority, the Trustee and the Underwriter, to the effect that:
(A) the Authority is a joint exercise of powers authority organized and existing under the laws of the State of California; (B) the resolution of the Authority approving and authorizing the execution and delivery of the Authority Documents, the Bonds and the Official Statement and other actions of the Authority was duly adopted at a meeting of the governing body of the 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, and the resolution is now in full force and effect and has not been amended or superseded in any way;
(C) the Authority Documents have been duly authorized, executed and delivered by the Authority, and (assuming due execution and delivery by parties other than the Authority) are valid, legal and binding agreements of the Authority enforceable in accordance with their terms, except that the rights and obligations under the Authority Documents are subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar laws 889
17 affecting creditors’ rights, to the application of equitable principles if equitable remedies are sought, to the exercise of judicial discretion in appropriate cases and to limitations on legal remedies against public agencies in the State;
(D) to such counsel’s knowledge, there is no action, suit, proceeding, inquiry or investigation at law or in equity before or by any court or public body pending with respect to which the Authority has been served or, to the such counsel’s knowledge, threatened against or affecting the Authority, except as may be disclosed in the Official Statement, which would materially adversely impact the Authority’s ability to complete the transactions contemplated by the Authority Documents, the Official Statement or any other document or certificate related to such transactions, restrain or enjoin the collection of Base Rental Payments with respect to the Lease, or in any way contesting or affecting the validity of the Bonds, the Official Statement, the Authority Documents or the transactions described in and contemplated thereby wherein an unfavorable decision, ruling or finding would materially adversely affect the validity and enforceability of the Bonds or the Authority Documents or in which a final adverse decision could materially adversely affect the operations of the Authority; and
(E) the execution and delivery of the Authority Documents and the issuance of the Bonds and compliance with the provisions thereof, 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, which breach or default has or may have a material adverse effect on the ability of the Authority to perform its obligations under the Authority Documents.
(7) Underwriter’s Counsel Opinion. An opinion of Underwriter’s Counsel, dated the date of the Closing addressed to the Underwriter, in such form as may be acceptable to the Underwriter.
(8) City Certificate. A certificate, dated the date of Closing, signed by a duly authorized official of the City satisfactory in form and substance to the Underwriter to the effect that: (a) the representations, warranties and covenants of the City contained in this Bond Purchase Agreement are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (b) the City has complied with all agreements, covenants and conditions to be complied with by the City at or prior to the Closing under the City Documents; (c) to the best of such official’s knowledge, no event affecting the City 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, in the light of the circumstances under which they were made, not misleading in any material respect. (9) Authority Certificate. A certificate of the Authority, dated the date of the Closing, signed on behalf of the Authority by the Chair or other duly authorized officer of the Authority to the effect that (a) the representations, warranties and covenants of the Authority contained herein and in the Authority Documents are true and correct in all material respects on and as of the date of the Closing as if made on the date of the Closing; (b) 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 and (c) to the best of such official’s knowledge, no event affecting the Authority has occurred since the date of the Official Statement which has not been disclosed therein 890
18 or in any supplement or amendment thereto which event should be disclosed in the Official Statement in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.
(10) Trustee and Escrow Agent’s Certificate. A certificate of U.S. Bank Trust Company, National Association (the “Bank”), dated the Closing Date, in form and substance acceptable to the Authority, Bond Counsel, the Underwriter and Underwriter’s Counsel. (11) Bank Incumbency Certificate. A certified copy of a certificate of an officer of the Bank certifying as to the incumbency, signature and signing authority of the officers who have executed and delivered the Indenture and Escrow Agreement and agreed to accept the duties of Trustee under the Indenture and Escrow Agent under the Escrow Agreement. (12) Bank Counsel’s Opinion. An opinion, dated the date of the Closing addressed to the Authority, the City and the Underwriter, of the Bank’s Counsel, in form and content satisfactory to the Authority, Bond Counsel, the Underwriter and Underwriter’s Counsel. (13) Title Policy. A copy of a CLTA or ALTA title insurance policy in an amount equal to the principal amount of the Bonds, insuring the City’s leasehold interest in the Leased Property, subject only to Permitted Encumbrances (as defined in the Lease) or such other acceptable encumbrances.
(14) Transcripts. An electronic transcript of the proceedings prepared by Bond Counsel relating to the authorization and issuance of the Bonds will be made available for download by the Underwriter in due course following the Closing. (15) 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 each. (16) Documents. An original executed or certified copy of each of the Authority Documents, the City Documents and the Joint Exercise of Powers Agreement (the “JPA Agreement”), dated as of September 1, 2014, between the City and the Fontana Fire Protection District and any amendments thereto.
(17) City Resolution. Certified copy by the City Clerk, of each resolution of the City relating to the City Documents, the actions contemplated thereby, provided that such resolutions may be contained in the transcripts.
(18) Authority Resolution. Certified copy by the Secretary or Assistant Secretary of the Authority, of each resolution of the Authority relating to the Authority Documents, the Bonds and the transactions contemplated thereby, provided that such resolutions may be contained in the transcripts.
(19) IRS Form 8038-G. Evidence that the federal tax information form 8038 G has been prepared for filing.
(20) Tax Certificate. A Tax Certificate in a form satisfactory to Bond Counsel.
891
19 (21) Rating. Evidence as of the Closing satisfactory to the Underwriter that the Bonds have received the rating set forth in the Official Statement and that such rating has not been reduced or withdrawn.
(22) Policy. The Policy, duly executed by the Insurer.
(23) Insurer Counsel Opinion. An opinion of counsel to the Insurer, dated the Closing Date, addressed to the Authority, the City and the Underwriter, in form and substance satisfactory to the Underwriter and Bond Counsel.
(24) Insurer Certificate. A certificate or certificates of the Insurer, dated the Closing Date, as to the accuracy of the information relating to the Insurer and the Policy included in the Official Statement and such other matters reasonably requested by the Underwriter and Bond Counsel.
(25) CDIAC Statement. A copy of the Notice of Final 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. (26) Additional Documents. Such additional certificates, instruments and other documents as the Underwriter and Bond Counsel may reasonably deem necessary.

If the Authority or the City shall be unable to satisfy the conditions contained in this Bond Purchase Agreement, or if the obligations of the Underwriter shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement may be terminated by the Underwriter, and none of the Underwriter, the Authority or the City shall be under further obligation hereunder.

10. Expenses. Except as otherwise provided in this Section, the Underwritershall be under no obligation to pay, and the Authority or the City shall pay or cause to be paid, the expenses incident to the performance of the obligations of the Authority and the City 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 City Documents and the Authority Documents and the cost of preparing, printing, issuing and delivering the Bonds;
(b) the fees and disbursements of any counsel, municipal advisors, accountants, or other experts or consultants retained by the Authority or the City; (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; and (e) charges of rating agencies for the rating of the Bonds.

The Underwriter shall pay all expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds including, but not limited to: (i) the fees and 892
20 disbursements of Underwriter’s Counsel; and (ii) all out-of-pocket disbursements and expenses incurred by the Underwriter in connection with the offering and distribution of the Bonds (including other expenses, fees of the California Debt and Investment Advisory Commission, CUSIP Service Bureau fees, and any other fees and expenses), except as otherwise provided in the preceding paragraph or otherwise agreed to by the Underwriter, the Authority and the City in writing. 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.

11. Notice. Any notice or other communication to be given to the Underwriter may be given by delivering the same to Samuel A. Ramirez & Co., Inc., 12130 Millennium Drive, Suite 300, Los Angeles, California 90094; Attention: Public Finance. Any notice or other communication to be given to the Authority or the City pursuant to this Bond Purchase Agreement may be given by delivering the same in writing to such entity, at the addresses set forth on the cover page hereof.

12. Entire Agreement. This Bond Purchase Agreement, when accepted by the Authority and the City, shall constitute the entire agreement among the Authority, the City and the Underwriter and is made solely for the benefit of the Authority, the City and the Underwriter (including the successors or assigns of any Underwriter). Except as provided in Section 16 below, no other person shall acquire or have any right hereunder by virtue hereof, except as provided herein. All the Authority’s and the City’s representations, warranties and agreements in this Bond Purchase Agreement 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 Bond Purchase Agreement.

13. Definitions. Terms not otherwise defined herein shall have the same meaning as when used in the Indenture or the Lease.

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 City Documents and the Authority Documents shall be governed by the laws of the State.

16. No Assignment. The rights and obligations created by this Bond Purchase Agreement shall not be subject to assignment by the Underwriter, the Authority or the City without the prior written consent of the other parties hereto.
893
S-1

17. Counterparts. This Bond Purchase Agreement 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.

SAMUEL A. RAMIREZ & CO., INC.

By:

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

FONTANA PUBLIC FACILITIES FINANCING

AUTHORITY
By:

Title:

Time of Execution: _____________ p.m. California time

CITY OF FONTANA
By:

Title:

Time of Execution: _____________ p.m. California time
[EXECUTION PAGE OF BOND PURCHASE AGREEMENT]
894
A-1

EXHIBIT A

MATURITY SCHEDULE
$____________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

MATURITY SCHEDULE
Maturity
(November 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Satisfied*
10% Test
Not
Satisfied
Subject to
Hold-TheOfferingPrice Rule
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
20__
(T)
20__
(T)
20__
(T)
(I) Insured Bond.
(T) Term Bond.
(C) Priced to optional call at [par] on November 1, 20__. * At the time of execution of this Purchase Agreement and assuming orders are confirmed by the close of the business day immediately following the date of this Purchase Agreement. 895
B-1

EXHIBIT B
$____________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

FORM OF ISSUE PRICE CERTIFICATE
The undersigned, on behalf of Samuel A. Ramirez & Co., Inc. (“Ramirez”) hereby certify as set forth below with respect to the sale and issuance of the above-captioned bonds (the “Bonds”).

1. Sale of the General Rule Maturities. As of the date of this certificate, for each Maturity of the General Rule Maturities, the first price at which at least 10% of such Maturity was sold to the Public is the respective price listed in Schedule A.

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) Ramirez offered the Hold-the-Offering-Price Maturities 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.
(b) As set forth in the Bond Purchase Agreement, dated [BPA Date], by and among Ramirez, the Issuer and the City of Fontana, Ramirez has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, it would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold-the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker-dealer who is a party to the retail distribution agreement, to comply with the hold-the-offering-price rule. Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Hold-theOffering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3. Defined Terms.
(a) Issuer means the Fontana Public Facilities Financing Authority. (b) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(c) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (d) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which Ramirez has sold at least 10% of such Hold-the-Offering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-theOffering-Price Maturity. 896
B-2
(e) 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.
(f) 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. (g) 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 [BPA Date]. (h) 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).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents the interpretation by Ramirez 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 attached Tax Certificate and with respect to compliance with the federal income tax rules affecting the Bonds, and by Bond Counsel, 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. Except as expressly set forth above, the certifications set forth herein may not be relied upon or used by any third party or for any other purpose.

Dated: [Closing Date] SAMUEL A. RAMIREZ & CO., INC., as underwriter By:

Authorized Signatory
897
B-3

SCHEDULE A

SALE PRICES OF THE GENERAL RULE MATURITIES AND INITIAL OFFERING

PRICES OF THE HOLD-THE-OFFERING-PRICE MATURITIES
[TO BE ATTACHED]
898
B-4

SCHEDULE B

PRICING WIRE OR EQUIVALENT COMMUNICATION
[TO BE ATTACHED]
899
C-1

EXHIBIT C

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A

FORM OF SUPPLEMENTAL OPINION OF BOND COUNSEL
Upon the initial issuance of the Bonds, Stradling Yocca Carlson & Rauth LLP, Bond Counsel, proposes to deliver a supplemental opinion to the Underwriter in substantially the form set forth below:
[Closing Date]
Samuel A. Ramirez & Co., Inc.

Los Angeles, California
Re: $____________ Fontana Public Facilities Financing Authority Lease Revenue Bonds Series 2025A
Ladies and Gentlemen:

On the date hereof, as Bond Counsel to the City of Fontana (the “City”) and the Fontana Public Facilities Financing Authority (the “Authority”), we have rendered to the City and the Authority our final legal opinion (the “Approving Opinion”) concerning the validity of $____________ aggregate principal amount of Fontana Public Facilities Financing Authority Lease Revenue Bonds Series 2025A (the “Bonds”). You may rely upon our Approving Opinion as if it were addressed to you. Capitalized terms used herein and not otherwise defined shall have the meaning given to such terms in the Bond Purchase Agreement dated [BPA Date] (the “Purchase Agreement”), among the Authority, the City and Samuel A. Ramirez & Co., Inc. (the “Underwriter”).

We have assumed, but not independently verified, that the signatures on all documents, letters, certificates and instructions which we have examined are genuine, that all documents submitted to us are authentic and were duly and properly executed by the parties thereto and that all representations made in the documents that we have reviewed are true and accurate.

We express no opinion herein with respect to any indemnification, contribution, choice of law, choice of forum, penalty or waiver provisions contained in the Bonds, the Indenture, the Ground Lease, the Lease Agreement or the Purchase Agreement, nor do we express any opinion with respect to the state or quality of title to any of the real or personal property described in the Ground Lease, the Lease Agreement or the Indenture, or the accuracy or sufficiency of the description of any such property contained therein.

Based upon the foregoing and such other information and documents as we consider necessary to render this opinion, we are of the opinion that:
(1) The Purchase Agreement has been duly authorized, executed and delivered by the Authority and the City and is a valid and binding agreement of the Authority and the City. (2) The statements on the cover of the Official Statement and in the Official Statement under the captions “INTRODUCTION,” “THE SERIES 2025A BONDS,” “THE PROPERTY,” 900
C-2
“SECURITY FOR THE SERIES 2025A BONDS,” and “TAX MATTERS,” and in “APPENDIX B – SUMMARY OF CERTAIN PROVISIONS OF THE PRINCIPAL LEGAL DOCUMENTS” and “APPENDIX D – PROPOSED FORM OF OPINION OF BOND COUNSEL,” insofar as such statements expressly summarize certain provisions of the Indenture, the Lease Agreement, the Ground Lease and the final opinion of Bond Counsel concerning certain tax matters relating to the Bonds, are accurate in all material respects.
(3) The Bonds are exempt from registration pursuant to 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.

The opinions expressed herein are based upon our analysis and interpretation of existing laws, regulations, rulings and judicial decisions and cover certain matters not directly addressed by such authorities. This opinion is limited to matters governed by the laws of the State of California and federal securities laws, and we assume no responsibility with respect to the applicability or the effect of the laws of any other jurisdiction.

We express no opinion herein regarding any tax consequences with respect to the Bonds. No opinion is expressed herein with respect to the compliance with, or applicability of, any “blue sky” laws of any state as they relate to the offer or sale of the Bonds.

We call attention to the fact that the foregoing opinions may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether such actions or events are taken (or not taken) or occur (or do not occur).

This opinion is furnished by us to you and is solely for your benefit, and may not be used, circulated, quoted or otherwise referred to or relied upon by others without our prior written consent.

This letter is not intended to be, and may not be, relied upon by the owners of the Bonds or any beneficial ownership interest therein. You have acknowledged that no attorney-client relationship exists between us and you with respect to any matters related to the Bonds.

Our engagement with respect to the Bonds has concluded with their delivery, and we disclaim any obligation to update this opinion or other matters discussed in the Official Statement.

Respectfully submitted,
901
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ESCROW AGREEMENT (2014 BONDS)
THIS ESCROW AGREEMENT, dated as of October 1, 2025, by and among the City of Fontana (the “City”), the Fontana Public Facilities Financing Authority (the “Authority”) and U.S. Bank Trust Company, National Association, acting in its capacity as escrow bank (the “Escrow Bank”) pursuant to this Escrow Agreement (2014 Bonds) (the “Agreement”) and as 2014 Trustee (as defined below);
WITNESSETH:

WHEREAS, the Authority has previously caused to be issued its Lease Revenue Refunding Bonds, Series 2014A (the “2014 Bonds”), in the original aggregate principal amount of $37,675,000, pursuant to an Indenture, dated as of October 1, 2014 (the “2014 Indenture”), by and between the Authority and U.S. Bank Trust Company, National Association, as successor trustee (the “2014 Trustee”), of which $24,375,000 aggregate principal amount is currently outstanding; and WHEREAS, the City and has determined that it is in its best interests and desirable that the 2014 Bonds be redeemed and defeased; and
WHEREAS, in order to accomplish such redemption it is necessary and desirable for the City to prepay a portion of its Base Rental Payment obligation under that certain Lease Agreement, dated as of October 1, 2014 (the “2014 Lease Agreement”), by and between the City and the Authority, and to thereby defease the 2014 Bonds in accordance with the terms of Section 10.02 of the 2014 Indenture and Section 7.02 of the 2014 Lease Agreement; and WHEREAS, the City and the Authority have agreed to provide funds necessary to secure redemption and defeasance of the 2014 Bonds through the issuance by the Authority of its $__________ aggregate principal amount Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A (the “Series 2025A Bonds”), secured in part by lease payments to be made by the City to the Facilities Authority pursuant to the Lease Agreement, dated as of October 1, 2025, by and between the City and the Authority; and
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained, the City, the Authority and the Escrow Bank agree as follows:

SECTION 1. Deposit of Moneys.
(a) The City and the Authority hereby deposit with the Escrow Bank $__________ from the net proceeds of the Series 2025A Bonds and direct the 2014 Trustee to transfer $__________ to the Escrow Bank from certain funds and accounts established in connection with the 2014 Bonds. Such moneys shall be held uninvested in irrevocable escrow by the Escrow Bank separate and apart from other funds of the City, the Authority, the Escrow Bank and the 2014 Trustee in a fund hereby created and established and to be known as the “Escrow Fund,” and shall be applied solely as provided in this Agreement. Such moneys are at least equal to an amount sufficient to redeem on ________ __, 2025 (the “Redemption Date”) the 2014 Bonds maturing on and after September 1, 2026.
902
2 4914-5241-6080v7/022777-0046
(b) The City and the Authority hereby direct the Escrow Bank to immediately apply $___________ to acquire, on the Closing Date, the Federal Securities set forth in Schedule B and to hold $__________ uninvested as cash.

SECTION 2. Use of Moneys. The Escrow Bank acknowledges receipt of the moneys described in Section 1 and agrees:
(a) to deposit such moneys in the Escrow Fund; and
(b) to make the payments required under Section 3(a) hereof at the times set forth in Section 3(a) hereof.

SECTION 3. Investment of Moneys.

The Escrow Bank acknowledges receipt of the moneys described in Section 2 and agrees immediately to invest such moneys in the Federal Securities listed on Schedule B hereto and to deposit such Federal Securities in the Escrow Fund. The Escrow Bank shall be entitled to rely upon the conclusion of __________ (the “Verification Agent”), that the Federal Securities listed on Schedule B hereto mature and bear interest payable in such amounts and at such times as, together with cash on deposit in the Escrow Fund, will be sufficient to pay on the Redemption Date, the Redemption Price of the 2014 Bonds.

SECTION 4. Investment of Any Remaining Moneys.

At the written direction of the City, the Escrow Bank shall reinvest any other amount of principal and interest, or any portion thereof, received from the Federal Securities prior to the date on which such payment is required for the purposes set forth herein, in noncallable Federal Securities maturing not later than the date on which such payment or portion thereof is required for the purposes set forth in Section 6, at the written direction of the City, as verified in a report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of obligations of political subdivisions to the effect that the reinvestment described in said report will not adversely effect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay on the Redemption Date, the Redemption Price of the 2014 Bonds, as set forth in Schedule C hereto, and provided that the City has obtained and delivered to the Escrow Bank an unqualified opinion of Stradling Yocca Carlson & Rauth LLP that such reinvestment will not adversely effect the exclusion from gross income for federal income tax purposes or of the interest with respect to the Series 2025A Bonds. Any interest income resulting from investment or reinvestment of moneys pursuant to this Section 4 which is not required for the purposes set forth in Section 6, as verified in the letter of the Verification Agent originally obtained by the City with respect to the refunding of the 2014 Bonds or in any other report prepared by an independent certified public accountant or firm of certified public accountants of favorable national reputation experienced in the refunding of tax-exempt obligations of political subdivisions, shall be paid to the City promptly upon the receipt of such interest income by the Escrow Bank. The determination of the City as to whether an accountant qualifies under this Agreement shall be conclusive.

SECTION 5. Substitution of Securities.
903
3 4914-5241-6080v7/022777-0046
Upon the written request of the City, and subject to the conditions and limitations herein set forth and applicable governmental rules and regulations, the Escrow Bank shall sell, redeem or otherwise dispose of the Federal Securities, provided that there are substituted therefor from the proceeds of the Federal Securities other Federal Securities, but only after the City has obtained and delivered to the Escrow Bank: (i) an unqualified opinion of Stradling Yocca Carlson & Rauth LLP to the effect that the substitution of securities is permitted under the legal documents in effect with respect to the 2014 Bonds and that such reinvestment will not adversely effect the exclusion from gross income for federal income tax purposes of the interest with respect to the Series 2025A Bonds; and (ii) a report by a firm of independent certified public accountants to the effect that the reinvestment described in said report will not adversely effect the sufficiency of the amounts of securities, investments and money in the Escrow Fund to pay on the Redemption Date, the Redemption Price of the 2014 Bonds, as set forth in Schedule C hereto. The Escrow Bank shall not be liable or responsible for any loss resulting from any reinvestment made pursuant to this Agreement and in full compliance with the provisions hereof.

SECTION 6. Payment and Redemption of the 2014 Bonds.

The City hereby requests and irrevocably instructs the Escrow Agent to pay on the Redemption Date, from the amounts on deposit in the Escrow Fund, the Redemption Price of the 2014 Bonds, as set forth in Schedule C hereto. Upon payment in full of the 2014 Bonds, the Escrow Agent shall transfer any moneys remaining in the Escrow Fund to the City and, after provision for payment of amounts due to the 2014 Trustee and the Escrow Agent pursuant to Section 6 and 13 hereof, this Agreement shall terminate. The Escrow Fund cash flow for the Escrow Fund is set forth in Schedule C attached hereto. Pursuant to the 2014 Indenture, as a result of the irrevocable deposit in the Escrow Fund pursuant to Section 2 of this Escrow Agreement to pay and redeem all of the 2014 Bonds, the entire indebtedness of the outstanding 2014 Bonds has been discharged within the meaning of the 2014 Indenture.

The holders of the 2014 Bonds shall have a first lien on the moneys and Federal Securities in the Escrow Fund which are allowable and sufficient to pay the 2014 Bonds until such moneys and Federal Securities are used and applied as provided in this Agreement. Cash and investments held in the Escrow Fund are irrevocably pledged only to the 2014 Bond holders.

SECTION 7. Performance of Duties. The Escrow Bank agrees to perform the duties set forth herein.

SECTION 8. Indemnity. The City and the Authority hereby assume liability for, and hereby agree (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and keep harmless the Escrow Bank and its respective successors, assigns, agents, employees and servants, from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including reasonable legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, the Escrow Bank at any time (whether or not also indemnified against the same by the City or the Authority or any other person under any other agreement or instrument, but without double indemnity) in any way relating to or arising out of the execution, delivery and performance of this Agreement, the establishment hereunder of the Escrow Fund, the acceptance of the funds and securities deposited therein and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Agreement; provided, however, that the City and the Authority shall not be required to indemnify the Escrow Bank against the Escrow 904
4 4914-5241-6080v7/022777-0046
Bank’s own negligence or willful misconduct or the negligent or willful misconduct of the Escrow Bank’s respective successors, assigns, agents and employees or the breach by the Escrow Bank of the terms of this Agreement. In no event shall the City, the Authority or the Escrow Bank be liable to any person by reason of the transactions contemplated hereby other than to each other as set forth in this section. The indemnities contained in this section shall survive the termination of this Agreement and the resignation or removal of the Escrow Bank.

SECTION 9. Responsibilities of the Escrow Bank. The Escrow Bank and its respective successors, assigns, agents and servants shall not be held to any personal liability whatsoever, in tort, contract or otherwise, in connection with the execution and delivery of this Agreement, the establishment of the Escrow Fund, the acceptance of the moneys deposited therein, the sufficiency of such moneys to accomplish the defeasance of the 2014 Bonds or any payment, transfer or other application of moneys or obligations by the Escrow Bank in accordance with the provisions of this Agreement or by reason of any non negligent act, non negligent omission or non negligent error of the Escrow Bank made in good faith in the conduct of its duties. The recitals of fact contained in the “Whereas” clauses herein shall be taken as the statements of the City and the Authority and the Escrow Bank assumes no responsibility for the correctness thereof. The Escrow Bank makes no representation as to the sufficiency of the moneys deposited in the Escrow Fund to accomplish the defeasance of the 2014 Bonds or to the validity of this Agreement as to the City and, except as otherwise provided herein, the Escrow Bank shall incur no liability with respect thereto. The Escrow Bank shall not be liable in connection with the performance of its duties under this Agreement except for its own negligence, willful misconduct or default, and the duties and obligations of the Escrow Bank shall be determined by the express provisions of this Agreement. In no event shall the Escrow Bank be liable for any special indirect or consequential damages. The Escrow Bank may consult with counsel, who may or may not be counsel to the City, and in reliance upon the written opinion of such counsel shall have full and complete authorization and protection with respect to any action taken, suffered or omitted by it in good faith in accordance therewith. Whenever the Escrow Bank shall deem it necessary or desirable that a matter be proved or established prior to taking, suffering, or omitting any action under this Agreement, such matter may be deemed to be conclusively established by a certificate signed by an authorized officer of the City or the Authority. The Escrow Bank shall incur no liability for losses arising from any investment made pursuant to this Agreement.

No provision of this Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. Any company into which the Escrow Bank may be merged or converted or with which it may be consolidated, or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business shall be the successor to the Escrow Bank without the execution or filing of any paper or further act, anything herein to the contrary notwithstanding.

SECTION 10. Irrevocable Instructions to Provide Notice. The forms of the notices required to be mailed pursuant to Sections 4.02 and 10.02 of the Indenture and the Continuing Disclosure Agreement, dated as of October 1, 2014, between the City and the 2014 Trustee (the “Continuing Disclosure Agreement”), are substantially in the forms attached hereto as Exhibits A and B. The City and the Authority hereby irrevocably instruct the Escrow Bank (a) to mail a notice of defeasance of the 2014 Bonds in the form attached hereto as Exhibit A, in accordance with Section 10.02 of the 2014 Indenture and the Continuing Disclosure Agreement, and (b) to mail a notice of redemption of 905
5 4914-5241-6080v7/022777-0046
the 2014 Bonds in the form attached as Exhibit B, in accordance with Section 4.02 of the 2014 Indenture.

SECTION 11. Amendments. This Agreement is made for the benefit of the City, the Authority and the holders from time to time of the 2014 Bonds and it shall not be repealed, revoked, altered or amended without the written consent of all such holders, the Escrow Bank and the City; provided, however, but only after the receipt by the Escrow Bank of an opinion of nationally recognized bond counsel that the exclusion from gross income of interest with respect to the Series 2025A Bonds and the 2014 Bonds will not be adversely affected for federal income tax purposes, that the City, the Authority and the Escrow Bank may, without the consent of, or notice to, such holders, amend this Agreement or enter into such agreements supplemental to this Agreement as shall not adversely affect the rights of such holders and as shall not be inconsistent with the terms and provisions of this Agreement for any one or more of the following purposes: (i) to cure any ambiguity or formal defect or omission in this Agreement; (ii) to grant to, or confer upon, the Escrow Bank for the benefit of the holders of the 2014 Bonds any additional rights, remedies, powers or authority that may lawfully be granted to, or conferred upon, such holders or the Escrow Bank; and (iii) to include under this Agreement additional funds, securities or properties. The Escrow Bank shall be entitled to rely conclusively upon an unqualified opinion of nationally recognized municipal bond attorneys with respect to compliance with this section, including the extent, if any, to which any change, modification, addition or elimination affects the rights of the holders of the 2014 Bonds or that any instrument executed hereunder complies with the conditions and provisions of this section.

SECTION 12. Term. This Agreement shall commence upon its execution and delivery and shall terminate on the later to occur of either: (i) the date upon which the 2014 Bonds have been paid in accordance with this Agreement; or (ii) the date upon which no unclaimed moneys remain on deposit with the Escrow Bank pursuant to Section 6 of this Agreement.

SECTION 13. Compensation. The Escrow Bank shall receive its reasonable fees and expenses as previously agreed to; provided, however, that under no circumstances shall the Escrow Bank be entitled to any lien nor will it assert a lien whatsoever on any moneys in the Escrow Fund for the payment of fees and expenses for services rendered by the Escrow Bank under this Agreement.

SECTION 14. Resignation or Removal of Trustee as Escrow Bank. (a) The Escrow Bank may resign by giving notice in writing to the City and the Authority. The Escrow Bank may be removed: (1) by: (i) filing with the City and the Authority an instrument or instruments executed by the holders of at least 51% in aggregate principal amount of the 2014 Bonds then remaining unpaid; and (ii) the delivery of a copy of the instruments filed with the City and the Authority to the Escrow Bank; or (2) by a court of competent jurisdiction for failure to act in accordance with the provisions of this Agreement upon application by the City or the Authority or the holders of 5% in aggregate principal amount of the 2014 Bonds then remaining unpaid.
(b) If the position of Escrow Bank becomes vacant due to resignation or removal of the Escrow Bank or any other reason, a successor Escrow Bank may be appointed by the City and the Authority. Within one year after a vacancy, the holders of a majority in principal amount of the 2014 Bonds then remaining unpaid may, by an instrument or instruments filed with the City and the Authority, appoint a successor Escrow Bank who shall supersede any Escrow Bank theretofore 906
6 4914-5241-6080v7/022777-0046
appointed by the City and the Authority. If no successor Escrow Bank is appointed by the City and the Authority or the holders of such 2014 Bonds then remaining unpaid, within 45 days after any such resignation or removal, the holder of any such 2014 Bonds or any retiring Escrow Bank may apply to a court of competent jurisdiction for the appointment of a successor Escrow Bank. The responsibilities of the Escrow Bank under this Escrow Agreement will not be discharged until a new Escrow Bank is appointed and until the cash held under this Escrow Agreement is transferred to the new Escrow Bank.

SECTION 15. Severability. If any one or more of the covenants or agreements provided in this Agreement on the part of the City, the Authority or the Escrow Bank to be performed should be determined by a court of competent jurisdiction to be contrary to law, such covenants or agreements shall be null and void and shall be deemed separate from the remaining covenants and agreements herein contained and shall in no way affect the validity of the remaining provisions of this Agreement.

SECTION 16. Counterparts. This Agreement may be executed in several counterparts, all or any of which shall be regarded for all purposes as one original and shall constitute and be but one and the same instrument.

SECTION 17. Governing Law. This Agreement shall be construed under the laws of the State of California.

SECTION 18. Holidays. If the date for making any payment or the last date for performance of any act or the exercising of any right, as provided in this Agreement, shall be a legal holiday or a day on which banking institutions in the city in which is located the principal office of the Escrow Bank are authorized by law to remain closed, such payment may be made or act performed or right exercised on the next succeeding day not a legal holiday or a day on which such banking institutions are authorized by law to remain closed, with the same force and effect as if done on the nominal date provided in this Agreement, and no interest shall accrue for the period from and after such nominal date.

SECTION 19. Assignment. This Agreement shall not be assigned by the Escrow Bank or any successor thereto without the prior written consent of the City.

SECTION 20. Standard and Poor’s. The City agrees to provide to S&P Global Ratings, prior notice of each amendment entered into pursuant to Section 11 hereof and a copy of such proposed amendment, and to forward a copy (as soon as possible) of: (i) each amendment hereto entered into pursuant to Section 11 hereof; and (ii) any action relating to severability or contemplated by Section 15 hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized officers.

CITY OF FONTANA
By:

City Manager
ATTEST:

By:

City Clerk

FONTANA PUBLIC FACILITIES FINANCING

AUTHORITY
By:

Executive Director
ATTEST:

By:

Secretary
[SIGNATURES CONTINUED ON NEXT PAGE.]
908
S-2
4914-5241-6080v7/022777-0046
[SIGNATURE PAGE CONTINUED.]
U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as Escrow Bank and 2014 Trustee
By:

Authorized Officer
909
Schedule A-1
4914-5241-6080v7/022777-0046

SCHEDULE A
2014 Bonds
Maturity Date
(September 1)
Interest
Rate Par Amount Redemption Date Call Price
2026 5.000% $ 1,555,000 December __, 2025 100%
2027 5.000 1,630,000 December __, 2025 100
2028 3.875 1,000,000 December __, 2025 100
2028 5.000 715,000 December __, 2025 100
2029 5.000 1,790,000 December __, 2025 100
2032 5.000 5,915,000 December __, 2025 100
2037 4.000 11,770,000 December __, 2025 100
910
Schedule B-1
4914-5241-6080v7/022777-0046

SCHEDULE B

FEDERAL SECURITIES
Security Type of SLGS Maturity
Principal
Amount Interest Rate
911
Schedule C-1
4914-5241-6080v7/022777-0046

SCHEDULE C

REDEMPTION PRICE OF PRIOR BONDS
Payment Date
Principal
Redeemed Interest Debt Payment
912
A-1
4914-5241-6080v7/022777-0046

EXHIBIT A

NOTICE OF DEFEASANCE OF

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2014A
Notice is hereby given to the owners of the outstanding bonds (the “2014 Bonds”) captioned above: (i) that there has been deposited with U.S. Bank Trust Company, National Association, as Escrow Bank, moneys as permitted by the Indenture of Trust, dated as of October 1, 2014 (the “2014 Indenture”), by and between the Fontana Public Facilities Financing Authority (the “Authority”) and U.S. Bank Trust Company, National Association, as 2014 Trustee, which, together with such other moneys deposited with the Escrow Bank, shall be sufficient and available to pay on __________, 2025 the redemption price equal to 100% aggregate principal amount of the 2014 Bonds maturing on and after September 1, 2026; and (ii) that the 2014 Bonds are deemed to be paid and that the 2014 Indenture and the pledge of Base Rental Payments (as such term is defined in the 2014 Indenture) and other assets made under the 2014 Indenture and all covenants, agreements and other obligations of the Authority under the 2014 Indenture have ceased, terminated, become void and been completely discharged and satisfied in accordance with Section 10.01 of the 2014 Indenture.

The obligations of the City of Fontana under the Continuing Disclosure Agreement dated October 1, 2014, by and between the City of Fontana and the 2014 Trustee have terminated as of the date hereof.

No representation is made as to the correctness of the CUSIP number either as printed on any of the 2014 Bonds or as contained herein and any error in the CUSIP number shall not affect the validity of the proceedings for redemption of the 2014 Bonds.

Dated this ___ day of __________, 2025.

FONTANA PUBLIC FACILITIES FINANCING

AUTHORITY
U.S. BANK TRUST COMPANY, NATIONAL

ASSOCIATION
as 2014 Trustee
913
B-1
4914-5241-6080v7/022777-0046

EXHIBIT B
[CONDITIONAL] NOTICE OF FULL OPTIONAL REDEMPTION

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2014A
BASE CUSIP: 34461B
NOTICE IS HEREBY GIVEN to the owners of the above-captioned bonds (the “2014 Bonds”) pursuant to the Indenture of Trust, dated as of October 1, 2014, by and between the Fontana Public Facilities Financing Authority (the “Authority”) and U.S. Bank Trust Company, National Association, as trustee (the “2014 Trustee”), that all of the outstanding 2014 Bonds in the aggregate principal amount of $24,375,000 have been called for redemption on __________ __, 2025 (the “Redemption Date”). The 2014 Bonds were originally issued on November 13, 2014 and are described in the following table:

CUSIP
Maturity
(September 1) Rate
Principal
Amount Redemption Price
AM8 2026 5.000% $ 1,555,000 100%
AN6 2027 5.000 1,630,000 100
AP1 2028 3.875 1,000,000 100
AU0 2028 5.000 715,000 100
AQ9 2029 5.000 1,790,000 100
AT3 2032 5.000 5,915,000 100
AV8 2037 4.000 11,770,000 100
On the Redemption Date, the principal amount of the 2014 Bonds at a redemption price of 100% of the principal amount plus accrued interest thereon to such date (the “Redemption Price”) will become due and payable at the principal office of the 2014 Trustee. Interest on the 2014 Bonds will cease to accrue and be payable from and after the Redemption Date, and such 2014 Bonds will be surrendered to the 2014 Trustee.
[Redemption of the Bonds is conditioned upon the receipt by the Trustee of sufficient funds on or before the Redemption Date to pay the Redemption Price. In the event that such funds are not received, the redemption of the 2014 Bonds will be cancelled and the Trustee will give written notice of such cancelation to the owners of the Bonds and this notice will be deemed to be canceled and rescinded.]
To receive payment on the Redemption Date, owners of the 2014 Bonds should present and to surrender said 2014 Bonds on the Redemption Date at the address of the 2014 Trustee set forth below:

Delivery Instructions
U.S. Bank Trust Company, National Association
Global Corporate Trust
111 Fillmore Avenue E
St. Paul, Minnesota 55107
914
B-2
4914-5241-6080v7/022777-0046

REQUIREMENT INFORMATION
For a list of redemption requirements please visit our website at www.usbank.com/corporatetrust and click on the “Bondholder Information” link for Redemption instructions. You may also contact our Bondholder Communications team at 1-800-934-6802 Monday through Friday from 8 AM to 6 PM CST.

IMPORTANT NOTICE
Federal law requires the 2014 Trustee to withhold taxes at the applicable rate from the payment if an IRS Form W-9 or applicable IRS Form W-8 is not provided. Please visit www.irs.gov for additional information on the tax forms and instructions.

If the owner of any 2014 Bond fails to deliver such 2014 Bond to the 2014 Trustee on the Redemption Date, such 2014 Bond shall nevertheless be deemed redeemed on the Redemption Date and the owner of such 2014 Bond shall have no rights in respect thereof except to receive payment of the Redemption Price from funds held by the 2014 Trustee for such payment.

Note: The Authority and the 2014 Trustee shall not be responsible for the selection or use of the CUSIP numbers selected, nor is any representation made as to their correctness in the notice or as printed on any 2014 Bond. They are included solely for the convenience of the holders.

U.S. BANK TRUST COMPANY, NATIONAL
ASSOCIATION, as 2014 Trustee
Dated this __________ __, 2025.
915
4935-1928-4304v9/022777-0046

INDENTURE
by and among

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
and

CITY OF FONTANA
and
U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION,
as Trustee
Dated as of October 1, 2025
Relating to
$_________

FONTANA PUBLIC FACILITIES FINANCING AUTHORITY
LEASE REVENUE BONDS, SERIES 2025A
916

TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS; EQUAL SECURITY
Section 1.01 Definitions.....................................................................................................................2 Section 1.02 Equal Security.............................................................................................................12

ARTICLE II

THE BONDS
Section 2.01 Authorization of Bonds............................................................................................... 12 Section 2.02 Terms of Series 2025A Bonds....................................................................................12 Section 2.03 Form of Series 2025A Bonds...................................................................................... 14 Section 2.04 Transfer and Exchange of Bonds................................................................................ 14 Section 2.05 Registration Books...................................................................................................... 14 Section 2.06 Execution of Bonds..................................................................................................... 14 Section 2.07 Authentication of Bonds............................................................................................. 15 Section 2.08 Temporary Bonds........................................................................................................ 15 Section 2.09 Bonds Mutilated, Lost, Destroyed or Stolen............................................................... 15 Section 2.10 Book-Entry Bonds ...................................................................................................... 15

ARTICLE III
ISSUANCE OF BONDS; APPLICATION OF PROCEEDS
Section 3.01 Issuance of Series 2025A Bonds................................................................................. 17 Section 3.02 Application of Proceeds of the Series 2025A Bonds.................................................. 17 Section 3.03 [Reserved]...................................................................................................................17 Section 3.04 Costs of Issuance Fund ............................................................................................... 17 Section 3.05 Project Fund ................................................................................................................ 18 Section 3.06 Conditions for the Issuance of Additional Bonds....................................................... 18 Section 3.07 Procedure for the Issuance of Additional Bonds ........................................................ 20 Section 3.08 Additional Bonds........................................................................................................ 21

ARTICLE IV

REDEMPTION OF BONDS
Section 4.01 Redemption of Series 2025A Bonds........................................................................... 21 Section 4.02 Notice of Redemption................................................................................................. 22 Section 4.03 Selection of Bonds for Redemption............................................................................ 22 Section 4.04 Partial Redemption of Bonds...................................................................................... 23 Section 4.05 Effect of Notice of Redemption.................................................................................. 23

ARTICLE V
SECURITY FOR BONDS; FLOW OF FUNDS; INVESTMENTS
Section 5.01 Pledge; Special Obligations........................................................................................ 23 Section 5.02 Flow of Funds.............................................................................................................23 Section 5.03 Application of Net Insurance Proceeds....................................................................... 24 Section 5.04 Title Insurance ............................................................................................................ 25 Section 5.05 Rebate Fund ................................................................................................................ 26 Section 5.06 Investment of Moneys................................................................................................. 27 917

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(continued)
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ARTICLE VI

COVENANTS
Section 6.01 Compliance with Agreements.....................................................................................28 Section 6.02 Compliance with Ground Lease and Lease Agreement.............................................. 28 Section 6.03 Observance of Laws and Regulations......................................................................... 29 Section 6.04 Other Liens.................................................................................................................. 29 Section 6.05 Prosecution and Defense of Suits ............................................................................... 29 Section 6.06 Accounting Records and Statements........................................................................... 29 Section 6.07 Recordation and Filing................................................................................................ 29 Section 6.08 Tax Covenants ............................................................................................................ 30 Section 6.09 Continuing Disclosure ................................................................................................ 30 Section 6.10 Further Assurances...................................................................................................... 31

ARTICLE VII

DEFAULT AND LIMITATIONS OF LIABILITY
Section 7.01 Action on Default........................................................................................................ 31 Section 7.02 Other Remedies of the Trustee....................................................................................31 Section 7.03 Non-Waiver................................................................................................................. 32 Section 7.04 Remedies Not Exclusive ............................................................................................. 32 Section 7.05 No Liability by the Authority to the Owners.............................................................. 32 Section 7.06 No Liability by the City to the Owners....................................................................... 32 Section 7.07 No Liability of the Trustee to the Owners .................................................................. 32 Section 7.08 Application of Amounts After Default ....................................................................... 32 Section 7.09 Trustee May Enforce Claims Without Possession of Bonds ...................................... 33 Section 7.10 Limitation on Suits...................................................................................................... 33 Section 7.11 [Consent of 2025 Insurer ............................................................................................ 34 Section 7.12 [2025 Insurer as Owner............................................................................................... 34 Section 7.13 [Special Provision for Insurer Default ........................................................................ 34

ARTICLE VIII

THE TRUSTEE
Section 8.01 Employment of the Trustee.........................................................................................34 Section 8.02 Duties, Removal and Resignation of the Trustee........................................................ 35 Section 8.03 Compensation of the Trustee ...................................................................................... 36 Section 8.04 Protection of the Trustee............................................................................................. 36

ARTICLE IX

MODIFICATION OR AMENDMENTS
Section 9.01 Modifications and Amendments Permitted................................................................. 38 Section 9.02 Effect of Supplemental Indenture ............................................................................... 40 Section 9.03 Endorsement of Bonds; Preparation of New Bonds ...................................................40 Section 9.04 Amendment of Particular Bonds................................................................................. 40 918

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(continued)
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ARTICLE X

DEFEASANCE
Section 10.01 Discharge of Indenture................................................................................................ 40 Section 10.02 Bonds Deemed To Have Been Paid............................................................................ 41 Section 10.03 Payment of Bonds After Discharge of Indenture........................................................ 42

ARTICLE XI

MISCELLANEOUS
Section 11.01 Benefits of Indenture Limited to Parties..................................................................... 42 Section 11.02 Successor Deemed Included in all References to Predecessor ................................... 42 Section 11.03 Execution of Documents by Owners .......................................................................... 43 Section 11.04 Waiver of Personal Liability....................................................................................... 43 Section 11.05 Destruction of Bonds .................................................................................................. 43 Section 11.06 Funds and Accounts.................................................................................................... 43 Section 11.07 Article and Section Headings Gender and References ............................................... 43 Section 11.08 Partial Invalidity.......................................................................................................... 44 Section 11.09 Disqualified Bonds...................................................................................................... 44 Section 11.10 Money Held for Particular Bonds............................................................................... 44 Section 11.11 Payment on Non-Business Days................................................................................. 45 Section 11.12 California Law ............................................................................................................ 45 Section 11.13 Notices ........................................................................................................................ 45 Section 11.14 Notice to Rating Agencies..........................................................................................46 Section 11.15 Execution in Counterparts........................................................................................... 46 Section 11.16 Payment Procedure Under the Policy ......................................................................... 46 Section 11.17 [2025 Insurer as Third Party Beneficiary.................................................................... 46 Section 11.18 [Additional Payments.................................................................................................. 46 Section 11.19 [Exercise of Rights by 2025 Insurer ........................................................................... 46 Signatures ................................................................................................................................... S-1 EXHIBIT A FORM OF SERIES 2025A BOND...........................................................................A-1 EXHIBIT B FORM OF PROJECT FUND REQUISITION .........................................................B-1 919
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INDENTURE
THIS INDENTURE (this “Indenture”), executed and entered into as of October 1, 2025, is by and among the FONTANA PUBLIC FACILITIES FINANCING AUTHORITY, a joint exercise of powers entity duly organized and existing under the laws of the State of California (the “Authority”), the CITY OF FONTANA, a municipal corporation and general law city duly organized and existing under and by virtue of the Constitution and laws of the State of California (the “City”) and U.S. BANK TRUST COMPANY, NATIONAL ASSOCIATION, a national banking association duly organized and existing under and by virtue of the laws of the United States, as Trustee (the “Trustee”);
WITNESSETH:

WHEREAS, the City previously financed a portion of the costs of the acquisition, construction and installation of certain public capital improvements in the City, as more fully described in the proceedings for the issuance of the 2007 Bonds (defined below) (the “2007 Project”);
WHEREAS, the City determined to provide the funds necessary to finance the 2007 Project through issuance by the Fontana Public Financing Authority of its Fontana Public Financing Authority 2007 Lease Revenue Bonds (the “2007 Bonds”), payable from certain lease payments to be made by the City under a lease agreement;
WHEREAS, the City and the Authority refinanced the 2007 Bonds and the City’s lease obligations in connection therewith, through the issuance by the Authority of its Lease Revenue Refunding Bonds, Series 2014A (the “Series 2014A Bonds”); WHEREAS, the City and the Authority now desire to finance the acquisition, construction, and installation of certain public capital improvements in the City, including capital improvements located in the City including demolition and reconstruction of the City Hall building, construction of a new parking garage, and other capital improvements including pavement rehabilitation, underground utility infrastructure, and park improvements (collectively, the “2025 Project”; and, together with the 2007 Project, the “Project”);
WHEREAS, the City and Authority desire to refinance all or a portion of the Series 2014A Bonds and finance all or a portion of the 2025 Project; WHEREAS, the City and the Authority have determined that it would be in the best interests of the City and residents of the City to authorize the preparation, sale and delivery of the “Fontana Public Facilities Financing Authority Lease Revenue Bonds, Series 2025A” (the “Series 2025A Bonds”) for the purpose of refinancing the Series 2014A Bonds and the City’s related lease payments and financing the 2025 Project;
WHEREAS, in order to facilitate the issuance of the Series 2025A Bonds, the City will lease certain real property and the improvements located thereon (the “Property”) to the Authority pursuant to a Ground Lease, dated as of the date hereof, and the City will sublease the Property back from the Authority pursuant to a Lease Agreement, dated as of the date hereof (the “Lease Agreement”); 920
2 4935-1928-4304v9/022777-0046
WHEREAS, the Series 2025A Bonds will be payable from the base rental payments (the “Base Rental Payments”) to be made by the City under the Lease Agreement; WHEREAS, all rights to receive the Base Rental Payments have been assigned without recourse by the Authority to the Trustee pursuant to an Assignment Agreement, dated as of the date hereof;
WHEREAS, the Series 2025A Bonds will be payable equally and ratably from the Base Rental Payments;
WHEREAS, the Authority and the City desire to provide for the issuance of additional bonds (the “Additional Bonds”) payable from the Base Rental Payments on a parity with the Series 2025A Bonds (the Series 2025A Bonds and any such Additional Bonds being collectively referred to as the “Bonds”);
WHEREAS, in order to provide for the authentication and delivery of the Bonds, to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof, premium, if any, and interest thereon, the Authority and the City have authorized the execution and delivery of this Indenture; and WHEREAS, the Authority and the City have determined that all acts and proceedings required by law necessary to make the Bonds, when executed by the Authority, authenticated and delivered by the Trustee and duly issued, the valid, binding and legal special obligations of the Authority, and to constitute this Indenture a valid and binding agreement for the uses and purposes herein set forth in accordance with its terms, have been done and taken, and the execution and delivery of the Indenture has been in all respects duly authorized; NOW THEREFORE, in consideration of the premises and of the mutual agreements and covenants contained herein and for other valuable consideration, the parties do hereby agree as follows:

Fontana City CouncilSeptember 9, 2025

Fontana City Council
September 9, 2025