buyers from purchasing the land, it did have discouraging effects. Interested parties indicated a desire to continue negotiations once all legal matters were resolved. Since the settlement of the lawsuit, the City has been looking to sell this last remaining parcel.
Staff is requesting the (City Council serving as) RDA Successor Agency Board approve the ROPS 26-27 for the period July 1, 2026 - June 30, 2027.
Fiscal Impact:
This report is for informational purposes only to the State. There is no fiscal impact until the sale of the final parcel of land occurs.
ATTACHMENTS:
1. ROPS 26-27 Summary
Recognized Obligation Payment Schedule (ROPS 26-27) - Summary Filed for the July 1, 2026 through June 30, 2027 Period Successor Agency: Hanford
County: Kings
Current Period Requested Funding for Enforceable
Obligations (ROPS Detail)
26-27A Total
(July -
December)
26-27B Total
(January -
June)
ROPS 26-27
Total
A Enforceable Obligations Funded as Follows (B+C+D) $ - $ - $ - B Bond Proceeds - - -
C Reserve Balance - - -
D Other Funds - - -
E Redevelopment Property Tax Trust Fund (RPTTF) (F+G) $ - $ - $ -
F RPTTF - - -
G Administrative RPTTF - - -
H Current Period Enforceable Obligations (A+E) $ - $ - $ - Certification of Oversight Board Chairman:
Name Title
Pursuant to Section 34177 (o) of the Health and Safety
code, I hereby certify that the above is a true and
accurate Recognized Obligation Payment Schedule for
the above named successor agency. /s/
Signature Date
Hanford
Recognized Obligation Payment Schedule (ROPS 26-27) - ROPS Detail July 1, 2026 through June 30, 2027
A B C D E F G H I J K L M N O P Q R S T U V W
Item
# Project Name Obligation Type
Agreement
Execution
Date
Agreement
Termination
Date
Payee Description Project Area
Total
Outstanding
Obligation
Retired
ROPS
26-27
Total
ROPS 26-27A (Jul - Dec)
26-27A
Total
ROPS 26-27B (Jan - Jun)
26-27B
Total
Fund Sources Fund Sources
Bond
Proceeds
Reserve
Balance
Other
Funds RPTTF Admin RPTTF
Bond
Proceeds
Reserve
Balance
Other
Funds
RPTTF
Admin
RPTTF
$- $- $- $- $- $- $- $- $- $- $- $- $- $-
1 KINGS EDC
LOAN
ThirdParty
Loans
05/04/
2000
06/30/2043 KINGS
EDC
LOAN FOR LAND
PURCHASE
INDUSTRIAL
PARK
- N $- - - - - - $- - - - - - $-
3 SUCCESSOR
AGENCY
ADM
Admin
Costs -
Litigation
07/01/
2019
06/30/2043 CITY OF
HANFORD
ADMINISTRATIVE
COSTS
ALL AREAS - N $- - - - - - $- - - - - - $-
Hanford
Recognized Obligation Payment Schedule (ROPS 26-27) - Report of Cash Balances July 1, 2023 through June 30, 2024
(Report Amounts in Whole Dollars)
Pursuant to Health and Safety Code section 34177 (l), Redevelopment Property Tax Trust Fund (RPTTF) may be listed as a source of payment on the ROPS, but only to the extent no other funding source is available or when payment from property tax revenues is required by an enforceable obligation.
A B C D E F G H
ROPS 23-24 Cash Balances
(07/01/23 - 06/30/24)
Fund Sources
Comments
Bond Proceeds Reserve Balance Other Funds RPTTF
Bonds issued
on or before
12/31/10
Bonds issued
on or after
01/01/11
Prior ROPS
RPTTF and
Reserve
Balances retained
for future
period(s)
Rent, grants,
interest, etc.
Non-Admin
and Admin
1 Beginning Available Cash Balance (Actual 07/01/23)
RPTTF amount should exclude "A" period distribution
amount.
250,074
2 Revenue/Income (Actual 06/30/24)
RPTTF amount should tie to the ROPS 23-24 total
distribution from the County Auditor-Controller
3 Expenditures for ROPS 23-24 Enforceable Obligations
(Actual 06/30/24)
8,952
4 Retention of Available Cash Balance (Actual 06/30/24) RPTTF amount retained should only include the amounts
distributed as reserve for future period(s)
5 ROPS 23-24 RPTTF Prior Period Adjustment
RPTTF amount should tie to the Agency's ROPS 23-24 PPA
form submitted to the CAC
No entry required
6 Ending Actual Available Cash Balance (06/30/24)
C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5)
$- $- $250,074 $- $(8,952)
Hanford
Recognized Obligation Payment Schedule (ROPS 26-27) - Notes July 1, 2026 through June 30, 2027
Item # Notes/Comments
1 3
17.A.
AGENDA
STAFF REPORT
MEETING DATE: 1/20/2026 AGENDA SECTION:
GENERAL BUSINESS
SUBJECT:
Designation of a Public Hearing date for the City of Hanford Solid Waste rate study.
RECOMMENDATION:
Recommendation:
That the City Council establishes March 17, 2026 as the Public Hearing date for the City of Hanford Solid Waste rate study and re-affirm the Councils desire to proceed with scenario 2 of the current rate study.
Recommended Motion:
That by motion, the City Council establishes March 17, 2026 as the Public Hearing date for the City of Hanford Solid Waste rate study and re-affirm the Councils desire to proceed with scenario 2 of the current rate study.
BACKGROUND:
April 1, 2025 Staff gave a presentation to Council of the struggles with unfunded mandates and unforeseen costs associated with solid waste.
July 1, 2025 Staff sought and received appropriations to conduct a Solid Waste rate study with R3 Consultants.
December 2, 2025 Staff presented the preliminary findings from R3 Consultants. At this meeting, Council provided direction as to which scenario to move forward with drafting a final rate study and public notice. Council selected scenario 2, including the potential option of KWRA increasing fees to $90 a ton, but a Public Hearing date was not set at that time.
FISCAL IMPACT:
No fiscal impact at this time.
ATTACHMENTS:
1. Rate Study
Refuse Rate Study and Public Hearing
Determination
Historical Background
• April 1, 2025, Staff presented a presentation on the struggles and short comings within the Solid Waste Division.
• July 1, 2025, Staff asked and received appropriations to conduct a prop 218 rate study.
• December 2, 2025, Staff presented Council the preliminary findings from R3 Consultants
At that meeting, Council provided direction as to which scenario to move forward with in drafting a final rate study but a hearing date was not set at that time.
Council selected to move forward with scenery 2 and to include the projected $90 tipping fee at KWRA.
Council additionally stated that they would ike to review annual rates before additional increase went into effect. Page 1104 of 1226 Proposed Prop 218 Rate Increase
Ø Scenario 1 – 15% + 5% each of the following 4 years
Ø Scenario 2 – 10% + 10% + 5% each of the following 3 year KWRA Tip Fee – Assumes 3.35% annual increase in
KRWA Fees over the 5-year planning period = $91.40
Solid Waste Tip Fee by FY 30/31 (currently $75.00).
Proposed Rate Comparison
Visalia
Sanger
Bakersfield
Avenal
Tulare
Hanford (Current)
Farmersville
Exeter
Selma
Porterville
Dinuba
Hanford Proposed (12%)
Reedley
Hanford Proposed (15%)
Fresno
Chowchilla
Lemoore
Kingsburg
Coalinga
Corcoran
Madera
$ -
$ 5.00
$ 10.00
$ 15.00
$ 20.00
$ 25.00
$ 30.00
$ 35.00
$ 40.00
$ 45.00
$ 50.00
90-96 Gallon Residential Solid Waste (without Street Sweeping)
Recommended Action
Recommended Action
• Affirm the desired rate structure of scenario 2 and set a date for a Public Hearing Next Steps
• Advise City Staff to issue Prop 218 notices to the public and begin the 45 dayreview period • At a March Council Meeting, following the 45 day-review period, adopt a resolution accepting/decling the new Solid Waste rates, effective April 1, 2026
17.B.
AGENDA
STAFF REPORT
MEETING DATE: 1/20/2026 AGENDA SECTION:
GENERAL BUSINESS
SUBJECT:
Approval of the 2026 Solar Equipment Lease/Purchase Agreement and an Escrow and Account Control Agreement and the City Manager to execute such actions.
RECOMMENDATION: Adopt Resolution No. 26-04-R approving an Equipment Lease/Purchase Agreement and an Escrow and Account Control Agreement and authorizing certain actions in connection therewith relating to the financing of certain equipment for the City, and the City Manager to execute such actions.
RECOMMENDED MOTION: I move to adopt Resolution No. 26-04-R approving an Equipment Lease/Purchase Agreement and an Escrow and Account Control Agreement and authorizing certain actions in connection therewith relating to the financing of certain equipment for the City and the City Manager to execute such actions.
BACKGROUND:
The City has been in ongoing discussions with OPTERRA Energy Services (“Opterra”) related to an large-scale Energy Savings Project (the “Project”) at the City of Hanford’s Wastewater Treatment Facility (“WWTF”). At the December 16, 2025, meeting, the City Council authorized a “Solar Only” contract with Opterra for design and construction of the solar portion of the Project. The Solar Only component of the larger Project has a cost of $3,680,000, which is unchanged from the Solar Only cost presented to City Council at the September 16, 2025, meeting.
In addition to the approval at the December 16, 2025, meeting, the City Council authorized several prior actions related to this Solar Only project. First, at the June 3, 2025, meeting City Council authorized procurement of an electrical switchgear cabinet at a cost of $133,368. That switchgear was procured in advance due to the long lead time associated with manufacturing and delivery.
Estimated delivery date for that switchgear is late January 2026.
The second previous item is Resolution 25-54-R (September 16, 2025), which made a finding that the project is compliant with the requirements of California Government Code sections 4217.10 through 4217.18 and also authorized the City Manager to negotiate the contract with Opterra and issue a Limited Notice to Proceed with a not-to-exceed amount of $200,000. The third previous council action on this Project is Resolution 25-65-R (November 18, 2025), which authorized a second Limited Notice to Proceed and authorized Opterra to continue performing a limited scope of work and expenses not to exceed $390,000.
This agenda item is related to a separate financing agreement with Banc of America Public Capital
Corp, which will provide the funding for the $3,680,000 Solar Only Project.
Structure of the 2026 Equipment Lease:
City staff are requesting authorization to enter into a 2026 Solar Equipment Lease/Purchase Agreement (“2026 Equipment Lease”) in an amount of $3,740,000, which will provide funding for the $3,680,000 cost of the Solar Only Project as well as an estimated $60,000 total costs of issuing the debt. This financing will not reimburse the City for costs previously authorized and incurred related to prior City Council actions.
City staff worked with its municipal advisor NHA Advisors LLC (“NHA”) and placement agent Oppenheimer and Company (“Oppenheimer”) to solicit bids from a variety of local, regional, and national banks for the 2026 Equipment Lease. The City received six bids from banks and Banc of America Public Capital Corp (“BAPCC”) was determined to be the optimal bid – both in terms of the lowest issuance costs and the lowest interest rate. A copy of BAPCC’s bid is attached hereto (Attachment E).
The 2026 Equipment Lease will be structured as an appropriations lease, meaning that the City will covenant to appropriate amounts in each year’s budget sufficient to pay the lease payments due in that fiscal year. Security for the 2026 Equipment Lease will be the solar panels themselves, as evidenced by a UCC-1 filing with the California Secretary of State. Lease payments will be structured to escalate at 5.5% annually for the 20-year term. Lease payments will Commence October 1, 2026 and will be due each October 1 and April 1 until final maturity on October 1, 2045. BAPCC has provided a locked and fixed interest rate of 4.489% for the 2026 Equipment Lease. This rate is locked through closing of the 2026 Equipment Lease, which protects the City from the risk of an increase in market interest rates. The interest rate is also a fixed rate, which means it will not change during the 20-year term of the financing.
The 2026 Equipment Lease has some prepayment terms that provide additional flexibility to the City.
Since the Solar Only Project is currently eligible for a federal investment tax credit under the Inflation Reduction Act, BAPCC has offered the City a one-time extraordinary prepayment option where the City can use money received from the federal government related to those Inflation Reduction Act tax credits and apply them to prepay a portion of the 2026 Equipment Lease. This would decrease future 2026 Equipment Lease payments, saving the City interest over the long-term. Additionally, after a 3- year period where prepayment is not allowed, the City would be able to prepay a portion or all of the 2026 Equipment Lease from years 4-10 at 102% of par and from year 11 onward at 101% of par.
The 2026 Equipment Lease is intentionally structured such that each year’s payment is equal to or less than the estimated net energy savings guaranteed by Opterra under its “Guaranteed Savings” feature in the contract for the Solar Only project. The graph below illustrates the projected savings and debt service payments for two potential scenarios. Grey bars in the graph represent the estimated net energy savings (net of annual operating and maintenance costs paid to Opterra). The orange line shows the anticipated debt service on the 2026 Equipment Lease without any prepayment from federal tax credits (i.e. “No IRA Prepayment”) while the green line shows that same anticipated debt service without after applying an estimated $936,000 in federal tax credits to a pro rata reduction of outstanding 2026 Equipment Lease payments. The amount by which the orange or green lines are lower than the grey bar represents net energy savings from the Solar Only Project.
In order for the City to enter into the 2026 Equipment Lease, City Council will need to adopt a resolution approving the lease documents and authorizing City staff to execute those lease documents and take other necessary actions.
Discussion of Lease Documents:
Equipment Lease/Purchase Agreement: The Equipment Lease/Purchase Agreement (“ELPA”) is included as Attachment B to this staff report and outlines the terms governing the 2026 Equipment Lease. The ELPA will identify the location and type of energy improvements (solar panels) and that the security for the 2026 Lease is a lien on the equipment. This lien will be in place until the 2026 Lease matures in October 2045, or is otherwise prepaid in accordance with the lease terms. The ELPA also contains the payment details, prepayment provisions, and other covenants of the City. A detailed payment schedule for the 2024 Lease can be found in Exhibit B of the ELPA.
Escrow and Account Control Agreement: The Escrow and Account Control Agreement (“Escrow Agreement”) included as Attachment C to this staff report. This Escrow Agreement is among BAPCC, the City of Hanford, and UMB Financial Corporation (“UMB”). The Escrow Agreement identifies the various covenants between the City and UMB as the Escrow Agent. UMB will hold the proceeds of the 2026 Lease starting on the closing/funding day and will distribute them to pay for Opterra project costs as requested from time to time by the City. Given the timing of the Solar Only Project, the escrow is likely fully drawn down within 12 months of closing the financing.
Placement Agent Agreement: This agreement is between the City of Hanford and its placement agent (Oppenheimer and Company). In its role as placement agent, Oppenheimer solicited local,
regional, and national banks and secured six viable bids for the lease. Interest rates on those bids ranged from 4.489% up to 5.41%. The Placement Agent Agreement outlines the role that Oppenheimer serves on the 2026 Equipment Lease, their required disclosures, and their contingent fee.
FISCAL IMPACT:
The 2026 Equipment Lease will have no financial impact on the FY 2025-26 budget cycle. First payments on the 2026 Equipment Lease will be due in October 2026 (FY 2026-27 Budget), with an estimated total payment in FY 2026-27 just below $200,000. That payment amount will escalate at approximately 5.5% annually through FY 2045-46. Since the payments are structured to mimic the estimated net savings from the Solar Only project, the net cost (savings less debt service) is expected to break even or have net savings to the City over the 20-year term.
The costs associated with issuing the 2026 Equipment Lease will be paid out of the proceeds of the 2026 Equipment Lease (no direct budgetary impact).
ATTACHMENTS:
1. Resolution 26-04-R
2. ELPA
3. Escrow and Account Control Agreement
4. 2026 Eqpt Lease Presentation
5. BAPCC Term Sheet
6. Placement Agent Agreement
CITY OF HANFORD CALIFORNIA
RESOLUTION NO. 26-04-R
Authorization of associated Financing Agreements with Banc of America Public Capital Corp Pursuant to Government Code Section 4217.10-18 et seq., Making Certain Findings Required Therefore, and Authorizing Related Actions WHEREAS, the City of Hanford, California (the “City") finds it to be in the best interests of the City to implement projects to promote energy efficiency and renewable energy to achieve utility budget cost reductions;
WHEREAS, Government Code sections 4217.10 through 4217.18 authorize the City's governing board (the “City Council”) to enter into one or more energy service contracts with any person or entity if the City Council finds that the anticipated cost to the City for thermal or electrical energy or conservation services provided by the energy conservation facility under the contract will be less than the anticipated marginal cost to the City of thermal, electrical, or other energy that would have been consumed by the City in the absence of those energy service contracts ("Savings"); WHEREAS, Government Code sections 4217.10 through 4217.18 authorize the City Council to enter into one or more facility financing contracts if the City finds that funds for the repayment thereof are projected to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services and facilities financed by proceeds available through the facility financing contracts;
WHEREAS, Government Code sections 4217.10 through 4217.18 require that a public hearing be held, and public comment be taken, at a regularly scheduled meeting of the City Council, at which meeting the City Council may consider and adopt the findings described herein and award energy services contracts and facility financing contracts based thereon, and that notice thereof be must given at least two weeks prior to the meeting;
WHEREAS, the City gave notice of its intent to conduct a public hearing and take public comment upon the subject matter of Resolution No. 25-54-R two weeks prior to the regularly scheduled public meeting of the City Council on September 16, 2025, at which meeting the City Council held a public hearing, took public comment, and approved Resolution No. 25-54-R, all as required under Government Code sections 4217.10 through 4217.18;
WHEREAS, the City Council and City staff reviewed the qualifications presented by OPTERRA Energy Services (“Opterra”) to provide assessment and implement improvements for energy consumption and infrastructure in order to reduce energy expenses, and found Opterra's qualifications to appear bona fide and adequate;
WHEREAS, Opterra assessed the feasibility of various potential energy conservation measures to reduce the City's energy consumption and expense and recommended specific energy conservation measures based thereon ("Analysis" as set forth in Exhibit B), upon which the City Council and City staff have relied; WHEREAS, Opterra and the City have entered into an Engineering, Procurement and Construction Contract ("Energy Services Contract,") dated December 16, 2025, to provide design/build implementation of the recommended energy conservation measures for the price stated therein and under the terms of that Energy Services Contract, Opterra will provide annual reporting and a savings performance guarantee; WHEREAS, the Analysis demonstrates that the cost for energy conservation services provided under the Energy Services Contract is less than the anticipated marginal cost to the City of thermal, electrical, or other energy that would have been consumed by the City in the absence energy conservation services ("Savings"); WHEREAS, Banc of America Public Capital Corp or its affiliate has offered to enter into an Equipment Lease/Purchase Agreement ("Equipment Lease/Purchase Agreement,") between the City, as Lessee, and Banc of America Public Capital Corp or its affiliate, as Lessor;
WHEREAS, Banc of America Public Capital Corp or its affiliate has offered to enter into an Escrow and Account Control Agreement ("Escrow Agreement," and, together with the Equipment Lease/Purchase Agreement, the "Financing Agreements"), with the City and UMB Bank, National Association, as escrow agent, under terms that are beneficial to the City;
WHEREAS, the Analysis indicates that funds for the repayment of lease payments under the Equipment Lease/Purchase Agreement are anticipated to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services provided under the Energy Services Contract; WHEREAS, in accordance with Government Code Section 5852.1, the City Council has obtained and disclosed the information set forth in Exhibit A hereto; and
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF HANFORD,
CALIFORNIA DOES HEREBY FIND, RESOLVE, DETERMINE, AND ORDER AS FOLLOWS:
Section 1. Recitals. All of the recitals herein contained are true and correct.
Section 2. Equipment Lease/Purchase Agreement Findings. The City Council finds that funds for the repayment of rental payments under the Equipment Lease/Purchase Agreement are projected to be available from the Savings, representing funds that otherwise would have been used for purchase of electrical, thermal, or other energy required by the City in the absence of the energy conservation services, and that it is in the best interest of the City to approve and enter into the Financing Agreements.
Section 3. Financing Agreements Approval. The forms of the Financing Agreements, in the forms on file with the City Clerk, are hereby approved, with such changes thereto, deletions therefrom and additions or modifications thereto as may be approved pursuant to Section 4 hereof.
Section 4. Execution and Delivery. The City Manager, ( the “Responsible Officers”), is hereby authorized and directed for and in the name of and on behalf of the City to execute and deliver the Financing Agreements, each in substantially the form presented to and considered at this meeting, with such changes therein, deletions therefrom and additions thereto as may be approved (i) by any Responsible Officer, in such person’s discretion, as being in the best interests of the City, and (ii) as to form, by City Attorney; such approval to be conclusively evidenced by the execution and delivery thereof by the person executing the same on behalf of the City.
Section 5. Further Actions. The Responsible Officers are, and each of them acting alone is, hereby authorized and directed to take such actions and to execute such documents and certificates as may be necessary to effectuate the purposes of this resolution, including the execution and delivery of the Financing Agreements, and execution and delivery of any and all memorandums of agreement or understanding, assignments, certificates, requisitions, agreements, notices, consents, instruments of conveyance, warrants and other documents, which they, or any of them, deem necessary or advisable in order to consummate the transactions and requirements as described herein.
Section 6. Ratification. All actions heretofore taken by any officer of the City with respect to the execution and delivery of the Financing Agreements, and the financing of the equipment and projects described therein are hereby approved, confirmed and ratified.
Section 7. Effective Date. This Resolution shall take effect upon adoption.
PASSED AND ADOPTED as of January 20, 2026 by the following vote:
AYES: _______________________________________________________________ NOES:_______________________________________________________________ ABSENT:_____________________________________________________________
ABSTAIN:_____________________________________________________________
__________________________
Mark Kairis
MAYOR of the City of Hanford
Attest:
__________________________________
NATALIE CORRAL
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF KINGS) ss
CITY OF HANFORD )
I, Natalie Corral, City Clerk of the City of Hanford, do hereby certify the foregoing Resolution was duly passed and adopted at a regular meeting of the City Council of the City of Hanford held on the _____day of ______, 20___.
Date: ____________________
_________________________________
City Clerk
EXHIBIT A
GOVERNMENT CODE SECTION 5852.1 DISCLOSURE
The following information consists of estimates that have been provided by NHA Advisors, LLC, the City’s Municipal Advisor, as required by Section 5821.1 of the California Government Code, which has been provided to the City in good faith:
(A) True interest cost of the Equipment Lease/Purchase Agreement (“Lease”):
4.49%1
(B) Finance charge of the Lease (sum of all costs of issuance and fees/charges paid to third parties): $60,000
(C) Net proceeds to be received (net of finance charges, reserves and capitalized interest, if any):$3,680,000
(D) Total payment amount through maturity: $6,200,606
1 The true interest cost means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Lease.
EXHIBIT B
ANALYSIS
Project Cost $3,680,000
Financing Costs $60,000
Amount to be Financed $3,740,000
Finance Term in Years 20
Estimated Annual Interest Rate 4.49%
Annual Escalation of Electricity Cost 6.00%
Annual Escalation of Solar Maintenance Cost 5.00%
Annual Degradation of Solar Panels 0.50%
Year
Solar
Energy
Savings
IRA Direct
Payment
Total
Program
Savings
Lease
Payment
Inverter
Replacement
costs
Solar
Operations &
Maintenance
Cost
Total
Program
Costs
Net Savings
Year 1 $207,500 $938,400 $1,145,900 $197,735 $24,577 $222,312 $923,588 Year 2 $218,850 $218,850 $187,552 $25,806 $213,358 $5,492 Year 3 $230,821 $230,821 $197,812 $27,096 $224,908 $5,913 Year 4 $243,447 $243,447 $208,633 $28,451 $237,084 $6,363 Year 5 $256,764 $256,764 $220,046 $29,873 $249,919 $6,845 Year 6 $270,809 $270,809 $232,081 $31,367 $263,448 $7,361 Year 7 $285,622 $285,622 $244,775 $32,936 $277,711 $7,911 Year 8 $301,246 $301,246 $258,165 $34,582 $292,747 $8,498 Year 9 $317,724 $317,724 $272,288 $36,311 $308,600 $9,124 Year 10 $335,103 $335,103 $287,180 $38,127 $325,307 $9,796 Year 11 $353,433 $353,433 $302,891 $119,465 $40,033 $462,389 -$108,956 Year 12 $372,766 $372,766 $319,457 $42,035 $361,492 $11,274 Year 13 $393,156 $393,156 $336,931 $44,137 $381,068 $12,089 Year 14 $414,662 $414,662 $355,362 $46,344 $401,706 $12,957 Year 15 $437,344 $437,344 $374,802 $48,661 $423,462 $13,882 Year 16 $461,267 $461,267 $395,303 $51,094 $446,397 $14,870 Year 17 $486,498 $486,498 $416,925 $53,649 $470,574 $15,925 Year 18 $513,110 $513,110 $439,730 $56,331 $496,061 $17,049 Year 19 $541,177 $541,177 $463,784 $59,147 $522,932 $18,245 Year 20 $570,779 $570,779 $489,154 $62,105 $551,259 $19,520 Year 21 $379,260 $379,260 $0 $194,596 $65,210 $259,806 $119,454 Year 22 $400,006 $400,006 $0 $68,471 $68,471 $331,535
Year 23 $421,886 $421,886 $0 $71,894 $71,894 $349,992
Year 24 $444,964 $444,964 $0 $75,489 $75,489 $369,475
Year 25 $469,303 $469,303 $0 $79,263 $79,263 $390,040
Year 26 $494,974 $494,974 $0 $83,226 $83,226 $411,747
Year 27 $522,049 $522,049 $0 $87,388 $87,388 $434,661
Year 28 $550,605 $550,605 $0 $91,757 $91,757 $458,848
Year 29 $580,723 $580,723 $0 $96,345 $96,345 $484,378
Year 30 $612,489 $612,489 $0 $101,162 $101,162 $511,326 Totals $12,088,338 $13,026,738 $6,200,606 $1,632,868 $8,147,535 $4,879,204 City of Hanford Phase 3 Solar only project
Preliminary Cash Flow Analysis
10002599
EQUIPMENT LEASE/PURCHASE AGREEMENT
(ESCROW ACCOUNT)
This Equipment Lease/Purchase Agreement (this “Agreement”) dated as of January 27, 2026, and entered into by and between Banc of America Public Capital Corp, a Kansas corporation (together with its successors, assigns and transferees, and as more particularly defined herein, “Lessor”), and City of Hanford, a city existing under the laws of the State of California (“Lessee”).
WITNESSETH:
WHEREAS, Lessee desires to lease and acquire from Lessor certain Equipment (as such term is defined herein), subject to the terms and conditions hereof; and, WHEREAS, Lessee is authorized under the constitution and laws of the State (as such term is defined herein) to enter into this Agreement for the purposes set forth herein; NOW, THEREFORE, for good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, and in consideration of the premises hereinafter contained, the parties hereby agree as follows:
ARTICLE I
Section 1.01. Definitions. The following terms will have the meanings indicated below unless the context clearly requires otherwise:
“Acquisition Amount” means $3,740,000.00. The Acquisition Amount is the amount represented by Lessee to be sufficient, together with other funds of Lessee (if any) that are legally available for the purpose of acquiring and installing the Equipment. “Acquisition Period” means the period ending five (5) business days prior to January 27, 2027.
“Agreement” means this Equipment Lease/Purchase Agreement, including the exhibits hereto, together with any amendments and modifications to this Agreement pursuant to Section 13.04.
“Casualty Value” means the amount that is shown for each Rental Payment Date under the column titled “Casualty Value” on the Payment Schedule. “Code” means the Internal Revenue Code of 1986, as amended. Each reference to a Section of the Code herein shall be deemed to include the relevant United States Treasury Regulations proposed or in effect thereunder.
“Collateral” has the meaning set forth in Section 6.02.
-2-
“Commencement Date” means the date when Lessee’s obligation to pay Rental Payments commences hereunder, which shall be the date on which the Acquisition Amount is deposited with the Escrow Agent.
“Contract Rate” means the rate identified as such in the Payment Schedule. “Disbursement Request” means the disbursement request attached to the Escrow Agreement as Schedule 1 and made a part thereof.
“Equipment” means the equipment, fixtures and other goods and property listed in the Equipment Schedule and all replacements, repairs, restorations, modifications and improvements thereof or thereto made pursuant to Article V or Section 8.01. Whenever reference is made in this Agreement to Equipment, such reference shall be deemed to include all such replacements, repairs, restorations, modifications and improvements of or to such Equipment. “Equipment Costs” means the total cost of the Equipment, including related soft costs such as freight, installation and taxes and other capitalizable costs, and other costs incurred in connection with the acquisition, installation and/or financing of the Equipment. “Equipment Schedule” means the Equipment Schedule attached hereto as Exhibit A and made a part hereof (including any duly authorized and executed amendments thereto). “Escrow Account” means the account established and held by the Escrow Agent pursuant to the Escrow Agreement.
“Escrow Agent” means the Escrow Agent identified in the Escrow Agreement, and its successors and assigns.
“Escrow Agreement” means the Escrow and Account Control Agreement in form and substance acceptable to and executed by Lessee, Lessor and the Escrow Agent, pursuant to which the Escrow Account is established and administered.
“Event of Default” means an Event of Default described in Section 12.01. “Event of Non-appropriation” means the failure of Lessee’s governing body to appropriate or otherwise make available funds to pay Rental Payments under this Agreement following the Original Term or then current Renewal Term sufficient for the continued performance of this Agreement by Lessee.
“Lease Term” means the Original Term and all Renewal Terms. “Lessee” means the entity referred to as Lessee in the first paragraph of this Agreement. “Lessee’s Counsel” means Griswold, LaSalle, Cobb, Dowd & Gin, LLP.
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“Lessor” means (a) the entity referred to as Lessor in the first paragraph of this Agreement and its successors or (b) any assignee or transferee of any right, title or interest of Lessor in and to this Agreement pursuant to Section 11.01 hereof, including the right, title and interest of Lessor in and to the Equipment, the Rental Payments and other amounts due hereunder, the Escrow Agreement and Escrow Account and other Collateral, but does not include any entity solely by reason of that entity retaining or assuming any obligation of Lessor to perform hereunder. “Lien” means any lien (statutory or otherwise), security interest, mortgage, deed of trust, pledge, hypothecation, assignment, deposit arrangement, encumbrance, preference, priority or other security or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing and the filing of any financing statement under the Uniform Commercial Code or comparable law of any jurisdiction). “Material Adverse Change” means any change in Lessee’s creditworthiness that could have a material adverse effect on (i) the financial condition or operations of Lessee, or (ii) Lessee’s ability to perform its obligations under this Agreement. “OpTerra Contract” means that certain Engineering, Procurement and Construction Contract dated as of December 16, 2025, between the Lessee and OpTerra, and as further amended or restated from time to time.
“Original Term” means the period from the Commencement Date until the end of the fiscal year of Lessee in effect at such Commencement Date.
“Outstanding Balance” means the amount that is shown for each Rental Payment Date under the column titled “Outstanding Balance” on the Payment Schedule. “Payment Schedule” means the Payment Schedule attached hereto as Exhibit B and made a part hereof.
“Prepayment Price” means the amount that is shown for each Rental Payment Date under the column titled “Prepayment Price” on the Payment Schedule. “Principal Portion” means the amount that is shown for each Rental Payment Date under the column titled “Principal Portion” on the Payment Schedule. “Prior Lessor” means (a) Banc of America Public Capital Corp or (b) any entity who was previously a Lessor under the terms of this Agreement but by reason of assignment or transfer is not a current Lessor under the terms of this Agreement. “Project Grant” means a grant, subsidy, or other incentive that the Lessee receives for the Equipment.
“Related Documents” means this Agreement and the Escrow Agreement, each as may be amended and supplemented.
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“Renewal Terms” means the consecutive renewal terms of this Agreement, the first of which commences immediately after the end of the Original Term and each having a duration and a term coextensive with each successive fiscal year of Lessee; provided that the final such Renewal Term shall commence on the first day of the last such fiscal year and end on the first business day after the last scheduled Rental Payment Date.
“Rental Payment Date” means each date on which Lessee is required to make a Rental Payment under this Agreement as specified in the Payment Schedule. “Rental Payments” means the basic rental payments payable by Lessee on the Rental Payment Dates and in the amounts as specified in the Payment Schedule, consisting of a principal component and an interest component, and in all cases sufficient to repay such principal component and interest thereon at the applicable Contract Rate (or Taxable Rate if then in effect). “Scheduled Term” means the Original Term and all scheduled Renewal Terms, with a final Renewal Term ending on October 1, 2045, as set forth in Exhibit B attached hereto. “SEC” means the U.S. Securities and Exchange Commission. “State” means the State of California.
“Taxable Rate” means, for each day that the interest component of Rental Payments is taxable for Federal income tax purposes, an interest rate equal to the Contract Rate plus a rate sufficient such that the total interest to be paid on any Rental Payment Date would, after such interest was reduced by the amount of any Federal, state or local income tax (including any interest, penalties or additions to tax) actually imposed thereon, equal the amount of interest otherwise due to Lessor.
“Vendor” means the manufacturer, installer or supplier of the Equipment or any other person as well as the agents or dealers of the manufacturer, installer or supplier with whom Lessee arranged Lessee’s acquisition, installation, maintenance and/or servicing of the Equipment, and includes, without limitation, OPTERRA Energy Services, LLC (“OpTerra”). “Vendor Agreement” means any contract entered into by Lessee and any Vendor for the acquisition, installation, maintenance and/or servicing of the Equipment, and includes, without limitation, the OpTerra Contract.
ARTICLE II
Section 2.01. Representations and Covenants of Lessee. Lessee represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(a) Lessee is a political subdivision of the State within the meaning of Section 103(c) of the Code, duly organized and existing under the constitution and laws of the State, with full power and authority to enter into the Related Documents and the transactions contemplated thereby and to perform all of its obligations thereunder.
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(b) Lessee has duly authorized the execution and delivery of the Related Documents by proper action of its governing body at a meeting duly called, regularly convened and attended throughout by the requisite quorum of the members thereof, or by other appropriate official approval, and all requirements have been met and procedures have occurred in order to ensure the validity and enforceability of the Related Documents. (c) No event or condition that constitutes, or with the giving of notice or the lapse of time or both would constitute, an Event of Default exists at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to this Agreement. (d) Lessee will do or cause to be done all things necessary to preserve and keep in full force and effect its existence as a city of the State. (e) Lessee has complied with such procurement and public bidding requirements as may be applicable to the Related Documents and the acquisition and installation by Lessee of the Equipment.
(f) During the Lease Term, the Equipment will be used by Lessee only for the purpose of performing essential governmental or proprietary functions of Lessee consistent with the permissible scope of Lessee’s authority. Lessee does not intend to sell or otherwise dispose of the Equipment or any interest therein prior to the last Rental Payment (including all Renewal Terms) scheduled to be paid hereunder. (g) Lessee has kept, and throughout the Lease Term shall keep, its books and records in accordance with generally accepted accounting principles and practices consistently applied, and shall deliver to Lessor (i) annual audited financial statements (including (1) a balance sheet, (2) statement of revenues, expenses and changes in fund balances for budget and actual, (3) statement of cash flows, and (4) footnotes, schedules and attachments to the financial statements) within two hundred seventy (270) days after the end of its fiscal year, (ii) such other financial statements and information as Lessor may reasonably request, and (iii) upon Lessor’s request, its annual budget for any prior or current fiscal year or for the following fiscal year when approved but not later than thirty (30) days prior to the end of its current fiscal year. The financial statements described in this subsection (g)(i) shall be accompanied by an unqualified opinion of Lessee’s independent auditor. Credit information relating to Lessee may be disseminated among Lessor and any of its affiliates and any of their respective successors and assigns. (h) Lessee has an immediate need for the Equipment and expects to make immediate use of the Equipment. Lessee’s need for the Equipment is not temporary and Lessee does not expect the need for any item of the Equipment to diminish during the Scheduled Term.
(i) The payment of the Rental Payments or any portion thereof is not (under the terms of this Agreement or any underlying arrangement) directly or indirectly (x) secured by any interest in property used or to be used in any activity carried on by any person other than a state or local governmental unit or payments in respect of such property;
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or (y) on a present value basis, derived from payments (whether or not to Lessee) in respect of property, or borrowed money, used or to be used in any activity carried on by any person other than a state or local governmental unit. The Equipment will not be used, directly or indirectly, in any activity carried on by any person other than a state or local governmental unit. No portion of the Acquisition Amount will be used, directly or indirectly, to make or finance loans to any person other than Lessee. With the exception of the terms of the OpTerra Contract, Lessee has not entered into any management or other service contract with respect to the use and operation of the Equipment. (j) There is no pending litigation, tax claim, proceeding or dispute that may adversely affect Lessee’s financial condition or impairs its ability to perform its obligations under the Related Documents. Lessee will, at its expense, maintain its legal existence and do any further act and execute, acknowledge, deliver, file, register and record any further documents Lessor may reasonably request in order to protect Lessor’s first priority security interest in the Equipment and the Escrow Account and Lessor’s rights and benefits under the Related Documents.
(k) Lessee is the fee owner of the real estate where the Equipment is and will be located (the “Real Property”) and has good and marketable title thereto, and there exists no mortgage, pledge, Lien, security interest, charge or other encumbrance of any nature whatsoever on or with respect to such Real Property. In the event any lien, encumbrance, restriction, asserted encumbrance, claim, dispute or other issue exists or arises with respect to the Lessee’s legal title to or valid and marketable, beneficial use and enjoyment of the Real Property or impairs or adversely impacts Lessor’s right, title or interest in the Equipment or any of Lessor’s rights or remedies under this Agreement with respect to the Equipment (each of the foregoing referred to as a “Real Property Issue”), Lessee will take all steps necessary to promptly quiet, resolve and/or eliminate such Real Property Issue to the satisfaction of Lessor and ensure that Lessee and Lessor have adequate access to and use of (including beneficial use and enjoyment of) the Real Property for all purposes of the Equipment contemplated herein and Lessee shall ensure that its fee interest in the Real Property and Lessor’s right, title or interest in the Equipment and rights or remedies under this Agreement with respect to the Equipment remain free and clear of Real Property Issues.
(l) No lease, rental agreement, lease-purchase agreement, payment agreement or contract for purchase to which Lessee has been a party at any time has been terminated by Lessee as a result of insufficient funds being appropriated in any fiscal year. No event has occurred which would constitute an event of default under any debt, revenue bond or obligation which Lessee has issued during the past ten (10) years. (m) Lessee represents to Lessor that it has adopted a debt policy in compliance with SB 1029 and Section 8855 of the Government Code of California et seq. and covenants that it shall comply with Section 8855 of the Government Code of California et seq. as amended (the “CDIAC Act”) throughout the Lease Term, including (i) preparing, submitting and filing the report of the proposed debt issuance relating to this Agreement by the method required by the California Debt and Investment Advisory Commission
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(“CDIAC”), (ii) preparing, submitting and filing the report of final sale (and accompanying documents) relating to this Agreement by the method required by CDIAC, (iii) submitting an annual report relating to the report of final sale for this Agreement by the method required by CDIAC, and (iv) paying all fees charged by CDIAC or the CDIAC Act relating to this Agreement, including, but not limited to the fee in an amount equal to 2.5 basis points (.025%) of the Acquisition Amount not to exceed five thousand dollars ($5,000) or as otherwise prescribed by the CDIAC Act.
(n) As of the date of execution and delivery of this Agreement, Lessee has not granted any Lien on the Collateral that would be senior in priority to, or pari passu with, the first priority Lien on the Collateral granted to Lessor under Section 6.02 of this Agreement.
(o) The street addresses and legal descriptions affixed to the UCC-1 financing statements and fixture filings filed and recorded pursuant to Section 3.04(vi), Section 6.01 and/or Section 6.02 hereof are true, accurate and complete street addresses and legal descriptions of all the properties on which the Equipment is located or to be installed. In the event any street address, legal description, other information, UCC-1 financing statement or fixture filing (or continuations or amendments thereof) filed or recorded with respect to the Lessor’s interests in the Equipment or any of the real property on which the Equipment is located or to be installed reflects any incorrect or incomplete real property legal description, equipment description or other information, Lessee shall take all steps necessary at its expense (with the Lessor’s prior written approval) to promptly correct any errors or deficiencies with respect to such legal descriptions, street address, other information, UCC-1 financing statements and/or fixture filings and to protect Lessor’s interests in the Equipment.
(p) Lessee will pay all Equipment Costs and costs of issuance in excess of the Acquisition Amount available therefor out of its own funds. Lessor shall not have any responsibility to pay amounts for any Equipment Costs or costs of issuance with respect to the Related Documents or the Equipment that individually or collectively exceed the Acquisition Amount.
(q) Lessee has complied with California Government Code Section 4217.10 et seq. and other applicable law pertaining to the authorization of this Agreement and the financing and acquisition by the Lessee of the Equipment. (r) To the extent applicable, as determined by Lessee in its sole discretion, Lessee has complied with the requirements of California Government Code Section 5852.1 et seq. in connection with this Agreement and the Equipment. (s) In connection with the Lessee’s compliance with any continuing disclosure undertakings (each, a “Continuing Disclosure Agreement”) entered into by the Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the Securities and Exchange Act of 1934, as amended (the “Rule”), the Lessee may be required to file with the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access system, or its
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successor (“EMMA”), notice of its incurrence of its obligations under the Related Documents and notice of any accommodation, waiver, amendment, modification of terms or other similar events reflecting financial difficulties in connection with the Related Documents, in each case including posting a full copy thereof or a description of the material terms thereof (each such posting, an “EMMA Posting”). Except to the extent required by applicable law, including the Rule, the Lessee shall not file or submit or permit the filing or submission of any EMMA Posting that includes the following unredacted confidential information about the Lessor or its affiliates and the Escrow Agent in any portion of such EMMA Posting: address, account information and logos of the Lessor or its affiliates and the Escrow Agent; e-mail addresses, telephone numbers, fax numbers, names and signatures of officers, employees and signatories of the Lessor or its affiliates and the Escrow Agent; and the form of Disbursement Request that is attached to the Escrow Agreement.
The Lessee acknowledges and agrees that the Lessor and its affiliates are not responsible for the Lessee’s or any other entity’s (including, but not limited to, any broker-dealer’s) compliance or noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement or any applicable securities or other laws, including but not limited to those relating to the Rule.
ARTICLE III
Section 3.01. Lease of Equipment. Subject to the terms and conditions of this Agreement, Lessor agrees to provide the Acquisition Amount to acquire the Equipment. Lessor hereby demises, leases and transfers to Lessee, and Lessee hereby acquires, rents and leases from Lessor, the Equipment. The Lease Term may be continued, solely at the option of Lessee, at the end of the Original Term or any Renewal Term for the next succeeding Renewal Term up to the maximum Scheduled Term as set forth in the Payment Schedule. At the end of the Original Term and at the end of each Renewal Term until the maximum Scheduled Term has been completed, Lessee shall be deemed to have exercised its option to continue this Agreement for the next Renewal Term unless Lessee shall have terminated this Agreement pursuant to Section 3.03 or Section 10.01 of this Agreement. The terms and conditions during any Renewal Term shall be the same as the terms and conditions during the Original Term, except that the Rental Payments shall be as provided in the Payment Schedule.
Section 3.02. Continuation of Lease Term. Lessee intends, subject to Section 3.03 hereof, to continue the Lease Term through the Original Term and all Renewal Terms and to pay the Rental Payments due hereunder. Lessee affirms that sufficient funds are legally available to pay all Rental Payments when due during the current fiscal year, and Lessee reasonably believes that an amount sufficient to make all Rental Payments during the entire Scheduled Term can be obtained from legally available funds of Lessee. Lessee further intends to do all things lawfully within its power to obtain and maintain funds sufficient and available to discharge its obligation to make Rental Payments due hereunder, including making provision for such payments to the extent necessary in each budget or appropriation request submitted and adopted in accordance with applicable provisions of law. Notwithstanding the foregoing, the decision whether or not to budget
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and appropriate funds or to extend the Lease Term for any Renewal Term is within the sole discretion of the governing body of Lessee.
Section 3.03. Non-appropriation. Lessee is obligated only to pay such Rental Payments as may lawfully be made during Lessee’s then current fiscal year from funds budgeted and appropriated for that purpose. Should Lessee fail to budget, appropriate or otherwise make available funds to pay Rental Payments following the then current Original Term or Renewal Term, this Agreement shall be deemed terminated at the end of the then current Original Term or Renewal Term. Lessee agrees to deliver notice to Lessor of such termination promptly after any decision to non-appropriate is made, but failure to give such notice shall not extend the term beyond such Original Term or Renewal Term. If this Agreement is terminated in accordance with this Section 3.03, Lessee agrees to cease use of the Equipment and peaceably remove and deliver to Lessor, at Lessee’s sole expense (from legally available funds), the Equipment to Lessor at the location(s) to be specified by Lessor.
Section 3.04. Conditions to Lessor’s Performance. (a) As a prerequisite to the performance by Lessor of any of its obligations under this Agreement, Lessee shall deliver to Lessor, in form and substance satisfactory to Lessor, the following:
(i) An Escrow Agreement substantially in the form attached hereto as Exhibit I, satisfactory to Lessor and executed by Lessee and the Escrow Agent and a Vendor Agreement satisfactory to Lessor and executed by Lessee and the Vendor; (ii) A certified copy of a resolution, ordinance or other official action of Lessee’s governing body, substantially in the form attached hereto as Exhibit C-1, authorizing the execution and delivery of this Agreement and the Escrow Agreement and performance by Lessee of its obligations under this Agreement and the Escrow Agreement; (iii) A Certificate completed and executed by the Clerk or Secretary or other comparable officer of Lessee, substantially in the form attached hereto as Exhibit C-2, completed to the satisfaction of Lessor;
(iv) Opinions of Lessee’s Counsel which opine on the matters set forth in the form attached hereto as Exhibit D and which are otherwise satisfactory to Lessor; (v) Evidence of insurance as required by Section 7.02 hereof; (vi) All documents, including financing statements, affidavits, notices and similar instruments which Lessor deems necessary or appropriate at that time pursuant to Section 6.02 hereof;
(vii) A waiver or waivers of interest in the Equipment from any mortgagee or any other party having an interest in the real estate on which the Equipment will be located and/or landlord of the real estate on which the Equipment will be located and amendments and agreements releasing liens and encumbrances, if any, on the real property where the Equipment is and will be located;
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(viii) Reserved;
(ix) A copy of the Form 8038-G, fully completed and executed by Lessee; (x) In the event that Lessee is to be reimbursed for expenditures that it has paid more than sixty (60) days prior to the Commencement Date, evidence of the adoption of a reimbursement resolution or other official action covering the reimbursement from tax exempt proceeds of expenditures incurred not more than sixty (60) days prior to the date of such resolution;
(xi) Copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale (if title to Equipment has passed to Lessee), to the extent required by Section 5.01(b) hereof;
(xii) Wire instructions for payments to be made to Vendors and Form W-9 from each such Vendor;
(xiii) A certified copy of any Surety Bond satisfying the conditions set forth in Section 7.04 hereof, or, at Lessor’s sole discretion, such Surety Bonds may be provided after the Commencement Date, provided however, that no “Disbursement Request” pursuant to the Escrow Agreement (other than for costs of issuance) shall be authorized by Lessor until such Surety Bonds satisfying the conditions set forth in Section 7.04 have been delivered to Lessor; and
(xiv) Such other items reasonably required by Lessor.
(b) In addition to satisfaction of the conditions set forth in subsection (a) of this Section 3.04, the performance by Lessor of any of its obligations under the Related Documents shall be subject to: (i) no Material Adverse Change having occurred since the date of this Agreement, (ii) no Event of Default having occurred and then be continuing and (iii) no Event of Non-appropriation having occurred or being threatened with respect to this Agreement. (c) Subject to satisfaction of the foregoing, Lessor will deposit the Acquisition Amount with the Escrow Agent to be held and disbursed pursuant to the Escrow Agreement.
Section 3.05. Evidence of Filing Form 8038-G. As soon as it is available, Lessee shall provide to Lessor evidence that it, or its paid preparer, has filed the Form 8038-G for this Agreement with the Internal Revenue Service by delivering to Lessor proof of mailing such Form 8038-G. Notwithstanding anything to the contrary in this Agreement, it shall not be an Event of Default hereunder if Lessee does not provide to Lessor evidence that it (or its paid preparer) filed the Form 8038-G for this Agreement with the Internal Revenue Service.
ARTICLE IV
Section 4.01. Rental Payments. Subject to Section 3.03 of this Agreement, Lessee shall promptly pay Rental Payments, in lawful money of the United States of America, to Lessor on the
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Rental Payment Dates and in such amounts as provided in the Payment Schedule. If any Rental Payment or other amount payable hereunder is not paid within ten (10) days of its due date, Lessee shall pay an administrative late charge of five percent (5%) of the amount not timely paid or the maximum amount permitted by law, whichever is less. Lessee shall not permit the Federal Government to guarantee any Rental Payments under this Agreement. Rental Payments consist of principal and interest components as more fully detailed on the Payment Schedule, the interest on which begins to accrue as of the Commencement Date.
Section 4.02. Interest and Principal Components. A portion of each Rental Payment is paid as, and represents payment of, interest, and the balance of each Rental Payment is paid as, and represents payment of, principal as more fully detailed on the Payment Schedule.
Section 4.03. Rental Payments to Constitute a Current Expense of Lessee. Lessor and Lessee understand and intend that the obligation of Lessee to pay Rental Payments shall constitute a current expense of Lessee payable from funds that are legally available for that purpose (which may include, but are not limited to, the Lessee’s general fund and/or the Lessee’s Wastewater Enterprise Fund) and shall not in any way be construed to be a debt of Lessee in contravention of any applicable constitutional or statutory limitation or requirement concerning the creation of indebtedness by Lessee, nor shall anything contained herein constitute a pledge of the general tax revenues, funds or moneys of Lessee.
Section 4.04. Rental Payments to be Unconditional. Except as provided in Section 3.03 of this Agreement, the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in this Agreement shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense, for any reason, including without limitation any failure of the Equipment, disputes with the Lessor or the Vendor of any Equipment, any defects, malfunctions, breakdowns or infirmities in the Equipment or any accident, condemnation or unforeseen circumstances, or failure of any Vendor to deliver any Equipment or otherwise perform any of its obligations for whatever reason, including bankruptcy, insolvency, reorganization or any similar event with respect to any Vendor or under any Vendor Agreement, or the failure or inability (for whatever reason) of Lessee to receive (or delay in receipt of) all or any portion of any Project Grant or other grant, subsidy, or other incentive, including but not limited to any refundable tax credit under Section 6417 of the Internal Revenue Code of 1986, as amended by the Inflation Reduction Act of 2022 (Pub. L. No. 117-169), any amounts described or derived from California Assembly Bill AB 841, any federal, state, local, private or other incentives or rebates or any substantially similar (to any of the foregoing) provision of federal, state, local or foreign tax or other law (including regulations or other guidance from any taxing or other authority).
Section 4.05. Tax Covenants. Lessee agrees that it will not take any action that would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes, nor will it omit to take or cause to be taken, in a timely manner, any action, which omission would cause the interest component of Rental Payments to be or to become ineligible for the exclusion from gross income of the owner or owners thereof for Federal income tax purposes. In connection with the foregoing, Lessee hereby agrees that (a) so long as any Rental Payments remain unpaid, moneys on deposit
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in the Escrow Account shall not be used in a manner that will cause this Agreement to be classified as an “arbitrage bond” within the meaning of Section 148(a) of the Code; and (b) Lessee shall rebate, from funds legally available for the purpose, an amount equal to excess earnings on the Escrow Account to the Federal Government if required by, and in accordance with, Section 148(f) of the Code, and make the determinations and maintain the records required by the Code.
Section 4.06. Event of Taxability. Upon the occurrence of an Event of Taxability, the interest component of Rental Payments and any charge on Rental Payments or other amounts payable based on the Contract Rate shall have accrued and be payable at the Taxable Rate retroactive to the date as of which the interest component is determined by the Internal Revenue Service to be includible in the gross income of the owner or owners thereof for Federal income tax purposes (which retroactive date shall be the earliest date as of which the interest component of any Rental Payment is deemed includible in the gross income of the owner or owners thereof for Federal income tax purposes, which may be earlier than the date of delivery of such determination by the Internal Revenue Service), and Lessee will pay such additional amount as will result in the owner receiving the interest component at the Taxable Rate.
For purposes of this Section, “Event of Taxability” means the circumstance of the interest component of any Rental Payment paid or payable pursuant to this Agreement becoming includible for Federal income tax purposes in an owner’s gross income as a consequence of any act, omission or event whatsoever, including but not limited to the matters described in the immediately succeeding sentence, and regardless of whether the same was within or beyond the control of Lessee. An Event of Taxability shall be presumed to have occurred upon (a) the receipt by Lessor or Lessee of an original or a copy of an Internal Revenue Service Technical Advice Memorandum or Statutory Notice of Deficiency or other written correspondence which legally holds that the interest component of any Rental Payment is includable in the gross income of the owner thereof; (b) the issuance of any public or private ruling of the Internal Revenue Service that the interest component of any Rental Payment is includable in the gross income of the owner thereof; or (c) receipt by Lessor or Lessee of a written opinion of a nationally recognized firm of attorneys experienced in matters pertaining to the tax-exempt status of interest on obligations issued by states and their political subdivisions, selected by Lessor and acceptable to Lessee, to the effect that the interest component of any Rental Payment has become includable in the gross income of the owner thereof for Federal income tax purposes. For all purposes of this definition, an Event of Taxability shall be deemed to occur on the date as of which the interest component of any Rental Payment is deemed includable in the gross income of the owner thereof for Federal income tax purposes.
Section 4.07. Mandatory Prepayment. (a) Any funds not applied to Equipment Costs and remaining in the Escrow Account on the earliest of (i) the expiration of the Acquisition Period, (ii) the date on which Lessee delivers to the Lessor the executed Disbursement Request to effect the final disbursement to pay (or reimburse) Equipment Costs from the Escrow Account or (iii) a termination of the Escrow Account as provided in the Escrow Agreement shall be applied by Lessor on each successive Rental Payment Date thereafter to pay all or a portion of the Rental Payment due and owing in the succeeding twelve (12) months and any remaining amounts shall be applied by Lessor as prepayment to the applicable unpaid Principal Portion of Rental Payments owing hereunder in the inverse order of the Rental Payment Dates at a price of 100% of such prepaid Principal Portion plus accrued interest thereon to the prepayment date.
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(b) In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule reflecting such partial prepayment and shall deliver the same to the Lessee, which new Payment Schedule shall be deemed to amend and replace the prior Payment Schedule and shall be binding on the parties, absent manifest error.
ARTICLE V
Section 5.01. Acquisition, Delivery, Installation and Acceptance of Equipment. (a) Lessee shall order the Equipment to be acquired and financed hereunder, cause the Equipment to be delivered and installed at the location specified in the Equipment Schedule and pay any and all delivery and installation costs and other Equipment Costs in connection therewith. Lessee shall conduct such inspection and testing of the Equipment as it deems appropriate in order to unconditionally accept such Equipment. When the Equipment has been delivered and correctly installed, including any component of Equipment, Lessee shall promptly accept such Equipment and evidence said acceptance by executing and delivering Disbursement Requests to the Lessor pursuant to the Escrow Agreement for the purpose of effecting disbursements from the Escrow Account to pay (or reimburse) Equipment Costs for the Equipment so acquired and installed. In connection with the execution and delivery by Lessee to Lessor of the final Disbursement Request, Lessee shall deliver to Lessor a “Final Acceptance Certificate” in the form attached hereto as Exhibit E.
(b) Lessee shall deliver to Lessor together with each Disbursement Request copies of invoices (and proof of payment of such invoices if Lessee seeks reimbursement for prior expenditures) and bills of sale or other evidence of title transfer to Lessee relating to each item of Equipment accepted by Lessee as evidenced by such Disbursement Request. Once approved, Lessor shall deliver such Disbursement Request to the Escrow Agent for disbursement from the Escrow Account in accordance with the Escrow Agreement.
Section 5.02. Quiet Enjoyment of Equipment. So long as no Event of Default and no Event of Non-appropriation exists hereunder, neither Lessor nor any entity claiming by, through or under Lessor, shall interfere with Lessee’s quiet use and enjoyment of the Equipment during the Lease Term.
Section 5.03. Location; Inspection. Once installed, no item of the Equipment will be moved or relocated from the location specified for it in the Equipment Schedule without Lessor’s prior written consent, which consent shall not be unreasonably withheld. Lessor shall have the right at all reasonable times during regular business hours to enter into and upon the property where the Equipment is located for the purpose of inspecting the Equipment.
Section 5.04. Use and Maintenance of the Equipment. Lessee shall not install, use, operate or maintain the Equipment (or cause the Equipment to be installed, used, operated or maintained) improperly, carelessly, in violation of any applicable law or in a manner contrary to that contemplated hereby. Lessee shall provide all permits and licenses, if any, necessary for the installation and operation of the Equipment. In addition, Lessee agrees to comply in all respects with all applicable laws, regulations and rulings of any legislative, executive, administrative, or judicial body, including, without limitation, all anti-money laundering laws and regulations;
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provided that Lessee may contest in good faith the validity or application of any such law, regulation or ruling in any reasonable manner that does not, in the opinion of Lessor, adversely affect the interest of Lessor in and to the Equipment or its interest or rights hereunder.
Lessee agrees that it shall (a) maintain, preserve, and keep the Equipment in good repair and working order, in a condition comparable to that recommended by the manufacturer; (b) proceed promptly, at its expense, to protect its rights and exercise its remedies under any warranty then in effect with respect to the Equipment; and (c) replace or rebuild any component of the Equipment that becomes permanently unfit for normal use or inoperable during the Lease Term (herein, the “Inoperable Component”) in order to keep the Equipment as a whole in good repair and working order during the Lease Term. Lessee shall promptly notify Lessor in writing when any component of the Equipment is reasonably expected within forty-five (45) days to become an Inoperable Component. Lessee shall promptly replace or rebuild the Inoperable Component with a similar component of comparable or improved make and model that has at least the equivalent value and utility of the Inoperable Component, a remaining useful life of no less than the remaining Scheduled Term and such replacement or rebuilt component shall be in good operating condition. Lessor shall have no responsibility to maintain, repair or make improvements or additions to the Equipment. In all cases, Lessee agrees to pay any costs necessary for the manufacturer to re-certify the Equipment as eligible for manufacturer’s maintenance upon the return of the Equipment to Lessor as provided for in Sections 3.03 and 12.02(b) of this Agreement.
Lessee shall not alter any item of Equipment or install any accessory, equipment or device on an item of Equipment if that would impair any applicable warranty, the originally intended function or the value of that Equipment. All repairs, parts, accessories, equipment and devices furnished, affixed to or installed on any Equipment, excluding temporary replacements, shall thereupon become subject to the security interest of Lessor.
ARTICLE VI
Section 6.01. Title to the Equipment. During the Lease Term, so long as Lessee is not in default under Article XII hereof and an Event of Non-appropriation has not occurred, all right, title and interest in and to each item of the Equipment shall be vested in Lessee immediately upon its acceptance of each item of Equipment, subject to the terms and conditions hereof. Lessee shall at all times protect and defend, at its own cost and expense, its title, and Lessor’s first priority security interest, in and to the Equipment (and Lessor’s other Collateral as defined in Section 6.02 hereof) from and against all claims, Liens and legal processes of its creditors, and keep all Equipment (and such other Collateral) free and clear of all such claims, Liens and processes. Lessee will, at its expense, do any further act and execute, acknowledge, deliver, file, register and record any further documents the Lessor may reasonably request in order to protect Lessor’s first priority security interest in the Collateral. Upon the occurrence of an Event of Default or upon termination of this Agreement pursuant to Section 3.03 hereof, full and unencumbered legal title to the Equipment shall, at Lessor’s option, pass to Lessor, and Lessee shall have no further interest therein. In addition, upon the occurrence of such an Event of Default or such termination, Lessee shall execute and deliver to Lessor such documents as Lessor may request to evidence the passage of such legal title to Lessor and the termination of Lessee’s interest therein, and upon request by Lessor shall deliver possession of the Equipment to Lessor in accordance with Section 3.03 or 12.02 of this
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Agreement, as applicable. Upon payment of all amounts due and owing hereunder by Lessee in accordance with Section 10.01 hereof, Lessor’s security interest or other interest in the Equipment shall terminate, and Lessor shall execute and deliver to Lessee such documents as Lessee may reasonably request to evidence the termination of Lessor’s security interest in the Equipment.
Section 6.02. Security Interest. As additional security for the payment and performance of all of Lessee’s obligations hereunder, Lessee hereby grants to Lessor a first priority security interest constituting a first Lien on (a) the Equipment, together with all replacements, repairs, restorations, modifications and improvements thereof or thereto and all accessories, equipment, parts and appurtenances appertaining or attached to any of the Equipment, and all substitutions, renewals, or replacements of and additions, improvements, accessions and accumulations to any and all of such Equipment, together with all the rents, issues, income, profits, proceeds and avails therefrom, (b) moneys and investments held from time to time in the Escrow Account, (c) all accounts, chattel paper, deposit accounts, documents, instruments, general intangibles and investment property (including any securities accounts and security entitlements relating thereto) evidenced by or arising out of or otherwise relating to the foregoing collateral described in clauses (a) and (b) above, as such terms are defined in Article 9 of the California Commercial Code, and (d) any and all proceeds of any and all of the foregoing, including, without limitation, insurance proceeds (collectively, the “Collateral”). Lessee authorizes Lessor to file (and Lessee agrees to execute, if applicable) such notices of assignment, chattel mortgages, financing statements and other documents, in form satisfactory to Lessor, which Lessor deems necessary or appropriate to establish and maintain Lessor’s security interest in the Collateral, including, without limitation, such financing statements with respect to personal property and fixtures under Article 9 of the California Commercial Code and treating such Article 9 as applicable to entities such as Lessee.
Section 6.03. Personal Property, No Encumbrances. Lessee agrees that the Equipment is deemed to be and will remain personal property, and will not be deemed to be affixed to or a part of the real estate on which it may be situated, notwithstanding that the Equipment or any part thereof may be or hereafter become in any manner physically affixed or attached to real estate or any building thereon. Lessee shall not create, incur, assume or permit to exist any mortgage, pledge, Lien, security interest, charge or other encumbrance of any nature whatsoever on any of the real estate where the Equipment is or will be located or enter into any agreement to sell or assign or enter into any sale/leaseback arrangement of such real estate without the prior written consent of Lessor; provided, that if Lessor or its assigns is furnished with a waiver of interest in the Equipment acceptable to Lessor or its assigns in their respective discretion from any party taking an interest in any such real estate prior to such interest taking effect, such consent shall not be unreasonably withheld.
ARTICLE VII
Section 7.01. Liens, Taxes, Other Governmental Charges and Utility Charges. Lessee shall keep the Equipment free of all levies, Liens, and encumbrances except those created by this Agreement. The parties to this Agreement contemplate that the Equipment will be used for a governmental or proprietary purpose of Lessee and that the Equipment will therefore be exempt from all property taxes. If the lease, sale, purchase, operation, use, possession or acquisition of
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any Equipment is nevertheless determined to be subject to taxation, Lessee shall pay when due all sales and other taxes, special assessments, governmental and other charges of any kind that are at any time lawfully assessed or levied against or with respect to the Equipment, the Rental Payments or any part of either thereof, or which become due during the Lease Term, whether assessed against Lessee or Lessor. Lessee shall pay all utility and other charges incurred in the operation, use and maintenance of the Equipment. Lessee shall pay such taxes, assessments or charges as the same may become due; provided that, with respect to any such taxes, assessments or charges that may lawfully be paid in installments over a period of years, Lessee shall be obligated to pay only such installments as accrue during the Lease Term. Lessor will not claim ownership of the Equipment under this Agreement for the purposes of any tax credits, benefits or deductions with respect to such Equipment. Lessee shall pay the fee charged by the California Debt and Investment Advisory Commission with respect to this Agreement pursuant to Section 8856 (or any successor provision) of the California Government Code.
Section 7.02. Insurance. Lessee shall during the Lease Term maintain or cause to be maintained (a) casualty insurance naming Lessor and its assigns as loss payee and insuring the Equipment against loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the State, and any other risks reasonably required by Lessor, in an amount at least equal to the greater of (i) the then applicable Outstanding Balance or (ii) the replacement cost of the Equipment; (b) liability insurance naming Lessor and its assigns as additional insured that protects Lessor from liability with limits of at least $5,000,000 per occurrence for bodily injury and property damage coverage (such liability insurance coverage may be in a combination of primary general liability and/or excess liability umbrella coverage), and in all events under clauses (a) and (b) above issued in form and amount satisfactory to Lessor and by an insurance company that is authorized to do business in the State and having a financial strength rating by A.M. Best Company of “A-” or better; and (c) worker’s compensation coverage as required by the laws of the State. Notwithstanding the foregoing, Lessee may self-insure against the risks described in clauses (a) and/or (b) through a government pooling arrangement, self-funded loss reserves, risk retention program or other self-insurance program, in each case with Lessor’s prior written consent (which Lessor may grant, withhold or deny in its sole discretion) and provided that Lessee has delivered to Lessor such information as Lessor may request with respect to the adequacy of such self-insurance to cover the risks proposed to be self-insured and otherwise in form and substance acceptable to Lessor. In the event Lessee is permitted, at Lessor’s sole discretion, to self-insure as provided in this Section 7.02, Lessee shall provide to Lessor a self-insurance letter in form and substance satisfactory to Lessor, in Lessor’s sole discretion.
Lessee shall furnish to Lessor evidence of such insurance or self-insurance coverage throughout the Lease Term. Lessee shall not cancel or modify such insurance or self-insurance coverage in any way that would affect the interests of Lessor without first giving written notice thereof to Lessor at least thirty (30) days in advance of such cancellation or modification.
Section 7.03. Risk of Loss. Whether or not covered by insurance or self-insurance, Lessee hereby assumes all risk of loss of, or damage to and liability related to injury or damage to any persons or property arising from the Equipment from any cause whatsoever, and no such loss of or damage to or liability arising from the Equipment shall relieve Lessee of the obligation to make the Rental Payments or to perform any other obligation under this Agreement. Whether or not covered by insurance or self-insurance, Lessee hereby agrees to reimburse Lessor (to the fullest
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extent permitted by applicable law, but only from legally available funds) for any and all liabilities, obligations, losses, costs, claims, taxes or damages suffered or incurred by Lessor, regardless of the cause thereof and all expenses incurred in connection therewith (including, without limitation, counsel fees and expenses, and penalties connected therewith imposed on interest received) arising out of or as a result of (a) entering into this Agreement or any of the transactions contemplated hereby, (b) the ordering, acquisition, ownership use, operation, condition, purchase, delivery, acceptance, rejection, storage or return of any item of the Equipment, (c) any accident in connection with the operation, use, condition, possession, storage or return of any item of the Equipment resulting in damage to property or injury to or death to any person, and/or (d) the breach of any covenant of Lessee under or in connection with this Agreement or any material misrepresentation provided by Lessee under or in connection with this Agreement. The provisions of this Section 7.03 shall continue in full force and effect notwithstanding the full payment of all obligations under this Agreement or the termination of the Lease Term for any reason.
Section 7.04. Surety Bonds; Lessee to Pursue Remedies Against Contractors and Sub-Contractors and Their Sureties. Lessee shall secure from each Vendor directly employed by Lessee in connection with the acquisition, construction, installation, improvement or equipping of the Equipment, a payment and performance bond (“Surety Bond”) executed by a surety company authorized to do business in the State, having a financial strength rating by A.M. Best Company of “A-” or better, and otherwise satisfactory to Lessor and naming Lessor as a co-obligee in a sum equal to the entire amount to become payable under each Vendor Agreement. Each bond shall be conditioned on the completion of the work in accordance with the plans and specifications for the Equipment and upon payment of all claims of subcontractors and suppliers. Lessee shall cause the surety company to add Lessor as a co-obligee on each Surety Bond, and shall deliver a certified copy of each Surety Bond to Lessor promptly upon receipt thereof by Lessee. Any proceeds from a Surety Bond shall be applied in accordance with such Surety Bond to the payment and performance of the Vendor’s obligations in accordance with the related Vendor Agreement and, if for whatever reason such proceeds are not so applied, first to amounts due Lessor under this Agreement, and any remaining amounts shall be payable to Lessee if allowed by law.
In the event of a material default by any Vendor under any Vendor Agreement in connection with the acquisition, construction, maintenance and/or servicing of the Equipment or in the event of a material breach of warranty with respect to any material workmanship or performance guaranty with respect to the Equipment, Lessee will promptly proceed to exhaust its remedies against the Vendor in default. Lessee shall advise Lessor of the steps it intends to take in connection with any such default. Any amounts received by Lessee in respect of damages, refunds, adjustments or otherwise in connection with the foregoing shall, with the prior written consent of the Lessor either be (a) applied to repair or replace the Equipment in order to address the Vendor’s default, or (b) paid to Lessor and applied against Lessee’s obligations hereunder.
Section 7.05. Advances. In the event Lessee shall fail to keep the Equipment in good repair and working order or shall fail to maintain any insurance required by Section 7.02 hereof, Lessor may, but shall be under no obligation to, maintain and repair the Equipment or obtain and maintain any such insurance coverages, as the case may be, and pay the cost thereof. All amounts so advanced by Lessor shall constitute additional rent for the then current Original Term or Renewal Term and Lessee covenants and agrees to pay such amounts so advanced by Lessor with interest
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thereon from the due date until paid at a rate equal to the Contract Rate (or the Taxable Rate if then in effect) plus five percent (5%) per annum or the maximum amount permitted by law, whichever is less.
ARTICLE VIII
Section 8.01. Damage, Destruction and Condemnation. If, prior to the termination of the Lease Term, (a) the Equipment or any portion thereof is destroyed, in whole or in part, or is damaged by fire or other casualty or (b) title to, or the temporary use of, the Equipment or any part thereof shall be taken under the exercise or threat of the power of eminent domain by any governmental body or by any person, firm or corporation acting pursuant to governmental authority, (i) Lessee and Lessor will cause the Net Proceeds of any insurance claim or condemnation award or sale under threat of condemnation to be applied to the prompt replacement, repair, restoration, modification or improvement of the Equipment or such part thereof and any balance of the Net Proceeds remaining after such work has been completed shall be paid to Lessee or (ii) Lessee shall exercise its option to prepay the obligations hereunder in accordance with Section 10.01(a)(ii) hereof.
If Lessee elects to replace any item of the Equipment (the “Replaced Equipment”) pursuant to this Section 8.01, the replacement equipment (the “Replacement Equipment”) shall be new or of a quality, type, utility and condition at least as good as the Replaced Equipment, shall be of equal or greater value than the Replaced Equipment and shall provide at least the same level of energy and/or operational savings expected in the aggregate from the Replaced Equipment prior to such casualty, destruction or condemnation and shall have an expected remaining useful life at least through the Scheduled Term. Lessee shall grant to Lessor a first priority security interest in any such Replacement Equipment. Lessee shall represent, warrant and covenant to Lessor that each item of Replacement Equipment is free and clear of all claims, Liens, security interests and encumbrances, excepting only those Liens created by or through Lessor, and shall provide to Lessor any and all documents as Lessor may reasonably request in connection with the replacement, including, but not limited to, documentation in form and substance satisfactory to Lessor evidencing Lessor’s security interest in the Replacement Equipment. Lessor and Lessee hereby acknowledge and agree that any Replacement Equipment acquired pursuant to this paragraph shall constitute “Equipment” for purposes of this Agreement. Lessee shall complete the documentation of Replacement Equipment on or before the next Rental Payment Date after the occurrence of a casualty event, or be required to exercise its option to prepay the obligations hereunder with respect to the damaged Equipment in accordance with Section 10.01(a)(ii) hereof.
For purposes of this Article VIII, the term “Net Proceeds” shall mean the amount remaining from the gross proceeds of any insurance claim or condemnation award or sale under threat of condemnation after deducting all expenses, including attorneys’ fees, incurred in the collection thereof.
Section 8.02. Insufficiency of Net Proceeds. If the Net Proceeds are insufficient to pay in full the cost of any repair, restoration, modification or improvement referred to in Section 8.01, Lessee shall either (a) complete such replacement, repair, restoration, modification or improvement and pay any costs thereof in excess of the amount of the Net Proceeds, or (b) pay or
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cause to be paid to Lessor the amount of the then applicable Casualty Value plus all other amounts then owing hereunder, and, upon such payment, the Lease Term shall terminate and Lessor’s security interest in the Equipment shall terminate as provided in Section 6.01 hereof. The amount of the Net Proceeds remaining, if any, after completing such repair, restoration, modification or improvement or after paying such Casualty Value plus all other amounts then owing hereunder shall be retained by Lessee. If Lessee shall make any payments pursuant to this Section 8.02, Lessee shall not be entitled to any reimbursement therefor from Lessor nor shall Lessee be entitled to any diminution of the amounts payable under Article IV.
ARTICLE IX
Section 9.01. Disclaimer of Warranties. Lessor makes no warranty or representation, either express or implied, as to the value, design, condition, merchantability or fitness for particular purpose or fitness for use of any of the Equipment, or any other warranty or representation, express or implied, with respect thereto and, as to Lessor, Lessee’s acquisition of the Equipment shall be on an “as is” basis. In no event shall Lessor be liable for any incidental, indirect, special or consequential damage in connection with or arising out of this Agreement, the Equipment or the existence, furnishing, functioning or Lessee’s use of any item, product or service provided for in this Agreement.
Section 9.02. Vendor Agreements; Warranties. Lessee covenants that it shall not in any material respect amend, modify, rescind or alter any Vendor Agreement without the prior written consent of Lessor. Lessor hereby irrevocably appoints Lessee its agent and attorney-in-fact during the Lease Term, so long as Lessee shall not be in default under this Agreement and so long as no Event of Non-appropriation has occurred, to assert from time to time whatever claims and rights (including without limitation warranties) relating to the Equipment that Lessor may have against a Vendor. Lessee’s sole remedy for the breach of such warranty, indemnification or representation shall be against the applicable Vendor of the Equipment, and not against Lessor. Any such matter shall not have any effect whatsoever on the rights and obligations of Lessor under this Agreement, including the right to receive full and timely Rental Payments and other payments hereunder.
Lessee expressly acknowledges that Lessor makes, and has made, no representations or warranties whatsoever as to the existence or the availability of such warranties relating to any of the Equipment.
ARTICLE X
Section 10.01. Prepayment; Payment in Full or in Part.
(a) Prepayment. Lessee shall have the option to prepay or satisfy some or all of its obligations hereunder, at the following times and upon the following terms:
(i) Optional Prepayment in Whole. From and after the date specified (if any) in the Payment Schedule (the “Prepayment Option Commencement Date”), on the Rental Payment Dates specified in the Payment Schedule, upon not less than forty-five (45) days prior written notice, and upon payment in full of the sum of all Rental Payments then due
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plus the then applicable Prepayment Price, which shall include a prepayment premium on the unpaid Outstanding Balance as set forth in the Payment Schedule plus all other amounts then owing hereunder; or
(ii) Casualty or Condemnation Prepayment. In the event of substantial damage to or destruction or condemnation of substantially all of the Equipment, on the day specified in Lessee’s notice to Lessor of its exercise of the prepayment option (which shall be the earlier of the next Rental Payment Date or sixty (60) days after the casualty event) upon payment in full to Lessor of (A) in the event such prepayment occurs on a Rental Payment Date, the sum of (i) all Rental Payments then due plus (ii) the then applicable Casualty Value plus (iii) all other amounts then owing hereunder OR, (B) in the event such prepayment occurs on a date other than a Rental Payment Date, the sum of (i) the applicable Casualty Value shown on the Payment Schedule for the Rental Payment Date immediately preceding the applicable date of such prepayment (or if the date of such prepayment occurs prior to the first Rental Payment Date, the earliest Casualty Value shown on the Payment Schedule) plus (ii) accrued interest at the Contract Rate (or the Taxable Rate if then in effect) on the Outstanding Balance as of the Rental Payment Date immediately preceding the applicable date of such prepayment from such Rental Payment Date (or if the date of such prepayment occurs prior to the first Rental Payment Date, the Commencement Date) to the date of such prepayment plus (iii) all other amounts then owing hereunder; or (iii) Extraordinary Prepayment in Part. Prior to December 31, 2029, on any Rental Payment Date following the Lessee’s receipt of the Project Grant, upon not less than thirty (30) days prior written notice, the Lessee may exercise a one-time extraordinary prepayment up to a total principal amount of $938,400 which shall be applied by Lessor to the applicable unpaid Principal Portion of Rental Payments owing hereunder (on a pro rata basis) at a price of 100% of such prepaid Principal Portion plus accrued interest thereon to the prepayment date. In connection with any partial prepayment of Rental Payments, Lessor shall prepare a new Payment Schedule reflecting such partial prepayment and shall deliver the same to the Lessee, which new Payment Schedule shall be deemed to amend and replace the prior Payment Schedule and shall be binding on the parties, absent manifest error.
(b) Payment in Full. Lessor’s security interests in and to the Equipment will be terminated and Lessee will own such Equipment free and clear of Lessor’s security interest in such Equipment after either (i) payment of either (A) the applicable Prepayment Price and all other amounts then owing hereunder in accordance with Section 10.01(a)(i) of this Agreement or (B) the applicable Casualty Value and all other amounts then owing hereunder in accordance with Section 10.01(a)(ii) of this Agreement or (ii) upon the expiration of the Scheduled Term and payment in full of all Rental Payments then due and all other amounts then owing hereunder in accordance with this Agreement. Notwithstanding anything herein to the contrary, no portion of Lessor’s security interests in and to the Equipment or other Collateral will be terminated due to any partial prepayment pursuant to Section 10.01(a)(iii) of this Agreement.
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ARTICLE XI
Section 11.01. Assignment by Lessor. (a) Lessor’s right, title and interest in and to this Agreement, the Rental Payments and any other amounts payable by Lessee hereunder, the Escrow Agreement, its security interest in the Collateral (collectively, the “Assigned Rights”), may be assigned and reassigned by Lessor at any time, in whole or in part, to one or more assignees or sub-assignees without the necessity of obtaining the consent of Lessee; provided, that any such assignment, transfer or conveyance (i) shall be made only to investors each of whom Lessor reasonably believes is a “qualified institutional buyer” as defined in Rule 144A(a)(1) promulgated under the Securities Act of 1933, as amended, or an “accredited investor” as defined in Section 501(a)(1), (2), (3) or (7) of Regulation D promulgated under the Securities Act of 1933, as amended, and in either case is purchasing the Assigned Rights (or any interest therein) for its own account with no present intention to resell or distribute such Assigned Rights (or interest therein), subject to each investor’s right at any time to dispose of the Assigned Rights (or any interest therein) as it determines to be in its best interests, (ii) shall not result in more than 35 owners of the Assigned Rights or the creation of any interest in the Assigned Rights in an aggregate principal component that is less than $100,000 and (iii) shall not require Lessee to make Rental Payments, to send notices or otherwise to deal with respect to matters arising hereunder or under the Escrow Agreement with or to more than one Lease Servicer (as such term is defined below), and any trust agreement, participation agreement or custodial agreement under which multiple ownership interests in the Assigned Rights are created shall provide the method by which the owners of such interests shall establish the rights and duties of a single entity, trustee, owner, servicer or other fiduciary or agent acting on behalf of all of the assignees (herein referred to as the “Lease Servicer”) to act on their behalf with respect to the Assigned Rights, including with respect to the exercise of rights and remedies of Lessor on behalf of such owners upon the occurrence of an Event of Default or an Event of Non-appropriation under this Agreement. Lessor and Lessee hereby acknowledge and agree that the restrictions and limitations on transfer as provided in this Section 11.01 shall apply to the first and subsequent assignees and sub-assignees of any of the Assigned Rights (or any interest therein). (b) Unless to an affiliate controlling, controlled by or under common control with Lessor, no assignment, transfer or conveyance permitted by this Section 11.01 shall be effective as against Lessee until Lessee shall have received a written notice of assignment that discloses the name and address of each such assignee; provided, that if such assignment is made to a bank or trust company as trustee or paying agent for owners of certificates of participation, participation interests, trust certificates or partnership interests with respect to the Rental Payments payable under this Agreement, it shall thereafter be sufficient that Lessee receives notice of the name and address of the bank, trust company or other entity that acts as the Lease Servicer. Notices of assignment provided pursuant to this Section 11.01(b) shall contain a confirmation of compliance with the transfer requirements imposed by Section 11.01(a) hereof. During the Lease Term, Lessee shall keep, or cause to be kept, a complete and accurate record of all such assignments in form necessary to comply with Section 149 of the Code. Lessee shall retain all such notices as a register of all assignees and shall make all payments to the assignee or assignees or Lease Servicer last designated in such register. Lessee shall not have the right to and shall not assert against any assignee any claim, counterclaim or other right Lessee may have against the Prior Lessor or the Vendor. Assignments in part may include without limitation assignment of all of Lessor’s security
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interest in and to the Equipment and all rights in, to and under this Agreement related to such Equipment, and all of Lessor’s security interest in and to the Collateral, or all rights in, to and under the Escrow Agreement.
(c) If Lessor notifies Lessee of its intent to assign this Agreement, Lessee agrees that it shall execute and deliver to Lessor a Notice and Acknowledgement of Assignment substantially in the form of Exhibit H attached hereto within five (5) business days after its receipt of such request.
Section 11.02. Assignment and Subleasing by Lessee. None of Lessee’s right, title, and interest in, to and under this Agreement or any portion of the Equipment, the Escrow Agreement, the Escrow Account or any of the other Collateral may be assigned, encumbered or subleased by Lessee for any reason, and any purported assignment, encumbrance or sublease without Lessor’s prior written consent shall be null and void.
ARTICLE XII
Section 12.01. Events of Default Defined. Any of the following events shall constitute an “Event of Default” under this Agreement:
(a) Failure by Lessee to (i) pay any Rental Payment or other payment required to be paid under this Agreement within ten (10) days after the date when due as specified herein, (ii) maintain insurance as required herein, or (iii) observe and perform any covenant, condition or agreement on its part to be observed or performed under Section 6.01 or 6.02 hereof;
(b) Failure by Lessee to observe and perform any covenant, condition or agreement contained in this Agreement on its part to be observed or performed, other than as referred to in subsection (a) above, for a period of thirty (30) days after written notice specifying such failure and requesting that it be remedied is given to Lessee by Lessor, unless Lessor shall agree in writing to an extension of such time prior to its expiration; provided that, if the failure stated in the notice cannot be corrected within the applicable period, Lessor will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by Lessee within the applicable period and diligently pursued until the default is corrected;
(c) Any statement, representation or warranty made by Lessee in or pursuant to this Agreement or its execution, delivery or performance shall prove to have been false, incorrect, misleading, or breached in any material respect on the date when made; (d) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which Lessee is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by Lessor or any affiliate of Lessor, or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $100,000.00;
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(e) Lessee shall (i) apply for or consent to the appointment of a receiver, trustee, custodian or liquidator of Lessee, or of all or a substantial part of the assets of Lessee, (ii) be unable, fail or admit in writing its inability generally to pay its debts as they become due, (iii) make a general assignment for the benefit of creditors, (iv) have an order for relief entered against it under applicable Federal bankruptcy law, or (v) file a voluntary petition in bankruptcy or a petition or an answer seeking reorganization or an arrangement with creditors or taking advantage of any insolvency law or any answer admitting the material allegations of a petition filed against Lessee in any bankruptcy, liquidation, readjustment, reorganization, moratorium or insolvency proceeding; or (f) An order, judgment or decree shall be entered by any court of competent jurisdiction, approving a petition or appointing a receiver, trustee, custodian or liquidator for Lessee or of all or a substantial part of the assets of Lessee, in each case without its application, approval or consent, and such order, judgment or decree shall continue unstayed and in effect for any period of thirty (30) consecutive days.
Section 12.02. Remedies on Default. Whenever any Event of Default exists, Lessor shall have the right, at its sole option without any further demand or notice, to take one or any combination of the following remedial steps:
(a) By written notice to Lessee, Lessor may declare all Rental Payments payable by Lessee and other amounts payable by Lessee hereunder to the end of the then current Original Term or Renewal Term to be immediately due and payable; (b) With or without terminating the Lease Term, Lessor may enter the premises where the Equipment is located and retake possession of such Equipment or require Lessee at Lessee’s expense to promptly return any or all of such Equipment to the possession of Lessor at such place within the United States as Lessor shall specify, and sell or lease such Equipment or, for the account of Lessee, sublease such Equipment, continuing to hold Lessee liable, but solely from legally available funds, for the difference between (i) the Rental Payments payable by Lessee and other amounts hereunder that are payable by Lessee to the end of the then current Original Term or Renewal Term, as the case may be, and (ii) the net proceeds of any such sale, leasing or subleasing (after deducting all expenses of Lessor in exercising its remedies hereunder, including without limitation all expenses of taking possession, storing, reconditioning and selling or leasing such Equipment and all brokerage, auctioneer’s and attorney’s fees), subject, however, to the provisions of Section 3.03 of this Agreement. The exercise of any such remedies respecting any such Event of Default shall not relieve Lessee of any other liabilities hereunder or with respect to the Equipment;
(c) Lessor may terminate the Escrow Agreement and apply any proceeds in the Escrow Account to the Rental Payments scheduled to be paid hereunder; and/or (d) Lessor may take whatever action at law or in equity as may appear necessary or desirable to enforce its rights under this Agreement or the Escrow Agreement or as a secured party in any or all of the Equipment or the Escrow Account.
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Section 12.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to Lessor is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient. In order to entitle Lessor to exercise any remedy reserved to it in this Article XII it shall not be necessary to give any notice other than such notice as may be required in this Article XII.
ARTICLE XIII
Section 13.01. Notices. All notices, certificates or other communications under this Agreement shall be sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, or delivered by overnight courier, or sent by facsimile transmission (with electronic confirmation) to the parties hereto at the addresses immediately after the signatures to this Agreement (or at such other address as either party hereto shall designate in writing to the other for notices to such party) and to any assignee at its address as it appears on the registration books maintained by Lessee.
Section 13.02. Binding Effect. This Agreement shall inure to the benefit of and shall be binding upon Lessor and Lessee and their respective successors and assigns.
Section 13.03. Severability. In the event any provision of this Agreement 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 13.04. Amendments, Changes and Modifications. This Agreement may only be amended by Lessor and Lessee in writing.
Section 13.05. Execution in Counterparts. This Agreement 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; provided, that only Counterpart No. 1 of this Agreement shall constitute chattel paper for purposes of the applicable Uniform Commercial Code.
Section 13.06. Applicable Law; Venue; Waiver of Jury Trial. This Agreement shall be governed by and construed in accordance with the laws of the State. The parties hereto consent and submit to the jurisdiction of the State and venue in any state or Federal court of such State for the purposes of any suit, action or other proceeding arising in connection with this Agreement, and each party expressly waives any objections that it may have to the venue of such courts. The parties hereto expressly waive any right to trial by jury in any action brought on or with respect to this Agreement. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.
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Section 13.07. Captions. The captions or headings in this Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.
Section 13.08. No Advisory or Fiduciary Relationship. In connection with all aspects of each transaction contemplated by this Agreement (including in connection with any amendment, waiver or other modification hereof or of any other related document), the Lessee acknowledges and agrees that: (a) (i) the transactions regarding this Agreement provided by the Lessor and any affiliate thereof are arm’s-length commercial transactions between the Lessee, on the one hand, and the Lessor and its affiliates, on the other hand, (ii) the Lessee has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate, and (iii) the Lessee is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement and by the other related documents; (b) (i) the Lessor and its affiliates each is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary, for the Lessee, or any other person and (ii) neither the Lessor nor any of its affiliates has any obligation to the Lessee with respect to the transactions contemplated by this Agreement except those obligations expressly set forth herein and in the other related documents; and (c) the Lessor and its affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Lessee, and neither the Lessor nor any of its affiliates has any obligation to disclose any of such interests to the Lessee. To the fullest extent permitted by law, the Lessee, hereby waives and releases any claims that it may have against the Lessor or any of its affiliates with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transactions contemplated by this Agreement.
Section 13.09. Entire Agreement. The parties agree that this Agreement constitutes the final and entire agreement between the parties superseding all conflicting terms or provisions of any prior proposals, term sheets, solicitation documents, requests for proposals, award notices, approval letters or any other agreements or understandings between the parties.
Section 13.10. Electronic Signatures. The Related Documents may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of the Related Documents and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes. Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [Remainder of Page Intentionally Left Blank]
[Signature Page Follows]
[Signature Page of Equipment Lease/Purchase Agreement]
IN WITNESS WHEREOF, Lessor and Lessee have caused this Equipment Lease/Purchase Agreement to be executed in their names by their duly authorized representatives as of the date first above written.
LESSOR: LESSEE:
BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF HANFORD
11333 McCormick Road
Hunt Valley II
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attention: Contract Administration
Fax No.: (443) 541-3057
319 North Douty Street
Hanford, CA 93230
Attention: Chris Tavarez, Acting City
Manager
Telephone: (559) 585-2500
Fax No.: (559) 582-1152
Email: [email protected]
By:_________________________________
Name: ___________________________
Title: ____________________________
By:_________________________________
Name: Chris Tavarez
Title: Acting City Manager
Counterpart No. _____ of _____ manually executed and serially numbered counterparts.
To the extent that this Agreement constitutes chattel paper (as defined in the applicable Uniform Commercial Code), no security interest or ownership herein may be created through the transfer or possession of any Counterpart other than Counterpart No. 1.
LIST OF EXHIBITS
EXHIBIT A — Form of Equipment Schedule
EXHIBIT B — Form of Payment Schedule
EXHIBIT C-1 — Form of Authorizing Resolution
EXHIBIT C-2 — Form of Incumbency and Authorization Certificate EXHIBIT D — Form of Opinion of Lessee’s Counsel
EXHIBIT E — Form of Final Acceptance Certificate
EXHIBIT F — Reserved
EXHIBIT G — Reserved
EXHIBIT H — Form of Notice and Acknowledgement of Assignment EXHIBIT I — Form of Escrow and Account Control Agreement
EXHIBIT A
EQUIPMENT SCHEDULE
Location of Equipment:
Equipment Description (Scope of Work):
EXHIBIT B
PAYMENT SCHEDULE
RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PREPAYMENT
PRICE
(including prepayment
premium, if any)
CASUALTY
PRICE
(including casualty
premium, if any)
1/27/26 $3,740,000.00 NA $3,814,800.00
10/1/26 $ 113,791.16 $ 113,791.16 $ 0.00 3,740,000.00 NA 3,814,800.00 4/1/27 83,944.30 83,944.30 0.00 3,740,000.00 NA 3,814,800.00 10/1/27 93,776.30 83,944.30 9,832.00 3,730,168.00 NA 3,804,771.36 4/1/28 93,775.62 83,723.62 10,052.00 3,720,116.00 NA 3,794,518.32 10/1/28 98,906.00 83,498.00 15,408.00 3,704,708.00 NA 3,778,802.16 4/1/29 98,906.17 83,152.17 15,754.00 3,688,954.00 NA 3,762,733.08 10/1/29 104,316.57 82,798.57 21,518.00 3,667,436.00 $3,740,784.72 3,740,784.72 4/1/30 104,316.60 82,315.60 22,001.00 3,645,435.00 3,718,343.70 3,718,343.70 10/1/30 110,022.79 81,821.79 28,201.00 3,617,234.00 3,689,578.68 3,689,578.68 4/1/31 110,022.82 81,188.82 28,834.00 3,588,400.00 3,660,168.00 3,660,168.00 10/1/31 116,040.64 80,541.64 35,499.00 3,552,901.00 3,623,959.02 3,623,959.02 4/1/32 116,039.86 79,744.86 36,295.00 3,516,606.00 3,586,938.12 3,586,938.12 10/1/32 122,387.22 78,930.22 43,457.00 3,473,149.00 3,542,611.98 3,542,611.98 4/1/33 122,387.83 77,954.83 44,433.00 3,428,716.00 3,497,290.32 3,497,290.32 10/1/33 129,082.53 76,957.53 52,125.00 3,376,591.00 3,444,122.82 3,444,122.82 4/1/34 129,082.58 75,787.58 53,295.00 3,323,296.00 3,389,761.92 3,389,761.92 10/1/34 136,144.38 74,591.38 61,553.00 3,261,743.00 3,326,977.86 3,326,977.86 4/1/35 136,143.82 73,209.82 62,934.00 3,198,809.00 3,262,785.18 3,262,785.18 10/1/35 143,590.27 71,797.27 71,793.00 3,127,016.00 3,189,556.32 3,189,556.32 4/1/36 143,589.87 70,185.87 73,404.00 3,053,612.00 3,114,684.24 3,114,684.24 10/1/36 151,445.32 68,538.32 82,907.00 2,970,705.00 3,000,412.05 3,000,412.05 4/1/37 151,445.47 66,677.47 84,768.00 2,885,937.00 2,914,796.37 2,914,796.37 10/1/37 159,728.86 64,774.86 94,954.00 2,790,983.00 2,818,892.83 2,818,892.83 4/1/38 159,728.61 62,643.61 97,085.00 2,693,898.00 2,720,836.98 2,720,836.98 10/1/38 168,465.54 60,464.54 108,001.00 2,585,897.00 2,611,755.97 2,611,755.97 4/1/39 168,465.46 58,040.46 110,425.00 2,475,472.00 2,500,226.72 2,500,226.72 10/1/39 177,680.97 55,561.97 122,119.00 2,353,353.00 2,376,886.53 2,376,886.53 4/1/40 177,681.01 52,821.01 124,860.00 2,228,493.00 2,250,777.93 2,250,777.93 10/1/40 187,400.53 50,018.53 137,382.00 2,091,111.00 2,112,022.11 2,112,022.11 4/1/41 187,400.99 46,934.99 140,466.00 1,950,645.00 1,970,151.45 1,970,151.45 10/1/41 197,651.23 43,782.23 153,869.00 1,796,776.00 1,814,743.76 1,814,743.76 4/1/42 197,651.64 40,328.64 157,323.00 1,639,453.00 1,655,847.53 1,655,847.53 10/1/42 208,462.52 36,797.52 171,665.00 1,467,788.00 1,482,465.88 1,482,465.88 4/1/43 208,462.50 32,944.50 175,518.00 1,292,270.00 1,305,192.70 1,305,192.70 10/1/43 219,865.00 29,005.00 190,860.00 1,101,410.00 1,112,424.10 1,112,424.10
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RENTAL
PAYMENT
DATE
RENTAL
PAYMENT
AMOUNT
INTEREST
PORTION
PRINCIPAL
PORTION
OUTSTANDING
BALANCE
PREPAYMENT
PRICE
(including prepayment
premium, if any)
CASUALTY
PRICE
(including casualty
premium, if any)
4/1/44 219,865.15 24,721.15 195,144.00 906,266.00 915,328.66 915,328.66 10/1/44 231,892.14 20,341.14 211,551.00 694,715.00 701,662.15 701,662.15 4/1/45 231,891.88 15,592.88 216,299.00 478,416.00 483,200.16 483,200.16 10/1/45 489,154.05 10,738.05 478,416.00 0.00 0.00 0.00
$6,200,606.20 $2,460,606.20 $3,740,000.00
Contract Rate. The Contract Rate is 4.489% per annum.
Prepayment Option Commencement Date. For purposes of Section 10.01 of the Agreement, the Prepayment Option Commencement Date is October 1, 2029.
[Signature Page to Payment Schedule]
LESSOR: LESSEE:
BANC OF AMERICA PUBLIC CAPITAL CORP CITY OF HANFORD
By:_________________________________
Name: ___________________________
Title: ____________________________
By:_________________________________
Name: Chris Tavarez
Title: Acting City Manager
EXHIBIT C-1
FORM OF AUTHORIZING RESOLUTION
See Transcript Item #3(a)
EXHIBIT C-2
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Hanford (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dated as of January 27, 2026 by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of January 27, 2026 by and among Lessor, Lessee and UMB Bank, National Association, as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.
NAME OF OFFICIAL TITLE SIGNATURE
Chris Tavarez Acting City Manager _____________________ Dated: January 27, 2026 By: ____________________________________ Name: Natalie Corral
Title: City Clerk
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)
EXHIBIT D
FORM OF OPINION OF COUNSEL TO LESSEE
(TO BE TYPED ON LETTERHEAD OF COUNSEL)
[Closing Date]
Banc of America Public Capital Corp
11333 McCormick Road
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of January 27, 2026, by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Hanford, as Lessee
Ladies and Gentlemen:
As legal counsel to the City of Hanford (“Lessee”), I have examined (a) an executed counterpart of that certain Equipment Lease/Purchase Agreement, dated as of January 27, 2026, and Exhibits thereto by and between Banc of America Public Capital Corp (“Lessor”) and Lessee (the “Agreement”), which, among other things, provides for the lease of certain property (the “Equipment”) and a certain Escrow and Account Control Agreement dated as of January 27, 2026 by and among Lessor, Lessee, and UMB Bank, National Association as Escrow Agent (the “Escrow Agreement”), (b) an executed counterpart of the ordinances or resolutions of Lessee with respect to authorization of the transaction contemplated by the Agreement, the Escrow Agreement and documents related thereto, and (c) such other opinions, documents and matters of law as I have deemed necessary in connection with the following opinions. The Agreement, the Escrow Agreement, and the documents relating thereto are herein collectively referred to as the “Transaction Documents”.
Based on the foregoing, I am of the following opinions:
1. Lessee is a city, duly organized and existing under the laws of the State, and is a political subdivision of the State within the meaning of Section 103(c) of the Internal Revenue Code of 1986, as amended (the “Code”) and the obligations of Lessee under the Agreement will constitute an obligation of Lessee within the meaning of Section 103(a) of the Code, notwithstanding Section 103(b) of the Code.
2. Lessee has the requisite power and authority to lease and acquire the Equipment and to execute and deliver the Transaction Documents and to perform its obligations under the Transaction Documents.
D-2
3. The Transaction Documents have been duly authorized, approved, executed and delivered by and on behalf of Lessee and the Transaction Documents are legal, valid and binding obligations of Lessee, enforceable against Lessee in accordance with their respective terms, except to the extent limited by state and federal law affecting creditor’s remedies and by bankruptcy, reorganization, moratorium or other laws of general application relating to or affecting the enforcement of creditors’ rights.
4. The authorization, approval, execution and delivery of the Transaction Documents and all other proceedings of Lessee relating to the transactions contemplated thereby have been performed in accordance with all open meeting laws, procurement and public bidding laws and all other applicable State or Federal laws.
5. There is no proceeding pending or threatened in any court or before any governmental authority or arbitration board or tribunal that, if adversely determined, would adversely affect the transactions contemplated by the Transaction Documents or the security interest of Lessor or its assigns, as the case may be, in the Equipment, the Escrow Account or other Collateral thereunder.
All capitalized terms herein shall have the same meanings as in the Transaction Documents unless otherwise provided herein. Lessor and its successors and assigns are entitled to rely on this opinion.
Sincerely,
EXHIBIT E
FORM OF FINAL ACCEPTANCE CERTIFICATE
Banc of America Public Capital Corp
11333 McCormick Road
M/C MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
Re: Equipment Lease/Purchase Agreement,
dated as of January 27, 2026, by and between
Banc of America Public Capital Corp, as Lessor,
and the City of Hanford, as Lessee
Ladies and Gentlemen:
In accordance with the above-referenced Equipment Lease/Purchase Agreement (the “Agreement”), the undersigned Lessee hereby certifies and represents to, and agrees with Lessor as follows:
1. All of the Equipment has been delivered, installed and unconditionally accepted on the date hereof.
2. Lessee has conducted such inspection and/or testing of the Equipment as it deems necessary and appropriate and hereby acknowledges that it accepts the Equipment for all purposes and the Equipment has been delivered, installed and is unconditionally accepted for all purposes by Lessee, and title to the Equipment has transferred to Lessee and any security interest of Vendor therein has been released.
3. Lessee is currently maintaining the insurance coverage required by Section 7.02 of the Agreement.
4. Lessee hereby reaffirms that the representations, warranties and covenants contained in the Agreement are true and correct as of the date hereof.
5. No event or condition that constitutes, or with notice or lapse of time, or both, would constitute, an Event of Default exists at the date hereof.
6. No Material Adverse Change has occurred since the date of the execution and delivery of the Agreement.
7. No Event of Non-appropriation has occurred or been threatened.
E-2
Capitalized terms used, but not defined, in this Final Acceptance Certificate shall have the same meanings as when such terms are used in the Agreement.
E-3
Date: ____________________-
LESSEE:
CITY OF HANFORD
By: ____________________________________
Name: ______________________________
Title: _______________________________
(SEAL)
EXHIBIT F
RESERVED
EXHIBIT G
RESERVED
EXHIBIT H
FORM OF NOTICE AND ACKNOWLEDGEMENT OF ASSIGNMENT
Dated ____________________
Banc of America Public Capital Corp (“Assignor”) hereby gives notice that it has assigned and sold to _________________________ (“Assignee”) all of Assignor’s right, title and interest in, to and under the Equipment Lease/Purchase Agreement dated as of January 27, 2026 (the “Agreement”), by and between Assignor and the City of Hanford (“Lessee”), together with all exhibits, schedules, addenda and attachments related thereto, and all certifications and other documents delivered in connection therewith, the Rental Payments and other amounts due under the Agreement, all of Assignor’s right, title and interest in the Equipment (as defined in the Agreement), and all of Assignor’s right, title and interest in, to and under the Escrow and Account Control Agreement dated as of January 27, 2026 (the “Escrow Agreement”) by and among Lessee, Assignor and UMB Bank, National Association, as Escrow Agent, together with the Escrow Account and other Collateral (collectively, the “Assigned Property”). Each capitalized term used but not defined herein has the meaning set forth in the Agreement.
1. Lessee hereby acknowledges the effect of the assignment of the Assigned Property and absolutely and unconditionally agrees to deliver to Assignee all Rental Payments and other amounts coming due under the Agreement in accordance with the terms thereof on and after the date of this Acknowledgment.
2. Lessee hereby agrees that: (i) Assignee shall have all the rights of Lessor under the Agreement and all related documents, including, but not limited to, the rights to issue or receive all notices and reports, to give all consents or agreements to modifications thereto, to receive title to the Equipment in accordance with the terms of the Agreement, to declare a default and to exercise all rights and remedies thereunder in connection with the occurrence of an Event of Non-appropriation or an Event of Default; and (ii) [except as provided in Section 3.03 of the Agreement,] the obligations of Lessee to make Rental Payments and to perform and observe the other covenants and agreements contained in the Agreement shall be absolute and unconditional in all events without abatement, diminution, deduction, set-off or defense.
3. Lessee agrees that, as of the date of this Notice and Acknowledgment of Assignment (this “Acknowledgement”), the following information about the Agreement is true, accurate and complete:
Number of Rental Payments Remaining ________________
Amount of Each Rental Payment $_______________
Total Amount of Rental Payments
Remaining $_______________
Frequency of Rental Payments ________________
Next Rental Payment Due ________________
Funds Remaining in Escrow Account $_______________
H-2
4. The Agreement remains in full force and effect, has not been amended, no Event of Default (or event which with the passage of time or the giving of notice or both would constitute an Event of Default) has occurred thereunder and no Event of Non-appropriation has occurred or is threatened with respect thereto.
5. Assignor hereby acknowledges the transfer restrictions imposed by Section 11.01 of the Agreement and confirms that the assignment to Assignee has been made in accordance with the provisions of that Section.
6. Any inquiries of Lessee related to the Agreement and any requests for disbursements from the Escrow Account, if applicable, and all Rental Payments and other amounts coming due pursuant to the Agreement on and after the date of this Acknowledgment should be remitted to Assignee at the following address (or such other address as provided to Lessee in writing from time to time by Assignee):
______________________________
______________________________
______________________________
ACKNOWLEDGED AND AGREED:
LESSEE: CITY OF HANFORD
By: _________________________________
Name: ___________________________
Title: ____________________________
ASSIGNOR: BANC OF AMERICA PUBLIC CAPITAL CORP
By: _________________________________
Name: ___________________________
Title: ____________________________
EXHIBIT I
ESCROW AND ACCOUNT CONTROL AGREEMENT
See Item #4 in Transcript
ESCROW AND ACCOUNT CONTROL AGREEMENT
This Escrow and Account Control Agreement (this “Agreement”), dated as of ___________, 2026, by and among Banc of America Public Capital Corp, a Kansas corporation (together with its successors and assigns, hereinafter referred to as “Lessor”), City of Hanford, a city existing under the laws of the State of California (hereinafter referred to as “Lessee”) and UMB Bank, National Association, a national banking association organized under the laws of the United States of America (hereinafter referred to as “Escrow Agent”).
Reference is made to that certain Equipment Lease/Purchase Agreement dated as of ___________, 2026 between Lessor and Lessee (hereinafter referred to as the “Lease”), covering the acquisition and lease of certain Equipment described therein (the “Equipment”). It is a requirement of the Lease that the Acquisition Amount ($3,740,000) be deposited into a segregated escrow account under terms satisfactory to Lessor, for the purpose of fully funding the Lease, and providing a mechanism for the application of such amounts to the purchase of and payment for the Equipment.
NOW,THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
Section 1. Creation of Escrow Account. (a) There is hereby created an escrow fund to be known as the “City of Hanford Escrow Account” (the “Escrow Account”) to be held by the Escrow Agent for the purposes stated herein, for the benefit of Lessor and Lessee, to be held, disbursed and returned in accordance with the terms hereof. (b) Lessee may, from time to time, provide written instructions for Escrow Agent to use any available cash in the Escrow Account to purchase any money market fund or liquid deposit investment vehicle that Escrow Agent from time to time makes available to the parties hereto.
Such written instructions shall be provided via delivery to Escrow Agent of a signed and completed Escrow Account Investment Selection Form (such form available from Escrow Agent upon request). All funds invested by Escrow Agent at the direction of Lessee in such short-term investments (as more particularly described in Escrow Agent’s Escrow Account Investment Selection Form) shall be deemed to be part of the Escrow Account and subject to all the terms and conditions of this Agreement. The Escrow Agent is hereby authorized and directed to sell or redeem any such investments as it deems necessary to make any payments or distributions required under this Agreement. The Lessee acknowledges that neither the Escrow Agent nor the Lessor is providing investment supervision, recommendations, or advice. If any cash is received for the Escrow Account after the cut-off time for the designated short-term investment vehicle, the Escrow Agent shall hold such cash uninvested until the next Business Day. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in Chicago, Illinois, Hanford, California or New York, New York. In the absence of written instructions from Lessee (on Escrow Agent’s Escrow Account Investment Selection Form) designating a short-term investment of cash in the Escrow Account, cash in the Escrow Account shall remain uninvested and it shall not be collateralized. Escrow Agent shall have no obligation to pay interest on cash in respect of any period during which it remains uninvested. Lessee shall
-2-
be solely responsible for ascertaining that all proposed investments and reinvestments are Qualified Investments and that they comply with federal, state and local laws, regulations and ordinances governing investment of such funds and for providing appropriate notice to the Escrow Agent for the reinvestment of any maturing investment. Accordingly, neither the Escrow Agent nor Lessor shall be responsible for any liability, cost, expense, loss or claim of any kind, directly or indirectly arising out of or related to the investment or reinvestment of all or any portion of the moneys on deposit in the Escrow Account, and Lessee agrees to and does hereby release the Escrow Agent and Lessor from any such liability, cost, expenses, loss or claim. Interest on the Escrow Account shall become part of the Escrow Account, and gains and losses on the investment of the moneys on deposit in the Escrow Account shall be borne by the Lessee. The Escrow Agent shall have no discretion whatsoever with respect to the management, disposition or investment of the Escrow Account. The Escrow Agent shall not be responsible for any market decline in the value of the Escrow Account and has no obligation to notify Lessor and Lessee of any such decline or take any action with respect to the Escrow Account, except upon specific written instructions stated herein. For purposes of this Agreement, “Qualified Investments” means any investments which meet the requirements of California Government Code Sections 53600 et seq. (c) Unless the Escrow Account is earlier terminated in accordance with the provisions of paragraph (d) below, amounts in the Escrow Account shall be disbursed by the Escrow Agent in payment of amounts described in Section 2 hereof upon receipt of written instruction(s) from Lessor, as is more fully described in Section 2 hereof. If the amounts in the Escrow Account are insufficient to pay such amounts, Lessee shall provide any balance of the funds needed to complete the acquisition of the Equipment. Any moneys remaining in the Escrow Account on or after the earlier of (i) the expiration of the Acquisition Period or (ii) the date on which Lessee executes a Final Acceptance Certificate shall be applied as provided in Section 4 hereof. (d) The Escrow Account shall be terminated at the earliest of (i) the final distribution of amounts in the Escrow Account, (ii) the date on which Lessee executes a Final Acceptance Certificate or (iii) written notice given by Lessor of the occurrence of an Event of Default under the Lease and Lessor’s election to terminate this Agreement or termination of the Lease due to an Event of Non-appropriation. Notwithstanding the foregoing, this Agreement shall not terminate nor shall the Escrow Account be closed until all funds deposited hereunder have been disbursed. (e) The Escrow Agent may act in reliance upon any writing or instrument or signature which it, in good faith, believes to be genuine and may assume the validity and accuracy of any statement or assertion contained in such a writing or instrument. The Escrow Agent shall not be liable in any manner for the sufficiency or correctness as to form, manner of execution, or validity of any instrument nor as to the identity, authority, or right of any person executing the same; and its duties hereunder shall be limited to the receipt of such moneys, instruments or other documents received by it as the Escrow Agent, and for the disposition of the same in accordance herewith.
Notwithstanding and without limiting the generality of the foregoing, concurrent with the execution of this Agreement, Lessee and Lessor, respectively, shall deliver to the Escrow Agent an authorized signers form in the form of Exhibit A-1 (Lessee) and Exhibit A-2 (Lessor) attached hereto. Notwithstanding the foregoing sentence, the Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications reasonably believed by it to have been sent or given by the parties or by a person or persons authorized by the parties. The Escrow
-3-
Agent specifically allows for receiving direction by written or electronic transmission from an authorized representative with the following caveat, to the extent permitted by law, Lessee and Lessor agree to indemnify and hold harmless the Escrow Agent against any and all claims, losses, damages, liabilities, judgments, costs and expenses (including reasonable attorneys’ fees) (collectively, “Losses”) incurred or sustained by the Escrow Agent as a result of or in connection with the Escrow Agent’s reasonable reliance upon and compliance with instructions or directions given by written or electronic transmission given by each, respectively, provided, however, that such Losses have not arisen from the gross negligence or willful misconduct of the Escrow Agent, with regards to the execution of the instructions or directions in question.
In the event conflicting instructions as to the disposition of all or any portion of the Escrow Account are at any time given by Lessor and Lessee, the Escrow Agent shall abide by the instructions or entitlement orders given by Lessor without consent of the Lessee. (f) Unless the Escrow Agent is guilty of gross negligence or willful misconduct with regard to its duties hereunder, Lessee agrees to and does hereby release and indemnify the Escrow Agent and its directors, officers, employees and agents and hold it harmless from any and all claims, liabilities, losses, actions, suits or proceedings at law or in equity, or any other expense, fees or charges of any character or nature, which it may incur or with which it may be threatened by reason of its acting as Escrow Agent under this Agreement; and in connection therewith, does to the extent permitted by law indemnify the Escrow Agent against any and all expenses; including reasonable attorneys’ fees and the cost of defending any action, suit or proceeding or resisting any claim.
(g) If Lessee and Lessor shall be in disagreement about the interpretation of the Lease, or about the rights and obligations, or the propriety of any action contemplated by the Escrow Agent hereunder, the Escrow Agent may, but shall not be required to, file an appropriate civil action including an interpleader action to resolve the disagreement. The Escrow Agent shall be reimbursed by Lessee the non-prevailing party in such action for all costs, including reasonable attorneys’ fees, in connection with such civil action, and shall be fully protected in suspending all or part of its activities under this Agreement until a final judgment in such action is received; [provided solely as between the Lessor and Lessee, the Lessor and Lessee agree that any obligation for reimbursement under this clause (g) shall be borne by the party determined by a court of competent jurisdiction to be responsible for causing the loss, damage, liability, cost or expense of the Escrow Agent].
(h) The Escrow Agent may consult with counsel of its own choice and shall have full and complete authorization and protection with the advice or opinion of such counsel. The Escrow Agent shall otherwise not be liable for any mistakes of fact or errors of judgment, or for any acts or omissions of any kind unless caused by its gross negligence or willful misconduct. (i) The compensation fee for Escrow Agent’s services under this Agreement is $0.00.
Lessee shall reimburse the Escrow Agent for all reasonable costs and expenses, including those of the Escrow Agent’s attorneys, agents and employees incurred for non-routine administration of the Escrow Account, execution of the directions provided by the Lessee and Lessor and the performance of the Escrow Agent’s powers and duties hereunder in connection with any Event of
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Default under the Lease, any termination of the Lease due to an Event of Non-appropriation or in connection with any dispute between Lessor and Lessee concerning the Escrow Account. The terms of this paragraph shall survive termination of this Agreement and/or the earlier resignation or removal of the Escrow Agent.
(j) The Escrow Agent or any successor may at any time resign by giving mailed notice to Lessee and Lessor of its intention to resign and of the proposed date of resignation (the “Effective Date”), which shall be a date not less than 60 days after such notice is delivered to an express carrier, charges prepaid, unless an earlier resignation date and the appointment of a successor shall have been approved by the Lessee and Lessor. After the Effective Date, the Escrow Agent shall be under no further obligation except to hold the Escrow Account in accordance with the terms of this Agreement, pending receipt of written instructions from Lessor regarding further disposition of the Escrow Account.
(k) The Escrow Agent shall have no responsibilities, obligations or duties other than those expressly set forth in this Agreement and no implied duties responsibilities or obligations shall be read into this Agreement. The Escrow Agent shall neither be responsible for, nor chargeable with, knowledge of the terms and conditions of any other agreement, instrument, or document other than this Agreement, whether or not an original or a copy of such agreement has been provided to the Escrow Agent.
(l) The permissive rights of the Escrow Agent to do things enumerated in this Agreement shall not be construed as a duty and, with respect to such permissive rights, the Escrow Agent shall not be answerable for other than its gross negligence or willful misconduct. (m) Nothing in this Agreement shall require the Escrow Agent to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder.
(n) In no event shall the Escrow Agent be responsible or liable for special, indirect, punitive, incidental or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Escrow Agent has been advised of the likelihood of such loss or damage and regardless of the form of action. (o) In the event that any of the funds in the Escrow Account shall be attached, garnished or levied upon by any court order, or the delivery thereof shall be stayed or enjoined by an order of a court, or any order, judgment or decree shall be made or entered by any court order affecting the funds in the Escrow Account, the Escrow Agent is hereby expressly authorized to respond as it deems appropriate or to comply with all writs, orders or decrees duly entered or issued. To the extent permitted by law, the Escrow Agent shall inform the Lessor and Lessee in writing about any such attachment, garnishment, levy, court order, judgment or decree within ten (10) business days of its receipt of any such attachment, garnishment, levy, court order, judgment or decree. In the event that the Escrow Agent reasonably obeys or complies with any such writ, order or decree, it shall not be liable to any of the other parties to this Agreement or to any other person, firm or corporation, should, by reason of such compliance notwithstanding, such writ, order or decree be subsequently reversed, modified, annulled, set aside or vacated.
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Section 2. Acquisition and Installation of Equipment.
(a) Acquisition Contracts. Lessee will arrange for, supervise and provide for, or cause to be supervised and provided for, the acquisition of the Equipment, with moneys available in the Escrow Account. Lessee represents the estimated costs of the Equipment are within the funds estimated to be available therefor, and Lessor makes no warranty or representation with respect thereto. Lessor shall have no liability under any of the acquisition or construction contracts.
Lessee shall obtain all necessary permits and approvals, if any, for the acquisition, equipping and installation of the Equipment, and the operation and maintenance thereof. Escrow Agent shall have no duty to inquire as to the performance or nonperformance of any provision of any other agreement, instrument, or document other than this Agreement or monitor or enforce Lessee’s compliance with the foregoing covenant.
(b) Authorized Escrow Account Disbursements. It is agreed as between Lessee and Lessor that disbursements from the Escrow Account shall be made for the purpose of paying (including the reimbursement to Lessee for advances from its own funds to accomplish the purposes hereinafter described) the cost of acquiring and installing the Equipment. (c) Requisition Procedure. No disbursement from the Escrow Account shall be made unless and until Lessor has approved in writing such requisition. Prior to disbursement from the Escrow Account there shall be filed with the Escrow Agent a requisition for such payment in the form of Disbursement Request attached hereto as Schedule 1, stating each amount to be paid and the name of the person, firm or corporation to whom payment thereof is due. All disbursements shall be made by wire transfer. The Escrow Agent is authorized to obtain and rely on confirmation of such Disbursement Request and payment instructions by telephone call-back to the person or persons designated for verifying such requests on Exhibit A-2 (such person verifying the request shall be different than the person initiating the request). The Lessor and Lessee hereby confirm that any call-back performed by Escrow Agent to verify a disbursement instruction pursuant to a Disbursement Request submitted pursuant to this Section 2(c) before release, shall be made to Lessor only and Escrow Agent shall have no obligation to call-back Lessee.
Each such Disbursement Request shall be signed by an authorized representative of Lessee (an “Authorized Representative”) and by Lessor, and shall be subject to the following conditions, which Escrow Agent shall conclusively presume have been satisfied at such time as a requisition duly executed by Lessee and Lessor is delivered to it:
1. Delivery to Lessor of an executed Disbursement Request in the form attached hereto as Schedule 1;
2. Delivery to Lessor of copies of invoices (and proofs of payment of such invoices, if Lessee seeks reimbursement) and bills of sale therefor or other evidence of title transfer, and release by Vendor of any security interest, therefor as required by Section 3.04 of the Lease and any additional documentation reasonably requested by Lessor; and
3. The disbursement shall occur during the Acquisition Period.
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Lessee and Lessor agree that their execution of the form attached hereto as Schedule 1 and delivery of the executed form to Escrow Agent confirms that all of the requirements and conditions with respect to disbursements set forth in this Section 2 have been satisfied.
Section 3. Deposit to Escrow Account. Upon satisfaction of the conditions specified in Section 3.04 of the Lease, Lessor will cause the Acquisition Amount to be deposited in the Escrow Account. Lessee agrees to pay any costs with respect to the Equipment in excess of amounts available therefor in the Escrow Account. The Escrow Agent shall not be liable for any amount in excess of the Acquisition Amount.
Section 4. Excess Proceeds in Escrow Account. Upon receipt of written instructions from Lessor including a representation that one of the following conditions has been satisfied (upon which representation Escrow Agent shall conclusively rely), any funds remaining in the Escrow Account on or after the earliest of (a) the expiration of the Acquisition Period, (b) the date on which Lessee executes a Final Acceptance Certificate, or (c) upon a termination of the Escrow Account as provided in this Agreement, shall be distributed by the Escrow Agent to the Lessor in order for the Lessor to apply such funds to amounts owed by Lessee under the Lease in accordance with Section 4.07 of the Lease.
Section 5. Security Interest. The Escrow Agent and Lessee acknowledge and agree that the Escrow Account and all proceeds thereof are being held by Escrow Agent for disbursement or return as set forth herein. Lessee hereby grants to Lessor a first priority perfected security interest in the Escrow Account, and all proceeds thereof, and all investments made with any amounts in the Escrow Account. If the Escrow Account, or any part thereof, is converted to investments as set forth in this Agreement, such investments shall be made in the name of Escrow Agent and the Escrow Agent hereby agrees to hold such investments as bailee for Lessor so that Lessor is deemed to have possession of such investments for the purpose of perfecting its security interest.
Section 6. Control of Escrow Account. In order to perfect Lessor’s security interest by means of control in (i) the Escrow Account established hereunder, (ii) all securities entitlements, investment property and other financial assets now or hereafter credited to the Escrow Account, (iii) all of Lessee’s rights in respect of the Escrow Account, such securities entitlements, investment property and other financial assets, and (iv) all products, proceeds and revenues of and from any of the foregoing personal property (collectively, the “Collateral”), Lessor, Lessee and Escrow Agent further agree as follows:
(a) All terms used in this Section 6 which are defined in the California Commercial Code (the “Commercial Code”) but are not otherwise defined herein shall have the meanings assigned to such terms in the Commercial Code, as in effect on the date of this Agreement.
(b) Escrow Agent will comply with all entitlement orders originated by Lessor with respect to the Collateral, or any portion of the Collateral, without further consent by Lessee.
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(c) Provided that account investments shall be held in the name of the Escrow Agent, Escrow Agent hereby represents and warrants (i) that the records of Escrow Agent show that Lessee is the sole owner of the Collateral, (ii) that Escrow Agent has not been served with any notice of levy or received any notice of any security interest in or other claim to the Collateral, or any portion of the Collateral, other than Lessor’s claim pursuant to this Agreement, and (iii) that Escrow Agent is not presently obligated to accept any entitlement order from any person with respect to the Collateral, except for entitlement orders that Escrow Agent is obligated to accept from Lessor under this Agreement and entitlement orders that Escrow Agent, subject to the provisions of paragraph (e) below, is obligated to accept from Lessee.
(d) Without the prior written consent of Lessor, Escrow Agent will not enter into any agreement by which Escrow Agent agrees to comply with any entitlement order of any person other than Lessor or, subject to the provisions of paragraph (e) below, Lessee, with respect to any portion or all of the Collateral. Escrow Agent shall promptly notify Lessor if any person requests Escrow Agent to enter into any such agreement or otherwise asserts or seeks to assert a Lien, encumbrance or adverse claim against any portion or all of the Collateral.
(e) Except as otherwise provided in this paragraph (e) and subject to Section 1(b) hereof, Lessee may effect sales, trades, transfers and exchanges of Collateral within the Escrow Account, but will not, without the prior written consent of Lessor, withdraw any Collateral from the Escrow Account. Escrow Agent acknowledges that Lessor reserves the right, by delivery of written notice to Escrow Agent, to prohibit Lessee from effecting any withdrawals (including withdrawals of ordinary cash dividends and interest income), sales, trades, transfers or exchanges of any Collateral held in the Escrow Account. Further, Escrow Agent hereby agrees to comply with any and all written instructions delivered by Lessor to Escrow Agent (once it has had a reasonable opportunity to comply therewith) and has no obligation to, and will not, investigate the reason for any action taken by Lessor, the amount of any obligations of Lessee to Lessor, the validity of any of Lessor’s claims against or agreements with Lessee, the existence of any defaults under such agreements, or any other matter.
(f) Lessee hereby irrevocably authorizes Escrow Agent to comply with all instructions and entitlement orders duly delivered by Lessor to Escrow Agent. (g) Escrow Agent will not attempt to assert control, and does not claim and will not accept any security or other interest in, any part of the Collateral, and Escrow Agent will not exercise, enforce or attempt to enforce any right of setoff against the Collateral, or otherwise charge or deduct from the Collateral any amount whatsoever. (h) Escrow Agent and Lessee hereby agree that any property held in the Escrow Account shall be treated as a financial asset under such section of the Commercial Code as corresponds with Section 8-102 of the Uniform Commercial Code, notwithstanding any contrary provision of any other agreement to which Escrow Agent may be a party.
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(i) Escrow Agent is hereby authorized and instructed, and hereby agrees, to send to Lessor at its address set forth in Section 8 below, concurrently with the sending thereof to Lessee, duplicate copies of any and all monthly Escrow Account statements or reports issued or sent to Lessee with respect to the Escrow Account.
Section 7. Information Required Under USA Patriot Act. The parties acknowledge that in order to help the United States government fight the funding of terrorism and money laundering activities, pursuant to Federal regulations that became effective on October 1, 2003 (Section 326 of the USA Patriot Act) all financial institutions are required to obtain, verify, record and update information that identifies each person establishing a relationship or opening an account. The parties to this Agreement agree that they will provide to the Escrow Agent such information as it may request, from time to time, in order for the Escrow Agent to satisfy the requirements of the USA Patriot Act, including but not limited to the name, address, tax identification number and other information that will allow it to identify the individual or entity who is establishing the relationship or opening the account and may also ask for formation documents such as articles of incorporation or other identifying documents to be provided.
Section 8. Miscellaneous. Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease. This Agreement may not be amended except in writing signed by all parties hereto. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original instrument and each shall have the force and effect of an original and all of which together constitute, and shall be deemed to constitute, one and the same instrument. Notices hereunder shall be made in writing and shall be deemed to have been duly given when personally delivered or when deposited in the mail, first class postage prepaid, or delivered to an express carrier, charges prepaid, or sent by facsimile with electronic confirmation, addressed to each party at its address below.
Notices and other communications hereunder may be delivered or furnished by electronic mail provided that any formal notice shall be attached to an email message in PDF format and provided further that any notice or other communication sent to an e-mail address shall be deemed received upon and only upon the sender’s receipt of affirmative acknowledgement or receipt from the intended recipient. For purposes hereof no acknowledgement of receipt generated on an automated basis shall be deemed sufficient for any purpose hereunder or admissible as evidence of receipt.
If a court of competent jurisdiction declares any provision hereof invalid, it will be ineffective only to the extent of such invalidity, so that the remainder of the provision and Agreement will continue in full force and effect.
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This Agreement and the exhibits hereto set forth the entire agreement and understanding of the parties related to this transaction and supersede all prior agreements and understandings, oral or written.
If to Lessor: Banc of America Public Capital Corp
11333 McCormick Road
Mail Code: MD5-032-07-05
Hunt Valley, MD 21031
Attn: Contract Administration
If to Lessee: City of Hanford
319 North Douty Street
Hanford, CA 93230
Attention: Chris Tavarez
Telephone: (559) 585-2500
Fax No.: 559-582-1152
Email: [email protected]
If to Escrow Agent: UMB Bank, National Association
3070 Bristol Street, Suite 300
Costa Mesa, CA 92526
Attention: Chris Johnson, Vice President
Telephone: (949) 807-1033
E-mail: [email protected]
Section 9. Lessee and Lessor understand and agree that they are required to provide the Escrow Agent with a properly completed and signed Tax Certification (as defined below) and that the Escrow Agent may not perform its duties hereunder without having been provided with such Tax Certification. As used herein “Tax Certification” shall mean an IRS form W-9 or W-8 as described above. The Escrow Agent will comply with any U.S. tax withholding or backup withholding and reporting requirements that are required by law. With respect to earnings allocable to a foreign person, the Escrow Agent will withhold U.S. tax as required by law and report such earnings and taxes withheld, if any, for the benefit of such foreign person on IRS Form 1042-S (or any other required form), unless such earnings and withheld taxes are exempt from reporting under Treasury Regulation Section 1.1461-1(c)(2)(ii) or under other applicable law.
With respect to earnings allocable to a United States person, the Escrow Agent will report such income, if required, on IRS Form 1099 or any other form required by law. The IRS Forms 1099 and/or 1042-S shall show the Escrow Agent as payor and Lessee as payee. Escrow Agent shall recognize Lessee as the designated party for regulatory reporting purposes.
Lessee and Lessor agree that they are not relieved of their respective obligations, if any, to prepare and file information reports under Code Section 6041, and the Treasury regulations thereunder, with respect to amounts of imputed interest income, as determined pursuant to Code Sections 483 or 1272. The Escrow Agent shall not be responsible for determining or reporting such imputed interest.
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Section 10. This Agreement shall be governed by and construed in accordance with the laws of the State of California and the parties hereto consent to jurisdiction in the State of California and venue in any state or Federal court located in the State of California, and each party expressly waives any objections that it may have to the venue of such courts. THE PARTIES
HERETO EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS AGREEMENT. If the waiver of jury trial contained herein is unenforceable for any reason, then the parties hereto agree that the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision.
Section 11. Any bank or corporation into which the Escrow Agent may be merged or with which it may be consolidated, or any bank or corporation to whom the Escrow Agent may transfer a substantial amount of its escrow business, shall be the successor to the Escrow Agent without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding. Any bank or corporation into which the Lessor may be merged or with which it may be consolidated, or any bank or corporation to whom the Lessor may transfer a substantial amount of its business, shall be the successor to the Lessor without the execution or filing of any paper or any further act on the part of any of the parties, anything herein to the contrary notwithstanding.
Section 12. This Agreement may be amended, modified, and/or supplemented only by an instrument in writing executed by all parties hereto.
Section 13. No party hereto shall assign its rights hereunder until its assignee has submitted to the Escrow Agent (i) Patriot Act disclosure materials and the Escrow Agent has determined that on the basis of such materials it may accept such assignee as a customer and (ii) assignee has delivered an IRS Form W-8 or W-9, as appropriate, to the Escrow Agent which the Escrow Agent has determined to have been properly signed and completed.
Section 14. Escrow Agent will treat information related to this Agreement as confidential but, unless prohibited by law, Lessee and Lessor authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates and other representatives and advisors of Escrow Agent and third parties selected by any of them, wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Escrow Agent and any such subsidiary, officer, affiliate or third party may transfer or disclose any such information as required by any law, court, regulator or legal process.
Lessor will treat information related to this Agreement as confidential but, unless prohibited by law, Escrow Agent and Lessee authorize the transfer or disclosure of any information relating to the Agreement to and between the subsidiaries, officers, affiliates, other representatives and advisors of Lessor and debt and equity sources and third parties selected by any of them, and to their prospective assignees wherever situated, for confidential use in the ordinary course of business, and further acknowledge that Lessor and any such subsidiary, officer, affiliate, debt and equity source or third party or prospective assignee may transfer or disclose any such information as required by any law, court, regulator or legal process. For the avoidance of doubt, nothing
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herein prohibits any individual from communicating or disclosing information regarding suspected violations of laws, rules, or regulations to a governmental, regulatory, or self-regulatory authority without any notification to any person.
Lessee will treat the terms of this Agreement as confidential except on a “need to know” basis to persons within or outside Lessee’s organization (including affiliates of such party), such as attorneys, accountants, bankers, financial advisors, auditors and other consultants of such party and its affiliates, except as required by any law, court, regulator or legal process and except pursuant to the express prior written consent of the other parties, which consent shall not be unreasonably withheld.
Section 15. This Agreement may be executed and delivered by facsimile signature or other electronic or digital means (including, without limitation, Adobe’s Portable Document Format (“PDF”)). Any such signature shall be of the same force and effect as an original signature, it being the express intent of the parties to create a valid and legally enforceable contract between them. The exchange and delivery of this Agreement and the related signature pages via facsimile or as an attachment to electronic mail (including in PDF) shall constitute effective execution and delivery by the parties and may be used by the parties for all purposes.
Notwithstanding the foregoing, at the request of either party, the parties hereto agree to exchange inked original replacement signature pages as soon thereafter as reasonably practicable. [SIGNATURE PAGES TO FOLLOW]
[Signature Page to Escrow and Account Control Agreement] IN WITNESS WHEREOF, the parties have executed this Escrow and Account Control Agreement as of the date first above written.
BANC OF AMERICA PUBLIC CAPITAL CORP,
as Lessor
CITY OF HANFORD, as Lessee
By:_________________________________
Name: ___________________________
Title: ____________________________
By:_________________________________
Name: ___________________________
Title: ____________________________
UMB BANK, NATIONAL ASSOCIATION, as
Escrow Agent
By:_________________________________
Name: ___________________________
Title: ____________________________
SCHEDULE 1
TO THE ESCROW AND ACCOUNT CONTROL AGREEMENT
FORM OF DISBURSEMENT REQUEST
Re: Equipment Lease/Purchase Agreement dated as of ___________, 2026 by and between Banc of America Public Capital Corp, as Lessor, and the City of Hanford, as Lessee (the “Lease”) (Capitalized terms not otherwise defined herein shall have the meanings assigned to them in the Lease.)
In accordance with the terms of the Escrow and Account Control Agreement, dated as of ___________, 2026 (the “Escrow and Account Control Agreement”) by and among Banc of America Public Capital Corp (“Lessor”), the City of Hanford (“Lessee”) and UMB Bank, National Association (the “Escrow Agent”), the undersigned hereby requests the Escrow Agent pay the following persons the following amounts from the Escrow Account created under the Escrow and Account Control Agreement for the following purposes:
DISBURSEMENT AMOUNTS:
Payee’s Name and Address
(if disbursement via wire,
must include wire transfer
instructions)
INVOICE NUMBER DOLLAR AMOUNT PURPOSE
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
Schedule I-2
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required.>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
<Payee’s Name>
<Payee Address 1>
<Payee Address 2>
<Payee Address 3>
<Payee Bank Name*>
<Payee Bank ABA/Routing*>
<Payee Bank Account No*>
<Payee Account Name*>
<*Payee Address and Payee Bank
information is required..>
<invoice list OR
“see attached” with
a spreadsheet>
< invoice amount> <general description of
equipment; ex “police cruiser”>
Lessee hereby represents, covenants and warrants for the benefit of Lessor on the date hereof as follows:
(i) Each obligation specified in the table herein titled as “Disbursement Amounts” (a) has been incurred by Lessee in the stated amount, (b) the same is a proper charge against the Escrow Account for Equipment Costs relating to the Equipment identified above and has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof), and (c) has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof), and the Equipment relating to such obligation has been delivered, installed and accepted by Lessee. [For COI Disbursement only: Each obligation specified in the table herein titled as “Disbursement Amounts” (a) has been incurred by Lessee in the stated amount, and (b) the same is a proper charge for costs of delivery of the Lease identified above and has not been paid (or has been paid by Lessee and Lessee requests reimbursement thereof, in which event Lessee further certifies that the requested reimbursement is not with respect to any amount previously paid).]
(ii) For each item of Equipment relating to an obligation specified in the table herein titled as “Disbursement Amounts” (a) Lessee has conducted such inspection and
Schedule I-3
testing of the Equipment as it deems appropriate in order to unconditionally accept such Equipment, and (b) such Equipment has been delivered, installed, and unconditionally accepted for all purposes by Lessee and title thereto has transferred to Lessee and any security interest of Vendor therein has been released. Attached hereto is a copy of the original invoice, and certification from Vendor as to title transfer and release by Vendor of any security interest with respect to such obligation.
(iii) The undersigned, as Authorized Representative, has no notice of any vendor’s, mechanic’s or other Liens or rights to Liens, chattel mortgages, conditional sales contracts or security interest which should be satisfied or discharged before such payment is made.
(iv) This requisition contains no item representing payment on account, or any retained percentages which Lessee is, at the date hereof, entitled to retain (except to the extent such amounts represent a reimbursement to Lessee). (v) The Equipment is insured in accordance with the Lease. (vi) No Event of Default, and no event which with notice or lapse of time, or both, would become an Event of Default, under the Lease has occurred and is continuing at the date hereof. No Event of Non-appropriation has occurred or is threatened with respect to the Lease.
(vii) The disbursement shall occur during the Acquisition Period. (viii) The representations, warranties and covenants of Lessee set forth in the Lease are true and correct as of the date hereof.
(ix) No Material Adverse Change has occurred since the date of the execution and delivery of the Lease.
(x) The information in this Disbursement Request regarding each Payee, including their respective name, address and wiring instructions (collectively, the “Payee Information”), is true and correct, such Payee Information has been verified and confirmed by Lessee and the Lessor can rely on Lessee’s verification and confirmation of the accuracy of such Payee Information. Lessee hereby acknowledges and agrees that any call-back performed by Lessor to verify the disbursement instructions pursuant to this Disbursement Request shall be made to Lessee only and Lessor shall have no obligation to call-back any Payee listed above.
[Signature Page to Disbursement Request]
Dated: ________________
CITY OF HANFORD
By: ____________________________________
Name: ______________________________
Title: _______________________________
Disbursement of funds from the Escrow
Account in accordance with the foregoing
Disbursement Request hereby is authorized
BANC OF AMERICA PUBLIC CAPITAL CORP
as Lessor under the Lease
By:
Name:
Title:
[AN “EXHIBIT A-1” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-1
FORM OF INCUMBENCY AND AUTHORIZATION CERTIFICATE
The undersigned, a duly elected or appointed and acting City Clerk of the City of Hanford (“Lessee”) certifies as follows:
A. The following listed persons are duly elected or appointed and acting officials of Lessee (the “Officials”) in the capacity set forth opposite their respective names below and the facsimile signatures below are true and correct as of the date hereof; B. The Officials are duly authorized, on behalf of Lessee, to negotiate, execute, in writing or electronically, and deliver the Equipment Lease/Purchase Agreement dated as of ___________, 2026 by and between Lessee and Banc of America Public Capital Corp (“Lessor”), the Escrow and Account Control Agreement dated as of ___________, 2026 by and among Lessor, Lessee and UMB Bank, National Association, as Escrow Agent, all documents related thereto and delivered in connection therewith, and any future modification(s) or amendments thereof (collectively, the “Operative Agreements”), and the Operative Agreements each are the binding and authorized agreements of Lessee, enforceable in all respects in accordance with their respective terms.
NAME OF OFFICIAL TITLE SIGNATURE
Chris Tavarez Acting City Manager ________________________ Jason Waters Deputy City Manager ________________________ Destiny Borba Acting Finance Director ________________________ Dated: ___________, 2026
By: ____________________________________
Name: Natalie Corral
Title: City Clerk__________________
(The signer of this Certificate cannot be listed above as authorized to execute the Operative Agreements.)
[AN “EXHIBIT A-2” MUST BE COMPLETED AND EXECUTED AT TIME OF EXECUTION OF THE AGREEMENT]
EXHIBIT A-2
ESCROW AND ACCOUNT CONTROL AGREEMENT DATED AS OF ___________, 2026 BY AND AMONG
BANC OF AMERICA PUBLIC CAPITAL CORP, AS LESSOR, THE CITY OF HANFORD, AS LESSEE AND
UMB BANK, NATIONAL ASSOCIATION, AS ESCROW AGENT
CERTIFICATE OF AUTHORIZED REPRESENTATIVES – [LESSOR]
Name: Candy Tam Name: Nancy Nusenko
Title: Authorized Agent Title: Authorized Agent
Phone: 415-765-7492 Phone: 443-541-3646
Facsimile: 415-633-0183 Facsimile:
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others Name: Nancy K. Hepner Name: Arlene Sobieck
Title: Authorized Agent Title: Authorized Agent
Phone: 443-541-3645 Phone: 443-541-3643
Facsimile: 804-553-2407 Facsimile:
E-mail: [email protected] E-mail: [email protected] Signature: Signature:
Fund Transfer / Disbursement Authority Level: Fund Transfer / Disbursement Authority Level:
Initiate Initiate
Verify transactions initiated by others Verify transactions initiated by others The Escrow Agent is authorized to comply with and rely upon any notices, instructions or other communications believed by it to have been sent or given by the person or persons identified above including without limitation, to initiate and verify funds transfers as indicated.
BANC OF AMERICA PUBLIC CAPITAL CORP
By:
Name:
Title:
Date: ___________, 2026
CITY OF HANFORD
2026 SOLAR EQUIPMENT LEASE
January 20, 2026
2 Financing Team Overview
City of Hanford – Lessee
• Obligated party for the Lease
NHA Advisors – Municipal Financial Advisor
• Manages the financing process and assists in structuring the Lease Oppenheimer & Company – Placement Agent
• Distributes lender RFP, negotiates with potential lenders, and assists in structuring the Lease Bank of America Public Capital Corp (“BAPCC”) – Lessor
• Originates the Lease
• Lessor’s counsel drafts the legal documents
UMB – Escrow Agent
• Manages escrow account and distributes loan proceeds to the City/Opterra as needed to pay for project and lease issuance costs
3 Background on Energy Project
At the 12/16/2026 meeting, City Council considered and approved an Agreement with OPTERRA Energy Services
(“Opterra”) to install solar photovoltaic (“PV”) improvements at the Wastewater Treatment Facility
Contract cost: $3,680,000
City paid some other project costs our of Wastewater Fund reserves and plans to fund the $3.68M contract cost with an equipment lease financing
Anticipated savings of $2.5M+ in net energy savings (savings after debt service and solar operations and maintenance costs) over the next 25 years
Total lease repayment: $5.3M, assuming federal tax credits
4 Inflation Reduction Act Investment Tax Credit
Current incentive under the 2022 Inflation Reduction
Act (“IRA”)
IRA “Direct-Pay” Project Incentive:
Valued at 25.5% of solar project costs – approximately $938K Cash tax credit paid at the conclusion of the project construction 2026 Lease amount can be partially prepaid when IRA
tax credit is received
5 Energy Equipment Lease
Placement agent ran the financing bid process
15 local, regional, and national banks invited to bid on the 20- year tax-exempt equipment lease
City received 6 proposals
Bank of America Public Capital Corp – Lowest Bid
2026 Solar Equipment Lease – Key Terms
Principal Amount $3,740,000
Final Maturity 10/1/2045
Interest Rate 4.489% (fixed, locked through closing)
Annual Debt Service Escalation* 5.5%
*Debt service escalates in line with the projected energy savings provided by Opterra
6 Projected Net Energy Savings & Lease Net Debt Service
7 Overview of Legal Documents
Resolution
Authorizes City staff to execute documents and perform other actions as needed to finalize the 2026 Lease
Not-to-exceed amount of $3,740,000 and not-to-exceed interest rate of 4.50% Both are slightly higher than the amounts expected, to be conservative Equipment Lease/Purchase Agreement
Describes the terms of the 2026 Lease
Identifies location of the improvements and that the security for the 2026 Lease is a lien on the equipment – no real City properties are pledged as security Contains payment details (Exhibit B), prepayment provisions, and other covenants Escrow and Account Control Agreement
Outlines UMB’s role as escrow agent
Identifies process for City/Opterra drawing down the 2026 Lease funds for project costs
APPENDIX: SAVINGS DETAIL
9 Savings
Detail
Notes:
Inverter cost in Years 11 and 21
NEM 2.0 pricing expires in year
20, resulting in a decrease in
savings in year 21
Total net savings through year
25: $1.6M (without IRA ITC),
$2.5M (with IRA ITC).
Project Cost $3,680,000
Financing Costs $60,000
Amount to be Financed $3,740,000
Finance Term in Years 20
Estimated Annual Interest Rate 4.49%
Annual Escalation of Electricity Cost 6.00%
Annual Escalation of Solar Maintenance Cost 5.00%
Annual Degradation of Solar Panels 0.50%
Year
Solar
Energy
Savings
IRA Direct
Payment
Total
Program
Savings
Lease
Payment
Inverter
Replacement
costs
Solar
Operations &
Maintenance
Cost
Total
Program
Costs
Net Savings
Year 1 $207,500 $938,400 $1,145,900 $197,735 $24,577 $222,312 $923,588 Year 2 $218,850 $218,850 $187,552 $25,806 $213,358 $5,492 Year 3 $230,821 $230,821 $197,812 $27,096 $224,908 $5,913 Year 4 $243,447 $243,447 $208,633 $28,451 $237,084 $6,363 Year 5 $256,764 $256,764 $220,046 $29,873 $249,919 $6,845 Year 6 $270,809 $270,809 $232,081 $31,367 $263,448 $7,361 Year 7 $285,622 $285,622 $244,775 $32,936 $277,711 $7,911 Year 8 $301,246 $301,246 $258,165 $34,582 $292,747 $8,498 Year 9 $317,724 $317,724 $272,288 $36,311 $308,600 $9,124 Year 10 $335,103 $335,103 $287,180 $38,127 $325,307 $9,796 Year 11 $353,433 $353,433 $302,891 $119,465 $40,033 $462,389 -$108,956 Year 12 $372,766 $372,766 $319,457 $42,035 $361,492 $11,274 Year 13 $393,156 $393,156 $336,931 $44,137 $381,068 $12,089 Year 14 $414,662 $414,662 $355,362 $46,344 $401,706 $12,957 Year 15 $437,344 $437,344 $374,802 $48,661 $423,462 $13,882 Year 16 $461,267 $461,267 $395,303 $51,094 $446,397 $14,870 Year 17 $486,498 $486,498 $416,925 $53,649 $470,574 $15,925 Year 18 $513,110 $513,110 $439,730 $56,331 $496,061 $17,049 Year 19 $541,177 $541,177 $463,784 $59,147 $522,932 $18,245 Year 20 $570,779 $570,779 $489,154 $62,105 $551,259 $19,520 Year 21 $379,260 $379,260 $0 $194,596 $65,210 $259,806 $119,454 Year 22 $400,006 $400,006 $0 $68,471 $68,471 $331,535
Year 23 $421,886 $421,886 $0 $71,894 $71,894 $349,992
Year 24 $444,964 $444,964 $0 $75,489 $75,489 $369,475
Year 25 $469,303 $469,303 $0 $79,263 $79,263 $390,040
Year 26 $494,974 $494,974 $0 $83,226 $83,226 $411,747
Year 27 $522,049 $522,049 $0 $87,388 $87,388 $434,661
Year 28 $550,605 $550,605 $0 $91,757 $91,757 $458,848
Year 29 $580,723 $580,723 $0 $96,345 $96,345 $484,378
Year 30 $612,489 $612,489 $0 $101,162 $101,162 $511,326 Totals $12,088,338 $13,026,738 $6,200,606 $1,632,868 $8,147,535 $4,879,204 City of Hanford Phase 3 Solar only project
Preliminary Cash Flow Analysis
Michael C. Brunsman
Senior Vice President
Energy Services
Global Leasing
5305 E Galbraith Rd, Suite 1200
Cincinnati, OH 45236
T 513-929-5102 M 513-484-0049
[email protected]
December 18, 2025
VIA ELECTRONIC MAIL
City of Hanford
315-321 North Douty St
Hanford, CA 93230
Cc: Jeff Land, Michael Garcia, Oppenheimer and Co., Inc.
Brad Koster & Tina Wilson, BofA Global Leasing – Energy Services Re: City of Hanford, approximately $3,750,000 Non-Bank Qualified Tax-Exempt Equipment Financing, Annual Appropriations Structure
Banc of America Public Capital Corp and its affiliates (“BAPCC") is pleased to submit to City of Hanford (the “City”) the Non-Bank Qualified Tax-Exempt Financing proposal (the Proposed Transaction”) as described in the attached Summary of Terms and Conditions (the "Term Sheet").
Please review the Term Sheet and contact me if you have any questions.
This letter and the Term Sheet (collectively, the “Proposal” or the “Proposal Letter”) include only a brief description of the principal terms of the Proposed Transaction, and are intended for discussion purposes only. Please understand that this Proposal is not a commitment or offer to purchase, and does not create any obligation for BAPCC. BAPCC will not be responsible or liable for any damages, consequential or otherwise, that may be incurred or alleged by any person or entity as a result of this Proposal Letter. BAPCC will notify you in writing of its decision to proceed with the Proposed Transaction after completing its review and analysis.
This Proposal must be accepted on or before December 31, 2025 in order for the BAPCC to proceed with its consideration of the Proposed Transaction. To accept this Proposal, please sign the enclosed copy of this Proposal Letter and return it to my attention at the following email address:
[email protected].
Thank you for allowing us the opportunity to prepare this Proposal for City of Hanford.
Sincerely yours,
Banc of America Public Capital Corp
Michael C. Brunsman
By: Michael C. Brunsman
Title: Senior Vice President
The undersigned, by its authorized representative below, accepts the Proposal contingent upon proper approval at a meeting of its Governing Board. The undersigned agrees to furnish BAPCC, its successors and assigns, any information relating to the business or financial condition of the City or its affiliates, and authorizes the BAPCC, Bank of America, N.A. and their affiliates to disclose to, discuss with and distribute such information (and any information they may already have) to any other affiliates or proposed assignees or successors of BAPCC.
City of Hanford
By: _____
Title: _____
Date: _____
“Bank of America” is the marketing name used by certain Global Banking and Global Markets businesses of Bank of America Corporation. Lending, leasing, equipment finance and other commercial banking activities, and trading in certain financial instruments are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., Member FDIC. Banc of America Public Capital Corp, a wholly-owned subsidiary of Bank of America, National Association, is not a municipal advisor and is not subject to the fiduciary duty established in Section 15B(c)(1) of the Securities Exchange Act of 1934, as amended, with respect to any municipal financial product or issuance of municipal securities. The information provided in this document is not intended to be and should not be construed as “advice” within the meaning of Section 15B of the Securities Exchange Act of 1934 and the municipal advisor rules of the SEC. © 2025 Bank of America Corporation. All rights reserved.
Interim City Manager
12/22/2025
City of Hanford
315-321 North Douty St
Hanford, CA 93230
Cc: Jeff Land, Michael Garcia, Oppenheimer and Co., Inc.
Brad Koster & Tina Wilson, BofA Global Leasing – Energy Services RE: City of Hanford Financing Proposal
Banc of America Public Capital Corp is pleased to submit the following financing proposal for the City of Hanford solar and energy efficiency project with Opterra. No municipal financial products or municipal securities have been included in the following proposal.
I. Lessee City of Hanford
II. Lessor Information
Lessor Name: Banc of America Public Capital Corp (“BAPCC”) Address: 312 Walnut Street, Suite 2200
Cincinnati, OH 45202
Contact: Michael Brunsman
Telephone: 513-929-5102
Email: [email protected]
Background: BAPCC offers unique financing features and qualifications that can be leveraged on behalf of the City to complete this private placement transaction at a low interest cost and in a smooth and efficient manner. These features and qualifications include:
1. Taxable & Tax-Exempt Private Placement Experience: BAPCC is a leading provider of private placement capital to the state government, municipal local government, K-12, housing authority, and higher education tax-exempt markets. Our teams are highly experienced in documenting and closing tax-exempt and taxable private placement transactions in California, such as the subject of this bid.
2. Energy Services Focus: BAPCC’s Energy Services group is a leading provider of financial solutions for energy efficiency, renewable energy, and energy generation equipment and assets; and as such we have experience in working with energy services companies. Bank of America is committed to improving the environment and has increased its current Environmental Business Initiative to $1 trillion. Since 2007, the Bank’s Environmental Business Initiative has deployed more than $158 billion in financing to low-carbon and sustainable business activities across the globe.
3. Financial Strength: Information regarding Bank of America’s financial condition can be found in the Annual Report on our website, www.bankofamerica.com.
III. Lease Structure
Purpose Finance the solar and energy efficiency project designed and installed by Opterra under a performance contract with City of Hanford (the “City” or “Lessee”).
Structure This transaction will be structured as a Non-Bank Qualified Tax-Exempt Equipment Lease/Purchase Agreement (the “Agreement”) between the Lessee and the Lessor.
The obligation to make Rental Payments under the Agreement shall be an annual appropriation obligation of the Lessee payable from any lawfully available funds.
Regardless of the status of installation or performance of the Equipment, the Lessee’s obligation to make payments commence on that certain date as set forth in the Agreement. Legal title to the Equipment shall be vested in the Lessee. The Agreement will be a net financial contract of the Lessee, and all expenses (including, but not limited to, insurance, maintenance, and taxes) will be for the account of the Lessee.
Security Lessor’s security interest in the Equipment will be evidenced by filing a UCC-1 Financing Statement (Personal Property) with respect to Equipment. Prior to closing, Lessee will be required to provide legal descriptions (as applicable) for the property locations at which the Equipment will be installed in order to enable the Lessor to record fixture filings in the appropriate recording offices.
Proceeds Not to exceed $3,750,000
Term Approximately 20 years all-in
Payments Payments similar to those shown on the attached amortization schedules.
Prepayment Beginning with the first payment date in payment year 4 and on each payment date through payment year 10, City will have the option to prepay its obligations under the Agreement in whole only with a prepayment premium of 102% of the outstanding principal balance. Beginning with the first payment date in payment year 11 and continuing through maturity, City will have the option to prepay its obligations under the Agreement in whole only at 101% of the outstanding principal balance.
Extraordinary
Optional
Prepayment
Extraordinary optional prepayment to accommodate Inflation Reduction Act will be permitted by Lessor. Lessor will accommodate the extraordinary optional prepayment for the IRA subsidy up to a mutually agreed maximum with prepayment at par.
The prepayment proceeds may be applied on a pro rata basis.
Termination The financing will be subject to annual appropriations (see Structure section above).
Interest Rate 20 years) 4.489%, locked through February 16, 2026 The calculation for the Interest Rate for each option above is:
15-Year SOFR SWAP Rate* X 79% + Applicable Spread Below:
Average Schedule Indicative
Life Swap Index Interest
Term Rate* x 79% Spread Rate
15 4.06% 3.21% 1.282% 4.489%
*Rates as of December 18, 2025 on Refinitiv page USDSROIS= Index Succession: In the event the SOFR swap index ceases (a) to be determined and made available through the applicable Refinitiv screen page (or comparable source selected by Lessor), (b) to be a representative index for approximating movements in Lessor’s costs of funding fixed-rate transactions, or (c) to be the generally accepted swap index in the marketplace, Lessor may in its discretion use another replacement swap index applicable to U.S. Dollar collateralized funding that is generally accepted in the commercial credit marketplace as a comparable substitute for the index.
Rate Expiry If this Proposal is signed and returned to Lessor on or prior to December 31, 2025, Lessor will hold the Interest Rate through February 16, 2026.
If closing of the transaction occurs after such rate lock expiration, the respective Interest Rate for the transaction is subject to repricing at the discretion of Lessor seven (7) business days prior to the scheduled closing date in accordance with the selected option formula above. In no event will the respective SOFR SWAP Rate(s) used to reset the Interest Rate be less than the SOFR SWAP Rate(s) in the pricing grid above.
IF LESSEE ASKS LESSOR TO LOCK THE RESPECTIVE INTEREST RATE ABOVE FOR
FUNDING, LESSEE AGREES NOT TO SEEK FUNDING FOR THE PROJECT WITH
ANOTHER LENDER FOR A PERIOD OF SIX MONTHS AS A MEANS TO CIRCUMVENT THE RATE THAT LESSEE HAS ASKED LESSOR TO HOLD.
PLEASE NOTE THAT THE PRICING AND INTEREST RATE ABOVE ARE BASED ON THE AVERAGE LIFE OF THE ATTACHED DRAFT AMORTIZATION SCHEDULES. TO
THE EXTEXT THAT THE AVERAGE LIFE OF THE FINAL SELECTED AMORTIZATION
SCHEDULE CHANGES FROM THE ATTACHED, THE RESPECTIVE INTEREST RATE
ABOVE IS SUBJECT TO MODIFCATION BY LESSOR TO ACCOUNT FOR ANY LENGTHENING OF THE AVERAGE LIFE OF THE FINAL SCHEDULE.
Closing Costs Lessor does not charge any closing costs or fees. The Lessee will be responsible for paying its costs, including delivery of a validity and tax opinion from the Lessee’s Bond Counsel and any CDIAC Reporting Fee.
Escrow Account
Terms
At closing, proceeds from the Agreement will be deposited into an Escrow Account established pursuant to an Escrow and Account Control Agreement (the “Escrow”) by and among the City, the Lessor and the Escrow Agent. The Escrow Agent will be selected by the City, subject to the Lessor’s approval. The Lessor has an arrangement with UMB, under which escrow agent services for these types of transactions are provided at no charge to City. During the installation period, the City will requisition funds in the manner outlined in the Escrow. No funds will be disbursed without the written approval of the City and approval of the Lessor.
The City will direct the investments in the Escrow Account and all interest earnings will accrue to the City’s benefit.
Documents Documents shall be prepared by the Lessor’s Counsel and will include all documents, certificates and opinions as are reasonably necessary to evidence and carry out the transaction. All documents must be acceptable to all parties.
Payment &
Performance
Bonds
The Lessor requires to be listed as dual obligee on the payment and performance bonds provided by Opterra. No draws from Escrow will be permitted until such bonds are in place.
Credit Approval This proposal is an indication of interest in the transaction, and not a commitment to provide financing by the Lessor. Consummation of this transaction is subject to credit approval by the Lessor and execution and delivery of documentation acceptable to all parties. All fundings are subject to no material adverse change in the financial condition of the City from the time of credit approval.
Closing Date On or before February 16, 2026. Sample amortization utilizes a closing date of January 27, 2026.
Assignment The Lessor shall be entitled to assign its right, title and interest or any part thereof in the Agreement and Equipment, on a private placement basis to qualified purchasers. In addition, the Lessor shall be entitled to assign its right, title and interest or any part thereof in the Agreement to a trustee for the purpose of issuing certificates of participation or other forms of certificates evidencing an undivided interest in such Agreement, provided such certificates are sold only on a private placement basis (and not pursuant to any “public offering”) to a purchaser(s) who represent that (I) such purchaser has sufficient knowledge and experience in financial and business matters to be able to evaluate the risks and merits of the investment (ii) such purchaser understands neither the Agreement or certificates will be registered under the Securities Act of 1933, (iii) such purchaser is either an “accredited investor” within the meaning of Regulation D under the Securities Act of 1933, or a qualified institutional buyer within the meaning of Rule 144A, and (iv) that it is the intention of such purchaser to acquire such certificates (A) for investment for its own account or (B) for resale in a transaction exempt from registration under the Securities Act of 1933. At any time, the Lessor may sell, assign or encumber all or any part of its right title and interest in the Agreement; however, in no event shall the Lessor assign this Agreement as a public offer of participation. The City consents to a private placement transaction within the meaning of applicable federal securities laws.
City’s
Responsibilities
All responsibilities imposed by the ownership or possession of the Equipment including, but not limited to, taxes, insurance and equipment maintenance, shall be borne by the City.
USA Patriot Act
Compliance
All financial institutions are required by Federal Law to obtain, verify and record information that identifies each customer who opens an account with us. When you open an account with us, we will ask you for your name, address and other information that will allow us to identify you, such as documents evidencing legal status and formation, taxpayer identification number and date of birth (if applicable).
Market
Disruption
Notwithstanding anything contained herein to the contrary, in the event any material change shall occur in the financial markets after the date of this Proposal Letter, including but not limited to any governmental action or other event which materially adversely affects the extension of credit by banks, leasing companies or other lending institutions, the Lessor may modify the indicative pricing described above.
III. Other Information
Capitalized terms used but not defined herein shall have the meaning given such terms in the transaction documents (i.e. the Agreement, Facility Lease, Site Lease, the Escrow).
This proposal letter and the Term Sheet include only a brief description of the principal terms of the Proposed Transaction and do not purport to summarize all of the conditions, covenants, representations, warranties and other provisions that would be contained in definitive documentation for the transaction contemplated hereby. The Lessor will not be responsible or liable for any damages, consequential or otherwise, that may be incurred or alleged by any person or entity, including the City or Opterra as a result of this Proposal Letter.
Thank you for the opportunity to provide this proposal. If you have any questions or would like to discuss this proposal in further detail, please let us know.
Sincerely yours,
Banc of America Public Capital Corp
Michael C. Brunsman
By: Michael C. Brunsman
Title: Senior Vice President
STANDARD DISCLOSURES AND DISCLAIMERS
The transaction described in this document is an arm’s length, commercial transaction between you and Banc of America Public Capital Corp (“BAPCC”) in which: (i) BAPCC is acting solely as a principal (i.e., as a lender or assignee) and for its own interest; (ii) BAPCC is not acting as a municipal advisor or financial advisor to you; (iii) BAPCC has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to this transaction and the
discussions, undertakings and procedures leading thereto (irrespective of whether BAPCC or any of its affiliates has provided other services or is currently providing other services to you on other matters); (iv) the only obligations BAPCC has to you with respect to this transaction are set forth in the definitive transaction agreements between us; and (v) BAPCC is not recommending that you take an action with respect to the transaction described in this document, and before taking any action with respect to the this transaction, you should discuss the information contained herein with your own legal, accounting, tax, financial and other advisors, as you deem appropriate. If you would like a municipal advisor in this transaction that has legal fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity.
STATEMENT FOR PROPOSALS SUBMITTED UNDER RFPS
This proposal is submitted in response to your Request for Proposal. The contents of this proposal and any subsequent discussions between us, including any and all information, recommendations, opinions, indicative pricing, quotations and analysis with respect to any municipal financial product or issuance of municipal securities, are provided to you in reliance upon the exemption provided for responses to requests for proposals or qualifications under the municipal advisor rules (the “Rules”) of the Securities and Exchange Commission (240 CFR 15Ba1-1 et seq.).
The Staff of the SEC’s Office of Municipal Securities has issued guidance which provides that, in order for a request for proposals to be consistent with this exemption, it must (a) identify a particular objective, (b) be open for not more than a reasonable period of time (up to six months being generally considered as reasonable), and (c) involve a competitive process (such as by being provided to at least three reasonably competitive market participants) or by being publicly posted to your official website. In submitting this proposal, we have relied upon your compliance with this guidance.
In submitting this proposal, we are not undertaking to act as a “municipal advisor” to you or any other person within the meaning of the Rules. In connection with this proposal and the transactions described herein, we are not subject to, and we hereby disclaim, any fiduciary duty to you or to any other person. We understand that you will consult with and rely on the advice of your own municipal, financial, tax, legal and other advisors as and to the extent you deem necessary in connection with your evaluation of this proposal and the transactions described herein.
PLACEMENT AGENT AGREEMENT
[Date]
City of Hanford
315-321 North Douty Street
Hanford, CA 93230
Attention: Christopher Tavarez, Interim City Manager
The undersigned, Oppenheimer & Co. Inc. (the “Placement Agent”), offers to enter into the following agreement (this “Agreement”) with the City of Hanford (the “City”), which, upon acceptance by the City, will be binding upon the City and the Placement Agent.
The City acknowledges and agrees that (i) the placement of the Equipment Lease/Purchase Agreement (the “Obligations”) pursuant to this Placement Agent Agreement is an arm’s-length commercial transaction between the City and the Placement Agent, (ii) in connection therewith and with the discussion, undertakings and procedures leading up to the consummation of such transaction, the Placement Agent is not acting as a fiduciary of or a financial advisor to the City, (iii) the Placement Agent has not assumed an advisory or fiduciary responsibility in favor of the City with respect to (a) the offering of the Obligations or the process leading thereto (whether or not the Placement Agent has advised or is currently advising the City on other matters) or (b) any other obligation to the City except the obligations expressly set forth in this Placement Agent Agreement, and (iv) the City has consulted with its own legal and other professional advisors to the extent it deemed appropriate in connection with the offering of the Obligations.
The Obligations shall be issued under and pursuant to the Equipment Lease/Purchase Agreement, dated as of [DATE] (the “Issuing Document”), by and between the Banc of America Public Capital Corp (the “Purchaser”).
Upon the terms and conditions and upon the basis of the representations, warranties and agreements set forth herein, the Placement Agent and the City hereby agree as follows:
1. Appointment of Placement Agent; Placement of Obligations; Closing. (a) The City hereby appoints the Placement Agent to act, and the Placement Agent hereby agrees to act, as the exclusive placement agent for the City in connection with the private sale and issuance of its Obligations, and the Placement Agent hereby accepts such appointment. As compensation for its services hereunder, the Placement Agent shall charge a fee not in excess of $20,000. At the closing of any such sale, the City shall pay or cause to be paid such fee to the Placement Agent by wire transfer or immediately available funds. The above fee does not include any services the Placement Agent may render in the future to the City with respect to any offering or placement of municipal securities other than the Obligations.
(b) The City understands that the Placement Agent will be acting as the agent of the City in the offering and sale of the Obligations and agrees that, in connection therewith, the Placement Agent will use its “best efforts” to place the Obligations. The Placement Agent agrees that,
in furtherance of its obligations hereunder, it shall provide substantially accurate and complete information to potential purchasers of the Obligations to the extent that it is able. (c) The City expressly agrees that nothing in this Agreement evidences or creates any expressed or implied commitment by the Placement Agent to purchase or place any of the Obligations.
(d) On the closing date, the City will cause to be delivered (a) a final approving opinion of Griswold, Lasalle, Cobb, Dowd & Gin, L.L.P., as Counsel to the City (“Counsel”), dated the closing date, addressed to or with a reliance letter to the Placement Agent, in a form acceptable to the Placement Agent, to the effect that the Obligations constitute valid and legally binding obligations of the City payable from any source of legally available funds of the City, as set forth in the Issuing Document and that the interest on the Obligations is exempt from federal and State of California income taxes under existing laws, regulations, rulings and judicial decisions, (b) one or more certificates in form and tenor satisfactory to the Placement Agent evidencing the proper execution and delivery of the Obligations and receipt of payment therefor, including statements of the City, dated as of the date of such delivery, to the effect that there is no litigation pending or, to the knowledge of the signer or signers thereof, threatened relating to the issuance, sale and delivery of the Obligations, (c) a letter or certificate of the Purchaser, addressed to the Placement Agent, in form and content acceptable to the Placement Agent.
2. Reliance. The City recognizes that, in providing services under this Agreement, the Placement Agent will rely upon and assume the accuracy and completeness of the financial, accounting, tax and other information discussed with or reviewed by the Placement Agent for such purpose, and the Placement Agent does not assume responsibility for the accuracy and completeness thereof. The Placement Agent will have no obligation to conduct any independent evaluation or appraisal of the assets or the liabilities of the City or any other party or to advise or opine on related solvency issues. Nothing in this Agreement is intended to confer upon any other person (including creditors, employees or other constituencies of the City) any rights or remedies hereunder or by reason hereof.
3. Termination. The Placement Agent’s authorization to carry out its duties hereunder may be terminated by the City or the Placement Agent at any time with or without cause, effective upon receipt of written notice to that effect by the other party. Notwithstanding the foregoing, in the event the City terminates this Agreement and within twelve (12) months after the City sells the Obligations to an investor identified by the Placement Agent prior to such termination, the amounts payable under Section 1(a) shall be immediately due and payable to the Placement Agent by the City.
4. Notices. Any notice or other communication to be given to any of the parties to this Agreement may be given by delivering the same in writing as follows: to the City at 315-321319 North Douty Street, Hanford, CA 93230, Attention: Interim City Manager, and to the Placement Agent at 135 Main Street, Suite 1700, San Francisco, CA 94105, Attention: Municipal Capital Markets Group.
5. Survival of Representations, Warranties and Agreements. This Agreement is made solely for the benefit of the City and the Placement Agent, and no other person shall acquire or have any right hereunder or by virtue hereof. All of the representations, warranties and agreements of the City contained in this Agreement shall remain operative and in full force and effect regardless of delivery of any payment for the Obligations.
6. Counterparts. The Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument.
7. Effectiveness. This Agreement shall become effective upon the execution of the acceptance hereof by duly authorized signatory of the City, which acceptance hereof shall be indicated on the signature page hereof, and shall be valid and enforceable as of the time of such acceptance. This Agreement may be executed by facsimile transmission and in several counterparts, each of which shall be regarded as an original and all of which shall constitute one and the same document.
8. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.
Very truly yours,
OPPENHEIMER & CO. INC.
By:
Executive Director
CITY OF HANFORD
By:
Interim City Manager
17.C.
AGENDA
STAFF REPORT
MEETING DATE: 1/20/2026 AGENDA SECTION:
GENERAL BUSINESS
SUBJECT:
Approval of the City of Hanford Salary Schedules
RECOMMENDATION:
Recommendation: That the City Council, by motion, approve the attached salary schedules to restate full-time and part-time employee rates and update the salary range for the position of City Manager.
Recommended Motion: By motion, approve the attached salary schedules and authorize administration to amend all other documents as may be necessary to implement the updates.
BACKGROUND:
Pursuant to the California Code of Regulations (CCR) 570.5, the California Public Employees’ Retirement System (CalPERS) requires that a publicly available pay schedule be used to determine pay rates. Additionally, pay rates shall be limited to the amount listed on a pay schedule and must meet all of the following eight requirements:
1. Be duly approved and adopted by the employer's governing body in accordance with requirements of applicable public meetings laws
2. Identify the position title for every employee position
3. Show the pay rate as a single amount or multiple amounts within a range for each identified position
4. Indicate the time base, including, but not limited to, whether the time base is hourly, daily, biweekly, monthly, bi-monthly, or annually
5. Be posted at the office of the employer or immediately accessible and available for public review from the employer during normal business hours or posted on the employer's website
6. Indicate an effective date and date of any revisions
7. Is retained by the employer and available for public inspection for not less than five years
8. Does not reference another document in lieu of disclosing the pay rate Staff intends to continue to obtain City Council approval on a frequent basis to satisfy the requirements set forth by the California Code of Regulations (CCR) 570.5. Additional updates to the salary schedule may be made based on organizational needs as long as they remain in compliant with established Administrative Regulations.
FISCAL IMPACT:
No changes have been made to the part-time salary schedule as the beginning rates exceed the state’s minimum wage hourly rate established for 2026. Previously approved bargaining unit increases have already been approved and incorporated into the City’s budget. Pursuant to department request, the part-time Clerical Support salary range has been amended and a part-time Aquatics Technician has been added based on operational needs. The position of Fire Marshall has been amended to Deputy Fire Chief/Deputy Fire Marshal. Additionally, the newly established salary for the City Manager position was negotiated with the selected candidate. All updates remain within the City’s budgeted allocation.
ATTACHMENTS:
1. City of Hanford Comprehensive Salary Schedule
Salary Schedules
Adopted by City Council January 20, 2026
Effective Date: February 2, 2026
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX GEMA Accountant 1 E 106 $6,055 $6,358 $6,676 $7,009 $7,360 34.93 36.68 38.51 40.44 42.46 SEIU Accounting Clerk 3 40 63 $3,947 $4,145 $4,352 $4,569 $4,798 22.77 23.91 25.11 26.36 27.68 GEMA Accounting Technician I 2 40 78 $4,583 $4,812 $5,052 $5,305 $5,570 26.44 27.76 29.15 30.61 32.14 GEMA Accounting Technician II 2 40 88 $5,062 $5,315 $5,581 $5,860 $6,153 29.20 30.66 32.20 33.81 35.50 GEMA Administrative Analyst I 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 GEMA Administrative Analyst II 1 E 109 $6,238 $6,550 $6,878 $7,222 $7,583 35.99 37.79 39.68 41.66 43.75 SEIU Administrative Assistant 3 40 73 $4,360 $4,578 $4,807 $5,047 $5,300 25.15 26.41 27.73 29.12 30.58 GEMA Administrative Specialist 2 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 SEIU Administrative Technician 3 40 83 $4,816 $5,057 $5,310 $5,576 $5,854 27.79 29.18 30.63 32.17 33.77 SEIU Animal Control Officer 3 40 69 $4,190 $4,400 $4,620 $4,850 $5,093 24.17 25.38 26.65 27.98 29.38 GEMA Assistant Engineer 1 E 115 $6,622 $6,953 $7,301 $7,666 $8,049 38.20 40.12 42.12 44.23 46.44 PUMA Assistant Finance Director 1 E 156 $9,958 $10,456 $10,979 $11,528 $12,104 57.45 60.32 63.34 66.51 69.83 SEIU Assistant Planner 3 40 104 $5,936 $6,232 $6,544 $6,871 $7,215 34.24 35.96 37.75 39.64 41.62 GEMA Associate Civil Engineer 1 E 135 $8,080 $8,484 $8,909 $9,354 $9,822 46.62 48.95 51.40 53.97 56.66 GEMA Associate Engineer 1 E 125 $7,315 $7,681 $8,065 $8,468 $8,891 42.20 44.31 46.53 48.85 51.30 GEMA Associate Planner 1 E 114 $6,557 $6,884 $7,229 $7,590 $7,970 37.83 39.72 41.70 43.79 45.98 GEMA Associate Surveyor 1 E 130 $7,688 $8,073 $8,476 $8,900 $9,345 44.35 46.57 48.90 51.35 53.91 PUMA Building and Safety Manager 1 E 146 $9,015 $9,466 $9,939 $10,436 $10,958 52.01 54.61 57.34 60.21 63.22 SEIU Building Inspector I 3 40 93 $5,320 $5,586 $5,866 $6,159 $6,467 30.69 32.23 33.84 35.53 37.31 SEIU Building Inspector II 3 40 103 $5,877 $6,171 $6,479 $6,803 $7,143 33.90 35.60 37.38 39.25 41.21 PUMA Building Official 1 E 141 $8,577 $9,006 $9,457 $9,929 $10,426 49.49 51.96 54.56 57.29 60.15 GEMA Building Superintendent 1 E 115 $6,622 $6,953 $7,301 $7,666 $8,049 38.20 40.12 42.12 44.23 46.44 PUMA City Clerk 1 E 125 $7,315 $7,681 $8,065 $8,468 $8,891 42.20 44.31 46.53 48.85 51.30 PUMA City Engineer 1 E 168 $11,221 $11,782 $12,371 $12,990 $13,639 64.74 67.97 71.37 74.94 78.69 City of Hanford Full-Time Salary Schedule
City Council Adoption Date: 01-20-2026 Effective Date: 02-01-2026
MONTHLY SALARY HOURLY SALARY
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
Unrepresented City Manager 1 E 208 16,707 17,542 18,419 19,340 20,307 96.38 101.20 106.26 111.58 117.16 PUMA City Surveyor 1 E 155 $9,860 $10,353 $10,870 $11,414 $11,984 56.88 59.73 62.71 65.85 69.14 GEMA Civil Engineer 1 E 145 $8,926 $9,372 $9,841 $10,333 $10,849 51.49 54.07 56.77 59.61 62.59 SEIU Code Compliance Officer 3 40 93 $5,320 $5,586 $5,866 $6,159 $6,467 30.69 32.23 33.84 35.53 37.31 GEMA Code Compliance Supervisor 1 E 105 $5,995 $6,295 $6,609 $6,940 $7,287 34.59 36.32 38.13 40.04 42.04 SEIU Combined Building Inspector 3 40 113 $6,492 $6,816 $7,157 $7,515 $7,891 37.45 39.32 41.29 43.36 45.52 GEMA
Communications Dispatch
Supervisor 3 40 110 $6,301 $6,616 $6,947 $7,294 $7,659 36.35 38.17 40.08 42.08 44.18 SEIU Communications Dispatcher 3 40 79 $4,628 $4,860 $5,103 $5,358 $5,626 26.70 28.04 29.44 30.91 32.46 EMEA Community Development Director 1 E 173 $11,793 $12,383 $13,002 $13,652 $14,335 68.04 71.44 75.01 78.76 82.70 SEIU
Community Development
Technician 3 40 83 $4,816 $5,057 $5,310 $5,576 $5,854 27.79 29.18 30.63 32.17 33.77 SEIU Community Enhancement Officer 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13 PUMA Community Relations Manager 1 E 127 $7,462 $7,835 $8,227 $8,638 $9,070 43.05 45.20 47.46 49.84 52.33 SEIU Community Services Officer 3 40 64 $3,987 $4,186 $4,395 $4,615 $4,846 23.00 24.15 25.36 26.63 27.96 SEIU Computer Technician 3 40 86 $4,962 $5,210 $5,471 $5,744 $6,032 28.63 30.06 31.56 33.14 34.80 SEIU
Construction
Coordinator/Inspector 3 40 111 $6,364 $6,682 $7,016 $7,367 $7,735 36.71 38.55 40.48 42.50 44.63 SEIU Construction Inspector I 3 40 91 $5,215 $5,476 $5,750 $6,037 $6,339 30.09 31.59 33.17 34.83 36.57 SEIU Construction Inspector II 3 40 101 $5,761 $6,049 $6,352 $6,669 $7,003 33.24 34.90 36.64 38.48 40.40 SEIU Custodian 3 40 51 $3,503 $3,678 $3,862 $4,055 $4,258 20.21 21.22 22.28 23.39 24.56 PUMA Deputy City Engineer 1 E 160 $10,362 $10,881 $11,425 $11,996 $12,596 59.78 62.77 65.91 69.21 72.67 Unrepresented Deputy City Manager 1 E 193 $14,390 $15,110 $15,865 $16,659 $17,491 83.02 87.17 91.53 96.11 100.91 IAFF
Deputy Fire Chief/Deputy Fire
Marshal 1 E 164 $10,783 $11,322 $11,888 $12,483 $13,107 62.21 65.32 68.59 72.02 75.62 PUMA Deputy Public Works Director 1 E 160 $10,362 $10,881 $11,425 $11,996 $12,596 59.78 62.77 65.91 69.21 72.67 SEIU Development Services Assistant 3 40 64 $3,987 $4,186 $4,395 $4,615 $4,846 23.00 24.15 25.36 26.63 27.96 SEIU
Development Services
Technician 3 40 79 $4,628 $4,860 $5,103 $5,358 $5,626 26.70 28.04 29.44 30.91 32.46 SEIU Engineering Technician I 3 40 81 $4,721 $4,958 $5,205 $5,466 $5,739 27.24 28.60 30.03 31.53 33.11 SEIU Engineering Technician II 3 40 91 $5,215 $5,476 $5,750 $6,037 $6,339 30.09 31.59 33.17 34.83 36.57
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
GEMA
Environmental Compliance
Analyst 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 GEMA
Environmental Compliance
Supervisor 1 E 114 $6,557 $6,884 $7,229 $7,590 $7,970 37.83 39.72 41.70 43.79 45.98 SEIU
Facilities Maintenance
Technician I 3 40 66 $4,067 $4,270 $4,484 $4,708 $4,943 23.46 24.64 25.87 27.16 28.52 SEIU
Facilities Maintenance
Technician II 3 40 76 $4,492 $4,717 $4,953 $5,200 $5,460 25.92 27.21 28.57 30.00 31.50 EMEA Finance Director 1 E 179 $12,519 $13,145 $13,802 $14,492 $15,217 72.22 75.84 79.63 83.61 87.79 PUMA Finance Manager 1 E 146 $9,015 $9,466 $9,939 $10,436 $10,958 52.01 54.61 57.34 60.21 63.22 GEMA Financial Analyst 1 E 119 $6,891 $7,236 $7,597 $7,977 $8,376 39.76 41.74 43.83 46.02 48.32 IAFF Fire Battalion Chief 1 E 162 10,571 11,099 11,654 12,237 12,849 60.99 64.03 67.24 70.60 74.13 IAFF Fire Battalion Chief* 4 E 120 $9,743 $10,231 $10,743 $11,279 $11,845 40.15 42.16 44.27 46.48 48.81 IAFF Fire Captain 4 24 141 $8,577 $9,006 $9,457 $9,929 $10,426 49.49 51.96 54.56 57.29 60.15 IAFF Fire Captain* 4 24 99 $7,906 $8,302 $8,717 $9,153 $9,610 32.58 34.21 35.92 37.72 39.60 EMEA Fire Chief 1 E 179 $12,519 $13,145 $13,802 $14,492 $15,217 72.22 75.84 79.63 83.61 87.79 IAFF Fire Engineer 4 24 124 $7,243 $7,605 $7,985 $8,384 $8,803 41.78 43.87 46.07 48.37 50.79 IAFF Fire Engineer* 4 24 82 $6,676 $7,011 $7,360 $7,729 $8,115 27.51 28.89 30.33 31.85 33.44 GEMA Fire Marshal 1 E 122 $7,100 $7,455 $7,828 $8,219 $8,630 40.96 43.01 45.16 47.42 49.79 GEMA Fire Prevention Coordinator 1 E 93 $5,320 $5,586 $5,866 $6,159 $6,467 30.69 32.23 33.84 35.53 37.31 IAFF Firefighter 4 24 114 $6,557 $6,884 $7,229 $7,590 $7,970 37.83 39.72 41.70 43.79 45.98 IAFF Firefighter* 4 24 72 $6,045 $6,346 $6,664 $6,996 $7,346 24.91 26.15 27.46 28.83 30.27 SEIU Fleet Mechanic I 3 40 72 $4,317 $4,533 $4,759 $4,997 $5,247 24.91 26.15 27.46 28.83 30.27 SEIU Fleet Mechanic II 3 40 82 $4,769 $5,007 $5,257 $5,520 $5,796 27.51 28.89 30.33 31.85 33.44 GEMA Fleet Superintendent 1 E 115 $6,622 $6,953 $7,301 $7,666 $8,049 38.20 40.12 42.12 44.23 46.44 GEMA Fleet Supervisor 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 SEIU Heavy Equipment Operator 3 40 76 $4,492 $4,717 $4,953 $5,200 $5,460 25.92 27.21 28.57 30.00 31.50 GEMA Housing Analyst 1 E 119 $6,891 $7,236 $7,597 $7,977 $8,376 39.76 41.74 43.83 46.02 48.32 SEIU Housing Program Specialist 3 40 83 $4,816 $5,057 $5,310 $5,576 $5,854 27.79 29.18 30.63 32.17 33.77 PUMA Human Resources Analyst 1 E 112 $6,427 $6,749 $7,086 $7,441 $7,813 37.08 38.94 40.88 42.93 45.07
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
PUMA Human Resources Manager 1 E 161 $10,466 $10,989 $11,539 $12,116 $12,722 60.38 63.40 66.57 69.90 73.39 GEMA Human Resources Technician 2 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 PUMA Information Systems Analyst 1 E 125 $7,315 $7,681 $8,065 $8,468 $8,891 42.20 44.31 46.53 48.85 51.30 GEMA Information Systems Specialist 1 E 106 $6,055 $6,358 $6,676 $7,009 $7,360 34.93 36.68 38.51 40.44 42.46 PUMA Information Technology Manager 1 E 140 $8,492 $8,917 $9,363 $9,831 $10,323 49.00 51.44 54.02 56.72 59.55 GEMA Land Surveyor 1 E 145 $8,926 $9,372 $9,841 $10,333 $10,849 51.49 54.07 56.77 59.61 62.59 SEIU Landscape Services Technician 3 40 81 $4,721 $4,958 $5,205 $5,466 $5,739 27.24 28.60 30.03 31.53 33.11 SEIU Meter Reader 3 40 64 $3,987 $4,186 $4,395 $4,615 $4,846 23.00 24.15 25.36 26.63 27.96 SEIU Office Assistant I 3 40 44 $3,267 $3,431 $3,602 $3,782 $3,971 18.85 19.79 20.78 21.82 22.91 SEIU Office Assistant II 3 40 54 $3,609 $3,790 $3,979 $4,178 $4,387 20.82 21.86 22.96 24.10 25.31 SEIU Parking Control Officer 3 40 54 $3,609 $3,790 $3,979 $4,178 $4,387 20.82 21.86 22.96 24.10 25.31 EMEA
Parks & Community Services
Director 1 E 168 $11,221 $11,782 $12,371 $12,990 $13,639 64.74 67.97 71.37 74.94 78.69 SEIU Parks Maintenance Worker I 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13 SEIU Parks Maintenance Worker II 3 40 71 $4,274 $4,488 $4,712 $4,948 $5,195 24.66 25.89 27.19 28.55 29.97 PUMA Parks Manager 1 E 137 $8,243 $8,655 $9,088 $9,542 $10,019 47.55 49.93 52.43 55.05 57.80 GEMA Parks Supervisor 1 E 94 $5,373 $5,642 $5,924 $6,220 $6,531 31.00 32.55 34.18 35.89 37.68 PUMA Payroll Analyst 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 GEMA Payroll Specialist 2 40 78 $4,583 $4,812 $5,052 $5,305 $5,570 26.44 27.76 29.15 30.61 32.14 GEMA Plans Examiner 1 E 111 $6,364 $6,682 $7,016 $7,367 $7,735 36.71 38.55 40.48 42.50 44.63 HPOA Police Cadet 4 40 53.5 $3,591 $3,771 $3,959 $4,157 $4,365 20.72 21.75 22.84 23.98 25.18 HPOA Police Captain 1 E 161.5 $10,518 $11,044 $11,597 $12,176 $12,785 60.68 63.72 66.90 70.25 73.76 EMEA Police Chief 1 E 185 $13,289 $13,954 $14,651 $15,384 $16,153 76.67 80.50 84.53 88.75 93.19 HPOA Police Corporal 4 14 124.5 $7,279 $7,643 $8,025 $8,426 $8,847 41.99 44.09 46.30 48.61 51.04 HPOA Police Lieutenant 1 E 153.5 $9,714 $10,199 $10,709 $11,245 $11,807 56.04 58.84 61.78 64.87 68.12 HPOA Police Officer/Investigator* 4 14 114.5 $6,589 $6,919 $7,265 $7,628 $8,009 38.02 39.92 41.91 44.01 46.21 SEIU Police Records Assistant 3 40 62 $3,908 $4,104 $4,309 $4,524 $4,750 22.55 23.67 24.86 26.10 27.41
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
HPOA Police Sergeant 4 14 139.5 $8,450 $8,873 $9,317 $9,782 $10,272 48.75 51.19 53.75 56.44 59.26 GEMA
Police Support Services
Administrator 1 E 120 $6,960 $7,308 $7,673 $8,057 $8,460 40.15 42.16 44.27 46.48 48.81 PUMA Principal Planner 1 E 141 $8,577 $9,006 $9,457 $9,929 $10,426 49.49 51.96 54.56 57.29 60.15 GEMA Project Manager 1 E 132 $7,843 $8,235 $8,647 $9,079 $9,533 45.25 47.51 49.88 52.38 55.00 SEIU
Property and Evidence
Technician 3 40 69 $4,190 $4,400 $4,620 $4,850 $5,093 24.17 25.38 26.65 27.98 29.38 EMEA Public Works Director 1 E 175 $12,030 $12,632 $13,264 $13,927 $14,623 69.41 72.88 76.52 80.35 84.36 PUMA Public Works Manager 1 E 142 $8,663 $9,096 $9,551 $10,029 $10,530 49.98 52.48 55.10 57.86 60.75 GEMA Purchasing Agent 1 E 119 $6,891 $7,236 $7,597 $7,977 $8,376 39.76 41.74 43.83 46.02 48.32 SEIU Recreation Coordinator 3 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 PUMA Recreation Manager 1 E 119 $6,891 $7,236 $7,597 $7,977 $8,376 39.76 41.74 43.83 46.02 48.32 GEMA Recreation Supervisor 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 SEIU Recycling Coordinator 3 40 92 $5,268 $5,531 $5,807 $6,098 $6,403 30.39 31.91 33.50 35.18 36.94 SEIU Refuse Collector 3 40 70 $4,232 $4,444 $4,666 $4,899 $5,144 24.42 25.64 26.92 28.26 29.68 PUMA Refuse Manager 1 E 129 $7,612 $7,993 $8,392 $8,812 $9,252 43.92 46.11 48.42 50.84 53.38 SEIU Refuse Service Worker 3 40 76 $4,492 $4,717 $4,953 $5,200 $5,460 25.92 27.21 28.57 30.00 31.50 GEMA Refuse Supervisor 1 E 102 $5,819 $6,110 $6,415 $6,736 $7,073 33.57 35.25 37.01 38.86 40.80 GEMA Regulatory Compliance Analyst 1 E 99 $5,648 $5,930 $6,226 $6,538 $6,865 32.58 34.21 35.92 37.72 39.60 PUMA Risk Management Analyst 1 E 115 $6,622 $6,953 $7,301 $7,666 $8,049 38.20 40.12 42.12 44.23 46.44 GEMA Safety and Risk Technician 2 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 GEMA
Sanitary Sewer Collection
Supervisor 1 E 104 $5,936 $6,232 $6,544 $6,871 $7,215 34.24 35.96 37.75 39.64 41.62 GEMA Senior Administrative Analyst 1 E 119 $6,891 $7,236 $7,597 $7,977 $8,376 39.76 41.74 43.83 46.02 48.32 PUMA Senior Civil Engineer 1 E 155 $9,860 $10,353 $10,870 $11,414 $11,984 56.88 59.73 62.71 65.85 69.14 SEIU
Senior Combined Building
Inspector 3 40 123 $7,171 $7,529 $7,906 $8,301 $8,716 41.37 43.44 45.61 47.89 50.29 SEIU
Senior Communications
Dispatcher 3 40 100 $5,704 $5,989 $6,289 $6,603 $6,933 32.91 34.55 36.28 38.09 40.00 GEMA Senior Construction Inspector 1 E 120 $6,960 $7,308 $7,673 $8,057 $8,460 40.15 42.16 44.27 46.48 48.81 SEIU Senior Custodian 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
PUMA Senior Engineer 1 E 150 $9,381 $9,850 $10,343 $10,860 $11,403 54.12 56.83 59.67 62.65 65.78 SEIU
Senior Facility/Building
Maintenance Technician 3 40 96 $5,481 $5,756 $6,043 $6,345 $6,663 31.62 33.20 34.87 36.61 38.44 SEIU Senior Fleet Mechanic 3 40 92 $5,268 $5,531 $5,807 $6,098 $6,403 30.39 31.91 33.50 35.18 36.94 PUMA Senior Human Resources Analyst 1 E 122 $7,100 $7,455 $7,828 $8,219 $8,630 40.96 43.01 45.16 47.42 49.79 SEIU Senior Maintenance Worker 3 40 81 $4,721 $4,958 $5,205 $5,466 $5,739 27.24 28.60 30.03 31.53 33.11 SEIU Senior Meter Reader 3 40 74 $4,404 $4,624 $4,855 $5,098 $5,353 25.41 26.68 28.01 29.41 30.88 GEMA Senior Planner 1 E 126 $7,388 $7,758 $8,145 $8,553 $8,980 42.62 44.76 46.99 49.34 51.81 GEMA Senior Plans Examiner 1 E 121 $7,030 $7,381 $7,750 $8,138 $8,544 40.56 42.58 44.71 46.95 49.30 SEIU Senior Police Records Assistant 3 40 72 $4,317 $4,533 $4,759 $4,997 $5,247 24.91 26.15 27.46 28.83 30.27 SEIU Senior Refuse Collector 3 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 SEIU
Senior Utilities Maintenance
Worker 3 40 91 $5,215 $5,476 $5,750 $6,037 $6,339 30.09 31.59 33.17 34.83 36.57 SEIU
Sewer Collections Maintenance
Worker I 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13 SEIU
Sewer Collections Maintenance
Worker II 3 40 71 $4,274 $4,488 $4,712 $4,948 $5,195 24.66 25.89 27.19 28.55 29.97 SEIU Shop and Parts Specialist 3 40 77 $4,537 $4,764 $5,002 $5,252 $5,515 26.18 27.49 28.86 30.30 31.82 SEIU Sports Coordinator 3 40 85 $4,913 $5,159 $5,417 $5,688 $5,972 28.35 29.76 31.25 32.81 34.45 SEIU Storm Maintenance Worker I 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13 SEIU Storm Maintenance Worker II 3 40 71 $4,274 $4,488 $4,712 $4,948 $5,195 24.66 25.89 27.19 28.55 29.97 SEIU Streets Maintenance Worker I 3 40 61 $3,869 $4,063 $4,266 $4,479 $4,703 22.32 23.44 24.61 25.84 27.13 SEIU Streets Maintenance Worker II 3 40 71 $4,274 $4,488 $4,712 $4,948 $5,195 24.66 25.89 27.19 28.55 29.97 PUMA Streets Manager 1 E 131 $7,765 $8,153 $8,561 $8,989 $9,438 44.80 47.04 49.39 51.86 54.45 GEMA Streets Supervisor 1 E 106 $6,055 $6,358 $6,676 $7,009 $7,360 34.93 36.68 38.51 40.44 42.46 GEMA Supervising Building Inspector 1 E 126 $7,388 $7,758 $8,145 $8,553 $8,980 42.62 44.76 46.99 49.34 51.81 SEIU Traffic Control Technician 3 40 96 $5,481 $5,756 $6,043 $6,345 $6,663 31.62 33.20 34.87 36.61 38.44 EMEA Utilities & Engineering Director 1 E 179 $12,519 $13,145 $13,802 $14,492 $15,217 72.22 75.84 79.63 83.61 87.79 SEIU Water Operator I 3 40 71 $4,274 $4,488 $4,712 $4,948 $5,195 24.66 25.89 27.19 28.55 29.97 SEIU Water Operator II 3 40 81 $4,721 $4,958 $5,205 $5,466 $5,739 27.24 28.60 30.03 31.53 33.11
BARGAINING OT FLSA SALARY
UNIT JOB TITLE DESIGNATION DESIGNATION RANGE 1/MIN 2 3 4 5/MAX 1/MIN 2 3 4 5/MAX
MONTHLY SALARY HOURLY SALARY
PUMA Utilities Manager 1 E 131 $7,765 $8,153 $8,561 $8,989 $9,438 44.80 47.04 49.39 51.86 54.45 GEMA Utilities Supervisor 1 E 108 $6,177 $6,485 $6,810 $7,150 $7,508 35.63 37.42 39.29 41.25 43.31 GEMA Utility Billing Specialist 1 E 91 $5,215 $5,476 $5,750 $6,037 $6,339 30.09 31.59 33.17 34.83 36.57 SEIU Water Conservation Technician 3 40 83 $4,816 $5,057 $5,310 $5,576 $5,854 27.79 29.18 30.63 32.17 33.77 PUMA WWTP Manager 1 E 142 $8,663 $9,096 $9,551 $10,029 $10,530 49.98 52.48 55.10 57.86 60.75 SEIU WWTP Operator I 3 40 79 $4,628 $4,860 $5,103 $5,358 $5,626 26.70 28.04 29.44 30.91 32.46 SEIU WWTP Operator II 3 40 89 $5,113 $5,368 $5,637 $5,919 $6,214 29.50 30.97 32.52 34.15 35.85 GEMA WWTP Supervisor 1 E 111 $6,364 $6,682 $7,016 $7,367 $7,735 36.71 38.55 40.48 42.50 44.63 SEIU WWTP/OIT 3 40 64 $3,987 $4,186 $4,395 $4,615 $4,846 23.00 24.15 25.36 26.63 27.96 Barganing Group Designation Overtime Designation FLSA Designation EMEA 1. No compensation for overtime work
GEMA
IAFF
HPOA
PUMA
SEIU
Unrep
NA
Unrepresented
E - Exempt
40 - 40 hour, 7 day work period (non-exempt)
14 - 86 hour/14 day work period (7k exemption)
24 -182 hour/24 day work period (7k exemption)
Management Employee
Conf/Other Employee
General Employee
Fire/Police Employee
2. Shall be paid for overtime work
3. Shall be paid for overtime work
4. Shall be paid for overtime work
*2,912 hours worked annually (all other job classifications salary are based on 2,080 hours worked annually) The designated salary range is the nearest possible to the calculated amount without falling below it.
Not Applicable
Executive Management Employees Association
General Employees Management Association
International Association of Firefighters
Hanford Police Officers Association
Service Employees International Union Local 521
Professional Upper Management Association
Administrative assignment pay in the Fire Department is calculated by taking current base rate x 2,912 multiplying that amount by 1.075 and dividing the total by 2,080. This converts a 56 hour work week to a 40 hour week.
BARGAINING OT FLSA
UNIT JOB TITLE DESIGNATION DESIGNATION 1/MIN to 5/MAX
NA Airport Manager 3 40 $25.00 to $25.00 Barganing Group Designation NA Airport Operations Attendant 3 40 $17.00 to $19.00 Not Applicable NA NA Aquatics Technician 3 40 $23.00 to $28.00
NA Certified Instructor 3 40 $17.00 to $23.00 Overtime Designation NA Clerical Support 3 40 $17.00 to $22.00 3.General Employee Shall be paid for overtime work NA Code Enforcement Officer 3 40 $17.00 to $19.00
NA Community Service Officer 3 40 $17.00 to $19.00 FLSA Designation NA Custodian 3 40 $17.00 to $19.00 40 - 40 hour, 7 day work period (non-exempt) NA Engineering Technician Aide 3 40 $17.00 to $19.00
NA Facilities Host 3 40 $17.00 to $19.00
NA Fire Help 3 40 $22.24 to $26.40
NA Fire Inspector 3 40 $25.00 to $25.00
NA Fleet Mechanic (Helper) 3 40 $17.00 to $25.00
NA Graffiti Control Officer 3 40 $17.00 to $19.00
NA Ice Rink Maintenance Technician 3 40 $18.00 to $22.00 NA Ice Rink Manager 3 40 $20.00 to $22.00
NA Intern 3 40 $17.00 to $19.00
NA Licensed Surveyor in Training 3 40 $35.00 to $50.00
NA Lead Facilities Host 3 40 $21.00 to $23.00
NA Management Intern 3 40 $17.00 to $22.00
NA Meter Reader 3 40 $17.00 to $19.00
NA Paint Program Coordinator 3 40 $17.00 to $19.00
NA Parking Control Officer 3 40 $17.00 to $19.00
NA Pool Manager 3 40 $17.00 to $19.00
NA Parks/Public Works Laborer 3 40 $18.00 to $22.00
NA Recreation Leader I 3 40 $17.00 to $18.00
NA Recreation Leader II 3 40 $17.50 to $18.50
NA Recreation Leader III 3 40 $18.00 to $19.00
NA Refuse Collector 3 40 $17.00 to $20.50
NA Reserve Police Officer (Level I) 3 40 $22.24 to $26.40 NA Senior Fire Inspector 3 40 $30.00 to $30.00
NA Sports Coordinator 3 40 $22.00 to $22.00
NA Sports Official 3 40 $17.00 to $23.00
City of Hanford Part-Time Salary Schedule
City Council Adoption Date - 01-20-2026 Effective Date: 02-01-2026 The above list contains the City of Hanford's part-time positions. Appointments for part-time work may be paid at an hourly rate as high as Step “3” of the range to which a full-time job classification has been established. Part-time appointments made at higher than Step “3” must be approved by the City Manager. If a part-time employee works more than 1,000 hours in a fiscal year he/she must become a member of CalPERS with the employee and the City making the appropriate contribution as defined by the City’s CalPERS contract. The employee will remain a CalPERS member until termination.
HOURLY SALARY
17.D.
AGENDA
STAFF REPORT
MEETING DATE: 1/20/2026 AGENDA SECTION:
GENERAL BUSINESS
SUBJECT:
City Manager Employment Agreement
RECOMMENDATION:
Recommendation: It is recommended that the City Council, by motion, approve the attached Employment Agreement for Christopher Tavarez and authorize the Mayor to execute the Agreement.
Recommended Motion: I move to approve the Employment Agreement for Christopher Tavarez and authorize the Mayor to execute the Agreement.
BACKGROUND:
With the resignation of former City Manager Mario Cifuentez II, the City has gone through the process of recruiting a new City Manager. In mid-2025 a Request for Proposals was issued seeking a qualified executive recruiting firm. Bob Murray and Associates were selected to conduct the national recruitment. Over 30 applications were received from interested parties across many states.
Upon completion of the recruitment process and a “Community Meet and Greet” on January 5, 2026, a final candidate was identified. Thereafter, the Council extended an offer of employment to the finalist, Interim City Manager Christopher Tavarez, who has been serving in his capacity since August 2025.
Prior to Mr. Tavarez’s appointment to the Interim City Manager position, he served as a Deputy City Manager since July 2025 and as the City’s Finance Director since April 2021.
Employment terms were discussed with Mr. Tavarez, and the attached Employment Agreement reflects the efforts of negotiations. The terms are summarized as follows:
• Term: five (5) year term.
• Performance Evaluations: Mr. Tavarez will be evaluated after the first six (6) months of employment and after the one (1) year anniversary of his hiring. Subsequent evaluations will occur annually.
• Salary: $20,307.00 per month ($243,684.00 per year). Adjustments to the City Manager’s salary will occur when the salaries of Executive Management Association (EMEA) members are adjusted, and the City Manager’s salary will be adjusted in a manner consistent with the adjustment of salaries of EMEA members (e.g., the City Manager’s salary will be increased by two percent (2%) if the
salaries of EMEA members are increased by two percent (2%)). • At-Will and Severance: Mr. Tavarez will be an at-will employee. If he is terminated for no-cause more than six (6) months before the Employee Agreement expires, he will receive a severance equal to six (6) months of his then-current salary; provided however, receipt of a severance payment will be conditioned on Mr. Tavarez’s signature of a General Release Agreement that releases the City of liability associated with his employment.
• Vehicle Allowance: $500.00 per month.
• Cell Phone/Mobile Device Reimbursement: $100.00 per month. • Misc. Benefits: Mr. Tavarez will receive benefits received by EMEA members.
FISCAL IMPACT:
Mr. Tavarez will receive: (i) a monthly salary of $20,307.00; and (ii) other compensation and reimbursements that he currently receives as Interim City Manager. The salary amount shall be adjusted according to any salary increases provided to the EMEA bargaining unit.
ATTACHMENTS:
1. Employment Agreement - Final
1 CITY OF HANFORD
CITY MANAGER EMPLOYMENT AGREEMENT
* * * * *
This Employment Agreement (“Agreement”) is entered the 20th day of January 2026 and is made by and between the City of Hanford, a California municipal corporation (“City”), and Christopher Tavarez (“Employee”) an individual, (sometimes collectively “the Parties”).
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California.
B. The Hanford City Council conducted an extensive recruitment process for the City Manager position, and after carefully evaluating Employee’s knowledge, skills, experience, administrative skills, and abilities, unanimously desires to appoint Employee to the position of City Manager.
C. The Parties mutually agree that this form of Agreement reflects the terms and conditions under which the Parties intend and desire to employ Employee, NOW, THEREFORE, City and Employee agree as follows:
SECTION 1. DUTIES AND PROFESSIONAL CONDUCT.
Employee shall serve as City Manager at the pleasure of the Council and shall be an “ATWILL” exempt employee of City. City hereby employs Employee as City Manager to perform the functions and duties specified in the job description, the laws of the State of California and Ordinances and Resolutions of the City, and to perform such other duties and functions as the Hanford City Council (“Council”) shall from time-to-time assign.
Employee shall remain exclusively employed by the City and shall not accept other employment that would be in conflict with Employee’s obligations owed to the City under this Agreement, until such time as Employee resigns or is terminated by City, or upon written approval of the City.
Employee shall adhere to the professional code of ethics as prescribed by the International City/County Management Association.
Consistent with the provisions of Hanford Municipal Code section 2.08.070, the Council and its members shall deal with the administrative matters of the City only through the City Manager, except for the purpose of inquiry, and neither the Council, nor any member thereof, shall give orders or instructions to any subordinate of the City Manager. The City Manager shall receive direction and
2 instruction from the Council only when it is sitting in a duly convened meeting of the Council, and individual Council members shall not give orders or direction to the City Manager without the knowledge and concurrence of a majority of the Council. The provisions of this section shall not be construed as limiting consultations on an individual basis between Council members and the City Manager.
SECTION 2. TERM OF AGREEMENT.
The term of this Agreement shall commence on February 2, 2026 (“Commencement Date”), and shall be in effect for five (5) years through February 2, 2031, or until terminated as set forth below.
SECTION 3. SALARY.
City shall pay Employee an initial monthly salary of TWENTY THOUSAND THREE HUNDRED AND SEVEN DOLLARS ($20,307.00) for services rendered, payable in installments at the same time and in the same manner as other employees of the City are paid. Increases in Employee’s salary may be effective at any time in the sole discretion of the Council.
To maintain appropriate separation between the salaries of the City Manager and Executive Management Association (“EMEA”) employees, the salary provided under this Agreement shall be adjusted at the same time any salary range increase is provided to the EMEA employees during the term of this Agreement. An adjustment to Employee’s salary will be equal to the adjustment to the salaries of EMEA members. For example (and solely for the purposes of illustration), if EMEA members receive a two percent (2%) salary increase, Employee’s salary will be increased by two percent (2%).
Employee’s salary increases approved by the City Council from time to time pursuant to this Agreement shall be effective as set forth in an annual salary resolution or minute action approved by the City Council.
Employee shall continue to receive a separate cell phone/mobile device reimbursement in the amount of ONE HUNDRED DOLLARS ($100.00 per month) in compliance with Administrative Regulation 1.26.
Employee shall continue to receive an additional TEN PERCENT (10%) for longevity pay, which shall be automatically adjusted to match any future modifications to longevity pay offered to the members of EMEA. This additional compensation is based on years of management and technical level service at the City and other public entities.
Employee shall continue to receive an additional FIVE PERCENT (5%) certificate pay for being a Certified Public Accountant, which shall be automatically adjusted to match any future modifications to certificate pay offered to the members of EMEA.
Employee shall continue to receive a monthly FIVE HUNDRED DOLLAR ($500.00) car allowance.
3 All items in this section shall encompass the Employee’s monthly salary and benefits.
If the City reduces the Salary or any other financial benefit of the Employee in a percentage that is greater than the average reduction of all EMEA members, such action shall constitute a termination of this Agreement without Cause under Section 8 of this Agreement, and Employee shall be entitled to Severance.
SECTION 4. BENEFITS AND LEAVE.
Employee was previously assigned to the position of Interim City Manager. He will continue to receive vacation and sick leave hours, retirement benefits, insurance, and other employment benefits Employee currently receives as described below:
City shall continue to provide Employee with eighty (80) hours of Management Leave per calendar year. It is preferred that Management Leave be used as time off. Employee may also cash out up to sixty-four (64) hours of their Management Leave or convert all or a portion of their leave to deferred compensation. Any Management Leave hours not taken by Employee by PP025 will be compensated to their cash-out balance, up to sixty-four (64) hours if available in PP026. Management Leave shall not be carried over to a new calendar year.
City will maintain Employee’s enrollment in the Public Employees’ Retirement System (“PERS”), and City will pay the employer’s required contribution. Employee shall pay, at his sole cost, the full employee contribution to PERS. City will maintain, in effect, the 3% @ 60 PERS retirement program as a Classic CalPERS member. Retirement formula designation is based on Employee’s CalPERS service date.
City will continue to provide term life insurance for Employee in the coverage amount of TWO HUNDRED THOUSAND DOLLARS ($200,000.00).
City shall provide Employee with the same health, dental, and vision insurance coverage offered to the members of EMEA.
Employee shall continue to receive a matched employer contribution for deferred compensation up to SEVENTY-FIVE DOLLARS ($75.00) per pay period.
Employee shall continue to accrue vacation leave at the rate of 6.462 hours per bi-weekly pay period (168 hours annually).
Employee shall continue to accrue sick leave at the rate of 3.69 hours per bi-weekly pay period (96 hours annually).
The use and accumulation of vacation and sick leave shall be the same as EMEA employees as outlined in the Compensation and Benefit Summary for EMEA.
Unless otherwise outlined in this agreement, benefits shall be the same as EMEA employees outlined in the Compensation and Benefit Summary for EMEA.
4 Except in an emergency, Employee will not be required to work on the holidays identified in the Compensation and Benefit Summary for EMEA. It is recognized that Employee may work all days of the week and hours are flexible.
SECTION 5. PERFORMANCE EVALUATION.
During the initial months of the Term of this Agreement, the Employee and the City Council shall meet to review and discuss performance expectations and establish an evaluation process.
The Employee shall receive a performance evaluation at the sixth (6th) month anniversary of the Commencement Date. Another evaluation shall occur at the one (1) year anniversary of the Commencement Date and annually thereafter. At City expense, a facilitator may be used for any evaluation process upon mutual agreement of the City Council and the Employee.
This provision does not limit City Council’s authority to perform additional evaluations of Employee’s performance, if necessary, including closed session items related thereto. Failure to conduct an evaluation shall not affect the rights, duties, or obligations of either party under this Agreement.
SECTION 6. BUSINESS AND PROFESSIONAL EXPENSES.
City agrees to pay the professional dues and subscriptions on behalf of Employee which are necessary for Employee’s continuation or full participation in international, national, regional, state, or local associations and organizations necessary and desirable for Employee’s continued professional participation, growth and advancement, or for the good of the City, as set forth in the City's budget.
City agrees to pay Employee’s travel and subsistence expenses for official travel, meetings, and occasions reasonably necessary to continue Employee’s professional development, and for Employee’s reasonable participation in necessary official and other functions for the City; including, but not limited to, national, regional, state, and local conferences, and governmental groups and committees on which Employee serves as a member. Notwithstanding the above, the number of conferences or meetings City will pay for each year, and attendance at out-of-state conferences and meetings, shall be at the discretion of the City Council as set forth in the City’s budget.
SECTION 7. CREDIT CARD.
City will provide to Employee a State of California purchasing card (CalCard) that Employee may utilize for City-related expenses. Employee shall only use City’s CalCard for City-related business and in accordance with State law and regulations and the City’s then-current purchasing card policy, the terms of which are incorporated herein by reference. Any misuse of City’s CalCard shall be grounds for discipline, including surrender of CalCard and/or immediate termination of employment for cause. Any legal expenses incurred by the City as a result of Employee’s misuse of CalCard shall be reimbursed by Employee.
5 SECTION 8. TERMINATION OF AGREEMENT, SEVERANCE, AND GENERAL RELEASE AGREEMENT.
A. In accordance with Hanford Municipal Code Section 2.08.080 termination shall mean removal of the City Manager and shall be effective only by a majority vote of the whole council (3 of 5 votes), as then constituted, convened in a regular council meeting.
B. This employment relationship may be terminated as follows:
1. Expiration of Agreement - This Agreement shall automatically terminate upon expiration. The City Council shall provide the Employee with written notice at least six (6) months prior to the expiration date indicating whether the Agreement will be extended or allowed to expire, and expiration of this Agreement shall constitute a termination of this Agreement without Cause under Section 8 of this Agreement, and Employee shall be entitled to Severance.
2. Employee Resignation - By Employee with prior written notice to City of at least thirty (30) calendar days. Aside from normal rate of compensation and accrued and unused vacation leave and up to sixty-four (64) hours of accrued and unused management leave, Employee shall not be entitled to any additional compensation or payment, including Severance.
3. Termination Without Cause – Subject to Hanford Municipal Code Section
2.08.080, the majority of the entire City Council may terminate this Agreement at any time without cause at a Regular City Council Meeting and if the Employee signs, delivers to the City Council and does not revoke the General Release Agreement in the form attached hereto as Exhibit A, Employee shall be entitled to Severance compensation equal to Employee’s current salary for six (6) months (compensation identified in Section 3 of this agreement).
However, in accordance with California Code Section 53260, the Severance amount will not exceed an amount equal to Employee’s then current monthly salary multiplied by the number of months remaining on the unexpired term of this Agreement. Additionally, the City will pay six months of Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage for Employee and his enrolled dependents. If Employee finds other employment that provides health benefits and Employee qualifies to begin receiving those health benefits before the six-month severance period expires, then the health benefits provided by the City shall terminate.
Severance for salary shall be paid in one lump sum and in the same manner as the customary payout of earned benefits. In addition to the Severance payment above, upon termination without cause Employee shall also receive payment for the cash value of the following upon the date of termination: accrued and unused vacation leave and up to sixty-four (64) hours of accrued and unused management leave.
6 4. Termination for Cause - By City, without payment of any Severance or additional compensation beyond the termination date, for any cause for disciplinary action under the City’s then-current Policy of Administration for Executive Management Employees as well as any of the following:
a. Any negligent action or inaction by Employee that materially and adversely: impedes or disrupts the operations of City or its organizational units; is detrimental to employees or public safety; or violates City’s properly-established rules or procedures. b. Conviction of, or plea of guilty or nolo contendre to, any crime or offense (other than minor traffic violations or similar offenses) which is likely to have a material adverse impact on the City or on the Employee’s reputation;
c. Material breach of this Agreement; or
d. Proven failure of the Manager to observe or perform any of his duties and obligations, if that failure continues for a period of thirty (30) business days from the date of his receipt of notice from the City Council specifying the acts or omissions deemed to amount to that failure.
5. Communications Upon Separation - In the event the City terminates Employee for Cause or Without Cause, the City and Employee agree that no member of the City Council, the City Executive Management staff, nor Employee, shall make written, oral, or electronic statements at any public meeting or to any member of the public or the press concerning the termination except in the form of a joint press release or statement, the content of which is mutually agreeable to the City and Employee. The joint press release or statement shall not contain any text or information that is disparaging to either party. Either party may verbally repeat the substance of the joint press release or statement in response to any inquiry.
6. Release and Waiver for Severance – In exchange for the Severance compensation Employee hereby expressly releases the City and waives any and all rights he may have under any applicable law, City policy, or otherwise to bring a claim or file a complaint relating to his termination or an alleged breach of this Agreement, or otherwise appeal or grieve his termination and the terms of this Agreement.
7. Abuse of Office. In the event that Employee is convicted of a crime involving an abuse of his office or position, as defined in California Government Code section 53243.4, Employee shall be required to fully reimburse the City in accordance with California Government Code sections 53243, 53243.1, 53243.2 and/or 53243.3.
7 C. Notwithstanding the foregoing provisions, Employee’s employment shall not be terminated other than for cause, during or within a period of one hundred and eight (180) calendar days before or following the date of a regular election for one (1) or more seats on the Council.
SECTION 9. BONDING.
City shall bear the full cost of any fidelity or other bonds (or equivalent coverage) required of Employee under any law or ordinance.
SECTION 10. CONFIDENTIALITY.
Employee acknowledges that in the course of his employment, Employee will be given or will have access to confidential and proprietary documents and information, relating to the City, its residents, businesses, employees, and customers (“Confidential Information”). Such Confidential Information may include, but is not limited to, all information given to or otherwise accessible to Employee that is not public information or would be exempt from public disclosure as confidential, protected, exempt, or privileged information. Employee shall hold the Confidential Information in trust for City’s benefit and shall not disclose the Confidential Information to others or utilize such information for personal benefit without express written consent of City.
SECTION 11. INDEMNIFICATION.
In accordance with Government Code section 825, et seq., City shall defend, hold harmless, and indemnify Employee against any claim or action against him arising out of an alleged act or omission occurring in the scope of his employment with the City, and Employee shall reasonably cooperate in good faith in the defense. This provision is not intended to, and shall not operate to, expand the protections afforded to Employee or the City’s obligations as provided in Government Code 825, et seq., except that this Section shall operate as Employee’s standing written request to the City for defense and indemnity as required by Government Code section 825 for any and all claims or actions against him arising out of an alleged act or omission occurring in the scope of his employment with the City whether such claim is submitted or action commenced during or after his employment with the City. In the event there is a conflict of interest between City and Employee such that independent counsel is required for Employee, Employee may engage his/her own legal counsel, in which event City shall indemnify Employee, including direct payment of all such reasonable costs related thereto.
8 SECTION 12. NOTICES.
Notices pursuant to this Agreement shall be in writing given by deposit in the custody of the United Stated Postal Service (certified mail, return receipt requested) or deposit in the custody of a nationally recognized delivery service, addressed as follows:
CITY:
City of Hanford
Attn: Mayor
319 N. Douty Street
Hanford, CA 93230
EMPLOYEE:
Christopher Tavarez
(At the home address on file with the Human
Resources Division).
Alternatively, notices required pursuant to this Agreement may be personally served in the same manner as is applicable to the civil judicial process. Notice shall be deemed given as of the date of personal service or as of the date of deposit of such written notice in the course of transmission of the United States Postal Service or nationally-recognized delivery service. Notice mailed must include/utilize delivery confirmation or the equivalent service offered by the delivery service at the time notice is mailed.
SECTION 13. MISCELLANEOUS PROVISIONS.
A. The text of this Agreement and the documents referenced herein, which are incorporated by reference, shall constitute the entire agreement between the parties, and supersede any and all other agreements, either oral or in writing, between the parties hereto with respect to the employment of Employee by City. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by either party, or anyone acting on behalf of either party, which are not embodied herein, and that no other agreement, statement, or promise not contained in this Agreement shall be valid or binding on either party.
B. This Agreement shall be binding upon and inure to the benefit of the heirs at law and executors of Employee. This Agreement shall not be assignable.
C. If any provision, or any portion thereof, contained in this Agreement is held unconstitutional, invalid, or unenforceable, the remainder of this Agreement, or portion thereof, shall be deemed severable, shall not be affected and shall remain in full force and effect.
D. Any modification of this Agreement will be effective only if it is in writing and signed by both Employee and City.
E. No waiver or any breach of any term, condition or provision of this Agreement shall constitute a waiver of any other breach of any other term, condition or provision and no consent of one (1) party to any departures by the other shall be effective unless such waiver shall be in writing and shall be signed by the non-waiving party or a duly authorized agent thereof and the same shall be
9 effective only for a period, on the conditions, and for the specific instances and purposes specified in such writing.
F. This Agreement shall be governed by the laws of the State of California. The venue for any and all litigation arising from this Agreement shall be in the Superior Court for the County of Kings, California, if in state court, or the United States District Court, Eastern District of California, if in federal court.
G. In the event legal action is brought to enforce this Agreement, the party prevailing in such action shall be entitled to his/its reasonable attorneys’ fees and costs, which will be paid by the nonprevailing party, except as to enforce Section 11, which contains its own attorneys’ fee provision.
H. In the event of a conflict between this Agreement and any other City rule, regulation, policy, practice, or procedure, this Agreement shall control.
I. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.
IN WITNESS WHEREOF, the parties have executed this Agreement in Hanford, Kings County, California.
Dated: January ___, 2026
EMPLOYEE
_____________________________
CHRISTOPHER TAVAREZ
Dated: January ___, 2026
CITY
City of Hanford, a municipal corporation
By: _____________________________
MARK KAIRIS
Mayor
APPROVED AS TO FORM:
GRISWOLD, LaSALLE, COBB,
DOWD & GIN, L.L.P., City Attorneys
By: _____________________________
TY N. MIZOTE
ATTEST:
By: _____________________________
NATALIE CORRAL
City Clerk
EXHIBIT A
1 CITY OF HANFORD
CITY MANAGER GENERAL RELEASE AGREEMENT
This General Release Agreement ("Release Agreement") is entered into by and between Christopher Tavarez (“Employee") and City of Hanford ("City"), in light of the following facts:
A. Employee's employment with City concluded on .
B. Certain disputes have arisen between City and Employee.
C. City and Employee each deny any liability whatsoever to the other.
D. City and Employee wish to fully and finally resolve any and all disputes they may have with each other.
E. Employee is hereby informed that he has twenty-one (21) days from receipt of this Agreement to consider it. City hereby advises Employee to consult with his legal counsel before signing this Agreement.
F. Employee acknowledges that for a period of seven (7) days following the signing of this Agreement ("Revocation Period"), he may revoke the Agreement. This Agreement shall not become effective or enforceable until the day the Revocation Period has expired.
G. Employee acknowledges that the salary payment referenced in Section 8 of Employee’s Employment Agreement, which is incorporated herein by reference, titled Termination of Agreement, Severance, and General Release Agreement represents all compensation, including salary, accrued benefit balances, and reimbursed expenses, due and payable to him/her through the date of employment termination. Employee also acknowledges that City has made this salary payment without regard to whether he signs this Agreement. The salary payment does not constitute consideration for this Agreement.
1. Receipt of Salary Payment. Employee hereby acknowledges receipt of all compensation owed to him, including salary, accrued benefit balances, and reimbursed expenses (salary payment) from City.
2. Severance. City shall pay severance in one lump sum and in the same manner as the customary payout of earned benefits less applicable deductions and shall pay six months of Consolidated Omnibus Budget Reconciliation Act (COBRA) coverage for Employee and his enrolled dependents. In addition to the severance payment, upon termination without cause Employee shall also receive payment for the cash value of the following upon the date of termination:
accrued and unused vacation leave and up to sixty-four (64) hours of accrued and unused management leave. Employee acknowledges that the severance payment is in excess of all amounts due and owing him as a result of his employment by City.
3. General Release. In consideration of the severance to be paid and provided to Employee, and other good and valuable consideration, Employee hereby releases and discharges City and its
2 past and present City Council Members, employees, representatives and agents, from all rights, claims, causes of action, and damages, both known and unknown, in law or in equity, concerning and/or arising out of his employment by City which he now has, or ever had, including but not limited to any rights, claims, causes of action or damages arising under Title VII of the Civil Rights Act of 1964, the Vocational Rehabilitation Act of 1973, the Employee Retirement Income Security Act, the Americans with Disabilities Act, the Age Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Family and Medical Leave Act of 1993, the Domestic Partners Act of 2003, the California Labor Code, the Private Attorneys General Act of 2004, the California Moore-Brown-Roberti Family Rights Act, the California Unruh Civil Rights Act, the California Fair Employment and Housing Act, any other federal, state, or local employment practice legislation, or any federal or state common law, including wrongful discharge, breach of express or implied contract, or breach of public policy.
Employee hereby waives and relinquishes all rights and benefits afforded by Section 1542 of the Civil Code of California. Employee understands and acknowledges the significance and consequences of this specific waiver of Section 1542. Section 1542 of the Civil Code of California states as follows:
"A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party."
Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and complete release and discharge of City and its past and present City Council Members, employees, representatives and agents, Employee expressly acknowledges that this General Release is intended to include in its effect, without limitation, all claims which he does not know or suspect to exist in his favor.
Employee further acknowledges that he has read this General Release and that he understands that this is a general release, and that he intends to be legally bound by the same.
4. Fees and Costs. Employee and City agree that in the event of litigation relating to this Release Agreement, the prevailing party shall be entitled to recover his reasonable attorneys' fees and costs.
///
///
///
3 Dated: _____________, 20___
EMPLOYEE
_____________________________
CHRISTOPHER TAVAREZ
Dated: _____________, 20___
CITY
City of Hanford, a municipal corporation
By: _____________________________
_____________________________
Mayor
APPROVED AS TO FORM:
By: _____________________________
_____________________________
City Attorney
ATTEST:
By: _____________________________
_____________________________
City Clerk
Council Future Agenda Items
Originated
Date Item Originator Staff Lead Date Estimate
11/26/2025 Main Street Hanford Annual Report City Manager Chris Tavarez Feb 2026 11/4/2025 Artificial Intelligence Policy Discussion City Council Chris Tavarez TBD 11/18/2025 RFP for City Attorney Services City Council Chris Tavarez Mid 2027