Hayward City Council
February 25, 2025

Tuesday, February 25, 2025
7:00 PM

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
Council Chambers
City Council
Agenda

February 25, 2025City Council Agenda

CITY COUNCIL MEETING
777 B Street, Hayward, CA 94541
City Hall, Council Chambers
NOTICE: The City Council will hold a hybrid meeting in the Council Chambers and virtually via Zoom.

PUBLIC PARTICIPATION
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CITY COUNCIL MEETING
777 B Street, Hayward, CA 94541
City Hall, Council Chambers
CALL TO ORDER: Mayor Salinas
Pledge of Allegiance: Council Member Bonilla Jr.

February 25, 2025City Council Agenda
AB 2449 TELECONFERENCE NOTIFICATIONS AND CONSIDERATION

ROLL CALL

PUBLIC COMMENTS
The Public Comments section provides an opportunity to address the City Council on items not listed on the agenda or Informational Staff Presentation items. The Council welcomes comments and requests that speakers present their remarks in a respectful manner, within established time limits, and focus on issues which directly affect the City or are within the jurisdiction of the City. As the Council is prohibited by State law from discussing items not listed on the agenda, items will be taken under consideration and may be referred to staff. The City Council welcomes comments, including criticism, about the policies, procedures, programs, or services of the City, or of the acts or omissions of the City Council. Speakers shall not use threatening, profane, or abusive language which disrupts, disturbs, or otherwise impedes the orderly conduct of a City Council. The City is committed to maintaining a workplace free of unlawful harassment and is mindful that City staff regularly attend Council meetings. Discriminatory statements or conduct that is hostile, intimidating, oppressive, or abusive – are per se disruptive to a meeting and will not be tolerated . ration and may be referred to staff.

CITY MANAGER’S COMMENTS
An oral report from the City Manager on upcoming activities, events, or other items of general interest to Council and the Public.

ACTION ITEMS
The Council will permit comment as each item is called for the Consent Calendar, Public Hearings, and Legislative Business. In the case of the Consent Calendar, a specific item will need to be pulled by a Council Member in order for the Council to discuss the item or to permit public comment on the item. Please notify the City Clerk any time before the Consent Calendar is voted on by Council if you wish to speak on a Consent Item.

February 25, 2025City Council Agenda

CONSENT
Adopt a Resolution Authorizing the City Manager to Amend the Fiscal Year 2025 Agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. to Increase the Award by $53,817 for a Not-to-Exceed Amount of $228,817
CONS 25-0481.

Attachments: Attachment I Staff Report
Attachment II Resolution
Adopt a Resolution Approving Plans and Specifications and Call for Bids for the FY 25 Pavement Improvement Project, Project No. 05338
CONS 25-0492.

Attachments: Attachment I Staff Report
Attachment II Resolution
Attachment III List of Affected Streets
Attachment IV Project Location Map
Adopt a Resolution Authorizing the City Manager to Execute Amendment No. 4 to the Agreement with Workforce Integrity and Training Solutions, LLC for Labor Compliance
Coordination Services in the Amount of $200,000, for a Total Not-To-Exceed Amount of $572,000, and for Extension of the Agreement to December 31, 2027
CONS 25-0503.

Attachments: Attachment I Staff Report
Attachment II Resolution

February 25, 2025City Council Agenda
Adopt a Resolution Approving the Final Map for Tract 8427, a Residential Subdivision at 22626 4th Street (Assessor’s Parcel Numbers 427-0036-033-05, 427-0036-033-06,
427-0036-055-20 through 427-0036-055-25, &
427-0036-085-01), to Allow the Construction of Forty (40) Detached Single-Family Residences with Common Open Space Areas and Related Site Improvements; Accepting Easements and Rights-of-Way Dedicated for Public Use; and Authorizing the City Manager to Execute a Subdivision Agreement; and Finding that the Action is Exempt from CEQA Review.

Applicant/Owner: J Darwin Homes LLC, Application Nos.
201704074 and MTA-24-0004
CONS 25-0524.

Attachments: Attachment I Staff Report
Attachment II Resolution
Attachment III Final Map Tract 8427
Attachment IV Approved Vesting Tentative Map Tract 8427 Adopt a Resolution Amending Resolution Number 24-149 to Authorize the City Manager to Negotiate and Execute a
Professional Services Agreement with the Presbytery of San Francisco as the Fiscal Sponsor and Agent for First
Presbyterian Church of Hayward to Operate the Year-Round Shelter at South Hayward Parish for Fiscal Year 2024-2025 for a Not-to-Exceed Amount of $447,621
CONS 25-0545.

Attachments: Attachment I Staff Report
Attachment II Resolution

February 25, 2025City Council Agenda

LEGISLATIVE BUSINESS
2025 Wastewater Revenue Bonds: Adopt Resolutions
Authorizing the Issuance and Sale of Wastewater Revenue Bonds in the Maximum Principal Amount of $135,000,000, to Finance Capital Improvements to the Wastewater System,
Including the Water Resources Recovery Facility
Improvements, and Approving Related Agreements and
Actions (Report from Public Works Director Ameri and Interim Finance Director Youngblood)
LB 25-0036.

Attachments: Attachment I Staff Report
Attachment II Resolution
Attachment III Indenture
Attachment IV Notice of Sale
Attachment V Preliminary Official Statement
FY 24-25 Mid-Year Budget Review: Adopt a Resolution
Approving the FY 24-25 Mid-Year Budget Amendments and
Receive and Review the Five-Year General Fund Financial Model Update (Report from Assistant City Manager Claussen) LB 25-0047.

Attachments: Attachment I Staff Report
Attachment II Amendment FY 24-25 Budget Resolution
Attachment IIA Exhibits A & B
Attachment III Amendment to FY 24-25 CIP Budget Resolution Attachment IIIA Exhibits A & B

COUNCIL REPORTS AND ANNOUNCEMENTS
Council Members can provide oral reports on attendance at intergovernmental agency meetings, conferences, seminars, or other Council events to comply with AB 1234 requirements (reimbursable expenses for official activities).

COUNCIL REFERRALS
Council Members may bring forward a Council Referral Memorandum (Memo) on any topic to be considered by the entire Council. The intent of this Council Referrals section of the agenda is to provide an orderly means through which an individual Council Member can raise an issue for discussion and possible direction by the Council to the appropriate Council Appointed Officers for action by the applicable City staff.

February 25, 2025City Council Agenda

ADJOURNMENT
NEXT MEETING, March 4, 2025, 7:00 PM

PUBLIC COMMENT RULES
Any member of the public desiring to address the Council shall limit their comments to three (3) minutes unless less or further time has been granted by the Presiding Officer or in accordance with the section under Public Hearings. The Presiding Officer has the discretion to shorten or lengthen the maximum time members may speak. Speakers will be asked for their name before speaking and are expected to honor the allotted time.

PLEASE TAKE NOTICE
That if you file a lawsuit challenging any final decision on any public hearing or legislative business item listed in this agenda, the issues in the lawsuit may be limited to the issues that were raised at the City's public hearing or presented in writing to the City Clerk at or before the public hearing.

PLEASE TAKE FURTHER NOTICE
That the City Council adopted Resolution No. 87-181 C.S., which imposes the 90-day deadline set forth in Code of Civil Procedure section 1094.6 for filing of any lawsuit challenging final action on an agenda item which is subject to Code of Civil Procedure section 1094.5. ***Materials related to an item on the agenda submitted to the Council after distribution of the agenda packet are available for public inspection in the City Clerk ’s Office, City Hall, 777 B Street, 4th Floor, Hayward, during normal business hours. An online version of this agenda and staff reports are available on the City ’s website. Written comments submitted to the Council in connection with agenda items will be posted on the City ’s website. All Council Meetings are broadcast simultaneously on the City website, Cable Channel 15 - KHRT, and YouTube. ***
Assistance will be provided to those requiring accommodations for disabilities in compliance with the Americans with Disabilities Act of 1990. Interested persons must request the accommodation at least 48 hours in advance of the meeting by contacting the City Clerk at (510) 583-4400 or [email protected].

Assistance will be provided to those requiring language assistance. To ensure that interpreters are available at the meeting, interested persons must request the accommodation at least 48 hours in advance of the meeting by contacting the City Clerk at (510) 583-4400.

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 25-048
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Assistant City Manager

SUBJECT
Adopt a Resolution Authorizing the City Manager to Amend the Fiscal Year 2025 Agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. to Increase the Award by $53,817 for a Not-to-Exceed Amount of $228,817

RECOMMENDATION
That City Council adopt a Resolution (Attachment II) authorizing the City Manager to execute an amendment to the agreement Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to increase the contract by $53,817 for a total not to exceed $228,817 utilizing prior year unspent Community Development Block Grant (CDBG) funds.

SUMMARY
This item amends the City’sexisting home rehabilitation program agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to assign eligible and previously unspent Community Development Block Grant (CDBG) funds. This amendment would allow Habitat to provide administrative support for upcoming City-funded projects and leverage State funds for home rehabilitation grants to low -income homeowners in Hayward. The additional $53,736 includes $37,081 in unspent balance from Habitat’sFY 2023 contract and $16,736 in unallocated FY 2019 CDBG entitlement funds set aside for this type of use. The amendment would increase the FY 2025 agreement to an amount not to exceed $228,817.

Habitat is one of two CDBG-funded providers in the City’shome rehabilitation program administered by the Community Services Division (CSD). Their work encompasses major health and safety repairs for owner-occupied, low-income single-family and mobile homes. The home rehabilitation program is intended to preserve habitability and prevent displacement of low-income homeowners. Habitat’s contract also includes project management and CDBG compliance support to the City for CDBG-funded public facilities and infrastructure projects. The additional funding added through this amendment would provide Habitat with the administrative support needed to grow its project pipeline for FY 2026 and leverage up to $1.6 million in outside funding for the rehabilitation of low-income Hayward homes, while still providing vital project management and CDBG-compliance support to the City.

CITY OF HAYWARD Printed on 2/20/2025Page 1 of 2
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File #:CONS 25-048

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
CITY OF HAYWARD Printed on 2/20/2025Page 2 of 2
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DATE: February 25, 2025

TO: Mayor and City Council

FROM: Assistant City Manager

SUBJECT: Adopt a Resolution Authorizing the City Manager to Amend the Fiscal Year 2024- 25 Agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. to Increase the Award by $53,817 for a Not-to-Exceed Amount of $228,817

RECOMMENDATION

That City Council adopt a Resolution (Attachment II) authorizing the City Manager to execute an amendment to the Fiscal Year 2024 -25 agreement Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to increase the contract by $53,817 for a total not to exceed $228,817 utilizing prior year unspent Community Development Block Grant (CDBG) funds.

SUMMARY

This item amends the City’s existing home rehabilitation program agreement with Habitat for Humanity of the East Bay/Silicon Valley, Inc. (“Habitat”) to assign eligible and previously unspent Community Development Block Grant (CDBG) funds. This amendment would allow Habitat to provide administrative support for upcoming City -funded projects and leverage State funds for home rehabilitation grants to low-income homeowners in Hayward. The additional $53,736 includes $37,081 in unspent balance from Habitat’s FY 2022-23 contract and $16,736 in unallocated FY 2018-19 CDBG entitlement funds set aside for this type of use.

The amendment would increase the FY 2025 agreement to an amount not to exceed $228,817.

Habitat is one of two CDBG -funded providers in the City’s home rehabilitation program administered by the Community Services Division (CSD). Their work encompasses major health and safety repairs for owner-occupied, low-income single-family and mobile homes. The home rehabilitation program is intended to preserve habitability and prevent displacement of low-income homeowners. Habitat’s contract also includes project management and CDBG compliance support to the City for CDBG-funded public facilities and infrastructure projects.

The additional funding added through this amendment would provide Habitat with the administrative support needed to grow its project pipeline for FY 2025-26 and leverage up to $1.6 million in outside funding for the rehabilitation of low-income Hayward homes, while still providing vital project management and CDBG-compliance support to the City.

BACKGROUND AND DISCUSSION

On April 23, 2024, City Council adopted Resolution 24-078, which affirmed the Community Services Commission’s FY 2024-25 Community Agency Funding (CAF) recommendations for the use of the City’s annual CDBG entitlement allocation.1 As part of the recommendations, City Council allocated $175,000 to Habitat. The contract included $150,000 in funding to support Habitat’s home rehabilitation activities, as well as $25,000 to provide project management and CDBG compliance support on the City’s behalf for CDBG-funded public facilities and infrastructure projects. Habitat, along with Rebuilding Together East Bay Network, provides services to low-income homeowners as part of the City’s Home Rehabilitation Program. The program is intended to preserve habitability and prevent the displacement of vulnerable low- income homeowners. The City included home rehabilitation as part of the Housing Program projects outlined in its FY 20 20-21 to FY 20 24-25 Consolidated Plan submitted to the US Department of Housing and Urban Development (HUD). The program also directly aligns with City Council’s Strategic Priority of “Preserve, Protect, and Produce Housing for All ” and is included as an activity in the City’s General Plan.

Habitat’s role within the Home Rehabilitation Program is the provision of major home repairs to eligible low-income Hayward homeowners. Repair services are provided to owners of both single-family and mobile homes, and may include rehabilitation or replacement of roofs, siding, porches, stairs, water heaters, furnaces, swamp coolers, floorin g, and appliances. Common repairs include plumbing and electrical maintenance, window replacement, and installation of accessibility features.

In addition to its Home Rehabilitation Program role, Habitat provides project management support with implementation of other CDBG-funded neighborhood facilities projects. In this capacity, Habitat ensures that awarded projects conform to HUD regulations for procurement, operations, and wages. In FY 20 24-25, Habitat is providing the City with support on facility improvements to emergency shelters operated by The Alliance for Community Wellness/La Familia and South Hayward Parish and to renovations at the Weekes Library branch.

CDBG funding provides Habitat with the flexibility required to cover administrative and personnel costs that enable both home rehabilitation projects directly funded by the City as well as projects funded by outside sources which restrict administrative costs. In FY 2024-25, CDBG funding will directly enable up to $87,500 in repairs to eligible homes but will also enable leveraging of outside funds. The additional $53,817 will increase the total FY 20 24-25 agreement to $228,817. The amended agreement would support the underwriting of seven CDBG-funded home rehabilitation applications for the FY 2025-26 pipeline and provide project management and administration for thirteen additional Hayward projects totaling $1,259,000 enabled by outside loans and grants such as the California Department of Housing and Community Development’s CalHome program.

1 https://hayward.legistar.com/LegislationDetail.aspx?ID=6642372&GUID=69D37BA2-CD84-48C4-8A72- A61D2A38D1FF&Options=&Search=

The amendment to the City’s FY 20 24-25 agreement will be funded by unspent CDBG entitlement balances from prior years. These funding sources include $37,018 from Habitat’s FY 2022-23 contract that was unspent at the end of the fiscal year and not carried forward and $16,736 in unspent FY 2018-19 CDBG entitlement originally allocated to another agency. The unspent balance in Habitat’s FY 20 22-23 contract is the remainder of a $49,500 contract amendment supporting a larger initiative that was completed under budget. The unspent FY 2018-19 CDBG entitlement returned to the City’s balance upon project closure at the end of the fiscal year and is set to expire if not allocated to a program in FY 2024-25.

ECONOMIC IMPACT

The amendment may result in a minor addit ional economic impact due to the repair and construction efforts enabled by the City’s additional funding as well as the leveraged outside funds. Projects executed by Habitat and supported with CDBG funds must use federally authorized local contractors and pay prevailing wages to workers.

STRATEGIC ROADMAP

This agenda item supports the Strategic Priorities of Preserve, Protect, and Produce Housing; Grow the Economy; and Support Quality of Life. It is not specifically related to a project identified in the Strategic Roadmap.

FISCAL IMPACT

All funds allocated in this item are from federal sources and will not impact the City’s General Fund. Through this amendment, the City will allocate $53,817 of its uncommitted CDBG entitlement funds as outlined in the discussion.

Per Office of Management and Budget (OMB) memorandum M-25-13, issued on January 27, 2025, federal agencies are required to temporarily pause activities related to obligation or disbursement of Federal funding. While the memorandum was rescinded on January 29, 2025, and the pause has been challenged in court, it is unclear which programs will or will not be affected and whether it applies to funds that have already been awarded. To date, the City has not experienced interruptions in disbursement of CDBG entitlement funds.

PUBLIC CONTACT

No public contact was necessary for this amendment. Initial funding recommendations are developed through the Community Services Commission, which is designated as the City’s primary public participation body for CDBG through the Co mmunity Services Division's Community Participation Plan. The opportunity to provide public feedback was provided at regular meetings of the Community Services Commission, as well as the annual work session and public hearing for the CAF funding allocations.

NEXT STEPS

Prepared by: Amy Cole-Bloom, Community Services Manager Rick Rivera, Management Analyst

Recommended by: Regina Youngblood, Assistant City Manager

Approved by:

______________________________________
Dr. Ana M. Alvarez, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL
RESOLUTION NO. 25-
Introduced by Council Member

RESOLUTION AUTHORIZING THE CITY MANAGER TO AMEND THE FISCAL YEAR 20 24-25 AGREEMENT WITH HABITAT FOR HUMANITY EAST
BAY/SILICON VALLEY, INC. FOR SERVICES IN CONNECTION WITH COMMUNITY DEVELOPMENT BLOCK GRANT BY $ 53,817 FOR A NOT -TO- EXCEED AMOUNT OF $228,817

WHEREAS, the City Council of the City of Hayward by Resolution No. 24 -078, dated April 23, 2024, indicated its intention to allocate a portion of the City’s Community Development Block Grant (CDBG) to certain agencies in accordance with the Housing and Community Development Act of 1974 (Public Law 93-383); and

WHEREAS, the CITY entered into an FY 202 4-25 agreement with Habitat for Humanity East Bay/Silicon Valley, Inc. (Habitat) to provide home rehabilitation services to eligible low-income Hayward homeowners for a not-to-exceed amount of $272,619; and

WHEREAS, home rehabilitation services are a priority goal in the City’s Annual Action Plan detailing planned CDBG-funded projects and submitted to the US Department of Housing and Urban Development (HUD) for FY 2024-25; and

WHEREAS, home rehabilitation services align with the City’s Strategic Roadmap priority of “Preserve, Protect, and Produce Housing”; and

WHEREAS, the City’s available CDBG entitlement funds for FY 202 4-25 include an unspent balance of $37,018 from Habitat ’s FY 202 2-23 agreement with the City and $16,736 in unallocated FY 2018-19 entitlement; and

WHEREAS, this amendment would position Habitat to fully leverage available outside sources of funding for home rehabilitation for Hayward residents as well as support future City-funded home rehabilitations;

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hayward hereby authorizes the City Manager or their designee to amend the Agreement with Habitat for Humanity East Bay/Silicon Valley , Inc. to increase the social services contract by $ 53,817 for a not -to-exceed amount of $ 228,817 to allow for the continuation of extended service hours through the end of Fiscal Year 2024-25.

IN COUNCIL, HAYWARD, CALIFORNIA , 2025
ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED AS TO FORM:

ATTEST:

City Clerk of the City of Hayward

City Attorney of the City of Hayward

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 25-049
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Director of Public Works

SUBJECT
Adopt a Resolution Approving Plans and Specifications and Call for Bids for the FY 25 Pavement Improvement Project, Project No. 05338

RECOMMENDATION
That City Council adopts the attached resolution (Attachment II) approving the plans and specifications and call for bids for the FY25 Pavement Improvement Project (PIP).

SUMMARY
The FY25 PIP calls for the rehabilitation of 14 street sections and preventive maintenance for 51 street sections, totaling 65 street sections to be addressed (Attachment III). The proposed improvements will repair failed pavement sections and improve street surfaces.

The project budget of $14,500,000 is funded via the Gas Tax, Road Repair and Accountability Act (RRAA) (SB1), Measure BB, Vehicle Registration Fees, Street Impact Fee, and Street System Improvement funds.

There is no General Fund contribution to this project.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III List of Affected Streets
Attachment IV Project Location Map
CITY OF HAYWARD Printed on 2/20/2025Page 1 of 1
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DATE: February 25, 2025

TO: Mayor and City Council

FROM: Director of Public Works

SUBJECT Adopt a Resolution Approving Plans and Specifications and Call for Bids for the FY25 Pavement Improvement Project, Project No. 05338

RECOMMENDATION

That the City Council adopts the attached resolution (Attachment II) approving the plans and specifications and call for bids for the FY25 Pavement Improvement Project (PIP).

SUMMARY

The FY 2024-2025 PIP calls for the rehabilitation of 14 street sections and preventive maintenance for 51 street sections, totaling 65 street sections to be addressed (Attachment III). The proposed improvements will repair failed pavement sections and improve street surfaces.

The project budget of $14,500,000 is funded via the Gas Tax, Road Repair and Accountability Act (RRAA) (SB1), Measure BB, Vehicle Registration Fees, Street Impact Fee, and Street System Improvement funds.

There is no General Fund contribution to this project.

BACKGROUND

On April 23, 20241, staff recommended City Council approve a project list for the SB1 FY 2024-2025 PIP Funding. A resolution was required to apply to the California Transportation Commission (CTC) to receive an estimated $4,000,000 in funding for pavement improvement.

On April 23, 20242, staff recommended Council adopt a resolution authorizing the City Manager to execute Amendment No. 6 to the Professional Services Agreement (PSA) with Pavement Engineering, Inc., (PEI) for engineering services associated with the FY 2024- 2025 PIP. The scope of work for PEI is limited to engineering review, pavement evaluation, measurement of field quantities, curb ramp design, and construction support.

1 https://hayward.legistar.com/LegislationDetail.aspx?ID=4544075&GUID=F617FA6F-C198-474E-B133-26C761043039&Options=&Search= 2 https://hayward.legistar.com/LegislationDetail.aspx?ID=4548864&GUID=6506EE24-A2C3-455B-9 2E1-8A42B60887B1&Options=&Search=

The PIP involves a combination of up to four types of treatments:

Pavement Rehabilitation:
1) Standard overlay of the existing street pavement with new Hot Mix Asphalt surfacing.
2) Cold-In-Place Recycling (CIR), which involves removing the top layer of asphalt, mixing the removed aggregates with a recycling agent and other additives on-site, replacing this pavement material onto the same roadway, then applying a Hot Mix Asphalt overlay.
3) Full Depth Reclamation (FDR), which consists of pulverizing and mixing distressed asphalt and underlying pavement materials with or without the addition of stabilizing agents; using the resulting material as a base for the renewed pavement structure and adding a new Hot Mix Asphalt cap.

Preventive Maintenance:
4) Varying combinations of: crack sealing, 6” spot repair and micro-surfacing.

Street selection for the PIP is based on staff analysis using several criteria described below:

 Technology – The Pavement Management Program (PMP)3 evaluates current and predicts future roadway conditions. It provides logical and efficient methods of identifying street rehabilitation needs. It also determines the most cost-effective allocation of funds to the street segments needing preventive maintenance, rehabilitation or reconstruction. Staff utilized the PMP to compile an initial list of recommended streets. This list is then revised to consider other criteria and project budget allocation parameters.
 Internal Reports - Reports from the City’s Maintenance Services staff on streets needing repair were considered.
 Council Members Input – Council member requests for selecting streets were considered.
 Public Input - Public requests for selecting streets were considered.  Geographic Location – Selecting streets in close vicinity to help lower construction bids was considered.
 Funding Availability – Available funding and potential for obtaining outside grant funding was evaluated.

The Pavement Condition Index (PCI) is an overall rating of road conditions. The PCI of each arterial and collector street segment is evaluated by an independent third-party every other year, and each residential street segment is evaluated every five years.

3 The PMP is a Metropolitan Transportation Commission (MTC) recommended software program.

PCI Rating Description

100 This rating is given to newly constructed or rehabilitated roadways.

85 - 99 Highly functional roadway. No action required.

70 - 85 Roadway can be maintained ("preventive maintenance") with crack sealing, slurry seals, micro-surfacing, and some minor, localized pothole repairs. As the roadway pavement ages, preventive maintenance may not be effective after a few maintenance cycles.

40 - 70 Extensive "dig-outs," grinding, fabric, or asphalt overlays may be required to maintain (or "rehabilitate") roadway.

0 - 40 Roadway requires complete reconstruction using full depth reconstruction, cold in place recycling, or hot in-place recycling methods. If a street deteriorates beyond certain points, it becomes progressively more expensive to bring that street back to the desired standard.

DISCUSSION

The FY 2024-2025 PIP focuses on enhancing the streets in the Mission Garin neighborhood, the Southwest Industrial district, and several arterial roads including portions of Industrial Parkway and Winton Avenue. The FY25 PIP aims to promote social equity by paving collector and arterial streets in proximity to lower socioeconomic areas, including Gading Rd, Cypress Rd, and Industrial Pkwy.

Staff has engaged an experienced consultant, Pavement Engineering, Inc., (PEI) to validate the selection of street segments and assess the approximate level of treatment required for each. Additionally, PEI will provide essential engineering support services throughout the project.

4.7 centerline miles of bike lane striping will be installed at the following locations:

1.9 centerline miles of Class II Bike Lanes:
 Amador St, Elmhurst St to Winton Av (0.2 miles)
 Clawiter Rd, Breakwater Av to SPRR Tracks (0.7 miles)  Cypress Ave, Harder Rd to Jackson St (0.4 miles)
 Gading Rd, W. Harder Rd to Schafer Rd (0.6 miles)

2.8 centerline miles of Class IV Bike Lanes:
 D St, Watkins St to Winton Ave (0.6 miles)
 Hayward Blvd, Carlos Bee Blvd to Farm Hill Dr (1.0miles)4  Industrial Pkwy, Huntwood Av to Mission Blvd (0.8 miles)  Winton Av, D St to Amador St (0.4 miles)

This project is categorically exempt from environmental review under Section 15301(c) of the California Environmental Quality Act (CEQA) Guidelines for the operation, repair, maintenance, or minor alteration of existing facilities.

On November 15, 2016, Council passed a resolution authorizing a Community Workforce Agreement (CWA) with the Alameda County Building Trades Council (BTC), which applies to City projects with construction costs of $1,000,000 or more. The agreement requires contractors to use local union hiring halls, encourages contractors to employ Hayward residents or Hayward Unified School District graduates, and requires hired workers to pay union dues and other benefit trust fund contributions, etc. The construction cost estimate for the FY25 PIP is more than $1,000,000, therefore, the CWA Agreement applies to this project.

ECONOMIC IMPACT

The project is funded by City’s CIP Program and State RRAA (SB1) funds.

FISCAL IMPACT

The estimated project funding sources are as follows:
 210 - Gas Tax $550,000  211 – RRAA (SB1) $4,300,000
 212 - Measure BB – Local Transportation $7,310,000  218 – Vehicle Registration Fee $840,000  450 – Street System Improvements $1,500,000 Total: $14,500,000

STRATEGIC ROADMAP

This agenda item supports the Strategic Roadmap of Invest in Infrastructure. Specifically, this item relates to the implementation of the following project(s):

Project N6 - Continue to add approximate 10 miles of bike lanes annually, with a focus on protected bike lanes and intersections that have high traffic/incidents.

4 Hayward Blvd bike lane will be class IV in uphill direction and class II in downhill direction.

SUSTAINABILITY FEATURES

The project requires the contractor to recycle all construction and demolition debris generated from the project.

This project is consistent with City’s Complete Streets Policy and improves travel for all users including:

 Improved pavement for motorists
 Additional bike lanes and sharrows for bicyclists
 More visible pavement markings for pedestrians, including near school zones  New or upgraded curb ramps to meet the recently revised Caltrans standards for pedestrians

The project satisfies the following 2040 General Plan policies:

 PFS-7.10 Recycled Products or Processes for Capital Projects  HQL-2.5 Safe Routes to School
 HQL-2.6 Education on Sharing the Road
 M-1.7 Eliminate Gaps (in pedestrian networks)
 M-3.1 Serving All Users
 M-5.1 Pedestrian Needs
 M-5.6 Safe Pedestrian Crossings
 M-6.2 Encourage Bicycle Use

PUBLIC CONTACT

Immediately after the construction contract is awarded, a preliminary notice explaining the project will be posted and distributed to all residents and businesses along the affected streets. After the construction work has been scheduled, signs on barricades will be posted seventy-two hours prior to commencement of work indicating the date a nd time of work for each stree t. Residents will be advised to park their vehicles on side streets outside of the work area during the period when the streets are being treated.

NEXT STEPS

March 2025 Bid Opening
April 2025 Award of Contract
May 2025 Start of Construction
Fall 2025 End of Construction

Prepared by: Kathy Garcia, Deputy Director of Public Works Yama Farouqi, Associate Civil Engineer

Recommended by: Alex Ameri, Director of Public Works

Approved by:

_____________________________________
Dr. Ana M. Alvarez, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 25-____

Introduced by Council Member _____________

RESOLUTION APPROVING PLANS AND SPECIFICATIONS FOR THE FY 25 PAVEMENT IMPROVEMENT PROJECT, PROJECT NO. 05338 AND CALL FOR BIDS

WHEREAS, those certain plans and speci fications for the FY 25 Pavement Improvement Project, Project No. 05338, on file in the office of the City Clerk, are hereby adopted as the plans and specifications for the project; and

WHEREAS, the City Clerk is hereby directed to cause a notice calling for bids for the required work and material to be made in the form and manner provided by law; and

WHEREAS, sealed bids therefor e will be received by the City Clerk’s office at City Hall, 777 B Street, City Hall Rotunda, Hayward, California 94541, up to the hour of 2:00 p.m. on Tuesday, March 25, 2025, and immediately thereafter publicly opened and declared by the City Clerk in the Hayward City Hall Rotunda, located on the 1st Floor o f City Hall, Hayward, California.

NOW, THEREFORE, BE IT RESOLVED, tha t the City Council will consider a report on the bids at a regular meeting following the aforesaid opening and declaration of same.

BE IT FURTHER RESOLVED, that the project is categorically exempt under section 15301(c) of the California Environmental Qu ality Act Guidelines for the operation, repair, maintenance, or minor alteration of existing facilities.

ATTACHMENT II

IN COUNCIL, HAYWARD, CALIFORNIA _______________________, 2025

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

#
Street Limits Treatment
1 Broadway Street - 1 East 10th Street to East 12th Street 2 Broadway Street - 2 East 16th Street to Mission Blvd
3 Calhoun Street Mission Blvd to End
4 Douglas Street Mission Blvd to End
5 East 10th Street Cul-De-Sac to Jefferson Street
6 East 11th Street Cul-De-Sac to Jefferson Street
7 East 13th Street Tennyson Road to Hancock Street
8 East 15th Street Webster Street to Calhoun Street
9 Hancock Street - 1 East 10th Street to Mission Blvd
10 Hancock Street - 2 Mission Blvd to East 16th Street
11 Hayward Blvd - 1 Carlos Bee Blvd to COP University
12 Jefferson Street Mission Blvd to East 10th Street
13 Kellogg Avenue Mission Blvd to Calhoun Street
14 Monticello Street East 12th Street to Mission Blvd
15 Amador Street Elmhurst Street to Winton Avenue
16 Bishop Avenue Evergreen Street to Harder Road
17 Broadway Street - 3 East 16th Street to End
18 Clawiter Road - 1 Breakwater Avenue to SPRR Tracks
19 Clawiter Road - 2 Breakwater Avenue to Eden Landing Road 20 Crocker Avenue Wiegman Road to Huntwood Avenue
21 Cypress Avenue Harder Road to Jackson Street
22 D Street - 1 Watkins Street to Grand Street
23 D Street - 2 Grand Street to Winton Avenue
24 Delta Court Wiegman Road to End
25 East 12th Street Tennyson Road to Jefferson Street
26 East 16th Street - 1 Webster Street to Calhoun Street 27 East 16th Street - 2 Cul-De-Sac to Webster Street
28 Encina St Rieger Av to End
29 Evergreen Street Harder Road to Regal Avenue
30 Jackson St Silva Av to End
31 Jennings Way Hamrick Ln to Eldridge Ave
32 Gading Road Patrick Avenue to Harder Road
33 Genstar Road San Luis Obispo Avenue to Salmon Way
34 Gomer Av Underwood Ave to Tampa Ave
35 Hayman Street Whipple Road to San Antonio Street
36 Hayward Blvd - 2 COP University to Parkside Drive
37 Hayward Blvd - 3 Parkside Drive to Civic Avenue
38 Hayward Blvd - 4 Civic Av to Farmhill Dr
39 Industrial PKWY Huntwood Avenue to Mission Blvd
40 Medallion Road Whipple Road to San Luis Obispo Avenue 41 Oharran Dr Tennyson Rd to Cole Pl
42 Orchard Ave Muir St Intersection
43 Pacific St Tennyson Rd to Spanish Ranch II
44 Salmon Way Genstar Road to Huntwood Avenue
45 San Antonio Street - 1 San Luis Obispo Avenue to Zephyr Avenue 46 San Antonio Street - 2 Zephyr Avenue to Huntwood Avenue Preventive Maintenance
Rehabilitation

ATTACHMENT III
#
Street Limits Treatment
47 San Benito Street San Luis Obispo Avenue to Zephyr Avenue 48 San Benito Court Zephyr Avenue to End
49 San Clemente Street San Luis Obispo Avenue to Zephyr Avenue 50 San Luis Obispo Avenue Huntwood Avenue to San Antonio Street 51 Santucci Court Sandoval Way to Cul-De-Sac
52 Santana Street Zephyr Avenue to Crocker Avenue
53 Sutro Street Meek Avenue to Chase Avenue
54 University Ct - 1 Quail Canyon Ct to Highland Blvd
55 University Ct - 2 Highland Blvd to End
56 Webster Street - 1 Mission Blvd to East 16th Street
57 Webster Street - 2 East 10th Street to East 12th Street 58 Whipple Rd 24 hr fitness
59 Wiegman Road - 1 Zephyr Avenue to Crocker Avenue
60 Wiegman Road - 2 Whipple Road to Zephyr Avenue
61 Winton Avenue - 1 Soto Road to D Street
62 Winton Avenue - 2 Eastern Abutment to Soto Road
63 Winton Avenue - 4 Amador Street to Western Abutment
64 Zephyr Avenue - 1 Wiegman Road to Huntwood Avenue
65 Zephyr Avenue - 2 Huntwood Avenue to Hayman Street
Rehabilitation

ATTACHMENT III
1 of 3

ATTACHMENT IV
FY25 PAVEMENT IMPROVEMENT PROJECTPROJECT NO. 05338PAVEMENT REHABILITATIONPREVENTIVE MAINTENANCEBIKE LANE

2 of 3

ATTACHMENT IV
FY25 PAVEMENT IMPROVEMENT PROJECTPROJECT NO. 05338PAVEMENT REHABILITATIONPREVENTIVE MAINTENANCEBIKE LANE

3 of 3

ATTACHMENT IV
FY25 PAVEMENT IMPROVEMENT PROJECTPROJECT NO. 05338PAVEMENT REHABILITATIONPREVENTIVE MAINTENANCEBIKE LANE

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 25-050
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Director of Public Works

SUBJECT
Adopt a Resolution Authorizing the City Manager to Execute Amendment No. 4 to the Agreement with Workforce Integrity and Training Solutions, LLC for Labor Compliance Coordination Services in the Amount of $200,000, for a Total Not-To-Exceed Amount of $572,000, and for Extension of the Agreement to December 31, 2027

RECOMMENDATION
That City Council adopts a resolution (Attachment II) authorizing the City Manager to execute Amendment No. 4 with Workforce Integrity and Training Solutions, LLC (WITS) in the amount of $200,000 for a total not-to-exceed (NTE) amount of $572,000 and for an extension of the agreement end date to December 31, 2027.

SUMMARY
Community Workforce Agreements (CWA) are common in the construction industry to assure that labor issues related to major construction projects are minimized and to help accomplish local hiring and apprenticeship goals. In April 2015, Council directed staff to negotiate and execute a CWA with the Alameda County Building Trades Council (BTC) for the 21st Century Library. In February 2016, Council directed staff to create a “Citywide” CWA that could be applied to a broader scope of projects within the community. To comply with the CWA and provide labor compliance coordination services, the City entered into an agreement with WITS in 2021. The agreement expired on December 31, 2024. Staff recommends increasing the agreement by $200,000 and extending it through December 31, 2027 for continued oversight on major projects, including the Water Resources Recovery Facility Phase 2 (WRRF) Headworks Rehabilitation, the annual Pavement Improvement Program (PIP), La Vista Park and others.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
CITY OF HAYWARD Printed on 2/20/2025Page 1 of 1
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DATE: February 25, 2025

TO: Mayor and City Council

FROM: Director of Public Works

SUBJECT: Adopt a Resolution Authorizing the City Manager to Execute Amendment No. 4 to the Agreement with Workforce Integrity and Training Solutions, LLC for Labor Compliance Coordination Services in the Amount of $200,000 for a Total Not-To-Exceed Amount of $572,000 and for Extension of the Agreement to December 31, 2027

RECOMMENDATION

That City Council adopts a resolution (Attachment II) authorizing the City Manager to execute Amendment No. 4 with Workforce Integrity and Training Solutions, LLC (WITS) in the amount of $200,000 for a total not-to-exceed (NTE) amount of $572,000 and for an extension of the agreement end date to December 31, 2027.

SUMMARY

Community Workforce Agreements (CWA) are common in the construction industry to assure that labor issues related to major construction projects are minimized and to help accomplish local hiring and apprenticeship goals. In April 2015, Council directed staff to negotiate and execute a CWA with the Alameda County Building Trades Council (BTC) for the 21st Century Library. In February 2016, Council directed staff to create a “Citywide” CWA that could be applied to a broader scope of projects within the community. To comply with the CWA and provide labor compliance coordination services, the City entered into an agreement with WITS in 2021. The agreement expired on December 31, 2024. Staff is recommending increasing the agreement by $200,000 and extending it through December 31, 2027 for continued oversight on major projects, including the Water Resources Recovery Facility Phase 2 (WRRF) Headworks Rehabilitation, the annual Pavement Improvement Program (PIP), La Vista Park and others.

BACKGROUND

In April 2015, Council directed staff to negotiate and execute a CWA with the BTC for the 21st Century Library. In February 2016, Council directed staff to create a “Citywide” CWA

that could be applied to a broader scope of projects within the community. To comply with the CWA and provide labor compliance coordinate services, the City released a Request for Proposal (RFP) and entered into an agreement with WITS in 2021 for $72,000. On April 19, 2022, Council adopted Resolution No. 22-081 which authorized Amendment No. 1 increasing the agreement to a NTE amount of $172,000 and expiration date of December 6, 2022. On December 6, 2022, Council adopted Resolution No. 22-293 which authorized Amendment No. 2 increasing the agreement to a NTE amount of $372,000 and expiration date of December 31, 2023. On March 25, 2024, the City Manager executed Amendment No. 3 extending the effective date of the agreement to December 31, 2024.

DISCUSSION

Administration of the CWA requires staff resources. It was proven more efficient to use WITS for these purposes. The concern is the administrative burden on the City’s project managers for implementing and closely monitoring the agreement. While a staff position was created to implement and monitor the CWA, it remains vacant. WITS provides labor compliance coordination services and has done so since 2020. WITS has assisted with the WRRF Headworks Rehabilitation, Mission Blvd. Phase 3, the FY23 & FY24 PIPs and other projects and is able to assist with upcoming projects such as the FY25 PIP, La Vista Park, and Annual Water and Sewer Line Replacement Projects.

ENVIRONMENTAL REVIEW

This item and action is statutorily exempt from environmental analysis under the California Environmental Quality Act (CEQA) since it is not a project. CEQA Guidelines, Section 15378(b)(5) states that a project does not include “organization or administrative activities of governments that will not result in direct or indirect physical changes in the environment.” CEQA reviews will be completed separately for individual Public Works’ projects subject to the Citywide CWA.

FISCAL IMPACT

This item will be funded through the Capital Improvement Program (CIP) project budgets that are recommended to comply with the City’s CWA. Budgets have been appropriated through the Adopted FY25 CIP. This item will have no impact on the General Fund.

STRATEGIC ROADMAP

This item is a routine operational item and does not directly relate to the Council’s Strategic Roadmap.

SUSTAINABILITY FEATURES

This item has no sustainability features.

PUBLIC CONTACT

No public contact has been made related to this item.

NEXT STEPS

If approved, the City Manager will execute Amendment No. 4 to the agreement with WITS to increase the contract amount to a NTE amount of $572,000 and extend the end date to December 31, 2027.

Prepared by: Michael Wolny, Management Analyst
Kathy Garcia, Deputy Director of Public Works

Recommended by: Alex Ameri, Director of Public Works

Approved by:

_____________________________________
Dr. Ana M. Alvarez, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 25-____

Introduced by Council Member ____________

RESOLUTION AUTHORIZING THE CITY MANAGER TO EXECUTE
AMENDMENT NO. 4 TO THE AGREEMENT WITH WORKFORCE INTEGRITY

AND TRAINING SOLUTIONS, LLC FOR LABOR COMPLIANCE COORDINATION SERVICES IN THE AMOUNT OF $200,000 FOR A TOTAL NOT -TO-EXCEED AMOUNT OF $ 572,000 AND EXTENDING THE AGREEME NT TO DECEMBER 31, 2027

WHEREAS, the aforesaid parties have entered into that certain Agreement dated the 27th day of January 2021 entitled “Agreement for Professional On-Call Services Between the City of Hayward And Workforce Integrity and Training Solutions (WITS) For Consulting Services For Community Workforce Agreement Oversight” in the amount of $72,000; and

WHEREAS, on April 19, 2022, City Council authorized Amendment No. 1 to increase the agreement by $100,000 and extend the expiration date to December 31, 2022; and

WHEREAS, on December 6, 2022, City Council authorized Amendment No. 2 to increase the agreement by $200,000 for NTE amount of $372,000 and extend the expiration date to December 31, 2023; and

WHEREAS, on March 25, 2024, the City Manager authorized Amendment No. 3 which extended the expiration date to December 31, 2024; and

WHEREAS, the City and WITS desire to amend the Agreement in certain respects to provide additional services related to the administration of the citywide CWA; and

WHEREAS, the FY25 Adopted CIP Budget has appropriated project budgets that will require this oversight.

NOW, THEREFORE, BE IT RESOLVED that the City Council hereby finds and determines as follows that the City Manager is hereby authorized to execute Amendment No. 4 with WITS for CWA administration services in an amount of $200,000, for a total not-to- exceed amount of $572,500, and extending the Agreement to December 31, 2027.

ATTACHMENT II

IN COUNCIL, HAYWARD, CALIFORNIA _______________________, 2025

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 25-052
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Director of Development Services

SUBJECT
Adopt a Resolution Approving the Final Map for Tract 8427, a Residential Subdivision at 22626 4th Street (Assessor’s Parcel Numbers 427‐0036‐033‐05, 427‐0036‐033‐06, 427‐0036‐055‐20 through 427‐0036‐ 055‐25, & 427‐0036‐085‐01), to Allow the Construction of Forty (40) Detached Single‐Family Residences with Common Open Space Areas and Related Site Improvements; Accepting Easements and Rights‐of‐ Way Dedicated for Public Use; and Authorizing the City Manager to Execute a Subdivision Agreement; and Finding that the Action is Exempt from CEQA Review. Applicant/Owner: J Darwin Homes LLC, Application Nos. 201704074 and MTA‐24‐0004

RECOMMENDATION
That the City Council adopt the attached resolution (Attachment II) to approve the Final Map for Tract 8427 (Attachment III), find it in substantial conformance with the approved Vesting Tentative Tract Map (Attachment IV), and authorize the City Manager to execute the Subdivision Agreement, related other documents and take appropriate administrative actions to effectuate the improvements required by the Conditions of Approval.

SUMMARY
The Final Map for Tract 8427 is a forty‐lot subdivision on a 5.1‐acre site at 22626 4th Street allowing the construction of forty (40) single‐family detached residential units with private streets and other site improvements. In addition to the forty residential lots, Parcels A and B, and Lots A, B, D, E and F are to be owned and maintained by the Homeowners Association of Tract 8427 and are reserved for access, utilities, creek setback/drainage, ingress, stormwater treatment, and/or landscaping purposes with Lots A, B and F, specifically being for new private streets Bernadine Drive, Nagy Circle, Azores Court, and Mary Court. Lot C is intended to be conveyed to the adjacent property owner at 22642 4th St. The City Council is also requested to authorize the City Manager to execute a Subdivision Improvement Agreement to compete all required improvements.

The Final Map and Improvement Plans are based on the Vesting Tentative Map, which was approved by the City Council on July 10, 2018. The City Engineer, in coordination with other potentially affected departments, has reviewed the Final Map and Improvement Plans and has determined these documents to be in substantial compliance with the City approved Vesting Tentative Map, applicable City Standards CITY OF HAYWARD Printed on 2/20/2025Page 1 of 2
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File #:CONS 25-052
to be in substantial compliance with the City approved Vesting Tentative Map, applicable City Standards and addressing the City’s conditions of map approval.

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III Final Tract Map 8427
Attachment IV Approved Vesting Tentative Map 8427
CITY OF HAYWARD Printed on 2/20/2025Page 2 of 2
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DATE: February 25, 2025

TO: Mayor and City Council

FROM: Director of Development Services

SUBJECT: Adopt a Resolution Approving the Final Map for Tract 8427, a Residential Subdivision at 22626 4th Street (Assessor’s Parcel Numbers 427-0036-033-05, 427-0036-033-06, 427-0036-055-20 through 427-0036-055-25, & 427‐0036‐ 085‐01), to Allow the Construction of Forty (40) Detached Single-Family Residences with Common Open Space Areas and Related Site Improvements; Accepting Easements and Rights-of-Way Dedicated for Public Use; and Authorizing the City Manager to Execute a Subdivision Agreement and Finding that the Action is Exempt from CEQA Review. Applicant/Owner: J Darwin Homes LLC, Application Nos. 201704074 and MTA-24-0004

RECOMMENDATION

That the City Council adopts the attached resolution (Attachment II) to approve the Final Map for Tract 8427 (Attachment III), finding it in substantial conformance with the approved Vesting Tentative Tract Map (Attachment IV), accepting easements and right-of-way dedicated for public use, finding the action is exempt from CEQA review, and authorizing the City Manager to execute the Subdivision Agreement, related other documents and take appropriate administrative actions to effectuate the improvements required by the Conditions of Approval.

SUMMARY

The Final Map for Tract 8427 is a forty-lot subdivision on a 5.1-acre site at 22626 4th Street allowing the construction of forty (40) single-family detached residential units with private streets and other site improvements. In addition to the forty residential lots, Parcels A and B, and Lots A, B, D, E and F are to be owned and maintained by the Homeowners Association of Tract 8427 and are reserved for access, utilities, creek setback/drainage, ingress, stormwater treatment, and/or landscaping purposes with Lots A, B and F, specifically being for new private streets Bernadine Drive, Nagy Circle, Azores Court, and Mary Court. Lot C is intended to be conveyed to the adjacent property owner at 22642 4th St. The City Council is also requested to authorize the City Manager to execute a Subdivision Improvement Agreement to complete all required improvements.

The Final Map and Improvement Plans are based on the Vesting Tentative Map, which was approved by the City Council on July 10, 20181. The City Engineer, in coordination with other potentially affected departments, has reviewed the Final Map and Improvement Plans and has determined these documents to be in substantial compliance with the City approved Vesting Tentative Map, applicable City Standards and addressing the City’s conditions of map approval.

BACKGROUND

Tentative Map - Per State law, Tentative and Final Maps are required for subdivision of real property into five or more parcels. The Planning Application (No. 201704074) showing the proposed subdivision into forty-one (41) residential lots and five (5) parcels allowing the construction of forty-one (41) single family residences, private streets, and related site improvements, along with preliminary plans and documents describing the proposed development was reviewed and approved by City Council on July 10, 2018, subject to certain Conditions of Approval.

The City Council approved the Vesting Tentative Map of Tract 8427, a Zone Change to Planned Development District, Site Plan Review, and Mitigated Negative Declaration with Mitigation Monitoring and Reporting Program in a public meeting after considering comments from the public and public agencies. The City Council also considered compliance with the Subdivision Map Act, the Environmental Quality Act, Planned Development guidelines, the City Subdivision Ordinance, Zoning Code, Building Regulations, the Hayward 2040 General Plan, and the site-specific requirements of the Planning, Public Works, Fire, and Police Departments. The single-family residential units proposed in the subdivision will fulfill several goals and objectives of the City’s General Plan by providing in-fill development, increasing housing diversity and incorporating Compete Streets elements.

On July 30, 2024, the applicant submitted a Precise Development Plan Application (MTA-24- 0004) as required by the Vesting Tentative Map and PD Rezoning Conditions of Approval. In that application, the number of residential lots was reduced from 41 to 40 lots. During a February 2024 biologist survey, the riparian vegetation had grown, thereby increasing the limit of the California Department of Fish and Wildlife (CDFW) jurisdiction (creek setback) and reducing the useable site area. In response to this, the lotting and lot sizes/ areas around the riparian edge were all adjusted to maintain the CDFW jurisdictional limit, and one lot was omitted. On January 10, 2025, the Precise Development Plan application was approved on the grounds that it substantially conforms to and satisfies the conditions of approval of the Preliminary Development Plan and Vesting Tentative Map that was initially approved by the City Council on July 10, 2018.

DISCUSSION

Final Map and Improvements Plans - After Vesting Tentative Map approval, the subdivider has submitted the Final Map and Improvement Plans. The City Engineer has reviewed and

1 City Council Minutes 071018

determined these documents to be in substantial compliance with the City approved Vesting Tentative Map, applicable City Standards and addressing the City’s conditions of the map approval.

Improvement Agreement and Securities - The subdivider has requested the City’s approval of the Final Map before all required improvements are completed as provided for in the State Subdivision Map Act Section 664622. The subdivider has agreed to execute an agreement with the City to complete the improvements required for the subdivision in a timely manner as per the improvement plans approved by the City Engineer and as stipulated in the Hayward Municipal Code Section 10-3.330 (a). Securities for the required improvements have been posted as per the Hayward Municipal Code Section 10-3.332(a)3.

New improvements will include a new crosswalk at the eastern side of the 4th and B intersection with associated traffic signal modifications; extension of the City’s sewer and water service to each new unit; undergrounding overhead utilities along the project frontages on 4th Street, B Street, and Chestnut Avenue; private streets Bernadine Drive, Nagy Circle, Azores Court, and Mary Court with fourteen on-street parking spaces; an open space area centered around two preserved oak trees; and site lighting, landscaping, stormwater treatment facilities, and a 12-foot wide multi-use pathway along 4th St. for both bicycles and pedestrians to be maintained by the Homeowners Association (HOA). All utilities within the subdivision will be underground.

The City Council’s approval of the Final Map shall not become effective until and unless the developer enters into a Subdivision Agreement with the City for the construction of improvements and other obligations required per conditions of approval of the Vesting Tentative Tract Map.

ENVIRONMENTAL REVIEW

The environmental review was completed when the Vesting Tentative Map was approved in 2018. There is no substantial change proposed in the Project or in its environmental setting, nor is there any new information which would require additional environmental review.

Approval of the final map is a ministerial act not involving exercise of discretionary powers by the City Council, and is therefore not an action subject to CEQA review pursuant to CEQA Guidelines section 15060(c)(3).

ECONOMIC AND FISCAL IMPACT

The Final Map, by itself, will not have a fiscal or economic impact. The development created by approval of the final map will redevelop an underutilized site in an existing residential setting.

The development would connect to existing public utilities and services and is not expected to have a negative result on the City regarding public utilities or public services. Furthermore, the project would result in new residents moving into Hayward, which should generate demand for goods and services, thereby providing stimulus for new or existing jobs and

2 California Code, GOV 66462
3 Hayward Municipal Code 10-3.332

services in the City’s economy. The Final Map approval is consistent with the approved project.

STRATEGIC ROADMAP

Approval of the Final Map supports the Strategic Priority of Preserve, Protect and Produce Housing for All, however, it is not tied to implementation of any specific projects.

SUSTAINABILITY FEATURES

The project includes sustainability features to improve energy efficiency, reduce greenhouse gas emissions, and conserve water. Rooftop solar panels will be installed on all the residences.

The proposed landscaping will be drought resistant in accordance with the Bay Friendly Water Efficient Landscape Ordinance. The site will be graded to ensure the stormwater runoff will be diverted to the bioretention and Silva Cell stormwater treatment areas.

NEXT STEPS

If the City Council approves the Final Map, the applicant will have the Final Map recorded after executing the Subdivision Improvement Agreement. Occupancy permits for the new units will be issued only after the required improvements are completed as per the plans approved by the City and a Homeowners Association (HOA) is incorporated for the maintenance and repair of the new common use improvements within the subdivision.

Prepared by: Cathleen Terentieff, Development Services Engineer

Recommended by: Sara Buizer, AICP, Director of Development Services

Approved by:

_________________________________
Dr. Ana M. Alvarez, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL
RESOLUTION NO. 25-_____

Introduced by Council Member ______________

RESOLUTION APPROVING THE FINAL MAP OF TRACT 8472, ACCEPTING

THE EASEMENTS AND CHESTNUT DRIVE RIGHT OF WAY DEDICATED

THEREON FOR PUBLIC USE AND AUTHORIZING THE CITY MANAGER TO

NEGOTIATE AND EXECUTE THE SUBDIVISION IMPROVEMENT AGREEMENT AND RELATED OTHER DOCUMENTS ; AND FINDING THAT THE ACTION IS

EXEMPT FROM CEQA REVIEW

WHEREAS, Vesting Tentative Tract Map No. 8472 was approved by the City Council of the City of Hayward on July 10, 2018; and

WHEREAS, the Final Map for Tract 8472 has been presented to the City Council of the City of Hayward for development of forty (40) detached single-family residential units with a private street and other site improvements located on nine existing parcels (Assessor’s Parcel Numbers 427-0036-033-05, 427-0036-033-06, 427 -0036-055-20 through 427-0036-055-25, & 427‐0036‐085‐01), 22626 4th Street; and

WHEREAS, the City Engineer has determined the map substantially complying with its Vesting Tentative Map and the City Surveyor has determined the map technically correct; and

WHEREAS, the City Engineer has also determined the Tract 8472 Improvement Plans acceptable and conforming to the City’s Conditions of Approval of the Vesting Tentative Map for Tract 8472; and

WHEREAS, the Subdivider has requested the City Council approval of Tract Map 8472 before its required improvements are complet ed and has agreed to complete the same within the time limits specified in an agreement with the city and post securities required therefore.

NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Hayward does hereby find that the Final Map for Tract 8472 is in substantial compliance with its approved Vesting Tentative Tract Map and does hereby approve the said Final Map and accepts on behalf of the public all easements and r ight of way dedicated for public use thereon, subject to the subdivider entering into a subdivision agreement for the completion of improvements and other obligations, as required by the conditions of approval of the Vesting Tentative Tract Map for Tract 8472, and that the approval of the Final Map for Tract 8472 shall not be effective until and unless and such agreement is entered into.

ATTACHMENT II

BE IT FURTHER RESOLVED, that t he environmental review for the project was completed when the Vesting Tentative Map was approved in 2018. There is no substantial change proposed in the Project or in its environmental setting, nor is there any new information which would require additional environmental review. Approval of the final map is a ministerial act not involving e xercise of discretionary powers, and is therefore not an action subject to CEQA review pursuant to CEQA Guidelines section 15060(c)(3).

BE IT FURTHER RESOLVED that the City Manager is hereby authorized to negotiate and execute, for and on behalf of the Ci ty of Hayward, a subdivision agreement in a form approved by the City Attorney.

IN CITY COUNCIL, HAYWARD, CALIFORNIA _______________________, 2025

ADOPTED BY THE FOLLOWING VOTE:

AYES: CITY COUNCIL MEMBERS:

MAYOR:

NOES: CITY COUNCIL MEMBERS:

ABSTAIN: CITY COUNCIL MEMBERS:

ABSENT: CITY COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward
Attachment III

PLANNED DEVELOPMENT SUBMITTAL

B STREET

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

LOCATION MAP

PROJECT TEAM
Attachment IV
B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A0.1SITE PLANSITE SUMMARY & OPEN SPACE0 408020 Open Space SummaryOpen Space Required:South16 units X 350 sf/unit =5600SFOpen Space Provided:SouthPrivate5772SFGroup3000SFTotal:8772SF548SF/Unit Open Space SummaryOpen Space Required:North25 units X 350 sf/unit =8750SFOpen Space Provided:NorthPrivate22274SFGroup13578SFTotal:35852SF1434SF/UnitOpen Space SummaryOpen Space Required:North + South41 units X 350 sf/unit =14350SFOpen Space Provided:North + SouthPrivate28046SFGroup16578SFTotal:44624SF1088SF/Unit North Site SummaryUnit NameDescriptionTypeApprox Gross SF*# %Approx Gross total SFPlan 13 bd + 2.5 bathAlley Loaded14522 8%2904Plan 23 bd + 2.5 bathFront Loaded16219 36%14589Plan 34 bd + 3 bathFront Loaded18855 20%9425Plan 43 bd + 2.5 bathFront Loaded19214 16%7684Plan 54 bd + 3 bathFront Loaded22515 20%11255Subtotal 25100%45857Overall Density+/-9.8du/acApprox. NET Avg. UnitSquare Foot+/-1834sq.ft.*Gross SF measure to outside face of stud, excludes garage areaParking (North)Garage spaces:50garage spacesPrivate Driveway spaces:10x2 20driveway spaces South Site SummaryUnit NameDescriptionTypeApprox Gross SF*# %Approx Gross total SFPlan 13 bd + 2.5 bathAlley Loaded14523 19%4356Plan 23 bd + 2.5 bathFront Loaded16213 19%4863Plan 34 bd + 3 bathFront Loaded18852 13%3770Plan 44 bd + 3 bathFront Loaded19216 38%11526Plan 54 bd + 2.5 bathFront Loaded22232 13%4446Subtotal 16100%28961Overall Density+/- du/ac North Site Area:2.6acres *South Site Area:1.6acres *Total Site Area:4.1acres **Acres are approximate On-street parking total (in Resi + 4th Street17open spaces87total spaces provided25x2 Parking (South)Garage spaces:32garage spacesPrivate Driveway spaces:5x2 10driveway spacesOn-street parking total (in Resi + 4th Street13open spaces55total spaces provided16x2 Approx. NET Avg. Unit Square Foot+/- 1810sq.ft.*Gross SF measure to outside face of stud, excludes garage area10.0 Lot CoverageLot #12456789101112131415161718192021222324252627282930 3 3132333435363738394041
Plan #P1ARP1BRP5.1AP2BP3AP2BP2AP5BP3ARP3BP3ARP2BP2BRP5AP5BRP3ARP2BP2AP2BP2AP5BP4AP4BRP4AP4BRP4BRP1AP4AP1BP4AP5AP3BRP5BRP3AP2BP2AP2BP4.1ARP4.1BP1AP4.1AR Ftpt. s.f.CoverageLot s.f.3,1312,1804,8303,6453,9963,3833,5674,7384,2464,2414,6974,8142,0742,8572,8572,5402,5292,6782,2222,0123,0602,5623,0013,0412,6165,0202,3693,1852,8263,7053,1412,6712,8704,0763,3142,3322,1924,0253,6002,4003,409 1,041
1,041
1,078
1,078
1,078
1,0751,0751,075
1,0751,0751,0751,0751,0751,075
1,0751,0751,0751,3191,319
1,319
1,3191,3191,3191,3191,467
1,467
1,468
1,4681,467
1,468
1,4681,2961,2961,2961,2541,2541,2961,296
1,2961,296
34%48%30%29%33%32%30%31%31%31%28%22%52%51%51%52%43%40%48%53%48%49%42%43%50%26%46%41%37%35%47%49%51%32%32%46%49%31%36%45%38% Indicates Enhanced Elevation(Lots 12, 17, 21, 22, 23, 24 25, 26) **
1,254 **** *
**
10 + 7
8 + 5

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A1.1PLAN 1A FLOOR PLAN Floor Plan3 Bedrooms2.5 Baths1,452 s.f.
024 8
First Floor515 s.f.Second Floor937 s.f.
32'-0"5'-0"22'-0"5'-0"
44'-0"
5'-0"
ac padmeters trash
Garage21'-3" x 19'-0"storageunderstairsPdr.Kitchen
Great Room21'-5" x 13'-0"
Porch
mediawall p
TanklessW.h.
up
opt.dr.
highglass
Parking Space20'-0" x 19'-0"
Laund.linenHalldn
Bath 2
Bedroom 210'-0" x 10'-6"Bedroom 311'-0" x 10'-0"
W.I.C.20'-0" l.f.

MasterBedroom14'-0" x 13'-0"MasterBath
opt.sink

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A1.3PLAN 1B PLAN CHANGE Floor Plan3 Bedrooms2.5 Baths1,467 s.f.
024 8
First Floor515 s.f.Second Floor952 s.f.
44'-0"
5'-0"
storageunderstairsPdr.Kitchen
Great Room21'-5" x 13'-0"
Porch
mediawall pup
HalldnW.I.C.20'-0" l.f.

MasterBedroom14'-0" x 14'-0"MasterBath

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A2.1PLAN 2A FLOOR PLAN Floor Plan3 Bedrooms + Loft2.5 Baths1,621 s.f.
024 8
First Floor611 s.f.Second Floor1,010 s.f.
46'-0"
4'-0"24'-8"4'-0"32'-8"
up
meters
trash Porch
Entry
Garage20'-11" x 19'-8"TanklessW.h.
coats /storagepKitchen
Great Room24'-0" x 13'-0"mediawall
Pdr.
ac pad
Trellis
Parking Space20'-0" x 19'-0"
dn
MasterBedroom15'-0" x 14'-8"MasterBathW.I.C.14'-1" l.f.

Loft13'-3" x 10'-0"lowlinen
Bath2 Laund.

Bedroom 210'-8" x 10'-0"
Bedroom 310'-2" x 11'-0"
Hall
opt. fr. drs. /Juliet Balcony

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A2.3PLAN 2B PLAN CHANGE Floor Plan3 Bedrooms + Loft2.5 Baths1,621 s.f.
024 8
First Floor611 s.f.Second Floor1,010 s.f. First FloorLot 17 46'-0"
up
meters
trash Porch
Entry
Garage20'-11" x 19'-8"TanklessW.h.
coats /storagepKitchenPdr.

Trellis
Parking Space20'-0" x 19'-0"
dn
W.I.C.14'-1" l.f.

Loft13'-3" x 10'-0"lowlinen
Bath2 Laund.

Bedroom 210'-8" x 10'-0"
Bedroom 310'-2" x 11'-0"
Hall
ExtendedPorch at Lot 17
up
meters
trash Porch
Entry
Garage20'-11" x 19'-8"TanklessW.h.
coats /storagepKitchenPdr.

Parking Space20'-0" x 19'-0"
2'-0"

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A3.1PLAN 3A FLOOR PLAN Floor Plan4 Bedrooms3 Baths1,885 s.f.
024 8
First Floor848 s.f.Second Floor1,037 s.f.
18'-0" 40'-0"
4'-0" 32'-0"4'-0"40'-0"
up
Garage20'-0" x 19'-0"TanklessW.h.
meters
Porch
Entry
coats /storage
mediawall
Great Room13'-0" x 15'-0"
Dining10'-10" x 11'-0"
Kitchen
p
pseat
Bath3
Bedroom 410'-0" x 10'-0"
Parking Space20'-0" x 19'-0"dn
MasterBedroom14'-6" x 16'-2"
MasterBathW.I.C.16'-4" l.f.

Bedroom 210'-0" x 11'-4"
Bedroom 310'-0" x 11'-4"
lowlinen
Sitting6'-10" x 8'-6"Open toBelowBath2
Hall
Laund.opt.sink

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A3.3PLAN 3B PLAN CHANGE Floor Plan4 Bedrooms3 Baths1,885 s.f.
024 8
First Floor848 s.f.Second Floor1,037 s.f.
18'-0" 40'-0"
up
Garage20'-0" x 19'-0"TanklessW.h.
meters
Porch
Entry
coats /storage
mediawall
Dining10'-10" x 11'-0"
p
pseat
Bath3
Parking Space20'-0" x 19'-0"dn
Bedroom 210'-0" x 11'-4"
Bedroom 310'-0" x 11'-4"
lowlinen
Sitting6'-10" x 8'-6"Open toBelowBath2
Hall
Laund.opt.sink

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A4.1PLAN 4&4.1A FLOOR PLAN 4 & 4.1 Floor Plan3 Bedrooms2.5 Baths1,921 s.f.
024 8
First Floor747 s.f.Second Floor1,174 s.f.

Alt. PorchLots 23, 24 & 38

4.1R First FloorLots 38, 39 & 41
4'-0" 30'-0"
43'-0"
6'-0" 30'-0" 13'-0"
up
Kitchen
Pdr.
ac pad
Garage20'-0" x 20'-0"
mediawall
Great Room20'-0" x 22'-0"
HomeMgmt.
meters
PorchEntry
coats /storage
TanklessW.h.trash
fence asoccurs
Courtyard9'-3" x 12'-0"
fence linevaries
p
Box Bay Lots23, 24 & 26
2'-0"9'-0"
Parking Space20'-0" x 19'-0"MasterBedroom14'-4" x 15'-4" MasterBathW.I.C.13'-0" l.f.
dn
HallLaund.opt.sink
linen
Bedroom 211'-5" x 10'-10"Bedroom 311'-5" x 12'-0"Bath2
opt.tech W.I.C.10'-4" l.f.
lowlinen
4'-0"PorchEntry
30'-0"
43'-0"
6'-0" 30'-0" 13'-0"
up
Kitchen
Pdr.
ac pad
Garage20'-0" x 20'-0"
mediawall
Great Room20'-0" x 22'-0"
HomeMgmt.
meters
PorchEntry
coats /storage
TanklessW.h.
trashfence asoccurs
p
Parking Space20'-0" x 19'-0"

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A4.3PLAN 4B PLAN CHANGE Floor Plan3 Bedrooms2.5 Baths1,921 s.f.
024 8
First Floor747 s.f.Second Floor1,174 s.f.
43'-0"
6'-0" 30'-0"
up
Kitchen
Pdr.
ac pad
Garage20'-0" x 20'-0"
mediawall
Great Room20'-0" x 22'-0"
HomeMgmt.

PorchEntry
coats /storage
TanklessW.h.trash
fence asoccursp
MasterBathW.I.C.13'-0" l.f.
dn
HallLaund.opt.sink
Bedroom 211'-5" x 10'-10"Bedroom 311'-5" x 12'-0"Bath2
opt.tech W.I.C.10'-4" l.f.
lowlinen

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A5.1PLAN 5&5.1A FLOOR PLAN 5 & 5.1 Floor Plan4 Bedrooms + LoftOpt. Bedroom 53 Baths2,318 s.f. 024 8
First Floor1,048 s.f.Second Floor1,270 s.f. 5.1 First FloorLot 3 6'-0" 35'-6" 5'-0"
4'-0" 37'-0" 4'-0"45'-0"
46'-6"
meters Entry
Garage20'-0" x 20'-0"TanklessW.h.
ac pad
KitchenDining Room10'-4" x 12'-4"
Great Room15'-11" x 18'-0"mediawall
pantryopt.cabinetsupcoats /storageBath3
Bedroom 410'-0" x 11'-0"
Parking Space20'-0" x 19'-0"
Porch
MasterBedroom15'-10" x 14'-6"MasterBathW.I.C.23'-0" l.f.

Bedroom 212'-6" x 11'-6"
Bedroom 311'-4" x 12'-5"Loft / Opt.Bedroom 510'-0" x 17'-0"Open toBelowlinen Laund.opt.sink
dn
HallBath2
mediawall
4'-8" 36'-10"5'-0"
37'-0"
46'-6"
meters
Entry
Garage20'-0" x 21'-6"TanklessW.h.
ac pad
KitchenDining Room10'-4" x 12'-4"
Great Room15'-11" x 18'-0"mediawall
pantryopt.cabinetsupcoats /storage
Bath3
Bedroom 410'-0" x 11'-0"
Parking Space20'-0" x 19'-0"
Porch

B STREETHAYWARD, CA # 2016-0385SCHEMATIC DESIGN05-04-2018 Architecture + Planning888.456.5849ktgy.com A5.3PLAN 5B PLAN CHANGE Floor Plan4 Bedrooms + LoftOpt. Bedroom 53 Baths2,272 s.f. 024 8
First Floor1,040 s.f.Second Floor1,232 s.f.Second FloorLot 21 First FloorLot 21 6'-0" 35'-6"
46'-6"
meters Entry
Garage20'-0" x 20'-0"TanklessW.h.

KitchenDining Room10'-4" x 12'-4"
pantryopt.cabinetsupcoats /storageBath3
Bedroom 410'-0" x 11'-0"
Parking Space20'-0" x 19'-0"
Porch
MasterBedroom15'-10" x 14'-6"MasterBathW.I.C.23'-0" l.f.

Bedroom 212'-6" x 11'-6"
Bedroom 311'-4" x 12'-5"Loft / Opt.Bedroom 510'-0" x 17'-0"Open toBelowlinen Laund.opt.sink
dn
HallBath2
mediawall
upcoats /storageBath3
Bedroom 412'-0" x 11'-0"
linenExtendedPlan at Lot 21
2'-0"Loft / Opt.Bedroom 510'-0" x 17'-0"
dn
mediawall

LANDSCAPE ARCHITECTURELAND PLANNING1615 BONANZA STREETSUITE 314WALNUT CREEK, CA 94596TEL: 925.938.7377 4TH STREETPERMEABLE PAVERENTRY WALK (TYP.)

SIDEWALK PER CIVIL ENGINEER'SIMPROVEMENT PLANS
STATION 1
STATION 2

EXISTING TREE TOBE REMOVED (TYP)
STATION 3

SILVA CELL PER CIVILENGINEER'S PLANSSTREET A

COURT A
EXISTING TREETO REMAIN (TYP)1.5" LANDSCAPEIRRIGATION WATER METER BENCH (TYP.)
TRAIL

SPECIMEN TREEDECOMPOSEDGRANITE WALK

TRAIL CONNECTIONWALKWAY
STATION 4
STATION 5

PRELIMINARY SITE PLAN

TYPICAL CROSS SECTIOND

SAN LORENZO CREEK SETBACK SECTION
E
·
·
·
·
·

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

PLANNED DEVELOPMENT SUBMITTAL

B STREET

PROPOSED PARKING PLAN

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

PLANNED DEVELOPMENT SUBMITTAL

B STREET

PRELIMINARY FIRE TURNING PATH

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

PLANNED DEVELOPMENT SUBMITTAL

B STREET

VESTING TENTATIVE MAP
TRACT 8427

B STREETCITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

OWNER'S STATEMENT

LOCATION MAPABBREVIATIONS

GENERAL NOTES

EXISTING SITE CONDITIONS & DEMOLITION PLAN

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET

PRELIMINARY SITE PLAN (NORTH)

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET

STREET A (NO PARKING)E

SAN LORENZO CREEK SETBACK SECTION
C
·
·
·
·
·

STREET A (WITH PARKING)
D

PRELIMINARY SITE PLAN (SOUTH)

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET

DRIVEWAY WITH MONOLITHIC SIDEWALK
1 ·
·
·
·
·
DRIVEWAY WITH DETACHED SIDEWALK2

STREET B
G

STREET B (WITH PARKING)H

PRELIMINARY GRADING PLAN

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET
TYPICAL LOT GRADING WITH 5' DRIVEWAY
TYPICAL LOT GRADING WITH 18' DRIVEWAY

SECTION A

SECTION B

SECTION C

PRELIMINARY ESTIMATED EARTHWORK QUANTITIES

PRELIMINARY UTILITY PLAN

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREETTYPICAL UTILITY SERVICES

PRELIMINARY STORM WATER TREATMENT PLAN

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET

CITY OF HAYWARD, ALAMEDA COUNTY, CALIFORNIA

VESTING TENTATIVE MAP
TRACT 8427 - B STREET
4 CURB OPENING AT BIO-RETENTION AREA
2 BUBBLE UP WITH ROCK RIPRAP DETAIL 3 DEEPEND CURB AT BIORETENTION AREA 1 BIORETENTION AREA

STORM WATER TREATMENT DETAILS
5 TYPICAL SILVA CELL SECTION

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: CONS 25-054
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Assistant City Manager

SUBJECT
Adopt a Resolution Amending Resolution Number 24-149 to Authorize the City Manager to Negotiate and Execute a Professional Services Agreement with the Presbytery of San Francisco as the Fiscal Sponsor and Agent for First Presbyterian Church of Hayward to Operate the Year-Round Shelter at South Hayward Parish for Fiscal Year 2024-2025 for a Not-to-Exceed Amount of $447,621

RECOMMENDATION
That City Council adopt a resolution (Attachment II) amending resolution 24-149 to authorize the City Manager to negotiate and execute a professional services agreement with the Presbytery of San Francisco to act as the fiscal sponsor and agent for First Presbyterian Church of Hayward to operate the year-round shelter at South Hayward Parish for Fiscal Year 2024-2025 for a not-to-exceed amount of $447,621.

SUMMARY
On June 25, 2024, City Council adopted a resolution authorizing the City Manager to negotiate and execute a professional services agreement with First Presbyterian Church of Hayward (FPCH) to operate the year-round shelter at South Hayward Parish (SHP) for Fiscal Year 2024-2025 for $447,621. The City Manager has not executed this contract as the agency does not currently meet one of the minimum contract standards established in the Community Services Division’s Community Agency Funding Process. Agencies are required to present a recent fiscal audit for all services agreements above $20,000.

While FPCH is currently in the process of obtaining a fiscal audit, the agency will not be able to obtain it before the end of the fiscal year.

As the only emergency shelter serving unsheltered adults in Hayward, SHP’sis a critical resource in the City’sresponse to unsheltered homelessness. To ensure continuation of these services, the Presbytery of San Francisco has agreed to act as FPCH’sfiscal sponsor and meets the minimum contracting standards, including providing a recent fiscal audit. Staff recommends that City Council amend resolution 24-149 to allow the City Manager to negotiate and execute a professional services agreement with the Presbytery of San Francisco to operate the year-round shelter at South Hayward Parish (SHP) for fiscal year 2024-25 for $447,621. There is no additional expense to the General Fund associated with this request.

CITY OF HAYWARD Printed on 2/20/2025Page 1 of 2
powered by Legistar™
File #:CONS 25-054

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
CITY OF HAYWARD Printed on 2/20/2025Page 2 of 2
powered by Legistar™

DATE: February 25, 2025

TO: Mayor and City Council

FROM: Assistant City Manager

SUBJECT: Adopt a Resolution Amending Resolution Number 24-149 to Authorize the City Manager to Negotiate and Execute a Professional Services Agreement with the Presbytery of San Francisco as the Fiscal Sponsor and Agent for First Presbyterian Church of Hayward to Operate the Year-Round Shelter at South Hayward Parish for Fiscal Year 2024-2025 for a Not-to-Exceed Amount of $447,621

RECOMMENDATION

That City Council adopt a resolution (Attachment II) amending resolution 24-149 to authorize the City Manager to negotiate and execute a professional services agreement with the Presbytery of San Francisco to act as the fiscal sponsor and agent for First Presbyterian Church of Hayward to operate the year-round shelter at South Hayward Parish for Fiscal Year 2024-2025 for a Not-to-Exceed amount of $447,621.

SUMMARY

On June 25, 2024, City Council adopted a resolution authorizing the City Manager to negotiate and execute a professional services agreement with First Presbyterian Church of Hayward (FPCH) to operate the year-round shelter at South Hayward Parish (SHP) for Fiscal Year 2024-2025 for $447,621.1 Agencies are required to submit a recent financial audit for all service agreements above $20,000. While FPCH is currently in the process of obtaining a financial audit of its operations, the agency has not been able to submit it before the end of the fiscal year.

Additionally, FPCH recently identified financial misappropriation. FPCH notified the City and took corrective actions. In response, staff placed a hold on executing new contracts with FPCH until FPCH could provide an updated final audit and more information on the misappropriation. Additionally, staff extended an option to FPCH to secure an agency who can serve as their fiscal sponsor as an interim alternative.

1 June 25, 2024, City Council Meeting Agenda and Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=6734720&GUID=4C67E5AB-5FA7-4CE3-B2AC- F82F2ED066A3&Options=ID|Text|&Search=south+hayward+parish

The Community Services Division’s (CSD) Community Agency Funding (CAF) process establishes a fiscal sponsorship option for agencies that are either not non-profits or want to apply for more than $20,000 without a recent fiscal audit. The fiscal sponsor acts as the fiscal agent for the applicant. The City contracts with the fiscal sponsor and the sponsor serves as a funding pass-through for the other agency. This is a common practice in the CAF process, enabling agencies that do not have a recent fiscal audit to still receive funding from the City for vital community services.

To ensure continuation of these services, the Presbytery of San Francisco has agreed to act as FPCH’s fiscal sponsor. As SHP fiscal sponsor, they will contract with the City; provide a recent fiscal audit of their operations and insurance certifications and will be the recipient of the City funds. In their role as the fiscal sponsor, Presbytery of San Francisco will function as a pass through agency to FPCH.

Staff recommends that City Council amend resolution 24-149 to allow the City Manager to negotiate and execute a professional services agreement with the Presbytery of San Francisco to operate the year-round shelter at South Hayward Parish (SHP) for fiscal year 2024-25 for $447,621. There is no additional expense to the General Fund associated with this request.

BACKGROUND

Beginning on December 1, 2018, FPCH took over operations of winter warming shelter services at SHP with funding support from the City. From 2018 through 2021, the Winter Warming Center provided 18 nightly shelter beds during the fall and winter months, when temperatures fell below 45 degrees or there was a high chance of rain.

On July 13, 2021, City Council approved the City of Hayward Federal Stimulus Expenditure Plan for the City’s American Rescue Plan Act (ARPA) award. They also adopted the Let’s House Hayward (LHH) Strategic Plan which detailed goals for reducing homelessness in Hayward and strategies and action steps required to achieve those goals.2

As an identified action step in both the Hayward Federal Stimulus Expenditure Plan and LHH Strategic Plan, City Council approved expanded services at the Winter Warming Shelter, authorizing FPCH to operate year-round instead of only during inclement weather.

The shelter began offering its expanded service hours in October 2021. During fiscal years 2022 and 2023, City Council authorized a combined total of $2,050,000 to ensure the ongoing operations of SHP’s nightly shelter2, a resource in South Hayward and a partner of the Hayward Evaluation and Response Teams (HEART).

2 August 15, 2023, City Council Meeting Agenda and Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=6315670&GUID=E8D2E2F9-CC73-4FD3-A1AC- 100E5B8DEB99&Options=&Search=

DISCUSSION

In early 2024, FPCH notified the City that without continued funding, the emergency shelter operations at SHP would not be able to operate at full capacity in FY 2024-2025. In response, staff explored different funding opportunities to support SHP’s emergency operations and encouraged FPCH staff to engage other potential funders to fill their FY 2024-2025 funding gap.

On June 25, 2024, City Council approved funding for FPCH’s FY 2024-2025 emergency shelter operation contract. 3 The funding included the combined use of the General Fund, HEART pilot program budget funded through salary savings, and CDBG-CV, as outlined in Table 1. The HEART program partners with SHP, with HEART staff bringing unhoused community members to SHP for services including showers, meals, and other support.

City Council authorized the City Manager to enter into a professional services agreement with First Presbyterian Church of Hayward (FPCH) to operate the year-round shelter at South Hayward Parish (SHP) for $447,621 for fiscal year 2024-2025.

Table 1: FY24-25 South Hayward Parish Shelter Recommended Funding

Source Amount
FY 2025 General Fund Allocation (CSD) $25,000
FY 2025 HEART Program Budget $250,000
CDBG-CV $172,621
Total $447,621

Subsequently, in late 2024, FPCH notified staff that they had become aware of financial misappropriation in their business office. FPCH is working with legal counsel and there is an ongoing law enforcement investigation. FPCH has taken several steps to understand the scope of the misappropriation; however, staff recommends not entering into new agreements directly with FPCH until they have completed a financial audit and there is more information on the outcome of the investigation. Therefore, the agreement authorized by Resolution 24- 149 has not been executed.

South Hayward Parish’s emergency shelter is a resource for the City’s unhoused community members. With 23 beds, it is the only emergency shelter for homeless adults in Hayward and is a component of the City’s homeless response system. To ensure continuation of these services, the Presbytery of San Francisco has agreed to act as FPCH’s fiscal sponsor. As fiscal sponsor, the Presbytery acts as the fiscal agent for FPCH. The City would contract with the Presbytery and the Presbytery serves as a funding pass-through for FPCH. The fiscal sponsor process is used frequently in the CAF process, where agencies that are either not a non-profit

3 June 25, 2024 City Council Meeting Agenda and Materials:
https://hayward.legistar.com/LegislationDetail.aspx?ID=6734720&GUID=4C67E5AB-5FA7-4CE3-B2AC- F82F2ED066A3&Options=ID|Text|&Search=south+hayward+parish

or do not have a recent fiscal audit work with a fiscal sponsor to meet minimum contracting requirements. This process is not new and aligns with existing practice. Staff recommend this approach for this fiscal year, as it is consistent with existing practice while preserving a resource in the City’s response to homelessness.

Staff recommend that City Council amend Resolution 24-149 and authorize the City Manager to enter into the shelter operations agreement with the Presbytery of San Francisco for $447,621 to continue year-round shelter operations at South Hayward Parish.

ECONOMIC IMPACT

There is a positive economic impact from addressing unsheltered homelessness by moving individuals into emergency housing with supportive services to help transition them to more permanent housing opportunities.

FISCAL IMPACT

This item has no associated fiscal impact. Funds associated with the referenced agreements were previously appropriated.

STRATEGIC ROADMAP

This agenda item supports the Strategic Priority of Preserve, Protect, and Produce Housing, under
 Project H2: Implement the Homelessness Reduction Strategic Plan

NEXT STEPS

If City Council approves, staff will move forward to negotiate and execute a professional services agreement with the Presbytery of San Francisco for $447,621 to operate the year- round shelter at South Hayward Parish for fiscal year 2024-2025. Staff will include an update on this agreement, the status of the City’s partnership with FPCH, and an analysis of program costs and outcomes at the next Let’s House Hayward Strategic Plan work session.

Prepared by: Emily Hwang, Management Analyst II

Recommended by: Amy Cole-Bloom, Community Services Manager Regina Youngblood, Assistant City Manager

Approved by:

______________________________________
Dr. Ana M. Alvarez, City Manager

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 25-____

Introduced by Council Member _________

RESOLUTION AMENDING RESOLUTION 24-149 TO AUTHORIZE THE CITY

MANAGER TO NEGOTIATE AND EXECUTE A PROFESSIONAL SERVICE S

AGREEMENT WITH THE PRESBYTERY OF SAN FRANCISCO TO SERVE AS THE

FISCAL SPONSOR FOR F IRST PRESBYTERIAN CH URCH OF HAYWARD TO

OPERATE THE YEAR-ROUND SHELTER AT SOUTH HA YWARD PARISH FOR FISCAL YEAR 2024-2025 FOR A NOT-TO EXCEED AMOUNT OF $447,621

WHEREAS, through Resolution Number 24-149 the City Council of the City of Hayward authorized the City Manager to negotiate and execute a professional services agreement with First Presbyterian Church of Hayward to operate the year-round shelter at South Hayward Parish for fiscal year 2024-2025 for a not-to-exceed amount of $447,621; and

WHEREAS, the Presbytery of San Francisco is able and willing to be a fiscal sponsor and agent for First Presbyterian Church of Hayward to pass through funds to South Hayward Parish’s year-round shelter program.

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hayward hereby amends Resolution 24-149 to change the agency that the City Manager negotiates and executes a professional services agreement from First Presbyterian Church of Hayward to The Presbytery of San Francisco.

BE IT FURTHER RESOLVED THAT the City Council of the City of Hayward hereby amends Resolution 24-149 to authorize and direct the City Manager to negotiate and execute a Professional Services Agreement with The Presbytery of San Francisco to serve as fiscal sponsor for First Presbyterian Church of Hayward to operate the year-round shelter at South Hayward Parish for fiscal year 2024-2025 for a not-to-exceed amount of $447,621.

ATTACHMENT II

IN COUNCIL, HAYWARD, CALIFORNIA _______________________, 2025

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: LB 25-003
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Director of Public Works and Interim Director of Finance

SUBJECT
2025 Wastewater Revenue Bonds: Adopt Resolutions Authorizing the Issuance and Sale of Wastewater Revenue Bonds in the Maximum Principal Amount of $135,000,000, to Finance Capital Improvements to the Wastewater System, Including the Water Resources Recovery Facility Improvements, and Approving Related Agreements and Actions

RECOMMENDATION
That Council adopts a resolution (Attachment II) authorizing the issuance and sale of Wastewater Revenue Bonds in the maximum principal amount of [$133,000,000] to finance capital improvements to the Wastewater System, including the Water Resources Recovery Facility (WRRF) improvements, and approving related agreements and actions.

SUMMARY
The City of Hayward’sDepartment of Public Works & Utilities is pursuing a major capital improvement project to construct a WRRF Administration and Laboratory Building (WRRF Administration and Laboratory Building Project) and to improve the Water Resources Recovery Facility (WRRF Phase II Project, and combined with the Administration and Laboratory Building Project, the “Project”) to meet the nutrient reduction mandate for treated effluent identified in the 3rd Nutrients Watershed Permit adopted by the California Regional Water Quality Control Board in July 2024. The total cost of the Project is estimated at $498 million, including all capital costs, contingencies, and financing costs.

As part of the funding strategy, the City intends to finance the project by the U.S. Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) loan program, funding from the Water Resources Development Act (WRDA), and publicly-sold revenue bonds. The WIFIA loan is expected to be approximately $244 million and is expected to provide funding for construction costs between September 2026 and September 2028.

In order to provide funding for construction costs until September 2026, the City is planning to issue 2025 Wastewater Revenue Bonds (2025 Bonds). In addition, pursuant to Resolution No. 24-061, adopted by Council on April 2, 2024, in which Council declared its intention to reimburse costs related to the Project from future tax-exempt obligations, the 2025 Bonds will reimburse the City up to $12 million in CITY OF HAYWARD Printed on 2/20/2025Page 1 of 2
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File #:LB 25-003
Project from future tax-exempt obligations, the 2025 Bonds will reimburse the City up to $12 million in Project costs incurred and paid to date.

The WIFIA Loan and the 2025 Bonds will draw from net revenues (total revenues minus operation and maintenance costs) received by the City from its wastewater collection, pumping, transport, treatment, storage, and disposal system (Wastewater System).

ATTACHMENTS
Attachment I Staff Report
Attachment II Resolution
Attachment III Indenture of Trust
Attachment IV Notice of Sale
Attachment V Preliminary Official Statement
CITY OF HAYWARD Printed on 2/20/2025Page 2 of 2
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DATE: February 25, 2025

TO: Mayor and City Council.

FROM: Director of Public Works and Interim Director of Finance

SUBJECT: 2025 Wastewater Revenue Bonds: Adopt Resolutions of the City Council Authorizing the Issuance and Sale of Wastewater Revenue Bonds in the Maximum Principal Amount of $135,000,000 to Finance Capital Improvements to the Wastewater System, Including the Water Resources Recovery Facility Improvements, and Approving Related Agreements and Actions

RECOMMENDATION

That Council adopts a resolution (Attachment II) authorizing the issuance and sale of Wastewater Revenue Bonds in the maximum principal amount of [$133,000,000] to finance capital improvements to the Wastewater System, including the Water Resources Recovery Facility (WRRF) improvements, and approving related agreements and actions.

SUMMARY

The City of Hayward’s Department of Public Works & Utilities is pursuing a major capital improvement project to construct a WRRF Administration and Laboratory Building (WRRF Administration and Laboratory Building Project) and to improve the Water Resources Recovery Facility (WRRF Phase II Project, and combined with the Administration and Laboratory Building Project, the “Project”) to meet the nutrient reduction mandate for treated effluent identified in the 3rd Nutrients Watershed Permit adopted by the California Regional Water Quality Control Board in July 2024. The total cost of the Project is estimated at $498 million, including all capital costs, contingencies, and financing costs.

As part of the funding strategy, the City intends to finance the project by the U.S.

Environmental Protection Agency’s Water Infrastructure Finance and Innovation Act of 2014 (WIFIA) loan program, a newly received grant from the Water Resources Development Act (WRDA), and publicly-sold revenue bonds. The WIFIA loan is expected to be approximately $244 million and is expected to provide funding for construction costs between September 2026 and September 2028.

In order to provide funding for construction costs until September 2026, the City is planning to issue 2025 Wastewater Revenue Bonds (2025 Bonds). In addition, pursuant to Resolution No. 24-061, adopted by Council on April 2, 20241, in which Council declared its intention to reimburse costs related to the Project from future tax-exempt obligations, the 2025 Bonds will reimburse the City up to $12 million in Project costs incurred and paid to date.

The WIFIA Loan and the 2025 Bonds will draw from net revenues (total revenues minus operation and maintenance costs) received by the City from its wastewater collection, pumping, transport, treatment, storage, and disposal system (Wastewater System).

BACKGROUND

City staff have worked with the City’s municipal advisor (NHA Advisors, or NHA) to develop a financing plan (Financing Plan) for the $498 million project. The Financing Plan was presented to the Council Budget & Finance Committee at the May 15, 20242 meeting. In addition, this item is related to the authorization for the City Manager to apply for the WIFIA Loan in an amount up to $260 million, approved by Council on April 16, 20243.

As summarized in the graphic below, the financing plan utilizes a combination of Sewer Fund reserves, the WIFIA loan, a $15 million WRDA grant, and two series of wastewater revenue bonds – 2025 Bonds and a future series (expected to be issued in or after 2027). The WIFIA loan is expected to be approximately $244 million, which is sized to 49% of the eligible project costs (which is the maximum financing amount available from the WIFIA program pursuant to the WIFIA statute).

1 April 2, 2024 City Council (https://hayward.legistar.com) 2 May 15, 2024 Council Budget & Finance Committee (https://hayward.legistar.com) 3 April 16, 2024 City Council (https://hayward.legistar.com) WIFIA Loan,
49%
2025 Bonds,
26%
2027
Bonds,
17%
Sewer Fund
Cash, 5%
2024 WRDA
Funding, 3%
Expected Sources of
Project Funding

Notably, WIFIA loans are “draw schedule loans”, which means that the City will only accrue interest on its WIFIA loan based on actual amounts drawn (not the full $244 million funding limit). Additionally, WIFIA loans come with a one-time interest rate reset option that allows a borrower to lower its interest rate, provided it has not drawn any funds from the WIFIA loan.

To maximize the benefit of this interest rate reset option, NHA has advised the City to close on its WIFIA Loan in spring 2025 but delay drawing any money from that loan until September 2026. Closing the WIFIA loan in spring 2025 puts a maximum value on the City’s WIFIA Loan interest rate (i.e., it cannot go higher than the rate set at closing). Since WIFIA loan rates are currently in the high 4% range at the time of this staff report, the objective of delaying WIFIA draws is to allow time for WIFIA loan rates to come down.

In February 2025, Staff was informed that the City’s application for the 2024 WRDA federal award has been approved in the amount of $15 million from U.S. Army Corps of Engineers (USACE). Staff is currently investigating whether there are any conditions or restrictions that would make the use of the award inadvisable.

The Financing Plan calls for the issuance of 2025 Bonds at this time order to fund construction between now and September 2026, as well as to reimburse the Sewer Fund for approximately $12 million in Project planning and design expenses incurred and paid between summer 2022 and now. Based on the current construction cost schedule for the Project, the 2025 Bonds need to raise approximately $127 million for future project costs and for reimbursement of prior Project planning and design costs.

The graphic below illustrates the semi-annual project cost schedule and the anticipated funding sources. The City has been using Sewer Fund reserves to pay Project costs to date and the next source of funding is the 2025 Bonds. Once the funds from the 2025 Bonds have been fully used, the City can begin drawing on its WIFIA Loan to fund construction through the end of 2027. Depending on the final costs of the project, the City will evaluate whether it is necessary to issue a second series of bonds in or around 2027. Finally, the City plans to commit $25 million in additional Sewer Fund reserves toward the project but is strategically planning to wait to contribute those funds until the final stages of Project closeout.

DISCUSSION

The 2025 Bonds will be structured as fixed-rate debt with a 30-year term and will mature in March 2055. The anticipated 2025 Bonds structure is shown in the graph below (purple series). The dark grey series on the bottom of the graph is the aggregate debt service on the Sewer Fund’s outstanding debt (2006 State Revolving Fund (SRF) Loan, 2011 California Energy Commission (CEC) Loan, 2019 CEC Loan). The medium grey and light grey series on top of the purple series shows the anticipated structure of the future 2027 Bonds and WIFIA Loan, respectively.

$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
$140,000,000
$160,000,000
3/1/2022
9/1/2022
3/1/2023
9/1/2023
3/1/2024
9/1/2024
3/1/2025
9/1/2025
3/1/2026
9/1/2026
3/1/2027
9/1/2027
3/1/2028
9/1/2028
3/1/2029
9/1/2029
3/1/2030
9/1/2030
Semiannual Construction Cost Schedule
WIFIA
2027 Bonds
2025 Bonds
City cash
City cash
(Partially Reimbursed from 2025 Bonds)

The 2025 Bonds will have a first interest payment due in FY 26 but will not commence principal repayments until FY 30. From FY 30 through FY 33, the 2025 Bonds will have level annual principal and interest payments of approximately $9.1 million per year. In FY 34, the 2025 Bonds will have an interest-only payment to provide some capacity for the Sewer Fund to make the anticipated payments on the WIFIA loan. Starting in FY 35, principal repayments re-commence and increase gradually each year until FY 38, when the annual principal and interest payments are expected to stay at approximately $9.1 million annually through final maturity in FY 55.

The 2025 Bonds will be sold to the public via a competitive sale. During a competitive sale process, the City provides notice to bond underwriting firms of the date and time when bids will be accepted. At that specified date and time, the City will work with NHA to evaluate the bids received and will award the bid to the bond underwriting firm that provides the lowest -
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
2023-24
2025-26
2027-28
2029-30
2031-32
2033-34
2035-36
2037-38
2039-40
2041-42
2043-44
2045-46
2047-48
2049-50
2051-52
2053-54
2055-56
2057-58
2059-60
2061-62
City of Hayward Wastewater Fund
Aggregate Outstanding and Anticipated Debt Service
Aggregate
Outstanding
Debt
2025 Bonds
2027 Bonds
WIFIA Loan

true interest cost of funds. Once the winning bid is awarded, the interest rates and bond amounts will be finalized and will not be subject to change.

There are several items attached to this staff report that are open for City staff consideration.

Key features and aspect of those documents are summarized below:

1. Authorizing Resolution (Attachment II): The authorizing resolution authorizes the issuance of the 2025 Bonds, the sale of the 2025 Bonds in a competitive sale and approves the form of the legal documents for the 2025 Bonds. The resolution also authorizes the execution of the legal documents for the 2025 Bonds, provided the final pricing of the 2025 Bonds is within not-to-exceed parameters identified in the resolution. These not-to-exceed parameters authorize Staff to cause the 2025 Bonds to be issued, provided the final principal amount and interest rates are equal to or less than the following: (1) the principal amount of the 2025 Bonds cannot exceed $135,000,000 and (2) the maximum true interest cost cannot exceed 5.25%. These not-to-exceed amounts are set higher than the expected actual principal amount or true interest cost to provide a little flexibility given the unpredictability in the bond markets.

2. Indenture of Trust (Attachment III): The Indenture formalizes the relationship between the City of Hayward and BNY Mellon Trust Company, National Association (“BNY Mellon”) as Trustee for the 2025 Bonds. The Indenture describes the terms of the 2025 Bonds, including the payment terms and schedule, prepayment options, other covenants related to the 2025 Bonds (many of which match those in the 2006 SRF Loan agreement and the WIFIA Loan documents), and other administrative items.

3. Notice of Sale (Attachment IV): The Notice of Sale lays out the terms and conditions of the competitive bond sale, including the date and time of the sale, location where bids will be received, requested structure and redemption terms, and limitations placed on bidders.

4. Preliminary Official Statement (Attachment V): A preliminary official statement (“POS”) will be distributed to potential investors to provide material information regarding the terms of and security for the 2025 Bonds.

Once the 2025 Bonds have been sold to an underwriter through competitive sale, the final pricing information will be inserted into the POS, thereby converting it to a final Official Statement. The winning underwriter will then distribute the final Official Statement to the individuals and institutions that placed orders to buy the 2025 Bonds from the Underwriter.

The attached POS has been reviewed and approved for transmittal to Council by City staff and its financing team. The distribution of the POS is subject to federal securities laws, including the Securities Act of 1933 and the Securities Exchange Act of 1934.

These laws require the POS to include all facts that would be material to an investor in

the 2025 Bonds. Material information is information that there is a substantial likelihood would have actual significance in the deliberations of the reasonable investor when deciding whether to buy or sell the 2025 Bonds. If Council concludes that the POS includes all facts that would be material to an investor in the 2025 Bonds, it will authorize a member of staff to execute a certificate to the effect that the POS has been "deemed final."

The Securities and Exchange Commission (the "SEC"), the agency with regulatory authority over compliance with the federal securities laws, has issued guidance as to the duties of Council with respect to their approval of the POS. In its "Report of Investigation in the Matter of County of Orange, California as it Relates to the Conduct of the Members of the Board of Supervisors" (Release No. 36761 / January 24, 1996) (the "Release"), the SEC stated that, if a member of the an issuer's legislative body has knowledge of any facts or circumstances that an investor would want to know about prior to investing in a proposed securities issuance such as the 2025 Bonds, whether relating to their repayment, tax-exempt status, undisclosed conflicts of interest with interested parties, or otherwise, he or she should endeavor to discover whether such facts are adequately disclosed in the preliminary official statement. In the Release, the SEC stated that the steps that a member of the issuer's legislative body could take include becoming familiar with the preliminary official statement and questioning staff and consultants about the disclosure of such facts.

Debt service on the 2025 Bonds will be payable from the net revenues of the Wastewater System. As such, information about the Wastewater System and the Sewer Fund is the focus of the POS, and the key provisions of the POS include the following:

 The section entitled “THE 2025 BONDS” summarizes the terms of the 2025 Bonds, including interest and principal payment dates and redemption (prepayment) terms.

 The section entitled “SECURITY AND SOURCES OF PAYMENT FOR THE 2025 BONDS” summarizes the pledge of net revenues of the Wastewater System to the 2025 Bonds and other obligations payable from the net revenues. This section also summarizes the City’s rate covenant, pursuant to which the City agrees to levy Wastewater System rates and charges in an amount sufficient to (i) pay the costs of operating the Wastewater System, (ii) pay debt service on the 2025 Bonds and other obligations and (3) generate net revenues equal to a “debt service coverage” amount.

 The section entitled “CITY OF HAYWARD WASTEWATER SYSTEM” summarizes the Wastewater System infrastructure, the Wastewater System customer base, the rates and charges paid by Wastewater System customers, and the historical and projected revenues and expenses of the Wastewater System.

 The section entitled “CERTAIN RISK FACTORS” describes various risk factors that could impact the City’s ability to pay debt service on the 2025 Bonds, including those circumstances that reduce net revenues (either by increasing expenses or decreasing revenues).

5. Continuing Disclosure Certificate (attached to the Preliminary Official Statement): Under the Continuing Disclosure Certificate, the City will agree to provide an annual report containing certain financial and operating information relevant to the security of the 2025 Bonds, to be filed on the EMMA system (the internet-based information repository for municipal bonds issued in the United States maintained by the Municipal Securities Rule Making Board) to make such information available to the investors. The City will also agree to disclose and make filings upon the occurrence of enumerated significant events (for example, a change in trustee, a rating change, or a missed debt payment on the 2025 Bonds).

STRATEGIC ROADMAP

This agenda item supports the Strategic Priority of Invest in Infrastructure. Specifically, this item relates to the implementation of the following project:

Project N22: Design Water Pollution Control Facility Phase II upgrade

ECONOMIC AND FISCAL IMPACT

Debt Service
There will be no immediate impact to the FY 25 Budget. Annual debt service on the 2025 Bonds is expected to commence in FY 26 and will have interest-only payments through FY 30.

From that point through final maturity, the annual principal and interest payment on the 2025 Bonds is expected to be approximately $9.1 million per year, with the notable exception is the period from FY 34 through FY 37 when the payments decrease to allow the Sewer Fund additional capacity for the anticipated future WIFIA Loan payments. Costs of issuing the 2025 Bonds will be paid out of the proceeds of sale and amortized over the life of the bonds. While the underwriting expenses will not be known until the day of the sale (and will be factored into the calculation to determine the lowest true interest cost bidder), issuance costs are not expected to exceed 1% of total par.

Sewer Rates and Connection Fees
On February 18th, 20254, Council adopted the sewer rate increases of 12% annually from FY 26 through FY 30 and the sewer connection fee increases of 10% in FY 26 and FY 27. The rate and connection fees adjustments will enable the City to fund the required borrowings to fund the implementation of improvements to meet the requirements of the San Francisco Regional Water Board’s newly adopted 3rd Watershed Permit. The adjustments will also allow the City

4 https://hayward.legistar.com/LegislationDetail.aspx?ID=7139170&GUID=F5F42295-1235-4AEB-89FD-ED864F22001B&Options=&Search=

to keep pace with the cost of sewer service collection, treatment, and disposal. This includes building reserves for future capital costs and ensuring that costs are recovered equitably. The required rate increases are anticipated to moderate after the first five years.

There is no General Fund Impact related to this.

SUSTAINABILITY FEATURES

There are no Sustainability Features directly associated with this item.

PUBLIC CONTACT

The WRRF Phase II Project includes a web page to be hosted on the City’s website which is being periodically updated throughout the multi-year duration of the project.

NEXT STEPS

If approved, City staff will work with the financing team to publish the Notice of Intention, Notice of Sale, and the Preliminary Official Statement. The competitive sale of the 2025 Bonds will happen approximately 2 weeks later (mid-March) and closing of the 2025 Bonds and delivery of funds will happen approximately two weeks after that (late March).

In addition, Staff expect to bring a future item before Council at a March meeting regarding the authorization for the City to enter into the WIFIA Loan.

Prepared by: Elli Lo, Senior Management Analyst
Christian Sprunger, NHA Advisors, LLC

Recommended by: Alex Ameri, Director of Public Works
Regina Youngblood, Interim Director of Finance

Approved by:

________________________________
Dr. Ana M. Alvarez

ATTACHMENT II

HAYWARD CITY COUNCIL

RESOLUTION NO. 25-___

Introduced by Council Member ___________

RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF WASTEWATER REVENUE BONDS IN THE MAXIMUM PRINCIPAL AMOUNT OF $135,000,000

TO FINANCE CAPITAL IMPROVEMENTS TO THE WASTEWATER SYSTEM,

INCLUDING THE WATER RESOURCE RECOVERY FACILITY IMPROVEMENTS,

AND APPROVING RELATED AGREEMENTS AND ACTIONS

WHEREAS, the City of Hayward (the “City”) owns and operates a wastewater collection, pumping, transport, treatment, storage, and disposal system (the “ Wastewater System”), including a Water Resource Recovery Facility (the “WRRF”); and

WHEREAS, increasing nutrient loadings in the Bay is a growing concern for the Bay Area water quality community, which has been discussed in both the first Nutrients Watershed Permit (issued 2014) and the Second Nutrients Watershed Permit (issued 2019) adopted by the California Regional Water Quality Control Board, S an Francisco Bay Region (the “Water Board”); and

WHEREAS, in June 2020, the City completed a comprehensive Facilities Plan update, the WRRF Phase II Facilities Plan, to identify improvements required for the WRRF to upgrade its treatment process to incorporate nutrient reduction in the treated effluent to meet the upcoming regulatory requirements (the “Phase II Project”); and

WHEREAS, the Water Board approved the 3rd Nutrients Watershed Permit on July 10, 2024, which requires the City to reduce nutrient loading to the Bay by 53% by May 1, 2034; and

WHEREAS, the main goal of the Phase II Project is to construct improvements necessary for nutrient removal in compliance with the Water Board's requirements in the 3rd Nutrients Permit; and

WHEREAS, in accordance with the Facilities Plan update, the City will also construct a 21,800 square foot building housing a centralized administration building, main control room for WRRF operations, expanded laboratory facilities, SCADA and st aff facilities ( the “WRRF Administration and Laboratory Building Project”); and

WHEREAS, at this time, the City anticipates receiving financing for the Phase II Project and the WRRF Administration and Lab oratory Building Project ( together, the “ Projects”) from the U.S. Environmental Protection Agency ’s Water Infrastructure Finance and Innovation Act (WIFIA) program and publicly-sold revenue bonds; and

WHEREAS, the City is a charter city organized and existing under the Constitution and laws of the State of California, and as such the City is authorized to make and enforce all laws and regulations in respect to municipal affairs under Sections 3, 5 and 7 of Art icle XI of the Constitution of the State of California and under Section 200 of the Charter of the City, subject only to such restrictions and limitations as may be provided in the Charter of the City and in the Constitution of the State of California; and

WHEREAS, pursuant to its municipal affairs powers as a charter city, the City Council of the City has adopted its Ordinance No. 24-05, enacting the City of Hayward Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 8, Article 22 of th e Hayward Municipal Code (the “Bond Law”), under which the City is authorized to issue its revenue bonds for the purpose of financing improvements to the water enterprise of the City and the Wastewater System; and

WHEREAS, in order to provide financing for the Projects, the City Council wishes at this time to authorize the issuance of City of Hayward 2025 Wastewater Revenue Bonds in the aggregate principal amount of not to exceed $135,000,000 (the “Bonds”) under the provisions of the Bond Law; and

WHEREAS, the Bonds will be payable from and secured by a pledge of and lien on the net revenues of the Wastewater System, on a parity with the pledge and lien which secures the obligations of the City incurred to finance the Wastewater System, including that certain outstanding Agreement No. 05 -807-550-0, by and between the City and the State Water Resources Control Board dated July 27, 2006 (the “2006 SRF Agreement”); and

WHEREAS, as required by California Government Code Section 5852.1 enacted January 1, 2018 by Senate Bill 450, attached hereto as Appendix A is certain financial information relating to the Bonds that has been obtained by the City Council and is hereby disclosed and made public; and

WHEREAS, the City Council has previously approved a Debt Issuance and Management Policy which complies with California Government Code Section 8855, and the issuance of the Bonds will be in compliance with said policy; and

WHEREAS, the City Council of the City h as duly considered such transactions and wishes at this time to approve said transactions in the public interests of the City;

NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Hayward as follows:

Section 1. Authorization of Bonds. The City Council hereby authorizes the issuance of the Bonds under the Bond Law in the maximum principal amount of $135,000,000, for the purpose of providing funds to finance the Projects and to pay related costs of issuing the

Bonds. The Bonds shall be revenue bonds, which are payable from and secured by a pledge of and lien on the net revenues of the Wastewater System.

Section 2. Approval of Indenture of Trust . The Bonds shall be issued under an Indenture of Trust between the City and The Bank of New York Mellon Trust Company, National Association, as trustee , which is hereby approved in substantially the form on file with the City Clerk together with any changes therein or additions thereto deemed advisable by the City Manager , the Assistant City Manager or the Director of Finance (each, an “Authorized Officer”), and the execution thereof by the City Manager (or the City Manager’s designee) shall be conclusive evidence of the approval of such changes and additions. The City Council hereby authorizes and directs the City Manager (or the City Manager’s designee) to execute, and the City Clerk to attest, the final form of the Indenture of Trust for and in the name of the City. The City Council hereby authorizes the delivery and performance of the Indenture of Trust.

Section 3. Competitive Sale of the Bonds. In accordance with Section 8-22.111 of the Bond Law, the City Council hereby authorizes the sale of the Bonds by competitive public bidding in accordance with the provisions of the Official Notice of Sale in substantially the form on file with the City Clerk, together with such additions thereto and changes therein as may be approved by an Authorized Officer . The true interest cost of the Bonds shall not exceed 5.25% per annum.

The terms and conditions of the offering and the sale of the Bonds shall be as specified in the Official Notice of Sale, which is hereby incorporated into this Resolution by this reference. An Authorized Officer, on behalf of the City, is hereby delegated the authority to accept the best responsible bid for the purchase of the Bonds, determined in accordance with the Official Notice of Sale. The sale of the Bonds shall be awarded, or all bids shall be rejected, not later than 24 hours after the expiration of the time prescribed for the receipt of proposals unless such time of award is waived by the successful bidder.

Section 4. Publication of Notice of Intent to Sell Bonds. Pursuant to Government Code Section 53692, the City Council hereby approves and authorizes the publication by Jones Hall, A Professional Law Corporation, as Bond Counsel to the City, of a notice of the City’s intention to sell the Bonds, in form and substance acceptable to Bond Counsel, in The Bond Buyer once at least five days prior to the date fixed for receipt of bids.

Section 5. Official Statement . The City Council hereby appr oves the preliminary Official Statement describing the Bonds in the form on file with the City Clerk, and authorizes an Authorized Officer to approve revisions to said preliminary Official Statement. At the request of the purchaser of the Bonds, an Author ized Officer shall execute a certificate deeming the preliminary Official Statement, as so revised, to be final within the meaning of Rule 15c2-12 of the Securities Exchange Act of 1934. Distribution of the Preliminary Official Statement to prospective purchasers of the Bonds is hereby approved. An Authorized Officer is hereby authorized and directed to approve any changes in or additions to a final form of said Official Statement, and the execution thereof by the City Manager (or the City Manager’s designee) shall be conclusive evidence of approval of any such changes and additions. The

City Council hereby authorizes the distribution of the final Official Statement . The final Official Statement shall be executed in the name and on behalf of the City by the City Manager (or the City Manager’s designee).

Section 6. Official Actions . The City Manager (or the City Manager’s designee) is hereby authorized and directed, for and in the name and on behalf of the City, to do any and all things and take any and all actions, including execution and delivery of any and all assignments, certificates, requisitions, agreements, notices, consents, i nstruments of conveyance and other documents, in a form approved by the City Attorney, which they, or any of them, may deem necessary or advisable in order to consummate the transactions described herein. Whenever in this Resolution any officer of the City is authorized to execute or countersign any document or take any action, such execution, countersigning or action may be taken on behalf of such officer by any person designated by such officer to act on his or her behalf if such officer is absent or unavailable.

Section 7. Effective Date. This Resolution shall become effective immediately upon its passage and adoption.

IN COUNCIL, HAYWARD, CALIFORNIA , 2025

ADOPTED BY THE FOLLOWING VOTE:

AYES: COUNCIL MEMBERS:

MAYOR:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

ATTEST: ______________________________________
City Clerk of the City of Hayward

APPROVED AS TO FORM:

_________________________________________
City Attorney of the City of Hayward

A-1

APPENDIX A

REQUIRED FINANCIAL DISCLOSURES PURSUANT TO
GOVERNMENT CODE SECTION 5852.1

1. True Interest Cost of the Bonds (Estimated): 4.67%.

2. Finance charge of the Bonds, being the sum of all fees and charges paid to third parties, in the amount of approximately $ 975,000.

Such amount consists of costs of issuing the Bonds in the amount of approximately $350,000 together with estimate d
Underwriter’s compensation in the amount of approximately $625,000.

3. Proceeds of the Bonds expected to be received by the City, net of proceeds for Costs of Issuance in (2) above to paid, capitalized interest and reserves (if any) from the principal amount of the Bonds (Estimated): $126,688,000.

4. Total Payment Amount for the Bonds, being the sum of all debt service to be paid on the Bonds to final maturity (Estimated):
$251,036,000.

*All amounts and percentages are estimates, and are made in good faith by the City based on information available as of February 7, 20 25.

Estimates include certain assumptions regarding tax -exempt rates available in the bond market at the time of pricing the Bonds.

ATTACHMENT III
1 INDENTURE OF TRUST

between the

CITY OF HAYWARD

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
as Trustee

Dated as of March 1, 2025

Relating to

$[Principal Amount]
City of Hayward
2025 Wastewater Revenue Bonds

-i-

TABLE OF CONTENTS

Page

ARTICLE I
DEFINITIONS; RULES OF CONSTRUCTION
Section 1.01. Definitions ................................ ................................ ............................. 2 Section 1.02. Authorization ................................ ................................ ......................... 2 Section 1.03. Interpretation ................................ ................................ ......................... 2

ARTICLE II

ISSUANCE OF BONDS
Section 2.01. Authorization and Purpose of 2025 Bonds ................................ ............ 3 Section 2.02. Terms of the 2025 Bonds................................ ................................ ....... 3 Section 2.03. Redemption of 2025 Bonds ................................ ................................ ... 4 Section 2.04. Book Entry System ................................ ................................ ................ 6 Section 2.05. Form and Execution of Bonds ................................ ............................... 8 Section 2.06. Transfer and Exchange of Bonds ................................ .......................... 8 Section 2.07. Registration Books ................................ ................................ ................ 9 Section 2.08. Bonds Mutilated, Lost, Destroyed or Stolen ................................ ........... 9 Section 2.09. CUSIP Numbers ................................ ................................ .................. 10 Section 2.10. Validity of Bonds ................................ ................................ .................. 10

ARTICLE III
ISSUE OF 2025 BONDS; ACQUISITION AND CONSTRUCTION OF THE 2025 PROJECTS Section 3.01. Issuance of 2025 Bonds ................................ ................................ ...... 10 Section 3.02. Deposit and Application of Proceeds ................................ ................... 10 Section 3.03. 2025 Costs of Issuance Fund ................................ .............................. 10 Section 3.04. 2025 Project Fund ................................ ................................ ............... 11 Section 3.05. Acquisition and Construction of the 2025 Projects ............................... 11

ARTICLE IV
REVENUES; FLOW OF FUNDS
Section 4.01. Pledge of Net Revenues ................................ ................................ ..... 12 Section 4.02. Receipt, Deposit and Application of Revenues ................................ .... 12 Section 4.03. Investments ................................ ................................ ......................... 13 Section 4.04. Establishment of Rate Stabilization Fund ................................ ............ 14 Section 4.05. Valuation and Disposition of Investments ................................ ............ 15

ARTICLE V

COVENANTS OF THE CITY
Section 5.01. Punctual Payment; Compliance with Documents ................................ 15 Section 5.02. Discharge of Claims ................................ ................................ ............ 15 Section 5.03. Operation of Wastewater System in Efficient and Economical Manner 16 Section 5.04. Sale or Eminent Domain of Wastewater System ................................ . 16 Section 5.05. Insurance ................................ ................................ ............................ 17 Section 5.06. Records and Accounts ................................ ................................ ........ 18 Section 5.07. Rates and Charges ................................ ................................ ............. 18 Section 5.08. Issuance of Parity Obligations ................................ ............................. 19 Section 5.09. Superior and Subordinate Obligations ................................ ................. 20 Section 5.10. Tax Covenants Relating to 2025 Bonds ................................ ............... 20 Section 5.11. Compliance With Parity Obligation Documents ................................ ... 21

-ii-
Section 5.12. Continuing Disclosure ................................ ................................ ......... 21 Section 5.13. Further Assurances ................................ ................................ ............. 21

ARTICLE VI

THE TRUSTEE
Section 6.01. Duties, Immunities and Liabilities of Trustee ................................ ........ 22 Section 6.02. Merger or Consolidation ................................ ................................ ...... 23 Section 6.03. Rights and Liabilities of Trustee ................................ ........................... 24 Section 6.04. Right to Rely on Documents ................................ ................................ 26 Section 6.05. Preservation and Inspection of Documents ................................ ......... 26 Section 6.06. Compensation and Indemnification ................................ ..................... 26 Section 6.07. Accounting Records and Financial Statements ................................ ... 27

ARTICLE VII

MODIFICATION AND AMENDMENT OF THIS INDENTURE
Section 7.01. Amendments Permitted ................................ ................................ ....... 27 Section 7.02. Effect of Supplemental Indenture ................................ ........................ 29 Section 7.03. Endorsement or Replacement of Bonds After Amendment .................. 29 Section 7.04. Amendment by Mutual Consent ................................ .......................... 29 Section 7.05. Trustee's Reliance ................................ ................................ ............... 29

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND OWNERS
Section 8.01. Events of Default and Acceleration of Maturities ................................ .. 29 Section 8.02. Application of Funds Upon Acceleration ................................ .............. 31 Section 8.03. Power of Trustee to Control Proceedings ................................ ............ 31 Section 8.04. Limitation on Owners' Right to Sue................................ ...................... 31 Section 8.05. Non-waiver ................................ ................................ .......................... 32 Section 8.06. Actions by Trustee as Attorney-in-Fact ................................ ................ 32 Section 8.07. Remedies Not Exclusive ................................ ................................ ..... 33

ARTICLE IX

MISCELLANEOUS
Section 9.01. Limited Liability of City ................................ ................................ ......... 33 Section 9.02. Benefits of Indenture Limited to Parties ................................ ............... 33 Section 9.03. Defeasance of Bonds ................................ ................................ .......... 34 Section 9.04. Execution of Documents and Proof of Ownership by Owners .............. 35 Section 9.05. Disqualified Bonds................................ ................................ ............... 35 Section 9.06. Waiver of Personal Liability ................................ ................................ . 35 Section 9.07. Destruction of Canceled Bonds ................................ ........................... 35 Section 9.08. Funds and Accounts ................................ ................................ ............ 35 Section 9.09. Notices ................................ ................................ ................................ 36 Section 9.10. Unclaimed Moneys ................................ ................................ .............. 36 Section 9.11. Execution in Several Counterparts ................................ ...................... 36 Section 9.12. Governing Law ................................ ................................ .................... 37 Section 9.13. U.S.A. Patriot Act ................................ ................................ ................ 37

APPENDIX A: DEFINITIONS
APPENDIX B: FORM OF 2025 BOND
APPENDIX C: FORM OF 2025 PROJECT FUND REQUISITION

1 INDENTURE OF TRUST

This INDENTURE OF TRUST, dated as of March 1, 2025, is between the CITY OF HAYWARD, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”), and The Bank of New York Mellon Trust Company, N.A., a national banking association organized and existing under the laws of the United States of America, with a corporate trust office in San Francisco, California, and being qualified to accept and administer the trusts hereby created (the “Trustee”).

BACKGROUND:

1. The City owns and operates a wastewater collection, pumping, transport, treatment, storage, and disposal system (the “Wastewater System”), including a Water Resource Recovery Facility (the “WRRF”).

2. In June 2020, the City completed a comprehensive Facilities Plan update, the WRRF Phase II Facilities Plan, to identify improvements required for the WRRF to upgrade its treatment process to incorporate nutrient reduction in the treated effluent to meet the upcoming regulatory requirements (the “Phase II Project”).

3. In accordance with the Facilities Plan update, the City will also construct a 21,800 square foot building housing a centralized administration building, main control room for WRRF operations, expanded laboratory facilities, SCADA and staff facilities (the “WRRF Administration and Laboratory Building Project”). Together, the Phase II Project and the WRRF Administration and Laboratory Building Project, along with other projects identified from time to time by the City, are referred to herein as the “2025 Projects”.

4. The City is a charter city organized and existing under the Constitution and laws of the State of California, and as such the City is authorized to make and enforce all laws and regulations in respect to municipal affairs under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California and under Section 200 of the Charter of the City, subject only to such restrictions and limitations as may be provided in the Charter of the City and in the Constitution of the State of California.

5. Pursuant to its municipal affairs powers as a charter city, t he City Council of the City has adopted its Ordinance No. 24-05, enacting the City of Hayward Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 8, Article 22 of the Hayward Municipal Code (the “Bond Law”), under which the City is authorized to issue its revenue bonds for the purpose of financing improvements to the water enterprise of the City and the Wastewater System.

6. In order to provide financing for the 2025 Projects , the City Council has adopted its Resolution No. ______ on _____, 2025, authorizing the issuance of City of Hayward 2025 Wastewater Revenue Bonds in the aggregate principal amount of $[Principal Amount] (the “2025 Bonds”) under the provisions of the Bond Law.

7. The 2025 Bonds are payable from and secured by a pledge of and lien on the Net Revenues (as defined herein) of the Wastewater System, on a parity with the pledge and lien which secures the obligations of the City under that certain Agreement No. 05-

2 807-550-0 entered into between the City and the State Water Resources Control Board (the “Water Board”) effective July 27, 2006 (the “2006 SRF Agreement”).

8. In order to provide for the authentication and delivery of the Bonds (as defined herein), to establish and declare the terms and conditions upon which the Bonds are to be issued and secured and to secure the payment of the principal thereof and of the interest thereon, the City Council of the City has authorized the execution of this Indenture.

AGREEMENT:

In order to secure the payment of the principal of and the interest and redemption premium (if any) on all the Bonds under this Indenture according to their tenor, and to secure the performance and observance of all the covenants and conditions therein and herein set forth, and to declare the terms and conditions upon and subject to which the Bonds are to be issued and received, and in consideration of the premises and of the mutual covenants herein contained and of the purchase and acceptance of the Bonds by the Owners thereof, and for other valuable considerations, the receipt of which is hereby acknowledged, the City and the Trustee hereby covenant and agree with one another, for the benefit of the respective Owners from time to time of the Bonds, as follows:

ARTICLE I

DEFINITIONS; RULES OF CONSTRUCTION

SECTION 1.01. Definitions. Unless the context clearly otherwise requires or unless otherwise defined herein, the capitalized terms defined in Appendix A attached to this Indenture have the respective meanings specified in Appendix A when used in this Indenture.

SECTION 1.02. Authorization. Each of the parties hereby represents and warrants that it has full legal authority and is duly empowered to enter into this Indenture, and has taken all actions necessary to authorize the execution hereof by the officers and persons signing it.

SECTION 1.03. Interpretation.

(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and include the neuter, masculine or feminine gender, as appropriate.

(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof.

(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

3 ARTICLE II

ISSUANCE OF BONDS

SECTION 2.01. Authorization and Purpose of 2025 Bonds. The City has reviewed all proceedings heretofore taken and has found, as a result of such review, and hereby finds and determines that all things, conditions and acts required by law to exist, happen or be performed precedent to and in connection with t he issuance of the 2025 Bonds do exist, have happened and have been performed in due time, form and manner as required by law, and the City is now duly empowered, under each and every requirement of law, to issue the 2025 Bonds in the manner and form provided in this Indenture.

The City hereby authorizes the issuance of 2025 Bonds in the aggregate principal amount of $[Principal Amount] under the Bond Law for the purposes of providing funds to finance the acquisition, construction and installation of the 2025 Projects. The 2025 Bonds are authorized and issued under, and are subject to the terms of, this Indenture and the Bond Law. The 2025 Bonds shall be designated the “City of Hayward 2025 Wastewater Revenue Bonds.”

SECTION 2.02. Terms of the 2025 Bonds. The 2025 Bonds are issuable in fully registered form without coupons in denominations of $5,000 or any integral multiple thereof, so long as no 2025 Bond has more than one maturity date. The 2025 Bonds will be dated as of the Closing Date and will mature on March 1 in the years and in the respective principal amounts and bear interest (calculated on the basis of a 360-day year comprised of twelve 30-day months) at the respective rates per annum as set forth in the following table:

Maturity Date
(March 1)
Principal
Amount
Interest
Rate
Maturity Date
(March 1)
Principal
Amount
Interest
Rate

* 2025 Term Bond

Interest on the 2025 Bonds shall be payable from the Interest Payment Date next preceding the date of authentication thereof unless:

4 (a) a 2025 Bond is authenticated on or before an Interest Payment Date and after the close of business on the preceding Re cord Date, in which event it will bear interest from such Interest Payment Date,

(b) a 2025 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the Closing Date, or

(c) interest on any 2025 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.

Interest shall be payable on each Interest Payment Date to the persons in whose names the ownership of the 2025 Bonds is registered on the Registration Books at the close of business on the immediately preceding Record Date, except as provided below.

Interest on any 2025 Bond which is not punctually paid or duly provided for on any Interest Payment Date is payable to the person in whose name the ownership of such 2025 Bond is registered on the Registration Books at the close of business on a special record date for the payment of such defaulted interest to be f ixed by the Trustee, notice of which is given to such Owner by first-class mail not less than 10 days prior to such special record date.

The Trustee will pay interest on the 2025 Bonds by check of the Trustee mailed by first class mail, postage prepaid, on each Interest Payment Date to the Owners of the 2025 Bonds at their respective addresses shown on the Registration Books as of the close of business on the preceding Record Date. At the written request of the Owner of 2025 Bonds in an aggregate principa l amount of at least $1,000,000, which written request is on file with the Trustee as of any Record Date, the Trustee will pay interest on such 2025 Bonds on each succeeding Interest Payment Date by wire transfer in immediately available funds to such account of a financial institution within the United States of America as specified in such written request, which written request will remain in effect until rescinded in writing by the Owner. The Trustee will pay principal of the 2025 Bonds in lawful money of the United States of America by check of the Trustee upon presentation and surrender thereof at the Office of the Trustee.

SECTION 2.03. Redemption of 2025 Bonds.

(a) Optional Redemption. The 2025 Bonds maturing on or before March 1, 2035 are not subject to redemption prior to their respective stated maturities. The 2025 Bonds maturing on or after March 1, 2036, are subject to redemption in whole, or in part among maturities on such basis as set forth in a Certificate of the City filed with the Trustee, and in any event by lot within a maturity, at the option of the City, from any available source of funds, on any date on or after March 1, 2035, at a redemption price equal to 100% of the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium.

The City shall give the Trustee written notice of its intention to redeem 2025 Bonds under this subsection (a), and the manner of selecting such 2025 Bonds for redemption from among the maturities thereof and the redemption price thereof, in sufficient time to

5 enable the Trustee to give notice of such redemption in accordance with subsection (b) of this Section.

If some but not all of the Term 2025 Bond s have been redeemed under subsections (a) or (b) of this Section, the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term 2025 Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis, as determined by the Trustee.

(b) Mandatory Sinking Fund Redemption of Term 2025 Bonds. The Term 2025 Bonds are subject to mandatory sinking fund redemption in whole, or in part by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on June 1 in the years as set forth in the following table.

Sinking Fund Principal Amount
Redemption Date to be Redeemed
(March 1) or Purchased

(Maturity)

If some but not all of the Term Bonds have been redeemed under subsection (a), the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis, as determined by the Trustee.

(c) Notice of Redemption. The Trustee on behalf and at the expense of the City shall mail (by first class mail) notice of any redemption to the respective Owners of any 2025 Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affect the validity of the proceedings for the redemption of such 2025 Bonds or the cessation of the accrual of interest thereon. Such notice shall be prepared by the City and must state the date of the notice, the redemption date, the redemption place and the redemption price and must designate the CUSIP numbers, the 2025 Bond numbers and the maturity or mat urities (in the event of redemption of all of the 2025 Bonds of such maturity or maturities in whole) of the 2025 Bonds to be redeemed, and must require that such 2025 Bonds be then surrendered at the Office of the Trustee identified in such notice for redemption at the redemption price, giving notice also that further interest on such 2025 Bonds will not accrue from and after the redemption date. In addition, the redemption notice may state that the City has the right to rescind the notice as provided in subsection (d) of this Section, if applicable.

(d) Right to Rescind Notice of Optional Redemption . The City has the right to rescind any notice of the optional redemption of 2025 Bonds under subsection (a) of this Section by written notice to the Trustee on or prior to the dated fixed for redemption. Any

6 notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the 2025 Bonds then called for redemption, and such cancellation shall not constitute an Event of Default. The City and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption. The Trustee shall mail notice of such rescission of redemption in the same manner as the original notice of redemption was sent under subsection (d) of this Section.

(e) Manner of Redemption. Whenever provision is made in this Section for the redemption of fewer than all of the 2025 Bonds, the City shall designate the maturities of the 2025 Bonds to be redeemed , and the Trustee shall select the 2025 Bonds within a maturity by lot in any manner which the Trustee deems appropriate. For purposes of such selection, all 2025 Bond s will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate 2025 Bonds which may be separately redeemed.

(f) Partial Redemption of 2025 Bonds. If only a portion of any 2025 Bond is called for redemption, then upon surrender of such 2025 Bond the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new 2025 Bond or 2025 Bond s of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2025 Bond to be redeemed.

(g) Effect of Redemption. From and after the date fixed for redemption, if notice of redemption has been duly mailed and funds available for the payment of the principal of and interest (and premium, if any) on the 2025 Bonds so called for redemption have been duly provided, such 2025 Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. Unless otherwise directed in writing by the City, the Trustee shall cancel and destroy all 2025 Bonds redeemed under this Section in accordance with its customary procedures.

SECTION 2.04. Book Entry System.

(a) Original Delivery. The 2025 Bonds will be initially delivered in the form of a separate single fully registered bond (which may be typewritten) for each maturity of the 2025 Bonds. Upon initial delivery, the Trustee shall register the ownership of each 2025 Bond on the Registration Book s in the name of the Nominee. Except as provided in subsection (c), the ownership of all of the Outstanding 2025 Bonds shall be registered in the name of the Nominee on the Registration Books.

With respect to 2025 Bonds the ownership of which shall be registered in the name of the Nominee, the City and the Trustee has no responsibility or obligation to any Depository System Participant or to any person on behalf of which the Nominee holds an interest in the 2025 Bonds. Without limiting the generality of the immediately preceding sentence, the City and the Trustee has no responsibility or obligation with respect to (i) the accuracy of the records of the Depository, the Nominee or any Depository System Participant with respect to any ownership interest in t he 2025 Bonds, (ii) the delivery to any Depository System Participant or any other person, other than a 2025 Bond Owner as shown in the Registration Books, of any notice with respect to the 2025 Bond s,

7 including any notice of redemption, (iii) the selectio n by the Depository of the beneficial interests in the 2025 Bonds to be redeemed if the City elects to redeem the 2025 Bonds in part, (iv) the payment to any Depository System Participant or any other person, other than a 2025 Bond Owner as shown in the Registration Books, of any amount with respect to principal, premium, if any, or interest on the 2025 Bonds or (v) any consent given or other action taken by the Depository as Owner of the 2025 Bonds. The City and the Trustee may treat and consider the person in whose name each 2025 Bond is registered as the absolute owner of such 2025 Bond for the purpose of payment of principal of and premium, if any, and interest on such 2025 Bond, for the purpose of giving notices of redemption and other matters with res pect to such 2025 Bond , for the purpose of registering transfers of ownership of such 2025 Bond , and for all other purposes whatsoever. The Trustee shall pay the principal of and the interest and premium, if any, on the 2025 Bond s only to the respective O wners or their respective attorneys duly authorized in writing, and all such payments shall be valid and effective to fully satisfy and discharge all obligations with respect to payment of principal of and interest and premium, if any, on the 2025 Bonds to the extent of the sum or sums so paid. No person other than a 2025 Bond Owner shall receive a 2025 Bond evidencing the obligation of the City to make payments of principal, interest and premium, if any, under this Indenture. Upon delivery by the Depository to the City of written notice to the effect that the Depository has determined to substitute a new Nominee in its place, and subject to the provisions herein with respect to Record Dates, such new nominee shall become the Nominee hereunder for all purposes; and upon receipt of such a notice the City shall promptly deliver a copy of the same to the Trustee.

(b) Representation Letter. In order to qualify the 2025 Bonds for the Depository’s book-entry system, the City has previously executed and delivered to such Depository a letter representing such matters as shall be necessary to so qualify the 2025 Bonds. The execution and delivery of such letter shall not in any way limit the provisions of subsection (a) above or in any other way impose upon the City or the Trustee any obligation whatsoever with respect to persons having interests in the 2025 Bonds other than the 2025 Bond Owners. Upon the written acceptance by the Trustee, the Trustee shall agree to take all action reasonably necessary for all representations of the Trustee in such letter with respect to the Trustee to at all times be complied with. In addition to the execution and delivery of such letter, the City may take any other actions, not inconsistent with this Indenture, to qualify the 2025 Bonds for the Depository’s book-entry program.

(c) Transfers Outside Book-Entry System. If either (i) the Depository determines not to continue to act as Depository for the 2025 Bonds, or (ii) the City determines to terminate the Depository as such, then the City shall thereupon discontinue the book-entry system with such Depository. In such event, the Depository shall cooperate with the City and the Trustee in the issuance of replacement 2025 Bonds by providing the Trustee with a list showing the interests of the Depository System Participants in the 2025 Bonds, and by surrendering the 2025 Bonds, registered in the name of the Nominee, to the Trustee on or before the date such replacement 2025 Bonds are to be issued. The Depository, by accepting delivery of the 2025 Bond s, agrees to be bound by the provisions of this subsection (c). If, prior to the ter mination of the Depository acting as such, the City fails to identify another Securities Depository to replace the Depository, then the 2025 Bonds shall no longer be required to be registered in the Registration Books in the name of the Nominee, but shall be registered in whatever name or names the Owners transferring or exchanging 2025 Bonds shall designate, in accordance with the provisions hereof.

8 If the City determines that it is in the best interests of the beneficial owners of the 2025 Bonds that they be able to obtain certificated 2025 Bonds, the City may notify the Depository System Participants of the availability of such certificated 2025 Bonds through the Depository. In such event, the Trustee will issue, transfer and exchange 2025 Bonds as requ ired by the Depository and others in appropriate amounts; and whenever the Depository requests, the Trustee and the City shall cooperate with the Depository in taking appropriate action (i) to make available one or more separate certificates evidencing the 2025 Bond s to any Depository System Participant having 2025 Bond s credited to its account with the Depository, or (ii) to arrange for another Securities Depository to maintain custody of a single certificate evidencing such 2025 Bonds, all at the City’s expense.

(d) Payments to the Nominee . Notwithstanding any other provision of this Indenture to the contrary, so long as any 2025 Bond is registered in the name of the Nominee, all payments with respect to principal of and interest and premium, if any, on such 2025 Bond and all notices with respect to such 2025 Bond shall be made and given, respectively, as provided in the letter described in subsection (b) of this Section or as otherwise instructed by the Depository.

SECTION 2.05. Form and Execution of Bonds. The 2025 Bonds, the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon, are set forth in Appendix B attached hereto and by this reference incorporated herein, with necessary or appropriate variations, omissions and insertions, as permitted or required by this Indenture.

The form of additional Bonds , the form of Trustee’s certificate of authentication, and the form of assignment to appear thereon shall be set forth in a Supplemental Indenture.

The City Manager of the City shall execute, and the City Clerk of the City shall attest, each Bond. Either or both of such signatures may be made manually or may be affixed by facsimile thereof. If any officer whose signature appears on any Bond ceases to be such officer before the Closing Date, such signature will nevertheless be as effective as if the officer had remained in office until the Closing Date. Any Bond may be signed and attested on behalf of the City by such persons as at the actual date of the execution of such Bond are the proper officers of the City, duly authorized to execute debt instruments on behalf of the City, although on the date of such Bond any such person was not an officer of the City.

Only those Bonds bearing a certificate of authentication in the form set forth in Appendix B or the applicable Supplemental Indenture, manually executed and dated by the Trustee, are valid or obligatory for any purpose or entitled to the benefits of th is Indenture, and such certificate of the Trustee is conclusive evidence that such Bonds have been duly authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

SECTION 2.06. Transfer and Exchange of Bonds.

(a) Transfer. Any Bond may, in accordance with its terms, be transferred, upon the Registration Books, by the person in whose name it is registered, in person or by a duly authorized attorney of such person, u pon surrender of such Bond to the Trustee at its Office for cancellation, accompanied by delivery of a written instrument of transfer in a

9 form acceptable to the Trustee, duly executed. The Trustee shall collect any tax or other governmental charge on the transfer of any Bonds under this Section. Whenever any Bond or Bonds shall be surrendered for transfer, the City shall execute and the Trustee shall authenticate and deliver to the transferee a new Bond or Bonds of like series, interest rate, maturity an d aggregate principal amount. The City shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any transfer of Bonds.

(b) Exchange. The Bonds may be exchanged at the Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations and of the same series, interest rate and maturity. The Trustee shall collect any tax or other governmental charge on the exchange of any Bonds under this subsection (b). The C ity shall pay the cost of printing Bonds and any services rendered or expenses incurred by the Trustee in connection with any exchange of Bonds.

(c) Limitations. The Trustee may refuse to transfer or exchange, under the provisions of this Section, any Bo nds selected by the Trustee for redemption under Section 2.03, or any Bonds during the period established by the Trustee for the selection of Bonds for redemption.

SECTION 2.07. Registration Books. The Trustee will keep or cause to be kept, at its Office, sufficient records for the registration and registration of transfer of the Bonds, which must at all times during normal business hours, and upon reasonable notice, be open to inspection by the City; and, upon presentation for such purpose, the Trustee shall, under such reasonable regulations as it may prescribe, register or transfer or cause to be registered or transferred, on the Registration Books, Bonds as hereinbefore provided.

SECTION 2.08. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond becomes mutilated, the City, at the expense of the Owner of such Bond, shall execute, and the Trustee shall thereupon authenticate an d deliver, a new Bond of like tenor in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. The Trustee shall cancel every mutilated Bond surrendered to it in accordance with its customary p rocedures and deliver such mutilated Bond to, or upon the order of, the City. If any Bond is lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Trustee and, if such evidence is satisfactory and if indemnity satisfactory to the Trustee is given, the City, at the expense of the Owner, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor in lieu of and in substitution for the Bond so lost, destroyed or stolen. The Trustee may require payment of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses that may be incurred by the Trustee in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen will constitute an original additional contractual obligation on the part of the City whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be equally and proportionately entitled to the benefits of this Indenture with all other Bonds issued under this Indenture.

Notwithstanding any other provision of this Section, in lieu of delivering a new Bond for which principal has become due for a Bond which has been mutilated, lost, destroyed or stolen, the Trustee, at the written direction of the City, shall make payment of such Bond in accordance with its terms upon receipt of indemnity satisfactory to the Trustee.

10 SECTION 2.09. CUSIP Numbers. The City in issuing the Bonds may use “CUSIP” numbers (if then generally in use), and, if so, the Trustee shall use “CUSIP” numbers in notices of redemption as a convenience to Owners; provided that the Trustee shall have no liability for any defect in th e “CUSIP” numbers as they appear on any Bond, notice or elsewhere, and, provided further that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Bonds or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Bonds, and any such redemption shall not be affected by any defect in or omission of such numbers. The City will promptly notify the Trustee in writing of any change in the "CUSIP" numbers.

SECTION 2.10. Validity of Bonds. The recital contained in the Bonds that they are issued pursuant to the laws of the State of California is conclusive evidence of their validity and of the regularity of their issuance.

ARTICLE III

ISSUE OF 2025 BONDS; ACQUISITION AND
CONSTRUCTION OF THE 2025 PROJECTS

SECTION 3.01. Issuance of 2025 Bonds. Upon the execution and delivery of this Indenture, the City shall execute and deliver 2025 Bonds in the aggregate principal amount of $[Principal Amount] to the Trustee and the Trustee shall authenticate and deliver the 2025 Bonds to the Original Purchaser upon receipt of a Request of the City therefor.

SECTION 3.02. Deposit and Application of Proceeds . On the Closing Date, the Trustee shall apply the proceeds of the 2025 Bonds as follows:

(a) The Trustee shall deposit the amount of $________ in the 2025 Costs of Issuance Fund.

(b) The Trustee shall deposit the amount of $________ in the Bond Service Fund, representing capitalized interest on the 2025 Bonds through September 1, 2025.

(c) The Trustee shall deposit the amount of $ ______, constituting the remainder of the Bond proceeds, in the 2025 Project Fund.

SECTION 3.03. 2025 Costs of Issuance Fund. There is hereby established a separate fund to be known as the “2025 Costs of Issuance Fund,” to be held by the Trustee in trust.

The Trustee shall disburse moneys in the 2025 Costs of Issuance Fund from time to time to pay Costs of Issuance related to the 2025 Bonds upon submission of a Request of the City stating (a) the person to whom payment is to be made, (b) the amounts to be paid, (c) the purpose for which the obligation was incurred, (d) that such payment is a

11 proper charge against the 2025 Costs of Issuance Fund, and (e) that such amounts have not been the subject of a prior Request of the City; in each case together with a statement or invoice for each amount requested thereunder.

On September 1, 2025, the Trustee shall transfer any amounts remaining in the 2025 Costs of Issuance Fund to the 2025 Project Fund and the Trustee shall thereupon close the 2025 Costs of Issuance Fund.

SECTION 3.04. 2025 Project Fund. The Trustee shall establish and maintain a separate fund to be known as the “ 2025 Project Fund”. Except as otherwise provided herein, moneys in the 2025 Project Fund shall be used solely for the payment of the Project Costs. The Trustee shall disburse moneys in the 2025 Project Fund from time to time to pay 2025 Project Costs (or to reimburse the City for payment of 2025 Project Costs) in accordance with Requisitions of the City filed with the Trustee (in the form as set forth in Appendix C hereto). Each such Requisition must state, with respect to each payment to be made thereby, (i) the name and address of the firm or corporation to whom payment is to be made, (ii) the amount and purpose of the payment and (iii) that each p ayment constitutes a 2025 Project Cost. The Trustee has no responsibility for payments made in accordance with this Section. The City shall maintain accurate records showing all disbursements from the 2025 Project Fund.

Upon the receipt by the Trustee o f a Certificate of the City stating that the 2025 Projects have been completed, the Trustee shall withdraw from the 2025 Project Fund and deposit in the Bond Service Fund all amounts remaining on deposit in the 2025 Project Fund, other than amounts estimat ed by the City (as identified in such Certificate) to be required to pay future Project Costs. Upon the filing with the Trustee of a Certificate of the City stating that no further amounts are intended to be requisitioned from the 2025 Project Fund, the T rustee shall thereupon close the 2025 Project Fund and transfer all remaining amounts therein to the Bond Service Fund.

SECTION 3.05. Acquisition and Construction of the 2025 Projects. The City hereby agrees with due diligence to supervise and provide for, or cause to be supervised and provided for, the acquisition, construction and installation of the 2025 Projects in accordance with the plans and specifications, purchase orders, construction contracts and other documents relating thereto and approved by the City under all applicable requirements of law. All contracts for, and all work relating to, the acquisition, construction and installation of the 2025 Projects are subject to all applicable provisions of law relating to the acquisition and construction of public works by the City.

Not later than 30 days following the completion of the 2025 Projects, the City shall file a Certificate of the City with the Trustee which ( a) states that the construction of the 2025 Projects has been completed (not just the portion of the 2025 Projects funded with proceeds of the 2025 Bonds), (b) identifies the total Project Costs thereof, and (c) identifies the amounts, if any, to be reserved in the 2025 Project Fund for payment of future Project Costs.

The City has the right to specify the exact scope, nature and identification of the 2025 Projects and the respective components thereof. The City may from time to time amend any such plans and specifications, and thereby change or modify the description of the 2025 Projects or any component thereof

12 ARTICLE IV

REVENUES; FLOW OF FUNDS

SECTION 4.01. Pledge of Net Revenues. The Bonds are secured by a first pledge of and lien on all of the Net Revenues, on a parity with the pledge which secures the 2006 SRF Agreement and all other outstanding Parity Obligations. In addition, the Bonds are secured by a pledge of all of the moneys in the Sinking Fund and the Bond Service Fund, including all amounts derived from the investment of such moneys.

The Bonds, the 2006 SRF Agreement and all other Parity Obligations are equally secured by a pledge, charge and lien upon the Net Revenues and such moneys without priority for series, issue, number or date and the payment of the interest on and principal of the Bonds shall be and are secured by an exclusive pledge, charge and lien upon the Net Revenues and such moneys. So long as any of the Bonds are Outstanding, the Net Revenues and such moneys may not be used for any other purpose; except that out of the Net Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by Section 4.02.

SECTION 4.02. Receipt, Deposit and Application of Revenues.

(a) Deposits into the Wastewater Fund. The City has previously establishe d the Wastewater Fund, which it will continue to hold and maintain for the purposes and uses set forth herein. The City shall deposit all Revenues in the Wastewater Fund promptly upon the receipt thereof, and shall apply amounts in the Wastewater Fund solely for the uses and purposes set forth herein and in the Parity Obligation Documents.

(b) Payment of Operation and Maintenance Costs. The City may at any time use and apply moneys in the Wastewater Fund for the payment of the Operation and Maintenance Costs of the Wastewater System (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs the payment of which is not immediately required).

(c) Deposits into the Bond Service Fund; Application of Mo neys in the Bond Service Fund. On or before the 3rd Business Day preceding each Interest Payment Date, so long as any Bonds remain Outstanding hereunder, the City shall withdraw from the Wastewater Fund and pay to the Trustee for deposit into the Bond Ser vice Fund (which the Trustee shall establish and hold in trust hereunder) an amount which, together with other available amounts then on deposit in the Bond Service Fund, is at least equal to the aggregate amount of principal of and interest coming due and payable on the Bonds on such Interest Payment Date, including the principal amount of any Term Bonds upon the mandatory sinking fund redemption thereof under Section 2.03(b) and the provisions of one or more Supplemental Indentures.

Payment of the debt service on the Bonds and the principal of and interest on any Parity Obligations will be made without preference or priority. If the amount of Net Revenues on deposit in the Wastewater Fund are any time insufficient to enable the City

13 to pay when due the d ebt service on the Bonds and the principal of and interest on any Parity Obligations, such payments will be made on a pro rata basis.

The Trustee shall apply amounts in the Bond Service Fund solely for the purpose of (i) paying the interest on the Outstan ding Bonds when due and payable (including accrued interest on any Bonds purchased or redeemed hereunder), (i i) paying the principal of the Bonds at the maturity thereof , and (iii) paying the principal amount of the Term Bonds upon the mandatory sinking fu nd redemption thereof under Section 2.03(b) and the provisions of one or more Supplemental Indentures . Upon the payment of all Outstanding Bonds, the Trustee shall transfer any moneys remaining in the Bond Service Fund to the City for deposit into the Wastewater Fund.

On the Closing Date, the Trustee will deposit proceeds of the 2025 Bonds in the Bond Service Fund in accordance with Section 3.02(b), and such amounts will be used to pay interest on the 2025 Bonds on September 1, 2025 and, to the extent available March 1, 2026.

(d) Management of the Wastewater Fund; Other Uses of Moneys in the Wastewater Fund. The City shall manage, conserve and apply moneys in the Wastewater Fund in such a manner that all deposits required to be made under this Section and under the Parity Obligation Documents will be made at the times and in the amounts so required.

Subject to the foregoing sentence, so long as no Event of Default has occurred and is continuing, the City may at any time use and apply moneys in the Wastewater Fund for any one or more of the following purposes:

(i) the acquisition and construction of extensions and betterments to the Wastewater System;

(ii) the redemption or prepayment of any of the Bonds , the 2006 SRF Agreement and any other Parity Obligations which are then subject to redemption or prepayment or the purchase thereof from time to time in the open market, at prices and in such manner, either at public or private sale, or otherwise, as the City in its discretion may determine; or

(iii) any other lawful purpose of the City relating to the Wastewater System, including deposits into the Rate Stabilization Fund.

SECTION 4.03. Investments.

(a) Investment of Funds Held by City. All moneys in the Wastewater Fund may be invested by the City from time to time in any securities in which the City may legally invest funds subject to its control.

(b) Investment of Funds Held by Trustee . The Trustee shall invest moneys in the funds and accounts held by it hereunder in Permitted Investments specified in the Request of the City delivered to the Trustee at least two Business Days in advance of the making of such investments. In the absence of any such direction from the City, the Trustee shall hold moneys uninvested.

14 (c) General Investment Provisions. Obligations purchased as an investment of moneys in any fund or account shall be deemed to be part of such fund or account.

Whenever in this Indenture the City is required to transfer any moneys to the Trus tee, such transfer may be accomplished by transferring a like amount of Permitted Investments. All interest or gain derived from the investment of amounts in any of the funds or accounts held by the Trustee hereunder shall be retained in the respective fu nd or account from which such investment was made. For purposes of acquiring any investments hereunder, the Trustee may commingle funds held by it hereunder upon receipt by the Trustee of the Request of the City. The Trustee may act as principal or agent in the acquisition or disposition of any investment and may impose its customary charges therefor. The Trustee shall incur no liability for losses , taxes, fees or other charges arising from any investments, reinvestments or liquidation of investments made under this Section.

The Trustee shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Trustee or brokers selected by the City. Upon the City’s election, such statements will be d elivered via the Trustee’s online service and upon electing such service, paper statements will be provided only upon request. The City waives the right to receive brokerage confirmations of security transactions effected by the Trustee as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Trustee will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.

The Trustee or any of its affiliates may act as sponsor, advisor or manager in connection with any investments made by the Trustee hereunder.

SECTION 4.04. Establishment of Rate Stabilization Fund. The City has the right (but not the obligation) at any time to establish a fund to be held by it and administered in accordance with this Section, for the purpose of stabilizing the rates and charges imposed by the City with respect to the Wastewater System. From time to time the City may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, as the City may determine, provided that deposits for each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the end of such Fiscal Year.

The City may, but is not required to, withdraw amounts on deposit in the Rate Stabilization Fund and deposit such amounts in the Wastewater Fund in any Fiscal Year, such withdrawals for a Fiscal Year to be made until (but not after) one hundred eighty (180) days after the end of such Fiscal Year . Amounts so transferred from the Rate Stabilization Fund to the Wastewater Fund during the time specified in the previous sentence constitute Revenues for that Fiscal Year ( except to the extent provided in Section 5.07 and Section 5.08 ), and will be applied for the purposes of the Wastewater Fund. Amounts on deposit in the Rate Stabilization Fund are not pledged to and do not secure the Bonds or any issue of Parity Obligations. All interest or other earnings on deposits in the Rate Stabilization Fund will be retained therein or, at the option of the City, be applied for any other lawful purposes. The City has the right at any time to withdraw any or all amounts on deposit in the Rate Stabilization Fund and apply such amounts for any other lawful purposes of the City.

15 SECTION 4.05. Valuation and Disposition of Investments.

(a) Except as otherwise provided in subsection (b) of this Section, the City covenants that all investments of amounts deposited in any fund or account created by or under this Indenture, or otherwise containing gross proceeds of the Bonds (within the meaning of Section 148 of the Tax Code) shall be acquired, disposed of and valued (as of the date that valuation is required by this Indenture or the Tax Code) at Fair Market Value. The Trustee has no duty in connection with the determination of Fair Market Value other than to follow the investment directions of the City in any Certificate or Request of the City.

(b) Investments in funds or accounts (or portions thereof) that are subject to a yield restriction under applicable provisions of the Tax Code shall be valued at cost thereof (consisting of present value thereof within the meaning of Section 148 of the Tax Code); provided that the City must inform the Trustee which funds are subject to a yield restriction, and must provide the Trustee with any necessary valuation criteria or formulae.

(c) Except as provided in the proceeding subsection (b), for the purpose of determining the amount in any fund, the Trustee shall value Permitted Investments credited to such fund at least annually at the Fair Market Value thereof. The Trustee may utilize computerized securities pricing services that may be available to it, including those available through its regular accounting system. If and as directed by the City in writing, the Trustee shall sell or present for redemp tion any Permitted Investment so purchased by the Trustee whenever it is necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Permitted Investment is credited, and the Trustee has no lia bility or responsibility for any loss , tax, fee or other charge resulting therefrom.

ARTICLE V

COVENANTS OF THE CITY

SECTION 5.01. Punctual Payment; Compliance with Documents. The City shall punctually pay or cause to be paid the interest and principal to become due with respect to all of the Bonds in strict conformity with the terms of the Bonds and of this Indentu re, and will faithfully observe and perform all of the conditions, covenants and requirements of this Indenture.

SECTION 5.02. Discharge of Claims . The City covenants that in order to fully preserve and protect the priority and security of the Bonds the City shall pay from the Revenues and discharge all lawful claims for labor, materials and supplies furnished for or in connection with the Wastewater System which, if unpaid, may become a lien or charge upon the Net Revenues prior or superior to the lien of the Bonds and materially impair the security for the Bonds. The City shall also pay from the Revenues all taxes and assessments or other governm ental charges lawfully levied or assessed upon or in respect of the Wastewater System or upon any part thereof or upon any of the Revenues therefrom.

16 SECTION 5.03. Operation of Wastewater System in Efficient and Economical Manner. The City covenants and agrees to operate the Wastewater System in an efficient and economical manner and to operate, maintain and preserve the Wastewater System in good repair and working order.

SECTION 5.04. Sale or Eminent Domain of Wastewater System.

(a) Except as provided herein, the City covenants that the Wastewater System will not be encumbered, sold, leased, pledged, any charge placed thereon, or otherwise disposed of, as a whole or substantially as a whole if such encumbrance, sale, lease, pledge, charge or other disposition would materially impair the ability of the City to pay the principal of or interest on all outstanding Parity Obligations, or would materially adversely affect its ability to comply with the terms of this Indenture or any Parity Obligation Documents. The City may not enter into any agreement which im pairs the operation of the Wastewater System or any part of it necessary to secure adequate Net Revenues to pay the Bonds and all outstanding Parity Obligations, or which otherwise would impair the rights of the Bond Owners with respect to the Net Revenues. If any substantial part of the Wastewater System that is material to the operation of the Wastewater System is sold, the payment therefor must either (a) be used for the acquisition or construction of improvements and extensions or replacement facilitie s or (b) be applied to redeem the Bonds or any Parity Obligations in accordance with this Indenture and the Parity Obligation Documents, respectively.

(b) If all or any part of the Wastewater System shall be taken by eminent domain proceedings, any amounts received as awards shall be deposited in an Insurance and Condemnation Fund established and held by the City and applied as follows:

(i) If the City has determined that it needs to use the award to make additions, betterments, extensions or improvements to the Wastewater System in order for the City to comply with Section 5.03, the City shall use such award to make such additions, betterments, extensio ns or improvements. If the amount of such award shall exceed the costs of such additions, betterments, extensions or improvements that are required for the City to comply with Section 5.03, the excess shall be applied to any lawful purpose of the Wastewat er System, including (i) the payment of debt service on the Bonds and any Parity Obligations , (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indenture and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(ii) If the City has determined that it does not need to use the award to make additions, betterments, extensions or improvements to the Wastewater System in order for the City to comply with Section 5. 03, the City shall use such award for any lawful purpose of the Wastewater System, including (i) the payment of debt service on the Bonds and any Parity Obligations , (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indenture and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(iii) Notwithstanding the foregoing, to the extent the award relates to improvements financed by one or more series of the Bonds, until such time as such Bonds have been redeemed or paid at maturity, (i) any use of such related award

17 shall comply with Section 5. 10 hereof or similar applicable provisions of Supplemental Indentures, (ii) such related award may not pay debt service on or prepay, discharge or redeem any others Bonds or other Parity Obligations , (iii) if such related award will be used to pay debt service on or prepay, discharge or redeem such Bonds, they cannot be investe d at a yield that is greater than the arbitrage yield of such Bonds and (iv) if such Bonds are refunded by tax -exempt refunding bonds (“Refunding Bonds”), such related award in the Insurance and Condemnation Fund shall be used for purposes not inconsistent with Section 5.10 hereof or similar applicable provisions of Supplemental Indentures.

SECTION 5.05. Insurance.

(a) The City will at all times maintain with responsible insurers all such insurance on the Wastewater System as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to the Wastewater System.

(b) All amounts collected from insurance against accident to or destruction of any por tion of the Wastewater System shall be deposited in an Insurance and Condemnation Fund established and held by the City and applied as follows:

(i) If the City has determined that it needs to use the insurance proceeds to make additions, betterments, exte nsions or improvements to the Wastewater System in order for the City to comply with Section 5.03, the City shall use such insurance proceeds to make such additions, betterments, extensions or improvements. If the amount of such insurance proceeds shall exceed the costs of such additions, betterments, extensions or improvements that are required for the City to comply with Section 5.03, the excess shall be applied to any lawful purpose of the Wastewater System, including (i) the payment of debt service on the Bonds and any Parity Obligations, (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indenture and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(ii) If the City has determined that it does not need to use the insurance proceeds to make additions, betterments, extensions or improvements to the Wastewater System in order for the City to comply with Section 5.03, the City shall use such insurance proceeds for any lawful purpose of the Wastewater System, including (i) the payment of debt service on the Bonds and any Parity Obligations, (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indentu re and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(iii) Notwithstanding the foregoing, to the extent the insurance proceeds relate to improvements financed by one or more series of the Bonds, until such time as such Bonds have been redeemed or paid at maturity, (i) any use of such related insurance proceeds shall comply with Section 5.10 hereof or similar applicable provisions of Supplemental Indentures, (ii) such related insurance proceeds may not pay debt service on or prepay, discharge or redeem any others Bonds or other Parity Obligations, (iii) if such related insurance proceeds will be used to pay debt service on or prepay, discharge or redeem such Bonds, they canno t be invested at a yield

18 that is greater than the arbitrage yield of such Bonds and (iv) if such Bonds are refunded by tax -exempt refunding bonds (“Refunding Bonds”), such related insurance proceeds in the Insurance and Condemnation Fund shall be used for purposes not inconsistent with Section 5.10 hereof or similar applicable provisions of Supplemental Indentures.

The City shall also maintain, with responsible insurers, worker's compensation insurance and insurance against public liability and property damage to the extent reasonably necessary to protect the City, the Trustee and the Owners of the Bonds. The Trustee has no liability to determine whether the City is in compliance with the provisions of this Section.

SECTION 5.06. Records and Accounts. The City will keep proper books of record and accounts of the Wastewater System, separate from all other records and accounts, in which complete and correct entries shall be made of all transactions relat ing to the Wastewater System . Said books shall, upon reasonable request, be subject to the inspection of the Trustee (who shall have no duty to inspect) and the Owners of not less than 10% of the Outstanding Bonds or their representatives authorized in writing.

The City will cause the books and accounts of the Wastewater System to be audited annually by an Independent Accountant and will make available for inspection by the Bond Owners at the Office of the Trustee, upon reasonable request, a copy of the report of such Independent Accountant. The City will furnish a copy of such statements, upon reasonable request, to the Trustee (who shall have no duty to inspect) and any Bond Owner.

SECTION 5.07. Rates and Charges.

(a) Covenant Regarding Revenues. The City will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Wastewater System during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to pay the following amounts in the following order:

(i) all Operation and Maintenance Costs estimated by the City to become due and payable in the Fiscal Year;

(ii) the principal of and interest on all outstanding Bonds, the 2006 SRF Agreement and all other outstanding Parity Obligations as they become due and payable during the Fiscal Year, without preference or priority;

(iii) all amounts, if any, required to restore the balance in any reserve funds established for the Bonds and any other Parity Obligations to their required levels; and

(iv) All payments required to meet any other obligations of the City which are charges, lien s, encumbrances upon, or which are otherwise payable from, the Revenues or the Net Revenues during such Fiscal Year.

19 (b) Covenant Regarding Net Revenues. In addition to the covenant set forth in the preceding clause (a) of this Section, the City will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Wastewater System during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to the sum of (i) 110% of the amount described in the preceding clause (a)(ii) for such Fiscal Year and (ii) 100% of (A) the amount described in the preceding clause (a)(ii) and (B) debt service payable during such Fiscal Year on all Subordinate Obligations.

For the purposes of this Section 5.07(b), the Net Revenues may include transfers from the Rate Stabilization Fund to the Wastewater Fund for such Fiscal Year , if any, provided that the Net Revenues excluding such transfers are at least equal to the sum of (i) the amount described in the preceding clause (a)(ii) for such Fiscal Year and (ii) debt service payable during such Fiscal Year on all Subordinate Obligations.

SECTION 5.08. Issuance of Parity Obligations. The City may issue additional Parity Obligations from time to time in such principal amount as it determines, subject to the following conditions precedent:

(a) No Event of Default (or no event with respect to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing.

(b) Net Revenues for the period of 12 consecutive months within the 18 months immediately preceding the issuance of the proposed additional Parity Obligations based on the City’s audited financial statement(s) for such period or a certificate of an Independent Accountant employed by the City, were at least equal to 110% of the debt service on the Outstanding Bonds, the 2006 SRF Loan and any other outstanding Parity Obligations in the Fiscal Year immediately succeeding the Fiscal Year in which the additional Parity Obligation is issued or incurred.

(c) (i) Estimated Net Revenues for the Fiscal Year in which the proposed Additional Parity Obligation is issued, and (ii) projected Net Revenues for the five Fiscal Years immediately following the Fiscal Year in which the additional Parity Obligation is issued, will be at least equal to 110% of the Debt Service in such Fiscal Year(s) for all Outstanding Bonds, all outstanding Parity Obligations and the proposed additional Parity Obligation. For purposes of clause (c)(ii), (A) if all or a portion of the interest due in such five Fiscal Years on any Outstanding Bonds, outstanding Parity Obligations or the proposed additional Parity Obligation is being or will be capitalized from the proceeds of such Outstanding Bonds, outstanding Parity Obligations or the proposed additional Parity Obligation, the five Fiscal Year period will commence with the first Fiscal Year beginning after the last capitalized interest payment, (B) projected Net Revenues for each Fiscal Year in the five Fiscal Year period may include Revenues arising from increases in the rates and charges estimated to be fixed and prescribed or received for the services of the Wastewater System and which are economically feasible and reasonably considered necessary based on projected operations for such Fiscal Year, and

20 (C) Net Revenues for a Fisca l Year may be increased by transfers from the Rate Stabilization Fund to the Wastewater Fund, provided that Net Revenues excluding such transfers are at least equal to the sum of (i) the amount described in the preceding clause (a)(ii) for such Fiscal Year and (ii)debt service payable during such Fiscal Year on all Subordinate Obligations. .

(d) The issuance of such Parity Obligations shall comply with all conditions to the issuance thereof as set forth in the applicable provisions of the Parity Obligation Documents.

(e) The City shall deliver to the Trustee a Certificate of the City certifying, and an opinion of Bond Counsel stating, that the conditions precedent to the issuance of such Parity Obligations set forth in the foregoing subsections (a), (b) and (c) of this Section have been satisfied.

SECTION 5.09. Superior and Subordinate Obligations.

(a) The City shall not issue or incur any additional bonds or other obligations having any priority in payment of principal or interest out of the Revenues or the Net Revenues over the Bonds.

(b) Nothing herein limits or affects the ability of the City to is sue or incur ( i) Parity Obligations under Section 5.08, or (ii) Subordinate Obligations.

SECTION 5.10. Tax Covenants Relating to 2025 Bonds.

(a) Generally. The City will take all actions necessary to assure the exclusion of interest on the 2025 Bonds from the gross income of the Owners of the 2025 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Tax Code as in effect on the date of issuance of the 2025 Bonds.

(b) Private Activity Bond Limitation. The City shall assure that the proceeds of the 2025 Bonds are not used in a manner which would cause the 2025 Bonds to become “private activity bonds” within the meaning of section 141(a) of the Tax Code or to meet the private loan financing test of Section 141(c) of the Tax Code.

(c) Federal Guarantee Prohibition. The City shall not take any action or permit or suffer any action to be taken if the result of the same would be to cause the 2025 Bonds to be “federally guaranteed” within the meaning of Section 149(b) of the Tax Code.

(d) No Arbitrage. The City shall not take, or permit or suffer to be taken by th e Trustee or otherwise, any action with respect to the 2025 Bond proceeds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the Closing Date, would have caused the 2025 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Tax Code.

(e) Rebate of Excess Investment Earnings. The City shall calculate or cause to be calculated all amounts of excess investment earnings with respect to the 2025 Bonds which are required to be rebated to the United States of America under Section 148(f) of the Tax Code, at the times and in the manner required under the Tax Code. The City shall

21 pay when due an amount equal to excess investment earnings to the United States of America in such amounts, at such times and in such manner as may be required under the Tax Code, such payments to be made from any source of legally available funds of the City. The City shall keep or cause to be kept, and retain or cause to be retained for a period o f six years following the retirement of the 2025 Bonds, records of the determinations made under this subsection (e).

(f) Record Retention . The City will retain its records of all accounting and monitoring it carries out with respect to the 2025 Bonds for at least 3 years after the 2025 Bonds mature or are redeemed (whichever is earlier); however, if the 2025 Bonds are redeemed and refunded, the City will retain its records of accounting and monitoring at least 3 years after the earlier of the maturity or redemption of the obligations that refunded the 2025 Bonds.

(g) Compliance with Tax Certificate. The Issuer will comply with the provisions of the Certificate as to Arbitrage and the Certificate Regarding Use of Proceeds with respect to the 2025 Bonds, which are incorporated herein as if fully set forth herein. The covenants of this Section will survive payment in full or defeasance of the 2025 Bonds.

The Trustee has no duty to monitor the compliance by the City with any of the covenants contained in this Section.

SECTION 5.11. Compliance With Parity Obligation Documents . The City will observe and perform all of the covenants, agreements and conditions on its part required to be observed and performed under all Parity Obligation Documents. The City will not take or omit to take any action within its control which would, or which if not corrected with the passage of time would, constitute an event of default under and within the meaning of any Parity Obligation Documents.

SECTION 5.12. Continuing Disclosure. The City will comply with and carry out all of the provisions of the Continuing Disclosure Certificate , which has been executed and delivered by the City on the Closing Date. Notwithstanding any other provision hereof, failure of the City to comply with the Continuing Disclosure Certificate does not constitute an Event of Default hereunder; provided, however, that any Participating Underwriter (as such term is defined in the Continuing Disclosure Certificate) or any Owner or beneficial owner of the 2025 Bonds may take such actions as may be necessary and appropriate, including seeking specific performance by court order, to cause the City to comply with its obligations under this Section.

SECTION 5.13. Further Assurances. The City will adopt, make, execute and deliver any and all such further resolutions, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture, and for the better assuring and confirming unto the Owners of the Bonds, the Trustee the rights and benefits provided in this Indenture.

22 ARTICLE VI

THE TRUSTEE

SECTION 6.01. Duties, Immunities and Liabilities of Trustee.

(a) Performance of Duties. The Trustee shall, prior to the occurrence of an Event of Default, and after the curing or waiving of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or duties will be read into this Indenture against the Trustee. The Trustee shall, during the existence of any Event of Default (which h as not been cured or waived), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

(b) Removal of Trustee. The City may remove the Trustee at any time, and shall remove the Trustee (i) if at any time requested to do so by an instrument or concurrent instruments in writing signed by the Owners of not less than a majority i n aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or (ii) if at any time the Trustee ceases to be eligible in accordance with subsection (e) of this Section, or becomes incapable of acting, or is adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property is appointed, or any public officer takes control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation. The City m ay accomplish such removal by giving 30 days written notice to the Trustee, whereupon the City will appoint a successor Trustee by an instrument in writing.

(c) Resignation by Trustee. The Trustee may at any time resign by giving written notice of such resignation to the City, and by giving notice of such resignation by first class mail, postage prepaid, to the Bond Owners at their respective addresses shown on the Registration Books. Upon receiving such notice of resignation, the City will promptly appoint a successor Trustee by an instrument in writing.

(d) Appointment of Successor Trustee . Any removal or resignation of the Trustee and appointment of a successor Trustee becomes effective upon acceptance of appointment by the successor Trustee. If no successor Trustee has been appointed and accepted appointment within 45 days following giving notice of removal or notice of resignation as aforesaid, the resigning Trustee, any Owner (on behalf of such Owner and all other Owners) may petition , at the City ’s expense, any federal or state court for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture shall s ignify its acceptance of such appointment by executing and delivering to the City and to its predecessor Trustee a written acceptance thereof, and to the predecessor Trustee an instrument indemnifying the predecessor Trustee for any and all costs, liabilities, expenses or claims arising during the time the successor Trustee serves as Trustee hereunder, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless, upon the receipt by the predecessor Trustee of the Request of the City or the request of the successor Trustee, and the payment of all amounts owed to it, such predecessor Trustee shall execute and

23 deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trus ts and conditions herein set forth. Upon request of the successor Trustee, the City will execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such mo neys, estates, properties, rights, powers, trusts, duties and obligations. Upon acceptance of appointment by a successor Trustee as provided in this subsection, the City shall mail or cause the successor Trustee to mail, by first class mail postage prepaid, a notice of the succession of such Trustee to the trusts hereunder to S&P, and to the Owners at the addresses shown on the Registration Books. If the City fails to mail such notice within 15 days after acceptance of appointment by the successor Trustee, the successor Trustee shall cause such notice to be mailed at the expense of the City.

(e) Qualifications of Trustee. Any Trustee appointed under the provisions of this Section in succession to the Trustee shall:

(i) be a company or bank having trust powers,

(ii) have a corporate trust office in the State of California,

(iii) have (or be part of a bank holding company system whose bank holding company has) a combined capital and surplus of at least $50,000,000, and

(iv) be subject to supervision or examination by federal or state authority.

If such bank or company publishes a report of condition at least annually, under law or to the requirements of any supervising or examining authority above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. In case at any time the Trustee shall cease to be eligible in accordance with th e provisions of this subsection (e), the Trustee shall resign immediately in the manner and with the effect specified in subsection (c) of this Section.

The City will maintain a Trustee which is qualified under the provisions of the foregoing provisions of this subsection (e), so long as any Bonds are Outstanding.

SECTION 6.02. Merger or Consolidation . Any bank or company into which the Trustee may be merged or converted or with which either of them may be consolidated or any bank or company resulting from any merger, conversion or consolidation to which it shall be a party or any bank or company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such bank or company shall be eligible under subsection (e) of Section 6.01, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

24 SECTION 6.03. Rights and Liabilities of Trustee.

(a) The recitals of facts herein and in the Bonds contained are taken as statements of the City, and the Trustee has no responsibility for the correctness of the same, nor does it have any liability whatsoever therefor, nor make any representations as to the validity or sufficiency of this Indenture or of the Bonds nor shall it incur any responsibility in respect thereof, other than as expressly stated herein. The Trus tee is, however, responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee is not liable in connection with the performance of its duties hereunder, except for its own negligence or willful misconduct. T he Trustee is not liable for the acts of any agents of the Trustee selected by it with due care. The Trustee may become the Owner of any Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of the Owners, whether or not such committee shall represent the Owners of a majority in principal amount of the Bonds then Outstanding. The Trustee, either as principal or agent, may engage in or be entrusted in any financial or other transaction with the City.

(b) The Trustee has no liability with respect to any action taken or omitted to be taken by it in accordance with the direction of the Owners of a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture.

(c) The Trustee has no liability for any action taken by it in good faith and believed by it to be authorized or within the rights or powers conferred upon it by this Indenture, excep t for actions arising from the negligence or willful misconduct of the Trustee. The permissive right of the Trustee to do things enumerated hereunder is not construed as a mandatory duty.

(d) The Trustee will not be deemed to have knowledge of any Event of Default hereunder unless and until a responsible officer of the Trustee has actual knowledge thereof, or unless and until a responsible officer of the Trustee has received written notice thereof at its Office. Except as otherwise expressly provided her ein, the Trustee is not bound to ascertain or inquire as to the performance or observance of any of the terms, conditions, covenants or agreements herein or of any of the documents executed in connection with the Bonds, or as to the existence of an Event o f Default hereunder or thereunder. The Trustee is not responsible for the City’s payment of principal and interest on the Bonds, the City’s observance or performance of any other covenants, conditions or terms contained herein, or the validity or effectiveness of any collateral given to or held by it. Without limiting the generality of the foregoing, and notwithstanding anything herein to the contrary, the Trustee is not responsible for reviewing the contents of any financial statements furnished to the Trustee under Section 5.06 and may rely conclusively on the Certificate of the City accompanying such financial statements to establish the City’s compliance with its financial covenants hereunder, including, without limitation, its covenants regarding the deposit of Revenues into the Wastewater Fund and the investment and application of moneys on deposit in the Wastewater Fund (other than its covenants to transfer such moneys to the Trustee when due hereunder).

25 (e) No provision in this Indenture requires the Trustee to risk or expend its own funds or otherwise incur any financial liability hereunder. The Trustee is entitled to receive interest on any moneys advanced by it hereunder (provided, however, that the Trustee shall not be required to advance any moneys hereunder), at the maximum rate permitted by law.

(f) The Trustee may establish additional accounts or subaccounts of the funds established hereunder as the Trustee deems necessary or appropriate in furtherance of its duties under this Indenture.

(g) The Trustee has no responsibility or liability whatsoever with respect to any information, statement, or recital in any official statement, offering memorandum or any other disclosure material prepared or distributed with respect to the Bonds, nor shal l the Trustee have any obligation to review any such material, and any such review by the Trustee will not be deemed to create any obligation, duty or liability on the part of the Trustee.

(h) At any and all reasonable times the Trustee, and its duly authorized agents, attorneys, experts, engineers, accountants and representatives, have the right (but not the duty) fully to inspect the Wastewater System, including all books, papers and records of the City pertaining to the Wastewater System and the Bonds, and to take such memoranda from and with regard thereto as may be desired but which is not privileged by statute or by law.

(i) Before taking any action under this Indenture the Trustee may require indemnity satisfactory to the Trustee be furnished to it to hold the Trustee harmless from any and all costs, liabilities, claims and expenses whatsoever and to protect it against any liability it may incur hereunder.

(j) The immunities extended to the Trustee also extend to its directors, officers, employees and agents.

(k) The permissive right of the Trustee to do things enumerated in this Indenture is not construed as a duty.

(l) The Trustee may execute any of the trusts or powers hereof and perform any of its duties through attorneys, agents and receivers and is not answerable for the conduct of the same if appointed by it with reasonable care.

(m) The Trustee shall not be considered in breach of or in default in its obligations hereunder or progress in respect thereto in the event of enforced delay in the performance of such obligations due to unforeseeable causes beyond its control and without its fault or negligence, including, but not limited to, Acts of God or of the public enemy or terrorists, acts of a government, acts of the other party, fires, floo ds, epidemics, quarantine restrictions, strikes, freight embargoes, earthquakes, explosion, mob violence, riot, inability to procure or general sabotage or rationing of labor, equipment, facilities, sources of energy, material or supplies in the open market, litigation or arbitration involving a party or others relating to zoning or other governmental action or inaction pertaining to the project, malicious mischief, condemnation, and unusually severe weather or delays of suppliers or subcontractors due to s uch causes or any similar event and/or occurrences beyond the control of the Trustee.

26 (n) In no event shall the Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.

SECTION 6.04. Right to Rely on Documents . The Trustee shall be protected in acting upon any notice, resolution, requisition, request, consent, order, certificate, report, opinion, facsimile transmission, electronic mail or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, of its selection, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by the Trustee hereunder in accordance therewith.

The Trustee is not bound to recognize any person as the Owner of a Bond unless and until such Bond is submitted for inspection, if required, and such person’s title thereto is established to the satisfaction of the Trustee.

Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee deems it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such mat ter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the City, which shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but the Trustee may (but has no duty to), in lieu thereof, accept other evidence of such matter or may require such additional evidence as to it may deem reasonable. The Trustee ma y conclusively rely on any certificate or report of any Independent Accountant appointed by the City.

The Trustee agrees to accept and act upon facsimile or electronic transmission of written instructions and/or directions under this Indenture provided, h owever, that the Trustee has received a current incumbency certificate providing that the individual signor is an authorized signatory and containing the specimen signature of such designated person.

SECTION 6.05. Preservation and Inspection of Documents . All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during normal business hours, and upon reasonable prior written notice, to the inspection of the City and any Owner, and their agents and representatives duly authorized in writing.

SECTION 6.06. Compensation and Indemnification. Absent any agreement to the contrary, the City shall pay to the Trustee from time to time compensation for all services rendered under this Indenture and also all expenses, charges, legal and consulting fees and expenses and other disbursements and those of its attorneys (including any allocated costs of internal counsel), agents and employees, incurred in and about the performance of its powers and duties under this Indenture. The Trustee has a first lien on the Net Revenues and all funds and accounts held by the Trustee hereunder to secure the payment to the Trustee of all fees, costs and expenses, including compensation to its experts, attorneys and counsel incurred in declaring such Event of Default and in exercising the rights and remedies set forth in Article VIII. Any such expenses incurred

27 by the Trustee shall be deemed to constitute a substantial contribution to the trust estate which secures the Bonds.

The City further covenants and agrees to indemnify and save the Trustee and its officers, di rectors, agents and employees, harmless against any , and all loss, claim, expense and liabilities, whether or not litigated, which it may incur arising out of or in the exercise and performance of its powers and duties hereunder, including the costs and expenses of defending against any claim of liability and of enforcing any remedies hereunder (including costs incurred to enforce this section) and under any related documents, but excluding any and all losses, expenses and liabilities which are due to the negligence or willful misconduct of the Trustee, its officers, directors, agents or employees.

The obligations of the City under this Section shall survive resignation or removal of the Trustee under this Indenture and payment of the Bonds and discharge of this Indenture.

SECTION 6.07. Accounting Records and Financial Statements. The Trustee shall at all times keep, or cause to be kept, proper books of record and account, prepared in accordance with corporate trust industry standards, in which complete and accurate entries shall be made of all transactions made by it relating to the proceeds of the Bonds and all funds and accounts established and held by the Trustee under this Indenture. Such books of record and account shall be available for inspection by the City at reasonable hours, during regular business hours, with reasonable prior notice and under reasonable circumstances. The Trustee shall furnish to the City, at least semiannually (provided that no additional statements will be required to be furnished with the same frequency) , an accounting (which may be in the form of its customary statements) of all transactions relating to the proceeds of the Bonds and all funds and accounts held by the Trustee under this Indenture.

ARTICLE VII

MODIFICATION AND AMENDMENT OF THIS

INDENTURE

SECTION 7.01. Amendments Permitted.

(a) Amendment With Bond Owner Consent. This Indenture and the rights and obligations of the City and of the Owners of the Bonds may be modified or amended by the City and the Trustee upon Request of the City at any time by the execution of a Supplemental Indenture, but only with the written consent of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding with respect to all Bonds then Outstanding, exclusive of Bonds disqualified as provided in Sect ion 9.05. Any such Supplemental Indenture becomes effective upon the execution and delivery thereof by the parties thereto and upon consent of the requisite Bond Owners. No such modification or amendment shall:

(i) extend the maturity of any Bond or red uce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal thereof, or interest thereon, or any premium payable on the redemption thereof, at the time and place and at the rate and in the currency provided therein, without the written consent of the Owner of such Bond, or

28 (ii) except as provided in Section 7.01(b), permit the creation by the City of any mortgage, pledge or lien upon the Revenues or the Net Revenues superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as expressly permitted by this Indenture), or reduce the percentage of Bonds required for the affirmative vote or written consent to an amendment or modification, or

(iii) modify any of the rights or obligations of the Trustee without its written consent.

(b) Amendment Without Bond Owner Consent . This Indenture and the rights and obligations of the City and of the Owners of the Bonds may also be modified or amended at any time by a Supplemental Indenture, without the consent of any Owners of the Bonds, but only for any one or more of the following purposes:

(i) to add to the covenants and agreements of the City contained in this Indenture, other covenants and agreements thereafter to be observed, or to limit or surrender any rights or power herein reserved to or conferred upon the City;

(ii) to cure any ambiguity, or to cure, correct or supplement any defective provision contained in this Indenture, or in any other respect whatsoever as the Cit y deems necessary or desirable, provided under any circumstances that such modifications or amendments do not materially adversely affect the interests of the Owners in the opinion of Bond Counsel filed with the City and the Trustee;

(iii) to provide for the issuance of Parity Obligations under Section 5.08, and to provide the terms and conditions under which such Parity Obligations may be issued, including but not limited to the establishment of special funds and accounts relating thereto and any other provisions relating solely thereto, subject to and in accordance with the provisions of Section 5.08;

(iv) to make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the Bonds; or

(v) to comply with the requirements of a Credit Provider related to the delivery of a Bond Insurance Policy or a Debt Service Reserve Fund Credit Instrument, including (A) pledging Net Revenues on a parity with the pledge of Net Revenues to t he Bonds and any Parity Obligations as security for the reimbursement of amounts advanced by the Credit Provider under a Bond Insurance Policy , interest on such advanced amounts and related costs and (B) pledging Net Revenues on a subordinate basis to the pledge of Net Revenues to the Bonds and any Parity Obligations as security for the reimbursement of amounts advanced by the Credit Provider under Debt Service Reserve Fund Credit Instrument , interest on such advanced amounts and related costs.

29 (c) Notice of Amendments. The City shall deliver or cause to be delivered a draft of any Supplemental Indenture to S&P, at least 10 days prior to the effective date of such Supplemental Indenture under this Section.

SECTION 7.02. Effect of Supplemental Indenture . From and after the time any Supplemental Indenture becomes effective under this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, the respective rights, duties and obligations of the parties hereto or thereto and all Owners, as the case may be, shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of an y Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

SECTION 7.03. Endorsement or Replacement of Bonds After Amendment . After the effective date of any amendment or modification hereof under this Article, the City may determine that any or all of the Bonds shall bear a notation, by endorsement in form approved by the City, as to such amendment or modificat ion and in that case upon demand of the City the Owners of such Bonds shall present such Bonds for that purpose at the Office of the Trustee, and thereupon a suitable notation as to such action shall be made on such Bonds. In lieu of such notation, the Ci ty may determine that new Bonds shall be prepared and executed in exchange for any or all of the Bonds and in that case upon demand of the City the Owners of the Bonds shall present such Bonds for exchange at the Office of the Trustee without cost to such Owners.

SECTION 7.04. Amendment by Mutual Consent. The provisions of this Article shall not prevent any Owner from accepting any amendment as to the particular Bond held by such Owner.

SECTION 7.05. Trustee’s Reliance. The Trustee may conclusively rely, and is protected in relying, upon a Certificate of the City and an opinion of counsel stating that all requirements of this Indenture relating to the amendment or modification hereof have been satisfied and that such amendments or modifications do not materially adversely affect the interests of the Owners.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BOND
OWNERS

SECTION 8.01. Events of Default and Acceleration of Maturities . Each of the following events constitutes an Event of Default hereunder:

(a) Failure to pay any installment of the principal of any Bonds when due, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise.

(b) Failure to pay any installment of interest on the Bonds when due.

30 (c) Failure by the City to observe and perform any of the other covenants, agreements or conditions on its part contained in this Indenture or in the Bonds, if such failure has continued for a period of 30 days after written notice thereof, specifying such failure and requiring the same to be remedied, has been given to the City by the Trustee; provided, however, if in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30-day period, such failure shall not constitute an Event of Default if the City institutes corrective action within such 30-day period and thereafter diligently and in good faith cures the failure in a reasonable period of time.

(d) The City commences a v oluntary case under Title 11 of the United States Code or any substitute or successor statute.

(e) The occurrence and continuation of an event of default under and as defined in any Parity Obligation Documents.

If an Event of Default occurs and is continuing, the Trustee may, and at the written direction of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding the Trustee shall, (a) declare the principal of the Bonds, together with the accrued interest thereon, to be due and payable immediately, and upon any such declaration the same will become immediately due and payable, anything in this Indenture or in the Bonds to the contrary notwithstanding, and (b) subject to the provisions of Section

8.06, exercise any other remedies available to the Trustee and the Bond Owners in law or at equity to enforce the rights of the Bond Owners under this Indenture.

Promptly upon becoming aware of the occurrence of an Event of Default, but in no event later than five Business Days following becoming aware of such occurrence, the Trustee shall give notice of such Event of Default to the City by telephone confirmed in writing. Such notice shall also state whether the principal of the Bonds has been declared to be or have immediately become due and payable. With respect to any Event of Default described in clauses (a) or (b) above the Trustee shall, and with respect to any Event of Default described in clause (c) above the Trustee in its sole discretion may, also give such notice to the Owners in the same manner as provided herein for notices of redemption of the Bonds, which shall include the statement that interest on the Bonds shall cease to accrue from and after the date, if any, on which the Trustee declares the Bonds to become due and payable under the preceding paragraph (but only to the extent that principal and any accrued, but unpaid, interest on the Bonds is actually paid on such date).

This provision, however, is subject to the condition that if, at any time after the principal of the Bonds has been so declared due and payable, and before any judgment or decree for the payment of the moneys due has been obtained or entered, the City shall deposit with the Trustee a sum sufficient to pay all principal on the Bonds matured prior to such declaration and all matured installments of interest (if any) upon all the Bonds, with interest on such overdue installments of principal and interest at an interest rate of 10% per annum, and the reasonable fees and expenses of the Trustee, including fe es and expenses of its attorneys, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) has been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate has been made therefor, then, and in every such case, the Owners of at least a majority in aggregate principal amount of the

31 Bonds then Outstanding, by written notice to the City and to the Trustee, may, on behalf of the Owners of all of the Bonds, rescind and annul such declaration and its consequences. However, no such rescission and annulment shall extend to or shall affect any subsequent default, or shall impair or exhaust any right or power consequent thereon.

SECTION 8.02. Application of Funds Upon Acceleration. All amounts received by the Trustee pursuant to any right given or action taken by the Trustee under the provisions of this Indenture shall be applied by the Trustee as follows and in the following order

(a) First, to the payment of any fees, costs and expenses incurred by the Trustee to protect the interests of the Owners of the Bonds; payment of the fees, co sts and expenses of the Trustee (including fees and expenses of its counsel, including any allocated costs of internal counsel) incurred in and about the performance of its powers and duties under this Indenture and the payment of all fees, costs and expenses owing to the Trustee under Section 6.06, together with interest on all such amounts advanced by the Trustee at the maximum rate permitted by law.

(b) Second, to the payment of the whole amount then owing and unpaid upon the Bonds for interest and prin cipal, with interest on such overdue amounts at the respective rates of interest borne by those Bonds, and in case such moneys shall be insufficient to pay in full the whole amount so owing and unpaid upon the Bonds, then to the payment of such interest, principal and interest on overdue amounts without preference or priority among such interest, principal and interest on overdue amounts ratably to the aggregate of such interest, principal and interest on overdue amounts.

SECTION 8.03. Power of Trustee to Control Proceedings. If the Trustee, upon the happening of an Event of Default, takes any action, by judicial proceedings or otherwise, in the performance of its duties hereunder, whethe r upon its own discretion or upon the request of the Owners of a majority in aggregate principal amount of the Bonds then Outstanding, it has full power, in the exercise of its discretion for the best interests of the Owners of the Bonds, with respect to t he continuance, discontinuance, withdrawal, compromise, settlement or other disposal of such action. The Trustee shall not, unless there no longer continues an Event of Default, discontinue, withdraw, compromise or settle, or otherwise dispose of any litigation pending at law or in equity, if at the time there has been filed with it a written request signed by the Owners of a majority in principal amount of the Outstanding Bonds hereunder opposing such discontinuance, withdrawal, compromise, settlement or other disposal of such litigation.

SECTION 8.04. Limitation on Owners’ Right to Sue . No Owner of any Bond has the right to institute any suit, action or proceeding at law or in equity, for any remedy under or upon this Indenture, unless:

(a) said Owner has previously given to the Trustee written notice of the occurrence of an Event of Default;

(b) the Owners of a majority in aggregate principal amount of all the Bonds then Outstanding have requested the Trustee in writing to

32 exercise the powers hereinbefore granted or to institute such action, suit or proceeding in its own name;

(c) said Owners have tendered to the Trustee indemnity satisfactory to it against the costs, expenses and liabil ities to be incurred in compliance with such request; and

(d) the Trustee has failed to comply with such request for a period of 60 days after such written request has been received by, and said tender of indemnity has been made to, the Trustee.

Such notification, request, tender of indemnity and refusal or omission are hereby declared, in every case, to be conditions precedent to the exercise by any Owner of any remedy hereunder; it being understood and intended that no one or more Owners has any right i n any manner whatever by his or their action to enforce any right under this Indenture, except in the manner herein provided, and that all proceedings at law or in equity to enforce any provision of this Indenture shall be instituted, had and maintained in the manner herein provided and for the equal benefit of all Owners of the Outstanding Bonds.

The right of any Owner of any Bond to receive payment of the principal of and premium, if any, and interest on such Bond as herein provided, shall not be impaire d or affected without the written consent of such Owner (it being understood that the Trustee does not have an affirmative duty to ascertain whether or not such actions or forbearances are unduly prejudicial to such Owners) , notwithstanding the foregoing p rovisions of this Section or any other provision of this Indenture.

SECTION 8.05. Non-waiver. Nothing in this Article or in any other provision of this Indenture or in the Bonds, affects or impairs the obligation o f the City, which is absolute and unconditional, to pay from the Net Revenues and other amounts pledged hereunder, the principal of and interest and redemption premium (if any) on the Bonds to the Bond Owners when due and payable as herein provided, or affects or impairs the right of action, which is also absolute and unconditional, of the Bond Owners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds.

A waiver of any default by any Owner does not affect any subsequen t default or impair any rights or remedies on the subsequent default. No delay or omission of any Owner 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 of any such default or an acquiescence therein, and every power and remedy conferred upon the Owners by the Bond Law or by this Article may be enforced and exercised from time to time and as often as shall be deemed expedient by the Bond Owners.

If a suit, action or proceedi ng to enforce any right or exercise any remedy is abandoned or determined adversely to the Bond Owners, the City the Bond Owners will be restored to their former positions, rights and remedies as if such suit, action or proceeding had not been brought or taken.

SECTION 8.06. Actions by Trustee as Attorney -in-Fact. Any suit, action or proceeding which any Owner has the right to bring to enforce any right or remedy hereunder may be brought by the Trustee for the equal benefit and protection of all Owners

33 similarly situated and the Trustee is hereby appointed (and the successive respective Owners by taking and holding the Bonds shall be conclusively deemed so to have appointed it) the true and lawful attorney-in-fact of the respective Owners for the purpose of bringing any such suit, action or proceeding and to do and perform any and all acts and things for and on behalf of the respective Owners as a class or classes, as may be necessary or advisable in the opinion of the Trustee as such attorney -in-fact, subject to the provisions of Article VI. Notwithstanding the foregoing provisions of this Section, the Trustee has no duty to enforce any such right or remedy unless it has been indemnified to its satisfaction for any additional fees, charges and expenses of the Trustee related thereto, including without limitation, fees , expenses and charges of its attorneys and advisors.

SECTION 8.07. Remedies Not Exclusive . No remedy herein conferred upon or reserved to the Owners is intended to be exclusive of any other remedy. Every such remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existi ng, at law or in equity or by statute or otherwise, and may be exercised without exhausting and without regard to any other remedy conferred by the Bond Law or any other law.

ARTICLE IX

MISCELLANEOUS

SECTION 9.01. Limited Liability of City. Notwithstanding anything contained in this Indenture, the City is not required to advance any moneys derived from any source of income other than the Net Revenues for the payment of the principal of or interest on the Bonds, or any premiums upon the red emption thereof, or for the performance of any covenants herein contained (except to the extent any such covenants are expressly payable hereunder from the Revenues). The City may, however, advance funds for any such purpose, provided that such funds are derived from a source legally available for such purpose and may be used by the City for such purpose without incurring indebtedness.

The Bonds are revenue bonds, payable exclusively from the Net Revenues and other funds as provided herein. The general fund of the City is not liable, and the credit of the City is not pledged, for the payment of the interest on or principal of the Bonds. The Owners of the Bonds have no right to compel the forfeiture of any property of the City.

The principal of and interest on the Bonds, and any premiums upon the redemption of any thereof, are not a debt of the City, or a legal or equitable pledge, charge, lien or encumbrance upon any property of the City or upon any of its income, receipts or revenues except the Net Revenues and other funds pledged to the payment thereof as provided in this Indenture.

SECTION 9.02. Benefits of Indenture Limited to Parties. Nothing in this Indenture, expressed or implie d, gives to any person other than the City and the Owners of the Bonds, any right, remedy or claim under or by reason of this Indenture. Any covenants, stipulations, promises or agreements in this Indenture contained by and on behalf of the City shall be for the sole and exclusive benefit of the Trustee and the Owners of the Bonds.

34 SECTION 9.03. Defeasance of Bonds. If the City pays and discharges the entire indebtedness on any Bonds in any one or more of the following ways:

(a) by paying or causing to be paid the principal of and interest on such Bonds, as and when the same become due and payable;

(b) by irrevocably depositing with the Trustee or an escrow bank, in trust, at or before maturity, an amount of cash which, together with the available amounts then on deposit in the funds and accounts established under this Indenture, in the opinion or report of an Independent Accountant is fully sufficient to pay such Bonds, including all principal, interest and redemption premium, if any;

(c) by irrevocably depositing with the Trustee or an escrow bank, in trust, Federal Securities in such amount as an Independent Accountant determines will, together with the interest to accrue thereon and available moneys then on deposit in any of the funds and accounts established under this Indenture, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premium, if any) at or before maturity; or

(d) by purchasing such Bonds prior to maturity and tendering such Bonds to the Trustee for cancellation;

and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption has been duly given or provision satisfactory to the Trustee has b een made for the giving of such notice, then, at the election of the City, and notwithstanding that any such Bonds have not been surrendered for payment, the pledge of the Net Revenues and other funds provided for in this Indenture and all other obligation s of the Trustee and the City under this Indenture with respect to such Bonds shall cease and terminate, except only:

(a) the obligations of the City under Section 5.10,

(b) the obligation of the Trustee to transfer and exchange Bonds hereunder,

(c) the obligation of the City to pay or cause to be paid to the Owners of such Bonds, from the amounts so deposited with the Trustee, all sums due thereon, and

(d) the obligations of the City to compensate and indemnify the Trustee under Section 6.06.

The City shall file notice of such election with the Trustee. The Trustee shall pay any funds thereafter held by it, which are not required for said purpose, to the City.

In the case of a defeasance or payment of all of the Bonds Outstanding in accordance with this Section, the Trustee shall pay all amounts held by it in any funds or accounts hereunder, which are not required for said purpose or for payment of amounts due the Trustee under Section 6.06, to the City.

35 SECTION 9.04. Execution of Documents and Proof of Ownership by Owners. Any request, consent, declaration or other instrument which this Indenture may require or permit to be executed by any Owner may be in one or mor e instruments of similar tenor, and shall be executed by such Owner in person or by their attorneys appointed in writing.

Except as otherwise herein expressly provided, the fact and date of the execution by any Owner or his attorney of such request, consent, declaration or other instrument, or of such writing appointing such attorney, may be proved by the certificate of any notary public or other officer authorized to take acknowledgments of deeds to be recorded in the state in which he purports to act, that the person signing such request, declaration or other instrument or writing acknowledged to him the execution thereof, or by an affidavit of a witness of such execution, duly sworn to before such notary public or other officer.

The ownership of Bonds and the amount, maturity, number and date of ownership thereof are conclusively proved by the Registration Books.

Any request, declaration or other instrument or writing of the Owner of any Bond binds all future Owners of such Bond in respect of anything d one or suffered to be done by the City or the Trustee in good faith and in accordance therewith.

SECTION 9.05. Disqualified Bonds. In determining whether the Owners of the requisite aggregate principal amou nt of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the City (but excluding Bonds held in any employees’ retirement fund) must be disregarded and deeme d not to be Outstanding for the purpose of any such determination. The Trustee will not be deemed to have knowledge that any Bond is owned or held by the City unless the City is the Registered Owner or the Trustee has received written notice to that effect.

SECTION 9.06. Waiver of Personal Liability . No member, officer, agent or employee of the City shall be individually or personally liable for the payment of the principal of or interest or any premium on the Bonds; but nothing herein contained shall relieve any such member, officer, agent or employee from the performance of any official duty provided by law.

SECTION 9.07. Destruction of Canceled Bonds . All Bonds acquired by the City, whether by purchase or gift or otherwise shall be surrendered to the Trustee for cancellation. Whenever in this Indenture provision is made for the cancellation by the Trustee of any Bonds, the Trustee sha ll destroy such Bonds in accordance with its customary procedures and deliver a certificate of such destruction to the City and the City shall be entitled to rely conclusively upon any statement of fact contained in any certificate with respect to the destruction of any such Bonds therein referred to. The City shall pay all costs of any microfilming of Bonds to be destroyed.

SECTION 9.08. Funds and Accounts . Any fund or account required by this Indenture to be established and maintained by the City or the Trustee may be established and maintained in the accounting records of the City or the Trustee, as the case may be, either as a fund or an account, and may, for the purpose of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account. All such records with respect to all such funds and accounts held by the

36 City shall at all times be maintained in accordance with generally accepted accou nting principles and all such records with respect to all such funds and accounts held by the Trustee shall be at all times maintained in accordance with industry practices; in each case with due regard for the protection of the security of the Bonds and the rights of every Owner thereof.

SECTION 9.09. Notices. All written notices to be given under this Indenture shall be given by first class or overnight mail or personal delivery to the party entitled thereto at its address set forth below, or at such address as the party may provide to the other party in writing from time to time. Notice shall be effective either (a) upon transmission by facsimile transmission, electronic means or other form of telecommunication, (b) 48 hours after deposit in the United States mail or overnight carrier, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The City or the Trustee may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.

If to the City: City of Hayward
777 B Street
Hayward, CA 94541
Attention: City Manager
Fax: [to come]

If to the Trustee: The Bank of New York Mellon Trust Company, N.A. [to come]
Attention: Corporate Trust Department
Fax: [to come]
Email:

SECTION 9.10. Unclaimed Moneys. Anything contained herein to the contrary notwithstanding, any money held by the Trustee in trust for the payment and discharge of the interest or premium (if any) on or principal of the Bonds which remains unclaimed for two years after the date when the payments of such interest, premium and principal have become payable, if such money was held by the Trustee at such date, or for two years after the date of deposit of such money if deposited with the Trustee after the date when the interest and premium (if any) on and principal of such Bonds have become payable, shall be repaid by the Trustee to the City as its absolute property free from trust, and the Trustee shall thereupon be released and discharged with respect thereto and the Owners shall look only to the City for the payment of the principal of and interest and redemption premium (if any) on such Bonds.

SECTION 9.11. Execution in Several Counterparts . This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the City and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument. The exchange of copies of this Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of this Indenture as to the parties hereto and may be used in lieu of the original Indenture and signature pages for all purposes.

37 SECTION 9.12. Governing Law. This Indenture shall be governed by and construed in accordance with the laws of the State of California.

SECTION 9.13. U.S.A. Patriot Act. The parties her eto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Trustee. The parties to this Indenture agree that they will provide the Trustee with such information as it may request in order for the Trustee to satisfy the requirements of the U.S.A. Patriot Act.

[Indenture of Trust Signature Page]
IN WITNESS WHEREOF, the CITY OF HAYWARD has caused this Indenture to be signed in its name by its City Manager and to be attested by its City Clerk, and The Bank of New York Mellon Trust Company, N.A., in token of its acceptance of the trust created hereunder, has caused this Indenture to be signed in its corporate name by its officer identified below, all as of the day and year first above written.

CITY OF HAYWARD

By
City Manager

Attest

City Clerk

THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A., as Trustee

By
Authorized Representative

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APPENDIX A

DEFINITIONS

“Bond Counsel” means (a) Jones Hall, A Professional Law Corporation, or (b) any other attorney or firm of attorneys appointed by or acceptable to the City of nationally - recognized experience in the issuance of obligations the interest on which is excludable from gross income for federal income tax purposes under the Tax Code.

“Bond Insurance Policy” means an insurance policy guaranteeing the scheduled payment of principal of and interest on one or more series of Bonds when due.

“Bond Law” means Ordinance No. 24-05, enacting the City of Hayward Water and Wastewater Enterprise Revenue Bond Law , as in effect on the Closing Date or as thereafter amended in accordance with its terms.

“Bond Service Fund ” means the fund by that name established and held by the Trustee under Section 4.02(a).

“Bonds” means, at any time Outstanding hereunder, (i) the 2025 Bonds and (ii) Parity Obligations issued as bonds pursuant to a Supplemental Indenture in accordance with Section 5.08.

“Business Day” means a day (other than a Saturday or a Sunday) on which banks are not required or authorized to remain closed in the city in which the Office of the Trustee is located, and on which the Federal Reserve Bank system is not closed.

“Certificate of the City” means a certificate in writing signed by the City Manager, the Director of Finance or any other officer of the City duly authorized by the City Council for that purpose.

“City” means the City of Hayward, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California.

“Closing Date” means (i) with respect to the 2025 Bonds, ______, 2025, being the date of delivery of the 2025 Bonds to the Original Purchaser and (ii) with respect to additional Bonds issued pursuant to a Supplemental Indenture, the date of delivery of such Bonds to the Original Purchaser.

“Costs of Issuance” means all items of expense directly or indirectly payable by or reimbursable to the City relating to the authorization, issuance, sale and delivery of the Bonds, including but not lim ited to: printing expenses; rating agency fees; filing and recording fees; initial fees, expenses and charges of the Trustee and its counsel, including the Trustee’s first annual administrative fee; fees, charges and disbursements of attorneys, financial advisors, accounting firms, consultants and other professionals; fees and charges for preparation, execution and safekeeping of the Bonds; and any other cost, charge or fee in connection with the original issuance of the Bonds.

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"Credit Provider" means the issuer of a Bond Insurance Policy or a Debt Service Reserve Fund Credit Instrument.

“Debt Service Reserve Fund Credit Instrument ” means a debt service reserve insurance policy or letter of credit guaranteeing payments to be applied to the payment of principal and interest on one or more series of Bonds.

“Depository” means (a) initially, DTC, and (b) any other Securities Depository acting as Depository under Section 2.04.

“Depository System Participant” means any participant in the Depository ’s book- entry system.

“DTC” means The Depository Trust Company, New York, New York, and its successors and assigns.

“Event of Default” means any of the events described in Section 8.01.

“Fair Market Value” means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of section 1273 of the Code) and, otherwise, the term "Fair Market Value" means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaran teed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the Issuer and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the applicable regulations under the Code, the term “investment” will include a hedge.

“Federal Securities” means: (a) any direct general non -callable obligations of the United States of America, including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America; and (b) any obligations the timely payment of principal of and interest on which are fully guar anteed by the United States of America or which are secured by obligations described in the preceding clause (a).

“Fiscal Year” means the period commencing on July 1 of each year and terminating on the next succeeding June 30, or such other period as may be established by the City as its official fiscal year period (written notice of which shall be given by the City to the Trustee).

“Fitch” means Fitch, Inc., doing business as Fitch Ratings, and its successors.

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“Indenture” means this Indenture of Trust, as originally executed or as it may from time to time be supplemented, modified or amended by any Supplemental Indenture pursuant to the provisions hereof.

“Independent Accountant ” means any accountant or firm of such accountants appointed and paid by the City, and who, or each of whom (a) is in fact independent and not under domination of the City; (b) does not have any substantial interest, direct or indirect, with the City; and (c) is not connected with the City as an officer or employee of the City, but who may be regularly retained to make annual or other audits of the books of or reports to the City.

“Interest Payment Date” means March 1 and September 1 in each year, beginning September 1, 2025, and continuing so long as any Bonds remain Outstanding.

“Net Revenues” means, for any Fiscal Year, all Revenues received by the City in such Fiscal Year less the Operations and Maintenance Costs for such Fiscal Year.

“Nominee” means (i) with respect to the 2025 Bonds, (a) initially, Cede & Co. as nominee of DTC, and (b) any other nominee of the Depository designated pursuant to Section 2.04(a) and (ii) with respect to additional Bonds, means the nominee specified in accordance with a Supplemental Indenture.

“Office” means, with respect to the Trustee, the corporate trust office of the Trustee at the address set forth in Section 9.09, or at such other or additional offices as may be specified by the Trustee in writing to the City.

“Operation and Maintenance Costs ” means the reasonable and necessary costs paid or incurred by the City to maintain and operate the Wastewater System, determined in accordance with generally accepted accounting principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Wastewater System in good repair and working order. It includes all reasonable and necessary administrative costs of the City that are charged directly or apportioned to System operation, such as employee salaries and wages, overhead, taxes (if an y), permit and license costs, operational charges, and insurance premiums. It excludes, in all cases, depreciation, replacement, and obsolescence charges or reserves therefor, amortization of intangibles and interest expense relating to subordinate obligations and unsecured obligations of the City. For the avoidance of doubt, bookkeeping entries and capital charges are excluded from Operations and Maintenance Costs.

“Original Purchaser” means (i) with respect to the 2025 Bonds, __________ , as the original purchaser of the 2025 Bonds upon their delivery by the Trustee on the Closing Date and (ii) with respect to additional Bonds issued pursuant to a Supplemental Indenture, the original purchaser of such Bonds upon their delivery specified in the Supplemental Indenture.

“Outstanding,” when used as of any particular time with reference to Bonds, means all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture except: (a) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (b) Bonds with respect to which all liability of the City has been discharged in accordance with Section 9.03; (c) Bonds for the transfer or exchange

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of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture and Bonds paid pursuant to the last sentence of Section 2.08 ; and (d) Bonds which are required to be disregarded and not deemed Outstanding under Section 9.05.

“Owner,” when used with respect to any Bond, means the person in whose name the ownership of such Bond shall be registered on the Registration Books.

“Parity Obligation Documents ” means , collectively, (a) each Supplemental Indenture, (b) the 2006 SRF Agreement, and (c) all leases, installment sale agreements, trust agreements, indentures of trust and other documents prescribing the terms and provisions applicable to any issue of Parity Obligations.

“Parity Obligations ” means , collectively, (a) any Bonds issued pursuant to a Supplemental Indenture, (b) the obligations of the City under the 2006 SRF Agreement, and (c) all other bonds, notes, loan agreements, installment sale agreements, leases or other obligations of the City payable from and secured by a pledge of and lien upon any of the Net Revenues issued or incurred on a parity with the Bonds under Section 5.08.

“Permitted Investments” means any of the following which at the time of investment are legal investments under the laws of the State of California for the moneys proposed to be invested therein , but only to the extent that the same are acquired at Fair Market Value:

(a) Federal Securities;

(b) Any direct or indirect obligations of an agency or department of the United States of America whose obligations represent the full faith and credit of the United States of America, or which are rated A or better by S&P or Fitch.

(c) Deposit accounts (including certificates of deposit) in federal or State chartered savings and loan associations or in federal or State of California banks (including the Trustee), provided that: (i) the unsecured obligations of such commercial bank or savings and loan association are rated A or better by S&P or Fitch; or (ii) such deposits are fully insured by the Federal Deposit Insurance Corporation.

(d) Commercial paper rated in the highest short-term rating category by S&P or Fitch.

(e) Federal funds or bankers acceptances with a maximum term of one year of any bank which an unsecured, uninsured and unguaranteed obligation rating in the highest rating category of S&P or Fitch.

(f) Money market funds registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933, and having a rating in the highest rating category of S&P or Fitch , excluding those with floating net asset values (such funds may include funds for which the Trustee, its

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affiliates, parent or subsidiaries provide investment advisory or other management services).

(g) Obligations the inter est on which is excludable from gross income pursuant to Section 103 of the Tax Code and which are either (a) rated A or better by S&P or Fitch , or (b) fully secured as to the payment of principal and interest by Federal Securities.

(h) Bonds or notes issued by any state or municipality which are rated by S&P or Fitch in one of the two highest rating categories assigned by S&P or Fitch.

(i) Any investment agreement with, or guaranteed by, a financial institution the long -term unsecured obligations or the claims paying ability of which are rated A or better by S&P or Fitch at the time of initial investment.

(j) the Local Agency Investment Fund of the State of California, created under Section 16429.1 of the California Government Code, to the extent the Tru stee is authorized to register such investment in its name.

“Rate Stabilization Fund” means the fund (if any) by that name established and held by the City under Section 4.04.

“Record Date” means, with respect to any Interest Payment Date, the 15th calendar day of the month preceding such Interest Payment Date.

“Registration Books” means the books maintained by the Trustee under Section

2.07 for the registration and transfer of ownership of the Bonds.

“Request of the City” means a request in writing signed by the City Manager, the Director of Finance or any other officer of the City duly authorized by the City Council for that purpose.

“Revenues” means all gross income and revenue received or receivable by the City from the ownership or operation of the Wastewater System, or otherwise arising from the Wastewater System during any Fiscal Year, including all rates, fees, and charges (including connection fees and charges) as received by the City for the services of the Wastewater System. It includes all other income and revenue howsoever derived by the City from System ownership or operation, or otherwise arising from the Wastewater System, including but not limited to all receipts derived from the investment of funds held by the City under the Indenture or any Parity Obligation Document s, transfers from (but exclusive of any transfers from the applicable Fiscal Year’s income and revenue to) the Sewer Fund Rate Stabilization Fund, and all moneys received by the City from other public entities whose inhabitants are served pursuant to contracts with the City.

“Securities Depositories ” means DTC; and, in accordance with then current guidelines of the Securities and Exchange Commission, such other addresses and/or such other securities depositories as the City may designate in a Request of the City delivered by the City to the Trustee.

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“S&P” means S&P Global Ratings, of New York, New York, and its successors.

“Supplemental Indenture” means any indenture, agreement, resolu tion or other instrument hereafter duly adopted or executed in accordance with the provisions of Section 7.01.

“Subordinate Obligations” means all bonds, notes, loan agreements, installment sale agreements, leases or other obligations of the City (a) that are either (i) payable from but not secured by a pledge or and lien upon any of the Net Revenues or (i) payable from and secured by a pledge of and lien upon any of the Net Revenues on a junior and subordinate basis to the Bonds and all other Parity Oblig ations, and (b) the principal of which cannot be accelerated and paid unless the Bonds and any Parity Obligations have been indefeasibly paid in full.

“Tax Code” means the Internal Revenue Code of 1986 as in effect on the Closing Date or (except as otherw ise referenced herein) as it may be amended to apply to obligations issued on the Closing Date, together with applicable temporary and final regulations promulgated, and applicable official public guidance published, under said Code.

“Term Bonds” means (i) the 2025 Term Bonds and (ii) Bonds identified as term bonds in a Supplemental Indenture..

“Trustee” means The Bank of New York Mellon Trust Company, N.A., as Trustee hereunder, or any successor thereto appointed as Trustee hereunder in accordance with the provisions of Article VI.

“Wastewater Fund” means the fund or account established and held by the City for the deposit of Revenues. Such fund or account may be designated in any manner deemed advisable by the City, and may be maintained in one or more funds or accounts.

“Wastewater System ” means all wastewater collection, pumping, transport, treatment, storage, and disposal facilities, including land and easements thereof, owned, controlled or operated by the City, and all other properties, structures, or works hereafter acquired and constructed by the City and determined to be a part of the Wastewater System, together with all additions, betterments, extensions, or improvements to such facilities, properties, stru ctures, or works, or any part thereof hereafter acquired and constructed. For the avoidance of doubt, the Wastewater System excludes the recycled water improvements owned, controller or operated by the City.

“2006 SRF Agreement” means Agreement No. 05-807-550-0 entered into between the City and the State Water Resources Control Board effective July 27, 2006, as originally executed and delivered and together with all duly authorized and executed amendments and supplements thereto.

“2025 Bonds ” means the City of Hayward 2025 Wastewater Revenue Bonds issued in the aggregate principal amount of $[Principal Amount] and at any time Outstanding hereunder.

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“2025 Costs of Issuance Fund” means the fund by that name established and held by the Trustee under Section 3.03.

“2025 Project Costs ” means, with respect to the 2025 Projects, all costs of the acquisition, construction and installation thereof which are paid from moneys on deposit in the 2025 Project Fund, including but not limited to:

(a) all costs require d to be paid to any person under the terms of any agreement for or relating to the acquisition, construction and installation of the 2025 Projects;

(b) obligations incurred for labor and materials in connection with the acquisition, construction and installation of the 2025 Projects;

(c) the cost of performance or other bonds and any and all types of insurance that may be necessary or appropriate to have in effect in connection with the acquisition, construction and installation of the 2025 Projects;

(d) all costs of engineering and architectural services, including the actual out-of-pocket costs for test borings, surveys, estimates, plans and specifications and preliminary investigations therefor, development fees, sales commissions, and for supervising construction, as well as for the performance of all other duties required by or consequent to the proper acquisition, construction and installation of the 2025 Projects;

(e) any sums required to reimburse the City for advances made for any of the above items or for any other costs incurred and for work done which are properly chargeable to the acquisition, construction and installation of the 2025 Projects;

(f) all financing costs incurred in connection with the acquisition, construction and installation of the 2025 Projects; and

(g) the interest on the 2025 Bonds during the period of acquisition, construction and installation of the 2025.

“2025 Project Fund ” means the fund by that name established and held by the Trustee under Section 3.04.

“2025 Projects” means the facilities, improvements and other property to be acquired, constructed and improved from the proceeds of the 2025 Bonds, including the Phase II Project and the WRRF Administration and Lab oratory Building. As provided in Section 3.05, the City has the right to change or modify the description of the 2025 Projects or any component thereof in its sole discretion.

“2025 Term Bonds” means the 2025 Bonds designated as such in Section 2.02.

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APPENDIX B

FORM OF 2025 BOND

No. ____ ***$__________**

CITY OF HAYWARD
2025 WASTEWATER REVENUE BOND

INTEREST RATE: MATURITY DATE: ISSUE DATE: CUSIP:

REGISTERED OWNER: CEDE & CO.

PRINCIPAL AMOUNT:

The City of Hayward, a charter city and municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”) for value received, hereby promises to pay (but only out of the Net Revenues and other assets pledged therefor as her einafter mentioned) to the Registered Owner stated above, or registered assigns, on the Maturity Date stated above (subject to any right of prior redemption hereinafter mentioned), the Principal Amount stated above, in lawful money of the United States of America; and to pay interest thereon in like lawful money from the Interest Payment Date next preceding the date of authentication of this Bond (unless this Bond is authenticated as of a day during the period commencing after the fifteenth day of the month preceding an Interest Payment Date and ending on or before such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or unless this Bond is authenticated on or before August 15, 2025 , in which event it shall bear interest from the Issue Date stated above) until payment of such principal sum shall be discharged as provided in the Indenture hereinafter mentioned, at the Interest Rate per annum stated above, payable semiannually on each March 1 and September 1, commencing September 1, 2025 (each, an “Interest Payment Date”).

The principal (or redemption price) hereof is payable by check at the Office (as defined in the Indenture referred to below) of The Bank of New York Mellon Trust Company, N.A. (together with any successor trustee under the Indenture, the “Trustee”).

Interest hereon is payable by check of the Trustee mailed on each Interest Payment Date to the Registered Owner as of the 15th day of the month preceding each Interest Payment Date (except with respect to payment of defaulted interest as provided in the Indenture hereinafter referred to) at the address shown on the registration books maintained by the Trustee. Payment of interest will be made by wire transfer in immediately available funds to an account in the United States of America to any Owner of Bonds in the aggregate

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principal amount of $1,000,000 or more who shall furnish written wire instructions to the Trustee before the 15th day of the month preceding the applicable Interest Payment Date.

This Bond is one of a duly authorized issue of bonds of the City designated as its “City of Hayward 2025 Wastewater Revenue Bonds ” (the “Bonds”), in the aggregate principal amount of $[Principal Amount] authorized under Resolution No. __________ adopted by the City Council of the City on ________, 2025, and the provisions of the City of Hayward Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 8, Article 22 of the Hayward Municipal Code e (the “Bond Law”), and issued u nder an Indenture of Trust dated as of March 1, 2025 (the “Indenture”), between the City and the Trustee. The Bonds have been issued for the purpose of financing improvements to the City’s wastewater collection, pumping, transport, treatment, storage, and disposal system (the “Wastewater System”).

Reference is hereby made to the Indenture (a copy of which is on file at said Office of the Trustee) and all indentures supplemental thereto and to the Bond Law for a description of the rights thereunder of the owners of the Bonds, of the nature and extent of the security, of the rights, duties and immunities of the Trustee and of the rights and obligations of the City thereunder. The Registered Owner of this Bond, by acceptance hereof, assents and agrees to all the provisions of the Indenture.

The Bonds and the interest thereon are payable from Net Revenues of the Wastewater System (as such terms are defined in the Indenture) and are secured by a pledge and assignment of said Net Revenues and of amounts held in the Bond Fund established under the Indenture, subject only to the provisions of the Indenture permitting the application thereof for the purposes and on the terms and conditions set forth in the Indenture. The City has the right under the Indenture to is sue additional obligations on a parity with the Bonds, subject to the specific conditions set forth in the Indenture. The Bonds are special obligations of the City and are not a lien or charge upon the funds or property of the City, except to the extent of the aforesaid pledge and assignment.

The Bonds ma turing on or before March 1, 2035, are not subject to redemption prior to their respective stated maturities. The Bonds maturing on or after March 1, 2036, are subject to redemption in whole, or in part among maturities on such basis as determined by the City and in any event by lot within a maturity, at the option of the City, from any available source of funds, on any business day on or after March 1, 2035, at a redemption price equal to 100% of the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium.

The Bonds maturing on March 1, ____, are subject to mandatory sinking fund redemption in whole, or in part by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on March 1 in the years as set forth in the following table.

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Sinking Fund Principal Amount
Redemption Date to be Redeemed
(March 1) or Purchased

(Maturity)

The City has the right to rescind any notice of the optional redemption of Bonds by written notice to the Trustee on or prior to the dated fixed for redemption. Any notice of optional redemption shall be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption, and such cancellation shall not constitute an Event of Default.

Whenever provision is made in the Indenture for the redemption of Bonds of more than one maturity, the Bonds to be redeemed shall be selected among maturities on such basis as shall be set forth in a written certificate of the City filed with the Trustee, and the Trustee shall select the Bonds to be redeemed within any maturity by lot in any manner which the Trustee in its sole discretion shall deem appropriate. For purposes of such selection, all Bonds shall be deemed to be comprised o f separate $5,000 portions and such portions shall be treated as separate Bonds which may be separately redeemed.

The Trustee on behalf and at the expense of the City shall mail (by first class mail) notice of any redemption to the respective Owners of an y Bonds designated for redemption, at least 20 but not more than 60 days prior to the redemption date, at their respective addresses appearing on the Registration Books. Neither the failure to receive any such notice so mailed nor any defect therein shall affect the validity of the proceedings for the redemption of such Bonds or the cessation of the accrual of interest thereon.

Interest on the Bonds called for redemption will not accrue from and after the redemption date.

The Bonds are issuable as fully registered Bonds in denominations of $5,000 and any integral multiple thereof. Subject to the limitations provided in the Indenture, Bonds may be exchanged, at said Office of the Trustee, for a like aggregate principal amount of Bonds of other authorized denominations of the same maturity.

This Bond is transferable by the Registered Owner hereof, in person or by his attorney duly authorized in writing, at said Office of the Trustee, but only in the manner, subject to the limitations provided in the Indent ure, and upon surrender and cancellation of this Bond. Upon such transfer, a new Bond or Bonds, of authorized denomination or denominations, of the same maturity and for the same aggregate principal amount, will be issued to the transferee in exchange her efor. The City and the Trustee may treat the Registered Owner hereof as the absolute owner hereof for all purposes, and the City and the Trustee shall not be affected by any notice to the contrary.

The Indenture and the rights and obligations of the City and of the owners of the Bonds and of the Trustee may be modified or amended from time to time and at any time in the manner, to the extent, and upon the terms provided in the Indenture; provided that no such modification or amendment shall (a) extend the maturity of or reduce the interest

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rate on any Bond or otherwise alter or impair the obligation of the City to pay the principal, interest or redemption premiums at the time and place and at the rate and in the currency provided therein of any Bond withou t the express written consent of the owner of such Bond, (b) reduce the percentage of Bonds required for the written consent to any such amendment or modification, or (c) without its written consent thereto, modify any of the rights or obligations of the Trustee, all as more fully set forth in the Indenture.

Unless this Bond is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to the Trustee for registration of transfer, exchange, or payment, and any Bond issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TR ANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein.

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

This Bond is not entitled to any b enefit under the Indenture, or is not valid or obligatory for any purpose, until the certificate of authentication hereon endorsed has been signed by the Trustee.

IN WITNESS WHEREOF, the City of Hayward has caused this Bond to be executed in its name and on its behalf by the facsimile signature of its City Manager and attested to by the facsimile signature of its City Clerk, all as of the Issue Date stated above.

CITY OF HAYWARD

By
City Manager

Attest

City Clerk

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TRUSTEE’S CERTIFICATE OF AUTHENTICATION

This is one of the Bonds described in the within-mentioned Indenture.

Dated:

THE BANK OF NEW YORK MELLON
TRUST COMPANY, N.A.,
as Trustee

By
Authorized Signatory

ASSIGNMENT

For value received the undersigned hereby sells, assigns and transfers unto __________________________________ whose address and social security or other tax identifying number is ____________________, the within -mentioned Bond and hereby irrevocably constitute(s) and appoint(s) _________________________ ______ attorney, to transfer the same on the registration books of the Trustee with full power of substitution in the premises.

Dated:

Signature Guaranteed

Note: Signature(s) must be guaranteed by an
eligible guarantor institution meeting the
requirements of membership or participation in the
Security Transfer Agent Medallion Program
(“STAMP”) or such other “signature guarantee
program” as may be determined in substitution for
STAMP, all in accordance with the Securities
Exchange Act of 1934, as amended.

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

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APPENDIX C

FORM OF 2025 PROJECT FUND REQUISITION

REQUISITION NO. __ OF THE CITY TO TRUSTEE FOR
DISBURSEMENT FROM THE 2025 PROJECT FUND

The undersigned hereby states and certifies that:

(i) I am the duly appointed, qualified and acting City Manager of the City of Hayward, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (the “City”), and as such, I am familiar with the facts herein certified and am authorized to certify the same; (ii) pursuant to Section 3.04 of the Indenture of Trust dated as of March 1, 2025 (the “Indenture”), between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Truste e”), the Trustee is hereby requested to disburse this date from the 2025 Project Fund established under the Trust Agreement to the payees set forth on Exhibit A attached hereto and by this reference incorporated herein, the respective sum set forth opposite each such payee, for the purposes identified therein;

(iii) each item to be paid pursuant to this Requisition has been properly incurred, is a proper charge against the 2025 Project Fund and has not been the basis of any previous disbursement;

(iv) each amount to be disbursed herein is for payment of a 2025 Project Cost; and

(v) all payments shall be made by check or wire transfer in accordance with payment instructions contained in Exhibit A or in any related invoice, and the Trustee has no duty or ob ligation to authenticate such payment instructions or the authorization thereof.

Capitalized terms used herein and not otherwise defined have the meanings given them in the Indenture.

Dated: CITY OF HAYWARD

By:

Name
Title

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EXHIBIT A

2025 PROJECT FUND DISBURSEMENTS

Payee Name and Address Purpose of Obligation Amount

ATTACHMENT IV

1 OFFICIAL NOTICE OF SALE

$[Principal Amount]*

CITY OF HAYWARD
2025 Wastewater Revenue Bonds

NOTICE IS HEREBY GIVEN by the City Council of the City of Hayward (the “City”), that that all-or-none bids will be received by a representative of the City for the purchase of $[Principal Amount] principal amount of bonds of the City designated the “City of Hayward 2025 Wastewater Revenue Bonds” (the “Bonds”). All bids must be submitted via BiDCOMPTM/Parity® (“Parity®”), the electronic bidding system, up to the time and at the place specified as follows:

DATE: TUESDAY, MARCH 11, 2025

TIME: 9:00 A.M. CALIFORNIA TIME

Bids for the purchase of the Bonds will be received and considered subject to the terms and conditions described herein.

Please note that the City reserves the right to cancel or reschedule the sale of the Bonds upon notice given through Bloomberg News or Thomson Municipal Market Monitor (www.tm3.com) at any time before the time for the receipt of bids, and if the sale is rescheduled, notice of the new sale date and time, if any, will be given through Bloomberg News or Thomson Municipal Market Monitor (www.tm3.com) no later than 10:00 a.m. California time the day prior to the new day bids are to be received, and bids will be received in the manner set forth above at the rescheduled date and time as the City may determine.

AUTHORITY FOR THE BONDS

The Bonds will be issued under the provisions of a Resolution adopted by the City Council of the City on February 25, 2025 (the “Bond Resolution”), and under Sections 3, 5 and 7 of Article XI of the Constitution of the State of California, Section 200 of the Charter of the City, and Chapter 8, Article 22 of the Hayward Municipal Code . The Bonds are more particularly described in the Indenture of Trust under which the Bonds will be issued (which is incorporated herein by reference) and copies thereof will be furnished to the bidder upon request.

PURPOSE OF THE BONDS

The proceeds of the Bonds will be applied by the City for the purpose of financing the acquisition and construction of improvements to the wastewater collection, pumping, transport, treatment, storage, and disposal system (the “Wastewater System”). A portion of the proceeds of the Bonds will also be applied to pay the costs of issuing the Bonds.

SECURITY FOR THE BONDS

The Bonds are revenue bonds of the City, payable from and secured by a pledge of and lien on the net revenues of the Wastewater System on a parity with certain outstanding obligations of the City and additional obligations to be issued by the City in the future . Bidders are referred to the Preliminary Official Statement relating to the Bonds for further details regarding the security and sources of payment for the Bonds.

The City will not establish a debt service reserve fund for the Bonds.

* Preliminary; subject to change.

2 TERMS OF THE BONDS

ISSUE; BOOK-ENTRY FORM: The Bonds will be issued in the form of fully registered Bonds without coupons. The Bonds will be issued in a book -entry only system with no physical distribution of the Bonds made to the public. The Depository Trust Company, New York, New York (“DTC”), will act as depository for the Bonds which will be immobilized in its custody. The Bonds will be registered in the name of Cede & Co., as nominee for DTC, on behalf of the participants in the DTC system and the subsequent beneficial owners of the Bonds.

DATE OF THE BONDS: The Bonds will be dated as of their original delivery, and will be issued in minimum denominations of $5,000.

MATURITIES: The Bonds will mature, or be subject to mandatory sinking fund redemption, on March 1 in each of the years, and in the amounts, as set forth in the following table. The final principal amount of the Bonds, and the final amount of each maturity of the Bonds, is subject to increase or decrease as described below under the heading “Adjustment of Principal Amounts”.

Each bidder must specify in its bid whether, for any particular year, the Bonds will mature or, alternately, be subject to mandatory sinking fund redemption in such year.

Maturity Date
(March 1)
Principal
Amount
Maturity Date
(March 1)
Principal
Amount
2030 $2,810,000 2043 $4,825,000
2031 2,950,000 2044 5,070,000
2032 3,100,000 2045 5,320,000
2033 3,255,000 2046 5,585,000
2034 0 2047 5,865,000
2035 1,000,000 2048 6,160,000
2036 2,000,000 2049 6,470,000
2037 3,000,000 2050 6,790,000
2038 3,780,000 2051 7,130,000
2039 3,970,000 2052 7,490,000
2040 4,170,000 2053 7,860,000
2041 4,380,000 2054 8,255,000
2042 4,595,000 2055 8,670,000

PAYMENT PROVISIONS: Interest on the Bonds will be payable on March 1, 2025, and on March 1 and September 1 in each year thereafter (the “Interest Payment Dates”), to the registered owners by check or draft of The Bank of New York Mellon Trust Company, National Association, as trustee for the Bonds (the “Trustee”) or, in the case of the owner of Bonds in an aggregate principal amount of at least $1,000,000, at the written request of such owner by wire transfer.

Principal of the Bonds will be paid upon presentation and surrender thereof at the office of the Trustee. The principal of and interest on the Bonds are payable in lawful money of the United States of America.

OPTIONAL REDEMPTION: Bonds maturing on or before March 1, 2035, are not subject to redemption prior to their respective stated maturities. Bonds maturing on or af ter March 1, 206, are subject to redemption prior to maturity, at the option of the City, in whole or in part among maturities on such basis as shall be designated by the City and by lot within a maturity, from any available source of funds, on March 1, 2035, and on any date thereafter, at a redemption price equal to 100% of the principal amount of Bonds to be redeemed together with accrued interest thereon to the date fixed for redemption, without premium.

3 SINKING FUND REDEMPTION: Any bidder may, at its option, specify that one or more maturities of the Bonds will consist of term Bonds which are subject to mandatory sinking fund redemption in consecutive years immediately preceding the maturity thereof, as designated in the bid of such bidder. If the bid of the successful bidder specifies that any maturity of Bonds will be term Bonds, such term Bonds will be subject to mandatory sinking fund redemption on March 1 in each year so designated in the bid, in the respective amounts for such years as set forth above under the heading “MATURITIES”, at a redemption price equal to the principal amount thereof to be redeemed together with accrued interest to the redemption date, without premium.

TAX-EXEMPT STATUS: In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bonds Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the Bonds is excluded from gross income for federal income t ax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, interest on the Bon ds is exempt from California personal income taxes. Bidders are referred to the Preliminary Official Statement for a description of the proposed opinion of Bond Counsel.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1986 (the “Tax Code”) that must be satisfied subsequent to the issuance of the Bonds in order that such interest be, or continue to be, excluded from gross income for federal income tax purposes. The City will covenant to comply with each such requirement. Failure to comply with certain of such requirements may cause the inclusion of such interest in gross income for federal income tax purposes to be retroactive to the date of issuance of the Bonds.

LEGAL OPINION: The legal opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, approving the validity of the Bonds, will be furnished to the purchaser of the Bonds without cost. A copy of the legal opinion will be appended to each Bond. Bidders are referred to the Preliminary Official Statement relating to the Bonds for the proposed form of Bond Counsel’s legal opinion.

FURTHER INFORMATION: A copy of the Preliminary Official Statement describing the Bonds, and any other information concerning the proposed financing, will be furnished upon request to the Municipal Advisor to the City (the “Municipal Advisor”), as follows:

NHA Advisors, LLC
Mail: 4040 Civic Center Drive, Suite 200, San Rafael, California 94903 Attn: Christian Sprunger
Telephone: (415) 785-2025 ext. 2007
Email: [email protected].

TERMS OF SALE

Important Note: This notice will be submitted to i-Deal LLC (“i-Deal”) for posting at the TM3 website and in the Parity bid delivery system. In the event i-Deal’s summary of the terms of sale of the Bonds conflicts with this Notice of Sale in any particula rs, the terms of this Notice of Sale (as amended, if necessary, with notice of any amendment hereto to be given as described above) shall control.

4 RIGHT TO CANCEL, POSTPONE OR RESCHEDULE SALE: The City reserves the right to cancel, postpone or reschedule the sale of the Bonds upon notice published on the website of the Municipal Advisor and through the TM3 system, not less than 24 hours before the time for receipt of bids. If the sale is postponed, bids will be received at the above place at such date an d hour as set forth in the notice. Failure of any bidder to receive such notice or any other form of notice of canceled, postponed or rescheduled sale will not affect the legality or validity of any sale.

FORM OF BID. All bids for the Bonds must be unco nditional and for not less than all of the Bonds offered for sale. Each bid must be in accordance with the terms and conditions set forth herein. Bids will only be accepted via PARITY® (the “Bid Service” or “Parity®”) pursuant to this Notice the time and date set forth for receipt of bids. To the extent any instructions or directions set forth in PARITY® conflict with this Notice, the terms of this Notice shall control. For further information about PARITY®, potential bidders may contact the City’s municipal advisor (see the cover page of this Notice of Sale for contact information).

ELECTRONIC BIDS. Only electronic bids submitted through Parity will be accepted. For further information about Parity, potential bidders may contact:

IHS Markit
450 West 33rd Street
New York, New York 10001
Phone: (212) 849-5023
Emaill: [email protected]
Internet address: http://www.newissuehome.i-deal.com

If any provision of this Notice of Sale conflicts with information provided by the Bid Service, this Notice of Sale shall control. Each bidder submitting an electronic bid agrees by doing so that it is solely responsible for all arrangements with (inclu ding any charges by) the Bid Service and that the Bid Service is not acting as an agent of the City. Instructions for submitting electronic bids must be obtained from the Bid Service, and the City does not assume any responsibility for ensuring or verifyi ng bidder compliance with the Bid Service’s procedures. The City shall be entitled to assume that any bid received via the Bid Services has been made by a duly authorized agent of the bidder.

If a bidder submits an electronic bid for the Bonds, such bidd er thereby agrees to the following terms and conditions:

(i) If any provision in this Notice of Sale with respect to the Bonds conflicts with information or terms provided or required by the Bid Service, this Notice of Sale, including any amendments issued as described herein, shall control;

(ii) each bidder shall be solely responsible for making necessary arrangements to access the Bid Service for purposes of submitting its bid in a timely manner and in compliance with the requirements of this Notice of Sale;

(iii) the City shall not have any duty or obligation to provide or assure access to the Bid Service to any bidder, and the City shall not be responsible for proper operation of, or have any liability for, any delays, interruptions or damages cau sed by use of the Bid Service or any incomplete, inaccurate or untimely bid submitted by any bidder through the Bid Service;

(iv) the City is using the Bid Service as a communication mechanism, and not as an agent of the City, to conduct the electronic bidding for the Bonds;

(v) the Bid Service is acting as an independent contractor, and is not acting for or on behalf of the City;

5 (vi) the City is not responsible for ensuring or verifying bidder compliance with any procedures established by the Bid Service;

(vii) the City may regard the electronic transmission of a bid through the Bid Service (including information regarding the purchase price for the Bonds and interest rates for any maturity of the Bonds) as though the information were submitted and executed on the bidder’s behalf by a duly authorized signatory;

(viii) if the bidder’s bid is accepted by the City, this Notice of Sale and the information that is transmitted electronically through the Bid Service shall form a contract, and the bidder shall be bound by the terms of such contract; and

(ix) information provided by the Bid Service to bidders shall form no part of any bid or any contract between the winning bidder and the City unless that information is included in this Notice of Sale provided by the City.

WARNING REGARDING ELECTRONIC BIDS . THE CITY WILL ACCEPT BIDS IN ELECTRONIC FORM SOLELY THROUGH PARITY®. EACH BIDDER SUBMITTING AN

ELECTRONIC BID UNDERSTANDS AND AGREES BY DOING SO THAT IT IS SOLELY RESPONSIBLE FOR ALL ARRANGEMENTS WIT H PARITY®, THAT THE CITY NEITHER ENDORSES NOR EXPLICITLY ENCOURAGES THE USE OF PARITY®, AND THAT PARITY® IS NOT ACTING AS AN AGENT OF THE CITY. INSTRUCTIONS AND FORMS FOR SUBMITTING ELECTRONIC BIDS MUST BE OBTAINED FROM PARITY®, AND THE CITY

ASSUMES NO RE SPONSIBILITY FOR ENSURING OR VERIFYING BIDDER COMPLIANCE WITH THE PROCEDURES OF PARITY®. THE CITY SHALL ASSUME THAT ANY BID RECEIVED THROUGH PARITY® HAS BEEN MADE BY A DULY AUTHORIZED AGENT OF THE BIDDER.

THE CITY, THE MUNICIPAL ADVISOR AND BOND COUNSEL ASSUME NO

RESPONSIBILITY FOR ANY ERROR CONTAINED IN ANY BID SUBMITTED

ELECTRONICALLY, OR FOR FAILURE OF ANY BID TO BE TRANSMITTED, RECEIVED OR OPENED AT THE OFFICIAL TIME FOR RECEIPT OF BIDS. THE OFFICIAL TIME FOR

RECEIPT OF BIDS WILL BE DETERMINED BY THE CITY AT THE PLACE OF BID OPENING, AND THE CITY SHALL NOT BE REQUIRED TO ACCEPT THE TIME KEPT BY PARITY® AS THE OFFICIAL TIME.

MINIMUM / MAXIMUM PURCHASE PRICE: Each proposal must be for not less than all of the Bonds hereby offered for sale. The purchase price for the Bonds shall be not less than 99% of the par amount thereof. Bidders should be aware that the required purchase price is net of purchaser’s compensation and bond insurance premium (if bond insurance is obtained), which is required to be paid by the purchaser.

DESIGNATION OF INTEREST RATES: Bidders may specify any number of separate interest rates, and any rate may be repeated as often as desired; provided, however, that:

(i) each interest rate specified must be in a multiple of 1/20 of 1% or 1/8 of 1%; (ii) the maximum interest rate bid for any maturity shall not exceed 6% per annum; (iii) a zero rate of interest cannot be specified;
(iv) interest on each Bond shall accrue from its dated date to its stated maturity date at the interest rate specified in the bid;
(v) all Bonds of the same maturity date shall bear the same rate of interest; (vi) bidders may bid to purchase the Bonds from the City at a discount or with a premium; however, no bid will be considered if the bid is to purchase Bonds at a n aggregate price less than 98%; and

6 (vii) no bid will be accepted which contemplates the waiver of any interest or other concession by the bidder as substitute for payment in full of the purchase price.

Bids that do not conform to the terms of this paragraph will be rejected.

BASIS OF AWARD: Unless all bids are rejected as described in this Notice of Sale, the Bonds will be awarded to the responsible bidder whose bid produces the lowest true interest cost on the Bonds. The true interest cost specified in a ny bid will be that rate which, when used in computing the present value of principal and interest to be paid on all Bonds from the expected date of delivery (which is assumed for computational purposes to be March 25, 2025 ), to their respective maturity dates, or mandatory sinking fund prepayment dates in the case of term Bonds, produces an amount equal to the purchase price (including any premium or original issue discount) specified in such bid. For purposes of computing the true interest cost represented by any bid, the purchase price specified in such bid shall be equal to the par amount of the Bonds plus any premium specified in such bid, less any original issue discount, and the true interest cost shall be calculated by the use of a semiannual interv al of compounding interest based on the Interest Payment Dates for the Bonds.

The interest rates used in the true interest computation will be the interest rates stated in the bid.

Bidders are requested to supply a calculation of the true interest cost of the Bonds to the City on the basis of their respective bids, which shall be considered as informative only and not binding on either the bidder or the City.

VERIFICATION: All bids are subject to verification and approval by the City. The City has the absolute right, in its sole discretion, to deem final each bid as reported by Parity to be accurate and binding on the bidder immediately after the deadline for receipt of bi ds. Information or calculations provided by Parity other than the information required to be provided by the bidder in accordance with this Notice of Sale is for information purposes only and is not binding on either the bidder or the City.

ALL OR NONE BID. Any prospective purchaser may submit a bid for the Bonds, provided that if any of the Bonds are bid for, then all of the Bonds must be bid for.

ADJUSTMENT OF PRINCIPAL MATURITIES: The City reserves the right to increase or decrease the principal amount of any maturity of the Bonds (or, in the case of the term Bonds, the principal amount thereof which is subject to mandatory sinking fund redemption on March 1 in any year). The City will give notice of any such adjustment to the successful bidder as soon as practicable following the notification of award. No such adjustment will alter the basis upon which the best bid is determined. The winning bidder may not withdraw its bid or change its i nterest rates bid as a result of any changes made to the principal amounts.

RIGHT OF REJECTION: The City reserves the right, in its discretion, to reject any and all bids and to the extent not prohibited by law to waive any irregularity or informality in any bid.

PROMPT AWARD: A representative of the City has been authorized to accept the best responsible bid for the purchase of the Bonds and to accept such bid, for and in the name of the City, by notice to the successful bidder. If two or more bids setting forth identical interest rates and premium, if any, are received, such officer may exercise discretion and judgment in making the award and may award the Bonds on a pro rata basis in such denominations as he or she determines. Such authorized representative of the City may also reject any and all bids and waive any irregularity or informality in any bid. Sale of the Bonds will be awarded or all bids will be rejected not later than 24 hours after the expiration of the time prescribed for the receip t of proposals unless such time of award is waived by the successful bidder; provided, that the award may be made after the expiration of the specified time if the bidder does not notify the City in writing of the withdrawal of its proposal.

7 PLACE OF DELIVERY; CANCELLATION FOR LATE DELIVERY: It is expected that the Bonds will be delivered to DTC for the account of the successful bidder on March 25, 2025. The successful bidder has the right, at the successful bidder’s option, to cancel the contract of pur chase if the Bonds are not tendered for delivery within 60 days from the date of the sale thereof.

PAYMENT OF PURCHASE PRICE: The successful bidder will be required to pay the purchase price of the Bonds in funds which are immediately available to the Trustee. Such payment shall be made on the date of original delivery of the Bonds by the City to DTC.

NO GOOD FAITH DEPOSIT: A good faith deposit is not required in connection with the sale of the Bonds.

CUSIP NUMBERS: It is anticipated that CUSIP numbers will be printed on the Bonds, but neither the failure to print such numbers on any Bonds nor any error with respect thereto will constitute cause for a failure or refusal by the purchaser to accept delivery of and pay for the Bonds in accordance with th e terms hereof. All expenses in relation to the printing of CUSIP numbers on the Bonds will be paid for by the City, except that the CUSIP Service Bureau charge for the assignment of said numbers will be the sole responsibility of and shall be paid for by the purchaser. The purchaser shall also notify the CUSIP Service Bureau as to the final structure of the Bonds awarded to such purchaser.

QUALIFICATION FOR SALE; BLUE SKY. Compliance with blue sky laws shall be the sole responsibility of the purchaser. The City will furnish such information and take such action not inconsistent with law as the purchaser may request and the City shall deem necessary or appropriate to qualify the Bonds for offer and sale under the blue sky or other securities laws and regulations of such states and other jurisdictions of the United States of America as may be designated by the purchaser; provided, however, that the City shall not execute a general or special consent to service of process or qualify to do business in connection with such qualification or determination in any jurisdiction. The purchaser will not offer to sell or solicit any offer to buy the Bonds in any jurisdiction where it is unlawful for such bidder to make such offer, solicitation or sale, and the bidder shall comply with the blue sky and other securities laws and regulations of the states and jurisdictions in which the bidder sells the Bonds.

CALIFORNIA DEBT AND INVESTMENT ADVISORY COMMISSION FEES: All fees payable to the California Debt and Investme nt Advisory Commission in connection with the issuance of the Bonds are the sole responsibility of the purchaser of the Bonds.

ESTABLISHMENT OF ISSUE PRICE FOR THE BONDS: By submitting a bid, the purchaser confirms that each maturity of the Bonds has been or will be offered to the public on or before the date of award at the offering price or prices (the “initial offering price”), or at the corresponding yield or yields, set forth in the bid submitted by the purchaser.

By submitting a bid, the purchaser agrees to assist the City and Special Counsel in establishing the issue price of the Bonds. Prior to delivery of the Bonds, the purchaser shall be required to provide to the City a reoffering price certification in form and substance similar to either the certificate attached as Appendix A to this Notice of Sale (if the “competitive sale requirements” described below have been met), the certificate attached as Appendix B to this Notice of Sale (if the competitive sale requirements have not been met and the purchaser elects to use the 10% test to determine the issue price), or the certificate attached as Appendix C to this Notice of Sale (if the competitive sale requirements have not been met and the purchaser elects to use the hold- the-offering rule to determine the issue price) . The Bonds actually delivered will have such modifications as may be appropriate or necessary, in the reasonable judgment of the purchaser, the City and Special Counsel to accurately reflect, as applicable, the role of the signatory and the sales price or prices or the initial offering price or prices to the public of the Bonds. In addition, based on reasonable requests of Special Counsel, the purchaser will provide information

8 regarding its sales of the Bonds. For purposes of this paragraph, sales of the Bonds to other securities brokers or dealers will not be considered sales to the general public.

Competitive Sale Requirements Satisfied. The City intends that the provisions of Treasury Regulation Section 1.148 -1(f)(3)(i) (defining “competitive sale” for purposes of establishing the issue price of the Bonds) will apply to the initial sale of the Bonds (the “competitive sale requirements”) because:

(1) the City shall disseminate this Notice of Sale to potential underwriters in a manner that is reasonably designed to reach potential underwriters;

(2) all bidders shall have an equal opportunity to bid;

(3) the City may receive bids from at least three und erwriters of municipal bonds who have established industry reputations for underwriting new issuances of municipal bonds; and

(4) The City anticipates awarding the sale of the Bonds to the bidder who submits a firm offer to purchase the Bonds at the highe st price (or lowest overall true interest cost), as set forth in this Notice of Sale.

Any bid submitted pursuant to this Notice of Sale shall be considered a firm offer for the purchase of the Bonds, as specified in the bid.

Bids will not be subject to c ancellation if the competitive sale requirements are not satisfied.

If the competitive sale requirements are not satisfied, the City shall so advise the purchaser. If the competitive sale requirements are not satisfied, the purchaser shall advise the City if any maturity of the Bonds satisfies the 10% test (as defined below) as of the date and time of the award of the Bonds, and if the purchaser has elected to apply the hold -the-offering-price rule (as defined below), the purchaser shall notify the City, within one hour of the time of award of the Bonds, which maturities of the Bonds satisfy the 10% test and which maturities shall be subject to the hold-the-offering-price rule.

Competitive Sale Requirements Not Satisfied – 10% Test . If the competitive sale requirements are not satisfied, and the purchaser does not elect to use the hold-the-offering-price rule, then the City shall treat the first price at which 10% of a maturity of the Bonds (the “10% test”) is sold to the public as the issue price of that maturity. Until the 10% test has been satisfied as to each maturity of the Bonds to which the 10% test shall apply, the purchaser agrees to promptly report to the City the prices at which such unsold Bonds of that maturity have been sold to the public. That reporting obligation shall continue, whether the Closing Date has occurred, until the 10% test has been satisfied as to the Bonds of that maturity or until all Bonds of that maturity have been sold.

Competitive Sale Requirements Not Satisfied – Hold-the-Offering-Price Rule. If the competitive sale requirements are not satisfied, and the purchaser has elected to use the hold - the-offering-price rule, the purchaser agrees, on behalf of the underwriters participating in the purchase of the Bonds, that the underwriters will neither offer nor sell unsold Bonds of any maturity to which the hold -the-offering-price rule applies to any person at a price that is higher than the initial offering price to the public during the period starting on the sale date and ending on the earlier of the following:

(1) the close of the 5th business day after the sale date; or

9 (2) the date on which the underwriters have sold at least 10% of that maturity of the Bonds to the public at a price that is no highe r than the initial offering price to the public.

The purchaser shall promptly advise the City when the underwriters have sold 10% of that maturity of the Bonds to the public at a price that is no higher than the initial offering price to the public, if that occurs prior to the close of the 5th business day after the sale date.

The City acknowledges that, if the purchaser has elected to use the hold-the-offering-price rule, in making the representation set forth above, the purchaser will rely on (i) the agreement of each underwriter to comply with the hold -the-offering-price rule, as set forth in an agreement among underwriters and the related pricing wires, (i i) if a selling group has been created in connection with the initial sale of the Bonds to the public, the agreement of each dealer who is a member of the selling group to comply with the hold-the-offering-price rule, as set forth in a selling group agreement and the related pricing wires, and (iii) if an underwriter is a party to a retail distribution agreement that was employed in connection with the initial sale of the Bonds to the public, the agreement of each broker-dealer that is a party to such agreement to comply with the hold-the-offering-price rule, as set forth in the retail distribution agreement and the related pricing wires. The City further acknowledges that each underwriter shall be solely liable for its failure to comply with its agreement regarding the hold-the-offering-price rule and that no underwriter shall be liable for the failure of any other underwriter, or of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a retail distribution agreement to comply with its corresponding agreement regarding the hold-the-offering-price rule as applicable to the Bonds.

By submitting a bid, each bidder confirms that:

(i) any agreement among underwriters, any selling group agreement and each retail distribution agreement (to which the bidder is a party) relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter, each dealer who is a member of the selling group, and each broker-dealer that is a party to such retail distribution agreement, as applicable, to (A) report the prices at which it sells to the public the unsold Bonds of each maturity allotted to it until it is notified by the purchaser that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public and (B) comply with the hold -the-offering-price rule, if applicable, in each case if and for so long as directed by the purchaser and as set forth in the related pricing wires, and

(ii) any agreement among underwriters relating to the initial sale of the Bonds to the public, together with the related pricing wires, contains or will contain language obligating each underwriter that is a party to a retail distribution agreement to be employed in connection with the initial sale of the Bonds to the public to require each broker-dealer that is a party to such retail distribution agreement to (A) report the prices at which it sells to the publi c the unsold Bonds of each maturity allotted to it until it is notified by the purchaser or such underwriter that either the 10% test has been satisfied as to the Bonds of that maturity or all Bonds of that maturity have been sold to the public and (B) com ply with the hold-the-offering-price rule, if applicable, in each case if and for so long as directed by the purchaser or such underwriter and as set forth in the related pricing wires.

Sales of any Bonds to any person that is a related party to an underwriter shall not constitute sales to the public for purposes of this Notice of Sale. Further, for purposes of this Notice of Sale:

(i) “public” means any person other than an underwriter or a related party,

(ii) “underwriter” means (A) any person that agrees pursuant to a written contract with the City (or with the lead underwriter to form an underwriting syndicate) to

10 participate in the initial sale of the Bonds to the public and (B) any person that agr ees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the public),

(iii) a purchaser of any of the Bonds is a “related party” to an underwriter if the underwriter and the purchaser are subject, directly or indirectly, to (A) more than 50% common ownership of the voting power or the total value of their stock, if both entities are corporations (including direct ownership by one corporation of another), (B) more than 50% common ownership of their capital interests or profits interests, if both entities are partnerships (including direct ownership by one partnership of another), or (C) more than 50% common ownership of the value of the outstanding stock of the corporation or the capital interests or profit interests of the partnership, as applicable, if one entity is a corporation and the other entity is a partnership (including direct ownership of the applicable stock or interests by one entity of the other), and

(iv) “sale date” means the date that the Bonds are awarded by the City to the purchaser.

OFFICIAL STATEMENT: The City has approved a Preliminary Official Statement relating to the Bonds. Copies of such Preliminary Official Statement will be distributed to any bidder, upon request, prior to the sale in a form “deemed final” by the City for purposes of Rule 15c2-12 under the Securities Exchange Act of 1934 (the “Rule”). Within seven business days from the sale date, the City will deliver to the purchaser copies of the final Official Statement, executed by an authorized representative of the City and the City and dated the date of delivery thereof to the purchaser, in sufficient number to allow the purchaser to comply with paragraph (b)(4) of the Rule and to satisfy the Municipal Securities Rulemaking Board (the “MSRB”) Rule G -32 or any other rules adopted by the MSRB, which shall include information permitted to be omitted by paragraph (b)(1) of the Rule and such other amendments or supplements as are approved by the City (the “Final Official Statement”). The purchaser agrees that it will not confirm the sale of any Bonds unless the confirmation of sale is accompanied or preceded by the delivery of a copy of the Final Official Statement.

CERTIFICATE REGARDING OFFICIAL STATEMENT: A responsible officer of the City will certify to the original purchaser of the Bonds, as a condition of closing, that based on such officer’s participation in the preparation of the Official Statement, nothing has come to his or her attention to lead him or her to believe that the Official Statement (except for certain financial statements, statistical data and other information) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

DISCLOSURE COUNSEL NEGATIVE ASSURANCE LETTER: The firm of Jones Hall, A Professional Law Corporation, as Disclosure Counsel to the City, will provide a letter to the original purchaser of the Bonds regarding the Official Statement. Such letter will be to the effect that during the course of Disclosure Counsel’s work with regard to the Bonds, no facts have come to their attention that cause them to believe that the Official Statement (except for any financial and statistical data and forecasts, numbers, estimates, assumptions and expressions of opinion, and information concerning the Depository Trust Company and the book-entry system) contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statement s therein, in the light of the circumstances under which they were made, not misleading.

NO LITIGATION CERTIFICATE: At the time of issuance of the Bonds, the City will certify there is no litigation pending concerning the validity of the Bonds, the corporate existence of the City,

11 or the entitlement of the City officers to their respective offices, and the purchaser will be furnished a no-litigation certificate certifying to the foregoing as of and at the time of delivery of the Bonds.

CONTINUING DISCLOSURE. In order to assist bidders in complying with S.E.C. Rule 15c2 - 12(b)(5), the City has committed to undertake, under the Bond Resolution and a Continuing Disclosure Certificate, to provide certain annual financial information and notices of the occurrence of certain events, if material. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the final Official Statement. S uch Continuing Disclosure Certificate will be a document required to be delivered at closing by the City, and the failure by the City to deliver such document in form and substance acceptable to Bond Counsel and the successful bidder will relieve the succe ssful bidder of its obligation to purchase the Bonds.

GIVEN by order of the City Council of the City of Hayward by resolution adopted February 25, 2025.

12 1

APPENDIX A
FORM OF REOFFERING PRICE CERTIFICATE*

TO BE DELIVERED IF COMPETITIVE SALE REQUIREMENTS ARE MET (I.E., 3 BIDS FROM

COMPETITIVE PROVIDERS ARE RECEIVED)

$____________

CITY OF HAYWARD
2025 Wastewater Revenue Bonds

ISSUE PRICE CERTIFICATE

The undersigned, on behalf of [ NAME OF UNDERWRITER ] ( “[SHORT NAME OF UNDERWRITER]”), hereby certifies as set forth below with respect to the sale of the above - captioned obligations (the “Bonds”).

1. Reasonably Expected Initial Offering Price.
(a) As of the Sale Date, the reasonably expected initial offering prices of the Bonds to the Public by [ SHORT NAME OF UNDERWRITER ] are the prices listed in Schedule 1 (the “Expected Offering Prices”). The Expected Offering Prices are the prices for the Maturities of the Bonds used by [SHORT NAME OF UNDERWRITER] in formulating its bid to purchase the Bonds.

Attached as Schedule 1 is a true and correct copy of the bid provided by [ SHORT NAME OF UNDERWRITER] to purchase the Bonds.
(b) [SHORT NAME OF UNDERWRITER ] was not given the opportunity to review other bids prior to submitting its bid.
(c) The bid submitted by [SHORT NAME OF UNDERWRITER] constituted a firm offer to purchase the Bonds.

2. Defined Terms.
(a) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(b) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (c) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [DATE]. (d) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this certificate represents [ SHORT NAME OF UNDERWRITER ]’s interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Certificate as to Arbitrage and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal

2 income tax purposes, the preparation of the Internal Revenue Service Form 8038 -G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

Dated: [ISSUE DATE] [UNDERWRITER]

By:

Name and Title

3 SCHEDULE 1

BIDDING DOCUMENTATION AND INITIAL OFFERING PRICES

1 APPENDIX B

FORM OF REOFFERING PRICE CERTIFICATE

TO BE DELIVERED IF COMPETITIVE SALE REQUIREMENTS ARE NOT MET (3 COMPETITIVE BIDS ARE NOT RECEIVED) AND 10% TEST IS USED FOR ISSUE PRICE

$____________

CITY OF HAYWARD
2025 Wastewater Revenue Bonds

ISSUE PRICE CERTIFICATE

The undersigned, on behalf of [ NAME OF UNDERWRITER/REPRESENTATIVE ] ([“[SHORT NAME OF UNDERWRITER]”) ][the “Representative”)][, on behalf of itself and [NAMES OF OTHER UNDERWRITERS ] (together, the “Underwriting Group”), ] hereby certifies as set forth below with respect to the sale and issuance of the above -captioned obligations (the “Bonds”).

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

2. Defined Terms.
(a) Issuer means the City of Hayward, California.
(b) Maturity means Bonds with the same credit and payment terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate maturities.
(c) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50 percent common ownership, directly or indirectly. (d) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [DATE]. (e) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (or with the lead underwriter to form an underwriting syndicate) to parti cipate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in this certificate are limited to factual matters only. Nothing in this c ertificate represents [ NAME OF UNDEWRITING FIRM ][the Representative’s ] interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as amended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Certificate as to Arbitrage and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038-G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

2 Dated: [ISSUE DATE] [UNDERWRITER]

By:

Name and Title

3 SCHEDULE 1

SALE PRICES

- 1 -

APPENDIX C

FORM OF REOFFERING PRICE CERTIFICATE

TO BE DELIVERED IF COMPETITIVE SALE REQUIREMENTS ARE NOT MET (3

COMPETITIVE BIDS ARE NOT RECEIVED) AND PURCHASER ELECTS TO USE

HOLD-THE-OFFERING-PRICE FOR ISSUE PRICE

$____________

CITY OF HAYWARD
2025 Wastewater Revenue Bonds

ISSUE PRICE CERTIFICATE

The undersigned, on behalf of [NAME OF UNDERWRITER/REPRESENTATIVE] ([“[SHORT NAME OF UNDERWRITER]”)][the “Representative”)][, on behalf of itself and [NAMES OF OTHER UNDERWRITERS] (together, the “Underwriting Group”), ] hereby certifies as set forth below with respect to the sale and issuance of the above - captioned obligations (the “Bonds”).

1. Initial Offering Price of the Bonds.
(a) [SHORT NAME OF UNDERWRITER ][The Underwriting Group ] offered each Maturity of the Bonds to the Public for purchase at the respective initial offering prices listed in Schedule 1 (the “Initial Offering Prices”) on or before the Sale Date. A copy of the pricing wire or equivalent communication for the Bonds is attached to this certificate as Schedule 1.
(b) As set forth in the [ Bond Purchase Agreement][Notice of Sale and bid award], [ SHORT NAME OF UNDERWRITER ][the members of the Underwriting Group] [has][have] agreed in writing that, (i) for each Maturity of the Bonds, [ it][they] would neither offer nor sell any of the Bonds of such Maturity to any person at a price that is higher than the Initial Offering Price for such Maturity during the Holding Period for such Maturity (the “hold -the-offering-price rule”), and (ii) any selling group agreement shall contain the agreement of each dealer who is a member of the selling group, and any retail distribution agreement shall contain the agreement of each broker -dealer who is a party to the retail distribution agreement, to comply with the hold -the-offering-price rule.

Pursuant to such agreement, no Underwriter (as defined below) has offered or sold any Maturity of the Bonds at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

2. Defined Terms.
(a) Holding Period means, for each Maturity of the Bonds, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date ([ DATE]), or (ii) the date on which [ SHORT NAME OF THE UNDERWRITER][the Underwriters] [has][have] sold at least 10% of such Maturity of the Bonds to the Public at prices that are no higher than the Initial Offering Price for such Maturity.
(b) Issuer means the City of Hayward, California.
(c) Maturity means Bonds with the same credit and paymen t terms. Bonds with different maturity dates, or Bonds with the same maturity date but different stated interest rates, are treated as separate Maturities.
(d) Public means any person (including an individual, trust, estate, partnership, association, company, or corporation) other than an Underwriter or a related party to an

- 2 -
Underwriter. The term “related party” for purposes of this certificate generally means any two or more persons who have greater than 50% common ownership, directly or indirectly. (e) Sale Date means the first day on which there is a binding contract in writing for the sale of a Maturity of the Bonds. The Sale Date of the Bonds is [DATE]. (f) Underwriter means (i) any person that agrees pursuant to a written contract with the Issuer (o r with the lead underwriter to form an underwriting syndicate) to participate in the initial sale of the Bonds to the Public, and (ii) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (i) of this paragraph to participate in the initial sale of the Bonds to the Public (including a member of a selling group or a party to a retail distribution agreement participating in the initial sale of the Bonds to the Public).

The representations set forth in t his certificate are limited to factual matters only.

Nothing in this certificate represents [ NAME OF UNDEWRITING FIRM ][the Representative’s] interpretation of any laws, including specifically Sections 103 and 148 of the Internal Revenue Code of 1986, as a mended, and the Treasury Regulations thereunder. The undersigned understands that the foregoing information will be relied upon by the Issuer with respect to certain of the representations set forth in the Certificate as to Arbitrage and with respect to compliance with the federal income tax rules affecting the Bonds, and by Jones Hall, A Professional Law Corporation, in connection with rendering its opinion that the interest on the Bonds is excluded from gross income for federal income tax purposes, the preparation of the Internal Revenue Service Form 8038- G, and other federal income tax advice that it may give to the Issuer from time to time relating to the Bonds.

Dated: [ISSUE DATE] [UNDERWRITER]

By:

Name and Title

- 3 -
SCHEDULE 1

LISTING OF HOLD-THE-PRICE MATURITIES, INITIAL OFFERING PRICES AND

PRICING WIRE

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

Attachment V
PRELIMINARY OFFICIAL STATEMENT DATED FEBRUARY ___, 2025

NEW ISSUE - FULL BOOK-ENTRY RATING: S&P: “___”
See “RATING”
In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to ce rtain qualifications described herein, under existing law, the interest on the 2025 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2025 Bonds may be subject to the corporate alternative minimum tax. In the further opinion of Bond Counsel, such interest is exempt from California personal income taxes. See “TAX MATTERS.”
$_____________*

CITY OF HAYWARD
2025 WASTEWATER REVENUE BONDS

Dated: Date of Delivery Due: March 1, as shown on inside cover Authority for Issuance. The captioned bonds (the “2025 Bonds”) are being issued by the City of Hayward (the “City”) pursuant to the City Charter, the City of Hayward Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 8, Article 22 of the Hayw ard Municipal Code (the “Bond Law”), a resolution adopted by the City Council of the City on [___________], 2025 and pursuant to an Indenture of Trust dated as of March 1, 2025 (the “Indenture”) between the City and The Bank of New York Mellon Trust Company, N.A. , Los Angeles, California, as trustee (the “Trustee”).

Purpose. The proceeds of the 2025 Bonds will be used to (i) finance capital improvement projects for the City’s wastewater system (the “Wastewater System”); (ii) to fund capitalized interest on the 2025 Bonds through September 1, 2025; and (iii) pay the costs of issuing the 2025 Bonds. See “THE FINANCING PLAN.”
Security for the 2025 Bonds; No Reserve Fund. The 2025 Bonds are special limited obligations of th e City and are payable from and secured by a pledge of and lien on the Net Revenues (as such term is defined in the Indenture) of the Wastewater System and from amounts on deposit in certain funds and accounts established under the Indenture. The City is n ot providing for a debt service reserve fund for the 2025 Bonds and is not obligated to fund a reserve fund in connection with, or upon the issuance of, any Parity Obligations. See “SECURITY FOR THE 2025 BONDS.”
Current and Future Parity Obligations. The 2025 Bonds are secured by the Net Revenues of the Wastewater System on a parity with the City’s obligations under an agreement between the City and the State Water Resources Control Board, effective July 27, 2006 ( the “2006 SRF Agreement”). In addition, the City may issue additional debt secured by the Net Revenues of the Wastewater System on a parity basis, subject to the conditions set forth in the Indenture. See “SECURITY FOR THE 2025 BONDS – Parity Obligations.” The City anticipates incurring additio nal Parity Obligations to finance capital improvement projects. See “WASTEWATER SYSTEM FINANCIAL INFORMATION – Future Wastewater System Financings.”
Bond Terms; Book-Entry Only. The 2025 Bonds will bear interest at the rates shown on the inside cover page , payable semiannually on March 1 and September 1 of each year, commencing on September 1, 2025 , and will be issued in fully -registered form without coupons in the denomination of $5,000 or any integral multiple of $5,000. The 2025 Bonds will be issued in book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company ( “DTC”). Purchasers of the 2025 Bonds will not receive certificates representing their interests in the 2025 Bonds. Payments of the principal of, premium, if any, and interest on the 2025 Bonds will be made to DTC, which is obligated in turn to remit such principal, premium, if any, and interest to its DTC Participants for subsequent disbursement to the ben eficial owners of the 2025 Bonds. See “THE 2025 BONDS - Description” and “APPENDIX F - DTC and the Book-Entry Only System.” Redemption. The 2025 Bonds are subject to redemption prior to maturity as described herein. See “THE 2025 BONDS –Redemption.” The following firm is serving as municipal advisor to the City:

[Insert NHA Logo]

This cover page contains information for general reference only, and is not a summary of the security or terms of this issue.

Investors must read the entire Official Statement, including the section entit led “CERTAIN RISK FACTORS,” for a discussion of special factors that should be considered, in addition to the other matters set forth in this Official Statement, in considering the investment quality of the 2025 Bonds. Capitalized terms used on this cover page and not otherwise defined have the meanings set forth in this Official Statement.

Competitive Sale of the 2025 Bonds. The 2025 Bonds will be sold and awarded pursuant to a competitive bidding process to be held on ___________, 2025, as set forth in t he Official Notice of Sale. The 2025 Bonds are offered when, as and if issued and accepted by the Purchaser, subject to approval as to their legality by Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel. Certain legal matters will also be passed upon for the City by Jones Hall, A Professional Law Corporation, as Disclosure Counsel. [Certain legal matters will be passed upon for the City by the City Attorney.] It is an ticipated that the 2025 Bonds, in book-entry only form, will be available through the facilities of DTC on or about _____________, 2025.

The date of this Official Statement is: _________, 2025.

* Preliminary; subject to change.

MATURITY SCHEDULE

$_________________*
City of Hayward
2025 Wastewater Revenue Bonds

Base CUSIP†: _____

Maturity
(March 1)
Principal
Amount
Interest
Rate

Yield

Price
CUSIP†
Number

$____ - ____% Term 2025 Bonds due March 1, 20__; Yield ____%; Price ____ ; CUSIP†: ___

$____ - ____% Term 2025 Bonds due March 1, 20__; Yield ____%; Price ____ ; CUSIP†: ___

*Preliminary, subject to change.
† CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 202 5 CUSIP Global Services. All rights reserved. CUSIP® data herei n is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Purchaser, or their agents or counsel take any responsibility for the accuracy of such numbers.

CITY OF HAYWARD, CALIFORNIA

City Council

Mark Salinas, Mayor
Julie Roche, Mayor Pro Tem
Angela Andrews, Council Member
Ray Bonilla Jr., Council Member
Dan Goldstein, Council Member
George Syrop, Council Member
Francisco Zermeño, Council Member

City Officials

Dr. Ana Alvarez, City Manager
Regina Youngblood, Assistant City Manager
Dustin Claussen, Assistant City Manager
Michael Lawson, City Attorney
Miriam Lens, City Clerk
[Nicole Gonzales, Finance Director]

Municipal Advisor

NHA Advisors, LLC
San Rafael, California

Bond Counsel and Disclosure Counsel

Jones Hall, A Professional Law Corporation
San Francisco, California

Trustee

The Bank of New York Mellon Trust Company, N.A.

Los Angeles, California

GENERAL INFORMATION ABOUT THIS OFFICIAL STATEMENT

No Offering May Be Made Except by this Official Statement. No dealer, broker, salesperson or other person has been authorized to give any information or to make any representations with respect to the 2025 Bonds other than as contained in this Official Statement, and if given or made, such other information or re presentation must not be relied upon as having been authorized.

No Unlawful Offers or Solicitations. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy in any state in which such offer or solicitation is not authorized or in which the person making such offer or solicitation is not qualified to do so or to any person to whom it is unlawful to make such offer or solicitation.

Effective Date. This Official Statement speaks only as of its date, and the in formation and expressions of opinion contained in this Official Statement are subject to change without notice. Neither the delivery of this Official Statement nor any sale of the 2025 Bonds will, under any circumstances, create any implication that there has been no change in the affairs of the City since the date of this Official Statement.

Use of this Official Statement. This Official Statement is submitted in connection with the sale of the 2025 Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose. This Official Statement is not a contract with the purchasers of the 2025 Bonds.

Preparation of this Official Statement. The information contained in this Official Statement has been obtained from sources that are believed to be reliable, but this information is not guaranteed as to accuracy or completeness.

Document References and Summaries. All references to and summaries of the Indenture or other documents contained in this Official Statement ar e subject to the provisions of those documents and do not purport to be complete statements of those documents.

Stabilization of and Changes to Offering Prices. The Purchaser may overallot or take other steps that stabilize or maintain the market price o f the 2025 Bonds at a level above that which might otherwise prevail in the open market. If commenced, the Purchaser may discontinue such market stabilization at any time. The Purchaser may offer and sell the 2025 Bond s to certain dealers, dealer banks a nd banks acting as agent at prices lower than the public offering prices stated on the cover page of this Official Statement, and those public offering prices may be changed from time to time by the Purchaser.

Bonds are Exempt from Securities Laws Regist ration. The issuance and sale of the 2025 Bonds have not been registered under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, in reliance upon exemptions for the issuance and sale of municipal securities provid ed under Section 3(a)(2) of the Securities Act of 1933 and Section 3(a)(12) of the Securities Exchange Act of 1934.

Estimates and Projections. Certain statements included or incorporated by reference in this Official Statement constitute “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. Such statements are generally identifiable by the terminology used such as “plan,” “expect,” “estimate,” “budget” or other similar words.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH FORWARD -

LOOKING STATEMENTS INVOLVE KNOWN A ND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS

WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY

DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD -LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR

REVISIONS TO THOSE FORWARD -LOOKING STATEMENTS IF OR WHEN ITS EXPECTATIONS, OR EVENTS, CONDITIONS OR CIRCUMSTANCES ON WHICH SUCH STATEMENTS ARE BASED OCCUR.

Internet Site. The City maintains a number of websites. However, the information presented on the City’s websites is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the 2025 Bonds. References to website addresses presented herein are for informational purposes only and may be in the form of a hyperlink solely for the reader’s convenience. Such websites and the information or links contained therein are not incorporated into, and are not part of, this fin al official statement for purposes of, and as that term is defined in, SEC Rule 15c2-12.

i

TABLE OF CONTENTS
Page Page
INTRODUCTION ................................ ....... 1 General ................................ .................. 1 The City ................................ .................. 2 The Wastewater System ......................... 2
Authority for Issuance ............................. 2
Redemption ................................ ............ 2 Security and Source of Payment for
the 2025 Bonds ................................ ... 2
Current and Future Parity Obligations ..... 3
No Debt Service Reserve Fund .............. 3
Rate Covenants ................................ ...... 3 Limited Obligation ................................ ... 3 Continuing Disclosure Information .......... 4
Risk Factors ................................ ........... 4 FINANCING PLAN ................................ ..... 4 Capital Improvement Projects ................. 4
Estimated Sources and Uses of Funds ... 5
Debt Service Schedule ........................... 6
THE 2025 BONDS ................................ ..... 7 Description ................................ ............. 7 Redemption ................................ ............ 7 Book-Entry Only System ......................... 9

SECURITY AND SOURCES OF
PAYMENT FOR THE 2025 BONDS ..... 10
Pledge of Net Revenues ....................... 10
Rate Stabilization Fund......................... 11
Deposit and Transfer of Net Revenues . 11
No Reserve Fund ................................ . 12
Parity Obligations ................................ . 13 Rate Covenant; Collection of Rates
and Charges ................................ ..... 14
Insurance; Net Proceeds ...................... 14
THE CITY ................................ ................ 16 THE WASTEWATER SYSTEM ................ 16
Overview ................................ .............. 16 Service Area ................................ ......... 16 Users of the Wastewater System .......... 16
Facilities ................................ ............... 17 Regulatory Compliance ........................ 18
Management and Operations ............... 19

WASTEWATER SYSTEM FINANCIAL
INFORMATION................................ ..... 20
Rates, Fees and Charges ..................... 20
Wastewater System Revenues ............. 24
Billing, Collection and Delinquencies .... 25
Historical Revenues and Expenses....... 26
Statement of Net Position ..................... 27
Projected Revenues, Expenditures and
Debt Service Coverage ..................... 29
Capital Improvement Program .............. 32
Future Wastewater System Financings . 34
Wastewater System Reserves;
Available Cash ................................ .. 34
Debt Management Policy ...................... 34
CERTAIN RISK FACTORS ...................... 34
Wastewater System Demand ................ 34
Wastewater System Expenses ............. 35
Future Parity Obligations ...................... 35
Articles XIllC and XIIID of the State
Constitution ................................ ....... 35 Natural Calamities ................................ 38 Climate Change ................................ .... 39 Cybersecurity ................................ ........ 39 Limited Recourse on Default ................. 40
Limitations on Remedies Available;
Bankruptcy ................................ ........ 40 No Obligation to Tax ............................. 40
No Reserve Fund ................................ .. 40
Change in Law ................................ ...... 40 Statutory and Regulatory Compliance ... 40
Construction Risk ................................ .. 41 Loss of Tax-Exemption ......................... 41
Secondary Market for 2025 Bonds ........ 41
TAX MATTERS ................................ ........ 42 CERTAIN LEGAL MATTERS ................... 43
NO MATERIAL LITIGATION .................... 44
RATING ................................ ................... 44 CONTINUING DISCLOSURE .................. 44
UNDERWRITING ................................ ..... 45
EXECUTION ................................ ............ 46

APPENDIX A: CITY OF HAYWARD GENREAL DEMOGRAPHIC AND ECONOMIC INFORMATION APPENDIX B: ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY OF HAYWARD FOR THE FISCAL YEAR ENDED JUNE 30, 2023
APPENDIX C: SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE APPENDIX D: PROPOSED FORM OF BOND COUNSEL OPINION
APPENDIX E: FORM OF CONTINUING DISCLOSURE CERTIFICATE
APPENDIX F: DTC AND THE BOOK-ENTRY ONLY SYSTEM

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1 __________________________________

OFFICIAL STATEMENT
__________________________________

$_______________*
City of Hayward
2025 Wastewater Revenue Bonds

INTRODUCTION

This introduction contains only a brief summary of certain of the terms of the 2025 Bonds (as defined herein) being offered and a brief description of the Official Statement. All statements contained in this introduction are qualified in their entirety by reference to the entire Official Statement. References to, and summaries of, provisions of the Constitution and laws of the State of California and any documents referred to herein do not purport to be complete and such references are qualified in their en tirety by reference to the complete provisions. The information and expressions of opinion herein speak only as of their date and are subject to change without notice.

Neither the delivery of this Official Statement nor any sale made hereunder nor any future use of this Official Statement shall, under any circumstances, create any implication that there has been no change in the affairs of the City of Hayward (the “City”) since the date hereof.

All capitalized terms used in this Official Statement and not otherwise defined herein have the meanings set forth in the Indenture (as defined herein). See APPENDIX C – “SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE.”
General

This Official Statement, including the cover and the Appendices attached hereto (the “Official Statement”), provides certain information concerning the sale and delivery of the City of Hayward 2025 Wastewater Revenue Bonds (the “2025 Bonds”). The 2025 Bonds are being issued pursuant to an Indenture of Trust, dated as of March 1, 2025, between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”) (the “Indenture”).

When delivered, the 2025 Bond s will be registered in the name of Cede & Co., as nominee of The Depository Trust Company , New York, New York (“DTC”), which will act as Depository for the 2025 Bonds. Purchases of the 2025 Bonds may be made in book-entry form only, through brokers and dealers who are, or who act t hrough, DTC Participants. Beneficial Owners of the 2025 Bonds will not receive physical delivery of certificated securities. Principal of and interest on the 2025 Bonds will be payable by the Trustee to DTC, which will in turn remit such payments to the DTC Participants, which will in turn remit such payments to the Beneficial Owners of the 2025 Bond s. See APPENDIX F – “DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

* Preliminary; subject to change.

2 The 2025 Bond s are being issued to (i) finance capital improvement projects for the City’s wastewater system, (ii) to fund capitalized interest on the 2025 Bonds through September 1, 2025, and (iii) pay the costs of issuing the 2025 Bonds. See “FINANCING PLAN.” The 2025 Bonds are subject to optional and mandatory sinking fund redemption prior to their stated maturities as described in this Official Statement. See “THE 2025 BOND S – Redemption.”

The City

The City is located fourteen miles south of Oakland in the San Francisco Bay Area and includes sixty-one square miles lying between the eastern shore of the San Francisco Bay and the southern Oakland-Berkeley Hills. The City is the sixth largest city in th e San Francisco Bay Area and the third largest city in Alameda County (the “County”). The City serves as a major transportation hub and center of commercial and industrial activity, with immediate access to major interstate freeways, rail lines, and public transit routes such as Bay Area Rapid Transit.

See “THE CITY” for additional information regarding the City and APPENDIX A – “CITY OF HAYWARD GENERAL DEMOGRAPHIC AND ECONOMIC INFORMATION ” for certain demographic and economic information regarding the City, the County and the State.

The Wastewater System

The City owns and operates a wastewater collection, treatment, and disposal system (the “Wastewater System”) that serves essentially all of the developed areas within the City as well as a limited portion of adjacent unincorporated areas (collectively, the “Service Area”). A small section in the northern part of the City, consisting of approximately 2,000 homes w ith a population of about 6,000, is served by the Oro Loma Sanitary District. The City is also a member of a joint powers authority, the East Bay Dischargers Authority (the “EBDA”), which provides dichlorination and outfall facilities to convey treated wat er from member agencies’ treatment plants to a discharge point in the San Francisco Bay.

See “THE WASTEWATER SYSTEM ” for additional information regarding the Wastewater System.

Authority for Issuance

The City is issuing the 2025 Bonds pursuant to the provisions of the City Charter, the City of Hayward Water and Wastewater Enterprise Revenue Bond Law, constituting Chapter 8, Article 22 of the Hayward Municipal Code (the “Bond Law”), a resolution adopted by the City Council of the City on [February 25], 2025 and pursuant to the Indenture.

Redemption

The 2025 Bonds are subject to redemption prior to maturity as described in “THE 2025 BONDS – Redemption” herein.

Security and Source of Payment for the 2025 Bonds

The 2025 Bonds are special limited obligations of the City and are payable from and secured by a pledge of and lien on the Net Revenues (as such term is defined in the Indenture)

3 of the Wastewater System and from amounts on deposit in certain f unds and accounts established under the Indenture. The City is not providing for a debt service reserve fund for the 2025 Bonds. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2025 BONDS.” Current and Future Parity Obligations

The 2025 Bonds are secured by the Net Revenues of the Wastewater System on a parity with the City’s obligations under a certain outstanding Agreement No. 05 -807-550-0, by and between the City and the State Water Resources Control Board dated July 27, 2006 (the “2006 SRF Agreement”). The City may issue additional bonds or other obligations secured by Net Revenues on parity with the 2025 Bonds and the 2006 SRF Agreement ( “Parity Obligations,” as defined herein), provided that the conditions set forth in the Indenture are met.

The City is not obligated to fund a debt service reserve fund in connection with, or upon the issuance of, Parity Obligations. See “CERTAIN RISK FACTORS ” and “SECURITY F AND SOURCES OF PAYMENT OR THE BONDS – Parity Obligations.”

The City currently anticipates incurring Parity Obligations to provide additional financing for the 2025 Projects (as defined herein) in an aggregate amount of approximately $343 million.

See “WASTEWATER SYSTEM FINANCIAL INFORMATION – Future Wastewater System Financings” for additional details.

No Debt Service Reserve Fund

The 2025 Bond s will not be secured by a debt service reserve fund or account. See “SECURITY AND SOURCES OF PAYMENT FOR THE 2025 BONDS – No Reserve Fund.”

Rate Covenants

In the Indenture, the City covenants to fix, prescribe, revise and collect rates, fees and charges to generate sufficient Revenues (defined in the Indenture and describ ed herein) which are sufficient to pay certain amounts set forth in the Indenture and described herein, including, but not limited to, debt service on the all outstanding Bonds, the 2006 SRF Agreement, and any other Parity Obligations. In addition, the City covenants to fix, prescribe, revise and collect rates, fees and charges sufficient to yield Net Revenues which are at least equal to the sum of (i) 110% of debt service on the 2006 SRF Agreement, the 2025 Bonds, and any other Parity Obligations for such Fiscal Year and (ii) 100% of (A) debt service on the 2006 SRF Agreement, the 2025 Bonds, and any other Parity Obligations for such Fiscal Year and (B) debt service payable during such Fiscal Year on all Subordinate Obligations.

Limited Obligation

Neither the 2025 Bonds nor the obligation to pay principal of or interest thereon constitutes a debt, obligation or liability of the City, the State of California or any of its political subdivisions within the meaning of any Constitutional limitation on indebtedness, or a pledge of the full faith and credit of the City. The 2025 Bonds are secured solely by the pledge of Net Revenues by the City and certain funds held under the Indenture. The 2025 Bonds are not secured by a pledge of the taxing power of the City.

4 Continuing Disclosure Information

The City has agreed to provide, or cause to be provided, in accordance with Securities Exchange Commission Rule 15c2 -12(b)(5), as amended (the “Rule”), certain annual financial information and operating data, including audited financial statements, and an update of certain information relating to the Wastewater System . Such annual information and data will not include updates regarding the status of the Project (as hereinafter defined). See “CONTINUING DISCLOSURE.”
Risk Factors

Certain events could affect the ability of the City to pay debt service on the 2025 Bonds when due. See the caption “CERTAIN RISK FACTORS” for a discussion of certain factors that should be considered, in addition to other matters that are set forth in this Official Statement, in evaluating an investment in the 2025 Bonds.

FINANCING PLAN

The proceeds of the 2025 Bonds will be used to (i) finance capital improvement projects for the Wastewater System, (ii) to fund capitalized interest on the 2025 Bonds through September 1, 2025, and (iii) pay the costs of issuing the 2025 Bonds.

Capital Improvement Projects

A portion of the proceeds of the 2025 Bonds will be used to fund a portion of the costs of the capital improvement projects described below.

Phase II Project . Increasing nutrient loadings in the San Francisco Bay is a growing concern for the Bay Area water quality community . In 2024, the California Regional Water Quality Control Board (the “SWRCB”), San Francisco Bay Region, initiated its Third Nutrients Watershed Permit, which requires all applicable agencies to reduce nutrient discha rge into the San Francisco Bay. The City and the EBDA are required to reduce total inorganic nitrogen by 50% by 2034. A portion of the proceeds of the 2025 Bonds will be used to finance the construction of improvements necessary to comply with such regulat ory requirements (the “Phase II Project”).

WRRF Administration and Laboratory Building Project. A portion of the proceeds of the 2025 Bonds is also expected to finance a portion of the costs of construction of a 21,800-square foot building housing a cen tralized administration building, main control room for the Water Resource Recovery Facility ( “WRRF”) operations, expanded laboratory facilities, SCADA and staff facilities (the “WRRF Administration and Laboratory Building Proj ect” and, together with the Phase II Project, the “2025 Projects”).

See “WASTEWATER SYSTEM FINANCIAL INFORMATION – Capital Improvement Program” for more information on these and other projects included in the Wastewater System’s capital improvement program. See “WASTEWATER SYSTEM FINANCIAL INFORMATION – Future Wastewater System Financings” for a discussion of additional financings anticipated to be needed to finance the above capital improvement projects.

5 Estimated Sources and Uses of Funds

The estimated sources and uses of funds relating to the 2025 Bonds are as follows:

Sources:

Principal Amount $
Plus: [Net] Original Issue Premium
TOTAL SOURCES $

Uses:

Deposit to 2025 Project Fund
Deposit to Bond Service Fund (1)
Costs of Issuance (2)
TOTAL USES $

(1) Represents capitalized interest on the 2025 Bonds through September 1, 2025. (2) Includes purchaser’s discount, bond and disclosure counsel fees, municipal advisor’s fees, printing costs, rating agency fees, trustee fees and other costs of issuing the 2025 Bonds.

6 Debt Service Schedule

Scheduled debt service on the 2025 Bonds, assuming no redemptions prior to maturity, is shown in the following table.

Fiscal Year
Ending June 30 Principal Interest
Total
Debt Service

Total

7 THE 2025 BONDS

Description

The 2025 Bonds will be dated their date of issuance and delivery, will bear interest at the rates per annum set forth on the inside cover page hereof payable semiannually on March 1 and September 1 (each, an “Interest Payment Date ”), commencing September 1, 2025, and will mature on the dates and in the amounts set forth on the inside cover page. The 2025 Bonds will be issued in denominations of $5,000 or any integral multiple thereof, so long as no 2025 Bond may have more than one maturity date. The 2025 Bonds will be issued only as one fully registered 2025 Bond for each maturity, in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), as registered owner of all Bonds. See “APPENDIX F – DTC and the Book-Entry Only System” below. Ownership may be changed only upon the registration books maintained by the Trustee as provided in the Indenture. See the discussion under “Transfer and Exchange” below.

Interest on the 2025 Bonds is payable from the Interest Payment Date next preceding the date of authentication thereof unless: (i) a 2025 Bond is authenticated between an Interest Payment Date and the 15th calendar day of the month immediately preceding such Interest Payment Date (each, a “Record Date”), in which event it will bear interes t from such Interest Payment Date; (ii) a 2025 Bond is authenticated on or before the first Record Date, in which event interest thereon will be payable from the date of original delivery of the 2025 Bonds; or interest on any 2025 Bond is in default as of the date of authentication thereof, in which event interest thereon will be payable from the date to which interest has been paid in full, payable on each Interest Payment Date.

Interest on the 2025 Bonds (including the final interest payment upon maturit y or redemption) is payable when due by check or draft of the Trustee mailed to the Owner thereof at such Owner’s address as it appears on the Registration Books at the close of business on the preceding Record Date; provided that at the written request of the Owner of at least $1,000,000 aggregate principal amount of 2025 Bonds, which written request is on file with the Trustee as of any Record Date, interest on such 2025 Bonds will be paid on the succeeding Interest Payment Date to such account in the Uni ted States as specified in such written request. The principal of the 2025 Bonds and any premium upon redemption, are payable in lawful money of the United States of America upon presentation and surrender thereof at the Office of the Trustee.

While the 2025 Bonds are held in the book-entry only system of DTC, all such payments will be made to Cede & Co., as the registered Owner of the 2025 Bonds. See “APPENDIX F – DTC and the Book-Entry Only System.”

Redemption

Optional Redemption. The 2025 Bonds maturing on or before March 1, 2035, are not subject to redemption prior to their respective stated maturities. The 2025 Bonds maturing on or after March 1, 2036, are subject to redemption in whole, or in part among maturities on such basis as set forth in a certificate of the City filed with the Trustee, and in any event by lot within a maturity, at the option of the City, from any available source of funds, on any date on or after

 Preliminary; subject to change.

8 March 1, 20 35, at a redemption price equal to 100% of the p rincipal amount thereof to be redeemed, together with accrued interest thereon to the redemption date, without premium.

Mandatory Sinking-Fund Redemption. The 2025 Bonds maturing on March 1, 20__ (the “Term Bonds”) are subject to mandatory sinking fund redemption in whole, or in part by lot, at a redemption price equal to the principal amount thereof to be redeemed, without premium, plus accrued interest to the date of redemption, in the aggregate respective principal amounts and on June 1 in the years as set forth in the following table.

Sinking Fund Principal Amount
Redemption Date to be Redeemed
(March 1) or Purchased

If some but not all of the Term Bonds have been redeemed under subsection (a), the total amount of all future sinking fund payments will be reduced by the aggregate principal amount of the Term Bonds so redeemed, to be allocated among such sinking fund payments on a pro rata basis, as determined by the Trustee.

Notice of Redemption. The Trustee on behalf and at the expense of the City shall mail (by first class mail) notice of any redemption to the respective Owners of any 2025 Bonds designated for redemption at their respective addresses appearing on the Registration Books, and to the Securities Depositories and to one or more Information Services, at least 20 but not more than 60 days prior to the date fixed for redemption; provided, however, that neither failure to receive any such notice so mailed nor any defect therein will affec t the validity of the proceedings for the redemption of such 2025 Bonds or the cessation of the accrual of interest thereon. Such notice must state the date of the notice, the redemption date, the redemption place and the redemption price and must designa te the CUSIP numbers, the 2025 Bond numbers and the maturity or maturities (in the event of redemption of all of the 2025 Bonds of such maturity or maturities in whole) of the 2025 Bonds to be redeemed, and must require that such 2025 Bonds be then surrend ered at the Office of the Trustee identified in such notice for redemption at the redemption price, giving notice also that further interest on such 2025 Bonds will not accrue from and after the redemption date. In addition, the redemption notice must state that the City has the right to rescind the notice, if applicable.

Right to Rescind Notice of Optional Redemption . The City has the right to rescind any notice of the optional redemption of 2025 Bonds by written notice to the Trustee prior to the date fixed for redemption. Any notice of optional redemption will be cancelled and annulled if for any reason funds will not be or are not available on the date fixed for redemption for the payment in full of the 2025 Bonds then called for redemption, and such cancellation will not constitute an Event of Default under the Indenture. The City and the Trustee have no liability to the Owners or any other party related to or arising from such rescission of redemption.

Selection of Bonds for Redemption . Whenever provision is made in in the Indenture for the redemption of fewer than all of the 2025 Bonds, the City shall designate the maturities of the 2025 Bonds to be redeemed, and the Trustee shall select the 2025 Bonds within a maturity by lot in any manner which the Trustee in its sole discretion deems appropriate. For purposes

9 of such selection, all 2025 Bonds will be deemed to be comprised of separate $5,000 denominations and such separate denominations will be treated as separate 2025 Bonds which may be separately redeemed. If only a portion of any 2025 Bond is called for redemption, then upon surrender of such 2025 Bond the City shall execute and the Trustee shall authenticate and deliver to the Owner thereof, at the expense of the City, a new 202 5 Bond or 2025 Bonds of the same series and maturity date, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the 2025 Bond to be redeemed.

Effect of Redemption . From and after the date fixed for redemption, if n otice of redemption has been duly mailed and funds available for the payment of the principal of and interest (and premium, if any) on the 2025 Bonds so called for redemption have been duly provided, such 2025 Bonds so called shall cease to be entitled to any benefit under this Indenture other than the right to receive payment of the redemption price, and no interest shall accrue thereon from and after the redemption date specified in such notice. Unless otherwise directed in writing by the City, the Trust ee shall cancel and destroy all 2025 Bonds redeemed under the Indenture.

Transfer and Exchange . So long as the 2025 Bonds are registered in the name of Cede & Co., as nominee of DTC, transfers and exchanges of 2025 Bonds will be made in accordance with DTC procedures. See APPENDIX F – “DTC AND THE BOOK -ENTRY ONLY SYSTEM.”

Any 2025 Bond may, in accordance with its terms, be transferred upon the Registration Books by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such 2025 Bond for cancellation at the Office of the Trustee, accompanied by delivery of a written instrument of transfer in a form approved by the Trustee.

Whenever any 2025 Bond or 2025 Bonds shall be surrendered for registration or tr ansfer, the City shall execute and the Trustee shall authenticate and deliver a new 2025 Bond or 2025 Bonds of like series, maturity, interest rate and aggregate principal amount. The City shall pay all costs of the Trustee incurred in connection with any such transfer, except that the Trustee may require the payment by the 2025 Bond Owner of any tax or other governmental charge required to be paid with respect to such transfer.

2025 Bonds may be exchanged at the Office of the Trustee, for a like aggregat e principal amount of 2025 Bonds representing other authorized denominations of the same series, interest rate and maturity. The City shall pay all costs of the Trustee incurred in connection with any such exchange, except that the Trustee may require the payment by the 2025 Bond Owner requesting such exchange of any tax or other governmental charge required to be paid with respect to such exchange.

Book-Entry Only System

The 2025 Bond s will be delivered in fully registered form, will be transferable and exchangeable as set forth in the Indenture and, when delivered, will be registered in the name of Cede & Co., as nominee of DTC. DTC will act as Depository for the 2025 Bonds. Ownership interests in the 2025 Bond s may be purchased in book -entry form onl y, in authorized denominations. So long as the 2025 Bond s are registered in the name of Cede & Co., all payments with respect to principal of and interest on the 2025 Bond s will be made by the Trustee to DTC, which is obligated in turn to remit such payme nts to its Direct Participants for subsequent disbursement to the Beneficial Owners of the 2025 Bonds. See APPENDIX F – “DTC AND THE BOOK-ENTRY ONLY SYSTEM.”

10 SECURITY AND SOURCES OF PAYMENT FOR THE 2025 BONDS

Pledge of Net Revenues

General. The 2025 Bonds are secured by a first pledge of and lien on all of the Net Revenues of the Wastewater System, on a parity basis with the 2006 SRF Agreement and any future Parity Obligations . In addition, the 2025 Bonds are secured by a pledge of all of the moneys in the Bond Service Fund, including all amounts derived from the investment of such moneys. The 2025 Bonds , the 2006 SRF Agreement and all other Parity Obligations are equally secured by a pledge, charge and lien upon the Net Revenues and such moneys without priority for series, issue, number or date and the payment of the interest on and principal of the 2025 Bonds shall be and are secured by an exclusive pledge, charge and lien upon the and such moneys. So long as any of the 2025 Bonds are O utstanding, the Net Revenues and such moneys may not be used for any other purpose; except that out of the Net Revenues there may be apportioned such sums, for such purposes, as are expressly permitted by the Indenture and the Parity Obligation Documents.

Definitions. Set forth below are the definitions of certain terms used in the Indenture:

“Net Revenues” means, for any Fiscal Year, all Revenues received by the City in such Fiscal Year less the Operation and Maintenance Costs for such Fiscal Year.

“Revenues” means all gross income and revenue received or receivable by the City from the ownership or operation of the Wastewater System, or otherwise arising from the Wastewater System during any Fiscal Year, including all rates, fees, and charges (including connection fees and charges) as received by the City for the services of the Wastewater System. It includes all other income and reven ue howsoever derived by the City from System ownership or operation, or otherwise arising from the Wastewater System, including but not limited to all receipts derived from the investment of funds held by the City under the Indenture or any Parity Obligati on Documents, transfers from (but exclusive of any transfers from the applicable Fiscal Year’s income and revenue to) the Sewer Fund Rate Stabilization Fund, and all moneys received by the City from other public entities whose inhabitants are served pursua nt to contracts with the City.

“Operation and Maintenance Costs ” means the reasonable and necessary costs paid or incurred by the City to maintain and operate the Wastewater System, determined in accordance with generally accepted accounting principles, including all reasonable expenses of management and repair and all other expenses necessary to maintain and preserve the Wastewater System in good repair and working order. It includes all reasonable and necessary administrative costs of the City that are charged directly or apportioned to Wastewater System operation, such as employee salaries and wages, overhead, taxes (if any), permit and license costs, operational charges, and insurance premiums. It excludes, in all cases, depreciation, replacement, and obsolescence charges or reserves therefor, amortization of intangibles and interest expense relating to subordinate obligations and unsecured obligations of the City. For the avoidance of doubt, bookkeeping entries and capital charges are excluded from Operations and Maintenance Costs.

“Parity Obligations Documents ” means, collectively, (a) each Supplemental indenture, (b) the 2006 SRF Agreement, and (c) all leases, installment sale agreements,

11 trust agreements, indentures of trust and other documents pres cribing the terms and provisions applicable to any issue of Parity Obligations. For a description of current and potential future Parity Obligations, see “–Parity Obligations.”

“Bonds” is sometimes used in this Official Statement to refer to ( a) the 2025 Bonds and (b) Parity Obligations issued as bonds pursuant to a Supplemental Indenture in accordance with the Indenture.

“Subordinate Obligations ” means all bonds, notes, loan agreements, installment sale agreements, leases or other obligations of the Cit y (a) that are either (i) payable from but not secured by a pledge or and lien upon any of the Net Revenues or (i) payable from and secured by a pledge of and lien upon any of the Net Revenues on a junior and subordinate basis to the Bonds and all other Pa rity Obligations, and (b) the principal of which cannot be accelerated and paid unless the Bonds and any Parity Obligations have been indefeasibly paid in full.

Rate Stabilization Fund

The City has the right at any time to establish a fund to be held by it and administered in accordance with the Indenture, for the purpose of stabilizing the rates and charges imposed by the City with respect to the Wastewater System (the “Rate Stabilization Fund”). From time to time the City may deposit amounts in the Rate Stabilization Fund, from any source of legally available funds, as the City may determine, provided that deposits for each Fiscal Year may be made until (but not after) one hundred eighty (180) days following the end of such Fiscal Year.

The City may, but is not required to, withdraw amounts on deposit in the Rate Stabilization Fund and deposit such amounts in the Wastewater Fund in any Fiscal Year , such withdrawals for a Fiscal Year to be made until (but not after) one hundred eighty (180) days after the end of such Fiscal Year. Amounts so transferred from the Rate Stabilization Fund to the Wastewater Fund during the time specified in the previous sentence constitute Revenues for that Fiscal Year (except to the extent provided in “ –Rate Covenant; Colle ction of Rates and Charges – Net Revenue Coverage ” and “ –Parity Obligations” ), and will be applied for the purposes of the Wastewater Fund. Amounts on deposit in the Rate Stabilization Fund are not pledged to and do not secure the Bonds or any issue of Parity Obligations. All interest or other earnings on deposits in the Rate Stabilization Fund will be retained therein or, at the option of the City, be applied for any other lawful purposes. The City has the right at any time to withdraw any or all amount s on deposit in the Rate Stabilization Fund and apply such amounts for any other lawful purposes of the City.

Deposit and Transfer of Net Revenues

Flow of Funds . The City has previously established a Wastewater Fund (the “Wastewater Fund”), which it will continue to hold and maintain for the purposes and uses set forth in the Indenture and the Parity Obligation Documents. The City shall deposit all Revenues in the Wastewater Fund promptly upon the receipt thereof, and shall apply amounts i n the Wastewater Fund solely for the uses and purposes set forth in the Indenture and in the Parity Obligation Documents. The City may at any time use and apply moneys in the Wastewater Fund for the payment of the Operation and Maintenance Costs of the Was tewater System (including amounts reasonably required to be set aside in contingency reserves for Operation and Maintenance Costs the payment of which is not immediately required).

12 Deposits into the Bond Service Fund; Application of Moneys in the Bond Se rvice Fund. On or before the 3rd Business Day of the month preceding each Interest Payment Date, so long as any 2025 Bonds remain Outstanding, the City shall withdraw from the Wastewater Fund and pay to the Trustee for deposit into the Bond Service Fund a n amount which, together with other available amounts then on deposit in the Bond Service Fund, is at least equal to the aggregate amount of principal of and interest coming due and payable on the 2025 Bonds on such Interest Payment Date, including the pri ncipal of the Term Bonds upon the mandatory sinking fund redemption thereof and the provisions of one or more Supplemental Indentures.

Payment of the debt service on the Bonds and the principal of and interest on any Parity Obligations will be made without preference or priority. If the amount of Net Revenues on deposit in the Wastewater Fund are any time insufficient to enable the City to pay when due the debt service on the Bonds and the principal of and interest on any Parity Obligations, such payments will be made on a pro rata basis.

The Trustee shall apply amounts in the Bond Service Fund solely for the purpose of (i) paying the interest on the Outstanding Bonds when due and payable (including accrued interest on any 2025 Bonds purchased or redeemed), (ii) paying the principal of the Term Bonds upon the mandatory sinking fund redemption thereof, and (iii) paying the principal of the 2025 Bonds at the maturity thereof and the provisions of one or more Supplemental Indentures. Upon the payment of all Outstanding Bonds, the Trustee shall transfer any moneys remaining in the Bond Service Fund to the City for deposit into the Wastewater Fund.

On the Closing Date, the Trustee will deposit a portion of the proceeds of the 2025 Bonds in the Bond Service Fund and such amounts will be used to pay interest on the 2025 Bonds on September 1, 2025 and, to the extent available, March 1, 2026. See “FINANCING PLAN.”

Other Uses of Wastewater Fund . The City will manage, conserve and apply moneys in the Wastewate r Fund in such a manner that all deposits required to be made under the Indenture and any Parity Obligation Document, will be made at the times and in the amounts so required.

So long as no event of default has occurred and is continuing under and as def ined in the Indenture, the City may at any time use and apply moneys in the Wastewater Fund for any one or more of the following purposes:

(i) the acquisition and construction of extensions and betterments to the Wastewater System;

(ii) the redemption or prepayment of any of the Bonds , the 2006 SRF Agreement and any other Parity Obligations which are then subject to redemption or prepayment or the purchase thereof from time to time in the open market, at prices and in such manner, either at public or private sale, or otherwise, as the City in its discretion may determine; or

(iii) any other lawful purpose of the City relating to the Wastewater System , including deposits into the Rate Stabilization Fund.

No Reserve Fund

13 No reserve fund is being establish ed in connection with the 2025 Bonds and no reserve fund is required to be established in connection with the issuance of any Parity Obligations (see “–Parity Obligations” below).

Parity Obligations

In addition to the 2025 Bonds, the City currently has outstanding certain Parity Obligations, consisting of the 2006 SRF Agreement. In addition, the City may issue additional Parity Obligations from time to time in such principal amount as it determines, subject to the following conditions precedent:

(a) No Event of Default (or no event with respect to which notice has been given and which, once all notice of grace periods have passed, would constitute an Event of Default) has occurred and is continuing.

(b) Net Revenues for the period of 12 consecutive months within the 18 months immediately preceding the issuance of the proposed additional Parity Obligations based on the City’s audited financial statement(s) for such period or a certificate of an Independent Accountant emplo yed by the City, were at least equal to 110% of the debt service on the Outstanding Bonds, the 2006 SRF Agreement and any other outstanding Parity Obligations in the Fiscal Year immediately succeeding the Fiscal Year in which the additional Parity Obligation is issued or incurred.

(c) (i) Estimated Net Revenues for the Fiscal Year in which the proposed Additional Parity Obligation is issued, and (ii) projected Net Revenues for the five Fiscal Years immediately following the Fiscal Year in which the additional Parity Obligation is issued, will be at least equal to 110% of the Debt Service in such Fiscal Year(s) for all Outstanding Bonds, all outstanding Parity Obligations and the proposed additional Parity Obligation. For purposes of clause (c)(ii), (A) if a ll or a portion of the interest due in such five Fiscal Years on any Outstanding Bonds, outstanding Parity Obligations or the proposed additional Parity Obligation. is being or will be capitalized from the proceeds of such Outstanding Bonds, outstanding Pa rity Obligations or the proposed additional Parity Obligation, the five Fiscal Year period will commence with the first Fiscal Year beginning after the last capitalized interest payment, (B) projected Net Revenues for each Fiscal Year in the five Fiscal Ye ar period may include Revenues arising from increases in the rates and charges estimated to be fixed and prescribed or received for the services of the Wastewater System and which are economically feasible and reasonably considered necessary based on proje cted operations for such Fiscal Year, and (C) Net Revenues for a Fiscal Year may be increased by transfers from the Rate Stabilization Fund to the Wastewater Fund, provided that Net Revenues excluding such transfers are at least equal to the sum of (i) the amount described in the preceding clause (a)(ii) for such Fiscal Year and (ii)debt service payable during such Fiscal Year on all Subordinate Obligations.

(d) The issuance of such Parity Obligations shall comply with all conditions to the issuance thereof as set forth in the applicable provisions of the Parity Obligation Documents.

(e) The City shall deliver to the Trustee a Certificate of the City certifying, and an opinion of Bond Counsel stating, that the conditions precedent to the issuance of such P arity Obligations set forth in the foregoing subsections (a), (b) and (c) above have been satisfied.

The City is not obligated to fund a debt service reserve fund in connection with, or upon the issuance of, any Parity Obligations.

14 Rate Covenant; Collection of Rates and Charges

Revenue Coverage. The City covenants in the Indenture that it will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Wastewater System during each Fiscal Year which are at least sufficient, after making allowances for contingencies and error in the estimates, to pay the following amounts in the following order:

(a) all Operation and Maintenance Costs estimated by the City to become due and payable in the Fiscal Year;

(b) the principal of and interest on all outstanding Bonds, the 2006 SRF Agreement, and all other outstanding Parity Obligations as they become due and payable during the Fiscal Year, without preference or priority;

(c) all amounts, if any, required to restore the balance in any reserve fund established for any other Parity Obligations to the required level; and

(d) all payments required to meet any other obligations of the City which are charges, liens, encumbrances upon, or which are otherwise payable from, the Revenues or the Net Revenues during such Fiscal Year.

Net Revenue Coverage. In addition to the covenant set forth regarding Revenues coverage, the City covenants in the Indenture that it will fix, prescribe, revise and collect rates, fees and charges for the services and facilities furnished by the Wastewater System during each Fiscal Year which are sufficient to yield Net Revenues which are at least equal to the sum of (i) 110% of the amount of principal of and interest on all outstanding Bonds, the 2006 SRF Agreement, and all other Parity Obligations as they come due and payable during the Fiscal Year, and (ii) 100% (A) the amount of principal of and interest on all outstanding Bonds, the 2006 SRF Agreement, and all other Parity Obligations as they come due and payable during the Fiscal Year and (B) debt service payable during suc h Fiscal Year on all Subordinate Obligations.

For purposes of this Net Revenue Covenant, the Net Revenues may include transfers from the Rate Stabilization Fund to the Wastewater Fund for such Fiscal Year, if any, provided that the Net Revenues excluding s uch transfers are at least equal to the sum of (i) the amount of principal of and interest on all outstanding Bonds, the 2006 SRF Agreement, and all other Parity Obligations as they come due and payable during the Fiscal Year and (ii) debt service payable during such Fiscal Year on all Subordinate Obligations.

Insurance; Net Proceeds

The City will at all times maintain with responsible insurers all such insurance on the Wastewater System as is customarily maintained with respect to works and properties of like character against accident to, loss of or damage to the Wastewater System. All amounts collected from insurance against accident to or destruction of any portion of the Wastewater System shall be deposited in an Insurance and Condemnation Fund established and held by the City and applied as follows:
(a) If the City has determined that it needs to use the insurance proceeds to make additions, betterments, extensions or improvements to the Wastewater System in order for the

15 City to comply with the Inde nture, the City shall use such insurance proceeds to make such additions, betterments, extensions or improvements. If the amount of such insurance proceeds shall exceed the costs of such additions, betterments, extensions or improvements that are required for the City to comply with the Indenture, the excess shall be applied to any lawful purpose of the Wastewater System, including (i) the payment of debt service on the Bonds and any Parity Obligations, (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indenture and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(b) If the City has determined that it does not need to use the award to make additions, betterments, extensions or improvements to the Wastewater System in order for the City to comply with the Indenture, the City shall use such award for any lawful purpose of the Wastewater System, including (i) the payment of debt service on the Bonds and any Parity Obligations, (ii) the prepayment or discharge of the Bonds and any Parity Obligations as provided in the Indenture and the Parity Obligation Documents, as applicable, and (iii) the payment of capital costs of improvements to the Wastewater System.

(c) Notwithstanding the foregoing, to the extent the award relates to improvements financed by one or more series of the Bonds, until such time as such Bonds have been redeemed or paid at maturity, (i) any use of such related award shall comply with the tax covenants of the Indenture or similar applicable provisions of Supplemental Indentures, (ii) such related award may not pay debt service on or prepay, discharge or redeem any others Bonds or other Parity Obligations, (iii) if such related award will be used to pay debt service on or prepay, discharge or redeem such Bonds, they cannot be invested at a yield that is greater than the arbitrage yield of such Bonds and (iv) if such Bonds are refunded by tax -exempt refunding bonds (“ Refunding Bonds”), such related award in the Insurance and Condemnation Fund shall be used for purposes not inconsistent with the tax covenants of the Indenture or similar applicable provisions of Supplemental Indentures.

16 THE CITY

The City is a charter city that was incorporated in 1876. The City operates under the council-manager form of government, in which authority is concentrated in the elected city council, which appoints a professional manager (the “City Manager”) to implement its policies.

The Mayor is elected by the voters of the City for a four -year term. The City Manager oversees the City’s annual operating budget and personnel matters, and serves as the City Council’s chief policy advisor.

The City Council consists of seven members elected to serve staggered four-year terms.

See APPENDIX A – “CITY OF HAYWARD GENERAL DEMOGRAPHIC AND ECONOMIC INFORMATION” for certain demographic and economic information regarding the City.

THE WASTEWATER SYSTEM

Overview

The City of Hayward wastewater system (the “Wastewater System”) is one of three enterprises managed, operated and maintained by the City. The other enterprises are the water and airport enterprises. The Wastewater System is comprised of a collection system , and treatment and disposal facilities located at 3700 Enterprise Avenue.

The City's first wastewater treatment plant was constructed in 1954. Since that time, a number of improvements and facilities have been constructed and installed including a new headworks, and sludge drying beds to manage the increasing volumes that came with development within the City's residential, commercial, and industrial sectors and to meet increasingly stringent discharge requirements from the California Water Resources Control Board (the “SWRCB”).

Service Area

The Wastewater System serves essentially all the developed areas within the City as well as a limited portion of adjacent unincorporated areas (collectively, the “Service Area ”) which comprises approximately 61 square miles. A small section in the northern part of the City, consisting of approximately 2,000 homes with a population of about 6,000, is served by Oro Loma Sanitary District. The Wastewater System provides sewage collection, primary and secondary treatment and disposal services for customers within the Service Area. The City is also a member of a joint powers authority, the East Bay Dischargers Authority (the “EBDA”), which provides dechlorination and outfall facilities to convey treated water from member agencies' treatment plants to a discharge point in the San Francisco Bay.

Users of the Wastewater System

The Wastewater System serves more than 35,000 residential, commercial and industrial units, made up primarily of residential customers. Table 1 below sets forth a five-year history of Wastewater System users.

17 Table 1

CITY OF HAYWARD WASTEWATER SYSTEM
Customer Base by Type of Account

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
Single Family
Residential 29,232 29,693 29,859 30,096 30,166
Multi Family Residential 1,436 1,436 1,438 1,441 1,444
Commercial / Industrial 3,393 3,411 3,421 3,448 3,475
Governmental /
Institutional 210 214 214 219 220
Critical User (Large
Industrial Users) 24 24 24 22 19
TOTAL 34,295 34,778 34,956 35,226 35,324
____________________
Source: City of Hayward.

Facilities

Collection System . The collection system consists of more than 3 25 miles of underground sanitary sewer lines and trunk lines of up to 48 -inches, 2.5 miles of force mains, two major lift stations, and seven smaller lift stations.

Water Resource Recovery Facility . The Water Resource Recovery Facility (the “WRRF”), formerly known as the Water Pollution Control Facility, is located on an approximately 306-acre site in the western part of the City. The WRRF site includes 220 acres of former oxidation ponds. Operation of the WRRF is a 24 -hour, seven -days a week, 365 -day a ye ar activity. The average of 11.38 million gallons per day ( “mgd”) of wastewater originating from residential, commercial, industrial and institutional customers within the service Area was treated and discharged at the WRRF in Fiscal Year 2023 -24. The perm itted capacity of the WRRF is 18.5 mgd.

Primary and secondary wastewater treatment is provided at the WRRF. Effluent from the WRRF is disinfected with hypochlorite and discharged to the EBDA “super sewer” line for final disposal. The treated wastewater is dechlorinated and then discharged into the deeper water of the San Francisco Bay. The WRRF treats wastewater in two steps: primary and secondary, each of which is required to meet environmental standards.

Primary Treatment. Primary treatment is comprised of preliminary, floatation and sedimentation processes. Preliminary treatment consists of processing the wastewater through grinders to reduce the size of large solids and relying on gravity to remove the solids from the wastewater. The wastewater is then subjected to a vacuator process to separate oils and greases by floatation in addition to removing heavier grit in order to protect equipment from abrasion and wear. The last stage of solids removal is primary clarification where additional solids settle in open clarifier tanks by gravity sedimentation.

Secondary Treatment. Secondary treatment consists of trickling filter and a final clarifier processes. The trickling filter removes organic materials in the primary effluent through the use of biological g rowth attached to media inside the filter tower. As the biological growth consumes the organic material in the primary effluent, solids thicken and precipitate from the media, pulling down additional solids in the final clarifier. The

18 final clarifier efflu ent is then chlorinated and discharged from the WRRF to the EBDA super sewer line.

Biosolids Management. The solid, stabilized organic materials removed from wastewater are called “biosolids.” The WRRF generates approximately [4,500 yards (4,000 dry metric tons)] per year of biosolids during the wastewater treatment process. The WRRF has capacity to store digested sludge for one year but ultimately disposes of all the dewatered biosolids offsite.

All the biosolids from the WRRF are currently removed by Waste Management of Alameda County ( “Waste Management ”), who is also the franchised hauler for solid waste collection and recycling services in the City. Biosolids are transported by Waste Management to offsite landfills. The City’s current contract with Waste Management expires in 2033.

Historical Flows and Treatment Capacity. The WRRF can treat up to 18.5 mgd, based on its permitted average dry weather flow capacity. Historical flow information for the last five fiscal years is presented in Table 2 below.

Table 2

CITY OF HAYWARD WASTEWATER SYSTEM
Historical Wastewater Flow and WRRF Capacity(1)

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
Average Daily Flow (2) 10.72 10.36 10.57 12.38 11.83
Peak Day Flow 13.4 16.9 21.1 33.6 21.6
Treatment Capacity (3) 18.5 18.5 18.5 18.5 18.5
Wet Weather Capacity 35.0 35.0 35.0 35.0 35.0

__________________
(1) Average and capacity presented in mgd. Peak day flow presented in millions of gallons for such peak day. (2) Average Daily Flow shown here is higher than average dry weather flows due to the inclusion of flows during rainy periods. (3) Current permitted average dry weather flow capacity under Permit.

Source: City of Hayward.

Regulatory Compliance

The construction and operation of wastewater treatment facilities and the discharge of sewage are highly regulated by State and federal laws to meet various requirements for the operation, treatment, monitoring, maintenance and disposal/discharge of wastew ater. The two principal laws governing wastewater treatment are the federal Clean Water Act enacted in 1972, and the State's Porter-Cologne Act first enacted in 1969. These laws require that policies, plans, requirements and standards for discharges of was tewater be developed in order to protect the beneficial uses of the water. The United States Environmental Protection Agency, the federal agency charged with implementation and enforcement of the Clean Water Act, has delegated much of the planning, permitt ing and enforcement activities to the states. In California, the SWRCB develops policies, plans, requirements and discharge standards for the three types of State waters: inland surface waters, enclosed bays and estuaries, and the ocean. The SWRCB is the e nforcement arm for the State and federal water pollution control programs, issuing the discharge permits and establishing the waste discharge requirements.

The discharge standards are set forth in NPDES permits issued and modified every five years by the SWRCB. The City discharges wastewater pursuant to the terms of an NPDES permit issued to EBDA. The current NPDES permit (the “Permit”) for EBDA was issued in 2022

19 and prescribes wastewater discharge requirements for the WRRF. The Permit expires in 20 27 and continues in full force until the SWRCB issues a new permit.

The other regulatory agency that issues a permit necessary for construction or operation of the Wastewater System is the Bay Area Air Quality Management District, which is responsible for estab lishing air emissions standards for the WRRF and the issuance of air emission permits.

Management and Operations

The Wastewater System is operated by the City on a self -supporting basis under the authority of the City Council. Day -to-day operations of th e Wastewater System are under the supervision of the City's Public Works Director. Brief resumes for management personnel of the Wastewater System and WRRF are set forth below:

Alex Ameri, Director of Public Works . Mr. Ameri was appointed as Director of Utilities & Environmental Services Department in 2011 , and he was then appointed as Director of Public Works and Utilities Department upon merging with the Department of Public Works. He is responsible for the management of construction, operation and main tenance of the City's utilities systems, including the wastewater system and the water distribution and storage facilities. He is also responsible for preparing and implementing the City’s Capital Improvement Program and managing the budgets for the wastew ater, water, recycled water and stormwater systems. Prior to this appointment, Mr. Ameri was appointed as the Deputy Director of Public Works/Utilities in 1993 and served as a Development Services Engineer with the City from 1989 to 1993. He also served th e City of Santa Barbara as a Land Development Engineer from 1987 to 1989. Mr. Ameri holds a Bachelor of Science in Civil Engineering, a Master of Science in Civil Engineering and a Master of Engineering in Mechanical Engineering. Mr. Ameri is also a Registered Professional Engineer in California, New York and New Jersey.

David Donovan, Water Resource Recovery Facility Manager . Mr. Donovan joined the City in 2015 as an Operations Supervisor and has served as the WRRF Manager since 2016.

He is responsible fo r the overall management of the City’s WRRF and oversees a team of 30 operations, maintenance, technical, laboratory and administrative staff in planning and executing process changes and maintenance projects. Mr. Donovan is registered with the California State Water Resource Control Board as the Chief Plant Operator (CPO) and is responsible for ensuring that the WRRF meets and exceeds compliance of the NPDES permit.

He also collaborates with other external agencies for the operations and maintenance of EBD A facilities. Prior to joining the City, he was a Shift Supervisor at West County Wastewater District, and held various operator roles in City of San Leandro Water Pollution Control Plant and Central Contra Costa Sanitary District. He is a licensed Grade V Operator.

Mark Orlandi, Water Resource Recovery Facility Operations Manager. Mr. Orlandi joined the City in 2016 as a Lead Operator and now serves as the WRRF Operations Manager. In his current role, he is responsible for managing the 24/7 operations of the WRRF, which includes wastewater treatment, recycled water treatment, solids handling, and cogeneration operations.

He oversees a team of six Lead Operators and seven Operators. He started his wastewater career through the Tri Valley ROP program held at Dublin San Ramon Services District in 2011.

Following the completion of his Operator in Training hours with the Manteca Wastewater Quality Control Facility, he was hired to work at the San Leandro Water Pollution Control Plant. After earning his license, he worked for Veolia Water as an Operations and Maintenance Technician for both water and wastewater in Discovery Bay. He then worked for Severn Trent Services in

20 Mountain House as a Lead Operator for the wastewater facility. He is a licensed Grade V operator.

Dan Magalhaes, Water Resource Recovery Facility Maintenance Manager . Mr.

Magalhaes started with the City in 2004 as the first WRRF Maintenance Supervisor after working in private sector, where he had over 20 years of industrial maintenance experience in food processing, packaging, and the paper and pulp industries. He started in quality control as an apprentice in the field of industrial maintenance. Upon his arrival at the WRRF, Mr.

Magalhaes established corrective, preventative, and predictive maintenance protocols that have yielded operational efficiencies in the treatment process as well as the resource recovery operations at the cogeneration, solar, and recycled water facilities. He has also worked closely with the Operations team to develop an ef fective Maintenance team and improve operational practices. In his current role, he works closely with Director Ameri, the WRRF management team, City engineers, and consultants to continue the improvement and growth of the WRRF.

Kyle Carbert, Senior Utilities Engineer. Mr. Carbert joined the City in 2023 and has been involved in the 2025 Projects since the preliminary design stage. He has more than 18 years of public works experience, with a focus on utilities projects, in both the public and private secto r.

Mr. Carbert is currently serving as the City’s project manager overseeing the 2025 Projects’ design. He will be responsible for working closely with the construction management team and interfacing with the WRRF operations and maintenance staff during c onstruction. Mr. Carbert is also serving a key role reviewing design packages, supporting the environmental review effort, coordinating with the City’s building and planning departments, and managing the design effort.

Elli Lo, Senior Management Analyst . Ms. Lo is responsible for assisting with the development of the City’s Capital Improvement Program. She is responsible for the administration of the CWSRF loan for the City’s Recycled Water Project, which includes budget tracking and applying for disbursements. Ms. Lo will provide the 2025 Projects’ day-to-day fiscal administration, which will include tracking costs and disbursements for all funding sources, including WIFIA. Ms. Lo has over 9 years in fiscal management for similar projects.

WASTEWATER SYSTEM FINANCIAL INFORMATION

Rates, Fees and Charges

The Wastewater System receives moneys from two primary sources: wastewater service charges and connection fees.

Service Charges . Customers of the Wastewater System receive bi -monthly bills, with monthly wastewater service charges based on a user classification system consisting , with residential customers charged based on dwelling type. Commercial users are charged based on business type, with different rate tables for customers with or without a separate irrigation water meter.

Residential. Residential users of the Wastewater System are billed a flat monthly charge depending upon classification (e.g., standard residential, multi -family, or mobile home). Alternatively, u sers with low water consumption in a given billing cycle automatically receive lower economy and lifeline wastewater rates . As of Fiscal Year 2023-24, approximately one-third of customer bills received the lower economy or lifeline wastewater rates. See “CERTAIN RISK FACTORS – Wastewater System Demand.”

21 Commercial. Commercial users of the Wastewater System are billed on a volume charge based on one-hundred cubic feet (“ccf”) of metered water consumption. Different volume charges are applied depending upon the user classification code.

Industrial. Industrial users of the Wastewater System, also sometimes called critical users, are charged based on actual wastewater strength and volume. This category is applicable for approximately 25 large businesses with wastewater discharge permits.

Current and Adopted Future Rates. The City has historically adopted revisions to its Wastewater System rates and charges on a two -year cycle, with the currently effective rates and charges having been adopted in 2023. However, the City is transitioning to a five -year cycle. The first new five-year cycle of Wastewater System rates and charges were approved by the City Council on February 18, 2025. The adopted rates will be effective annually from July 1, 2025 through June 30, 2030, and the adopted connection fees will be effective annually from September 1, 2025 through August 30, 2027. Table 3 sets for the current and adopted future Wastewater System rates.

Table 3

CITY OF HAYWARD WASTEWATER SYSTEM
Historical and Adopted Future Wastewater System Rates

Monthly Residential Service Charges

Current
(October 1,
2024-June 30,
2025)
Effective July
1, 2025
Effective July
1, 2026
Effective July
1, 2027
Effective July
1, 2028
Effective July
1, 2029
Standard Residential
(per unit) $44.19 $47.83 $53.57 $60.00 $67.20 $75.27
Multi-Family (per unit) 39.33 43.49 48.71 54.56 61.11 68.45 Mobile Home (per
unit) 30.94 32.34 36.23 40.58 45.45 50.91
Economy, 5-8 units of
water usage 20.70 22.52 25.23 28.26 31.66 35.46
Lifeline, 0 -4 units of
water usage 10.36 11.61 13.01 14.58 16.33 18.29

22 Commercial (With Separate Irrigation Meter)
Volume Charge per CCF of Metered Water Use

Current
(October 1,
2024-June 30,
2025)
Effective July
1, 2025
Effective July
1, 2026
Effective July
1, 2027
Effective July
1, 2028
Effective July
1, 2029
All Other Domestic Use $7.99 $7.95 $8.91 $9.98 $11.18 $12.53 Restaurant w/ Grease
Interceptor 10.44

10.53 11.80 13.22 14.81 16.59
Restaurant w/o Grease
Interceptor 13.52

12.96 14.52 16.27 18.23 20.42
Commercial Laundry 8.07 9.04 10.13 11.35 12.72 14.25 Bakery 13.77 14.39 16.12 18.06 20.23 22.66
Industrial Laundry 12.53 14.04 15.73 17.62 19.74 22.11 Beverage Bottling 8.15 9.13 10.23 11.46 12.84 14.39 Food Manufacturing 30.34 25.72 28.81 32.27 36.15 40.49 Meat Products 15.37 17.22 19.29 21.61 24.21 27.12
Slaughterhouse 17.69 19.82 22.20 24.87 27.86 31.21
Dairy Product Processors 12.68 14.21 15.92 17.84 19.99 22.39 Canning & Packing 9.04 10.13 11.35 12.72 14.25 15.96 Grain Mills 11.90 13.33 14.93 16.73 18.74 20.99
Fats and Oils 8.58 9.61 10.77 12.07 13.52 15.15
Pulp & Paper
Manufacturing 10.45

10.07 11.28 12.64 14.16 15.86
Inorganic Chemicals 14.51 16.26 18.22 20.41 22.86 25.61 Paint Manufacturing 22.62 25.34 28.39 31.80 35.62 39.90 Leather Tanning 29.79 33.37 37.38 41.87 46.90 52.53 Fabricated Metal 4.32 5.87 6.58 7.37 8.26 9.26

Commercial (Without Separate Irrigation Meter)
Volume Charge per CCF of Metered Water Use

Current
(October 1,
2024-June 30,
2025)
Effective July
1, 2025
Effective July
1, 2026
Effective July
1, 2027
Effective July
1, 2028
Effective July
1, 2029
Commercial/Governmental $7.20 $7.16 $8.02 $8.99 $10.07 $11.28 Restaurant w/ Grease
Interceptor 9.40 9.47 10.61 11.89 13.32 14.92
Restaurant w/o Grease
Interceptor 12.17 11.66 13.06 14.63 16.39 18.36
Commercial Laundry 7.26 7.79 8.73 9.78 10.96 12.28
Bakery 12.38 13.87 15.54 17.41 19.50 21.84
Industrial Laundry 11.27 12.63 14.15 15.85 17.76 19.90 Beverage Bottling 7.33 8.21 9.20 10.31 11.55 12.94
Food Manufacturing 27.30 30.58 34.25 38.36 42.97 48.13 Meat Products 13.84 13.15 14.73 16.50 18.48 20.70
Slaughterhouse 15.93 17.85 20.00 22.40 25.09 28.11
Dairy Product Processors 11.41 12.78 14.32 16.04 17.97 20.13 Canning & Packing 8.13 9.11 10.21 11.44 12.82 14.36 Grain Mills 10.72 12.01 13.46 15.08 16.89 18.92
Fats and Oils 7.72 8.65 9.69 10.86 12.17 13.64
Pulp & Paper
Manufacturing 9.40 8.89 9.96 11.16 12.50 14.00
Inorganic Chemicals 13.07 14.64 16.40 18.37 20.58 23.05 Paint Manufacturing 20.37 22.82 25.56 28.63 32.07 35.92 Leather Tanning 26.80 30.02 33.63 37.67 42.20 47.27 Fabricated Metal 3.89 5.28 5.92 6.64 7.44 8.34

23 Industrial (aka Critical User) Service Charges
Based on Wastewater Flows

Current
(October 1,
2024-June 30,
2025)
Effective
July 1, 2025
Effective
JulyU1, 2026
Effective
July 1, 2027
Effective
July 1, 2028
Effective
July 1, 2029
Flow – cost per
ccf of
wastewater $3.69323 $5.49120 $6.15020 $6.88830 $7.71490 $8.64070 Carbonaceous
Biochemical
Oxygen
Demand – cost
per pound 0.88057 0.51680 0.57890 0.64840 0.72630 0.81350 Suspended
Solids – cost
per pound 1.18346 1.78620 2.00060 2.24070 2.50960 2.81080 _____________
Source: City of Hayward.

Comparative Monthly Wastewater Service Charges . The City's average residential charges effective as of July 1, 2025 were approved by the City Council on February 18, 2025, and are set forth in Table 4 below with a comparison to other Bay Area cities.

Table 4

CITY OF HAYWARD WASTEWATER SYSTEM
Monthly Sewer Charge Comparison Average Residential Service

City
Average Monthly
Residential Charge
City of Oakland $79.10
City of San Leandro 53.20
Union Sanitary District 50.97
Hayward (effective 7/1/25) 48.75
Castro Valley SD 45.89
Dublin San Ramon SD 43.02
Oro Loma SD 40.55
_____________
Source: City of Hayward.

Connection Fees. Connection fees are one -time charges levied by the City to recover costs incurred by the Wastewater System for providing capacity in the Wastewater System required by new users. The collection of such fees is therefore subject to the pace of development in the Service Area.

Wastewater connection fees are collected at the time that a new connection is made to the public sanitary Wastewater System, or when an existing commercial or industrial customer wishes to increase the volume and/or waste strength of wastewater discharge from its facility to the public Wastewater System. Current and adopted connection fees are set forth in Table 5 below.

24 Table 5

CITY OF HAYWARD WASTEWATER SYSTEM
Connection Fees (As of October 1)

Current (effective
September 1, 2024)
Effective September
1, 2025
Effective September
1, 2026
Residential
Single Family, Duplex, Triplex, Fourplex $12,031.00 $13,235.00 $14,559.00 Multi-Family (per unit) 10,709.00 11,781.00 12,960.00
Accessory Dwelling Units (per unit) 4,813.00 5,295.00 5,825.00

Commercial, Industrial, Other
Per gallon of daily capacity required $33.61 $32.98 36.28 Per pound per year of carbonaceous
biochemical oxygen demand

13.33 34.11 37.53
Per pound per year of suspended solids 14.34 22.34 24.58 Minimum 12,031.00 13,235.00 14,559.00
_____________
Source: City of Hayward.

Wastewater System Revenues

Table 6 below shows the Wastewater System revenues by type of account for the last five fiscal years. The data presented in Table 6 do not include connection fees or other fees.

Table 6

CITY OF HAYWARD WASTEWATER SYSTEM
Revenues by Type of Account

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
Single Family
Residential $9,905,540 $10,497,449 $10,349,030 $10,809,011 $11,233,360 Multi Family Residential 5,990,676 6,248,930 6,471,238 6,916,171 7,332,005 Commercial / Industrial 6,984,989 6,783,537 6,935,206 8,400,240 7,981,391 Governmental /
Institutional 994,173 765,898 734,615 1,213,238 901,704 Critical User (Large
Industrial Users) 1,599,538 1,323,257 999,878 773,100 1,197,356 TOTAL $25,474,915 $25,619,071 $25,489,968 $28,111,759 $28,645,816 _____________
Source: City of Hayward.

25 Table 7 below sets forth the current and future adopted connection fees by type of use.

Table 7

CITY OF HAYWARD WASTEWATER SYSTEM
Ten Largest Wastewater System Rate Payers
As of June 30, 2024

Customer Name Type of Business Billed Amount
% of Total
Wastewater Use
Charges
Hayward Unified School District Institutional $411,039 1.43% Russell City Energy Center Industrial – Critical User 338,134 1.18 Park Orchard Apartments Multi Family Residential 318,702 1.11 Essex Portfolio LP Multi Family Residential 242,247 0.85 Alvista at the Bridge Apartments Multi Family Residential 234,156 0.82 Lyrical Foods, Inc. Industrial – Food Manufacturing 206,614 0.72 Cal State – East Bay Institutional 200,722 0.70
Bottling Group LLC (Pepsi-Cola) Industrial – Critical User 172,242 0.60 Glen Eden Garden Homes Assoc. Multi Family Residential 168,763 0.59 Monterey Coast LP Multi Family Residential 157,043 0.55 TOTAL $2,449,662 8.55%
_____________
Source: City of Hayward.

The connection fee revenues received by the Wastewater System for the last five fiscal years are set forth in Table 8 below.

Table 8

CITY OF HAYWARD WASTEWATER SYSTEM
Historical Connection Fee Revenues

Fiscal Year
Connection Fee
Revenues
2019-20 $4,422,747
2020-21 3,464,083
2021-22 4,898,975
2022-23 4,636,000
2023-24 3,275,991
_____________
Source: City of Hayward.

Billing, Collection and Delinquencies

Users of the Wastewater System who are connected to the City's water system are billed separately for sewer service and water service, on a combined bill, by the City's Water Department. The fee for either service may not be paid separately from the other. Users of the City's Wastewater System who are not connected to the City's water system are billed for sewer service only.

Bills are issued bi -monthly and are considered delinquent 17 days after the due date.

After 180 days, if the account is closed and the bill remains unpaid, the delinquent bill is sent to collections; if the account remains open, the City continues to seek payment of the delinquent bill. The City complies with State law regarding discontinuation of water service due to account delinquency. Since most customers of the Wastewater System also receive water service from

26 the City and are billed on a combined basis, the water shutoff policy effectively applies to most customers of the Wastewater System.

Historical delinquency and write-off information is set forth in Table 9 below.

Table 9

CITY OF HAYWARD WASTEWATER SYSTEM
Historical Delinquencies and Write-offs
(as of June 30 of each Fiscal Year)

2019-20 2020-21 2021-22 2022-23 2023-24
Total Amount Billed to
Ratepayers $25,048,676 $25,205,057 $26,435,961 $26,933,425 $28,433,576 Total Amount Delinquent $662,989 $820,456 $230,868 $831,856 $330,680 Delinquency as % of Billing 2.65% 3.26% 0.87% (1) 3.09% 1.16% (2) Amounts Written Off as
Uncollectable $54,957 $85,862 $88,516 $80,040 $15,510
Write-Offs as % of Billing 0.22% 0.34% 0.33% 0.30% 0.05% __________________
(1) Delinquency rate in Fiscal Year 2021-22 reflects approximately $584,000 received from the SWRCB’s California Water and Wastewater Arrearage Payment Program (“CWWAPP”) as a credit toward delinquent customer bills. (2) Delinquency rate in Fiscal Year 2023-24 reflects approximately $470,000 received from CWWAPP as a credit toward delinquent customer bills.

Source: City of Hayward.

Historical Revenues and Expenses

The Wastewater System operations are accounted for as an enterprise fund of the City.

The Statements of Revenues, Expenses, and Changes in Fund Net Assets of the Wastewater System for the five most recent fiscal years are set forth in Table 10 below.

27 Table 10

CITY OF HAYWARD WASTEWATER SYSTEM
Historical Revenues, Expenses, Changes in Fund Net Assets (Fiscal Year Ended June 30)

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
(Unaudited)

OPERATING REVENUES
Charges for services $29,524,613 $29,100,056 $30,598,276 $31,803,745 Miscellaneous 554,184 1,044,328 858,881 3,420,550
Total operating revenues 30,078,797 30,144,384 31,457,157 $35,224,295

OPERATING EXPENSES
Salaries and related expenses 9,074,215 8,804,152 9,824,309 $9,641,707 Materials, supplies and services 4,819,900 6,089,429 5,380,560 10,148,860 Repairs and maintenance 850,110 795,021 1,229,342 1,840,082 Depreciation 5,037,959 5,576,099 6,183,762 6,162,641
Total operating expenses 19,782,184 21,264,701 22,617,973 $27,793,290

Operating income (loss) 10,296,613 8,879,683 8,839,184 $7,431,005

NONOPERATING REVENUES (EXPENSES)
Investment income (loss) 2,308,947 482,896 (2,189,270) $1,208,068 Interest (expense) (365,746) (663,767) (525,149) (513,983) Gain on investment in JPA -- -- (965,799) 28,806
Gain from equity investment 119,683 -- -- --
Net nonoperating revenues
(expenses) 2,062,884 (180,871) (3,680,218) $722,891
Income (loss) before capital
contributions and transfers 12,359,497 8,698,812 5,158,966 $8,153,896

TRANSFERS
Transfers in

3,730,000 3,115,520 794,608 $989,607
Transfers out (1,182,724) (1,667,760) (4,706,386) (2,168,406) Net Transfers 2,547,276 1,447,760 (3,911,778) $(1,178,799)

Change in net position 14,906,773 10,146,572 1,247,188 $6,975,097

Net position - beginning 163,864,820 178,771,593 188,918,165 $190,165,353 Net position - ending $178,771,593 188,918,165

$190,165,353 $197,140,450
__________________
Sources: City of Hayward for Fiscal Year 2023-24; City of Hayward Annual Comprehensive Financial Reports for Fiscal Years 2019-20 through 2022-23.

Statement of Net Position

The Statements of Net Position for the Wastewater System for the five most recent fiscal years are set forth in Table 11 below.

28 Table 11

CITY OF HAYWARD WASTEWATER SYSTEM
Statement of Net Position

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
(Unaudited)
ASSETS
Current assets:

Cash and investments $97,058,021 $110,952,654 $109,542,651 $114,087,334 Cash and investments with fiscal agents -- 1 1 1
Accounts receivable, net 5,609,235 5,603,829 5,754,901 5,414,240 Due from other governments 1,554,592 -- 14,084 15,631
Deposits, parts, supplies and other -- -- 2,471,492 2,139,985 Due from other funds -- 136,051 329,813 232,283
Total current assets 104,221,848 116,692,535 118,112,942 121,889,474 Noncurrent assets:

Investment in EBDA 10,382,103 10,382,103 9,416,305 9,445,110 Deposits, parts, supplies and other 3,134,504 2,802,998 -- -- Capital assets:

Land 1,830,143 1,830,143 1,830,143 1,830,143
Construction in progress 30,048,965 5,085,671 9,809,312 14,961,990 Depreciable capital assets, net 85,866,482 110,664,618 105,133,799 99,432,728 Total noncurrent assets 131,262,197 130,765,433 126,189,559 125,669,971 Total assets 235,484,045 247,457,968 244,302,501 247,559,445

DEFFERED OUTFLOWS OF RESOURCES
Related to pensions 1,102,287 1,136,199 1,096,350 2,924,467 Related to OPEB 852,546 534,569 1,213,193 1,099,633
Total deferred outflows of resources 1,954,833 1,670,768 2,309,543 4,024,100

LIABILITIES
Current liabilities:

Accounts payable 923,618 1,437,253 703,903

1,680,669
Accrued interest 249,517 325,412 323,438 320,987
Accrued liabilities 222,668 326,616 311,084 380,772
Unearned revenue 219,065 229,565 229,565 229,565
Compensated absences, due within 1 year 325,684 306,077 411,368 409,742 Accrued reclamation costs 125,000 125,000 125,000 125,000 Long-term debt, due within 1 year 3,338,694 3,492,587 3,503,260 3,515,005 Total current liabilities 5,404,246 6,242,510 5,607,618 6,661,740

Noncurrent liabilities:

Compensated absences, due in more than 1 year

102,860 333,335 144,240 125,763
Net pension liabilities, due in more than 1 year 10,366,211 10,662,127 8,179,023 12,243,824 Net OPEB liability, due in more than 1 year 4,803,691 4,173,825 4,747,574 4,560,031 Long-term debt, due in more than 1 year 35,447,451 36,523,485 33,020,238 29,505,232 Total nonconcurrent liabilities 50,720,213 51,692,772 46,091,075 46,434,850 Total liabilities 56,124,459 57,935,282 51,698,693 53,096,590 (continued on next page)

29 Fiscal
Year
2019-20
Fiscal
Year
2020-21
Fiscal
Year
2021-22
Fiscal
Year
2022-23
Fiscal Year
2023-24
(Unaudited)

DEFFERED INFLOWS OF RESOURCES
Related to pensions 158,152 18,325 2,577,316 30,215
Related to OPEB 2,384,674 2,256,964 2,170,682 1,316,290 Total deferred inflows of resources 2,542,826 2,275,289 4,747,998 1,346,505

NET POSITION
Net investment in capital assets 78,959,445 77,564,260 80,249,756 83,204,624 Restricted for debt service -- 1 1 1
Unrestricted 99,812,148 111,353,904 109,915,596 113,935,825 Total net position $178,771,593 188,918,165 $190,165,353 $197,140,450 _____________________
Sources: City of Hayward for Fiscal Year 2023-24; City of Hayward Annual Comprehensive Financial Reports for Fiscal Years 2019-20 through 2022-23.

[remainder of page left intentionally blank]

30 Historical Revenues, Expenditures and Debt Service Coverage

The following table summarizes the historical operating results for the Wastewater System over the five fiscal years shown.

Table 12

CITY OF HAYWARD WASTEWATER SYSTEM
Historical Revenues, Expenses and Debt Service Coverage

Fiscal Year
2019-20
Fiscal Year
2020-21
Fiscal Year
2021-22
Fiscal Year
2022-23
Fiscal Year
2023-24
(Unaudited)
Revenues:

Charges for Services (1)(2)
$[29,524,61
3] $25,635,973 $25,700,301 $27,167,748 $29,532,215
Connection Fees (1)(2) [__] 3,464,083 4,897,975 4,636,000 3,275,991

Miscellaneous (1) 554,184 1,044,328 858,881 3,420,550 411,109

Investment Income (3) [0] 707,502 406,863 1,635,114 2,516,331 Transfers In (4) 0 586,720 611,607 611,607 611,607
Total Revenues

Operating Expenses:

Salaries and Related Expenses (1) 9,074,215 8,804,152 9,824,309 9,641,707 11,580,354 Adjustment for Non-cash Items (5) [__] 561,776 0 1,238,793 (743,472) Materials, Supplies, and Services (1) 4,819,900 6,089,429 5,380,560 10,148,860 9,051,444 Less: Capital Expenses [__] (3,273,173) (1,309,569) (6,270,428) (4,787,792) Less: Non-Cash Bad Debt Expense [__] (64,410) (1,095,290) (130,373) (168,675) Repairs and Maintenance (1) $850,110 $795,021 $1,229,342 $1,840,082 1,659,216 Total Operating Expenses $14,744,225 $12,912,795 $14,029,352 $16,468,641 $16,591,075

Net Revenues Before Debt Service $15,334,572 $18,525,811 $18,446,275 $21,002,379 $19,756,178

Debt Service (6)
2006 SRF Agreement 2,727,501 2,727,501 2,727,501 2,727,501 2,727,501 2016/18 SRF Agreement (7) 0 586,720 611,607 611,607 611,607 Total Debt Service $2,727,501 $3,314,221 $3,339,108 $3,339,108 $3,339,108

Debt Service Coverage 5.62x 5.59x 5.52x 6.29x 5.92x
______________________________
(1) Source: City of Hayward Annual Comprehensive Financial Reports. (2) Charges for services as presented in the City's Annual Comprehensive Financial Reports includes Connection Fees revenues. Connection fees are shown separately in this table and the Charges for Services line is accordingly reduced to net out connection fees.
(3) Investment income shown on a cash basis, net of non-cash fair market adjustments under GASB 72. (4) Reflects transfers from Recycled Water Fund related to that Recycled Water Fund's share of the debt service on the 2016/18 SRF Loan.
(5) Source: City of Hayward financial records; these expenses are excluded from the definition of "Operating Expenses" for the 2025 Bonds and future parity debt.
(6) Debt service shown here excludes payments on a 2011 CEC L oan and 2019 CEC Loan, neither of which are secured by a pledge of wastewater revenues.
(7) 2016 SRF Loan was amended in 2018; this debt service cost is paid through a transfer from the Recycled Water Fund .

See footnote 4.

31 Projected Revenues, Expenditures and Debt Service Coverage

The following table summarizes the projected operating results for the Wastewater System over the current and next four fiscal years. The projections below are based on several assumptions that the Wastewater System regards as reasonable based on their current plans and knowledge of the activities of outside entities that impact the financial performance of the Wastewater System . No assurance can be given, however, that such assumptions will be realized, and actual results ma y vary materially from those projected and produce substantially different financial results. Actual revenues and expenses may vary materially from these projections.

Table 13

CITY OF HAYWARD WASTEWATER SYSTEM
Projected Revenues, Expenses and Debt Service Coverage

Fiscal Year
2024-25
(Estimated)
Fiscal Year
2025-26
Fiscal Year
2026-27
Fiscal Year
2027-28
Fiscal Year
2028-29
Revenues:

Charges for Services (1) $31,599,470 $34,996,413 $39,195,983 $43,899,501 $49,167,441

Miscellaneous (2) 250,000 250,000 250,000 250,000 250,000

Investment Income (3) 200,000 200,000 200,000 200,000 200,000

Connection Fees (4) 3,000,000 3,750,000 3,750,000 3,750,000 3,750,000 Transfers In (5) 611,607 942,677 929,210 915,743 902,277 Total Revenues $35,661,077 $40,139,090 $44,325,193 $49,015,244 $54,269,717

Operating Expenses:

Salaries and Related Expenses (6) 11,270,357 11,721,172 12,190,018 12,677,619 13,184,724 Materials, Supplies, and Services (6) 4,258,776 4,429,127 4,606,292 4,790,544 4,982,166 Repairs and Maintenance (6) 1,725,585 1,794,608 1,866,392 1,941,048 2,018,690

Additional Operating Expenses (Project-
related) (7) 0 0 0 4,000,916 4,160,953
Additional personnel (Project-related) (7) 0 0 0 3,603,164 3,747,291 Total Operating Expenses $17,254,718 $17,944,907 $18,662,703 $27,013,292 $28,093,823

Net Revenues Before Debt Service $18,406,359 $22,194,183 $25,662,490 $22,001,952 $26,175,894

Debt Service (8)
2006 SRF Agreement 2,727,501 2,727,501 2,727,501 2,727,501 2,727,501 2016/18 SRF Agreement (9) 611,607 0 0 0 0
2025 Bonds* (10) 0 3,204,750 6,409,500 6,409,500 6,409,500 Estimated WIFIA Loan(11) 0 0 0 0 0
Estimated Future Revenue Bonds(12) 0 0 0 2,458,625 4,917,250 Total Debt Service* $3,339,108 $5,932,251 $9,137,001 $11,595,626 $14,054,251

Debt Service Coverage * 5.51x 3.74x 2.81x 1.90x 1.86x
______________________________
* Preliminary; subject to change.
(1) Projected Charges for Services revenues assume 7% rate increase in July 2024 and 12% annual rate increases each subsequent July through July 2028.
(2) Miscellaneous revenue projected at $250,000 annually, which is approximately 60% of the Miscellaneous revenue in FY 2023-24.
(3) Investment income projected at $200,000 annually, which the City believes to be a conservative estimate given expected future cash balances.

32 (4) Connection fee revenues based on an estimated 350 -400 new connections annually for the term of the projection. This estimate is based on curre nt or anticipated developments within the service area; the City's 5 -year historical average is 300 new connections per year.
(5) Transfer in for FY 2024 -25 reflects the Recycled Water Fund's share of the 2016/18 SRF Loan; future transfers in reflect estimated repayment of a $13.5 million interfund loan between the Sewer Fund and the Recycled Water Fund. Such transfers are "Revenues" within the terms of the 2025 Bonds and future parity debt. (6) Projected expenses based on Fiscal Year 2023 -24 expenses (net of non-cash expenses and capital expenses), growing at 4% annually.
(7) Estimated operating expenses related to facilities constructed as part of the Project; conservatively estimated to start 2 years before Project completion.
(8) Debt service shown here excludes payments on a 2011 CEC Loan and 2019 CEC Loan, neither of which are secured by a wastewater revenue pledge.
(9) The City prepaid the 2016/18 SRF Loan in January 2025; payment was made through an interfund transfer between the Sewer Fund and the Recycled Water Fund (see footnote 5 above). (10) Estimated; reflects capitalized interest for a portion of fiscal year 2025 -26; interest only amortization through fiscal year 2028-29.
(11) The City intends to capitalize interest on the WIFIA loan through Fis cal Year 2032-33. See “– Future Wastewater System Financings” for further information.
(12) Estimated; reflects capitalized interest for a portion of fiscal year 2027 -28. See “– Future Wastewater System Financings” for further information.

The projected revenues, expenses and debt service coverage is subject to uncertainties.

Inevitably, some assumptions used to develop the projections will not be realized and unanticipated events and circumstances may occur. Therefore, there are likely to be differences between projections and actual results, and those differences may be material.

Capital Improvement Program

Overview. Each fiscal year, the City adopts a 10 -year Capital Improvement Program (“CIP”) that includes improvements for the Wastewater System. The CIP is separate from the City’s operating budget and funds public infrastructure projects. Each fiscal year’s CIP is typically presented to the City Council in May, before being adopted by the City Council in May or June.

Phase II Facilities Plan. In 2020, the City completed the WRRF Phase II Facilities Plan the (“Phase II Facilities Plan”) to guide WRRF infrastructure needs for the following 20 years.

The Phase II Facilities Plan updated the previous Water Pollution Control Facility Master P lan to, among other things, address regulatory requirements restricting discharge of nutrients to the San Francisco Bay. The net proceeds of the 2025 Bonds are expected to be used for costs of the 2025 Projects (which consist of the Phase II Project and the WRRF Administration and Laboratory Building Proj ect), which are included in the Phase II Facilities Plan. The total estimated cost of the 2025 Projects is approximately $ 426 million for the Phase II Project and approximately $63 million for the WRRF Admi nistration and Laboratory Building Proj ect. Such costs include approximately $79 million in construction contingency. The Phase II Project is currently anticipated to be completed in Fiscal Year 20 30-31 and the WRRF Administration and Laboratory is currently anticipated to be completed in Fiscal Year 2026 -27. See “FINANCING PLAN – Capital Improvement Projects” for more information on 2025 Projects and the use of proceeds of the 2025 Bonds.

The CIP also includes other projects, improvements, and replacemen ts for the Wastewater System.

Table 13 below presents the CIP for the Wastewater System for Fiscal Years 2024 -25 through 2033 -34, as adopted by the City Council of the City in June 2024 . As a new CIP is adopted each fiscal year, the City frequently evaluates additional projects . Future CIPs could include additional projects and the cost of such projects is unknown.

33 Table 14

CITY OF HAYWARD WASTEWATER SYSTEM
Wastewater System Capital Improvement Program
Fiscal Years 2024-25 through 2033-34

Fiscal Year
2024-25
Fiscal Year
2025-26
Fiscal Year
2026-27
Fiscal Year
2027-28
Fiscal Year
2028-29
Fiscal Year
2029-30
Fiscal Year
2030-31
Fiscal Year
2031-32
Fiscal Year
2032-33
Fiscal Year
2033-34 TOTAL
Sewer Collection
System $10,680,000 $7,550,000 $7,700,000 $8,070,000 $8,370,000 $8,670,000 $9,040,000 $9,340,000 $9,640,000 $10,010,000 $89,070,000 WRRF 2,718,000 6,665,000 1,360,000 3,250,000 1,420,000 12,060,000 1,120,000 2,920,000 1,010,000 1,340,000 33,863,000 WRRF Laboratory 160,000 160,000 160,000 180,000 180,000 180,000 200,000 200,000 200,000 200,000 1,820,000 WRRF Phase II
Improvements (1) 25,474,508 97,958,000 85,167,000 68,226,000 33,884,000 0 0 0 0 0 310,709,508 Other 230,000 205,000 205,000 210,000 210,000 210,000 215,000 215,000 215,000 220,000 2,135,000 TOTAL $39,262,508 112,538,000 94,592,000 79,936,000 44,064,000 21,120,000 10,575,000 12,675,000 11,065,000 11,770,000 $437,597,508 _____________
(1) WRRF Phase II Improvements shown in this table are a low-end estimate of the cost of the 2025 Projects being financed in part by the WIFIA Loan and in part by the 2025 Bonds.

Source: City of Hayward FY 2025-2034 Capital Improvement Program.

34 Future Wastewater System Financings

As additional financing for the Phase II Project, the City anticipates undertaking additional financings in the next three years in the approximate amount of $343 million. First, the City expects to secure a loan from the United States Environmental Protection Agency under the terms of the Water Infrastructure Finance and Innovation Act of 2014 (the “ WIFIA Loan”) in the approximate principal amount of $244 million. Second, t he City anticipates the iss uance of additional wastewater revenue bonds in the approximate principal amount of $ 99 million. Any amounts not covered by the WIFIA Loan or additional wastewater revenue bonds are expected to be paid from other available sources of funds of the City, inc luding available Wastewater Fund reserves.

Wastewater System Reserves; Available Cash

It is the City’s practice to maintain various reserves for the Wastewater System. First, the City targets maintaining a reserve equal to at least 25% of Maintenance an d Operation Costs in an operating reserve. Second, the City targets maintaining a capital reserve equal to one year of the five-year average CIP. Third, the City targets funding a rate stabilization fund (which is not considered a Rate Stabilization Fund u nder the terms of the Indenture) for the Wastewater System at an amount equal to 25% of annual service changes. As of June 30, 2024, the target for these reserves was approximately $ 25 million in aggregate, or approximately 550 days of Maintenance and Operation Costs. As of June 30, 2024, the Wastewater System had available cash on hand totaling approximately $[___] million (unaudited), including approximately $[___] million in reserves. This amount was equivalent to approximately [____] days of Maintenance and Operation Costs during Fiscal Year 2023-2024.

Debt Management Policy

The City Council adopted a Debt Management Policy for the City on May 21, 2002 . The policy is reviewed annually by the City Council and was last amended on June 20, 2023. The policy allocates responsibility for debt management activities to the Finance Department, describes the purposes for which debt may be issued, establishes overall parameters for issuing and administering the City’s debt, including initial and continuing discl osure as required under the City’s undertakings entered into pursuant to the Rule.

CERTAIN RISK FACTORS

The following describes certain special considerations and risk factors affecting the payment of and security for the 2025 Bonds. The following discussion is not meant to be an exhaustive list of the risks associated with the purchase of any 2025 Bonds and the order in which information is presented does not necessarily reflect the relative importance of the various risks. Potential investors in the 2025 Bonds are advised to consider the following special factors along with all other information in this Official Statement in evaluating the 2025 Bonds.

There can be no assurance that other considerations will not materialize in the future.

Wastewater System Demand

There can be no assurance that the local demand for wastewater service provided by the Wastewater System will be maintained at levels described in this Official Statement under the heading “THE WASTEWATER SYSTEM.” Additionally, residential customers of the

35 Wastewater System who have low water consumption in a given billing cycle automatically receive significantly lower economy or lifeline wastewater service charges. If more residential customers reduced water consu mption to below the eligibility levels for economy or lifeline wastewater service charges, Wastewater System revenues could be reduced accordingly. See “WASTEWATER SYSTEM FINANCIAL INFORMATION – Rates, Fees and Charges.”

Reduction in the level of demand c ould require an increase in rates or charges in order to produce Net Revenues sufficient to comply with the City’s rate covenant in the Indenture.

Such rate increases could increase the likelihood of nonpayment, and could also further decrease demand. Fu rthermore, there can be no assurance that any other entity with regulatory authority over the Wastewater System will not adopt further restrictions on operation of the Wastewater System.

Wastewater System Expenses

There can be no assurance that Operati on and Maintenance Costs of the Wastewater System will be consistent with the levels described in this Official Statement. Changes in technology, increases in the cost of energy or other expenses would reduce Net Revenues, and could require substantial increases in rates or charges in order to comply with the rate covenant.

Such rate increases could increase the likelihood of nonpayment, and could also decrease demand. In addition, the Wastewater System is subject to significant regulatory provisions, and costs associated with complying with federal and State requirements may materially increase Operation and Maintenance Costs in the future. Finally, cyber-security incidents that may befall the City generally, or the Wastewater System specifically, resulting from hacking, viruses, malware, ransomware or other attacks on the City’s or Wastewater System’s computer systems, could have a material adverse impact on Operation and Maintenance Costs.

Future Parity Obligations

The Indenture permits the issuance by the City of certain indebtedness which may have a lien upon the Net Revenues which is on a parity basis to the lien which secures the 2025 Bonds and the 2006 SRF Agreement , if certain coverage tests are met (see “SECURITY AND SOURCES OF PAYMENT FOR THE BONDS – Parity Obligations” herein). These coverage tests involve, to some extent, projections of Net Revenues. If such indebtedness is issued, the debt service coverage for the Bonds will be diluted below what it otherwise would be s ubject to under the coverage tests. Moreover, there is no assurance that the assumptions which form the basis of such projections, if any, will be actually realized subsequent to the date of such projections. If such assumptions are not realized, the amo unt of future Net Revenues may be less than projected, and the actual amount of Net Revenues may be insufficient to provide for the payment of the 2025 Bonds, the 2006 SRF Agreement, and such additional Parity Obligations.

Articles XIllC and XIIID of the State Constitution

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

36 government] upon a parcel or upon a person as an incident of property ownership, including user fee s or charges for a property related service ” (and referred to in this section as a “property-related fee or charge”).

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

With respect to local government “taxes,” Proposition 26 expressly excludes a variety of levies, charges and exactions from the definition of “tax,” including a “charge imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege. ” Although the City believes that the Wastewater System rates and charges are not taxes for pur poses of Proposition 26, a court could conclude that, to the extent the City transfers surplus funds to the General Fund, the Wastewater System rates and charges constitute “taxes” for purposes of Proposition 26.

Proposition 26 amended Article XIIIC to pr ovide that the local government bears the burden of proving by a preponderance of the evidence that a levy, charge or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.

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

Further, under Article XIIID, revenues derived from a property-related fee or charge may not exceed the funds required to provide the “property-related service” and the entity may not use such fee or charge for any purpose other than that for which it imposed the fee or charge.

The amount of a property -related fee or charge may not exceed the proportional cost of the service attributable to the parcel, and no property -related fee or charge may be imposed for a service unless that service is actually us ed by, or is immediately available to, the owner of the property in question.

Initiative Power. In addition, Article XIIIC states that “the initiative power shall not be prohibited or otherwise limited in matters of reducing or repealing any local tax, assessment, fee or charge. The power of initiative to affect local taxes, assessments, fees and charges shall be applicable to all local governments and neither the Legislature nor any local government charter shall impose a signature requirement higher th an that applicable to statewide statutory initiatives.”

37 Judicial Interpretation of Articles XIIIC and XIIID . After Proposition 218 was enacted in 1996, appellate court cases and an Attorney General’s opinion initially indicated that fees and charges levied for water and wastewater services would not be considered property-related fees and charges, and thus not be subject to the requirements of Article XIIID regarding notice, hearing and protests in connection with any increase in the fees and charges bein g imposed.

However, three subsequent cases have held that certain types of water and wastewater charges could be subject to the requirements of Article XIIID under certain circumstances.

In Richmond v. Shasta Community Services District (2004) 32 Cal. 4th 409, the California Supreme Court addressed the applicability of the notice, hearing and protest provisions of Article XIIID to certain charges related to water service. In Richmond, the Court held that capacity charges are not subject to Proposition 21 8. The Court also indicated in dictum that a fee for ongoing water service through an existing connection could, under certain circumstances, constitute a property -related fee and charge, with the result that a local government imposing such a fee and cha rge must comply with the notice, hearing and protest requirements of Article XIIID.

In Howard Jarvis Taxpayers Association v. City of Fresno (2005) 127 Cal.App.4th 914, the California Court of Appeal, Fifth District, concluded that water, sewer and trash fees are property-related fees subject to Proposition 218 and a municipality must comply with Article XIIID before imposing or increasing such fees. The California Supreme Court denied the City of Fresno’s petition for review of the Court of Appeal’s decision on June 15, 2005.

In July 2006, the California Supreme Court, in Bighorn-Desert View Water Agency v.

Verjil (2006) 39 Cal.4th 205, addressed the validity of a local voter initiative measure that would have (a) reduced a water agency’s rates for water consumption (and other water charges), and (b) required the water agency to obtain voter approval before increasing any existing water rate, fee, or charge, or imposing any new water rate, fee, or charge. The court adopted the position indicated by its s tatement in Richmond that a public water agency’s charges for ongoing water delivery are “fees and charges ” within the meaning of Article XIIID, and went on to hold that charges for ongoing water delivery are also “fees” within the meaning of Article XIIIC’s mandate that the initiative power of the electorate cannot be prohibited or limited in matters of reducing or repealing any local tax, assessment, fee or charge. Therefore, the court held, Article XIIIC authorizes local voters to adopt an initiative me asure that would reduce or repeal a public agency’s water rates and other water delivery charges. (However, the court ultimately ruled in favor of the water agency and held that the entire initiative measure was invalid on the grounds that the second part of the initiative measure, which would have subjected future water rate increases to prior voter approval, was not supported by Article XIIIC and was therefore invalid.)

The court in Bighorn specifically noted that it was not holding that the initiative power is free of all limitations; the court stated that it was not determining whether the electorate’s initiative power is subject to the statutory provision requiring that water service charges be set at a level that will pay for operating expenses, prov ide for repairs and depreciation of works, provide a reasonable surplus for improvements, extensions, and enlargements, pay the interest on any bonded debt, and provide a sinking or other fund for the payment of the principal of such debt as it may become due.

Current Practice Regarding Rates and Charges . The City’s practice in implementing increases in water rates and charges has been to comply with the requirements of Article XIIID, including the practice of providing property owners with a 45 -day maile d notice and public hearing before the City Council approves rate increases.

38 Conclusion. It is not possible to predict how courts will further interpret Article XIIIC and Article XIIID in future judicial decisions, and what, if any, further implementing legislation will be enacted. Under the Bighorn case, local voters could adopt an initiative measure that reduces or repeals the City’s rates and charges, though it is not clear whether (and California courts have not decided whether) any such reduction or repeal by initiative would be enforceable in a situation in which such rates and charges are pledged to the repayment of bonds or other indebtedness, as is the case with respect to the 2025 Bonds. There can be no assurance that the courts will not further interpret, or the voters will not amend, Artic le XIIIC and Article XIIID to limit the ability of local agencies to impose, levy, charge and collect increased fees and charges for water, or to call into question previously adopted water rate increases.

Natural Calamities

General. From time to time, the City is subject to natural calamities, including, but not limited to, earthquakes, floods, and wildfires, that may adversely affect economic activity in the City, and which could have a negative impact on the Net Revenues of the Wastewater System.

The Wastewater System is also susceptible to subject to risks relating to drought and climate change/sea level rise.

Seismic. The City is located in a seismically active region. Active earthquake faults underlie both the City and the surrounding Bay Area. Three major earthquake faults that comprise the San Andreas fault system extend through the Bay Area. On August 24, 2014, an earthquake occurred in Napa, California. The tremor’s epicenter was located approximately 3.7 miles northwest of American Canyon ne ar the West Napa Fault and registered 6.0 on the Richter scale of earthquake intensity. The Napa earthquake caused fires, damaged buildings and roads, and injured approximately 200 people. The Napa earthquake was the largest earthquake in the Bay Area sinc e the 1989 Loma Prieta earthquake on the San Andreas Fault, which was centered about 60 miles south of San Francisco and registered 6.9 on the Richter scale of earthquake intensity. The Loma Prieta earthquake caused fires and collapses of and structural damage to buildings, highways and bridges in the Bay Area.

In April 2008, the Working Group on California Earthquake Probabilities (a collaborative effort of the U.S. Geological Survey, the California Geological Society, and the Southern California Earthqua ke Center) reported that there is a 63% chance that one or more earthquakes of magnitude 6.7 or larger will occur in the Bay Area before the year 2038. Such earthquakes may be very destructive. The United States Geological Survey predicts that a magnitude 7 earthquake occurring today on the Hayward Fault would likely cause hundreds of deaths and approximately $100 billion of damage. To date, the United States Geological Survey has not issued an updated report taking into account the Napa earthquake. Propert y within the City could sustain extensive damage in a major earthquake, and a major earthquake could adversely affect the area’s economic activity.

While the City is not currently located in any existing special study zone, defined in the Alquist-Priolo Earthquake Zoning Act, which requires the State Division of Mines and Geology to delineate all known active faults and establish minimum set back distances for the construction of habitable structures near active fault zones, it is possible that new geolog ical faults could be discovered in the area and that an earthquake occurring on such faults could result in damage of varying degrees of seriousness to property and infrastructure in the City, including the facilities of the Wastewater System.

39 Flood. The National Flood Insurance Reform Act requires, among other things, that the Federal Emergency Management Agency ( “FEMA”) assess its flood hazard map inventory at least once every five years. The current flood insurance rate map (a “FIRM”) indicates that th e City is not within the boundaries of a 100 -year floodplain. A 100 -year floodplain is an area expected to be inundated during a flood event of the magnitude for which there is a 1% possibility of occurrence in any year.

The City makes no representation that FEMA will not issue revised FIRMs that place the City within the boundaries of a 100-year floodplain.

Drought. As with much of the State, the City experiences recurring drought as a result of its climate conditions. Droughts impact public health and safety related to both water supply and wildfire risk. On October 19, 2021, the Governor declared a Statewide drought state of emergency and requested that all water users voluntarily reduce water use by 15%. On March 24, 2023, the Governor eased the emer gency drought restrictions imposed as a result of the Governor’s 2021 declaration. There can be no assurance that subsequent declarations will not impose mandatory water use restrictions should dry conditions persist in future years.

Climate Change

The S tate is susceptible to wildfires and hydrologic variability. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic activity, climate change is expected to intensify, increasing the frequency, severity and timing of ex treme weather events such as coastal storm surges, drought, wildfires, floods and heat waves, and raising sea levels. The future fiscal impact of climate change on the City and its Wastewater System is difficult to predict, but it could be significant and it could have a material adverse effect on the Wastewater System by requiring greater expenditures to counteract the effects of climate change or by changing the operations and activities of City residents and business establishments.

Cybersecurity

The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. As a recipient and provider of personal, private or other sensitive electronic information, the City is potentially subj ect to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks.

On July 9, 2023, the City became aware of a breach and attempts to disrupt and hold hostage parts of its network. The City Manager respo nded by declaring a local emergency and the City Council passed a resolution proclaiming a local emergency on July 13, 2023. A resolution amending and extending the proclamation of local emergency was passed on August 7, 2023. The City declared the emergen cy to provide greater flexibility in responding to the threat. The breach did not have a material impact on City finances or operations.

No assurance can be given that the City’s efforts to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, including the Wastewater System.

40 Limited Recourse on Default

If the City defaults on its obligation to pay the 2025 Bonds, the Trustee has the right to accelerate the total unpaid principal amounts of the 2025 Bonds. However, in the event of a default and such acceleration there can be no assurance that the City will have sufficient Net Revenues to pay the accelerated 2025 Bonds.

Limitations on Remedies Available; Bankruptcy

The enforceability of the rights and remedies of the Owners and the obligations of the City may become subject to the following: the federal bankruptcy code and applicable bankruptcy, insolvency, r eorganization, moratorium, or similar laws relating to or affecting the enforcement of creditors’ rights generally, now or hereafter in effect; equitable principles which may limit the specific enforcement under State law of certain remedies; the exercise by the United States of America of the powers delegated to it by the Federal Constitution; and the reasonable and necessary exercise, in certain exceptional situations, of the police power inherent in the sovereignty of the State and its governmental bodies in the interest of servicing a significant and legitimate public purpose. Bankruptcy proceedings, or the exercising of powers by the federal or State government, if initiated, could subject the Owners to judicial discretion and interpretation of their rights in bankruptcy or otherwise and consequently may entail risks of delay, limitation, or modification of their rights.

No Obligation to Tax

The obligation of the City to pay the 2025 Bonds does not constitute an obligation of the City for which the Ci ty is obligated to levy or pledge any form of taxation or for which the City has levied or pledged any form of taxation. The obligation of the City to pay 2025 Bonds does not constitute a debt or indebtedness of any City, the State of California or any of its political subdivisions, within the meaning of any constitutional or statutory debt limitation or restriction.

No Reserve Fund

No reserve fund is being established in connection with the 2025 Bonds and no reserve fund is required to be established in connection with the issuance of any Parity Obligations.

Accordingly, if Net Revenues are insufficient to make debt service payments on the 2025 Bonds and Parity Obligations, no reserve will be available to the Trustee to draw on to make payments to holders of the 2025 Bonds.

Change in Law

In addition to the other limitations described herein, the California electorate or Legislature could adopt a constitutional or legislative property tax decrease or an initiative with the effect of reducing revenues pa yable to or collected by the City. There is no assurance that the California electorate or Legislature will not at some future time approve additional limitations that could have the effect of reducing the Net Revenues and adversely affecting the security of the 2025 Bonds.

Statutory and Regulatory Compliance

Laws and regulations governing the treatment and disposal of wastewater are enacted and promulgated by federal, State and local government agencies. Compliance with these laws

41 and regulations is an d will continue to be costly, and, as more stringent standards are developed, such costs will likely increase.

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

Construction Risk

The City has entere d into agreements for the construction of the Projects. The City anticipates that such contracts will be subject to adjustment for a variety of circumstances, including higher than anticipated costs of labor and materials or subcontractor bids, changes in scope, unforeseen site conditions and force majeure e vents. The estimated costs of, and the projected schedule for, the Projects are subject to a number of uncertainties. The ability of the City to complete the Projects may be adversely affected by various factors including but not limited to: (1) estimati ng errors, (2) design and engineering errors, (3) changes to the scope of the Projects, (4) material and/or labor shortages, (5) unforeseen site conditions, (6) adverse weather conditions and other force majeure events, (7) contractor defaults, (8) labor d isputes, (9) unanticipated levels of inflation, and (10) environmental issues. No assurance can be provided that the Projects will not cost more than the current budget therefor. Any schedule delays or cost increases could result in the need to issue add itional indebtedness and may result in increased costs, thereby making the Wastewater System less economically competitive. There can be no assurances that significant increases in costs over the amounts projected by the City will not materially adversely affect the financial condition or operations of the Wastewater System.

Loss of Tax-Exemption

As discussed in this Official Statement under the caption “TAX MATTERS,” interest on the 2025 Bonds could become includable in gross income for purposes of federa l income taxation retroactive to the date the 2025 Bonds were issued, as a result of future acts or omissions of the City in violation of its covenants in the Indenture. Should such an event of taxability occur, the 2025 Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Indenture.

Secondary Market for 2025 Bonds

There can be no guarantee that there will be a secondary market for the 2025 Bonds or, if a secondary market exists, that any 2025 Bonds can be sold for any particular price. Prices of bond issues for which a market is being made will depend upon then -prevailing circumstances.

Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is

42 being made will depend upon then-prevailing circumstances. Such prices could be substantially different from the original purchase price.

TAX MATTERS

Federal Tax Status. In the opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, Bond Counsel, subject, however to the qualifications set forth below, under existing law, the interest on the 2025 Bonds is excluded from gross income for federal income tax purposes and such interest is not an item of tax preference for purposes of the federal alternative minimum tax. Interest on the 2025 Bonds may be subject to the corporate alternative minimum tax

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Internal Revenue Code of 1 986, as amended (the “Tax Code”) that must be satisfied subsequent to the issuance of the 2025 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The City has made certain represe ntations and covenants in order to comply with each such requirement. Inaccuracy of those representations, or failure to comply with certain of those covenants, may cause the inclusion of such interest in gross income for federal income tax purposes, which may be retroactive to the date of issuance of the 2025 Bonds.

Tax Treatment of Original Issue Discount and Premium. If the initial offering price to the public at which a 2025 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount ” for purposes of federal income taxes and State of California personal income taxes. If the initial offering price to the public at which a 2025 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “bond pr emium” for purposes of federal income taxes and State of California personal income taxes.

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

Under the Tax Code, bond premium is amortized on an annual basis over the term of the 2025 Bond (said term being the shorter of the 2025 Bond's maturity date or its call date). The amount of bond premium amortized each year reduces the adjusted basis of the owner of the 2025 Bond for purposes of determining taxable gain or loss upon disposition. The amount of bond premium on a 2025 Bond is amortized each year over the term to maturity of the 2025

43 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight -line interpolations between compounding d ates). Amortized 2025 Bond premium is not deductible for federal income tax purposes. Owners of premium 2025 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to State of Californ ia personal income tax and federal income tax consequences of owning such 2025 Bonds.

California Tax Status. In the further opinion of Bond Counsel, interest on the 2025 Bonds is exempt from California personal income taxes.

Other Tax Considerations. Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2025 Bonds to be subject, directly or indirectly, to federal income taxation or to be subject to or exempted from state income taxation, or otherwise prevent beneficial owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2025 Bonds. It cannot be predicted whether or in what form any such proposal might be enacted or whether, if enacted, such legislation would apply to bonds issued prior to enactment.

The opinions e xpressed by Bond Counsel are based upon existing legislation and regulations as interpreted by relevant judicial and regulatory authorities as of the date of such opinion, and Bond Counsel has expressed no opinion with respect to any proposed legislation or as to the tax treatment of interest on the 2025 Bonds, or as to the consequences of owning or receiving interest on the 2025 Bonds, as of any future date. Prospective purchasers of the 2025 Bonds should consult their own tax advisors regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

Owners of the 2025 Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the 20 25 Bonds may have federal or state tax consequences other than as described above. Other than as expressly described above, Bond Counsel expresses no opinion regarding other federal or state tax consequences arising with respect to the 2025 Bonds, the ownership, sale or disposition of the 2025 Bonds, or the amount, accrual or receipt of interest on the 2025 Bonds.

CERTAIN LEGAL MATTERS

The validity of the 2025 Bond s and certain other legal matters are subject to the approving opinion of Jones Hall, A Professional Law Corporation, San Francisco, California, as Bond Counsel to the City. A complete copy of the proposed form of Bond Counsel opinion is contained in Appendix D hereto. Bond Counsel undertakes no responsibility for the accuracy, completeness or fairness of this Official Statement.

Certain legal matters will be passed upon for the City and the City by the City Attorney, and by Jones Hall, A Professional Law Corporation, San Francisco, California, as Disclosure Counsel. Payment of the fees and ex penses of Bond Counsel, Disclosure Counsel , the Municipal Advisor , and the Purchaser is contingent upon the sale and delivery of the 2025 Bonds.

44 NO MATERIAL LITIGATION

In connection with issuance of the 2025 Bonds, the City will certify that there is no litigation pending or, to the City’s knowledge, threatened in any way to restrain or enjoin the issuance, execution or delivery of the 2025 Bonds, to contest the validity of the 2025 Bonds, the Indenture or any proceedings of the City with respect thereto.

Although the City is subject to claims and lawsuits from time to time, the City does not believe there are any claims or lawsuits pending against the City that could materially adversely affect the finances of the City or the Wastewater System so as to impair the ability of the City to pay principal of, and interest on, the 2025 Bonds when due.

RATING

S&P Global Ratings ( “S&P”) has assigned its municipal bond rating of “____” to the 2025 Bonds. Such rating reflects only the view of S&P, and an explanation of the significance of the rating, and any outlook assigned to or associated with the rating, should be obtained from S&P.

Generally, a rating agency bases its rating on the information and materials furnished to it and on investigations, studies and assumptions of its own. The City has provided certain additional information and materials to the rating agency (some of which does not appear in this Official Statement). To the extent that suc h information has been omitted from this Official Statement, it has been deemed immaterial to investors in the 2025 Bonds.

There is no assurance that this rating will continue for any given period of time or that this rating will not be revised downward or withdrawn entirely by the rating agency, if in the judgment of the rating agency, circumstances so warrant. Any such downward revision or withdrawal of any rating on the 2025 Bonds may have an adverse effect on the market price or marketability of the 2025 Bonds.

CONTINUING DISCLOSURE

The City has covenanted for the benefit of owners of the Certificates to provide certain financial information and operating data relating to the City and its general fund by not later than nine months after the end of the City’s fiscal year, or March 31 each year based on the City’s current fiscal year -end of June 30, commencing March 31, 202 5, with the report for fiscal year 2023-24 (the “Annual Report”) and to provide notices of the occurrence of certain listed events (“Event Notices”); provided that the requirement to file the Annual Report for the 2023-24 fiscal year by no later than March 31, 2025, shall be satisfied by the filing of the Official Statement. All Annual Reports and Event Notices are required to be fil ed electronically with the Municipal Securities Rulemaking Board (the “MSRB”).

These covenants have been made in order to assist the Purchaser in complying with Rule 15c2-12(b)(5) promulgated under the Securities Exchange Act of 1934, as amended (the “Rule”). The specific nature of the information to be contained in the Annual Report and the Event Notices is set forth in APPENDIX E.

45 ]Based upon a review of the City’s filing obligations during the past five years, there have been no instances in which th e City failed to comply, in all material respects, with any undertaking previously entered into by it pursuant to the Rule.]

UNDERWRITING

The 2025 Bonds were sold at competitive sale held on ________, 2025, and were awarded to ________ (the “Purchaser”), whose proposal represented the lowest true interest rate for the 2025 Bonds. The 2025 Bonds are being purchased by the Purchaser at a purchase price of $________, which represents the aggregate principal amount of the 2025 Bonds ($________), plus net o riginal issue premium of $________ less a purchaser’s discount of $________.

The Purchaser will be obligated to take and pay for all of the 2025 Bonds if any are taken. The Purchaser intends to offer the 2025 Bonds to the public at the offering prices s et forth on the inside cover page of this Official Statement. After the initial public offering, the public offering price may be varied from time to time by the Purchaser.

46 EXECUTION

The execution and delivery of this Official Statement have been dul y authorized by the City.

CITY OF HAYWARD

By:

Finance Director

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APPENDIX A

CITY OF HAYWARD GENERAL DEMOGRAPHIC AND ECONOMIC INFORMATION

General

The City. The City was given the official name of “Haywood,” due to a clerical error the same year the post office was established, 1860. In 1876, “Haywood” was incorporated as the “Town of Haywards,” with a population of 1,100. On March 11, 1876, the City was chartered into the State and officially recognized as a City. In 1894, the “s” in “Haywards” was dropped and on September 18, 1928, the status of the community was changed to the “City of Hayward.” In the early decades of the 20th Century, the Hayward Area became known as the “Heart of the Garden of Eden ” because of its temperate climate and fertile soil. Everything – produce, chickens, cattle, flowers – grew in abundance. By 1950, the City grew to a population of 14,000, had become the “Apricot City” and home to Hunt’s Cannery.

On March 7, 1956, the City adopted the City of Hayward Charter. By 1960, the population had swelled to 72,700. By the mid-1960’s, the City’s landscape changed from apricot trees and canneries to subdivisions and shopping centers. The City’s growth continued through the 1970’s and 1980’s. By 1990, with a population of 121,000, the City became one of the top 15 most ethnically-diverse communities in the nation. Here, people from many cultures live and work together to build a community reflective of its residents.

The County. The County of Alameda (the “County”) is located on the east side of the San Francisco Bay, extending to the City of Albany on the north, the City of Fremont on the south, and to the City of Livermore on the east, and is approximately ten miles west of San Francisco. Automobile access to San Francisco is provided by the San Francisco -Oakland Bay Bridge.

The northern part of the County has direct access to San Francisco Bay and the City and County of San Francisco. It is highly diversified with residential areas, active commercial areas, traditional heavy industry, the University of California at Berkeley, the Port of Oakland, and sophisticated manufacturing, computer services and biotechnology firms. The middle of the County is also highly developed including older established residential and industrial areas. The southeastern corner of the County, including the cities of Pleasanton and Livermore, has se en strong growth in residential development and manufacturing. Many high -tech firms have moved from neighboring Silicon Valley in Santa Clara County to the County.

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Population

As of January 1, 2024, the population of the City was estimated to be 159,770. The following table presents population data for the last five years for the City, County and State.

COUNTY OF ALAMEDA
Population

Year City of Hayward County of Alameda State of California 2020 159,266 1,663,114 39,648,938
2021 162,079 1,666,341 39,327,868
2022 159,986 1,643,683 39,114,785
2023 160,699 1,650,656 39,061,058
2024 159,770 1,641,869 39,128,162

Source: State Department of Finance estimates (as of January 1).

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Principal Employers

The following table shows the principal employers in the City, listed alphabetically, as shown in the City’s Annual Comprehensive Financial Report for fiscal year ending June 30, 2023.

CITY OF HAYWARD
Principal Employers(1)

Employer
Alameda County Sheriff’s Department
Baxter Bio Pharma
California State University East Bay
Chabot Community College
Fremont Bank Operations Center
Hayward Unified School District
Illumina
Impax Laboratories, Inc.

Pentagon Technologies
Plastikon Industries, Inc.

Siemens Building Tech
St. Rose Hospital

(1) Presented in alphabetical order based on economic development’s assessment.

Source: City Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023.

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The unemployment rate in the Oakland-Hayward-Berkeley MD was 4.5% in December 2024, down from a revised 4.8% in November 2024, and unchanged the year -ago estimate of

4.5%. This compares with an unadjusted unemployment rate of 5.2% for California and 3.8% for the nation during the sam e period. The unemployment rate was 4.5% in the County, and

4.6% in Contra Costa County.

The table below lists employment by industry group for Alameda and Contra Costa Counties for the years 2019 to 2023.

OAKLAND- HAYWARD-BERKELEY MD
(Alameda and Contra Costa Counties)
Annual Averages Civilian Labor Force, Employment and Unemployment, Employment by Industry
(March 2023 Benchmark)

2019 2020 2021 2022 2023
Civilian Labor Force (1)(2) 1,401,500 1,364,400 1,354,000 1,367,400 1,376,700 Employment 1,359,000 1,242,300 1,270,000 1,320,400 1,320,300 Unemployment 42,500 122,100 84,000 47,100 56,400
Unemployment Rate 3.0% 9.0% 6.2% 3.4% 4.1%
Wage and Salary Employment: (3)
Agriculture 1,400 1,500 1,700 1,900 1,900
Mining and Logging 200 200 200 300 300
Construction 75,600 71,100 74,300 75,400 75,100
Manufacturing 101,000 98,700 106,000 112,300 111,900
Wholesale Trade 45,400 42,100 41,100 41,500 41,400
Retail Trade 112,000 101,500 105,300 106,200 105,600
Transportation, Warehousing, Utilities 43,700 45,200 49,500 54,500 54,400 Information 27,600 25,600 24,700 25,000 24,200
Finance and Insurance 37,200 35,900 34,800 33,600 32,300 Real Estate and Rental and Leasing 18,100 16,800 17,200 18,400 18,400 Professional and Business Services 193,200 184,900 190,700 195,500 189,500 Educational and Health Services 198,400 191,300 198,500 205,800 216,500 Leisure and Hospitality 121,000 84,700 92,500 108,300 112,100 Other Services 41,200 33,100 35,600 39,200 41,300
Federal Government 13,400 14,200 13,400 13,100 13,300
State Government 39,600 38,200 35,900 33,100 33,700
Local Government 121,800 113,500 111,800 115,200 118,000 Total all Industries 1,190,700 1,098,500 1,133,200 1,179,100 1,189,900

(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self -employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Totals may not add due to rounding.

Source: State of California Employment Development Department.

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Effective Buying Income

“Effective Buying Income” is defined as personal income less personal tax and nontax payments, a number often referred to as “disposable” or “after -tax” income. Personal income is the aggregate of wages and salaries, other labor -related income (such as employer contributions to private pension funds), proprietor’s income, rental income (which includes imputed rental income of owner -occupants of non -farm dwellings), dividends paid by corporations, interest income from all sources, and transfer payments (such as pensions and welfare assistance). Deducted from this total are personal taxes (federal, state and local), nontax payments (fines, fees, penalties, etc.) and personal contributions to social insurance.

According to U.S. government definitions, the resultant figure is commonly known as “disposable personal income.”

The following table summarizes the total effective buying income and median household effective buying income for the City, the County, the State and the United States for the period 2021 through 2025.

CITY OF HAYWARD, COUNTY OF ALAMEDA,

STATE OF CALIFORNIA, AND UNITED STATES
Effective Buying Income
2021 through 2025

Year

Area
Total Effective
Buying Income
(000’s Omitted)
Median
Household
Effective Buying
Income

2021 Hayward $5,228,881 $77,359
Alameda County 77,794,202 88,389
California 1,290,894,604 67,956
United States 9,809,944,764 56,790

2022 Hayward $5,859,087 $88,091
Alameda County 85,225,529 99,940
California 1,452,426,153 77,058
United States 11,208,582,541 64,448

2023 Hayward $5,653,768 $86,987
Alameda County 80,766,211 98,721
California 1,461,799,662 77,175
United States 11,454,846,397 65,326

2024 Hayward $5,951,502 $91,190
Alameda County 84,213,255 101,689
California 1,510,708,521 80,973
United States 11,987,185,826 67,876

2025 Hayward $6,156,310 $93,050
Alameda County 88,476,678 106,127
California 1,557,429,767 82,725
12,525,577,707 69,687

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Source: Claritas, LLC.

Commercial Activity

Summaries of the historic taxable sales within the City and the County during the past five years in which data is available are shown in the following tables.

Total taxable sales during the first three quarters of calendar year 2024 in the City were reported to be $2,952,754,941, a 2.97% increase from the total taxable sales of $2,867,659,534 reported during the first three quarters of calendar year 2023.

CITY OF HAYWARD
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions

Number
of Permits
Taxable
Transactions
2019 2,241 $1,882,843 4,378 $3,347,430
2020 2,351 1,635,537 4,628 2,942,668
2021 2,169 1,903,039 4,407 3,371,260
2022 2,229 2,037,312 4,494 3,684,279
2023 2,207 2,066,380 4,443 3,907,462

Source: State Department of Tax and Fee Administration.

Total taxable sales during the first three quarters of calendar year 2024 in the County were reported to be $29,003,232,735, a 6.05% decrease from the total taxable sales of $30,871,933,944 reported during the first three quarters of calendar year 2023.

ALAMEDA COUNTY
Taxable Retail Sales
Number of Permits and Valuation of Taxable Transactions (Dollars in Thousands)

Retail Stores Total All Outlets

Number
of Permits

Taxable
Transactions

Number
of Permits

Taxable
Transactions
2019 28,375 $21,921,743 49,197 $35,116,164
2020 28,831 19,931,259 50,461 32,176,002
2021 26,964 22,602,772 47,565 37,935,594
2022 27,010 23,910,667 48,059 44,323,669
2023 26,192 23,007,753 46,749 41,256,727

Source: State Department of Tax and Fee Administration.

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Construction Activity

The following tables show a five -year summary of the valuation of building permits issued in the City and the County.

CITY OF HAYWARD
Building Permit Valuation
(Valuation in Thousands of Dollars)

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $209,636.7 $55,409.9 $63,505.1 $51,406.8 $58,268.1 New Multi-family 61,901.8 76,703.6 41,238.4 73,973.6 82,132.4 Res. Alterations/Additions 27,798.2 8,628.6 9,667.1 17,639.0 18,082.5 Total Residential $299,336.7 $140,742.1 $114,410.6 $143,019.4 $158,483.0

New Commercial $38,931.4 $76,422.5 $33,378.0 $59,909.2 4,050.0 New Industrial 0.0 0.0 0.0 4,800.0 20,000.0
New Other 5,731.6 8,08.2 3,582.0 25,373.1 2,967.9
Com. Alterations/Additions 36,908.3 3,433.2 50,245.9 84,008.9 61,284.5 Total Nonresidential $81,571.3 $79,855.7 $87,205.9 $174,091.2 $88,302.4

New Dwelling Units
Single Family 562 184 238 204 155
Multiple Family 440 335 1,279 335 603
TOTAL 1,002 519 1,517 539 758

Source: Construction Industry Research Board, Building Permit Summary.

ALAMEDA COUNTY
Building Permit Valuation
(Valuation in Thousands of Dollars)

2019 2020 2021 2022 2023
Permit Valuation
New Single-family $675,129.8 $394,500.3 $407,585.0 $339,046.4 $332,289.9 New Multi-family 782,536.4 772,038.0 829,822.2 795,917.3 507,952.9 Res. Alterations/Additions 512,409.9 293,866.8 222,971.3 323,712.1 425,659.0 Total Residential $1,970,076.1 $1,460,405.1 $1,460,378.5 $1,458,675.8 $1,265,901.8

New Commercial $718,569.0 $238,516.5 $312,914.6 $268,498.4 405,330.0 New Industrial 5,638.5 0.0 600.0 33,740.8 65,576.2
New Other 78,049.9 131,447.0 110,817.0 120,294.6 94,551.2 Com. Alterations/Additions 922,668.1 628,230.5 892,656.8 993,782.1 852,215.1 Total Nonresidential $1,724,925.5 $998,194.0 $1,316,988.4 $1,416,315.9 $1,417,672.5

New Dwelling Units
Single Family 1,871 1,152 1,589 1,176 1,061
Multiple Family 4,145 2,610 4,494 3,366 3,686
TOTAL 6,016 3,762 6,083 4,542 4,747

Source: Construction Industry Research Board, Building Permit Summary.

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Transportation

The City has become the crossroad of the Bay Area. Interstate Highway 580 (east-west), Interstate Highway 680 (north -south) and Highway 61 provides access to commuters and residents to travel to the nearby cities of Oakland, San Francisco, Sacramento, San Jose, and the Central Valley with ease.

Bay Area Rapid Transit (BART), the regional rapid transit system, has two stations in the City: the Hayward station, in downtown; and the South Hayward station, near the Hayward - Union City border. The AC Transit bu s system, which provides bus service for Alameda County and Contra Costa County, operates in the City, and has a repair/training center located there.

Amtrak, the national rail passenger system, provides daily service at its Hayward station for the Capitol Corridor train, which runs between San Jose in the South Bay, and Auburn in the Greater Sacramento area.

The City has a general aviation airport, the Hayward Executive Airport. The Hayward Air National Guard station was located at the airport in 1942, until being reassigned to Moffett Field in 1980.

Employee Retirement System

PERS Plan Description . All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other ) Plans, agent multiple -employer defined benefit pension plans administered by the California Public Employees’ Retirement System ( “PERS”), which acts as a common investment and administrative agent for its participating member employers. Employees of the Wastewater System are eligible to participate in the City’s Miscellaneous Plan. Benefit provisions under the Plans are established by State statute and City resolution. PERS issues publicly available reports that include a full description of the pension p lans regarding benefit provisions, assumptions and membership information that can be found on the PERS website.

PERS Plan Eligibility. For a more detailed discussion of the eligibility requirements for the City’s PERS retirement plans, see Appendix B, Note 13.

PERS Plan Contributions. The City is required to contribute the actuarially determined remaining amounts necessary to fund the benefits for its members. The actuarial methods and assumptions used are those adopted by the PERS Board of Administrat ion (the “Board of Administration”). For the measurement period ended June 30, 202 3 (the measurement date), the average active employee contribution rate on or after January 1, 2013 is 6.75% of annual pay for the Miscellaneous Plan. The employer contribution rate on or after January 1, 2013 is

9.77% of annual payroll for the Miscellaneou s Plan. The contribution requirements of the plan members are established by State statute, and the employer contribution rates are established and may be amended by PERS.

Implementation of GASB Nos. 68. Commencing with fiscal year ended June 30, 2015, the City implemented the provisions of GASB Statement Nos. 68, which require certain new pension disclosures in the notes to its audited financial statements commencing with the audit for fiscal year 2014 -15. Statement No. 68 generally requires the City to recognize its proportionate share of the unfunded pension obligation by recognizing a net pension liability measured as of a date (the measurement date) no earlier than the end of its prior fiscal year. As

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a result of the implementation of GASB Statement Nos. 68, the City reflected a restatement of its beginning net position as of July 1, 2014.

For a more detailed discussion of the eligibility requirements for the City’s retirement plans, see Appendix B, Note 13 for detailed information about the actuari al assumptions underlying the contributions. The City’s fiscal year 202 1-22 contributions to the City’s Miscellaneous Plan and the funded status of the Miscellaneous Plan are set forth below.

Fiscal Year
Ended
Total Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability
Plan
Fiduciary Net
Position as a
Percentage
of the Total
Pension
Liability
Covered
Employee
Payroll
Plan Net
Pension
Liability as a
Percentage
of Covered
Employee
Payroll
Contributions
Employer
6/30/2022 $544,066,746 $354,826,823 $189,239,923 65.22% $53,975,164 350.61% $16,196,634

Recent Actions by PERS. On November 15, 2021, the CalPERS Board selected a new asset allocation mix that will guide the fund’s investment portfolio for the next four years, while at the same time retaining the reduction of discount rate from 7.0% to 6.8%. Notable changes for employers include a decrease in median total employer contribution rates, from less than 1% in miscellaneous plans to a decrease of more than 2% in some safety plans. Contribution changes took effect in fiscal year 2023-24 for public agencies.

Other Post Employment Benefits (“OPEB”)

Description of Postretirement Healthcare Benefits (OPEB) . The City participates in the California Employers’ Retiree Benefit Trust ( “CERBT”), an agent multiple -employer plan administered by PERS, consisting of an aggregation of single-employer plans.

By City Council resolution, the City provides certain health care benefits for employees who retire directly from the City with at least five years of service with the City and who are vested in PERS. The City participates in the PE RS health care plan which is governed under the California Public Employees Health and Medical Care Act ( “PEMCHA”). Required retiree medical plan contributions are also governed by PEMCHA for member agencies.

The City contributes up to a fixed dollar amou nt of retiree medical benefits, which varies by employee bargaining group and coverage level as governed by PEMCHA. Benefits continue for surviving spouses in amounts as required by PEMCHA. Should an eligible retiree opt out of the PERS medical plan, they will receive $ 149 to 151 per month in lieu of contributions to the PERS plan.

As of the June 30, 2021, measurement date, the following current and former employees of the City were covered by the benefit terms of the OPEB Plan:

Inactive employees or beneficiaries currently receiving benefits 712 Inactive employees entitled to but not yet receiving benefits 170 Active employees 806
Total 1,697

Source: City of Hayward Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2023.

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Funding Policy and Actuarial Assumptions. The annual required contribution (“ARC”) was determined as part of a June 30, 2021 actuarial valuation using the projected unit credit cost method. This is a cost method that takes into account the benefits th at are expected to be paid for current actives and retirees. The actuarial assumptions included (a) 6.10% investment rate of return, 3.00% projected annual salary increase and a 2.50% health care cost inflation.

The long -term expected rate of return on OPE B plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produ ce the long -term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.

Total OPEB Liability. The City’s OPEB liability of $89,461,199 was measured as of June 30, 2022, and was determined by an actuarial valuation as of June 30, 2021, rolled forward to June 30, 2022, using standard update procedures.

The City’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023, and in particula r Note 15 thereto, includes information about the City’s postemployment healthcare liabilities and funding.

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APPENDIX B

ANNUAL COMPREHENSIVE FINANCIAL REPORT OF THE CITY OF HAYWARD FOR THE FISCAL YEAR ENDED JUNE 30, 2023

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APPENDIX C

SUMMARY OF CERTAIN PROVISIONS OF THE INDENTURE

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APPENDIX D

PROPOSED FORM OF BOND COUNSEL OPINION

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APPENDIX E

FORM OF CONTINUING DISCLOSURE CERTIFICATE

$_____________

CITY OF HAYWARD
2025 WASTEWATER REVENUE BONDS

This Continuing Disclosure Certificate (the “Disclosure Certificate ”) is executed and delivered by the City of Hayward (the “City”) in connection with the issuance of the bonds captioned-above (the “Bonds”). The Bonds are being issued pursuant to a n Indenture of Trust, dated as of March 1, 2025, between the City and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”), as supplemented or amended from time to time in accordance with the provisions thereof (the “Indenture”).

The City hereby covenants and agrees as follows:

Section 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the City for the benefit of the holders and beneficial owners of the Bonds and in order to assist the Participating Underwriter in complying with Rule 15c2 -12(b)(5) of the Securities and Exchange Commission.

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

“Annual Rep ort” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4.

“Annual Report Date” means the date not later than March 31 after the end of each fiscal year of the City (currently June 30th).

“Dissemination Agent ” means, initially, [Willdan Financial Services] , or any successor Dissemination Agent designated in writing by the City and which has filed with the City a written acceptance of such designation.

“Listed Events” means any of the events listed in Section 5(a).

“MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule.

“Official Statement ” means the final official statement dated ___________, 202 5, executed by the City in connection with the issuance of the Bonds.

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

“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.

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Section 3. Provision of Annual Reports.

(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 31, 2025, with the report for the 2023-24 fiscal year, provide to the MSRB in an electronic format as prescribed by the MSRB, an Annual Repor t that is consistent with the requirements of Section 4 of this Disclosure Certificate; provided, however, that the requirement to file the Annual Report for the 2023-2024 fiscal year by no later than March 31, 2025, shall be satisfied by the filing of the Official Statement with the MSRB.

Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). I f by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder.

(b) If the City does not provide (or cause the Disse mination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) notice in a timely manner to the MSRB.

(c) With respect to each Annual Report, the Dissemination Agent shall:

(i) determine each year prior to the Annual Report Date the then -applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and

(ii) if the Dissemination Agent is other than the City, file a report with t he City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports . The City’s Annual Report shall contain or incorporate by reference the following:

(a) The City’s audited financial statements prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audite d financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statemen ts shall be filed in the same manner as the Annual Report when they become available.

(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the

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most recently completed fiscal year , substantially similar to that provided in the corresponding tables in the Official Statement, as follows:

(1) Table 1 – Customer Base by Type of Account,

(2) Table 7 – Ten Largest Wastewater System Rate Payers, and

(3) Table 12 – Historical Revenues, Expenditures and Debt Service Coverage.

(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.

(d) Any or all of the items listed above may be included by specific reference to other documents, including off icial statements of debt issues of the City or related public entities, which are available to the public on the MSRB’s internet web site or filed with the Securities and Exchange Commission. The City shall clearly identify each such other document so included by reference.

Section 5. Reporting of Significant Events.

(a) The City shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds:

(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties.
(4) Unscheduled draws on credit enhancements reflecting financial difficulties.
(5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701 -TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security. (7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.

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(11) Rating changes.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the term ination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material.
(14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City or an obligated person, any of which affect security holders, if material. (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.

(b) Upon the occurrence of a Listed Event, the City shall, or shall cau se the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstandi ng the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Indenture.

(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier “material” with respect to certain notices, determinations or other events affecting the tax status of the Bonds.

The City shall cause a notice to be filed as set forth in paragraph (b) above with re spect to any such event only to the extent that the City determines the event’s occurrence is material for purposes of U.S. federal securities law. Whenever the City obtains knowledge of the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above.

(d) For purposes of this Disclosure Ce rtificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body a nd officials or officers in possession but subject to the supervision and orders of a court or

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governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having sup ervision or jurisdiction over substantially all of the assets or business of the City.

(e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledg ed as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the Munic ipal Securities Rulemaking Board consistent with the Rule.

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

Section 7. Termination of Reporting Obligation . The City’s obligations under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior t o the final maturity of the Bonds, the City shall give notice of such termination in the same manner as for a Listed Event under Section 5(b).

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

Section 9. Amendment; Waiver . Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:

(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted;

(b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied wi th the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and

(c) the proposed amendment or waiver either (i) is appr oved by holders of the Bonds in the manner provided in the Indenture for amendments to the Indenture with the consent of holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

If the annual financial information or operating data to be provided in the Annual Report is amended pursuant to the provisions hereof, the first annual financial information filed

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pursuant hereto containing the amended operating data or financial information shall explain, in narrative form, the reasons for the amendment and the impact of the change in the type of operating data or financial information being provided.

If an amendment is made to the undertaking specifying the accounting principles to be followed in preparing financial statements, the annual financial information for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new a ccounting principles and those prepared on the basis of the former accounting principles. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on th e presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative. A notice of the change in the accounting principles shall be filed in the same manner as for a Listed Event under Section 5(b).

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

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

Section 12. Duties, Immunities and Liabilities of Dissemination Agent.

(a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they may incur arising out of or in the exercise or performance of its powers and duti es hereunder, including the costs and expenses (including attorney fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall have no duty or obligation to review any information provided to it by the City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive res ignation or removal of the Dissemination Agent and payment of the Bonds.

(b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and

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shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

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

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

Date: CITY OF HAYWARD

By:

Finance Director

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APPENDIX F

DTC AND THE BOOK-ENTRY ONLY SYSTEM

The following description of the Depository Trust Company ( “DTC”), the procedures and record keeping with respect to beneficial ownership interests in the 2025 Bonds, payment of principal, interest and other payments on the 2025 Bonds to DTC Participants or Beneficial Owners, confirmation and transfer of beneficial own ership interest in the 2025 Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC. Accordingly, no representations can be made concerning these matters and ne ither the DTC Participants nor the Beneficial Owners should rely on the foregoing information with respect to such matters, but should instead confirm the same with DTC or the DTC Participants, as the case may be.

Neither the issuer of the 2025 Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the 2025 Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

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

1. The Depository Trust Company ( “DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully -registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully -registered Security certificate will be issued for each issue of the Securities, each in the aggregate principal amount of such issue, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s larg est securities depository, is a limited -purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation ” within the meaning of the New York Uniform Commercial Code, and a “clearing agency ” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934.

DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants ( “Direct Participants ”) deposit with DTC. DTC also facilitates the post -trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book -entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non -U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations.

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DTC is a wholly -owned subsidiary of The Depository Trust & Clearing Corporation ( “DTCC”).

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

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expecte d to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership inte rests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, ex cept in the event that use of the book -entry system for the Securities is discontinued.

4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowl edge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the no minee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the registrar and request that copies of notices be provided directly to them.

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

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

8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts u pon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructi ons and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or r egulatory requirements as may be in effect from time to time.

Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Is suer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.

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

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

11. The information i n this section concerning DTC and DTC’s book -entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.

CITY OF HAYWARD
Hayward City Hall
777 B Street
Hayward, CA 94541
www.Hayward-CA.gov
File #: LB 25-004
DATE: February 25, 2025
TO: Mayor and City Council
FROM: Assistant City Manager

SUBJECT
FY 24-25 Mid-Year Budget Review: Adopt a Resolution Approving the FY 24-25 Mid-Year Budget Amendments; and Receive and Review the Five-Year General Fund Financial Model Update

RECOMMENDATION
That the City Council 1) Reviews the FY 24-25 Mid-Year budget; 2) Adopts a resolution providing amendments to the previously adopted City of Hayward FY 24-25 Operating Budget (Attachment II); and 3) Adopts a resolution providing amendments to the previously adopted City of Hayward FY 24-25 Capital Improvement Program Budget (Attachment III).

SUMMARY
This report presents the mid-year review of the FY 24-25 Adopted Budget, and an update to the Five-Year General Fund Financial Model (model) presenting proposed changes and projected year-end results based on current trends and data. While staff considers the entire City budget in its mid-year review, this report focuses primarily on the General Fund.

Proposed FY 24-25 mid-year expenditures net a total increase of $1.56 million in General Fund expenses.

Table 1 details the key changes in General Fund expenditure related to previous City Council authorized and approved appropriations and carryforwards and Table 2 details proposed new FY 24-25 mid-year requests:

Table 1: Previous City Council Authorized and Approved General Fund Appropriations & Carryforwards
Previous Council Approved Appropriations & Carryforwards FY 24-25 Impact ($)
Appropriations $1,185,183
Carryforwards $3,640,787
Previous Council Approved Appropriations Subtotal $4,825,970 CITY OF HAYWARD Printed on 2/20/2025Page 1 of 3
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File #:LB 25-004
Table 2: Proposed New FY 2024-25 General Fund Mid-Year Requests Mid-Year Request (NEW) FY 24-25
Impact ($)
Retired Annuitant for District-based election development $14,470 Personnel Expenses $14,470
Print cost and notices for the transition to District-based elections and the 2024 Presidential Election
$50,001
Consulting services for the transition to District-based election $54,985 Registrar of Voter’s invoice for the 2024 Presidential Election $331,487 Reduction of Cost Allocation from Special Revenue to the General Fund $167,575 Additional consulting services inspection fees and plan check for services $500,000 Vehicle procurement for new Development Services staff $46,000 Repair and replace a ladder on a ladder truck through Seagrave $400,000 Non-Personnel Expenses $1,550,048
Mid-Year Requests (NEW) Subtotal $1,564,518
TOTAL GENERAL FUND EXPENSES $1,564,518
General Fund revenues are expected to exceed the originally projected FY 24-25 amount by $10.4 million.

Changes in revenue projections are detailed in Table 3 of the report. Key changes in the General Fund revenues are as follows:

Table 3: General Fund Revenues
GENERAL FUND REVENUE ADJUSTMENTS FY 2024-25
IMPACT ($)
Projected increase in Property Tax $1,250,000
Projected increase in Sales Tax 1,796,000
Projected increase in Utility User Tax 3,000,000
Projected increase in Franchise Fees 1,156,000
Projected decrease in Real Estate Property Transfer Tax (2,000,000) Projected increase in Business License Tax 300,000
Projected increase in Rental Inspection Income 325,000
Projected increase in Other Revenue 570,000
One-time allocation from unallocated ARPA funds 4,018,911 TOTAL GENERAL FUND REVENUES $10,415,911
If mid-year requests are approved as proposed, in addition to the revised revenue totals for FY 24-25, the revised budget would result in an increase of $67,000 in projected General Fund Reserves for FY 24-25.

This report provides an overall update to the City’s Five-Year General Fund outlook which includes the revised use of General Fund reserves.

CITY OF HAYWARD Printed on 2/20/2025Page 2 of 3
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File #:LB 25-004

ATTACHMENTS
Attachment I Staff Report
Attachment II Amendment to FY 2024/2025 Operating Budget Resolution Attachment IIA Exhibits A & B
Attachment III Amendment to FY 2024/2025 Capital Improvement Program Budget Resolution
Attachment IIIA Exhibits A & B
CITY OF HAYWARD Printed on 2/20/2025Page 3 of 3
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