La Mesa City Council
July 14, 2026

90449.00001\44990979.3 Attachment C

ESCROW DEPOSIT AND TRUST AGREEMENT
by and between the

CITY OF LA MESA
and
ZIONS BANCORPORATION, N.A.
as Escrow Bank
Dated as of _________ 1, 2026

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TABLE OF CONTENTS
Page
i
SECTION 1. APPOINTMENT OF ESCROW BANK ............................................................ 2 SECTION 2. ESTABLISHMENT OF ESCROW FUND........................................................ 2 SECTION 3. DEPOSIT INTO ESCROW FUND; INVESTMENT OF AMOUNTS ............. 2 SECTION 4. INSTRUCTIONS AS TO APPLICATION OF DEPOSIT ................................ 2 SECTION 5. PROCEEDINGS FOR REDEMPTION OF PRIOR BONDS............................ 2 SECTION 6. APPLICATION OF CERTAIN TERMS OF RESOLUTION ........................... 3 SECTION 7. COMPENSATION TO ESCROW BANK......................................................... 3 SECTION 8. LIABILITIES AND OBLIGATIONS OF ESCROW BANK............................ 3 SECTION 9. AMENDMENT................................................................................................... 5 SECTION 10. TERMINATION; UNCLAIMED MONEY....................................................... 5 SECTION 11. SEVERABILITY................................................................................................ 6 SECTION 12. NOTICE OF ESCROW BANK AND CITY...................................................... 6 SECTION 13. MERGER OR CONSOLIDATION OF ESCROW BANK................................ 6 SECTION 14. GOVERNING LAW........................................................................................... 6 SECTION 15. EXECUTION IN SEVERAL COUNTERPARTS............................................. 6

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1 ESCROW DEPOSIT AND TRUST AGREEMENT
This ESCROW DEPOSIT AND TRUST AGREEMENT is made and entered into as of _______ 1, 2026, by and between the CITY OF LA MESA, a general law city organized and existing by virtue of Constitution and laws of the State of California (the “City”) and Zions Bancorporation, N.A., as Escrow Bank (the “Escrow Bank”).

W I T N E S S E T H:

WHEREAS, the City issued its $21,825,000 City of La Mesa General Obligation Refunding Bonds, Series 2016 (Fire, Police and Emergency Services Measure) (the “Prior Bonds”), pursuant to Resolution No. 2016-100 (the “Resolution”) and which approved Zions Bank, a division of ZB, N.A., previously known as Zions Bank, a division of ZB, N.A., as paying agent (the “Prior Paying Agent”); and
WHEREAS, the Resolution provides that in the event that the City deposits with the Prior Paying Agent lawful money of the United States of America in an amount, together with investment earnings and certain funds held under the Resolution, sufficient to pay the Redemption Price (defined below) and all unpaid interest thereon to the Redemption Date (defined below), then the obligations of the City under the Resolution shall cease and terminate with respect to the obligations so discharged; and
WHEREAS, the City has determined that it is in the best interests of the City at this time to refinance the Prior Bonds and, as a result thereof, to redeem the Prior Bonds on August 1, 2026 (the “Redemption Date”) at a redemption price of 100% of the principal amount thereof (the “Redemption Price”), plus accrued interest; and
WHEREAS, the City proposes to make the deposit of moneys referenced in the Resolution and to appoint the Escrow Bank as its agent for the purpose of applying said deposit to the redemption of the Prior Bonds in accordance with the Resolution, and the Escrow Bank will accept said appointment; and
WHEREAS, to obtain moneys to make such deposit, the City will issue its $[___________] City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “2026 Bonds”) pursuant to Resolution No. [_____] adopted by the City Council of the City on July 14, 2026 and that certain Paying Agent Agreement, dated as of ______ 1, 2026 (the “Paying Agent Agreement”), by and between the City and Zions Bancorporation, N.A., as paying agent (the “Paying Agent”); and WHEREAS, the City wishes to make such a deposit with the Escrow Bank and to enter into this Escrow Deposit and Trust Agreement for the purpose of providing the terms and conditions for the deposit and application of amounts so deposited; and WHEREAS, the Escrow Bank has full powers to act with respect to the irrevocable escrow and trust created herein and to perform the duties and obligations to be undertaken pursuant to this Escrow Deposit and Trust Agreement.

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2 NOW, THEREFORE, in consideration of the above premises and of the mutual promises and covenants herein contained and for other valuable consideration, the parties hereto do hereby agree as follows:

Appointment of Escrow Bank. The City hereby appoints the Escrow Bank as escrow bank for all purposes of this Escrow Deposit and Trust Agreement and in accordance with the terms and provisions of this Escrow Deposit and Trust Agreement, and the Escrow Bank hereby accepts such appointment.

Establishment of Escrow Fund. There is hereby created by the City with, and to be held by, the Escrow Bank, as security for the payment of the Prior Bonds, an irrevocable escrow to be maintained in trust by the Escrow Bank on behalf of the City and for the benefit of the owners of the Prior Bonds, said escrow to be designated the “Escrow Fund.” All moneys and Federal Securities deposited in the Escrow Fund shall be held as a special fund for the payment of the Prior Bonds in accordance with the provisions of the Resolution. If at any time the Escrow Bank shall receive actual knowledge that the moneys and Federal Securities in the Escrow Fund will not be sufficient to make any payment required by Section 4 hereof, the Escrow Bank shall notify the City of such fact and the City shall immediately cure such deficiency.

Deposit into Escrow Fund; Investment of Amounts. Concurrently with delivery of the Bonds, the City shall cause to be transferred to the Escrow Bank for deposit into the Escrow Fund the amount of $[___________] (the “Escrow Funds”) in immediately available funds which shall be derived from (i) the proceeds of the 2026 Bonds ($[___________]) and (ii) funds on hand from ad valorem taxes collected ($[___________]). The amount of $[_________] shall be held in cash, uninvested.

Instructions as to Application of Deposit. The amount deposited in the Escrow Fund shall be applied for the sole purpose of paying the the redemption price and accrued interest on all of the Prior Bonds called for redemption on August 14, 2026. Any funds on hand with the Escrow Bank on the day after redemption of the Prior Bonds and not needed for the prepayment of Prior Bonds shall be returned to the District and used for any lawful purposes thereof.

The Cash shall be deposited with and held by the Escrow Bank in the Escrow Fund therein solely for the uses and purposes set forth herein. The Escrow Bank shall have no lien upon or right of set-off against the Cash at any time on deposit in the Escrow Fund.

Instructions as to Application of Deposit. The total amount of Cash and Escrowed Securities deposited in the Escrow Fund pursuant to Section 3 shall be transferred by the Escrow Bank to the Prior Paying Agent for the payment of the Bonds on the Redemption Date at the Redemption Price, together with interest thereon to the Redemption Date.

Proceedings for Redemption of Prior Bonds. The City hereby irrevocably elects to redeem the Prior Bonds in full pursuant to the Resolution on the Redemption Date and the Redemption Price, together with interest to the Redemption Date.

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3 The City shall instruct the Prior Paying Agent to give a conditional notice of redemption, in the form attached at Exhibit A hereto, on [_____ 1, 2026] with respect to the Prior Bonds in accordance with Section 11.(c) of the Supplement to the Resolution dated December 27, 2016.

Application of Certain Terms of Resolution. All of the terms of the Resolution relating to the making of payments of principal and interest with respect to the Prior Bonds are incorporated in this Escrow Deposit and Trust Agreement as if set forth in full herein.

The provisions of the Resolution relating to the limitations from liability and protections afforded the Prior Paying Agent and the resignation and removal of the Prior Paying Agent are also incorporated in this Escrow Deposit and Trust Agreement as if set forth in full herein and shall apply to the Escrow Bank and shall be the procedure to be followed with respect to any resignation or removal of the Escrow Bank hereunder.

Compensation to Escrow Bank. The City shall pay the Escrow Bank full compensation for its duties under this Escrow Deposit and Trust Agreement, including out-ofpocket costs such as publication costs, redemption expenses, legal fees and other costs and expenses relating hereto. Under no circumstances shall amounts deposited in the Escrow Fund be deemed to be available for said purposes.

Liabilities and Obligations of Escrow Bank. The Escrow Bank shall have no obligation to make any payment or disbursement of any type or incur any financial liability in the performance of its duties under this Escrow Deposit and Trust Agreement unless the City shall have deposited sufficient funds with the Escrow Bank to satisfy such obligation. The Escrow Bank may rely and shall be protected in acting upon the written instructions of the City or its agents relating to any matter or action as Escrow Bank under this Escrow Deposit and Trust Agreement.

The Escrow Bank undertakes such duties as specifically set forth herein and no implied duties or obligations shall be read into this Escrow Deposit and Trust Agreement against the Escrow Bank.

The City hereby assumes liability for, and hereby agrees (whether or not any of the transactions contemplated hereby are consummated) to indemnify, protect, save and hold harmless the Escrow Bank and its respective successors, assigns, agents and servants from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, suits, costs, expenses and disbursements (including legal fees and disbursements) of whatsoever kind and nature which may be imposed on, incurred by, or asserted against, at any time, the Escrow Bank (whether or not also indemnified against by any other person under any other agreement or instrument) and in any way relating to or arising out of the execution and delivery of this Escrow Deposit and Trust Agreement, the establishment of the Escrow Fund, the retention of the moneys therein and any payment, transfer or other application of moneys or securities by the Escrow Bank in accordance with the provisions of this Escrow Deposit and Trust Agreement, or as may arise by reason of any act, omission or error of the Escrow Bank made in good faith in the conduct of its duties; provided, however, that the City shall not be required to indemnify the Escrow Bank against its own negligence or misconduct. The indemnities contained in this Section 9 shall survive the termination of this Escrow Deposit and Trust Agreement and the resignation and removal of the Escrow Bank.

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4 The Escrow Bank shall not have any liability hereunder except to the extent of its own negligence or willful misconduct. In no event shall the Escrow Bank be liable for any special indirect or consequential damages.

The Escrow Bank may consult with counsel of its own choice and the opinion of such counsel shall be full and complete authorization to take or suffer in good faith any action hereunder in accordance with such opinion of counsel.

The Escrow Bank shall not be responsible for any of the recitals or representations contained herein.

No provision of this Agreement shall require the Escrow Bank to expend or risk its own funds or otherwise incur any financial liability in the performance or exercise of any of its duties hereunder, or in the exercise of its rights or powers.

The Escrow Bank shall have the right to accept and act upon instructions, including funds transfer instructions (“Instructions”) given pursuant to this Escrow Deposit and Trust Agreement and delivered using Electronic Means (“Electronic Means” shall mean the following communications methods: e-mail, facsimile transmission, secure electronic transmission containing applicable authorization codes, passwords and/or authentication keys issued by the Escrow Bank, or another method or system specified by the Escrow Bank as available for use in connection with its services hereunder); provided, however, that the City shall provide to the Escrow Bank an incumbency certificate listing officers with the authority to provide such Instructions (“Authorized Officers”) and containing specimen signatures of such Authorized Officers, which incumbency certificate shall be amended by the City whenever a person is to be added or deleted from the listing. If the City elect to give the Escrow Bank Instructions using Electronic Means and the Escrow Bank in its discretion elects to act upon such Instructions, the Escrow Bank’s good faith understanding of such Instructions shall be deemed controlling. The City understands and agrees that the Escrow Bank cannot determine the identity of the actual sender of such Instructions and that the Escrow Bank shall conclusively presume that directions that purport to have been sent by an Authorized Officer listed on the incumbency certificate provided to the Escrow Bank have been sent by such Authorized Officer. The City shall be responsible for ensuring that only Authorized Officers transmit such Instructions to the Escrow Bank and that the City and all Authorized Officers are solely responsible to safeguard the use and confidentiality of applicable user and authorization codes, passwords and/or authentication keys upon receipt by the City. The Escrow Bank shall not be liable for any losses, costs or expenses arising directly or indirectly from the Escrow Bank’s reliance upon and compliance with such Instructions notwithstanding such directions conflict or are inconsistent with a subsequent written instruction. The City agrees: (i) to assume all risks arising out of the use of Electronic Means to submit Instructions to the Escrow Bank, including without limitation the risk of the Escrow Bank acting on unauthorized Instructions, and the risk of interception and misuse by third parties; (ii) that it is fully informed of the protections and risks associated with the various methods of transmitting Instructions to the Escrow Bank and that there may be more secure methods of transmitting Instructions than the method(s) selected by the City; (iii) that the security procedures (if any) to be followed in connection with its transmission of Instructions provide to it a commercially reasonable degree of protection in light of its particular needs and circumstances;

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5 and (iv) to notify the Escrow Bank immediately upon learning of any compromise or unauthorized use of the security procedures.

The Escrow Bank may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents, attorneys, custodians or nominees appointed with due care, and shall not be responsible for any willful misconduct or negligence on the part of any agent, attorney, custodian or nominee so appointed.

The Escrow Bank may conclusively rely, as to the trust and accuracy of the statements and correctness of the opinions and the calculations provided to it in connection with this Escrow Deposit and Trust Agreement, and shall be protected in acting, or refraining from acting, upon any written notice, instruction, request, certificate, document or opinion furnished to the Escrow Bank in accordance with this Escrow Deposit and Trust Agreement and reasonably believed by the Escrow Bank to have been signed or presented by the proper party, and it need not investigate any facts or matter stated in such notice, instruction, request, certificate or opinion.

The Escrow Bank shall furnish the City periodic cash transaction statements which include detail for all investment transactions effected by the Escrow Bank or brokers selected by the City.

Upon the City’s election, such statements will be delivered via the Escrow Bank’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 Escrow Bank as they occur, to the extent permitted by law. The City further understands that trade confirmations for securities transactions effected by the Escrow Bank will be available upon request and at no additional cost and other trade confirmations may be obtained from the applicable broker.

Amendment. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement which shall become effective when the written consents of the owners of one hundred percent (100%) in aggregate principal amount of the Prior Bondsthen outstanding shall have been filed with the Escrow Bank. This Escrow Deposit and Trust Agreement may be modified or amended at any time by a supplemental agreement, without the consent of any such owners, but only (1) to add to the covenants and agreements of any party, other covenants to be observed, or to surrender any right or power herein or therein reserved to the City, (2) to cure, correct or supplement any ambiguous or defective provision contained herein, (3) in regard to questions arising hereunder or thereunder, as the parties hereto or thereto may deem necessary or desirable and which, in the opinion of counsel, shall not adversely affect the interests of the owners of the Prior Bonds or the 2026 Bonds, and that such amendment will not cause interest on the Prior Bonds to become subject to federal income taxation.

Termination; Unclaimed Money. This Escrow Deposit and Trust Agreement shall terminate when the Prior Bonds have been paid; provided, however, that (i) money held by the Escrow Bank pursuant to this Escrow Deposit and Trust Agreement for the payment and discharge of any of the Prior Bonds (which shall not be payable as to interest from and after the date set for redemption) which remain unclaimed for two (2) years after such payments were due, shall be repaid by the Escrow Bank to the City free from the trust created by the Resolution and this Escrow Deposit and Trust Agreement, and the Escrow Bank shall

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6 thereupon be released and discharged with respect thereto and hereto and all liability of the Escrow Bank with respect to such money shall thereupon cease and (ii) excess moneys held by the Escrow Bank not needed for the payment and discharge of the Prior Bonds shall be transferred to the Bond Fund under the Paying Agent Agreement.

Severability. If any section, paragraph, sentence, clause or provision of this Escrow Deposit and Trust Agreement shall for any reason be held to be invalid or unenforceable, the invalidity or unenforceability of such section, paragraph, sentence, clause or provision shall not affect any of the remaining provisions of this Escrow Deposit and Trust Agreement.

Notice of Escrow Bank and City. Any notice to or demand upon the Escrow Bank may be served and presented, and such demand may be made, at the principal corporate trust office of the Escrow Bank as specified by the Escrow Bank as Prior Paying Agent in accordance with the provisions of the Resolution or by physical delivery with confirmation of receipt or by confirmed telecopy. Any notice to or demand upon the City shall be deemed to have been sufficiently given or served for all purposes three (3) business days after being mailed by registered or certified mail, and deposited, postage prepaid, in a post office letter box, addressed to the City as provided in the Resolution (or such other address as may have been filed in writing by the City with the Escrow Bank).

Merger or Consolidation of Escrow Bank. Any company into which the Escrow Bank may be merged or converted or with which it may be consolidated, or any company resulting from any merger, conversion or consolidation to which it shall be a party, or any company to which the Escrow Bank may sell or transfer all or substantially all of its corporate trust business, provided such company in each of the foregoing cases shall be eligible to act as Prior Paying Agent under the Resolution, shall be the successor hereunder to the Escrow Bank without the execution or filing of any paper or any further act.

Governing Law. This Escrow Deposit and Trust Agreement shall be construed and governed in accordance with the laws of the State of California.

Execution in Several Counterparts. This Escrow Deposit and Trust Agreement 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 shall constitute but one and the same instrument.

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S-1
IN WITNESS WHEREOF, the City and the Escrow Bank have each caused this Escrow Deposit and Trust Agreement to be executed by their duly authorized officers all as of the date first above written.

CITY OF LA MESA
By: ______________________________________
City Manager
-Signature PageEscrow Deposit and Trust Agreement

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S-2
Zions Bancorporation, N.A., as Escrow Bank
By: ______________________________________
Authorized Officer
-Signature PageEscrow Deposit and Trust Agreement

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A-1

EXHIBIT A

CONDITIONAL NOTICE OF REDEMPTION
(SUBJECT TO THE SALE AND DELIVERY OF REFUNDING BONDS)

TO THE OWNERS OF
City of La Mesa
General Obligation Refunding Bonds, Series 2016
(Fire, Police and Emergency Services Measure)
Date of Notice: [_________], 2026
Date of Issuance: December 27, 2016
Date of Redemption: August 14, 2026
NOTICE IS HEREBY GIVEN that pursuant to the applicable provisions of the governing documents of the above captioned bonds (the “Bonds”), $[_________] principal of the Bonds will be redeemed on August 14, 2026 (the “Redemption Date”) at the referenced price noted below, together with interest accrued to the Redemption Date, and further interest on the Bonds will not accrue from and after the Redemption Date.

The advancing of the maturity and redemption of the Bonds is contingent on the City of La Mesa (the “City”) completing the sale and delivery of its General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “Refunding Bonds”) to fund the redemption of the Bonds. The Refunding Bonds were priced on [_________], 2026 and it is currently scheduled for the City to receive the proceeds of the sale of the Refunding Bonds on or about [_________], 2026. If, however, such Refunding Bonds are not sold and delivered prior to [_________], 2026, City will not advance the maturity of and redeem the Bonds. In that event a notice will be mailed on or about [_________], 2026 to the registered owners of the Bonds advising them accordingly. If this notice is rescinded by the City, such notice shall be of no force and effect, and none of the Bonds shall be redeemed pursuant hereto.

Subject to the satisfaction of the above contingency,] the following Bonds will be redeemed and paid upon presentation:

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A-2
Maturity
(August 1) Principal Interest Rate Redemption Price
CUSIP*
(Base No. 503642)
2027 1,095,000 3.50 3.10C CV0
2028 1,145,000 3.50 3.33C CW8
2029 1,190,000 3.50 3.52C CX6
2030 1,240,000 4.00 3.69C CY4
2031 1,300,000 4.00 3.75C CZ1
2032 1,355,000 4.00 3.82C DA5
2033 1,425,000 4.00 3.87C DB3
2034 1,490,000 4.00 3.91C DC1
2035 1,565,000 5.00 3.61C DD9
2036 1,180,000 5.00 3.64C DE7
Subject to the completion of the sale and delivery of the Refunding Bonds, on the date fixed for redemption there shall become due and payable on each Bond or portion thereof called for redemption, the redemption price stated above (representing the principal thereof, together with the redemption premium) and interest accrued to the redemption date, and from and after such date, interest thereon shall cease to accrue and be payable.

Called Bonds must be surrendered at the principal corporate trust office of [___________], as Paying Agent, at the following address by U.S. Mail, Certified Mail, Registered Mail, Overnight Express or Delivery in Person:
[]
Attn: [_______________________]
[____________________________]
[____________________________]
Attn: [_______________________]
To avoid a 28% back-up withholding tax required by Federal law, holders of Bonds must submit with their Bonds a completed IRS Form W-9.
* The CUSIP number has been assigned by CUSIP Global Services and is included solely for the convenience of the holders of Bonds. Neither the City nor the Paying Agent shall be responsible for the selection or use of the CUSIP numbers nor is any representation made as to their correctness on the Bonds or as indicated in any redemption Notice.

City of La Mesa
By: Zions Bancorporation, N.A., as Paying
Agent
DATED: [_________], 2026

PRELIMINARY OFFICIAL STATEMENT DATED [__________], 2026 NEW ISSUE — FULL BOOK-ENTRY RATING: Moody’s “[___]”
See “RATING” herein)
In the opinion of Best Best & Krieger LLP, Riverside, California (“Bond Counsel”), subject, however, to certain qualifications described in this Official Statement, under existing statutes, regulations, rulings and judicial decisions, and assuming certain representations and compliance with certain covenants and requirements described herein, the interest on the Bonds is excluded from gross income for federal income tax purposes, and interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations; however, interest on the Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax. See “LEGAL MATTERS — Tax Matters” herein. $8,205,000*

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)
Dated: Date of Delivery Due: August 1, as shown on inside cover The $8,205,000* City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “Bonds”) are being issued by the City of La Mesa (the “City”) pursuant to a resolution adopted by the City Council on July 14, 2026 and that certain Paying Agent Agreement, dated as of August 1, 2026 (the “Paying Agent Agreement”), by and between the City Zions Bancorporation, N.A., as paying agent (the “Paying Agent”). The Bonds are being issued by the City to (i) refund all of the outstanding City of La Mesa General Obligation Refunding Bonds, Series 2016 (Fire, Police and Emergency Services Measure) (the “Prior Bonds”), and (ii) pay certain costs of issuing the Bonds. See “INTRODUCTION ” and “THE BONDS - Application of Bond Proceeds” herein.

The Bonds are general obligation bonds of the City payable solely from ad valorem property taxes levied on taxable property within the City.

The City Council is empowered and is obligated to levy ad valorem taxes, without limitation as to rate or amount, upon all property within the City subject to taxation by the City (except certain personal property which is taxable at limited rates), for the payment of interest on and principal of the Bonds when due. The City will direct the County of San Diego (the “County”) to collect such ad valorem taxes in such amounts and at such times as is necessary to ensure the timely payment of debt service on the Bonds. See “THE BONDS - Security” herein.

The Bonds will be issued in book-entry form only, and will be initially issued and registered in the name of Cede & Co. as nominee for The Depository Trust Company, New York, New York (collectively referred to herein as “DTC”). Purchasers of the Bonds (the “Beneficial Owners”) will not receive physical certificates representing their interest in the Bonds. The Bonds are issued as fully registered securities in denominations of $5,000 or any integral multiple thereof. Payments of principal of and interest on the Bonds will be paid by the Paying Agent, who also serves as authenticating agent and transfer agent, to DTC for subsequent disbursement to DTC Participants (defined herein) who will remit such payments to the beneficial owners of the Bonds. See “THE BONDS - Book-Entry Only System” herein.

The Bonds will be dated their date of delivery. Interest on the Bonds accrues from their dated date and is payable semiannually on February 1 and August 1 of each year, commencing [February 1, 2027].

The Bonds are not subject to optional redemption or mandatory sinking fund redemption prior to maturity. *
See “THE BONDS - Redemption
of Bonds” herein.

This cover page contains certain information for general reference only. It is not intended to be a summary of the security or terms of this issue. Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision. Capitalized terms used on this cover page and not otherwise defined shall have the meaning set forth herein.

THE BONDS ARE GENERAL OBLIGATION BONDS OF THE CITY AND DO NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE COUNTY. NO PART OF ANY FUND OF THE COUNTY IS PLEDGED OR OBLIGATED TO THE PAYMENT OF THE BONDS.

MATURITY SCHEDULE
(See Inside Cover Page)
The Bonds are delivered when, as and if issued and received by the Underwriter, subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel to the City. Best Best & Krieger LLP, is also acting as Disclosure Counsel to the City. Certain other legal matters are being passed upon for the City by Best, Best & Krieger LLP, Sacramento, California. Certain legal matters will be passed upon for the Underwriter by Stradling Yocca Carlson & Rauth LLP, Newport Beach, California. It is anticipated that the Bonds will be available for delivery through the facilities of DTC on or about __________, 2026. [OPPENHEIMER LOGO]
Dated: ___________, 2026.

* Preliminary, subject to change.

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. These securities may not be sold nor may offers to buy be accepted prior to the time the Official Statement is delivered in final form. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

DEBT SERVICE SCHEDULE
The following table shows the semi-annual debt service schedule with respect to the Bonds.

Period Ending
August 1 Principal Interest
Total Annual Debt
Service
$ $ $
Total $ $ $

$8,205,000*

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)

MATURITY SCHEDULE
BASE CUSIP®†__________
Maturity
(August 1)
Principal
Amount
Interest
Rate Yield CUSIP†
$ % %

† CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, which is owned by FactSet Research Systems Inc. (“FactSet”). FactSet will manage the CUSIP system on behalf of the American Bankers Association. This information is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City or the Underwriter and are included solely for the convenience of the registered owners of the applicable Bonds. Neither the City nor the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

CITY OF LA MESA

COUNTY OF SAN DIEGO

STATE OF CALIFORNIA

MAYOR AND MEMBERS OF THE CITY COUNCIL
Mark Arapostathis, Mayor
Lauren Cazares, Vice Mayor
Laura Lothian, Member
Patricia Dillard, Member
Genevieve Suzuki, Member
STAFF
Greg Humora, City Manager
Glenn Sabine, City Attorney
Shannon Esenwein, Director of Finance
Matthew Strabone, City Treasurer
Kristine Ogden, Finance Manager
Megan Wiegelman, CMC, City Clerk

SPECIAL SERVICES
Bond Counsel/Disclosure Counsel
Best Best & Krieger LLP
Riverside, California
Municipal Advisor
Urban Futures, Inc.

Walnut Creek, California
Paying Agent/Escrow Agent
Zions Bancorporation, N.A.

Los Angeles, California

No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations in connection with the offer or sale of the Bonds other than those contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers or Owners of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The Underwriter has provided the following sentence for inclusion in this Official Statement:

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

This Official Statement and the information contained herein are subject to completion or amendment without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City or any other parties described herein since the date hereof.

These securities may not be sold nor may an offer to buy be accepted prior to the time the Official Statement is delivered in final form. This Official Statement is being submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose, unless authorized in writing by the City. All summaries of documents and laws are made subject to the provisions thereof and do not purport to be complete statements of any or all such provisions.

The information set forth in this Official Statement has been furnished by the City and other sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by the City. 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,” “project,” “budget,” “intend” or similar words.

Such forward-looking statements include, but are not limited to, certain statements contained under the caption “PROPERTY TAXATION.”

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN SUCH

FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND

OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE OR ACHIEVEMENTS

DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY

DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT. IN EVALUATING SUCH STATEMENTS, POTENTIAL

INVESTORS SHOULD SPECIFICALLY CONSIDER THE VARIOUS FACTORS WHICH COULD CAUSE

ACTUAL EVENTS OR RESULTS TO DIFFER MATERIALLY FROM THOSE INDICATED BY SUCH FORWARD-LOOKING STATEMENTS.

IN CONNECTION WITH THE OFFERING OF THE BONDS, THE UNDERWRITER MAY

OVERALLOT OR EFFECT TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT LEVELS ABOVE THOSE THAT MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.

SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER

MAY OFFER AND SELL THE BONDS TO CERTAIN SECURITIES DEALERS, DEALER BANKS, BANKS

ACTING AS AGENT AND OTHERS AT PRICES OR YIELDS LOWER THAN THOSE STATED ON THE COVER

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

THE BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS

AMENDED, IN RELIANCE UPON AN EXEMPTION CONTAINED IN SUCH ACT, AND HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE SECURITIES LAWS OF ANY STATE.

The City maintains a website; however, information presented there is not a part of this Official Statement and should not be relied upon in making an investment decision with respect to the Bonds.

TABLE OF CONTENTS
-iINTRODUCTION...................................................1 The City............................................................1 The Bonds.........................................................2 Security and Sources of Payment for
the Bonds....................................................2 Offering and Delivery of the Bonds .................3
Tax Matters.......................................................3 Continuing Disclosure ......................................3 Forward Looking Statements............................3 Other Information.............................................4 THE REFUNDING PLAN .....................................4 THE BONDS ..........................................................5 Authority for Issuance ......................................5 Purpose of Issue................................................5 Security.............................................................6 Payment of the Bonds.......................................6 Book-Entry-Only System .................................7 Paying Agent ....................................................7 Application of Bond Proceeds..........................8 Redemption of Bonds.......................................8 Defeasance........................................................8 Registration, Transfer and Exchange of
Bonds .........................................................8 Events of Defaults and Remedies.....................9
Amendments to Paying Agent
Agreement..................................................9 SOURCES AND USES OF FUNDS ....................11
DEBT SERVICE SCHEDULE.............................11
PROPERTY TAXATION.....................................12 General............................................................12 Levy and Collection........................................12 Taxation of State-Assessed Utility
Property....................................................12 Assessed Valuation.........................................13 Alternative Method of Tax
Apportionment – No Teeter Plan .............15
Appeals of Assessed Value.............................16 Risk of Loss of Assessed Value......................17
Tax Rates........................................................18 Top Taxpayers................................................19 Direct and Overlapping Debt..........................19

CONSTITUTIONAL AND STATUTORY

PROVISIONS AFFECTING CITY
TAXES AND APPROPRIATIONS.................21
Article XIIIA of the State Constitution ..........21
Legislation Implementing Article
XIIIA........................................................21 Article XIIIB of the State Constitution...........22
Articles XIIIC and XIIID of the State
Constitution..............................................22 Proposition 62.................................................23 Proposition 1A; Proposition 22...................... 24 Possible Future Initiatives.............................. 24 TAX MATTERS .................................................. 24 APPROVAL OF LEGAL PROCEEDINGS ........ 26
AUDITED FINANCIAL STATEMENTS........... 26
CONTINUING DISCLOSURE............................ 27

LITIGATION AND SIGNIFICANT
CLAIMS .......................................................... 27 RATING ............................................................... 27 MUNICIPAL ADVISOR ..................................... 28 UNDERWRITER................................................. 28 ADDITIONAL INFORMATION ........................ 29
APPENDIX A – FINANCIAL, ECONOMIC

AND DEMOGRAPHIC INFORMATION

CONCERNING THE CITY AND
COUNTY.......................................................A-1 APPENDIX B – ANNUAL

COMPREHENSIVE FINANCIAL

REPORT FISCAL YEAR ENDED JUNE
30, 2025 .........................................................B-1

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

APPENDIX D - FORM OF CONTINUING
DISCLOSURE CERTIFICATE....................D-1

APPENDIX E - INFORMATION
CONCERNING DTC.................................... E-1

APPENDIX F - SUMMARY OF THE
PAYING AGENT AGREEMENT.................F-1

(THIS PAGE INTENTIONALLY LEFT BLANK)

1 $8,205,000*

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)

INTRODUCTION
This Official Statement (which includes the cover page, the table of contents and appendices hereto) is furnished by the City of La Mesa (the “City”), located in San Diego County (the “County”), California, to provide information concerning the $8,205,000* City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “Bonds”).

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

The Bonds are being issued to (i) refund on a current basis the City of La Mesa General Obligation Refunding Bonds, Series 2016 (Fire, Police and Emergency Services Measure) (the “2016 Bonds” or “Refunded Bonds”) and (ii) pay certain costs of issuance of the Bonds. The Refunded Bonds, which as of August 2, 2026, will be outstanding in the aggregate principal amount of $12,985,000, were authorized at an election of the registered voters of the City held on March 2, 2004, at which two-thirds or more of the persons voting on the proposition voted to authorize the issuance and sale of not to exceed $25,000,000 principal amount of general obligation bonds (the “Authorization”) to construct, upgrade and acquire land for City fire and police stations and medical response equipment, including an emergency operations center (the “Project”). See the caption “THE REFUNDING PLAN.”
The Bonds are being issued under the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code and a resolution adopted by the City Council of the City (the “City Council”) on July 14, 2026 (the “Resolution”). See the caption “THE BONDS—Authority for Issuance.” The City has appointed Zions Bancorporation, N.A. (the “Paying Agent”) to act as paying agent for the Bonds.

The Bonds are general obligations of the City payable solely from ad valorem property taxes levied and collected by the County of San Diego (the “County”). The City Council is empowered to direct the County and the County is obligated to annually levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within the City subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property which is taxable at limited rates). See the caption “SECURITY FOR THE BONDS.”
The City
The City is located approximately 10 miles east of downtown San Diego, California. The City was incorporated in 1912 and is a general law city operating under a council/manager form of government. The City is governed by a five-member City Council who are elected at-large for four-year terms. The Mayor is a separately elected office and is directly elected at-large for a four-year term. The City has an estimated population of 61,700 as of January 1, 2026, to which it provides police, fire protection, parks and recreation, public works, planning, engineering, community development and general City administration. In addition, the City provides for the operation and maintenance of the City’s wastewater collection system that is accounted for in a separate enterprise fund. See Appendices A and B for certain demographic, statistical and financial information regarding the City.

* Preliminary, subject to change.

2 See “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION CONCERNING THE CITY AND THE COUNTY” and “APPENDIX B – ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2025,” for demographic and financial information regarding the City.

The Bonds
Authority for Issuance. The Bonds are being issued pursuant to the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (commencing with Sections 53550 and 53580, respectively) (collectively, the “Refunding Law”), a resolution adopted by the City Council on July 14, 2026 (the “Bond Resolution”) and that certain Paying Agent Agreement dated as of August 1, 2026 (the “Paying Agent Agreement”), by and between the City and Zions Bancorporation, N.A., as paying agent (the “Paying Agent”). See “THE BONDS - Authority for Issuance” herein.

Purpose. The Bonds are being issued to refund the City’s outstanding 2016 General Obligation Refunding Bonds (the “Refunded Bonds”) and pay the costs of issuing the Bonds. See “THE BONDS - Application of Bond Proceeds” and “ESTIMATED SOURCES AND USES OF FUNDS” herein. The Refunded Bonds refunded the City of La Mesa General Obligation Bonds, Election of 2004, Series A (Fire, Police and Emergency Services Measure) (the “Series A Bonds”), which were issued on August 19, 2004, in the initial aggregate principal amount of $19,000,000 and the City of La Mesa General Obligation Bonds, Election of 2004, Series B (Fire, Police and Emergency Services Measure) (Bank Qualified) (the “Series B Bonds” and together with the Series A Bonds, the “2008 Bonds”), which were issued on January 24, 2008, in the initial aggregate principal amount of $6,000,000.

Payment and Registration. The Bonds will mature on August 1 in the years and in the principal amounts set forth on the inside cover page hereof. The Bonds will be dated their date of delivery (the “Dated Date”). Interest on the Bonds accrues from their Dated Date at the rates set forth on the inside cover page of this Official Statement, and is payable semiannually on each February 1 and August 1, commencing [February 1, 2027]. The principal amount of the Bonds is payable at maturity or at earlier redemption upon surrender of the applicable Bond for payment.

The Bonds will be issued in fully registered form only, registered in the name of Cede & Co. as nominee of The Depository Trust Company, New York, New York (“DTC”), and will be available to actual purchasers of the Bonds (the “Beneficial Owners”) in authorized denominations, under the book-entry system maintained by DTC, only through brokers and dealers who are or act through DTC Participants as described herein. Beneficial Owners will not be entitled to receive physical delivery of the Bonds. See “THE BONDS - Book-Entry-Only System” herein. In the event that the book-entry-only system described below is no longer used with respect to the Bonds, the Bonds will be registered in accordance with the Paying Agent Agreement described herein. See “THE BONDS - Registration, Transfer and Exchange of Bonds.” herein. The Bonds will be issued and beneficial ownership interests may be purchased by Beneficial Owners in denomination of $5,000 or any integral multiple thereof.

Redemption*. The Bonds are not subject to optional or mandatory sinking fund redemption prior to maturity. See “THE BONDS – Redemption of Bonds” herein.

Security and Sources of Payment for the Bonds
The Bonds are general obligations of the City payable from ad valorem taxes levied by the City and collected by the County. The City Council is empowered and is obligated to annually levy ad valorem taxes for the payment of the Bonds and the interest thereon upon all property within the City subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property which is taxable at limited rates).

* Preliminary, subject to change.

3 Pursuant to Section 53515 of the California Government Code, all general obligation bonds by local agencies are secured by a statutory lien on the future ad valorem property taxes that are the source of repayment of the general obligation bonds. The statutory lien will be valid and binding from the time the Bonds are issued.

The revenues received pursuant to the levy and collection of the ad valorem property taxes will be immediately subject to the lien. See “THE BONDS - Security” herein.

THE BONDS ARE GENERAL OBLIGATION BONDS OF THE CITY AND DO NOT CONSTITUTE A DEBT, LIABILITY OR OBLIGATION OF THE COUNTY. NO PART OF ANY FUND OF THE COUNTY IS PLEDGED OR OBLIGATED TO THE PAYMENT OF THE BONDS.

Offering and Delivery of the Bonds
The Bonds are offered when, as and if issued, subject to approval of legality by Best Best & Krieger LLP, Riverside California (“Bond Counsel”). It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of DTC on or about August ___, 2026 (the “Delivery Date”).

Tax Matters
In the opinion of Bond Counsel, based on an analysis of existing laws, regulations, rulings and court decisions, and assuming, among other matters, compliance with certain covenants, interest on the Bonds is excluded from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986 and is exempt from State of California personal income taxes. In the further opinion of Bond Counsel, interest on the Bonds is not a specific preference item for purposes of federal alternative minimum tax imposed on individuals and corporations, although Bond Counsel observes that such interest is included in annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. Bond Counsel expresses no opinion regarding any other federal or state income tax consequences relating to the ownership or disposition of, or the accrual or receipt of interest on, the Bonds.

Set forth in Appendix C is the proposed form of opinion of Bond Counsel expected to be delivered in connection with the issuance of the Bonds. For a more complete discussion of such opinion and certain other tax consequences incident to the ownership of the Bonds, including certain exceptions to the tax treatment of interest.

See “TAX MATTERS” herein.

Continuing Disclosure
In order to assist the Underwriter of the Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5), as amended, the City will covenant for the Owners and Beneficial Owners to make available certain financial information and operating data relating to the City and to provide notices of the occurrence of certain listed events pursuant to a Continuing Disclosure Certificate. See “CONTINUING DISCLOSURE” herein.

The specific nature of the information to be made available and the listed events are set forth in APPENDIX D – “FORM OF CONTINUING DISCLOSURE CERTIFICATE” herein.

Forward Looking Statements
Certain statements included or incorporated by reference in this Official Statement constitute “forwardlooking 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,” “project,” “budget” or other similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information regarding the City herein.

THE ACHIEVEMENT OF CERTAIN RESULTS OR OTHER EXPECTATIONS CONTAINED IN

SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,

UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE ACTUAL RESULTS, PERFORMANCE

OR ACHIEVEMENTS DESCRIBED TO BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS,

4 PERFORMANCE OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. THE CITY DOES NOT PLAN TO ISSUE ANY UPDATES OR REVISIONS TO THE FORWARD-LOOKING STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to change. Copies of documents referred to herein and information concerning the Bonds are available from the City, 8130 Allison Avenue, La Mesa, California 91942. A charge will be made to cover the City’s reasonable costs of duplication and delivery. In addition, documents are available for inspection during business hours at the address above, or at the principal corporate trust office of the Paying Agent in Los Angeles, California.

No dealer, broker, salesperson or other person has been authorized by the City to give any information or to make any representations other than as contained herein and, if given or made, such other information or representations must not be relied upon as having been authorized by the City. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Bonds by a person in any jurisdiction in which it is unlawful for such person to make such an offer, solicitation or sale.

This Official Statement is not to be construed as a contract with the purchasers of the Bonds. Statements contained in this Official Statement which involve estimates, forecasts or matters of opinion, whether or not expressly so described herein, are intended solely as such and are not to be construed as representations of fact.

The summaries and references to documents, statutes and constitutional provisions referred to herein do not purport to be comprehensive or definitive, and are qualified in their entireties by reference to each of such documents, statutes and constitutional provisions.

The information set forth herein, other than that provided by the City, has been obtained from official sources which are believed to be reliable, but it is not guaranteed as to accuracy or completeness by the City. The information and expressions of opinions herein are subject to change without notice and neither delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. This Official Statement is submitted in connection with the sale of the Bonds referred to herein and may not be reproduced or used, in whole or in part, for any other purpose.

All terms used herein and not otherwise defined shall have the meanings given such terms in the Paying Agent Agreement.

THE REFUNDING PLAN
The Bonds are being issued to provide moneys which will be sufficient to defease the outstanding principal amount of the Refunded Bonds. Bond proceeds will be used to pay the principal and interest on the Refunded Bonds to and including August 1, 2026 and to redeem the outstanding Refunded Bonds at a redemption price equal to the principal amount thereof, plus accrued interest to the date of redemption, without premium, on August 1, 2026 (the “Redemption Date”).

5 The tables below show the Refunded Bonds to be refunded from a portion of the proceeds of the Bonds.

Refunded Bonds
BASE CUSIP®† 503642
Maturity Date
(August 1)
Principal
Amount Interest Rate CUSIP®† Redemption Date Redemption Price 2027 $1,095,000 3.50% CV0 August 1, 2026 100%
2028 1,145,000 3.50 CW8 August 1, 2026 100
2029 1,190,000 3.50 CX6 August 1, 2026 100
2030 1,240,000 4.00 CY4 August 1, 2026 100
2031 1,300,000 4.00 CZ1 August 1, 2026 100
2032 1,355,000 4.00 DA5 August 1, 2026 100
2033 1,425,000 4.00 DB3 August 1, 2026 100
2034 1,490,000 4.00 DC1 August 1, 2026 100
2035 1,565,000 5.00 DD9 August 1, 2026 100
2036 1,180,000 5.00 DE7 August 1, 2026 100

THE BONDS
Authority for Issuance
The Bonds are being issued under the provisions of Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the California Government Code (the “Law”) and the Resolution.

Pursuant to the provisions of the Law, as amended, and pursuant to Ordinance No. 2003-2742 adopted by the City Council of the City on November 25, 2003 (the “Ordinance”), a special election was held on March 2, 2004 in the City at which there was submitted to the voters a proposition to incur indebtedness of up to $25,000,000 to finance the Project. Two-thirds or more of the votes cast at the election were in favor of the incurring of such indebtedness. The Bonds are payable as to principal and interest from ad valorem taxes levied exclusively upon the taxable property within the City as permitted by law. See the caption “SECURITY FOR THE BONDS.”
Purpose of Issue
The Bonds are being issued to refund the outstanding Refunded Bonds and pay the costs of issuing the Bonds. See “THE BONDS - Application of Bond Proceeds” and “ESTIMATED SOURCES AND USES OF FUNDS” herein.

†
CUSIP® is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, which is owned by FactSet Research Systems Inc. (“FactSet”). FactSet will manage the CUSIP system on behalf of the American Bankers Association. This information is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services Bureau. CUSIP numbers have been assigned by an independent company not affiliated with the City or the Underwriter and are included solely for the convenience of the registered owners of the applicable Bonds.

Neither the City nor the Underwriter is responsible for the selection or uses of these CUSIP numbers, and no representation is made as to their correctness on the applicable Bonds or as included herein. The CUSIP number for a specific maturity is subject to being changed after the issuance of the Bonds as a result of various subsequent actions including, but not limited to, a refunding in whole or in part or as a result of the procurement of secondary market portfolio insurance or other similar enhancement by investors that is applicable to all or a portion of certain maturities of the Bonds.

6 Security
The Bonds are general obligations of the City and the City Council is empowered and is obligated to levy ad valorem taxes upon all property within the City subject to taxation by the City, without limitation of rate or amount (except with respect to certain personal property which is taxed at limited rates), for the payment of the Bonds and the interest thereon, in accordance with all relevant provisions of law.

Pursuant to Section 53515 of the California Government Code, all general obligation bonds by local agencies are secured by a statutory lien on the future ad valorem property taxes that are the source of repayment of the general obligation bonds. Under the federal bankruptcy code, a statutory lien is a lien that arises solely by statute and not as a result of an agreement between parties. Previously, the governing statutes relating to the issuance of general obligation bonds by cities required that all taxes levied and collected be used for the paying of principal of and interest on general obligation bonds and for no other purpose, but did not provide for a statutory lien. The statutory lien will be valid and binding from the time the Bonds are issued.

The City will direct the County to collect such ad valorem taxes in such amounts and at such times as is necessary to ensure the timely payment of debt service. Such taxes, when collected, will be deposited into the debt service account for the Bonds (the “2026 Debt Service Account”), which is maintained by the City and which is irrevocably pledged for the payment of principal of and interest on the Bonds when due. For further information regarding the City’s assessed valuation, tax rates, overlapping debt, and other matters concerning taxation, see “PROPERTY TAXATION.”
City property taxes are assessed and collected by the County in the same manner, at the same time and in the same installments as other ad valorem taxes on real property, and will have the same priority, become delinquent at the same times and in the same proportionate amounts, and bear the same proportionate penalties and interest after delinquency, as do the other ad valorem taxes on real property. Certain counties within the State have adopted an “Alternative Method of Distribution of Tax Levies and Collections and Tax Sale Proceeds” authorized under the State Revenue and Taxation Code (the “Teeter Plan”). Under the Teeter Plan local taxing agencies receive 100% of the tax levy for each fiscal year, rather than on the basis of actual collections. The City has elected not to participate in the Teeter Plan with respect to taxes levied for the Bonds or otherwise and the City thus is subject to current delinquencies and receives the payment of past delinquencies, penalties, and interest.

The amount of the annual ad valorem tax levied by the City and collected by the County to repay the Bonds will be determined by the relationship between the assessed valuation of taxable property in the City and the amount of debt service due on the Bonds. A reduction in the assessed valuation of taxable property in the City caused by economic factors beyond the City’s control, such as economic recession, slower growth, or deflation of land values, a relocation out of the City by one or more major property owners, or the complete or partial destruction of such property caused by, among other eventualities, an earthquake, flood or other natural disaster, could cause a reduction in the assessed value of the City and necessitate an unanticipated increase in the annual tax levy. For further information regarding the City’s tax base, overlapping debt and other matters concerning taxation, see “APPENDIX A – FINANCIAL, ECONOMIC AND DEMOGRAPHIC INFORMATION CONCERNING THE CITY AND THE COUNTY.”
Payment of the Bonds
The Bonds will be issued in book-entry form only and will be initially issued and registered in the name of Cede & Co. Purchasers will not receive certificates representing their interest in the Bonds.

The Bonds shall be issued in the denomination of $5,000 each or any integral multiple thereof. The Bonds mature on August 1, in the years and amounts set forth on the cover page hereof. See the maturity schedule on the inside cover page hereof and “DEBT SERVICE SCHEDULE.”

7 Interest on the Bonds accrues from the date of delivery, and is payable on [February 1, 2027], and semiannually thereafter on February 1 and August 1 of each year (the “Interest Payment Dates”). Interest on the Bonds shall be calculated on the basis of a 360-day year comprised of twelve 30-day months. Each Bond shall bear interest from the Interest Payment Date next preceding the date of registration and authentication thereof unless (i) it is registered and authenticated as of an Interest Payment Date, in which event it shall bear interest from such date, or (ii) it is registered and authenticated prior to an Interest Payment Date and after the close of business on the fifteenth day of the month preceding such Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (iii) it is registered and authenticated prior to July 15, 2026, in which event it shall bear interest from the date of delivery; provided, however, that if at the time of authentication of a Bond, interest is in default thereon, such Bond shall bear interest from the Interest Payment Date to which interest has previously been paid or made available for payment thereon.

Interest on the Bonds (including the final interest payment upon maturity or early redemption) is payable by check of the Paying Agent mailed on the Interest Payment Date to the owner thereof at such owner’s address as it appears on the registration books maintained by the Paying Agent at the close of business on the fifteenth day of the month preceding the Interest Payment Date, or at such other address as the owner may have filed with the Paying Agent for that purpose; provided that an owner of $1,000,000 or more aggregate principal amount of Bonds, or the owner of all of the Bonds at the time outstanding, shall, at his or her option, receive payment of interest by wire transfer to an account in the United States of America designated by such owner to the Paying Agent no later than the fifteenth (15) day of the month immediately preceding the applicable Interest Payment Date. Principal of the Bonds is payable in lawful money of the United States of America at the principal office of the Paying Agent. See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.” Book-Entry-Only System
The Bonds will be initially registered in the name of “Cede & Co.,” as nominee of DTC which has been appointed securities depository for the Bonds, and registered ownership may not thereafter be transferred except as provided in the Paying Agent Agreement. The Bonds are being issued in book-entry form only. Purchasers will not receive certificates representing their interests in the Bonds. Principal of and interest on the Bonds will be paid by the Paying Agent to DTC or its nominee, Cede & Co., which in turn is obligated to remit such principal and interest to its participants for subsequent disbursement to Beneficial Owners of the Bonds as described herein. See “APPENDIX E – INFORMATION CONCERNING DTC.”
Paying Agent
Zions Bancorporation, N.A., Los Angeles, California will act as the registrar, transfer agent, and paying agent for the Bonds. As long as DTC’s book-entry method is used for the Bonds, the Paying Agent will send any notice of redemption or other notices to owners only to DTC. Any failure of DTC to advise any DTC Participant, or of any DTC Participant to notify any Beneficial Owner, of any such notice and its content or effect will not affect the validity or sufficiency of the proceedings relating to the redemption of the Bonds called for redemption or of any other action premised on such notice.

The Paying Agent, the City, and the Underwriter of the Bonds have no responsibility or liability for any aspects of the records relating to or payments made on account of beneficial ownership, or for maintaining, supervising or reviewing any records relating to beneficial ownership, of interests in the Bonds.

In the event that either (i) DTC determines not to continue to act as securities depository for the Bonds, or (ii) the City determines to terminate DTC as a securities depository for the Bonds, then the City will discontinue the book-entry system with DTC. If the City fails to identify another securities depository to replace DTC, then the Bonds shall no longer be required to be registered in the name of DTC, but shall be registered in whatever name or names the owners transferring or exchanging Bonds shall designate, in accordance with the provisions of the Paying Agent Agreement. See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.”

8 Application of Bond Proceeds
A portion of the proceeds from the sale of the Bonds will be deposited into an escrow fund (the “Escrow Fund”) together with other funds to be deposited by the City to refund the Refunded Bonds. The Escrow Fund is to be created and maintained by Zions Bancorporation, N.A., as escrow agent (the “Escrow Agent”), for the purpose of refunding the Refunded Bonds. See “SOURCES AND USES OF FUNDS.” Moneys in the Escrow Fund will be held in cash and will be sufficient to pay the principal and interest due on the Refunded Bonds on August 1, 2026 and to redeem the Refunded Bonds on August 1, 2026 at a redemption price equal to the principal amount thereof, plus accrued interest, without premium.

Amounts on deposit in the Escrow Fund are not available to pay debt service on the Bonds.

Redemption of Bonds
Optional Redemption. The Bonds are not subject to optional redemption prior to maturity.

Defeasance
The City shall have the option to pay and discharge the entire indebtedness on all or any portion of the Bonds (including the principal due on the Bonds on any date as a result of a scheduled mandatory sinking fund redemption) in any one or more of the following ways:
(a) by paying or causing to be paid the principal of, and interest and any premium on, such outstanding Bonds, as and when the same become due and payable; (b) by depositing with an escrow agent, in trust, at or before maturity, money which, together with, in the event of a discharge of all of the Bonds, the amounts then on deposit in the funds and accounts provided for in the Paying Agent Agreement is fully sufficient to pay such outstanding Bonds, including all principal, interest and redemption premiums; or
(c) by irrevocably depositing with an escrow agent, in trust, cash and Federal Securities in such amount as the City shall determine as confirmed by an independent certified public accountant will, together with the interest to accrue thereon and, in the event of a discharge of all of the Bonds, moneys then on deposit in the fund and accounts provided for in the Paying Agent Agreement, be fully sufficient to pay and discharge the indebtedness on such Bonds (including all principal, interest and redemption premiums) at or before their respective maturity dates.

If the City shall have taken any of the actions specified in (a), (b) or (c) above, and if such Bonds are to be redeemed prior to the maturity thereof notice of such redemption shall have been given as in the Paying Agent Agreement provided or provision satisfactory to the Paying Agent shall have been made for the giving of such notice, then, at the election of the City, and notwithstanding that any Bonds shall not have been surrendered for payment, the pledge of the funds and moneys provided for in the Paying Agent Agreement and all other obligations of the City under the Paying Agent Agreement with respect to such outstanding Bonds shall cease and terminate.

Notwithstanding the foregoing, the obligation of the City to pay or cause to be paid to the owners of the Bonds not so surrendered and paid all sums due thereon and all amounts owing to the Paying Agent pursuant to the Paying Agent Agreement shall continue in any event. See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.”
Registration, Transfer and Exchange of Bonds
The Paying Agent shall keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection by the City upon reasonable notice; and, upon presentation for such purpose, the Paying Agent shall, under such reasonable regulations as it may prescribe, register or transfer

9 or cause to be registered or transferred, on said books, the Bonds. See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.”
Events of Defaults and Remedies
The following constitute Events of Default under the Paying Agent Agreement:
(a) if default shall be made by the City in the due and punctual payment of the principal of or redemption premium, if any, on any Bond when and as the same shall become due and payable, whether at maturity as therein expressed or by declaration or otherwise; or (b) if default shall be made by the City in the due and punctual payment of any installment of interest on any Bond when and as such interest installment shall become due and payable.

Upon the occurrence of an Event of Default, any bondowner shall have the right, for the equal benefit and protection of all bondowners similarly situated:
(a) by mandamus, suit, action or proceeding, to compel the City and its members, officers, agents or employees to perform each and every term, provision and covenant contained in the Paying Agent Agreement and in the Bonds, and to require the carrying out of any or all such covenants and agreements of the City and the fulfillment of all duties imposed upon it; or
(b) by suit, action or proceeding in equity, to enjoin any acts or things which are unlawful, or the violation of any of the bondowners’ rights.

Nothing in the Paying Agent Agreement, or in the Bonds, shall affect or impair the obligation of the City, which is absolute and unconditional, to pay the principal of and interest on the Bonds to the respective owners of the Bonds at the respective dates of maturity, or affect or impair the right of action, which is also absolute and unconditional, of such bondowners to institute suit to enforce such payment by virtue of the contract embodied in the Bonds. A waiver of any default by any bondowner shall not affect any subsequent default or impair any rights or remedies on the subsequent default. No delay or omission of any owner of any of the Bonds 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 bondowners by the Paying Agent Agreement may be enforced and exercised from time to time and as often as shall be deemed expedient by the owners of the Bonds.

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

No remedy conferred upon the owners of Bonds under the Paying Agent Agreement shall be exclusive of any other remedy and that each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or thereafter conferred on the bondowners. See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.”
Amendments to Paying Agent Agreement
The Paying Agent Agreement and the rights and obligations of the City and of the owners of the Bonds may be modified or amended at any time by a Supplemental Paying Agent Agreement pursuant to the affirmative vote at a meeting of owners, or with the written consent without a meeting, of the owners of at least a majority in aggregate principal amount of the Bonds then outstanding, exclusive of Bonds disqualified as provided in the Paying Agent Agreement. No such modification or amendment shall (i) extend the maturity of any Bond or reduce the interest rate thereon, or otherwise alter or impair the obligation of the City to pay the principal of, and the interest and any premium on, any Bond, without the express consent of the owner of such Bond, or (ii) permit the

10 creation by the City of any pledge or lien upon the ad valorem taxes of the taxes superior to or on a parity with the pledge and lien created for the benefit of the Bonds (except as otherwise permitted by the Act, the laws of the State of California or the Paying Agent Agreement), or reduce the percentage of Bonds required for the amendment of the Paying Agent Agreement. Any such amendment may not modify any of the rights or obligations of the Paying Agent without its written consent.

The Paying Agent Agreement and the rights and obligations of the City and of the bondowners may also be modified or amended at any time by a Supplemental Paying Agent Agreement, without the consent of any owners, only to the extent permitted by law and only for any one or more of the following purposes:
(a) to add to the covenants and agreements of the City in the Paying Agent Agreement contained, other covenants and agreements thereafter to be observed, or to limit or surrender any right or power reserved to or conferred upon the City;
(b) to make such provisions for the purpose of curing any ambiguity, or of curing, correcting or supplementing any defective provision contained in the Paying Agent Agreement, or in regard to questions arising under the Paying Agent Agreement, as the City and the Paying Agent may deem necessary or desirable and not inconsistent with the Agreement, and which shall not adversely affect the rights of the owners of the Bonds; and (c) to make such additions, deletions or modifications as may be necessary or desirable to assure compliance with Section 148 of the Code or otherwise as may be necessary to assure exclusion from gross income for federal income tax purposes of interest on the Bonds or to conform with the Regulations.

See “APPENDIX F – SUMMARY OF THE PAYING AGENT AGREEMENT.”

11 SOURCES AND USES OF FUNDS
Proceeds of the Bonds plus funds on-hand at the City will be applied as follows:

Sources of Funds
Principal Amount $
Plus/Less Net Original Issue Premium/Discount
Funds On-Hand
Total Sources $
Uses of Funds
Escrow Fund(1) $
Cost of Issuance(2)
Total Uses $
________________________
(1) Amounts on deposit will be used to redeem the Refunded Bonds. (2) Includes Underwriter’s discount, legal fees, rating agency fees, fees of the City, Paying Agent/Escrow Agent fees, Municipal Advisor fees, printing expenses and other costs of issuance with respect to the Bonds.

DEBT SERVICE SCHEDULE
The following table shows the debt service schedule with respect to the Bonds.

Period Ending
(August 1)
Annual
Principal Payment
Annual
Interest Payment
Total Annual
Debt Service
$ $ $
TOTAL $ $ $

12 PROPERTY TAXATION
General
Property taxes represent a source of tax revenue to the City. This section describes property tax levy and collection procedures and certain information regarding historical assessed values and major property tax payers in the City. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY TAXES AND APPROPRIATIONS” and “BOND OWNERS’ RISKS – Property Taxes” for a description of risks associated with the levy and collection of property tax revenues.

Property taxes have historically been the primary revenue source affected by voter initiatives and legislative actions. With approval of Proposition 13 (“Proposition 13”), property tax revenues were reduced by two-thirds and thereafter limited to 2% annual increases or the consumer price index, whichever is less. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY TAXES AND APPROPRIATIONS – Article XIIIA of the State Constitution” for further description of Proposition 13.

Levy and Collection
Property taxes are levied for each Fiscal Year on taxable real and personal property as of the preceding January 1. For assessment and collection purposes, property is classified either as “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State-assessed public utilities property and real property the taxes on which are a lien sufficient, in the opinion of the County Assessor, to secure payment of the taxes. Other property is assessed on the “unsecured roll.”
Property taxes on the secured roll are due in two installments, on November 1 and February 1 of each Fiscal Year, and become delinquent on December 10 and April 10, respectively. A penalty of 10% attaches immediately to all delinquent payments. Property on the secured roll with respect to which taxes are delinquent become tax defaulted on or about June 30 of the Fiscal Year. Such property may thereafter be redeemed by payment of a penalty of 1% per month to the time of redemption, plus costs and a redemption fee. If taxes are unpaid for a period of five years or more, the property is deeded to the State and may be sold at public auction.

Property taxes on the unsecured roll are due as of the January 1 lien dates and become delinquent on August 31. A 10% penalty attaches to delinquent unsecured taxes. If unsecured taxes are unpaid at 5:00 p.m. on October 31, an additional penalty of 1% attaches to them on the first day of each month until paid. The County has four ways of collecting delinquent unsecured personal property taxes: (1) a civil action against the taxpayer; (2) filing a judgment in the office of the County Clerk specifying certain facts in order to obtain a lien on certain property of the taxpayer; (3) filing a certificate of delinquency for record in the County Recorder’s office in order to obtain a lien on certain property of the taxpayer; and (4) seizure and sale of personal property, improvements or possessory interests belonging or assessed to the assessee. The exclusive means of enforcing the payment of delinquent taxes in respect of property on the secured roll is the sale of the property securing the taxes for the amount of taxes which are delinquent.

Beginning in 1978-79, Proposition 13 and its implementing legislation shifted the function of property tax allocation to the counties, except for levies to support prior voted debt, and prescribed how levies on countywide property values are to be shared with local taxing entities within each county. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY TAXES AND APPROPRIATIONS – Article XIIIA of the State Constitution” for further description of Proposition 13.

Taxation of State-Assessed Utility Property
Some amount of property tax revenue of the City is derived from utility property which is considered party of a utility system with components located in many taxing jurisdictions (“unitary property”). Under the State Constitution, such property is assessed by the State Board of Equalization (“BOE”) as part of a “going

13 concern” rather than as individual pieces of real or personal property. Such State-assessed unitary property is allocated to the counties by BOE, taxed at special county-wide rates, and the tax revenues distributed to taxing jurisdictions (including the City) according to statutory formulae generally based on the distribution of taxes in the prior year.

The State’s electric utility industry has been undergoing significant changes in its structure and the way in which components of the industry are regulated and owned. Sale of electric generation assets to largely unregulated, nonutility companies may affect how those assets are assessed, and which local agencies are to receive the property taxes. The City is unable to predict the impact of these changes on its utility property tax revenues, or whether legislation may be proposed or adopted in response to industry restructuring, or whether any future litigation may affect ownership of utility assets of the State’s methods of assessing utility property and the allocation of assessed value to local taxing agencies, including the City.

Assessed Valuation
All property is assessed using full cash value as defined by Article XIIIA of the State Constitution. State law provides exemptions from ad valorem property taxation for certain classes of property such as churches, colleges, non-profit hospitals, and charitable institutions. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY TAXES AND APPROPRIATIONS” herein.

Future assessed valuation growth allowed under Article XIIIA (new construction, certain changes of ownership, 2% inflation) will be allocated on the basis of “situs” among the jurisdictions that serve the tax rate area within which the growth occurs. Local agencies and schools will share the growth of “base” revenues from the tax rate area. Each year’s growth allocation becomes part of each agency’s allocation in the following year.

For assessment and collection purposes, property is classified as either “secured” or “unsecured” and is listed accordingly on separate parts of the assessment roll. The “secured roll” is that part of the assessment roll containing State-assessed property and real property having a tax lien which is sufficient, in the opinion of the assessor, to secure payment of the taxes. Unsecured property comprises all property not attached to land such as personal property or business property. Boats and airplanes are examples of unsecured property. Unsecured property is assessed on the unsecured roll.

Assessed Valuation History. The following Table 1 shows current and historical assessed valuation of taxable property in the City for the five most recent fiscal years. Assessed values in the City have increased by 27% since Fiscal Year 2021-22. Economic and other factors beyond the City’s control, such as general market decline in property values, disruption in financial markets that may reduce availability of financing for purchasers of property, reclassification of property to a class exempt from taxation, whether by ownership or use (such as exemptions for property owned by the State and local agencies and property used for qualified education, hospital, charitable or religious purposes), or the complete or partial destruction of the taxable property caused by a natural or manmade disaster, such as earthquake, fire, drought, flood or toxic contamination, could cause a reduction in the assessed value of taxable property within the City. Any such reduction would result in a corresponding increase in the annual tax rate levied by the City to pay the debt service with respect to the Bonds.

14 TABLE 1

CITY OF LA MESA
Assessed Value of All Taxable Property
Fiscal Years 2021-22 through 2025-26
Local Secured Utility Unsecured Total
2021-22 $8,187,641,207 $500 $123,531,094 $8,311,172,801 2022-23 8,950,336,472 500 148,817,000 9,099,153,972
2023-24 9,561,440,242 500 164,485,078 9,725,925,820
2024-25 9,933,752,026 500 164,902,507 10,098,655,033
2025-26 10,448,694,162 500 174,663,902 10,623,358,564
________________________
Source: California Municipal Statistics, Inc.

Assessed Valuation by Land Use. The following Table 2 shows the land use of parcels in the City for fiscal year 2025-26, according to assessed valuation. As shown below, the majority of land in the City is used for residential purposes.

TABLE 2

CITY OF LA MESA
Assessed Valuation and Parcels by Land Use
Non-Residential:
2025-26
Assessed Valuation(1)
% of
Total
No. of
Parcels
% of
Total
Commercial $1,446,486,753 13.84% 620 3.64%
Vacant Commercial 48,108,091 0.46 68 0.40
Industrial 116,213,012 1.11 66 0.39
Vacant Industrial 3,510,328 0.03 11 0.06
Recreational 1,664,281 0.02 9 0.05
Government/Social/Institutional 33,137,237 0.32 83 0.49 Subtotal Non-Residential $1,649,119,702 15.78% 857 5.03% Residential:

Single Family Residence $5,288,765,315 50.62% 10,976 64.48% Condominium/Townhouse 1,161,658,320 11.12 3,373 19.82
Mobile Home 6,985,002 0.07 64 0.38
Mobile Home Park 24,730,360 0.24 13 0.08
2-4 Residential Units 469,210,149 4.49 822 4.83
5+ Residential Units/Apartments 1,688,565,152 16.16 454 2.67 Miscellaneous Residential 2,770,659 0.03 86 0.51
Vacant Residential 156,889,503 1.50 377 2.21
Subtotal Residential $8,799,574,460 84.22% 16,165 94.97% Total $10,448,694,162 100.00% 17,022 100.00%
________________________
(1) Local Secured Assessed Valuation, excluding tax-exempt property.

Source: California Municipal Statistics, Inc.

15 Assessed Valuation of Single-Family Residential Parcels. The following Table 3 shows a breakdown of the assessed valuations of improved single-family residential parcels in the City, according to assessed valuation.

TABLE 3

CITY OF LA MESA
Per Parcel Fiscal Year 2025-26 Assessed Valuation of Single-Family Homes No. of
Parcels
2025-26
Assessed Valuation
Average
Assessed Valuation
Median
Assessed Valuation
Single-Family Residential 10,976 $5,288,765,315 $481,848 $461,948 2025-26
Assessed Valuation
No. of
Parcels (1)
% of
Total
Cumulative
% of Total
Total
Valuation
% of
Total
Cumulative
% of Total
$0 - $49,999 43 0.392% 0.392% $ 1,746,478 0.033% 0.033% $50,000 - $99,999 977 8.901 9.293 73,905,774 1.397 1.430 $100,000 - $149,999 513 4.674 13.967 62,520,290 1.182 2.613 $150,000 - $199,999 494 4.501 18.468 86,654,392 1.638 4.251 $200,000 - $249,999 681 6.204 24.672 154,537,973 2.922 7.173 $250,000 - $299,999 775 7.061 31.733 212,963,030 4.027 11.200 $300,000 - $349,999 676 6.159 37.892 220,142,088 4.162 15.362 $350,000 - $399,999 608 5.539 43.431 227,789,411 4.307 19.669 $400,000 - $449,999 578 5.266 48.697 245,368,336 4.639 24.309 $450,000 - $499,999 655 5.968 54.665 311,556,939 5.891 30.200 $500,000 - $549,999 687 6.259 60.924 360,945,725 6.825 37.024 $550,000 - $599,999 632 5.758 66.682 363,288,961 6.869 43.893 $600,000 - $649,999 666 6.068 72.750 416,563,045 7.876 51.770 $650,000 - $699,999 564 5.138 77.888 380,978,203 7.204 58.973 $700,000 - $749,999 476 4.337 82.225 344,790,503 6.519 65.493 $750,000 - $799,999 426 3.881 86.106 329,715,735 6.234 71.727 $800,000 - $849,999 356 3.243 89.349 293,225,077 5.544 77.271 $850,000 - $899,999 288 2.624 91.973 251,775,552 4.761 82.032 $900,000 - $949,999 221 2.013 93.987 204,230,406 3.862 85.893 $950,000 - $999,999 171 1.558 95.545 166,690,749 3.152 89.045 $1,000,000 and greater 489 4.455 100.000 579,376,648 10.955 100.000 Total 10,976 100.000% $5,288,765,315 100.000%
________________________
(1) Improved single-family residential parcels. Excludes condominiums and parcels with multiple family units.

Source: California Municipal Statistics, Inc.

Alternative Method of Tax Apportionment – No Teeter Plan The Board of Supervisors of the County has approved the implementation of the Teeter Plan, as provided for in Section 4701 et seq. of the California Revenue and Taxation Code. Under the Teeter Plan local taxing agencies receive 100% of the tax levy for each fiscal year, rather than on the basis of actual collections. The City has elected not to participate in the Teeter Plan with respect to taxes levied for the Bonds or otherwise, and the City thus absorbs current delinquencies and receives the payment of past delinquencies, penalties, and interest.

16 Tax Levies and Delinquencies. Secured tax charges and delinquencies for Fiscal Years 2020-21 through 2024-25 for the City’s general obligation bond debt and 1% General Fund apportionment are shown in the following Table 4.

TABLE 4

CITY OF LA MESA
Secured Tax Charges and Delinquencies
Fiscal Years 2020-21 through 2024-25
Secured
Tax Charge
Amount Delinquent
June 30
% Delinquent
June 30
GO Bond Levy(1)
2020-21 $1,554,671.90 $10,372.94 0.67%
2021-22 1,217,969.47 8,601.09 0.71
2022-23 1,336,367.10 11,618.57 0.87
2023-24 1,411,588.49 11,081.83 0.79
2024-25 1,492,963.54 12,928.07 0.87
1% Apportionment(2)
2020-21 $7,949,978.82 $81,993.04 1.03%
2021-22 8,347,290.69 77,818.73 0.93
2022-23 9,164,130.06 103,479.84 1.13
2023-24 9,776,704.72 119,384.81 1.22
2024-25 10,133,210.35 112,233.58 1.11
________________________
(1) City’s general obligation bond debt service levy.
(2) 1% General Fund apportionment.

Source: California Municipal Statistics, Inc.

Appeals of Assessed Value
There are two types of appeals of assessed values that could adversely impact property tax revenues within the City.

Appeals may be based on Proposition 8 of November 1978, which requires that for each January 1 lien date, the taxable value of real property must be the lesser of its base year value, annually adjusted by the inflation factor pursuant to Article XIIIA of the State Constitution, or its full cash value, taking into account reductions in value due to damage, destruction, depreciation, obsolescence, removal of property or other factors causing a decline in value.

Under State law, property owners may apply for a Proposition 8 reduction of their property tax assessment by filing a written application, in form prescribed by the BOE, with the County board of equalization or assessment appeals board. In most cases, the appeal is filed because the applicant believes that present market conditions (such as residential home prices) cause the property to be worth less than its current assessed value. Proposition 8 reductions may also be unilaterally applied by the County Assessor.

Any reduction in the assessment granted as a result of such appeal applies to the year for which the application is made and during which the written application was filed. These reductions are subject to yearly reappraisals and are adjusted back to their original values when market conditions improve. Once the property has regained its prior value, adjusted for inflation, it once again is subject to the annual inflationary factor growth rate allowed under Article XIIIA.

17 A second type of assessment appeal involves a challenge to the base year value of an assessed property.

Appeals for reduction in the base year value of an assessment, if successful, reduce the assessment for the year in which the appeal is taken and prospectively thereafter. The base year is determined by the completion date of new construction or the date of change of ownership. Any base year appeal must be made within four years of the change of ownership or new construction date.

The City cannot predict the changes in assessed values that might result from pending or future appeals by taxpayers. Any reduction in aggregate City assessed valuation due to appeals, as with any reduction in assessed valuation due to other causes, will cause the tax rate levied to repay the Bonds to increase accordingly, so that the fixed debt service on the Bonds (and other outstanding general obligation bonds, if any) may be paid.

Risk of Loss of Assessed Value
The greater the assessed value of taxable property in the City, the lower the tax rate necessary to generate taxes sufficient to pay scheduled debt service on bonds. Natural and economic forces can affect the assessed value of taxable property in the City. Economic and market forces, such as a downturn in the State’s economy generally or a relocation out of the City or financial difficulty or bankruptcy by one or more major property taxpayer or employer of City residents, can also affect assessed values, as those forces affect the residential housing and commercial property markets. In addition, the total assessed value can be reduced through the reclassification of taxable property to a class exempt from taxation whether by ownership or use (such as exemptions for property owned by State and local agencies and property used for qualified educational, hospital, charitable or religious purposes).

The City, like all California communities, may be subject to unpredictable seismic activity, fires, flood, drought or other natural disasters. Seismic activity represents a potential risk for damage to buildings, roads, bridges and property within the City as it is located in a seismically active region. In addition, land susceptible to seismic activity may be subject to liquefaction during the occurrence of such event.

In recent years, wildfires have caused extensive damage throughout the State. Certain of these fires have burned thousands of acres and destroyed hundreds and in some cases thousands of homes. In some instances entire neighborhoods have been destroyed. Fires have also destroyed property in areas that were not previously considered to be at risk from such events. Property damage due to wildfire could result in a significant decrease in the assessed value of property within the City.

In the event of a severe earthquake, fire, flood or other natural disaster, there may be significant damage to both property and infrastructure in the City. As a result, a substantial portion of the property owners may be unable or unwilling to pay property taxes when due. Additionally, there may be a substantial decrease in the assessed value of the property. The City cannot predict or make any representations regarding the effects that natural disasters such as earthquakes, fires, flood, and drought may have on the value of taxable property within the City and economic activity in the City.

18 Tax Rates
The following Table 5 shows historical property tax rates within the City for fiscal years 2021-22 through 2025-26. Assuming issuance of the Bonds, the City’s tax rates are expected to decrease significantly beginning in 2032.

TABLE 5

CITY OF LA MESA
Typical Total Tax Rates per $100 Assessed Valuation (TRA 5-003) (1)
2021-22 2022-23 2023-24 2024-25 2025-26
General 1.00000 1.00000 1.00000 1.000000 1.00000
La Mesa-Spring Valley School District 0.04779 0.04338 0.04548 0.04214 0.05365 Grossmont Union High School District 0.06448 0.06180 0.06194 0.06167 0.06293 Grossmont-Cuyamaca Community College District 0.04115 0.03936 0.02749 0.04237 0.03752 Grossmont Healthcare 0.02459 0.02459 0.02459 0.02038 0.01989 City of La Mesa 0.01500 0.01500 0.01500 0.01500 0.01500 Metropolitan Water District 0.00350 0.00350 0.00350 0.00700 0.00700 Total 1.19651 1.18763 1.17800 1.18856 1.19599
________________________
(1) 2025-26 assessed valuation of TRA 5-006 is $6,803,539,897, which is 64.04% of the City’s total assessed valuation.

Source: California Municipal Statistics, Inc.

19 Top Taxpayers
The following Table 6 lists the top twenty local secured taxpayers in the City in fiscal year 2025-26.

TABLE 6

CITY OF LA MESA
Top Twenty Local Secured Taxpayers
Fiscal Year 2025-26
Property Owner Primary Land Use
2025-26
Assessed Valuation
% of
Total(1)

1. F R Grossmont LLC Shopping Center $ 189,425,626 1.81%

2. Trolley 8727 Apartments California LLC Apartments 168,520,346 1.61

3. WRPV XIV Veranda La Mesa LLC Apartments 146,374,165 1.40

4. Jefferson La Mesa LLC Apartments 92,561,241 0.89

5. Seta Apartment Homes LLC Apartments 80,718,754 0.77

6. MMGER Partnership Apartments 72,687,824 0.70

7. Montera Propco LLC Convalescent Home 54,330,000 0.52

8. Central Park Partners LP Apartments 49,150,719 0.47

9. ALS Wales La Mesa LLC Apartments 48,364,950 0.46

10. BMF IV CA Cove La Mesa LLC Apartments 46,744,831 0.45

11. La Mesa Senior Living LP Convalescent Home 44,141,959 0.42

12. Adagio Partners LP Apartments 39,341,087 0.38

13. CPI / AHP Fletcher MOB Owner LLC Medical Building 37,967,452 0.36

14. Universe At Serena Vista LLC Apartments 37,676,106 0.36

15. Rainbow Investment Co. Commercial 37,470,904 0.36

16. ASN La Mesa LLC Apartments 34,918,349 0.33

17. La Mesa Springs Center LLC Shopping Center 33,417,152 0.32

18. Vista La Mesa Senior Living LLC Convalescent Home 30,244,428 0.29

19. Echo Court Apartments LLC Apartments 28,004,715 0.27

20. Prime Campina LLC Residential Properties 27,318,725 0.26 $1,299,379,333 12.44%
________________________
(1) 2025-26 Local Secured Assessed Valuation: $10,448,694,162.

Source: California Municipal Statistics, Inc.

Direct and Overlapping Debt
Set forth below in Table 7 is a direct and overlapping debt report (the “Debt Report”) prepared by California Municipal Statistics, Inc. and effective June 1, 2026. The Debt Report is included for general informational purposes only. The City has not reviewed the Debt Report for completeness or accuracy and makes no representation in connection therewith.

The Debt Report generally includes long-term obligations sold in the public credit markets by public agencies whose boundaries overlap the boundaries of the City in whole or in part. Such long-term obligations generally are not payable from revenues of the City (except as indicated) nor are they necessarily obligations secured by land within the City. In many cases, long-term obligations issued by a public agency are payable only from the general fund or other revenues of such public agency.

The contents of the Debt Report are as follows: (a) the first column indicates the public agencies which have outstanding debt as of the date of the Debt Report and whose territory overlaps the boundaries of the City; (b) the second column shows the percentage that the City’s assessed valuation represents of the total assessed valuation of each public agency identified in the first column; and (c) the third column is an apportionment of the dollar amount of each public agency’s outstanding debt to property in the City, as determined by multiplying the

20 total outstanding debt of each agency by the percentage of the City’s assessed valuation represented in the second column.

TABLE 7

CITY OF LA MESA
Statement of Direct and Overlapping Debt
2025-26 Assessed Valuation: $10,623,358,564
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt 6/1/26 Metropolitan Water District 0.250% $ 40,113
Grossmont-Cuyamaca Community College District 14.095 52,553,974 San Diego Community College District 0.002 40,644
San Diego Unified School District 0.002 123,718
Grossmont Union High School District 14.476 84,849,920
La Mesa-Spring Valley School District 46.914 59,501,557 Lemon Grove School District 13.588 7,878,494
City of La Mesa 100.000 14,035,000(1)
Grossmont Hospital District 13.282 25,411,826
TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $244,435,246 DIRECT AND OVERLAPPING GENERAL FUND DEBT:

San Diego County General Fund Obligations 1.367% $ 5,579,616 San Diego County Pension Obligations 1.367 890,601
San Diego County Superintendent of Schools Certificates of Participation 1.367 64,317 Grossmont Union High School District Certificates of Participation 14.476 4,219,030 Lemon Grove School District Certificates of Participation 13.588 2,958,787 City of La Mesa General Fund Obligations 100.000 475,000 TOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT $14,187,351 COMBINED TOTAL DEBT $258,622,597(2)
Ratios to 2025-26 Assessed Valuation
Direct Debt ($14,035,000)................................................................... 0.13% Total Direct and Overlapping Tax and Assessment Debt...................... 2.30% Combined Direct Debt ($14,510,000) ................................................ 0.14% Combined Total Debt............................................................................. 2.43% ________________________
(1) Excludes the Bonds to be issued.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.

21 CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING

CITY TAXES AND APPROPRIATIONS
Principal of and interest on the Bonds are payable from the proceeds of an ad valorem tax levied by the City for the payment thereof (See “THE BONDS — Security” herein.) Articles XIIIA, XIIIB, XIIIC and XIIID of the Constitution, Propositions 62, 111, and 218 and 1A, and certain other provisions of law discussed below, are included in this section to describe the potential effect of these Constitutional and statutory measures on the ability of the City to levy taxes and spend tax proceeds for operating and other purposes, and it should not be inferred from the inclusion of such materials that these laws impose any limitation on the ability of the City to levy taxes for payment of the Bonds. The tax levied by the City for payment of the Bonds was approved by the City’s voters in compliance with Article XIIIA and all applicable laws.

Article XIIIA of the State Constitution
On June 6, 1978, California voters approved Proposition 13 (“Proposition 13”), which added Article XIIIA to the State Constitution (“Article XIIIA”). Article XIIIA, as amended, limits the amount of any ad valorem tax on real property to one percent of the full cash value thereof, except that additional ad valorem taxes may be levied to pay debt service (i) on indebtedness approved by the voters prior to July 1, 1978, (ii) on bonded indebtedness approved by a two-thirds vote on or after July 1, 1978, for the acquisition or improvement of real property or (iii) bonded indebtedness incurred by a school district, community college district or county office of education for the construction, reconstruction, rehabilitation or replacement of school facilities, including the furnishing and equipping of school facilities or the acquisition or lease of real property for school facilities, approved by 55 percent of the voters voting on the proposition. Article XIIIA defines full cash value to mean “the county assessor’s valuation of real property as shown on the 1975-76 tax bill under “full cash value,” or thereafter, the appraised value of real property when purchased, newly constructed, or a change in ownership has occurred after the 1975 assessment.” The full cash value may be adjusted annually to reflect inflation at a rate not to exceed two percent per year, or to reflect a reduction in the consumer price index or comparable data for the area under taxing jurisdiction, or may be reduced in the event of declining property value caused by substantial damage, destruction or other factors. Legislation enacted by the State Legislature to implement Article XIIIA provides that, notwithstanding any other law, local agencies may not levy any ad valorem property tax except the 1% base tax levied by each County and taxes to pay debt service on indebtedness approved by the voters as described above.

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

Both the California State Supreme Court and the United States Supreme Court have upheld the validity of Article XIIIA.

Legislation Implementing Article XIIIA
Legislation has been enacted and amended a number of times since 1978 to implement Article XIIIA.

Under current law, local agencies are no longer permitted to levy directly any property tax (except to pay voterapproved indebtedness). The one percent property tax is automatically levied by the County and distributed according to a formula among taxing agencies. The formula apportions the tax roughly in proportion to the relative shares of taxes levied prior to 1989.

Increases of assessed valuation resulting from reappraisals of property due to new construction, change in ownership or from the two percent annual adjustment are allocated among the various jurisdictions in the

22 “taxing area” based upon their respective “situs.” Any such allocation made to a local agency continues as part of its allocation in future years.

All taxable property is shown at full market value on the tax rolls. Consequently, the tax rate is expressed as $1 per $100 of taxable value. All taxable property value included in this Official Statement is shown at 100 percent of market value (unless noted differently) and all tax rates reflect the $1 per $100 of taxable value.

Article XIIIB of the State Constitution
In addition to the limits Article XIIIA imposes on property taxes that may be collected by local governments, certain other revenues of the State and most local governments are subject to an annual “appropriations limit” imposed by Article XIIIB which effectively limits the amount of such revenues those entities are permitted to spend. Article XIIIB, approved by the voters in June 1979, was modified substantially by Proposition 111 in 1990. The appropriations limit of each government entity applies to “proceeds of taxes,” which consist of tax revenues, State subventions and certain other funds, including proceeds from regulatory licenses, user charges or other fees to the extent that such proceeds exceed “the cost reasonably borne by such entity in providing the regulation, product or service.” “Proceeds of taxes” excludes tax refunds and some benefit payments such as unemployment insurance. No limit is imposed on the appropriation of funds which are not “proceeds of taxes,” such as reasonable user charges or fees, and certain other non-tax funds. Article XIIIB also does not limit appropriation of local revenues to pay debt service on Bonds existing or authorized by January 1, 1979, or subsequently authorized by the voters, appropriations required to comply with mandates of courts or the federal government, appropriations for qualified capital outlay projects, and appropriation by the State of revenues derived from any increase in gasoline taxes and motor vehicle weight fees above January 1, 1990, levels. The appropriations limit may also be exceeded in case of emergency; however, the appropriations limit for the next three years following such emergency appropriation must be reduced to the extent by which it was exceeded, unless the emergency arises from civil disturbance or natural disaster declared by the Governor, and the expenditure is approved by two-thirds of the legislative body of the local government.

The State and each local government entity has its own appropriations limit. Each year, the limit is adjusted to allow for changes, if any, in the cost of living, the population of the jurisdiction, and any transfer to or from another government entity of financial responsibility for providing services. Proposition 111 requires that each agency’s actual appropriations be tested against its limit every two years.

If the aggregate “proceeds of taxes” for the preceding two-year period exceeds the aggregate limit, the excess must be returned to the agency’s taxpayers through tax rate or fee reductions over the following two years.

The City has never exceeded its appropriations limit.

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

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

23 Article XIIIC requires that all new local taxes be submitted to the electorate before they become effective.

Taxes for general governmental purposes of the City (“general taxes”) require a majority vote; taxes for specific purposes (“special taxes”), even if deposited in the City’s General Fund, require a two-thirds vote.

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

Reduction or Repeal of Taxes, Assessments, Fees and Charges. Article XIIIC also removes limitations on the initiative power in matters of reducing or repealing local taxes, assessments, fees or charges. No assurance can be given that the voters of the City will not, in the future, approve an initiative or initiatives which reduce or repeal local taxes, assessments, fees or charges currently comprising a substantial part of the City’s General Fund.

If such repeal or reduction occurs, the City’s ability to pay debt service on the Bonds could be adversely affected.

Burden of Proof. Article XIIIC provides that local government “bears the burden of proving by a preponderance of the evidence that a levy, charge, or other exaction is not a tax, that the amount is no more than necessary to cover the reasonable costs of the governmental activity, and that the manner in which those costs are allocated to a payor bear a fair or reasonable relationship to the payor’s burdens on, or benefits received from, the governmental activity.” Similarly, Article XIIID provides that in “any legal action contesting the validity of a fee or charge, the burden shall be on the agency to demonstrate compliance” with Article XIIID.

Judicial Interpretation of Proposition 218. The interpretation and application of Articles XIIIC and XIIID will ultimately be determined by the courts, and it is not possible at this time to predict with certainty the outcome of such determination.

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

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

Proposition 62
On November 4, 1986, California voters adopted Proposition 62, which requires that (i) any local tax for general governmental purposes (a “general tax”) must be approved by a majority vote of the electorate; (ii) any local tax for specific purposes (a “special tax”) must be approved by a two-thirds vote of the electorate; (iii) any general tax must be proposed for a vote by two-thirds of the legislative body; and (iv) proceeds of any tax imposed in violation of the vote requirements must be deducted from the local agency’s property tax allocation.

Most of the provisions of Proposition 62, which was a statutory initiative, were affirmed by the 1995 California Supreme Court decision in Santa Clara County Local Transportation Authority v. Guardino, which invalidated a special sales tax for transportation purposes because less than two-thirds of the voters voting on the measure had approved the tax. Claims for taxpayer relief where a local entity may have violated Proposition 62 are subject to a three-year statute of limitations, created by statute. In the case Howard Jarvis Taxpayers

24 Association v. City of La Habra (2001), the California Supreme Court determined that this statute of limitations begins to run anew every time the city collects the challenged tax.

Proposition 1A; Proposition 22
Proposition 1A. Proposition 1A, proposed by the Legislature in connection with the State’s Fiscal Year 2004-05 Budget, approved by the voters in November 2004 and generally effective in Fiscal Year 2006-07, provided that the State may not reduce any local sales tax rate, limit existing local government authority to levy a sales tax rate or change the allocation of local sales tax revenues, subject to certain exceptions. Proposition 1A generally prohibited the State from shifting to schools or community colleges any share of property tax revenues allocated to local governments for any Fiscal Year, as set forth under the laws in effect as of November 3, 2004.

Any change in the allocation of property tax revenues among local governments within a county has to be approved by two-thirds of both houses of the Legislature.

Proposition 1A of 2004 provided, however, that beginning in Fiscal Year 2008-09, the State may shift to schools and community colleges up to 8% of local government property tax revenues, which amount must be repaid, with interest, within three years, if the Governor proclaimed that the shift is needed due to a severe State financial hardship, the shift was approved by two-thirds of both houses and certain other conditions were met.

The State could also approve voluntary exchanges of local sales tax and property tax revenues among local governments within a county. Pending certain State actions, a Proposition 1A shift could occur in future fiscal years.

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

Proposition 19. At the November 2020 Statewide election, a ballot measure known as “Proposition 19” was approved by the voters of the State. Proposition 19 amended Article XIIIA, to permit eligible homeowners to transfer tax assessments anywhere in the State, narrowing existing special rules for inherited properties, and broadening the scope of triggers for reassessment of properties. Any additional revenues and net savings resulting from Proposition 19 will be allocated to fire protection services and reimbursing local governments for taxation‐ related changes.

Possible Future Initiatives
Articles XIIIA, XIIIB, XIIIC and XIIID and Propositions 62, 111, 218 and 1A were each adopted as measures that qualified for the ballot pursuant to the State’s initiative process. From time to time other initiative measures could be adopted, further affecting revenues of the City or the City’s ability to expend revenues. The nature and impact of these measures cannot be anticipated by the City.

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

25 certain corporations. In the further opinion of Bond Counsel, interest on the Bonds is exempt from California personal income tax.

The opinions set forth in the preceding paragraph are subject to the condition that the City comply with all requirements of the Tax Code that must be satisfied subsequent to the issuance of the Bonds. The City has made certain representations and covenanted to comply with each such requirement. Inaccuracy of these representations or failure to comply with these covenants may result in interest on the Bonds being included in gross income for federal income tax purposes, possibly from the date of original issuance of the Bonds. The opinion of Bond Counsel assumes the accuracy of these representations and compliance with these covenants.

Bond Counsel has not undertaken to determine (or to inform any person) whether any actions taken (or not taken), or events occurring (or not occurring), or any other matters coming to Bond Counsel’s attention after the date of issuance of the Bonds may adversely affect the value of, or the tax status of interest on, the Bonds. Accordingly, the opinion of Bond Counsel is not intended to, and may not, be relied upon in connection with any such actions, events, or matters.

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

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

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

Current and future legislative proposals, if enacted into law, clarification of the Tax Code, or court decisions may cause interest with respect to the 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 Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding

26 any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

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

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

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

Owners of the Bonds should also be aware that the ownership or disposition of, or the accrual or receipt of interest on, the Bonds may have federal or state tax consequences other than as described above. Bond Counsel expresses no opinion regarding any federal or state tax consequences arising with respect to the Bonds other than as expressly described above.

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

APPROVAL OF LEGAL PROCEEDINGS
Certain legal matters incident to the authorization, issuance and sale of the Bonds are subject to the approval of Best Best & Krieger LLP, Riverside, California, Bond Counsel. Best Best & Krieger LLP, Riverside, California, is also serving as Disclosure Counsel in connection with the sale, issuance and delivery of the Bonds.

Certain legal matters will be passed upon for the Underwriter by its counsel, Stradling, Yocca, Carlson & Rauth LLP.

Copies of the approving opinion of Bond Counsel will be available at the time of delivery of the Bonds.

The form of the opinion is set forth in APPENDIX C – “FORM OF OPINION OF BOND COUNSEL.” Except as expressly described in certain opinions delivered to the City and the Underwriter, Bond Counsel is not passing upon and undertakes no responsibility for the accuracy, completeness or fairness of the information contained in the Official Statement. The Municipal Advisor and Underwriter’s Counsel will receive compensation that is contingent upon the sale, issuance and delivery of the Bonds.

AUDITED FINANCIAL STATEMENTS
The annual comprehensive financial report of the City for fiscal year ended June 30, 2025, included as Appendix B to this Official Statement has been audited by Rogers, Anderson, Malody & Scott, LLP, San Bernardino, California (the “Auditor”), the City’s independent auditor, as stated in their report appearing herein.

In connection with the inclusion of such financial statements and the report of the auditor therein, the City did not request the Auditor to, and the Auditor has not undertaken to, update its report or take any action intended or likely to elicit information concerning the accuracy, completeness or fairness of the statements made in this Official Statement, and no opinion is expressed by the Auditor with respect to any event subsequent to the date of its report. See APPENDIX B – “ANNUAL COMPREHENSIVE FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2025.”

27 CONTINUING DISCLOSURE
The City will covenant in the Paying Agent Agreement that it will comply with and carry out all of the provisions of that certain Continuing Disclosure Certificate executed by the City and dated the date of issuance and delivery of the Bonds, as originally executed and as it may be amended from time to time in accordance with the terms thereof (the “Continuing Disclosure Certificate”). See APPENDIX D – “FORM OF CONTINUING DISCLOSURE CERTIFICATE.” Any Owner may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the City to comply with its obligations under the Continuing Disclosure Certificate. These covenants have been made in order to assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5), as amended (the “Rule”).

The City and certain entities related to the City for which the City coordinates have entered into previous undertakings pursuant to the Rule. A review of compliance with continuing disclosure undertakings for filings required by the City within the last five years indicates that the City may not have fully complied with its prior continuing disclosure undertakings under the Rule. Identification of the below described events does not constitute a representation by the City that the late filings were material. The review indicated that, for fiscal years 2020-21 through 2024-25, the City did not timely file its audited financial statements and failed to include all required operating data in its annual reports, and failed to timely file the same, as required by certain of its outstanding continuing disclosure undertakings for such years. In addition, for fiscal years 2020-21, 2022-23, and 2023-24, its audited financial statements and certain operating data were not correctly linked to all outstanding CUSIPs.

The City has made supplemental filings and is currently in compliance with its continuing disclosure undertakings.

Additionally, in October 2024, Moody’s withdrew the City’s ratings because the City had not provided audited financial statements for more than a year after the end of fiscal year 2022-23; Moody’s reinstated the City’s ratings in 2025 upon provision of its audited financial statements.

In order to ensure ongoing compliance by the City with its continuing disclosure undertakings, the City is expected to engage Urban Futures, Inc. to assist the City in filing accurate, complete and timely annual reports on behalf of the City.

LITIGATION AND SIGNIFICANT CLAIMS
No litigation is pending against the City with service of process accomplished or threatened in writing concerning the validity of the Bonds, or questioning the political existence of the City or seeking to restrain or enjoin the issuance or execution of the Bonds. The City will furnish to the purchaser of the Bonds a certificate as to the foregoing as of the time of the original delivery of the Bonds.

There are a variety of civil cases in which the City is a named defendant pending at any given time.

Additionally, there are numerous claims filed with the City or with other agencies in which the claimants allege that they have been damaged by the City. If these cases or these claims which develop into civil actions were determined adversely to the City, it is possible there could be an adverse effect on the City’s revenues and cash flow.

RATING
Upon the issuance of the Bonds, Moody’s Investors Service, Inc. (“Moody’s”) will assign the Bonds a rating of “[___].” Such rating reflects only the views of such organization and any desired explanation of the significance of the rating should be obtained from Moody’s. Generally, rating agencies base their ratings on the information and materials furnished to them and on investigations, studies and assumptions of their own. There is no assurance such rating will continue for any given period of time or that such 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 the rating may have an adverse effect on the market price of the Bonds.

28 MUNICIPAL ADVISOR
The City has retained the services of Urban Futures, Inc., Walnut Creek, California, as its municipal advisor (the “Municipal Advisor”) in connection with the authorization and delivery of the Bonds. The Municipal Advisor is not obligated to undertake, and has not undertaken to make, an independent verification or to assume responsibility for the accuracy, completeness or fairness of the information contained in this Official Statement.

UNDERWRITER
The Bonds are being purchased by Oppenheimer & Co., Inc. (the “Underwriter”). The Underwriter has agreed to purchase the Bonds at an aggregate purchase price of $___________ (consisting of the principal amount of the Bonds of $___________, [plus/less] [net] original issue [premium/discount] in the amount of $___________, less Underwriter’s discount in the amount of $___________).

The Underwriter may offer and sell the Bonds to certain dealers and others at prices lower than the public offering prices set forth on the inside cover page hereof. The offering prices may be changed from time to time by the Underwriter.

29 ADDITIONAL INFORMATION
The purpose of this Official Statement is to supply information to the purchasers of the Bonds. Quotations from and summaries and explanations of the Bonds, the Paying Agent Agreement providing for issuance of the Bonds, and the constitutional provisions, statutes and other documents referenced herein, do not purport to be complete, and reference is made to said documents, constitutional provisions and statutes for full and complete statements of their provisions.

Some of the data contained herein has been taken or constructed from City records. Appropriate City officials, acting in their official capacities, have reviewed this Official Statement and have determined that, as of the date hereof, the information contained herein is, to the best of their knowledge and belief, true and correct in all material respects and does not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made herein, in light of the circumstances under which they were made, not misleading. This Official Statement has been approved by the City Council.

CITY OF LA MESA
By:

Title: City Manager

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APPENDIX A

FINANCIAL, ECONOMIC AND DEMOGRAPHIC

INFORMATION CONCERNING THE CITY
The following material is descriptive of the City of La Mesa (the “City”). The following information covers general information about the City’s governance structure, budget processes, and tax and revenue sources, City expenditures, labor relations, employment benefits and retirement costs, and investments, bonds and other long-term obligations. Information contained herein is presented as general background data. The Bonds are payable solely from the ad valorem taxes levied on property within the City. The Bonds are not a debt of the County of San Diego (“County”) or the State of California (“State”).

The various reports, documents, websites and other information referred to herein are not incorporated herein by such references. The City has referred to certain specified documents in this Appendix A, including financial information, concerning the City is available from the City’s publications, websites and its departments. Any such information that is inconsistent with the information set forth in this Official Statement should be disregarded and is not a part of or incorporated into this Appendix A. The information contained in this Official Statement, including this Appendix A, speaks only as of its date, and the information herein is subject to change. Prospective investors are advised to read the entire Official Statement to obtain information essential to the making of an informed investment decision. Certain material in this Appendix A has been prepared by or excerpted from the sources as noted herein and has not been reviewed for accuracy by the City or Bond Counsel.

Introduction
The City encompasses approximately 9 square miles and is located approximately 10 miles east of downtown San Diego. The City has a population of approximately 61,700 residents as of January 1, 2026.

Interstate Highway 8 and State Route 125 bisect the City, making the City easily accessible for regional commerce and recreation.

Government and Administration
The City was incorporated in 1912 and is a general law city operating under a council/manager form of government. The City is governed by a five-member City Council who are elected at-large for four-year terms.

The Mayor is elected separately at-large for a four-year term. The City provides police, fire, emergency medical response, parks and recreation, wastewater, public works, planning, engineering and other services for its residents. Water service in the City is provided by the Helix Water District.

The City Manager, appointed by the City Council, serves as the City’s chief executive officer and is responsible for overseeing the daily operations of City departments. The City Manager serves as an advisor to the City Council on policy matters impacting the community and the City’s organization, supports the informational and policymaking needs of the City Council, implements City Council decisions and prepares, manages, and implements the annual budgets for the City, as well as the City’s Capital Improvement Program.

Greg Humora is the City Manager, and was appointed in 2020. Prior to being appointed City Manager, Mr. Humora served as the Assistant City Manager and the Director of Public Works/City Engineer. Mr. Humora has 30 years of experience working in municipal government and has worked for the City since 1999. He has a Bachelor of Science degree in Civil Engineering from Worcester Polytechnic Institute and a Masters of Public Administration degree from the University of Massachusetts Amherst.

Other key personnel responsible for management of the City include the Director of Finance. In addition, the City Attorney provides legal services to the City.

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Shannon Esenwein is the Director of Finance for the City. Ms. Esenwein was appointed as Director of Finance in 2025. Prior to her employment as Director of Finance, Ms. Esenwein served as the Finance Director of the City of Ceres, and has previously worked for the cities of Hughson and Arroyo Grande, as well as the counties of San Joaquin and Stanislaus. Overall, Ms. Esenwein has 25 years working for municipal governments.

Ms. Esenwein has a Bachelor of Science degree in Business Administration with a concentration in accounting from California Polytechnic State University San Luis Obispo and is a California Certified Public Accountant.

Glenn Sabine is the City Attorney. Mr. Glenn Sabine has been the City Attorney for the City since 1996.

Mr. Sabine holds a Master’s Degree in City and Regional Planning and a Juris Doctorate degree from the Ohio State University. Mr. Sabine is expected to retire in the next year and the City is currently looking for his replacement.

Population
The following table below shows historical population figures for the City, the County and the State of California (the “State”) from 2022 through 2026.

POPULATION ESTIMATES
City, County and State
2022 through 2026
Year(1) City Population County Population
State
Population
2022 60,976 3,286,310 39,159,480
2023 61,326 3,296,097 39,167,274
2024 61,768 3,318,648 39,446,835
2025 61,863 3,339,392 39,646,907
2026 61,707 3,344,322 39,592,978
________________________
(1) January 1 data.

Source: California Department of Finance; 2020 Benchmark.

Development
The City is in the process of updating its Downtown Village Specific Plan, originally adopted in 1990, to facilitate new commercial revitalization, mixed use development and serve as a blueprint for future growth and development of Downtown La Mesa. The update is intended to promote economic development, support infill mixed-use and multifamily housing, and implement parking policies and programs in support of smart growth in order to guide future improvements in Downtown La Mesa.

City Municipal Services
The City provides municipal services related to police, fire protection, parks and recreation, public works, planning, engineering, community development and general City administration. In addition, the City provides for the operation and maintenance of the City’s wastewater collection system that is accounted for in a separate enterprise fund. A portion of the revenues from this enterprise fund is annually paid to the City’s general fund for various administrative support services provided to this enterprise.

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CITY FINANCES
The information in below concerning the operations of the City and the City’s general fund finances is provided as supplementary information only, and it should not be inferred from the inclusion of this information in this Official Statement that the principal of or interest on the Bonds is payable from the general fund of the City. The Bonds are payable solely from the proceeds of an ad valorem tax levied by the City in an amount sufficient for the payment thereof.

City Finances
The following selected financial information provides a brief overview of the City’s finances. This financial information has been extracted from the City’s audited financial statements for the fiscal year ended June 30, 2025 (the “Financial Statements”), from audited financial statements for prior fiscal years and, in some cases, from unaudited information provided by the City’s Finance Department. The Financial Statements, together with an unqualified opinion of Rogers, Anderson, Malody & Scott, LLP, San Bernardino, California (the “Auditor”) are included as Appendix B to this Official Statement. The Auditor has not performed any postaudit analysis of the financial condition of the City.

Accounting Policies and Financial Reporting
The City maintains its accounting records in accordance with Generally Accepted Accounting Principles (“GAAP”) and the standards established by GASB. On a semiannual basis, a report is prepared for the City Council and City staff which reviews fiscal performance to date against the budget. Combined financial statements are produced following the close of each fiscal year.

The City Council employs an independent certified public accountant (currently, the Auditor) who examines at least annually the financial statements of the City in accordance with GAAP, including tests of the accounting records and other auditing procedures as such accountant considers necessary. As soon as practicable, after the end of the fiscal year, a final audit and report is submitted by the independent accountant to the City Council.

The accounts of the City are organized on the basis of funds and account groups, which is the basic fiscal and accounting entity in governmental accounting. The three broad fund categories include governmental, proprietary and fiduciary funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues and expenditures, or expenses, as appropriate. Government resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The basis of accounting for all funds is more fully explained in the notes to the Financial Statements. The general fund is the general operating fund of the City. It is used to account for all financial resources except those required to be accounted for in another fund. The tables set forth below under the captions “Budgetary Process,” “Change in Fund Balance of the City General Fund” and “General Fund Balance Sheets of the City” include certain historical and current fiscal year budget information for the general fund. Information on the remaining governmental funds of the City as of June 30, 2025 is set forth in the Financial Statements in Appendix B.

Budgetary Process
The City prepares its annual budget pursuant to a two-year biennial budget program. The current twoyear budget cycle covers fiscal years 2025-26 and 2026-27. The two-year budget program permits the City to account for fiscal decisions made in the current year and to reflect actions influenced by changing circumstances and State budget updates. The budget includes proposed expenditures, by fund and by department, and the revenues expected to finance them. The budget is legally enacted through passage of a resolution of the City Council, usually in June. The City Manager is authorized to transfer budgeted amounts between line items within

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any department; however, any revisions which alter total expenditures of any department must be approved by the City Council. Formal budgetary integration is employed as a management control device during the year for the general fund and special revenue funds. Budgets are adopted on a basis consistent with generally accepted accounting principles.

The City Council approved the current biennial budget on October 14, 2025 (the “Budget”). Set forth below are the general fund budgets for fiscal years 2024-25, 2025-26 and 2026-27, and the unaudited actual general fund results for 2024-25. During the course of each fiscal year, the budget is amended and revised as necessary by the City Council.

CITY OF LA MESA
General Fund Budgets and Results(1)
Revenues
Amended Final
2024-25 Budget
2024-25
Audited
Results 2025-26 Budget 2026-27 Budget
Property taxes $19,333,500 $20,228,630 $21,175,300 $22,047,800 Other taxes 35,638,680 35,577,090 40,424,500 42,361,100 Licenses and permits 1,663,300 2,348,594 2,418,200 2,453,500 Fines, forfeits and penalties 508,000 505,304 540,500 545,100 Use of money and property(2) 2,159,130 6,154,418 6,859,100 6,494,300 Intergovernmental 1,534,050 2,880,011 1,771,100 1,774,100 Charges for services 2,630,050 2,531,415 2,867,700 3,473,100 Other revenues 190,460 933,052 3,564,500 1,332,500
Transfers from Other Funds - 1,408,566 - -
Total Revenues $63,657,170 $72,567,080 $79,620,900 $80,481,500 Expenditures
General government $13,419,544 $9,029,541 $9,201,045 $6,819,510 Police 26,532,202 27,506,233 32,534,118 33,981,460
Fire 16,553,289 17,290,901 17,808,841 19,721,140
Public Works 12,730,913 11,087,053 13,347,277 13,558,120 Community Services(3) 2,943,191 2,754,534 2,997,519 3,048,320 Community Development 4,874,736 2,930,282 4,386,983 4,018,950 Debt Service
Principal - 392,131 - -
Interest - 9,823 - -
Transfers to other funds - 1,546,220 - -
Total Expenditures $77,053,875 $72,546,718 $80,275,783 $81,147,500 _____________________________
(1) Totals may not sum due to rounding.
(2) The variance from budget to actuals resulted from the maturity of lower yield investments and elevated interest rates in LAIF, both of which contributed to significantly higher returns. (3) Community Services was renamed Parks & Recreation at the end of fiscal year 2024-25.

Sources: Adopted budget of the City of La Mesa for 2025-26 and 2026-27 and audited financial report for Fiscal Year ended June 30, 2025.

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Change in Fund Balance of the City General Fund
Set forth below are the City’s audited general fund statements of revenues, expenditures and changes in fund balance for the fiscal years 2020-21 through 2024-25.

CITY OF LA MESA
General Fund Statement of Revenues, Expenditures and Changes in Fund Balance 2020-21 2021-22 2022-23 2023-24 2024-25
Property taxes(1) $15,979,871 $16,687,577 $ 18,418,083 $19,583,792 $ 20,228,630 Other taxes(2) 32,615,152 36,521,606 37,372,154 37,155,025 35,577,090 Licenses and permits 1,576,687 2,163,310 2,473,422 2,258,450 2,348,594 Fines and forfeitures 288,898 462,540 442,809 546,276 505,304 Use of money and property 1,814,831 (283,463) 3,510,031 4,594,408 6,154,418 Intergovernmental 1,533,165 2,139,554 1,701,778 1,639,768 2,880,011 Charges for services 1,614,785 2,557,339 3,413,608 2,640,725 2,531,415 Other revenues 197,860 142,126 1,261,304 975,290 933,052 Total Revenues $55,621,249 $60,390,589 $68,593,189 $69,393,734 $71,158,514 Expenditures
Current:

General government $ 6,005,880 $ 7,350,118 $ 7,151,776 $ 7,990,097 $ 9,029,541 Police 20,577,688 21,796,432 22,793,662 24,205,997 27,506,233 Fire 12,400,879 13,541,283 14,308,258 16,207,678 17,290,901 Public works 8,763,352 8,751,602 8,997,778 10,642,214 11,087,053 Community development 2,207,760 2,441,496 2,338,650 2,330,928 2,930,282 Community services 1,683,803 1,949,538 2,194,954 2,472,055 2,754,534 Capital outlay 4,339,213 20,169 1,456,400 - -
Debt service
Principal - 2,306 460,488 504,832 392,131
Interest - 123 9,134 20,745 9,823
Total Expenditures $51,639,362 $55,853,067 $59,711,100 $64,344,546 $71,000,498 Excess (Deficiency) of
Revenues Over (Under)
Expenditures $ 3,981,887 $4,537,522 $8,882,089 $5,049,188 $ 158,016 Other Financing Sources
(Uses)
Transfers in $ 2,929,936 $2,644,716 $ 2,122,249 $ 2,639,823 $ 1,408,566 Transfers out (1,291,430) (1,583,148) (1,644,291) (4,252,612) (1,546,220) Proceeds from lease - 20,169 1,456,400 - -
Total Other Financing Sources
(Uses) $1,638,506 $1,081,737 $1,934,358 $(1,612,789) $(137,654) Fund balances, end of year $53,364,673 $58,983,932 $69,800,379 $68,597,086(3) $71,679,876(4) Net Change in Fund Balance $ 5,620,393 $5,619,259 $10,816,447 $3,436,399 $20,362 __________________
(1) Includes ad valorem property taxes, delinquent property taxes, motor vehicle in-lieu fees, and tax increment property taxes. (2) Includes sales taxes, Proposition L sales taxes, property transfer taxes, transient occupancy tax and franchise taxes. (3) Reflects correction of error noted in the City’s audited financial statements for Fiscal Year ended June 30, 2024. (4) Reflects adjustments noted in the City’s audited financial statements for Fiscal Year ended June 20, 2025.

Sources: City of La Mesa Annual Comprehensive Financial Report for Fiscal Year ended June 30, 2025.

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General Fund Balance Sheets of the City
Set forth in the table below are the City’s audited general fund balance sheets for the last five audited fiscal years.

CITY OF LA MESA
General Fund Balance Sheets
Assets
2021 2022 2023 2024 2025
Cash and investments $37,140,899 $41,063,157 $49,311,123 $53,207,450 $51,848,943 Restricted Investment in Section 115 Trust 7,983,884 7,365,660 7,938,631 8,642,890 7,676,639 Receivables:

Accounts 7,210,825 7,374,831 7,147,775 4,395,552 6,406,820 Loans 25,601 26,463 29,917 33,130 36,767
Grants - 15,761 - - -
Interest - 185,840 455,634 - 456,092
Lease - 28,749,614 28,530,745 28,304,945 28,331,258
Due from other funds 1,201,373 2,384,873 3,604,184 1,445,101 4,029,892 Due from successor agency - - 315,067 246,881 -
Inventory 53,079 136,967 286,924 373,652 462,984
Prepaid items 1,526 2,099 1,971 2,572 23,794
Advances to other governments(1) 5,300,000 5,300,000 5,080,004 4,707,657 4,021,001 Total Assets $58,917,187 $92,605,265 $102,701,975 $101,359,830 $103,294,190 Liabilities
Accounts payable $ 887,453 $1,485,163 $1,297,641 $1,965,034 $ 661,248 Salaries payable 1,576,177 630,221 765,601 997,292 1,212,662 Deposits 3,088,884 3,383,103 3,722,774 3,618,458 4,244,946 Total Liabilities $5,552,514 $5,498,487 $5,786,016 $6,580,784 $6,118,856 Deferred Inflows of Resources
Leases $ - $28,122,846 $27,115,580 $26,181,960 $25,495,458 Fund Balances
Non-spendable
Inventory $ 53,079 $ 136,967 $ 286,924 $ 373,652 $ 462,984 Prepaid 1,526 2,099 1,971 2,572 23,794
Advances to other governments 5,300,000 5,300,000 5,080,004 4,707,657 4,021,001 Restricted for
Investment in Section 115 trust 7,983,884 7,365,660 7,938,631 8,642,890 7,676,639 General government - - - - -
Public safety - - - - -
Capital outlays 3,427,328 3,427,328 3,427,328 3,427,328 - (2)
Community services - - - - -
Community development - - - - -
Debt service - - - - -
Unassigned 36,598,856 42,751,878 53,065,521 51,442,987 59,495,458 Total Fund Balances $53,364,673 $58,983,932 $69,800,379 $68,597,086 $71,679,876 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances $58,917,187 $92,605,265 $102,701,975 $101,359,830 $103,294,190 (1)
Reflects amount due to the City from the Successor Agency, as successor to the former La Mesa Community Redevelopment Agency, under a promissory note. The State Department of Finance has denied such amount as an enforceable obligation of the Successor Agency. (2) Beginning in Fiscal Year ended June 30, 2025, amounts previously reflected as assigned for capital outlay were determined to be unrestricted and are presented in unassigned fund balance amounts.

Source: City of La Mesa annual comprehensive financial reports for fiscal years 2020-21 through 2024-25.

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Sales Taxes
Sales and use tax receipts (including Proposition L sales taxes in the amount of $12,924,288) of $30,302,483 provided the largest tax revenue source for the City in 2024-25, contributing approximately 54.3% of general fund tax revenues and approximately 42.6% of total general fund revenues.

A sales tax is imposed on retail sales or consumption of personal property and collected and distributed by the State Board of Equalization. The basic sales tax rate is established by the State Legislature, and local overrides may be approved by voters. The current sales tax rate in the City is 8.5%. The City does not receive all sales tax revenues generated, as a portion thereof is allocated to the State. (see “— Proposition L Sales Tax” below).

Proposition L Sales Tax
On November 4, 2008, voters in the City approved Proposition L, authorizing a 0.75% increase in the City sales tax for a 20-year period, effective April 1, 2009. In fiscal year 2023-24, sales tax revenues resulting from Proposition L were above budgetary projections by $0.8 million. For fiscal year 2024-25, sales tax revenues resulting from Proposition L were approximately $12.9 million, a decrease of $38,000 from the previous fiscal year. Proceeds from the tax measure are being used to maintain City certain services such as emergency services, street repair and youth programs.

Property Taxes
Property tax receipts of $20,228,630 were a large tax revenue source of the City in fiscal year 2024-25, contributing approximately 28.4% of total general fund revenues. See the Official Statement under the caption “PROPERTY TAXATION” for information related to assessed valuations and property tax collections of the City.

Other Taxes
Other taxes of $3,889,839 collected by the City in fiscal year 2024-25, including but not limited to transient occupancy taxes and property transfer taxes, provided approximately 5.5% of total general fund revenues for fiscal year 2024-25.

State of California Motor Vehicle In-Lieu Payments
The State imposes a Vehicle License Fee (the “VLF”), which is the portion of the fees paid in lieu of personal property taxes on a vehicle. The VLF is based on vehicle value and declines as the vehicle ages. Prior to the adoption of the State fiscal year 2004-05 budget, the VLF was 2% of the value of a vehicle. Through prior legislation, the State enacted VLF reductions under which the State was required to “backfill” local governments for their revenue losses resulting from the lowered fee. The State fiscal year 2004-05 budget permanently reduced the VLF from 2% to 0.65% of the value of a vehicle and deleted the requirement for backfill payments, providing instead that the amount of the backfill requirement will be met by an increase in the property tax allocation to cities and counties.

As set forth in the table below, for fiscal year 2024-25, the City received $8,772,487 in total VLF revenues, all of which was distributed from property tax receipts.

CITY OF LA MESA
State Motor Vehicle In-Lieu Payments
Fiscal Year
Source 2020-21 2021-22 2022-23 2023-24 2024-25
Motor Vehicle In-Lieu Payments $6,958,182 $7,217,528 $7,902,495 $8,447,275 $8,772,487 ______________
Source: City.

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Indebtedness
General Fund-Supported Debt.

Certificates of Participation 2006A and 2006B. On August 9, 2006, the City executed and delivered its Certificates of Participation 2006A (Taxable) (Civic Center Project) and 2006B (Tax Exempt) (Civic Center Project) (collectively, the “2006 Certificates”) to finance the costs of constructing a building and related site improvements at the City’s civic center. The 2006 Certificates are secured by lease payments payable by the City pursuant to a lease agreement with the La Mesa Public Financing Authority. The 2006 Certificates mature on August 1, 2026.

San Diego County Next Gen RCS – 2017. In July 2016, the County awarded a contract regarding a new system for the San Diego-Imperial County Regional Communications System (which is utilized by police, fire and public works departments). The City’s share of the cost to finance the new system is $148,411 annually through 2026. The City’s final payment will be made in 2026.

Equipment Leases. As of June 30, 2025, the City has two equipment leases which range in payments from $4,163 and $54,822 with interest rates ranging from 1.29% to 1.6%. As of June 30, 2025, the total combined value of the lease liability was $317,109. The term of the leases extends to 2031.

Other Long Term Debt. As of June 30, 2025, the City had a total of approximately $10,197,493 aggregate principal amount of obligations outstanding payable from revenues of the City’s wastewater collection system pursuant to a loan agreement entered into with the State Water Resources Control Board to finance certain improvements to the City’s wastewater collection system.

Short-Term Debt. The City currently has no short-term debt outstanding.

Estimated Direct and Overlapping Bonded Debt. The estimated direct and overlapping bonded debt of the City, as of June 1, 2026, is set forth in the Official Statement under the caption “PROPERTY TAXATION— Direct and Overlapping Debt.”
City Investment Policy
The City invests its funds in accordance with the City’s Investment Policy. In accordance with Section 53600 et seq. of the California Government Code, idle cash management and investment transactions are the responsibility of the City Treasurer. The City’s Investment Policy sets forth the policies and procedures applicable to the investment of City funds and designates eligible investments. The Investment Policy sets forth a stated objective, among others, of insuring the safety of invested funds by limiting credit and market risks.

Eligible investments are generally limited to the Local Agency Investment Fund which is operated by the California State Treasurer, the San Diego County Investment Pool for local agencies, U.S. Treasury Bills, Notes and Bonds, obligations issued by certain government agencies, FDIC-insured or negotiable certificates of deposit, certain repurchase agreements, certain banker’s acceptances, certain commercial paper, and certain money market funds. Funds are invested in the following order of priority:
 Safety of principal of invested funds;
 Maintenance of sufficient liquidity to meet cash flow needs; and  Attainment of maximum yield possible consistent with the first two objectives.

The City Treasurer is required to provide a quarterly report that provides a clear picture of the status of the current investment portfolio and transactions made. A summary of the City’s investments attributed to its unrestricted funds, including the general fund, as of March 31, 2026, is set forth in the table below. As shown below, approximately 35.83% of the moneys invested and held by the City are invested in government agencies

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and 52.11% of the moneys invested and held by the City are invested in LAIF. The City’s investment report for the period ending March 31, 2026 was presented to the City Council on May 12, 2026.

CITY OF LA MESA
Summary of Investments as of March 31, 2026
Maturity
(Years)
Government
Agencies
Certificates of
Deposit LAIF Total
Percentage
of
Portfolio
0-1 $17,000,000 $3,471,000 $39,594,064 $60,065,064 79.05% 1-2 3,000,000 3,464,000 0 6,464,000 8.51
2-3 0 1,984,000 0 1,984,000 2.61
3-4 1,250,000 0 0 1,250,000 1.65
4-5 5,975,000 245,000 0 6,220,000 8.19
Totals $27,225,000 $9,164,000 $39,594,064 $75,983,064 100.0% City General Fund Reserve Policy
The City’s General Fund Reserve Policy establishes two reserve targets: a 15% Rainy Day Reserve for one-time or extraordinary costs and a 25% Cash Flow Reserve to manage seasonal cash fluctuations, which totals a combined 40% reserve in the General Fund. At the discretion of City Council, reserve levels in excess of policy targets may be used for one-time opportunity costs or other specific purposes approved through the budget process or separate action by the City Council. General Fund reserve totals were above the combined policy target for Fiscal Year 2024-25 and are expected to remain above the combined policy target in Fiscal Year 2025-26.

City Debt Management Policy
The City has adopted a Debt Management Policy as required by California Government Code Section 8855 in order to establish guidelines and parameters for the effective governance, management and administration of debt issued by the City and to ensure compliance with legislation, statutes and laws that place regulations on local agency debt. The policy incorporates the purposes for which debt may be incurred, the objectives of the policy, the types of debt that may be issued, and debt management practices.

City Cyber Security Incident Response Plan
The City has adopted a Cyber Security Incident Response Plan (“Response Plan”). The Response Plan provides practical guidelines on responding to cyber security and data breach incidents in a consistent and effective manner while establishing a team of first responders for incidents with defined roles, responsibilities, and means of communication. Additionally, the City conducts cyber security awareness education and training for staff.

Impact of State Budget on City Revenues
A number of the City’s revenues are collected or subvened by the State (such as sales tax and motor vehicle license fees) or allocated in accordance with State law (such as property taxes). Thus, State budget decisions can have an impact on City finances. Approximately 70% of the City’s General Fund revenues are collected by the State or otherwise allocated in accordance with State law. During prior State fiscal crises, the State has reallocated a portion of such revenues to assist in its own budget balancing, or taken other actions that adversely impacted the financial condition of local governments, including the City. Proposition 1A, adopted in 2004, amended the State Constitution to impose limits on the State’s ability to reallocate local revenue. See “CONSTITUTIONAL AND STATUTORY PROVISIONS AFFECTING CITY TAXES AND APPROPRIATIONS – Proposition 1A; Proposition 22” in the Official Statement.

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Dissolution of Redevelopment Agency. On December 29, 2011, the California Supreme Court upheld Assembly Bill IX 26 that provided for the dissolution of all redevelopment agencies in the State. The effect of AB 1x26 upon the City is the termination of the Former Agency’s redevelopment functions and the transfer of such functions to a successor agency (the City Council elected the City to becomes the Successor Agency to the Redevelopment Agency of the City of La Mesa (the “Former Redevelopment Agency”), referred to in this context as the “Successor Agency”) tasked with winding down the Former Agency’s redevelopment activities.

Under AB 1x26, the Successor Agency cannot enter into new redevelopment projects or obligations and its assets can be used only to pay enforceable obligations in existence in mid-2011, when AB 1x26 was signed by the Governor. In addition, the Successor Agency will receive tax increment revenues in amounts that are sufficient to pay 100% (but no greater amount) of such enforceable obligations until such obligations are paid in full, at which time the Successor Agency will be dissolved. Certain tax revenues formerly allocable to the Commission will continue to be available to the Successor Agency to pay certain obligations, and a portion of such revenues may be redirected to other taxing agencies, such as the County, school districts and the City. The Successor Agency’s activities are subject to review by an oversight board established under AB 1x26.

On June 27, 2012, the Governor signed Assembly Bill 1484 (“AB 1484”), which made certain amendments to AB 1x26. Under AB 1484, the County Auditor and Controller, the State Department of Finance and the State Controller may require the return of funds improperly spent or transferred to a public entity in conflict with the provisions of the Community Redevelopment Law, as amended by AB 1x26 and AB 1484, and if such funds are not returned within 60 days, they may be recovered through an offset of sales and use tax or property tax allocations to the local agency, which, in the case of the Successor Agency, is the City. In dealing with the wind down, in 2012, the City received a determination from the Department of Finance that denied certain obligations of the Former Agency owed to the City as enforceable obligations. In 2018, however, the Oversight Board approved a repayment schedule and the Department of Finance issued a determination letter approving the amounts owed to the City as an enforceable obligation. Additionally, in fiscal year 2016- 17, the City was ordered to transfer certain assets back to the Successor Agency as an unallowable transfer of assets. See the City’s audited financial statements for fiscal year ended June 30, 2025 attached hereto as APPENDIX B for information about the impact on the City of the dissolution of the Former Redevelopment Agency.

Future State Budgets. The City cannot predict what actions will be taken in future years by the State Legislature and the Governor to address the State’s current or future budget deficits. Future State budgets will be affected by national and state economic conditions and other factors over which the City has no control. To the extent that the State budget process results in reduced revenues to the City, the City will be required to make adjustments to its budget. Decreases in such revenues may have an adverse impact on the City’s ability to pay scheduled debt service on the Bonds.

Retirement Programs
This caption contains certain information relating to the California Public Employees’ Retirement System (“PERS”). The information is primarily derived from information produced by PERS, its independent accountants and actuaries. The City has not independently verified the information provided by PERS and makes no representations and expresses no opinion as to the accuracy of the information provided by PERS.

The comprehensive annual financial reports of CalPERS are available on its website at www.calpers.ca.gov. The CalPERS website also contains CalPERS’ most recent actuarial valuation reports and other information concerning benefits and other matters. Such information is not incorporated by reference herein. The City cannot guarantee the accuracy of such information. Actuarial assessments are “forwardlooking” statements that reflect the judgment of the fiduciaries of the pension plans, and are based upon a variety of assumptions, one or more of which may not materialize or be changed in the future. Actuarial assessments will change with the future experience of the pension plans.

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Plan Description. The City contributes to two plans administered by PERS, which acts as a common investment and administrative agent for its participating member employers. Employees vest after five years of service and may receive retirement benefits at age 50. All qualified permanent and probationary employees are eligible to participate depending on the employee classification: (1) Miscellaneous Employee Pension Plan, an agent multiple-employer defined benefit plan (“Miscellaneous Plan”); or (2) Safety Employee Pension Plan, a cost-sharing employer defined pension plan (“Safety Plan”). Benefit provisions under the Miscellaneous and Safety Plans are established by State statute and City resolution. PERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the PERS website (https://www.calpers.ca.gov). Such information is not incorporated by reference herein. The City cannot guarantee the accuracy of such information.

Provisions and Benefits. The Miscellaneous and Safety Plan’s provisions and benefits in effect at June 30, 2025, are summarized below:

Miscellaneous Employee Plan
Miscellaneous Plan
Hire Date
Prior to
1/1/2011
On or after 1/1/2011
and
prior to 1/1/2013
On or after
1/1/2013
Benefit Formula 3.0% at 60 2.5% at 55 2.0% at 62
Benefit Vesting Schedule 5 years 5 years 5 years
Lifetime Benefit Payments Monthly Monthly Monthly
Retirement Age 50-67+ 50-57+ 52-67+
Required Employee Contribution Rate 11.9% 11.9% 11.9%
Safety Employee Plan
Safety Plan
Hire Date
Prior to
1/1/2011
On or after 1/1/2011
and
prior to 1/1/2013
On and after
1/1/2013
Benefit Formula 3.0% at 50 3.0% at 55 2.7% at 57
Benefit Vesting Schedule 5 years 5 years 5 years
Lifetime Benefit Payments Monthly Monthly Monthly
Retirement Age 50 50 50
Required Employee Contribution Rate 21.37% 21.37% 21.37% Employees Covered. At the June 30, 2023 valuation date, the following employees were covered by the benefit terms for the Miscellaneous Plan: (1) 292 inactive employees or beneficiaries currently receiving benefits; (2) 233 inactive employees entitled to but not yet receiving benefits; and (3) 144 active employees.

At the June 30, 2023 valuation date, the following employees were covered by the benefit terms for the Safety Plan: (1) 217 inactive employees or beneficiaries currently receiving benefits; (2) 75 inactive employees entitled to but not yet receiving benefits; and (3) 106 active employees.

PERS Contributions and Funding Policy. Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined based on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate.

Funding contributions for the plan is determined annually on an actuarial basis as of June 30 by PERS. The actuarially determined rate is the estimated amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Additionally, and depending on the employee group, retirement plan and tier, City employees have

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agreed (through employment contracts) to contribute a portion of the City’s required contribution rate (also known as “cost sharing”) in an amount ranging from 3-6% of wages subject to PERS.

PERS contributions have experienced significant increases due to the PERS approved decrease in the assumed rate of return that the plan assets are expected to generate. A decrease in the assumed rate of return does not influence current normal retirement costs as significantly as it affects the unfunded accrued liability (“UAL”). The UAL is the difference between the amount that should be held in investments (for future retirement payouts) and the actual amount held in investments.

Employees hired on or after January 1, 2013 who meet the definition of a “New Member” are subject to the California Public Employees’ Pension Reform Act of 2013 (“AB 340”), which was signed by the State Governor on September 12, 2012. AB 340 established a third pension tier (2% at 62 formula for Miscellaneous Plan employees and 2.7% at 57 formula for Safety Plan employees) with a maximum benefit formula of 2.5% at age 67. Benefits for New Members are calculated on the highest average annual compensation over a consecutive 36 month period. Employees are required to pay at least 50% of the total normal cost rate. New Members are currently required to contribute 6.25% of their annual covered salary under the Miscellaneous Plan and 12.25% of their annual covered salary under the Safety Plan. The City does not pay any portion of such contributions. See the caption “—AB 340” below.

The City had an unfunded accrued liability of $86,466,341 for the Safety Plan as of June 30, 2024, based on a market value of assets of $158,101,592 as set forth in the most recent actuarial report prepared by CalPERS. The City had an unfunded accrued liability of $46,407,537 for the Miscellaneous Plan as of June 30, 2024, based on a market value of assets of $100,778,743 as set forth in the most recent actuarial report prepared by CalPERS.

Implementation of GASB Statement No. 68. In June 2012 and November 2013, the Governmental Accounting Standards Board issued GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27 (“GASB 68”) and GASB No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – An Amendment of GASB Statement No. 68 (“GASB Statement No. 71”), respectively. The primary objective of GASB 68, as amended, is to improve accounting and financial reporting by state and local governments for pensions and improve information provided by state and local governmental employers about financial support for pensions that is provided by other entities.

GASB 68, as amended, revised the accounting treatment of defined benefit pension plans, changing the way expenses and liabilities are calculated and how state and local government employers report those expenses and liabilities in their financial statements. Major changes include: (i) the inclusion of unfunded pension liabilities on the government’s balance sheet (previously, such unfunded liabilities were typically included as notes to the government’s financial statements); (ii) pension expense incorporates more rapid recognition of actuarial experience and investment returns and is no longer based on the employer’s actual contribution amounts; (iii) lower actuarial discount rates that are required to be used for underfunded plans in certain cases for purposes of the financial statements; (iv) closed amortization periods for unfunded liabilities that are required to be used for certain purposes of the financial statements; and (v) the difference between expected and actual investment returns to will be recognized over a closed five-year smoothing period. The reporting requirements took effect in fiscal year 2014-15. Based on the adoption of the new accounting standards, beginning with the fiscal year 2014-15 actuarial valuation, the annual required contribution and the annual pension expense will be different. GASB 68, as amended, changes the reporting and disclosure requirements for financial statement accounting purposes, but it does not change the City’s pension plan funding obligations and, therefore, had no effect on the City’s General Fund.

Information shown in this section that has been sourced from a PERS Actuarial Valuation Report has not been prepared in accordance with GASB 68, as amended. For a presentation of additional information that

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is required by GASB 68, see the City’s Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025, which is attached as APPENDIX B. The City has implemented the provisions of GASB 68.

Section 115 Trust. In 2016, the City established an irrevocable CalPERS Section 115 Pension Trust (“115 Trust”) to prefund future employer pension contributions in an effort to help manage pension rate volatility, enhance local control of funds, and stabilize future pension payments. The 115 Trust is administered by CalPERS through the California Employers’ Pension Prefunding Trust. The City, however, retains authority over the timing and amount of contributions and withdrawals from the 115 Trust. The City’s Budget reported an unadjusted trust value of approximately $7.7 million noting that pension costs are expected to peak around 2030.

PARS. The PARS Retirement Enhancement Plan is an enhanced single employer defined benefit pension plan administered by Public Agency Retirement Services (PARS). The plan enhancement was designed to provide a retirement factor of 3.0% at 60. At the time the plan was implemented, the CalPERS benefit only extended to 2.0% at 55. The plan was closed on January 13, 2006 when employees voted to change to the 3.0% at 60 benefit formula through CalPERS. At this time the nature of the plan changed and the participants were divided into three groups, those that were already retired and receiving the defined benefit of the enhancement plan, those that are currently inactive and will not receive a defined benefit payment but do have their contributions set aside and available at retirement, and one active employee.

The benefit provided by PARS is equal to a percentage of the highest pay multiplied by years of service, with the percentage varying by retirement age based on a modified 3.0% target offset by CalPERS 3.0% at 60 formula for current actives. There are no active participants and twenty-one former employees who retired with PARS or are currently considered inactive. Benefits are increased by a 2% annual cost of living adjustment after retirement. The PARS plan has been closed to new entrants since January 7, 2006. Employees that elected to change over to the CalPERS 3.0% at 60 formula will receive their contributions made to the plan in a lump sum payment upon retirement. See the City’s audited financial statements for fiscal year 2024-25 attached hereto as Appendix B.

Net Pension Liability. In accordance with GASB 68, the City is required to measure and report liabilities associated with pension liability. The City’s estimated pension liability at June 30, 2024 was $42,161,005 for the Miscellaneous Plan and $80,863,068 for the Safety Plan.

California Public Employee’s Pension Reform Act of 2013 (“PEPRA”). On September 12, 2012, Governor Brown signed AB 340, a bill that enacted the California Public Employees’ Pension Reform Act of 2013 (“PEPRA”) and that also amended various sections of the State Education and Government Codes. AB 340 (i) increases the retirement age for new State, school, and city and local agency employees depending on job function, (ii) caps the annual PERS pension benefit payouts, (iii) addresses numerous abuses of the system, and (iv) requires State, school, and certain city and local agency employees to pay at least half of the costs of their PERS pension benefits. PEPRA applies to all public employers except the University of California, charter cities and charter counties (except to the extent they contract with PERS).

The provisions of AB 340 went into effect on January 1, 2013 with respect to new State, school, and city and local agency employees hired on that date and after; existing employees who are members of employee associations, including employee associations of the City, will have a five-year window to negotiate compliance with AB 340 through collective bargaining. If no deal is reached by January 1, 2018, a city, public agency or school district could force employees to pay their half of the costs of PERS pension benefits, up to 8% of pay for civil workers and 11% or 12% for public safety workers.

PERS has predicted that the impact of AB 340 on employers, including the City and other employers in the PERS system, and employees will vary, based on each employer’s current level of benefits. To the extent that the new formulas lower retirement benefits, employer contribution rates could decrease over time as current employees retire and employees subject to the new formulas make up a larger percentage of the workforce. This

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change would, in some circumstances, result in a lower retirement benefit for employees than they currently earn. Additionally, PERS has noted that changes arising from AB 340 could ultimately have an adverse impact on public sector recruitment in areas that have historically experienced recruitment challenges due to higher pay for similar jobs in the private sector.

More information about AB 340 can be accessed through the PERS’s web site at www.calpers.ca.gov/index.jsp?bc=/member/retirement/pension-reform-impacts.xml&pst=ACT& pca=ST.

This internet address is provided for reference and convenience only; the information contained within this website may not be current and has not been reviewed by the City and is not incorporated herein by reference.

The City is unable to predict the amount of PERS liabilities in the future or the amount of the PERS contributions which the City may be required to make, all as a result of the implementation of AB 340, the initiatives described above, or due to additional PERS Board action.

Other Post-Employment Benefits
The City provides the minimum required employer contribution under the CalPERS Health Plan for eligible retirees and surviving spouses in receipt of a pension benefit from CalPERS. An employee is eligible for this employer contribution provided they are vested in their CalPERS pension benefit and commence payment of their pension benefit within 60 days of retirement with the City. Vesting requires at least 5 years of CalPERS total service. The surviving spouse of an eligible retiree who elected spouse coverage under CalPERS is eligible for the employer contribution upon the death of the retiree. The scheduled minimum required employer contributions for each eligible retiree under the plan are $158 per month per employee in 2025.

By unanimous vote of the City Council on May 12, 2009, the City adopted pre-funding the CalPERS Health Plan through the California Employers’ Retiree Benefit Trust (CERBT), a GASB eligible trust. The CERBT has an investment policy with an expected long-term rate of return equal to 6.00% for employers fullyfunding the annual required contribution each year. For the year ended June 30, 2025, the City contributed $396,253 to CERBT, and $306,149 in implicit subsidy for the total contribution after the measurement date of $702,402.

For the year ended June 30, 2025, the City’s annual required contribution is $290,947. This amount is comprised of the present value of benefits accruing in the fiscal year (normal cost) plus a 30-year amortization (on a level-dollar basis) of the unfunded actuarial accrued liability (past service liability) at June 30, 2013. The net OPEB asset at the end of a fiscal year will reflect any actual retiree health contributions and any GASB eligible pre-funding amounts made during the period.

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Funded Status and Funding Progress
The following table provides the changes in the City’s OPEB plan net OPEB liability and related ratios:

Fiscal Year 2024-25
(Measurement
Period 2023-24)
Total OPEB Liability
Service cost $ 198,340
Interest on total OPEB liability 468,616
Differences Between Excepted and Actual (380,829)
Changes of assumptions 25,712
Benefit payments, including refunds of member contributions (507,380) Net change in total pension liability (195,541)
Total OPEB liability ‐ beginning of fiscal year 7,373,548 Total OPEB liability ‐ end of fiscal year $ 7,178,007
Plan Fiduciary Net Position
Contributions ‐ employer $ 1,003,552
Net investment income 761,999
Benefit Payments (507,380)
Administrative Payment (2,241)
Net change in plan fiduciary net position 1,255,930
Total fiduciary net position ‐ beginning of fiscal year 6,617,304 Total fiduciary net position ‐ end of fiscal year $ 7,873,234 Net pension liability ‐ end of fiscal year $ (695,227)
Plan fiduciary net position as a percentage of the total OPEB liability 109.7% Covered payroll 31,009,797
Net OPEB liability as a percentage of covered payroll -2.2% ________________________
Source: City of La Mesa Comprehensive Annual Financial Report for Fiscal Year 2024-25.

Labor Relations
The City had approximately [__] full- and part-time employees as of June 30, 2025. Certain City employees are represented by three labor unions and associations, as shown below. Certain management and confidential employees are exempt from collective bargaining. The City has never experienced a strike, slowdown or work stoppage. The City recently finalized negotiations with the firefighters union, the result of which increased salaries at a cost to the City of approximately $550,000 in Fiscal Year 2026-27.

Group Employees Contract Expires
La Mesa City Employees Association [__] June 30, 2028
Heartland Firefighters of La Mesa Local No. 4759 [__] June 30, 2029 La Mesa Police Officers’ Association [__] June 30, 2027

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Risk Management
The City is exposed to various risks of loss related to torts, theft or damage to, and destruction of, assets, errors and omissions, injuries to employees, and natural disasters. The City manages these risks through a combination of self-insurance, participation in risk-sharing pools, and the purchase of commercial insurance.

See Note 13 to APPENDIX B – “Annual Comprehensive Financial Report Fiscal Year Ended June 30, 2025.” Personal Income
The following table shows of per capita personal income for the County, State of California and the United States from 2020 through 2025.

PER CAPITA PERSONAL INCOME(1)
San Diego County, State of California, and United States 2020 through 2025
Year
County of
San Diego California United States
2020 67,479 70,090 59,151
2021 73,319 77,113 64,692
2022 75,055 77,230 66,303
2023 79,921 81,231 70,013
2024 84,312 86,378 73,227
2025 -
(2) 91,116 76,393
________________________
(1) Per capita personal income is the total personal income divided by the total mid-year population estimates of the U.S. Bureau of the Census. All dollar estimates are in current dollars (not adjusted for inflation). (2) Data not yet available.

Source: U.S. Department of Commerce, Bureau of Economic Analysis.

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Employment
The following table summarizes the labor force, employment and unemployment figures for the City, the County and the State from 2021 through 2025.

CIVILIAN LABOR FORCE, EMPLOYMENT AND UNEMPLOYMENT RATE
City, County and State
2021 through 2025(1)
Year Area Labor Force Employment Unemployment
Unemployment
Rate (%)
2021 City 30,700 28,700 2,000 6.4
County 1,575,400 1,475,200 100,200 6.4
State 19,013,800 17,619,300 1,394,500 7.3
2022 City 31,300 30,200 1,100 3.4
County 1,613,900 1,558,800 55,100 3.4
State 19,268,400 18,441,400 826,100 4.3
2023 City 31,800 30,600 1,200 3.7
County 1,642,500 1,581,500 61,000 3.7
State 19,514,600 18,593,600 921,000 4.7
2024 City 32,000 30,700 1,300 4.2
County 1,660,700 1,589,700 71,000 4.3
State 19,692,800 18,650,700 1,042,200 5.3
2025 City 32,181 30,781 1,409 4.4
County 1,671,100 1,594,300 76,800 4.6
State 19,823,800 18,738,500 1,085,300 5.5
________________________
(1) Data is based on annual averages, unless otherwise specified, and is not seasonally adjusted.

Source: U.S. Department of Labor – Bureau of Labor Statistics, California Employment Development Department.

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Industry
The City is included in the San Diego-Chula Vista-Carlsbad Metropolitan Statistical Area. The distribution of employment in said Metropolitan Statistical Area is presented in the following table for the calendar years 2021 through 2025. These figures are countywide statistics and may not necessarily accurately reflect employment trends in the City.

INDUSTRY EMPLOYMENT & LABOR FORCE ANNUAL AVERAGES
San Diego-Chula Vista-Carlsbad Metropolitan Statistical Area Calendar Years 2021 through 2025
2021 2022 2023 2024 2025
Civilian Labor Force(1)
Employment 1,475,200 1,558,800 1,581,500 1,589,700 1,594,300 Unemployment Rate 6.4% 3.4% 3.7% 4.3% 4.6%
Total Farm 9,000 9,600 9,400 9,100 8,700
Total Nonfarm 1,442,100 1,531,400 1,553,800 1,566,600 1,564,400 Mining, Logging, and Construction 84,100 87,800 89,700 90,800 89,000 Manufacturing 114,400 116,900 115,500 112,900 110,400
Service-Providing 1,243,500 1,326,800 1,348,600 1,363,000 1,364,900 Wholesale Trade 42,100 43,700 43,500 43,000 41,200
Retail Trade 137,600 138,600 138,800 137,300 135,700
Transportation, Warehousing, Utilities 37,100 40,100 41,300 42,300 42,100 Information 21,500 22,100 22,000 20,400 18,100
Financial Activities 76,200 76,900 73,100 72,900 73,200 Professional and Business Services 265,300 282,500 275,600 267,000 263,100 Private Education and Health Services 216,700 228,700 246,600 261,800 273,100 Leisure and Hospitality 161,600 193,100 200,900 202,300 203,200 Other Services 47,500 54,400 56,800 57,600 58,000
Government 237,900 246,600 250,100 258,400 257,300
Total, All Industries(3) 1,451,100 1,541,000 1,563,100 1,575,700 1,573,100 ________________________
(1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike. (3) Data is based on annual averages, unless otherwise specified, and is not seasonally adjusted. Data may not add due to rounding.

Source: Labor Division of the California State Employment Development Department; March 2025 Benchmark.

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Largest Employers in the County
The following table shows the largest employers located in the County for fiscal year 2024-25.

Employer
Number of
Employees Rank
Percentage of Total
County Employment
U.S. Navy 91,317 1 5.74%
MCS MCRD San Diego Marine Corps 42,687 2 2.68
University of California, San Diego 41,698 3 2.62
County of San Diego 20,471 4 1.29
Sharp 20,432 5 1.28
Scripps San Diego 17,760 6 1.12
Kaiser Permanente Vandever Med 12,859 7 0.81
UC San Diego Health 12,675 8 0.80
Merchants Building Maintenance 6,000 9 0.38
Cubic Corporation 6,000 10 0.38
________________________
Source: San Diego County Annual Comprehensive Financial Report for Fiscal Year ended June 20, 2025.

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APPENDIX B

ANNUAL COMPREHENSIVE FINANCIAL REPORT
FISCAL YEAR ENDED JUNE 30, 2025

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APPENDIX C

FORM OF OPINION OF BOND COUNSEL
Upon delivery of the Bonds, Best Best & Krieger LLP, Riverside, California, Bond Counsel to the City of La Mesa, proposes to render their final approving opinion with respect to the Bonds in substantially the following form:
[Closing Date]
City Council
City of La Mesa
8130 Allison Avenue
La Mesa, California 91942
Re: $_________ City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure)
Ladies and Gentlemen:

We have examined a certified copy of the record of the proceedings relative to the issuance and sale of $_________ City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Police, and Emergency Services Measure) (the “Bonds”). As to questions of fact which are material to our opinions, we have relied upon the representations of the City contained in the Agreement, and in certificates of its authorized officers which have been delivered to us for the purpose of supplying such facts, without having undertaken to verify the accuracy of any such representations by independent investigation. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to such terms in the Bond Purchase Agreement related to the Bonds.

The opinions expressed herein are based on an analysis of existing laws, regulations, rulings and court decisions and cover certain matters not directly addressed by such authorities. Such opinions may be affected by actions taken or omitted or events occurring after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions are taken or omitted or events do occur or any other events come to our attention after the date hereof. Accordingly, this opinion speaks only as of its date and is not intended to, and may not, be relied upon in connection with any such actions, events or matters. Our engagement with respect to the Bonds has concluded with their issuance, and we disclaim any obligation to update this letter.

We have assumed the genuineness of all documents and signatures presented to us (whether as originals or as copies) and the due and legal execution and delivery thereof by, and validity against, any parties other than the City. We have assumed, without undertaking to verify, the accuracy of the factual matters represented, warranted or certified in the documents, and of the legal conclusions contained in the opinions, referred to in the second paragraph hereof. Furthermore, we have assumed compliance with all covenants and agreements contained in the Paying Agent Agreement and the Tax Certificate, including (without limitation) covenants and agreements compliance with which is necessary to ensure that future actions, omissions or events will not cause interest on the Bonds to be included in gross income for federal income tax purposes. We call attention to the fact that the rights and obligations under the Bonds, the Resolution, the Paying Agent Agreement and the Tax Certificate and their enforceability may be subject to bankruptcy, insolvency, reorganization, arrangement, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, to the exercise of judicial

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discretion in appropriate cases, and to the limitations on legal remedies against cities and their subordinate entities in the State of California. We express no opinion with respect to any indemnification, contribution, penalty, choice of law, choice of forum, choice of venue, waiver or severability provisions contained in the documents mentioned in the preceding sentence. Finally, we undertake no responsibility for the accuracy, completeness or fairness of the Official Statement or other offering materials relating to the Bonds and express no opinion with respect thereto.

Based upon the foregoing, we are of the opinion, under existing law, that:

1. The Bonds have been duly and validly authorized by the City.

2. The Bonds constitute valid and binding general obligations of the City, payable as to both principal and interest from the proceeds of the levy of ad valorem taxes on all property subject to such taxes in the City, which taxes are unlimited as to rate or amount.

3. The Paying Agent Agreement has been duly and validly authorized, executed and delivered by the City and, assuming the Paying Agent Agreement constitutes the legally valid and binding obligation of the Paying Agent, constitutes a legally valid and binding obligation of the City, enforceable against the City in accordance with its terms.

4. Under existing statutes, regulations, rulings and judicial decisions, interest on the Bonds is excluded from gross income for federal income tax purposes. Interest on the Bonds is not an item of tax preference for purposes of calculating the federal alternative minimum tax imposed on individuals and corporations, however, interest on the Bonds is taken into account in determining the annual adjusted financial statement income of certain corporations for the purpose of computing the alternative minimum tax imposed on certain corporations. Although the interest on the Bonds is excluded from gross income for purposes of federal income taxation, the accrual or receipt of interest on the Bonds, or any portion thereof, may otherwise affect the federal income tax liability of the recipient. The extent of these other tax consequences will depend on the recipient’s particular tax status or other items of income or deduction. We express no opinion regarding any such consequences.

5. Interest on the Bonds is exempt from State of California personal income tax.

The opinions expressed herein may be affected by actions taken (or not taken) or events occurring (or not occurring) after the date hereof. We have not undertaken to determine, or to inform any person, whether any such actions or events are taken or do occur. The Paying Agent Agreement permits certain actions to be taken or to be omitted if a favorable opinion of Bond Counsel is provided with respect thereto.

No opinion is expressed herein as to the effect of such action on the exclusion from gross income of interest for federal income tax purposes with respect to any Bond if any such action is taken or omitted based upon the advice of counsel other than ourselves. Other than as expressly stated herein, we express no opinion regarding tax consequences with respect to the Bonds.

The opinions expressed herein as to the exclusion from gross income of interest on the Bonds are based upon certain representations of fact and certifications made by the City and others and are subject to the condition that the City complies with all requirements of the Internal Revenue Code of 1986, as amended (the “Code”), that must be satisfied subsequent to the issuance of the Bonds to assure that such interest will not become includable in gross income for federal income tax purposes. Failure to comply with such requirements of the Code might cause interest on the Bonds to be included in gross income for federal income tax purposes retroactive to the date of issuance of the Bonds. The City has covenanted in the Paying Agent Agreement to comply with all such requirements.

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The rights of the owners of the Bonds and the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights heretofore or hereafter enacted, to the extent constitutionally applicable, and their enforcement may also be subject to the exercise of judicial discretion in appropriate cases.

Respectfully submitted,

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APPENDIX D

FORM OF CONTINUING DISCLOSURE CERTIFICATE
THIS CONTINUING DISCLOSURE CERTIFICATE (the “Disclosure Certificate”) is executed and delivered by the City of La Mesa (the “Issuer”), in connection with the issuance and delivery of its $_________ General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “Bonds”). The Bonds are being issued pursuant to that certain Paying Agent Agreement dated as of August 1, 2026 (the “Agreement”), by and between the Issuer and Zions Bancorporation, N.A. as paying agent. The Issuer covenants as follows:

SECTION 1. Purpose of the Disclosure Certificate. This Disclosure Certificate is being executed and delivered by the Issuer for the benefit of the Owners of the Bonds and in order to assist the Participating Underwriter in complying with the Rule.

SECTION 2. Definitions. In addition to the definitions set forth in the Agreement which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
“Annual Report” shall mean any Annual Report provided by the Issuer pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Disclosure Representative” shall mean the City Manager, Assistant City Manager or Finance Director of the Issuer or either of their designees, or such other officer or employee as the Issuer shall designate in writing to the Dissemination Agent from time to time. “Dissemination Agent” shall mean, initially, Urban Futures, Inc., or any successor Dissemination Agent designated in writing by the Issuer and which has been filed with the Dissemination Agent a written acceptance of such designation.
“Listed Events” shall mean any of the events listed in Section 5(a) of this Disclosure Certificate. “Participating Underwriter” shall mean Oppenheimer & Co., Inc., the original underwriter of the Bonds required to comply with the Rule in connection with offering of the Bonds. “Repository” shall mean the Electronic Municipal Market Access System of the Municipal Securities Rulemaking Board, which can be found at http://emma.msrb.org/, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future.
“Rule” shall mean 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. “Tax-exempt” shall mean that interest on the Bonds is excluded from gross income for federal income tax purposes, whether or not such interest is includable as an item of tax preferences or otherwise includable directly or indirectly for purposes of calculating any other tax liability, including any alternative minimum tax or environmental tax.

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SECTION 3. Provision of Annual Reports.
(a) The Issuer shall, or shall cause the Dissemination Agent upon written direction to, not later than March 31 after the end of the Issuer’s Fiscal Year, commencing with the report for the Fiscal Year ending June 30, 2026, provide to the Repository an Annual Report which is consistent with the requirements of Section 4 of this Disclosure Certificate. 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 Issuer may be submitted separately from and later than the balance of the Annual Report if they are not available by the date required above for the filing of the Annual Report.

The Annual Report shall be provided at least annually notwithstanding any Fiscal Year longer than 12 calendar months. The Issuer’s Fiscal Year is currently effective from July 1 to the immediately succeeding June 30 of the following year. The Issuer will promptly notify the Repository and the Paying Agent and the Dissemination Agent of a change in the Fiscal Year dates. The Issuer 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 it hereunder. The Dissemination Agent may conclusively rely upon such certification of the Issuer and shall have no duty or obligation to review such Annual Report.
(b) Not later than fifteen (15) Business Days prior to the date specified in subsection (a) for providing the Annual Report to the Repository, the Issuer shall provide the Annual Report to the Dissemination Agent (if the Issuer is not the Dissemination Agent). If by fifteen (15) Business Days prior to such date the Dissemination Agent has not received a copy of the Annual Report, the Dissemination Agent (if the Issuer is not the Dissemination Agent) shall contact the Issuer to determine if the Issuer is in compliance with subsection (a).
(c) If the Dissemination Agent is unable to verify that an Annual Report has been provided to the Repository by the date required in subsection (a), the Dissemination Agent shall send a notice in a timely manner to the Repository, in substantially the form attached as Exhibit A. (d) The Dissemination Agent shall promptly after receipt of the Annual Report, file a report with the Issuer certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date it was provided to the Repository. The Dissemination Agent’s duties under this subsection (d) shall exist only if the Issuer provides the Annual Report to the Dissemination Agent for filing.

SECTION 4. Content of Annual Reports. The Issuer’s Annual Report shall contain or include by reference the following:
(a) The audited financial statements of the Issuer for the most recent Fiscal Year of the Issuer then ended. If the audited financial statements are not available by the time the Annual Report is required to be filed, the Annual Report shall contain any unaudited financial statements of the Issuer in a format similar to the financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available. Audited financial statements of the Issuer shall be audited by such auditor as shall then be required or permitted by State law. Audited financial statements shall be prepared in accordance with generally accepted accounting principles as prescribed for governmental units by the Governmental Accounting Standards Board; provided, however, that the Issuer may from time to time, if required by federal or state legal requirements, modify the basis upon which its financial statements are prepared. In the event that the Issuer shall modify the basis upon which its financial statements are prepared, the Issuer shall provide a notice of such modification to the Repository, including a reference to

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the specific federal or state law or regulation specifically describing the legal requirements for the change in accounting basis.
(b) Any change to the County of San Diego investment pool which would affect the Issuer’s access to property tax collections used to pay debt service on the Bonds. (c) Assessed value of taxable property within the jurisdiction of the Issuer for the most recent Fiscal Year.
(d) If and to the extent such information is available from the County, property tax levies and collections for the Issuer for the most recent Fiscal Year. (e) Amount of all general obligation debt of the Issuer outstanding, and total scheduled debt service on such general obligation debt.

Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the Issuer or related public entities, which have been submitted to each of the Repositories or the Securities and Exchange Commission. If the document included by reference is a final official statement, it must be available from the Municipal Securities Rulemaking Board. The Issuer shall clearly identify each such other document so included by reference.

SECTION 5. Reporting of Significant Events.
(a) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds in a timely manner not in excess of 10 business days after the occurrence of the event:

1. principal and interest payment delinquencies.

2. tender offers.

3. defeasances.

4. rating changes.

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

6. unscheduled draws on the debt service reserves reflecting financial difficulties.

7. unscheduled draws on credit enhancement reflecting financial difficulties.

8. substitution of the credit or liquidity providers or their failure to perform.

9. bankruptcy, insolvency, receivership or similar event of the Issuer. For the purposes of the event identified in this Section 5(a)(9), the event is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent or similar officer for the Issuer in a proceeding under the U.S. Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the Issuer, or if such jurisdiction has been assumed by leaving the existing governmental body and officials or officers in possession but subject to the supervision and orders

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of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the Issuer.

10. 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 (for the definition of “financial obligation,” see clause (e)). (b) Pursuant to the provisions of this Section 5, the Issuer shall give, or cause to be given, notice of the occurrence of any of the following events with respect to the Bonds, if material:

1. non-payment related defaults.

2. modifications to rights of Bondholders.

3. bond calls.

4. unless described under Section 5(a)(5) above, adverse tax opinions, material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds.

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

6. the consummation of a merger, consolidation, or acquisition involving the Issuer or the sale of all or substantially all of the assets of the Issuer, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms.

7. Appointment of a successor or additional trustee or paying agent with respect to the Bonds or the change of name of such a trustee or paying agent.

8. Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material (for the definition of “financial obligation,” see clause (e)).
(c) Whenever the Issuer obtains knowledge of the occurrence of a Listed Event under Section 5(b) hereof, the Issuer shall as soon as possible determine if such event would be material under applicable federal securities laws.
(d) If the Issuer determines that knowledge of the occurrence of a Listed Event under Section 5(c) hereof would be material under applicable federal securities laws, the Issuer shall, or shall cause the Dissemination Agent (if not the Issuer) to file a notice of such occurrence with the Repository in a timely manner not in excess of 10 business days after the occurrence of the event. The Dissemination Agent shall have no duty to independently prepare or file any report of Listed Events. The Dissemination Agent may conclusively rely on the Issuer’s determination of materiality pursuant to Section 5(c). (e) “Financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.

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SECTION 6. Termination of Reporting Obligation. The obligations of the Issuer under this Disclosure Certificate shall terminate upon the legal defeasance, prior redemption or payment in full of all of the Bonds. If such termination occurs prior to the final maturity of the Bonds, the Issuer shall give notice of such termination in the same manner as for a Listed Event under Section 5.

SECTION 7. Dissemination Agent. The Issuer may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under the Disclosure Certificate, and may discharge any such Dissemination Agent, with or without appointing a successor Dissemination Agent. If at any time there is not any other designated Dissemination Agent, the Issuer shall be the Dissemination Agent. The Dissemination Agent may resign by providing thirty days written notice to the Issuer. The Dissemination Agent shall not be responsible for the content of any report or notice prepared by the Issuer.

The Dissemination Agent shall have no duty to prepare any information report nor shall the Dissemination Agent be responsible for filing any report not provided to it by the Issuer in a timely manner and in a form suitable for filing.

SECTION 8. Amendment. (a) This Disclosure Certificate may be amended, by written agreement of the parties, without the consent of the Owners, if all of the following conditions are satisfied:
(1) such amendment is made in connection with a change in circumstances that arises from a change in legal (including regulatory) requirements, a change in law (including rules or regulations) or in interpretations thereof, or a change in the identity, nature or status of the Issuer or the type of business conducted thereby, (2) this Disclosure Certificate as so amended would have complied with the requirements of the Rule as of the date of this Disclosure Certificate, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances, (3) there shall have been delivered to the Issuer an opinion of a nationally recognized bond counsel or counsel expert in federal securities laws, addressed to the Issuer, to the same effect as set forth in clause (2) above, (4) the Issuer shall have delivered to the Dissemination Agent an opinion of nationally recognized bond counsel or counsel expert in federal securities laws, addressed to the Issuer, to the effect that the amendment does not materially impair the interests of the Owners, and (5) the Issuer shall have delivered copies of such opinion and amendment to each Repository.
(b) This Disclosure Certificate may be amended, by written agreement of the parties, upon obtaining consent of Owners at least 25% of the outstanding Bonds; provided that the conditions set forth in Section 8(a)(1), (2) and (3) have been satisfied; and provided, further, that neither the Paying Agent or the Dissemination Agent shall be obligated to enter into any such amendment that modifies or increases its duties or obligations hereunder.
(c) To the extent any amendment to this Disclosure Certificate results in a change in the type of financial information or operating data provided pursuant to this Disclosure Certificate, the first Annual Report provided thereafter shall include a narrative explanation of the reasons for the amendment and the impact of the change.
(d) If an amendment is made to the basis on which financial statements are prepared, the Annual Report for the year in which the change is made shall present a comparison between the financial statements or information prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles. Such comparison shall include a quantitative and, to the extent reasonably feasible, qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information.

SECTION 9. Additional Information. Nothing in this Disclosure Certificate shall be deemed to prevent the Issuer 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

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Annual Report or notice of occurrence of a Listed Event, in addition to that which is required by this Disclosure Certificate. If the Issuer 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 Issuer shall have no obligation under this Agreement to update such information or include it in any future Annual Report or notice if occurrence of a Listed Event.

The Issuer acknowledges and understands that other state and federal laws, including but not limited to the Securities Act of 1933 and Rule 10b-5 promulgated under the Securities Exchange Act of 1934, may apply to the Issuer, and that under some circumstances compliance with this Disclosure Certificate, without additional disclosures or other action, may not fully discharge all duties and obligations of the Issuer under such laws.

SECTION 10. Default. In the event the Issuer fails to comply with any provision in this Disclosure Certificate, the Dissemination Agent may (or shall upon direction of the Owners of 25% in aggregate principal of the Bonds then outstanding or the Participating Underwriter) take all action necessary to cause the Issuer to comply with this Disclosure Certificate. In the event of a failure of the Dissemination Agent to comply with any provision of this Disclosure Certificate, any 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 Issuer to comply with its obligations under this Disclosure Certificate. A default under this Disclosure Certificate shall not be deemed an Event of Default under the Agreement, and the sole remedy under this Disclosure Certificate in the event of any failure of the Issuer to comply with this Disclosure Certificate shall be an action to compel performance.

SECTION 11. Duties, Immunities and Liabilities of Paying Agent and Dissemination Agent. The Dissemination Agent (if other than the Issuer) shall have only such duties as are specifically set forth in this Disclosure Certificate, and the Issuer agrees to indemnify and save the Dissemination Agent and its officers, directors, employees and agents, harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorneys’ fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The Dissemination Agent shall be paid compensation by the Issuer for its services provided hereunder in accordance with its schedule of fees as amended from time to time and all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder. The Dissemination Agent shall have no duty or obligation to review any information provided to them hereunder and shall not be deemed to be acting in any fiduciary capacity for the Issuer, the Bond holders, or any other party. The obligations of the Issuer under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. No person shall have any right to commence any action against the Dissemination Agent hereunder, seeking any remedy other than to compel specific performance of this Disclosure Certificate. The Dissemination Agent shall not be liable under any circumstances for monetary damages to any person for any breach under this Disclosure Certificate.

SECTION 12. Beneficiaries. This Disclosure Certificate shall inure solely to the benefit of the Issuer, the Dissemination Agent, the Participating Underwriter and Owners from time to time of the Bonds, and shall create no rights in any other person or entity.

Dated: __________, 2026 CITY OF LA MESA
By:

Its: City Manager

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EXHIBIT A

NOTICE TO REPOSITORIES OF FAILURE TO FILE ANNUAL REPORT Name of Issuer: City of La Mesa
Name of Bond Issue: $__________ City of La Mesa General Obligation Refunding Bonds, Series 2026 (Fire, Policy and Emergency Services Measure)
Date of Issuance: ____________, 2026
NOTICE IS HEREBY GIVEN that the City of La Mesa (the “City”) has not provided an Annual Report with respect to the above-named Bonds as required by Section 3 of its Continuing Disclosure Certificate dated [__________, 2026]. [The City anticipates that the Annual Report will be filed by ________.] Dated: _________

CITY OF LA MESA
By:

Its: City Manager
cc: Issuer; Urban Futures, Inc.

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APPENDIX E

INFORMATION CONCERNING DTC
The information in this section concerning DTC and DTC’s book-entry only system has been obtained from sources that the City believes to be reliable, but the City takes no responsibility for the completeness or accuracy thereof. The following description of the procedures and record keeping with respect to beneficial ownership interests in the Bonds, payment of principal, premium, if any, accreted value and interest on the Bonds to DTC Participants or Beneficial Owners, confirmation and transfers of beneficial ownership interests in the Bonds and other related transactions by and between DTC, the DTC Participants and the Beneficial Owners is based solely on information provided by DTC to the City which the City believes to be reliable, but the City and the Underwriter do not and cannot make any independent representations concerning these matters and do not take responsibility for the accuracy or completeness thereof. Neither the DTC, Direct Participants, Indirect 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.

The Depository Trust Company (“DTC”), New York, New York, will act as securities depository for the Bonds. The Bonds will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Bond will be issued for each annual maturity of the Bonds, each in the aggregate principal amount of such maturity, and will be deposited through the facilities of DTC.

DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.6 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC 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.

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

Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Bonds are to be accomplished

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by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners.

Beneficial Owners will not receive Bonds representing their ownership interests in Bonds, except in the event that use of the book-entry system for the Bonds is discontinued.

To facilitate subsequent transfers, all Bonds deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Bonds with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not affect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Bonds; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Bonds are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.

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

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

Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Bonds unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the City 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 Bonds are credited on the record date (identified in a listing attached to the Omnibus Proxy).

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

Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the City or the Paying 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.

A Bond Owner shall give notice to elect to have its Bonds purchased or tendered, through its Participant, to the Paying Agent, and shall effect delivery of such Bonds by causing the Direct Participant to transfer the Participant’s interest in the Bonds, on DTC’s records, to the Paying Agent. The requirement for physical delivery of Bonds in connection with an optional tender or a mandatory purchase will be

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deemed satisfied when the ownership rights in the Bonds are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Bonds to the Paying Agent’s DTC account.

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

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

THE PAYING AGENT, AS LONG AS A BOOK-ENTRY ONLY SYSTEM IS USED FOR THE

BONDS, WILL SEND ANY NOTICE OF REDEMPTION OR OTHER NOTICES TO OWNERS ONLY TO DTC. ANY FAILURE OF DTC TO ADVISE ANY DTC PARTICIPANT, OR OF ANY DTC

PARTICIPANT TO NOTIFY ANY BENEFICIAL OWNER, OF ANY NOTICE AND ITS CONTENT

OR EFFECT WILL NOT AFFECT THE VALIDITY OF SUFFICIENCY OF THE PROCEEDINGS

RELATING TO THE REDEMPTION OF THE BONDS CALLED FOR REDEMPTION OR OF ANY OTHER ACTION PREMISED ON SUCH NOTICE.

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APPENDIX F

SUMMARY OF PAYING AGENT AGREEMENT
The following is a summary of certain provisions of the Payment Agent Agreement not otherwise described in the rest of the Official Statement. This summary is not intended to be definitive, and reference is made to the full text of the Paying Agent Agreement on file with the City. [TO COME]

Attachment E
4918-8692-8563v3/200721-0051
$_____

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)

BOND PURCHASE AGREEMENT
_____, 2026
City of La Mesa
8130 Allison Avenue
La Mesa, California 91942
Ladies and Gentlemen:

Oppenheimer & Co. Inc. (the “Underwriter”), offers to enter into this Bond Purchase Agreement (the “Bond Purchase Agreement”) with the City of La Mesa (the “City”) which, upon your acceptance hereof, will be binding upon the City and the Underwriter. This offer is made subject to the written acceptance of this Bond Purchase Agreement by the City and delivery of such acceptance to the Underwriter at or prior to 11:59 P.M., California time, on the date hereof.

1. Purchase and Sale of the Bonds. Upon the terms and conditions and in reliance upon the representations, warranties and agreements herein set forth, the Underwriter hereby agrees to purchase from the City for reoffering to the public, and the City hereby agrees to sell to the Underwriter for such purpose, all (but not less than all) of $__________ in aggregate principal amount of the City’s General Obligation Refunding Bonds, Series 2026 (Fire, Police and Emergency Services Measure) (the “Bonds”). The purchase price for the Bonds shall be $__________ (being equal to the aggregate principal amount of the Bonds ($__________), less an Underwriter’s discount of $__________, and plus original issue premium of $__________). [The payment of the principal of and interest on the Bonds when due will be insured by ____________________ (the “Municipal Bond Insurer”). The premium for the Municipal Bond Insurer’s municipal bond insurance policy (the “Policy”) in the amount of $__________ will be paid by the Underwriter to the Municipal Bond Insurer from the purchase price as an accommodation to the City. Of the net amount ($__________), $__________ will be remitted by the Underwriter to Zions Bancorporation, N.A., as costs of issuance custodian for use to pay costs of issuance relating to the Bonds, and $__________ will be remitted by the Underwriter to the Zions Bancorporation, N.A., as paying agent (the “Paying Agent”) for use as set forth in the Paying Agent Agreement (as hereinafter defined).]
The City acknowledges and agrees that (i) the purchase and sale of the Bonds pursuant to this Bond Purchase Agreement is an arm’s-length commercial transaction between the City and the Underwriter, (ii) in connection with such transaction, the Underwriter is acting solely as a principal and not as an advisor (including, without limitation, a Municipal Advisor (as such term is defined in Section 975(e) of the Dodd-Frank Wall Street Reform and Consumer Protection Act)), agent or a fiduciary of the City, (iii) the Underwriter has not assumed a fiduciary responsibility in favor of the

4918-8692-8563v3/200721-0051 2
City with respect to the offering of the Bonds or the process leading thereto (whether or not the Underwriter, or any affiliate of the Underwriter, has advised or is currently advising the City on other matters) or any other obligation to the City except the obligations expressly set forth in this Bond Purchase Agreement, (iv) the Underwriter has financial and other interests that differ from those of the City, and (v) the City has consulted with its own legal and financial advisors to the extent it deemed appropriate in connection with the offering of the Bonds.

The City acknowledges that it has previously provided the Underwriter with an acknowledgement of receipt of the required Underwriter disclosure under Rule G-17 of the Municipal Securities Rulemaking Board.

2. The Bonds. Except as hereinafter described, the Bonds shall be as described in, and shall be issued and secured pursuant to, the provisions of the resolution of the City adopted on [July 14], 2026 (the “Resolution”), that certain Paying Agent Agreement, dated as of [August 1], 2026 (the “Paying Agent Agreement”), by and between the Paying Agent and the City, Articles 9 and 11 of Chapter 3 of Part 1 of Division 2 of Title 5 of the Government Code of the State of California (the “Act”) and other applicable provisions of law. The Bonds shall be issued, authenticated and delivered under and in accordance with the provisions of this Bond Purchase Agreement and the Resolution.

The Bonds are being issued to (i) refund all of the City’s outstanding General Obligation Refunding Bonds, Series 2016 (Fire, Police and Emergency Services Measure) (the “Refunded Bonds”), and (ii) pay costs of issuing the Bonds. The Refunded Bonds shall be refunded from Bond proceeds deposited into an escrow fund that will be established under that certain Escrow Deposit and Trust Agreement (the “Escrow Agreement”), dated as of [August] 1, 2026, by and between the City and Zions Bancorporation, N.A.

The Bonds will be dated the date of delivery and accrue interest from such date, payable semiannually on February 1 and August 1 of each year, commencing on February 1, 2027. The Bonds will mature on the dates, bear interest at the rates and be subject to redemption on the terms and conditions, all as shown on Appendix A hereto, which is incorporated herein by this reference.

The Bonds will be issued as fully registered bonds, without coupons, in the denominations of $5,000 and any integral multiple thereof.

To assist the Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5), as amended (the “Rule”), the City will undertake, pursuant to the Resolution and a continuing disclosure certificate (the “Continuing Disclosure Certificate”), to provide annual reports and notices of certain events. A description of this undertaking is set forth in the Preliminary Official Statement and will also be set forth in the Official Statement (each as hereinafter defined).

3. Use of Documents. The City hereby authorizes the Underwriter to use, in connection with the offer and sale of the Bonds, this Bond Purchase Agreement, the Official Statement and the Resolution and all information contained herein and therein and all of the documents, Bonds or statements furnished by the City to the Underwriter in connection with the transactions contemplated by this Bond Purchase Agreement.

4. Public Offering of the Bonds. The Underwriter agrees to make a bona fide public offering of all the Bonds at the initial public offering price or yield to be set forth on the cover page of the Official Statement and Appendix A hereto. Except as described below in Section 5 subsequent

4918-8692-8563v3/200721-0051 3
to such initial public offering, the Underwriter reserves the right to change such initial public offering price or yield as it deems necessary in connection with the marketing of the Bonds.

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

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

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the third-party distribution agreement and the related pricing wires. The City further acknowledges that the Underwriter shall not be liable for the failure of any dealer who is a member of a selling group, or of any broker-dealer that is a party to a third-party distribution agreement, to comply with its corresponding agreement to comply with the requirements for establishing issue price of the Bonds, including, but not limited to, its agreement to comply with the hold-the-offering-price rule, if applicable to the Bonds.
(f) The Underwriter acknowledges that sales of any Bonds to any person that is a related party to an underwriter participating in the initial sale of the Bonds to the public (each such term being used as defined below) shall not constitute sales to the public for purposes of this section.

Further, for purposes of this section:
(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 participate in the initial sale of the Bonds to the public and (B) any person that agrees pursuant to a written contract directly or indirectly with a person described in clause (A) to participate in the initial sale of the Bonds to the public (including a member of a selling group or a party to a third-party distribution agreement participating in the initial sale of the Bonds to the public); (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 (i) 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), (ii) 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 (iii) 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 of execution of this Bond Purchase Agreement by all parties.

6. Review of Official Statement. The Underwriter hereby represents that it has received and reviewed the preliminary official statement with respect to the Bonds, dated __________, 2026 (the “Preliminary Official Statement”). The City represents that it has duly authorized and caused the preparation of the Preliminary Official Statement and that it deemed the Preliminary Official Statement to be final as of its date, except for either revision or addition of the offering price(s), yield(s), selling compensation, aggregate principal amount, delivery date, rating(s) and other terms of the Bonds which depend upon the foregoing as provided in and pursuant to the Rule.

The Underwriter agrees that prior to the time a final Official Statement (hereinafter defined) relating to the Bonds is available, the Underwriter will send to any potential purchaser of the Bonds, upon the request of such potential purchaser, a copy of the most recent Preliminary Official Statement. Such Preliminary Official Statement shall be sent by first class mail (or other equally

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prompt means) not later than the first business day following the date upon which each such request is received.

7. Closing. At 8:00 A.M., California time, on __________, 2026, or at such other time or on such other date as shall have been mutually agreed upon by the parties hereto (the “Closing”), the City will deliver to the Underwriter (except as otherwise provided in the Resolution), through the facilities of The Depository Trust Company (“DTC”), or at such other place as the parties may mutually agree, the Bonds in fully registered book-entry form, duly executed and registered in the name of Cede & Co., as nominee of DTC, and in San Francisco, California, the other documents hereinafter mentioned; and the Underwriter will accept such delivery and pay the purchase price thereof in immediately available funds by check, draft or wire transfer to or upon the order of the Paying Agent, on behalf of the City, [and the premium for the Policy to the Municipal Bond Insurer.]

8. Representations, Warranties and Agreements of the City. The City hereby represents, warrants and agrees with the Underwriter that:
(a) Due Organization. The City is a general law city duly organized and validly existing under the laws of the State of California, with the power to issue the Bonds pursuant to the Act.
(b) Due Authorization. (i) At or prior to the Closing, the City will have taken all action required to be taken by it to authorize the issuance and delivery of the Bonds; (ii) the City has full legal right, power and authority to enter into this Bond Purchase Agreement, to adopt the Resolution, to perform its obligations under each such document or instrument, and to carry out and effectuate the transactions contemplated by this Bond Purchase Agreement, the Paying Agent Agreement and the Resolution; (iii) the execution and delivery or adoption of, and the performance by the City of the obligations contained in the Bonds, the Resolution, the Paying Agent Agreement, the Continuing Disclosure Certificate, and this Bond Purchase Agreement have been duly authorized and such authorization shall be in full force and effect at the time of the Closing; (iv) this Bond Purchase Agreement, the Resolution, the Paying Agent Agreement, and the Continuing Disclosure Certificate constitute the valid and legally binding obligations of the City; (v) the Bonds, when issued, authenticated and sold to the Underwriter in accordance with the Resolution, the Paying Agent Agreement, and this Bond Purchase Agreement, will be the legal, valid, binding and enforceable obligations of the City enforceable in accordance with their terms; and (vi) the City has duly authorized the consummation by it of all transactions contemplated by this Bond Purchase Agreement, the Resolution, the Paying Agent Agreement, and the Continuing Disclosure Certificate.

The City will not amend, terminate or rescind, and will not agree to any amendment, termination or rescission of the Resolution, the Paying Agent Agreement, the Continuing Disclosure Certificate or this Bond Purchase Agreement without the prior written consent of the Underwriter prior to the date of the Closing.
(c) Consents. Other than the adoption of the Resolution, no consent, approval, authorization, order, filing, registration, qualification, election or referendum of or by any court or governmental agency or public body whatsoever is required in connection with the issuance, delivery or sale of the Bonds or the consummation of the other transactions effected or contemplated herein or hereby, except for such actions as may be necessary to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions of the United States as the Underwriter may reasonably request, or which have not been taken or obtained; provided,

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however, that the City shall not be required to subject itself to service of process in any jurisdiction in which it is not so subject as of the date hereof.
(d) Internal Revenue Code. The City has covenanted to comply with the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder, with respect to the Bonds.
(e) No Conflicts. The issuance of the Bonds, and the execution, delivery and performance of this Bond Purchase Agreement, the Paying Agent Agreement, the Resolution, the Continuing Disclosure Certificate and the Bonds, and the compliance with the provisions hereof do not conflict with or constitute on the part of the City a violation of or default under, the Constitution of the State of California or any existing law, charter, ordinance, regulation, decree, order or resolution and do not conflict with or result in a violation or breach of, or constitute a default under, any agreement, indenture, mortgage, lease or other instrument to which the City is a party or by which it is bound or to which it is subject.
(f) Litigation. As of the time of acceptance hereof, based on the advice of counsel to the City, no action, suit, proceeding, hearing or investigation is pending for which the City has been served or, to the best knowledge of the City, threatened against the City: (i) in any way affecting the existence of the City or in any way challenging the respective powers of the several offices or of the titles of the officials of the City to such offices; or (ii) seeking to restrain or enjoin the sale, issuance or delivery of any of the Bonds, the application of the proceeds of the sale of the Bonds, or the collection of taxes of the City pledged or to be pledged or available to pay the principal of and interest on the Bonds, or the pledge thereof, or, the levy of any taxes contemplated by the Resolution, or in any way contesting or affecting the validity or enforceability of the Bonds, this Bond Purchase Agreement, the Paying Agent Agreement, the Continuing Disclosure Certificate or the Resolution or contesting the powers of the City or its authority with respect to the Bonds, the Resolution, the Paying Agent Agreement, the Continuing Disclosure Certificate or this Bond Purchase Agreement; or (iii) in which a final adverse decision could (a) materially adversely affect the operations of the City or the consummation of the transactions contemplated by this Bond Purchase Agreement, the Paying Agent Agreement, the Continuing Disclosure Certificate or the Resolution, (b) declare this Bond Purchase Agreement to be invalid or unenforceable in whole or in material part, or (c) adversely affect the exemption of the interest paid on the Bonds from federal or California personal income taxation.
(g) No Other Debt. Between the date hereof and the Closing, without the prior written consent of the Underwriter, the City will not have issued, nor will the City cause San Diego County (the “County”), on behalf of the City, to issue, any bonds, notes or certificates of participation except for such borrowings as may be described in or contemplated by the Official Statement.
(h) Arbitrage Certificate. The City has not been notified of any listing or proposed listing by the Internal Revenue Service to the effect that the City is a bond issuer whose arbitrage Bonds may not be relied upon.
(i) Bonds. Any Bonds signed by any officer of the City and delivered to the Underwriter shall be deemed a representation by the City to the Underwriter, but not by the person signing the same, as to the statements made therein.

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(j) Official Statement. The City has reviewed the Preliminary Official Statement and, as of its date and as of the date hereof, the information set forth therein contains no untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading in any material respect. The City will provide to the Underwriter a certificate dated as of the Closing stating that it has reviewed the Official Statement and, as of the Closing, the information set forth therein contains no untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements made therein, in the light of the circumstances under which they were made, not misleading in any material respect. (k) Financial Statements. The financial statements of the City contained in the Preliminary Official Statement and the Official Statement present fairly the financial position of the City as of the dates indicated and the results of its operations for the periods specified. (l) Continuing Disclosure. Based on a review of its prior undertakings under the Rule, and except as otherwise disclosed in the Preliminary Official Statement and the Official Statement, the City has not failed to comply in all material respects with any previous undertakings with regard to said Rule to provide annual reports or notices of material events with respect to the last five years.
(m) Levy of Tax. The City hereby agrees to take any and all actions as may be required by the County or otherwise necessary in order to arrange for the levy and collection of taxes for the payment of the Bonds, and the deposit and investment of Bond proceeds. In particular, the City hereby agrees to provide to the appropriate officials of the County a copy of the Resolution, a copy of Appendix A hereto, and the full debt service schedule for the Bonds.

9. Covenants of the City. The City covenants and agrees with the Underwriter as follows:
(a) Securities Laws. The City will furnish such information, execute such instruments, and take such other action in cooperation with the Underwriter if and as the Underwriter may reasonably request in order to qualify the Bonds for offer and sale under the Blue Sky or other securities laws and regulations of such states and jurisdictions, provided, however, that the City shall not be required to consent to service of process in any jurisdiction in which it is not so subject as of the date hereof;
(b) Application of Proceeds. The City will apply the proceeds from the sale of the Bonds for the purposes specified in the Resolution and the Paying Agent Agreement; (c) Official Statement. The City hereby agrees to deliver or cause to be delivered to the Underwriter, not later than the seventh (7th) business day following the date this Bond Purchase Agreement is signed, copies of a final Official Statement substantially in the form of the Preliminary Official Statement, with only such changes therein as shall have been accepted by the Underwriter and the City (such Official Statement with such changes, if any, and including the cover page and all appendices, exhibits, maps, reports and statements included therein or attached thereto being herein called the “Official Statement”) in such quantities as may be requested by the Underwriter in order to permit the Underwriter to comply with paragraph (b)(4) of the Rule and with the rules of the Municipal Securities Rulemaking Board (the “MSRB”). The City hereby authorizes

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the Underwriter to use and distribute the Official Statement in connection with the offering and sale of the Bonds;
(d) Subsequent Events. The City hereby agrees to notify the Underwriter of any event or occurrence that may affect the accuracy or completeness of any information set forth in the Official Statement until the date which is ninety (90) days following the Closing or until such time (if earlier) as the Underwriter shall no longer hold any of the Bonds for sale; (e) References. References herein to the Preliminary Official Statement and the final Official Statement include the cover page and all appendices, exhibits, maps, reports and statements included therein or attached thereto; and
(f) Amendments to Official Statement. For a period of ninety (90) days after the Closing or until such time (if earlier) as the Underwriter shall no longer hold any of the Bonds for sale, the City will not adopt any amendment of or supplement to the Official Statement to which, after having been furnished with a copy, the Underwriter shall object in writing or which shall be disapproved by the Underwriter; and if any event relating to or affecting the City shall occur as a result of which it is necessary, in the opinion of the Underwriter, to amend or supplement the Official Statement in order to make the Official Statement not misleading in light of the circumstances existing at the time it is delivered to a purchaser, the City shall forthwith prepare and furnish (at the expense of the City) a reasonable number of copies of an amendment of or supplement to the Official Statement (in form and substance satisfactory to the Underwriter) which will amend or supplement the Official Statement so that it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances existing at the time the Official Statement is delivered to a purchaser, not misleading.

10. Conditions to Closing. The Underwriter has entered into this Bond Purchase Agreement in reliance upon the representations and warranties of the City contained herein and the performance by the City of its obligations hereunder, both as of the date hereof and as of the date of Closing. The Underwriter’s obligations under this Bond Purchase Agreement are and shall be subject at the option of the Underwriter, to the following further conditions at the Closing:
(a) Representations True. The representations and warranties of the City contained herein shall be true, complete and correct in all material respects at the date hereof and at and as of the Closing as if made at and as of the Closing, and the statements made in all Bonds and other documents delivered to the Underwriter at the Closing pursuant hereto shall be true, complete and correct in all material respects on the date of the Closing; and the City shall be in compliance with each of the agreements made by it in this Bond Purchase Agreement; (b) Obligations Performed. At the time of the Closing, (i) the Official Statement, this Bond Purchase Agreement, the Paying Agent Agreement, the Resolution, and the Continuing Disclosure Certificate shall be in full force and effect and shall not have been amended, modified or supplemented except as may have been agreed to in writing by the Underwriter; (ii) all actions under the Act which, in the opinion of Bond Counsel, shall be necessary in connection with the transactions contemplated hereby shall have been duly taken and shall be in full force and effect; and (iii) the City shall perform or have performed all of their obligations required under or specified in the Resolution, this Bond Purchase Agreement, the Paying Agent Agreement, the Continuing Disclosure Certificate or the Official Statement to be performed at or prior to the Closing;

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(c) Adverse Rulings. No decision, ruling or finding shall have been entered by any court or governmental authority since the date of this Bond Purchase Agreement (and not reversed on appeal or otherwise set aside), or to the best knowledge of the City, pending or threatened which has any of the effects described in Section 8(f) hereof or contesting in any way the completeness or accuracy of the Official Statement;
(d) Marketability. Between the date hereof and the date of Closing, the market price or marketability, at the initial public offering prices set forth in the Official Statement, of the Bonds shall not have been materially adversely affected, in the judgment of the Underwriter (evidenced by a written notice to the City terminating the obligation of the Underwriter to accept delivery of and make any payment for the Bonds), by reason of any of the following:
(1) an amendment to the Constitution of the United States or the State of California shall have been passed or legislation shall have been introduced in or enacted by the Congress of the United States or legislation pending in the Congress of the United States shall have been amended or legislation shall have been recommended to the Congress of the United States or otherwise endorsed for passage (by press release, other form of notice or otherwise) by the President of the United States, the Treasury Department of the United States, the Internal Revenue Service or the Chairman or ranking minority member of the Committee on Finance of the United States Senate or the Committee on Ways and Means of the United States House of Representatives, or legislation shall have been proposed for consideration by either such Committee or presented as an option for consideration by either such Committee, or legislation shall have been favorably reported for passage to either House of the Congress of the United States by a Committee of such House to which such legislation has been referred for consideration, or a decision shall have been rendered by a court of the United States or of the State of California or the Tax Court of the United States, or a ruling shall have been made or a regulation or temporary regulation shall have been proposed or made or any other release or announcement shall have been made by the Treasury Department of the United States, the Internal Revenue Service or other federal or State of California District, with respect to federal or State of California taxation upon revenues or other income of the general character to be derived by the City or upon interest received on obligations of the general character of the Bonds which may have the purpose or effect, directly or indirectly, of affecting the tax status of the City, its property or income, its securities (including the Bonds) or the interest thereon, or any tax exemption granted or authorized by United States or State of California legislation, which materially and adversely affects the market for the Bonds or the market price generally of obligations of the general character of the Bonds;
(2) legislation enacted, introduced in the Congress or recommended for passage by the President of the United States, or a decision rendered by a court established under Article III of the Constitution of the United States or by the Tax Court of the United States, or an order, ruling, regulation (final, temporary or proposed) or official statement issued or made by or on behalf of the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter shall have been made or issued to the effect that obligations of the general character of the Bonds, or the Bonds, including any or all underlying arrangements, are not exempt from registration under the Securities Act of 1933, as amended, or that the Indenture is not exempt from qualification under the Trust Indenture Act of 1939, as amended; (3) any legislation, ordinance, rule or regulation shall be introduced in, or be enacted by any governmental body, department or agency of the State of California, or a decision by any court of competent jurisdiction within the State of California or any court of the United States

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of America shall be rendered which, in the reasonable opinion of the Underwriter, materially adversely affects the market price of the Bonds;
(4) the United States has become engaged in hostilities which have resulted in a declaration of war or a national emergency or there has occurred any other outbreak or escalation of, or engagement in hostilities or a national or international emergency, calamity or crisis, financial or otherwise, including but not limited to, pandemic, epidemic, civil unrest, bombings or terrorism (whether alleged or proven) relating to the effective operation of government or the financial community or financial markets, in the United States or elsewhere, or the escalation of such emergency, calamity or crisis, which, in the judgment of the Underwriter, makes it impracticable or inadvisable to proceed with the offering or the delivery of the Bonds on the terms and in the manner that are contemplated in the Preliminary Official Statement or the Official Statement; (5) the declaration of a general banking moratorium by federal, New York or California authorities, or the general suspension of trading on any national securities exchange;
(6) a general suspension of trading on the New York Stock Exchange or other major exchange shall be in force, or minimum or maximum prices for trading shall have been fixed and be in force, or maximum ranges for prices for securities shall have been required and be in force on any such exchange, whether by virtue of determination by that exchange or by order of the SEC or any other governmental authority having jurisdiction; (7) the imposition by the New York Stock Exchange or other national securities exchange, or any governmental District, of any material restrictions not now in force with respect to the Bonds or obligations of the general character of the Bonds or securities generally, or the material increase of any such restrictions now in force, including those relating to the extension of credit by, or the charge to the net capital requirements of, the Underwriter; (8) an order, decree or injunction of any court of competent jurisdiction, or order, ruling, regulation or official statement by the Securities and Exchange Commission, or any other governmental agency having jurisdiction of the subject matter, issued or made to the effect that the issuance, offering or sale of obligations of the general character of the Bonds, or the issuance, offering or sale of the Bonds, including any or all underlying obligations, as contemplated hereby or by the Official Statement, is or would be in violation of the federal securities laws as amended and then in effect;
(9) there shall have occurred or any notice shall have been given of any intended review, downgrading, suspension, withdrawal, or negative change in credit watch status to any rating of the City’s outstanding indebtedness (without regard to any insurance) by a national rating agency;
(10) there shall have occurred any materially adverse change in the affairs or financial condition of the City;
(11) any amendment shall have been made to the federal or State Constitution or action by any federal or State court, legislative body, regulatory body, or other authority materially adversely affecting the tax status of the City, its property, income securities (or

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interest thereon) or the validity or enforceability of the levy of taxes to pay principal of and interest on the Bonds;
(12) any litigation shall be instituted, pending or threatened to restrain or enjoin the issuance or sale of the Bonds or in any way contesting the validity of the Bonds, or the existence or powers of the City;
(13) any event occurring, or information becoming known that, in the judgment of the Underwriter, makes untrue in any material respect any statement or information contained in the Official Statement or has the effect that the Official Statement contains any untrue statement of material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(14) any proceeding shall have been commenced or be threatened in writing by the SEC against the City;
(15) the marketability of the Bonds or the market price thereof has been materially and adversely affected by disruptive events, occurrences or conditions in the securities or debt markets;
(16) additional material restrictions not in force as of the date hereof shall have been imposed upon trading in securities generally by any governmental authority or by any national securities exchange which restrictions materially adversely affect the Underwriter’s ability to trade the Bonds;
(17) the purchase of and payment for the Bonds by the Underwriter, or the resale of the Bonds by the Underwriter, on the terms and conditions herein provided shall be prohibited by any applicable law, governmental authority, board, agency or commission; (18) a material disruption in securities settlement, payment or clearance services affecting the Bonds shall have occurred;
(19) the withdrawal or downgrading of any rating of the Bonds o[r the Municipal Bond Insurer] by a national rating agency; or (20) any other event shall have occurred since the date of hereof that in the reasonable judgment of the Underwriter materially adversely affects the marketability or market price of the Bonds.
(e) Delivery of Documents. At or prior to the date of the Closing, Bond Counsel shall deliver sufficient copies of the following documents, in each case dated as of the date of the Closing and satisfactory in form and substance to the Underwriter:
(1) Bond Opinion. An approving opinion of Bond Counsel, dated the date of the Closing, addressed to the City, in the form attached to the Official Statement as Appendix C;
(2) Reliance Letter. A reliance letter from Bond Counsel to the effect that the Underwriter can rely upon the approving opinion described in (e)(1) above;

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(3) Supplemental Opinion. A supplemental opinion of Bond Counsel, dated the date of the Closing, addressed to the Underwriter to the effect that:
(A) this Bond Purchase Agreement has been duly executed and delivered by the City and, assuming due authorization, execution and delivery by and validity against the Underwriter, is a valid and binding agreement of the City, subject to bankruptcy, insolvency, reorganization, arrangement, moratorium, fraudulent conveyance and other laws relating to or affecting creditors’ rights, to the application of equitable principles and to the exercise of judicial discretion in appropriate cases;
(B) the statements contained in the Official Statement under the captions “INTRODUCTION,” “THE BONDS,” “PROPERTY TAXATION” and “TAX MATTERS,” insofar as such statements purport to summarize certain provisions of the Bonds, the Resolution, the Paying Agent Agreement and Bond Counsel’s opinion concerning certain tax matters relating to the Bonds, are accurate in all material respects as of the date of the Official Statement and as of the date of Closing; and
(C) the Bonds are not subject to the registration requirements of the Securities Act and the Resolution is exempt from qualification under the Trust Indenture Act; (4) Disclosure Counsel Opinion. An opinion letter, dated the date of the Closing and addressed to the City and the Underwriter of Bond Counsel, acting as disclosure counsel for the Bonds, to the effect that nothing has come to such counsel’s attention that would lead them to believe that the Preliminary Official Statement, as of its date and as of the date of the Bond Purchase Agreement, and the Official Statement, as of its date and as of the Closing (except that no opinion need be expressed with respect to: (i) the expressions of opinion, the assumptions, the projections, estimates and forecasts, the charts, tables, graphs, the financial statements or other financial, numerical, economic, demographic or statistical data, assessed or appraised valuations, absorption or environmental matters contained in the Official Statement, (ii) any CUSIP numbers or information relating thereto, (iii) any information with respect to The Depository Trust Company and its bookentry system, (iv) any information contained in the Appendices to the Official Statement, (v) any information incorporated by reference into the Official Statement, and (vi) any information with respect to the Underwriter or underwriting matters with respect to the Bonds, including but not limited to information under the caption “UNDERWRITER”) contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (5) Bonds. Bonds signed by appropriate officials of the City. (6) District Closing Certificate. A certificate signed by appropriate officials of the City to the effect that (i) such officials are authorized to execute this Bond Purchase Agreement and the Paying Agent Agreement, (ii) the representations, agreements and warranties of the City herein are true and correct in all material respects as of the date of Closing, (iii) the City has complied with all the terms of the Resolution, the Paying Agent Agreement and this Bond Purchase Agreement, which are necessary to be complied with prior to or concurrently with the Closing and such documents are in full force and effect, (iv) the City has reviewed the Official Statement and on such basis certifies that the Official Statement does not contain any untrue statement of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading, (v) no further consent is required for

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inclusion of the City’s audited financial statements in the Official Statement, and (vi) the Bonds being delivered on the date of the Closing to the Underwriter under this Bond Purchase Agreement substantially conform to the descriptions thereof contained in the Paying Agent Agreement; (7) Non-Arbitrage Certificate. A non-arbitrage certificate of the City in a form satisfactory to Bond Counsel;
(8) Escrow Agreement. An executed copy of the Escrow Agreement. (9) Verification Report. A verification report of __________ with respect to the Refunded Bonds.
(10) [Policy. The Policy, issued by the Municipal Bond Insurer; (11) Certificate of the Municipal Bond Insurer. A certificate of the Municipal Bond Insurer or an opinion of counsel to the Municipal Bond Insurer, dated the date of the Closing, to the effect that the information in the Official Statement regarding the Policy and the Municipal Bond Insurer under the caption “BOND INSURANCE” and contained in an appendix to the Official Statement containing a specimen of the Policy, is accurate in all material respects; (12) Opinion of Counsel to the Municipal Bond Insurer. An opinion of counsel to the Municipal Bond Insurer as to the validity and enforceability of the Policy, in form and content satisfactory to Bond Counsel and the Underwriter;] (13) Ratings. Evidence satisfactory to the Underwriter that the Bonds shall have received an underlying rating of “__” from S&P Global Ratings, a Standard & Poor’s Financial Services LLC business (“S&P”), [and an insured rating of “__” from S&P,] and that such ratings have not been revoked or downgraded;
(14) Resolution. A certificate, together with fully executed copies of the Resolution, of the City Clerk of the City Council to the effect that:
(A) such copies are true and correct copies of the Resolution; and (B) that the Resolution was duly adopted and has not been modified, amended, rescinded or revoked and is in full force and effect on the date of the Closing. (15) Official Statement. Bonds of the appropriate officials of the City evidencing their determinations respecting the Official Statement in accordance with the Rule and not more than 25 copies of the Official Statement;
(16) Paying Agent Agreement. An executed copy of the Paying Agent Agreement;
(17) Continuing Disclosure Certificate. The Continuing Disclosure Certificate as summarized in the Official Statement and in the form attached thereto as Appendix D, satisfactory to the Underwriter which complies with the Rule; and

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(18) Underwriter’s Certifications. At or before Closing, and contemporaneously with the acceptance of delivery of the Bonds and the payment of the purchase price thereof, the Underwriter will provide (or cause to be provided) to the City:
(A) the receipt of the Underwriter, in form satisfactory to the City and signed by an authorized officer of the Underwriter, confirming delivery of the Bonds to the Underwriter, receipt of all documents required by the Underwriter, and the satisfaction of all conditions and terms of this Purchase Agreement by the City and confirming to the City that as of the date of the Closing all of the representations of the Underwriter contained in this Purchase Agreement are true, complete and correct in all material respects; and (B) the certification of the Underwriter, in form satisfactory to Bond Counsel, regarding the prices at which the Bonds have been reoffered to the public; and (19) Other Documents. Such additional legal opinions, Bonds, proceedings, instruments and other documents as the Underwriter may reasonably request to evidence compliance (i) by the City with legal requirements, (ii) the truth and accuracy, as of the time of Closing, of the representations of the City herein contained, and (iii) the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied by the City.
(f) Termination. Notwithstanding anything to the contrary herein contained, if for any reason whatsoever the Bonds shall not have been delivered by the City to the Underwriter prior to the close of business, California Time, on __________, 2026, then the obligation to purchase the Bonds hereunder shall terminate and be of no further force or effect except with respect to the obligations of the City and the Underwriter under Section 11 hereof.

If the City shall be unable to satisfy the conditions to the Underwriter’s obligations contained in this Bond Purchase Agreement or if the Underwriter’s obligations shall be terminated for any reason permitted by this Bond Purchase Agreement, this Bond Purchase Agreement may be canceled by the Underwriter at, or at any time prior to, the time of Closing. Notice of such cancellation shall be given to the City in writing, or by telephone or telegraph, confirmed in writing. Notwithstanding any provision herein to the contrary, the performance of any and all obligations of the City hereunder and the performance of any and all conditions contained herein for the benefit of the Underwriter may be waived by the Underwriter in writing at its sole discretion.

11. Conditions to Obligations of the City. The performance by the City of its obligations is conditioned upon (i) the performance by the Underwriter of its obligations hereunder; and (ii) receipt by the City and the Underwriter of opinions and Bonds being delivered at the Closing by persons and entities other than the City.

12. Costs and Expenses. Whether or not the transactions contemplated by this Bond Purchase Agreement are consummated, the Underwriter shall be under no obligation to pay, and the City shall pay from the proceeds of the Bonds or otherwise, all expenses and costs of the City incident to the performance of their obligations in connection with the authorization, execution, sale and delivery of the Bonds to the Underwriter, including, without limitation, printing costs, rating agency fees and charges, initial fees of the Paying Agent, including fees and disbursements of its counsel, if any, fees and disbursements of Bond Counsel, Disclosure Counsel and other professional advisors employed by the City, and costs of preparation, printing, signing, transportation, delivery

4918-8692-8563v3/200721-0051 16
and safekeeping of the Bonds. The Underwriter shall pay all out-of-pocket expenses of the Underwriter, including, without limitation, advertising expenses, the California Debt and Investment Advisory Commission fee, CUSIP Service Bureau charges, regulatory fees imposed on new securities issuers, fees and disbursements of counsel to the Underwriter and any and all other expenses incurred by the Underwriter in connection with the public offering and distribution of the Bonds, shall be paid by the Underwriter.

13. Notices. Any notice or other communication to be given under this Bond Purchase Agreement (other than the acceptance hereof as specified in the first paragraph hereof) may be given by delivering the same in writing if to the City, to the City Manager, or if to the Underwriter, to Oppenheimer & Co. Inc. 135 Main Street, Suite 1700, San Francisco, CA 94105, Attention:

Municipal Capital Markets Group.

14. Parties in Interest; Survival of Representations and Warranties. This Bond Purchase Agreement when accepted by the City in writing as heretofore specified shall constitute the entire agreement between the City and the Underwriter. This Bond Purchase Agreement is made solely for the benefit of the City and the Underwriter (including the successors or assigns of the Underwriter). No person shall acquire or have any rights hereunder or by virtue hereof. All representations, warranties and agreements of the City in this Bond Purchase Agreement shall survive regardless of (a) any investigation or any statement in respect thereof made by or on behalf of the Underwriter, (b) delivery of and payment by the Underwriter for the Bonds hereunder, and (c) any termination of this Bond Purchase Agreement.

15. Execution in Counterparts. This Bond Purchase Agreement may be executed in several counterparts each of which shall be regarded as an original and all of which shall constitute but one and the same document.

4918-8692-8563v3/200721-0051 S-1

16. Applicable Law. This Bond Purchase Agreement shall be interpreted, governed and enforced in accordance with the law of the State of California applicable to contracts made and performed in such State.

Very truly yours,
OPPENHEIMER & CO., INC., as Underwriter
By
Authorized Officer
The foregoing is hereby agreed to and
accepted as of the date first above written:

CITY OF LA MESA
By
City Manager
Time of execution:

4918-8692-8563v3/200721-0051 A-1

APPENDIX A

MATURITY SCHEDULES AND REDEMPTION PROVISIONS
$__________

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)
Maturity
(August 1)
Principal
Amount
Interest
Rate Yield Price
10% Test
Used
Hold the
Offering
Price Used
_____________________
No Redemption Provisions
No Optional Redemption. The Bonds are not subject to optional redemption prior to maturity.

4918-8692-8563v3/200721-0051 B-1

APPENDIX B

FORM OF ISSUE PRICE CERTIFICATE
$__________

CITY OF LA MESA
GENERAL OBLIGATION REFUNDING BONDS, SERIES 2026
(FIRE, POLICE AND EMERGENCY SERVICES MEASURE)
(Bank Qualified) The undersigned, on behalf of Oppenheimer & Co. Inc. (“Oppenheimer”), based on the information available to it, hereby certifies as set forth below with respect to the sale and issuance of the above-captioned general obligation bonds (the “Bonds”).

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

2. Initial Offering Price of the Hold-the-Offering-Price Maturities. (a) The Underwriter offered the Hold-the-Offering-Price Maturities to the Public for purchase at the respective initial offering prices listed in Schedule A (the “Initial Offering Prices”) on or before the Sale Date.
(b) As set forth in the Purchase Agreement, Underwriter has agreed in writing that, (i) for each Maturity of the Hold-the-Offering-Price Maturities, 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 Hold-the-Offering-Price Maturities at a price that is higher than the respective Initial Offering Price for that Maturity of the Bonds during the Holding Period.

3. Defined Terms.
(a) General Rule Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “General Rule Maturities.”
(b) Hold-the-Offering-Price Maturities means those Maturities of the Bonds listed in Schedule A hereto as the “Hold-the-Offering-Price Maturities.” (c) Holding Period means, with respect to a Hold-the-Offering-Price Maturity, the period starting on the Sale Date and ending on the earlier of (i) the close of the fifth business day after the Sale Date, or (ii) the date on which the Underwriter has sold at least 10% of such Hold-theOffering-Price Maturity to the Public at prices that are no higher than the Initial Offering Price for such Hold-the-Offering-Price Maturity.