Attach 3 - POS — Laguna Beach City Council, December 9, 2025

This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any jurisdiction in which such offer solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.

Agenda Version
PRELIMINARY OFFICIAL STATEMENT DATED JANUARY __, 2026
NEW ISSUE – BOOK-ENTRY ONLY NOT RATED
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 “TAX MATTERS” herein. $3,890,000*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Dated: Date of Delivery Due: September 2, as shown on inside cover The City of Laguna Beach Underground Utility Assessment District No. 2021-1 (West Street) Limited Obligation Improvement Bonds (the “Bonds”) are being issued by the City of Laguna Beach, California (the “City”), pursuant to provisions of the Improvement Bond Act of 1915 (the “1915 Act”) and a Fiscal Agent Agreement dated as of January 1, 2026 (the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as Fiscal Agent. Capitalized terms used but not defined herein have the meanings given to such terms in the Fiscal Agent Agreement. The Bonds are limited obligations of the City secured by and paid from Assessment Revenues (as defined herein), which principally consist of the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid assessments levied on the parcels of property within Underground Utility Assessment District No. 2021-1 (West Street), City of Laguna Beach, Orange County, State of California (the “Assessment District”), and moneys deposited in certain funds held by the Fiscal Agent and the Treasurer of the City. The Assessment District was formed to finance the design and construction of improvements to underground overhead utilities (the “Improvements”).

The Assessment District was formed and special assessments will be levied on property within the Assessment District in accordance with the Municipal Improvement Act of 1913 (the “1913 Act”). The proceeds of the Bonds will be used to (i) pay for costs of the Improvements, (ii) fund a deposit to the Reserve Fund for the Bonds, (iii) finance capitalized interest for the Bonds through September 2, 2026, and (iv) pay costs of issuance.

The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple thereof, except that one Bond may include the amount by which the total exceeds the maximum integral of $5,000. The Bonds will be issued in fully registered book-entry only form, initially registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”) and purchasers will not receive certificates representing their interest in the Bonds. Interest is payable semiannually on March 2 and September 2 of each year, commencing September 2, 2026. Payments of principal and interest on the Bonds will be paid by the Fiscal Agent directly to DTC or its nominee as the registered owner of the Bonds. Upon receipt of payments of principal and interest on the Bonds, DTC is to remit such principal and interest to DTC Participants for subsequent disbursement to the beneficial owners of such Bonds.

The Bonds are subject to redemption prior to maturity as described herein. See “THE BONDS – Redemption of Bonds.” Under the provisions of the 1915 Act, assessment installments of principal and interest sufficient to meet annual debt service on the Bonds, plus an administrative expense, will be levied by the City and billed by the County of Orange, California to owners of property within the Assessment District against which there are unpaid assessments. On or before the 15th business day preceding each Interest Payment Date, the City will cause these annual assessment installments to be deposited with the Fiscal Agent into the Redemption Fund and used to pay debt service on the Bonds on such date. Unpaid assessments constitute fixed liens on the lots and parcels assessed within the Assessment District and do not constitute a personal indebtedness of the respective owners of such lots and parcels. Accordingly, in the event of a delinquency, proceedings may be taken only against the real property securing the delinquent assessment. Thus, the value of land within the Assessment District is a critical factor in determining the investment quality of the Bonds. See “THE ASSESSMENT DISTRICT – Value-to-Lien Ratios” and “BONDOWNERS’ RISKS – Property Values.” A Reserve Fund has been established under the Fiscal Agent Agreement and, upon the issuance of the Bonds, a deposit will be made so that the balance therein equals the Reserve Requirement on such date. The Reserve Fund will provide funds for payment of principal and interest on the Bonds in the event of any delinquent assessment installments. The City’s obligation to advance funds to the Redemption Fund as a result of delinquent installments is limited to the balance in the Reserve Fund. The City has covenanted in the Fiscal Agent Agreement to initiate judicial foreclosure in the event of a delinquency in the payment of assessment installments. See “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure.”
The Bonds are not a debt or a liability of the City, the State of California or any political subdivision thereof. Neither the full faith and credit nor the taxing power of the City, the State of California or any political subdivision thereof is pledged to the payment of the Bonds, or the interest or any premium thereon, and no Owners of the Bonds may compel the exercise of the taxing power of the City or the forfeiture of any of its property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City nor a legal or equitable pledge, charge, lien or encumbrance upon any of its property or upon any of its income, receipts or revenues, other than the assessments.

Investment in the Bonds involves risks which may not be appropriate for some investors. See “BONDOWNERS’ RISKS” for a discussion of certain of the risk factors that should be considered, in addition to the matters set forth herein, in evaluating the investment quality of the Bonds.

This cover page contains certain information for reference only. It is not a summary of this financing. Prospective investors must read the entire Official Statement to obtain information essential to the making of an informed investment decision.

The Bonds are to be offered when, as and if issued and delivered to the Underwriter, subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, as Bond Counsel. Certain legal matters will be passed upon for the City by the City Attorney, and Anzel Galvan LLP, San Francisco, California, as Disclosure Counsel, and for the Underwriter by its counsel, Kutak Rock LLP, Irvine, California. It is anticipated that the Bonds in book-entry form will be available for delivery through the facilities of DTC on or about ______, 2026. [Oppenheimer Logo]
Dated: _____________, 2026
* Preliminary; subject to change.

Attachment 3
66 MATURITY SCHEDULE
$3,890,000*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Base CUSIP†
: _______
Maturity
(September 2)
Principal
Amount
Interest
Rate Yield Price
CUSIP†
Number
$______ ____% Term Bonds due September 2, 20__; Yield ___%; Price ____; CUSIP†
:
$______ ____% Term Bonds due September 2, 20__; Yield ___%; Price ____; CUSIP†
:

C: Priced to optional redemption of September 2, 20__, at ___%. † CUSIP® is a registered trademark of the American Bankers Association. CUSIP Global Services (CGS) is managed on behalf of the American Bankers Association by FactSet Research Systems Inc. Copyright (c) 2026 CUSIP Global Services. All rights reserved. CUSIP® data herein is provided by CUSIP Global Services. This data is not intended to create a database and does not serve in any way as a substitute for the CGS database. CUSIP® numbers are provided for convenience of reference only. None of the City, the Underwriter or their agents or counsel take any responsibility for the accuracy of such numbers. * Preliminary; subject to change.
67 CITY OF LAGUNA BEACH

COUNTY OF ORANGE

CITY COUNCIL
Alex Rounaghi, Mayor
Mark Orgill, Mayor Pro Tem
Hallie Jones, Councilmember
Sue Kempf, Councilmember
Bob Whalen, Councilmember

CITY OFFICIALS
Dave Kiff, City Manager
Gavin Curran, Assistant City Manager
Jeremy Frimond, Assistant City Manager
Michelle Bannigan, Director of Finance
Ann Marie McKay, City Clerk
Laura Parisi, C.P.A., City Treasurer
Megan Garibaldi, City Attorney
Mark McAvoy, Director of Public Works and Utilities

PROFESSIONAL SERVICES
Assessment Engineer
NV5, Inc.

San Diego, California
District Administrator
David Taussig and Associates, Inc.1
Newport Beach, California
Bond Counsel
Best Best & Krieger LLP
Riverside, California
Disclosure Counsel
Anzel Galvan LLP
San Francisco, California
Municipal Advisor
Fieldman, Rolapp & Associates, Inc.

Irvine, California
Fiscal Agent
The Bank of New York Mellon Trust
Company, N.A.

Los Angeles, California
1 David Taussig and Associates, Inc. does business in California under the fictious business name “DTA.” 68 GENERAL INFORMATION ABOUT THE OFFICIAL STATEMENT
No dealer, broker, salesperson or other person has been authorized by the City or the Underwriter to give any information or to make any representations with respect to the City or the Bonds other than the information contained herein and, if given or made, such other information or representation must not be relied upon as having been authorized by the City or the Underwriter. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the 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 a representation of facts.

Certain of the information set forth herein has been obtained from sources which the City believes to be reliable, but such information is not guaranteed as to accuracy or completeness. The information and expressions of opinion herein are subject to change without notice; and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the City since the date hereof. The information set forth in this Official Statement is not guaranteed as to accuracy or completeness by the Underwriter, and this Official Statement is not to be construed as a representation by the Underwriter.

The Underwriter has provided the following sentence for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement, each 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.

All summaries of the Fiscal Agent Agreement and other documents herein are made subject to the complete provisions thereof and do not purport to be complete statements of any or all of such provisions. Reference is hereby made to such documents on file with the City for further information in connection therewith. 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.

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

CAN BE GIVEN THAT THE FUTURE RESULTS DISCUSSED HEREIN WILL BE ACHIEVED, AND ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE FORECASTS DESCRIBED HEREIN. IN THIS RESPECT, THE WORDS “ESTIMATE,” “PROJECT,” “ANTICIPATE,” “EXPECT,” “INTEND,” “BELIEVE” AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. ALL PROJECTIONS, FORECASTS, ASSUMPTIONS, EXPRESSIONS OF OPINIONS,

ESTIMATES AND OTHER FORWARD-LOOKING STATEMENTS ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS SET FORTH IN THIS OFFICIAL STATEMENT.

The City maintains a website. However, the information presented on that website is not part of this Official Statement and should not be relied upon in making investment decisions with respect to the Bonds.

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITER MAY OVERALLOT OR EFFECT

TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE BONDS AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME. THE UNDERWRITER MAY OFFER AND SELL

THE BONDS TO CERTAIN DEALERS AND DEALER BANKS AND BANKS ACTING AS AGENT AT

PRICES LOWER THAN THE PUBLIC OFFERING PRICES STATED ON THE INSIDE COVER PAGE

HEREOF AND SUCH PUBLIC OFFERING PRICES MAY BE CHANGED FROM TIME TO TIME BY THE UNDERWRITER.
69 TABLE OF CONTENTS
i
Page Page
INTRODUCTION......................................................1 Purpose; Security for the Bonds...............................1 Forward Looking Statements...................................2 Assessment District................................................2 No Additional Bonds...............................................3 The Improvements...................................................3 Professionals Involved in the Offering ..................3 Continuing Disclosure ...........................................4 Bondowners’ Risks................................................4 Other Information ..................................................4

ESTIMATED SOURCES AND USES OF
FUNDS ..................................................................5 THE BONDS..............................................................5 General...................................................................5 Redemption of Bonds ............................................6 Purchase in Lieu of Redempton.............................8 Notice of Redemption ............................................8 Selection of Bonds for Redemption.......................9 Effect of Redemption.............................................9 Refunding Bonds ...................................................9 Annual Debt Service Schedule ..............................9 SECURITY FOR THE BONDS ..............................10 Limited City Obligation.......................................10 Pledge and Transfers of Assessment Revenues...11
Reserve Fund .......................................................12 Covenant to Commence Superior Court
Foreclosure ......................................................13 Delinquency Resulting in Ultimate or
Temporary Loss on Bonds ..............................15 Priority of Lien; Senior Prior Lien.......................15 Existing Liens ......................................................15 No Teeter Plan .....................................................15 Deferral Program .................................................16 No Additional Bonds Except for Refunding
Purposes...........................................................16 THE ASESSMENT DISTRICT...............................18 Description...........................................................18 Description of Improvements ..............................18 Formation Proceedings ........................................19 Allocation of Assessments...................................20 Maximum Annual Assessment for
Administrative Costs and Expenses................20
Value-to-Lien Ratios............................................21 Largest Property Owners .....................................24 Direct and Overlapping Debt...............................25 Sample Tax Bill................................................... 26 BONDOWNERS’ RISKS ....................................... 27 Potential Insufficiency of Assessment
Installments..................................................... 27 Assessments Are Not Personal Obligations........ 28
Risks of Real Estate Secured Investments
Generally ........................................................ 28 Limited Obligations ............................................ 28 Delinquency Resulting in Ultimate or
Temporary Loss on Bonds.............................. 29 Potential Early Redemption of Bonds from
Prepayments or Other Sources ....................... 29 Non-Cash Payments of Assessments.................. 29
Limited City Obligation Upon Delinquency....... 29
Bankruptcy and Foreclosure ............................... 30 FDIC/Federal Government Interests in
Properties........................................................ 31 No Acceleration Provision .................................. 32 Limitations on Remedies..................................... 32 Foreclosure Shortfall........................................... 33 Natural Disasters................................................. 33 Hazardous Substances......................................... 35 Property Values................................................... 36 Parity of Taxes, Bonds and Special
Assessments.................................................... 36 Right to Vote on Taxes Act................................. 37 Ballot Initiatives and Legislative Measures........ 38
Impact of Legislative Proposals, Clarifications
of the Tax Code and Court Decisions on
Tax Exemption ............................................... 38 Loss of Tax Exemption ....................................... 38 IRS Audit of Tax-Exempt Bond Issues............... 39
Absence of Secondary Market for the Bonds ..... 39
Future Debt Issuance........................................... 39 Disclosures to Future Purchasers........................ 40 Cybersecurity ...................................................... 40 LEGAL MATTERS ................................................ 40 ABSENCE OF LITIGATION................................. 40 TAX MATTERS ..................................................... 41 CONTINUING DISCLOSURE .............................. 43 NO RATING ........................................................... 43 UNDERWRITING.................................................. 43 MUNICIPAL ADVISOR........................................ 44 FINANCIAL INTERESTS ..................................... 44 MISCELLANEOUS................................................ 44 APPENDIX A - GENERAL ECONOMIC DATA REGARDING THE CITY AND THE COUNTY...................... A-1 APPENDIX B - FORM OF BOND COUNSEL OPINION ....................................................................................... B-1 APPENDIX C - SUMMARY OF THE FISCAL AGENT AGREEMENT................................................................ C-1 APPENDIX D - FORM OF CONTINUING DISCLOSURE CERTIFICATE ......................................................... D-1 APPENDIX E - THE BOOK-ENTRY SYSTEM .. .................................................................................................... E-1 APPENDIX F - ASSESSMENT DIAGRAM................................................................................................................ F-1 APPENDIX G - ENGINEER’S REPORT.................................................................................................................. G-1 APPENDIX H - LIST OF UNPAID ASSESSMENTS ................................................................. ............................. H-1 70 [INSERT AERIALS AND REGIONAL LOCATION MAP]
71 1
__________________________________

OFFICIAL STATEMENT
__________________________________
$3,890,000*

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS

INTRODUCTION
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 the Bonds to potential investors is made only by means of the entire Official Statement.

Purpose; Security for the Bonds
The purpose of this Official Statement, which includes the cover page and Appendices hereto (this “Official Statement”), is to provide certain information concerning the sale and issuance of the City of Laguna Beach Underground Utility Assessment District No. 2021-1 (West Street) Limited Obligation Improvement Bonds (the “Bonds”) by the City of Laguna Beach, California (the “City”).

The Bonds will be issued pursuant to a Fiscal Agent Agreement dated as of January 1, 2026 (the “Fiscal Agent Agreement”), by and between the City and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”). Capitalized terms not otherwise defined herein shall have the meanings set forth in the Fiscal Agent Agreement. See Appendix C – “SUMMARY OF THE FISCAL AGENT AGREEMENT.”
The Bonds will be secured under the Fiscal Agent Agreement by a pledge of all of the Assessment Revenues and moneys deposited in certain funds held by the Fiscal Agent and the City Treasurer of the City under the Fiscal Agent Agreement. See “SECURITY FOR THE BONDS.” Assessment Revenues principally consist of the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid Assessments (as defined herein) excluding amounts collected for administrative costs pursuant to Sections 8682, 8682.1 and 10204(f) of the California Streets and Highways Code levied on parcels of property within Underground Utility Assessment District No. 2021-1 (West Street), City of Laguna Beach, Orange County, State of California (the “Assessment District”).

The proceeds of the Bonds will be used to (i) pay for costs to finance the design and construction of improvements to underground overhead utilities (the “Improvements”) within the Assessment District, (ii) fund a deposit to the Reserve Fund for the Bonds, (iii) finance capitalized interest for the Bonds through September 2, 2026, and (iv) pay costs of * Preliminary; subject to change.
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issuance. See “ESTIMATED SOURCES AND USES OF FUNDS” and “THE ASSESSMENT DISTRICT.”
Forward Looking Statement
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 a “plan,” “expect,” “estimate,” “project,” “budget” or similar words. Such forward-looking statements include, but are not limited to, certain statements contained in the information under the caption “THE ASSESSMENT DISTRICT.”

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.

Assessment District
The Assessment District is located within the City and is generally bounded by Coast Highway, Egan Road, Eagle Rock Way, West Street, Valido Road and Rico Road. The Assessment District consists of 102 parcels, two of which are undevelopable strip parcels with an assessed value of zero dollars each and are not subject to the levy of Assessments. The parcels in the Assessment District are mostly developed for residential use. Of the 100 assessable parcels within the Assessment District, a total of 95 parcels are zoned for residential use, including three parcels that comprise a City park. The remaining five parcels are non-residential parcels, four of which are zoned within a local business district and one is an institutional parcel owned by the South Coast Water District (“SCWD”).

The City is a community of approximately 22,800 residents, located in the County of Orange, California (the “County”), approximately 50 miles south of the City of Los Angeles. The City’s location on the Pacific Coast has enhanced its position as a regional arts and tourism center. See Appendix A – “GENERAL ECONOMIC DATA REGARDING THE CITY AND THE COUNTY” for general information regarding the City and the County.

Assessment proceedings were initiated by the City Council of the City pursuant to the Municipal Improvement Act of 1913, Division 12 of the California Streets and Highways Code (the “1913 Act”) by adoption of Resolution No. 25.032 on May 20, 2025, declaring its intention to form the Assessment District and directing NV5, Inc., San Diego, California, (the “Assessment Engineer”), to prepare a written report containing among other things, the proposed assessment for each parcel of land in the Assessment District. The written report was filed and preliminarily approved by the City Council on May 20, 2025 by Resolution No. 25.033 The Assessment Engineer subsequently filed a final written report with the City Council, which report was approved by the 73 3
City Council on September 23, 2025 by Resolution No. 25.077 (the “Engineer’s Report”). See Appendix G – “ENGINEER’S REPORT.”
On September 23, 2025, a public hearing was duly held as noticed, and all persons interested and desiring to be heard were given an opportunity to speak and be heard, and all matters pertaining to the Assessment District and proposed levy of assessments were fully heard and considered by the City Council, and all oral statements and all written protests or communications were duly considered. Following the public hearing, the assessment ballots were tabulated by the Assessment Engineer and the City Clerk and it was found that a majority protest as defined by Article XIIID of the California Constitution did not exist. On September 23, 2025, the City Council adopted its resolution confirming the proposed assessments. The City Council confirmed a total assessment of $5,233,077 and recorded such confirmed assessments (the “Assessments”). After confirmation and recordation, the Assessments became liens against the assessed parcels.

Following the recordation of the Assessments, all property owners in the Assessment District were given the opportunity to pay all or a portion of their Assessments in cash. As previously described, originally, there were 102 parcels in the Assessment District, of which 100 were assessed parcels with Assessments totaling $5,233,077 (the remaining 2 parcels are not subject to levy of Assessments). During the cash prepayment period, 22] parcels fully prepaid their Assessment in the total amount of $1,061,227]. The Bonds will be secured by unpaid Assessments equal to the aggregate principal amount of the Bonds. See “SECURITY FOR THE BONDS.” As of the date of issuance of the Bonds, there are 78] parcels in the Assessment District with unpaid Assessments securing the Bonds. See “THE ASSESSMENT DISTRICT.” For a list of the unpaid Assessments, see Appendix H – “LIST OF UNPAID ASSESSMENTS.”
No Additional Bonds
The City is not authorized to issue any additional bonds (other than refunding bonds) secured by the Assessment Revenues on a parity with the Bonds. See “THE BONDS – Refunding Bonds” and “SECURITY FOR THE BONDS – No Additional Bonds.”
The Improvements
The proceeds of the Bonds will primarily be used to provide financing to complete the Improvements. The Improvements to be constructed and installed will provide conversion to an underground utility system. See ‘THE ASSESSMENT DISTRICT – Description of Improvements.” The Assessment Engineer has determined that the Improvements provide a special benefit to the assessed parcels, will enhance neighborhood aesthetics, and the safety and reliability of the utility system. See Appendix G – “ENGINEER’S REPORT.”
Professionals Involved in the Offering
The Bank of New York Mellon Trust Company, N.A., Los Angeles, California, will act as Fiscal Agent under the Fiscal Agent Agreement. David Taussig and Associates, Inc., doing business as DTA (“DTA”), Newport Beach, California, will serve as District Administrator and as the initial Dissemination Agent under the City’s Continuing Disclosure Certificate. Fieldman, Rolapp & Associates, Inc., Irvine, California, has served as Municipal Advisor to the City in connection with the Bonds.
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The legal proceedings in connection with the issuance and delivery of the Bonds are subject to the approval as to their legality by Best Best & Krieger LLP, Riverside, California, Bond Counsel.

Certain legal matters will be passed on for the City by the City Attorney, and by Anzel Galvan LLP, San Francisco, California, as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by Kutak Rock LLP, Irvine, California. Other professional services have been performed by NV5, Inc., San Diego, California, as Assessment Engineer. For information concerning financial or other interest which certain of the above-mentioned professionals, advisors, counsel and agents may have in the offering of the Bonds, see “FINANCIAL INTERESTS.” Continuing Disclosure
In order to assist the Underwriter in complying with Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission, the City will agree to provide certain annual financial information and operating data and notice of certain enumerated events See “CONTINUING DISCLOSURE” and Appendix D – “FORM OF CONTINUING DISCLOSURE CERTIFICATE” for a description of the specific nature of the annual reports and notices of enumerated events to be provided by the City.

Bondowners’ Risks
Certain events could affect the timely repayment of the principal of and interest on the Bonds when due. See the section of this Official Statement entitled “BONDOWNERS’ RISKS” for a discussion of certain factors which should be considered, in addition to other matters described in this Official Statement, in evaluating an investment in the Bonds. The purchase of the Bonds involves risks, and the Bonds are not suitable investments for some types of investors. See “BONDOWNERS RISKS.”
Other Information
This Official Statement speaks only as of its date, and the information contained herein is subject to change. Brief descriptions of the Bonds and the Fiscal Agent Agreement are included in this Official Statement. Such descriptions and information do not purport to be comprehensive or definitive. All references herein to the Fiscal Agent Agreement, the Bonds and the constitution and laws of the State as well as the proceedings of the City Council of the City, are qualified in their entirety by references to such documents, laws and proceedings, and with respect to the Bonds, by reference to the Fiscal Agent Agreement. Copies of the Fiscal Agent Agreement, the Continuing Disclosure Certificate and other documents and information referred to herein are available for inspection and (upon request and payment to the Fiscal Agent of a charge for copying, mailing and handling) for delivery from the Fiscal Agent.

The information set forth herein has been obtained from sources which are believed to be reliable but is not guaranteed as to accuracy or completeness and is not to be construed as a representation 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 or the Assessment District 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.
75 5

ESTIMATED SOURCES AND USES OF FUNDS
The table below provides a summary of the sources and uses of funds for the Bonds, contributions by the City, and prepayments of Assessment by property owners during the cash prepayment period.

Sources: Amount
Principal Amount of the Bonds $
Less: Underwriter’s Discount
Plus: [Net] Original Premium
Plus: City Contributions
Plus: Property Owner Prepayments
Total Sources $
Uses:

Improvement Fund(1) $
Capitalized Interest Fund(2)
Reserve Fund(3)
Costs of Issuance Fund(4)
Total Uses $
(1) To be held by the City Treasurer and used to finance the construction of the Improvements. (2) To be held by the City Treasurer and used to pay interest on the Bonds through September 2, 2026. (3) To be held by the Fiscal Agent; equals the Reserve Requirement for the Bonds on the date the Bonds are issued. See “SECURITY FOR THE BONDS – Reserve Fund.”
(4) To be held by the City Treasurer and used to pay costs of issuance, including but not limited to, Fiscal Agent, Bond Counsel and Disclosure Counsel fees and costs, printing costs and other related costs for the issuance of the Bonds, reimbursable expenses of the City.

THE BONDS
General
The Bonds were authorized for issuance by a resolution adopted by the City Council of the City on December 9, 2025], and are being issued by the City pursuant to the Improvement Bond Act of 1915 (the “1915 Act”) and the Fiscal Agent Agreement.

The Bonds will be dated their date of delivery and mature on September 2 in the years and in the amounts shown on the inside cover page of this Official Statement. Interest shall be payable semiannually on March 2 and September 2 (each an “Interest Payment Date”) of each year until maturity commencing September 2, 2026. The Bonds shall be issued as fully registered bonds, without coupons, in the denominations of $5,000 or any integral multiple thereof, except that one Bond may include the amount by which the total exceeds the maximum integral of $5,000, if any.

Interest will be calculated on the basis of a 360-day year composed of twelve 30-day months.

Each Bond shall bear interest from the Interest Payment Date next preceding the date of authentication thereof unless (i) it is authenticated after a Record Date and before the close of business on the next Interest Payment Date, in which event it shall bear interest from such Interest Payment Date, or (ii) it is authenticated on or before the Record Date preceding the first Interest 76 6
Payment Date, in which event it shall bear interest from the Closing Date; 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 or from the Closing Date, if no interest has previously been paid or made available for payment thereon. “Record Date” is defined in the Fiscal Agent Agreement as the 15th day of the month next preceding the applicable Interest Payment Date whether or not such day is a Business Day.

Interest on the Bonds is payable by check of the Fiscal Agent mailed by first class mail, postage prepaid, on each Interest Payment Date, until the principal amount of a Bond has been paid or made available for payment, to the registered Owner thereof at such registered Owner’s address as it appears on the registration books maintained by the Fiscal Agent at the close of business on the Record Date preceding the Interest Payment Date. The Bonds will be held in book entry form and registered in the name of Cede & Co., as nominee of The Depository Trust Company (“DTC”), and all interest payments will be made directly to DTC for distribution to the beneficial owners of the Bonds in accordance with DTC’s procedures. See APPENDIX E – “THE BOOK-ENTRY SYSTEM.”
Redemption of Bonds*
Optional Redemption. The Bonds are subject to redemption prior to their stated maturity dates on any Interest Payment Date on and after September 2, 20__, on a pro rata basis among maturities (and by lot within any one maturity), in integral multiples of $5,000, at the option of the City from moneys derived by the City from any source, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption:

Redemption Dates Redemption Price
September 2, 20__ and March 2, 20__ 103%
September 2, 20__ and March 2, 20__ 102
September 2, 20__ and March 2, 20__ 101
September 2, 20__ and any Interest Payment Date thereafter 100 Mandatory Redemption From Assessment Prepayments. The Bonds are subject to mandatory redemption prior to their stated maturity dates on any Interest Payment Date, as selected by the City, in integral multiples of $5,000, from moneys derived by the City from Assessment Prepayments, at the following redemption prices (expressed as percentages of the principal amount of the Bonds to be redeemed), together with accrued interest to the date of redemption:

Redemption Dates Redemption Price
Interest Payment Dates on or before March 2, 20__ 103%
September 2, 20__ and March 2, 20__ 102
September 2, 20__ and March 2, 20__ 101
September 2, 20__ and any Interest Payment Date thereafter 100 * Preliminary; subject to change.
77 7
In selecting Bonds for mandatory redemption, the City Treasurer shall select such Bonds in such a way that the ratio of the principal amount of the Bonds in each maturity of the Bonds that will remain Outstanding to the aggregate principal amount of the Bonds that will remain Outstanding will be approximately the same as it was prior to the redemption of such Bonds, insofar as possible. See “BONDOWNERS’ RISKS – Potential Early Redemption of Bonds from Prepayments or Other Sources.”
Sinking Fund Redemption. The Outstanding Bonds maturing on September 2, 20__, are subject to mandatory sinking fund redemption, in part, on September 2, 20__, and on each September 2 thereafter prior to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, from sinking fund payments as follows:

Redemption Dates
(September 2) Sinking Fund Payments
$
(maturity)
The Outstanding Bonds maturing on September 2, 20__, are subject to mandatory sinking fund redemption, in part, on September 2, 20__, and on each September 2 thereafter prior to maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, from sinking fund payments as follows:

Redemption Dates
(September 2) Sinking Fund Payments
$
(maturity)
The Outstanding Bonds maturing on September 2, 20__, are subject to mandatory sinking fund redemption, in part, on September 2, 20__, and on each September 2 thereafter prior to 78 8
maturity, by lot, at a redemption price equal to the principal amount thereof to be redeemed, together with accrued interest to the date of redemption, without premium, from sinking fund payments as follows:

Redemption Dates
(September 2) Sinking Fund Payments
$
(maturity)
The amounts in the foregoing schedules will be reduced pro rata among redemption dates, in order to maintain substantially level Annual Debt Service, as directed in writing to the Fiscal Agent by an Authorized Officer, as a result of any prior partial optional redemption or mandatory redemption from Assessment Prepayments of the Bonds or from moneys derived by the City from any source as described above under the subcaptions “– Optional Redemption” and “– Mandatory Redemption From Assessment Prepayments” above, respectively.

Purchase in Lieu of Redemption
In lieu of payment at maturity or redemption as described in the preceding section, moneys in the Redemption Fund may be used and withdrawn by the Fiscal Agent for purchase of Outstanding Bonds, upon the filing with the Fiscal Agent of an Officer’s Certificate requesting such purchase, at public or private sale as and when, and at such prices (including brokerage and other charges) as such Officer’s Certificate may provide, but in no event may Bonds be purchased at a price in excess of the principal amount thereof, plus interest accrued to the date of purchase.

Notice of Redemption
The Fiscal Agent will cause notice of any redemption to be mailed by first class mail, postage prepaid, at least 30 days but not more than 60 days prior to the date fixed for redemption, to the Securities Depositories and to one or more Information Services selected by an Authorized Officer, and to the respective registered Owners of any Bonds designated for redemption, at their addresses appearing on the Bond registration books maintained by the Fiscal Agent at its Principal Office; but such mailing shall not be a condition precedent to such redemption and failure to mail or to receive any such notice, or any defect therein, shall not affect the validity of the proceedings for the redemption of such Bonds.

The notice of redemption shall state the date of such notice, the date of issue of the Bonds, the place or places of redemption, the redemption date, the redemption price and, if less than all of the then Outstanding Bonds are to be called for redemption, shall designate the CUSIP numbers and Bond numbers of the Bonds to be redeemed, by giving the individual CUSIP number and Bond number of each Bond to be redeemed, or shall state that all Bonds between two stated Bond numbers, both inclusive, are to be redeemed or that all of the Bonds of one or more maturities have been called for redemption, shall state as to any Bond called for redemption in part the portion of the principal of the Bond to be redeemed, shall require that such Bonds be then surrendered at the Principal Office of the Fiscal Agent for redemption at the said redemption price, and shall state that further interest on such Bonds will not accrue from and after the redemption date. 79 9
Redemption notices may be conditional. The City has the right to rescind any notice of redemption of the Bonds by providing written notice to the Fiscal Agent prior to the date fixed for redemption. Any notice of redemption shall be cancelled and annulled if for any reason funds will not or are not available on the date fixed for redemption for the payment in full of the Bonds then called for redemption and such cancellation shall not constitute an Event of Default. The City and the Fiscal Agent have no liability to the Owners of the Bonds or any other party related to or arising from such rescission of redemption. The Fiscal Agent shall deliver the rescission notice in the same manner as the notice of redemption was delivered.

Selection of Bonds for Redemption
Whenever provision is made in the Fiscal Agent Agreement for the redemption of less than all of the Bonds, the Fiscal Agent shall select the Bonds for redemption in such a way that the ratio of Outstanding Bonds shall be approximately the same in each maturity of the Bonds insofar as possible, and shall select Bonds for redemption within each maturity of the Bonds by lot.

Upon surrender of Bonds redeemed in part only, the City shall execute and the Fiscal Agent shall authenticate and deliver to the Owner, at the expense of the City, a new Bond or Bonds, of the same maturity, of authorized denominations in aggregate principal amount equal to the unredeemed portion of the Bond or Bonds.

Effect of Redemption
From and after the date fixed for redemption, if funds available for the payment of the redemption prices of the Bonds called for redemption, together with accrued interest to the date of redemption, shall have been deposited in the Redemption Fund, such Bonds shall cease to be entitled to any benefit under the Fiscal Agent Agreement other than the right to receive payment of the redemption price, and interest shall cease to accrue on the Bonds to be redeemed on the redemption date specified in the notice of redemption.

Refunding Bonds
Pursuant to the Refunding Act of 1984 for 1915 Improvement Act Bonds (Division 11.5 of the Streets and Highways Code) (the “1984 Act”), the City may issue refunding bonds for the purpose of redeeming all or a portion of the Bonds. The City may issue and sell refunding bonds without giving notice to or conducting a hearing for the owners of property in the Assessment District if the City Council makes the findings required in the 1984 Act. In the event refunding bonds are sold, the Bonds will be redeemed in whole or in part, as applicable, from refunding bond proceeds.

Annual Debt Service Schedule
The following table presents the debt service schedule for the Bonds based on the maturity schedule and interest rates set forth on the inside cover page of this Official Statement assuming no earlier redemption thereof (other than mandatory sinking fund redemption). 80 10
TABLE 1

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Debt Service
Year Ending
September 2 Principal Interest
Total Debt
Service
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
2046
2047
2048
2049
2050
TOTAL
Source: Underwriter.

SECURITY FOR THE BONDS
Limited City Obligation
THE CITY’S OBLIGATION TO ADVANCE MONEYS TO PAY DEBT SERVICE ON

THE BONDS IN THE EVENT OF DELINQUENT ASSESSMENT INSTALLMENTS IS

LIMITED TO THE MONEYS AVAILABLE IN THE REDEMPTION FUND AND IN THE RESERVE FUND. BONDOWNERS SHOULD NOT RELY UPON THE CITY TO ADVANCE 81 11

MONEYS TO THE REDEMPTION FUND SHOULD THE RESERVE FUND EVER BE

DEPLETED AND THE CITY HAS MADE THE EXPRESS ELECTION UNDER SECTION 8769(B) OF THE CALIFORNIA STREETS AND HIGHWAYS CODE NOT TO DO SO.

THE BONDS ARE NOT SECURED BY THE GENERAL TAXING POWER OF THE

CITY, THE COUNTY OF ORANGE OR THE STATE OF CALIFORNIA, OR ANY OF ITS

POLITICAL SUBDIVISIONS, NOR IS THE FULL FAITH AND CREDIT OF THE CITY, THE

COUNTY, THE STATE OR ANY OF ITS POLITICAL SUBDIVISIONS PLEDGED TO THE PAYMENT OF THE BONDS.

Pledge and Transfers of Assessment Revenues
Pledge of Assessment Revenues. The Bonds will be secured by a pledge of all of the Assessment Revenues and all moneys deposited in the Redemption Fund, all moneys deposited in the Reserve Fund and the Capitalized Interest Fund and, until disbursed as provided in the Fiscal Agent Agreement, all moneys deposited in the Improvement Fund. The Assessment Revenues and all moneys deposited into such funds (except as otherwise provided in the Fiscal Agent Agreement with respect to moneys disbursed from the Improvement Fund) are dedicated in their entirety to the payment of the principal of the Bonds, and interest and any premium on, the Bonds, as provided in the Fiscal Agent Agreement and in the 1915 Act, until all of the Bonds have been paid and retired or until moneys or Federal Securities have been set aside irrevocably for that purpose in accordance with the Fiscal Agent Agreement.
“Assessment Revenues” are defined in the Fiscal Agent Agreement to mean the revenues received by the City in each Fiscal Year from the collection of the annual installments of the unpaid Assessments, including penalties and interest on delinquent installments of the unpaid Assessments and proceeds from the sale of property for delinquent Assessment installments, but excluding the amounts of the annual assessments collected by the City for the payment of administration costs pursuant to Sections 8682, 8682.1 and 10204(f) of the California Streets and Highways Code (see “THE ASSESSMENT DISTRICT – Maximum annual Assessment for Administrative Costs and Expenses”) and Assessment Prepayments.
“Assessment Prepayment” is defined in the Fiscal Agent Agreement to mean an amount received by the City from a property owner as a payment in full or a partial payment of the unpaid amount of the Assessment levied on his or her property.

Although the unpaid Assessments constitute fixed liens on the lots and parcels assessed, they do not constitute a personal indebtedness of the respective owners of such lots and parcels. There can be no assurance as to the ability or the willingness of such owners to pay the unpaid Assessments when due. See “BONDOWNERS’ RISKS.”
The unpaid Assessments will be collected in annual installments, together with interest, on the County secured tax roll on which general taxes on real property are collected (the “Assessment Installments”). The City will include in the Annual Installments an amount for the payment of administrative expenses in the amount set forth in the Engineer’s Report; such amounts are not pledged as security for, or otherwise available to pay debt service on, the Bonds. The Assessment Installments are payable and become delinquent at the same time and in the same proportionate amounts and bear the same proportionate penalties and interest after delinquency as do general taxes. 82 12
The properties upon which the Assessments are levied are subject to the same provisions for sale and redemption as are properties for nonpayment of general taxes.

Transfers of Assessment Revenues. No later than August 15, 2026, the Fiscal Agent shall transfer moneys from the Capitalized Interest Fund and deposit said moneys to the Redemption Fund in the amount necessary to equal the interest which is due and payable on the Outstanding Bonds on such September 2, 2026 On or before the 15th Business Day preceding each Interest Payment Date, excluding the September 2, 2026, the City Treasurer shall transfer to the Fiscal Agent for deposit in the Redemption Fund an amount of the Assessment Revenues which the Fiscal Agent has advised the City Treasurer will be needed to pay Debt Service on the Bonds on such Interest Payment Date.

Upon receipt of each such transfer of Assessment Revenues, the Fiscal Agent shall deposit the amount thereof in the Redemption Fund for the payment of Debt Service on the Bonds on the Interest Payment Date for which the transfer is made.

The Assessment Installments billed against each of the lots and parcels in the Assessment District each year represent a pro rata share of the total principal, including mandatory sinking fund payments, if any, and interest coming due on all of the Bonds that year, including any amounts needed to replenish the Reserve Fund. The amount billed against each lot or parcel is based on the percentage which the unpaid Assessment against the property bears to the total of unpaid Assessments in the Assessment District. The failure of a property owner to pay an annual Assessment Installment will not result in an increase in Assessment Installments against other parcels in the Assessment District.

Each property owner has a statutory right to prepay the Assessment on a parcel in whole or in part on any date. Amounts received as prepaid Assessments will be used solely for the purpose of redeeming Bonds. See “THE BONDS – Redemption of Bonds – Mandatory Redemption from Assessment Prepayments.”
Reserve Fund
General. The Fiscal Agent Agreement provides for the creation of the “Underground Utility Assessment District No. 2021-1 (West Street) Reserve Fund” (the “Reserve Fund”), as a separate account to be held by the Fiscal Agent. Moneys in the Reserve Fund shall be held by the Fiscal Agent for the benefit of the Owners of the Bonds as a reserve for the payment of the principal of and interest and any premium on the Bonds and shall be subject to a lien in favor of the Owners of the Bonds.

The Reserve Fund is required to be maintained at the Reserve Requirement. Under the Fiscal Agent Agreement, “Reserve Requirement” is defined to mean the amount of $____, representing 6% of the original principal amount of the Bonds.

Use of Funds. Except as otherwise described below, all amounts deposited in the Reserve Fund shall be used and withdrawn by the Fiscal Agent solely for the purpose of making transfers to the Redemption Fund in the event of any deficiency at any time in the Redemption Fund of the amount then required for payment of the principal of, and interest and any premium on the Bonds or, in accordance with the provisions of the Fiscal Agent Agreement described under the subcaption “– Transfer of Excess of Reserve Requirement” below, or for the purpose of redeeming Bonds. Amounts transferred from the Reserve Fund to the Redemption Fund will be restored by the City from the 83 13
collection of delinquent installments on the Assessments levied on parcels for which such installments are delinquent, and penalties and interest thereon, whether by judicial foreclosure proceedings or otherwise, as soon as is reasonably possible following the receipt by the City of such delinquent installments, penalties and interest.

Transfer Due to Deficiency in Redemption Fund. Whenever transfer is made from the Reserve Fund to the Redemption Fund due to a deficiency in the Redemption Fund, the Fiscal Agent shall report such fact to the City.

Transfers on Payment of Assessments. Whenever an Assessment levied on a lot or parcel of property within the Assessment District is paid off, the Fiscal Agent shall, upon receiving an Officer’s Certificate regarding such Assessment, transfer from the Reserve Fund to the Redemption Fund an amount equal to the reduction in such Assessment determined pursuant to Section 8881 of the California Streets and Highways Code, which amount shall be specified in the Officer’s Certificate. Upon receipt of such an Officer’s Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer’s Certificate.

Transfer of Excess of Reserve Requirement. Whenever, on any September 3, the amount in the Reserve Fund, less Investment Earnings resulting from the investment of the funds therein which must be rebated to the United States, exceeds the then applicable Reserve Requirement, the Fiscal Agent shall provide written notice to the City of the amount of the excess and shall, subject to the requirements of the Fiscal Agent Agreement, transfer an amount equal to the excess from the Reserve Fund to the Redemption Fund to be used for the payment of Debt Service on the next succeeding Interest Payment Date in accordance with the Fiscal Agent Agreement.

Transfer When Balance Exceeds Outstanding Bonds. Whenever the balance in the Reserve Fund exceeds the amount required to redeem or pay the Outstanding Bonds, including interest accrued to the date of payment or redemption and premium, if any, due upon redemption, the Fiscal Agent shall, upon receiving written direction from an Authorized Officer, transfer the amount in the Reserve Fund to the Redemption Fund to be applied, on the next succeeding Interest Payment Date to the payment and redemption, in accordance with the provisions of the Fiscal Agent Agreement, as applicable, of all of the Outstanding Bonds. In the event that the amount so transferred from the Reserve Fund to the Redemption Fund exceeds the amount required to pay and redeem the Outstanding Bonds, the balance in the Reserve Fund shall be transferred by the Fiscal Agent to the City to be applied as provided in Section 8885 of the California Streets and Highways Code. Upon receipt of such an Officer’s Certificate, the Fiscal Agent is authorized to act thereon without further inquiry, shall not be responsible for the accuracy of the statements contained therein, and shall be absolutely protected and incur no liability in relying on such Officer’s Certificate. The City has no obligation to replenish the Reserve Fund except to the extent that delinquent Assessments are paid or proceeds from foreclosure sales are realized. See “BONDOWNERS’ RISKS – Foreclosure Shortfall.”
Covenant to Commence Superior Court Foreclosure
The 1913 Act provides that in the event any assessment or installment thereof or any interest thereon is not paid when due, the City may order that the same be collected by an action brought in 84 14
the superior court to foreclose the lien of the unpaid assessment. In such an action, the real property subject to the unpaid assessment may be sold at judicial foreclosure sale. This foreclosure sale procedure is not mandatory. However, in the Fiscal Agent Agreement, the City covenants with and for the benefit of the Owners of the Bonds that it will order, and cause to be commenced, upon default of any Assessment installments due (except under circumstances to be specified in the resolution of issuance of the Bonds), judicial foreclosure proceedings against properties with delinquent Assessment installments to be brought within 150 days of such default, as permitted by Section 8830(d) of the California Streets and Highways Code. The Fiscal Agent Agreement further provides that, notwithstanding the foregoing, the City may elect, in its sole discretion, to defer foreclosure proceedings against properties that are determined to be delinquent in the payment of any Assessment installments within 150 days of such default, as permitted by Section 8830(d) of the California Streets and Highways Code, if the City has received funds equal to the delinquent Assessment installments for each parcel of property from any source, including, but not limited to, funds appropriated by the City for such purpose, and such funds are sufficient to make timely payment of scheduled payment of principal and interest on the Bonds, together with any penalties and fees that otherwise would have been paid or required to be paid from the delinquent Assessment installments.

If the Reserve Fund is depleted, there could be a default or a delay in payments to the Owners of the Bonds pending prosecution of foreclosure proceedings and receipt by the Assessment District of foreclosure sale proceeds, if any.

Prior to July 1, 1983, the right of redemption from foreclosure sales was limited to a period of one year from the date of sale. Under legislation effective July 1, 1983, this statutory right of redemption was amended to provide that before notice of sale of the foreclosed parcel can be given following court judgment of foreclosure, a redemption period of 120 days must elapse. Furthermore, if the purchaser at the sale is the judgment creditor (here, the City) an action may be commenced by the delinquent property owner within six months after the date of sale to set aside such sale. The constitutionality of the aforementioned legislation which repeals the one year redemption period has not been tested and there can be no assurance that, if tested, such legislation will be upheld.

Foreclosure by court action is subject to normal litigation delays, the nature and extent of which are largely dependent upon the nature of the defense, if any, put forth by the debtor and the condition of the calendar of the superior court. Such foreclosure actions can be stayed by the superior court on generally accepted equitable grounds or as the result of the debtor’s filing for relief under the federal bankruptcy laws. Amendments to the 1915 Act enacted in 1988 and effective January 1, 1989, provide that under certain circumstances property may be sold upon foreclosure at less than the Minimum Price or without a Minimum Price. “Minimum Price” as used in the 1915 Act is the amount equal to the delinquent installments of principal or interest of the assessment together with all interest penalties, costs, fees, charges and other amounts more fully detailed in the 1915 Act. The court may authorize a sale at less than the Minimum Price if the court determines that sale at less than the Minimum Price will not result in an ultimate loss to the Owners of the Bonds or, under certain circumstances, if owners of 75% or more of the outstanding Bonds consent to such sale. However, there can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Fund and a delay in payments of debt service on the Bonds. In the event court foreclosure proceedings are commenced by the City, there may be delays in payments to Owners of the Bonds pending prosecution of the foreclosure proceedings to completion and the receipt of the City of any proceeds of the foreclosure sale. It is also possible that no qualified bid will be received at the foreclosure sale. See “BONDOWNERS’ RISKS.” 85 15
Delinquency Resulting in Ultimate or Temporary Loss on Bonds The Fiscal Agent Agreement provides that, if the City Treasurer determines, pursuant to Section 8770 of the California Streets and Highways Code, that there is a danger of an ultimate loss accruing to the Bond Owners, for any reason, the provisions of that section and Sections 8771, 8772 and 8773 of the California Streets and Highways Code shall govern with respect to the procedures which shall be followed in paying the principal of and interest on the Outstanding Bonds. Under said sections, if after holding a hearing, the City Council determines that in its judgment there will be a shortage in the Redemption Fund, it shall direct the City Treasurer to pay to the holders of all outstanding and unpaid Bonds such proportion thereof as the amount of funds on hand bears to the total amount of the unpaid principal of the Bonds and the interest which has accrued or will accrue thereon. Similar proportionate payments shall thereafter be made periodically as moneys come into the Redemption Fund.

Priority of Lien; Senior Prior Lien
The Assessments and each Assessment Installment, and any interest and penalties thereon, constitute a lien against the respective parcels of assessable property within the Assessment District until the same are paid. Such lien is subordinate to all fixed special assessment liens previously imposed upon the same property but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended.

The City previously formed Underground Utility Assessment District No. 09-1 (“Assessment District 09-1”), an underground utility assessment district. Three parcels in the Assessment District are also located within the boundaries of Assessment District 09-1. The lien of the assessments levied on such parcels for Assessment District 09-1 is senior to the lien of the unpaid Assessments levied on such parcels for the Assessment District. See “THE ASSESSMENT DISTRICT – Value to Lien Ratios.” See also “BONDOWNERS’ RISKS – Parity of Taxes, Bonds and Special Assessments.” See “THE ASSESSMENT DISTRICT – Direct and Overlapping Debt” herein for a description of other special taxes, assessments or reassessments secured by a lien on property within the Assessment District.

Existing Liens
In addition to Assessment District 09-1, contained within the Assessment District are numerous overlapping local agencies providing public services and having liens against the respective parcels of assessable property within the Assessment District. See “THE ASSESSMENT DISTRICT — Direct and Overlapping Debt” herein.

No Teeter Plan
In 1949, the California Legislature enacted an alternative method for the distribution of secured property taxes to local agencies. This method, known as the Teeter Plan, is now set forth in Sections 4701-4717 of the California Revenue and Taxation Code. The County has adopted a Teeter Plan. However, the City has not made application to the County to request that assessments or reassessments of its special assessment districts, including the Assessment District, be included in the 86 16
County’s Teeter Plan. Consequently, the amount of the levy of Assessments in the Assessment District that can be allocated to the City depends upon the actual collections of such Assessments.

Deferral Program
Pursuant to Section 10700 et seq. of the California Streets and Highways Code, the City has established a deferral program with respect to assessments levied on parcels in assessment districts that are formed by the City under the 1913 Act to finance the undergrounding of utilities (the “Deferral Program”), including the Assessment District. Under the Deferral Program, eligible property owners are permitted to defer the payment of assessments so long they continue to own the property in the district. Participation in the Deferral Property is subject to the satisfaction of certain other eligibility requirements, including: (1) the property owner or their spouse must be at least 62 years old, blind or disabled in accordance with standards used by the Internal Revenue Service for tax return purposes; (2) the property within the assessment district must be the property owner’s primary residence; and the (3) the property owner’s household income cannot exceed the amount corresponding to low income household in the County. In connection with the Bonds, none of the property owners within the Assessment District applied to participate in the Deferral Program.

No Additional Bonds Except for Refunding Purposes
The City is not authorized to issue additional bonds (other than refunding bonds) secured by the Assessment Revenues. See “THE BONDS – Refunding Bonds.” See Appendix C – “SUMMARY OF FISCAL AGENT AGREEMENT” for a further summary of the Fiscal Agent Agreement.

87 17
[Insert Boundary Map]
88 18

THE ASSESSMENT DISTRICT
Description
The Assessment District is generally bounded by Coast Highway, Egan Road, Eagle Rock Way, West Street, Valido Road and Rico Road within the City. The first page of the Assessment Diagram outlining the boundaries of the Assessment District is included in the previous page. See Appendix F – “ASSESSMENT DIAGRAM” for a complete copy of the Assessment Diagram outlining the boundaries of the Assessment District.

Originally, there were 102 parcels in the Assessment District, of which 100 were assessed parcels with unpaid Assessments totaling $5,233,077 (the remaining 2 parcels are not subject to levy of Assessments). Of the 100 assessable parcels in the Assessment District, the Assessments for 22] parcels were paid in full during the cash prepayment period. As a result, there are 78] parcels in the Assessment District with unpaid Assessments securing the Bonds.

The parcels in the Assessment District are mostly developed for residential use. Of the 100 assessable parcels within the Assessment District, a total of 95 parcels are zoned for residential use, including three parcels that comprise a City park. The remaining five parcels are non-residential parcels, four of which are zoned within a local business district and one is an institutional parcel owned by SCWD. SCWD provides water, recycled water, and wastewater services to the South Orange County. A portion of the City, including the Assessment District, is located within SCWD’s service area. The parcel in the Assessment District that is owned by SCWD includes a reservoir and a fueling station. The City and SCWD are among the property owners in the Assessment District that prepaid their assessment during the cash prepayment period.

As previously described, three parcels (Assessor Parcel Numbers 056-062-06, 056-062-07, and 056-062-08) in the Assessment District are also within the boundaries of Assessment District 09-

1. The City previously issued limited obligation bonds in the original principal amount of $5,345,000 payable from unpaid assessments levied in Assessment District 09-1, of which unpaid assessments totaling approximately $3,167 relate to such three parcels. The lien of the assessments levied on such parcels for Assessment District 09-1 is senior to the lien of the unpaid Assessments levied on such parcels for the Assessment District. See Appendix H – “LIST OF UNPAID ASSESSMENTS” for certain information for such parcels including their estimated value-to-lien ratios. See also “BONDOWNERS’ RISKS – Parity of Taxes, Bonds and Special Assessments.” The Bonds will be secured by unpaid Assessments equal to the aggregate principal amount of the Bonds. The first Assessment Installments are expected to be levied in fiscal year 2026-27. The aggregate assessed value of parcels in the Assessment District with unpaid Assessments was $113,336,445] for fiscal year 2025-26. See Appendix H – “LIST OF UNPAID ASSESSMENTS.” Description of Improvements
The Improvements within the Assessment District will consist of the undergrounding of overhead utility lines and utility poles within the Assessment District. The Improvements will include removal of existing overhead power, telephone and cable wires, removal of existing utility poles, removal of overhead residential service drops, construction of mainline underground power, telephone and cable conduit, and construction of service conduits. The utilities to be undergrounded 89 19
include power lines owned by San Diego Gas & Electric and communication lines owned by Frontier Communications, Cox Communications and Crown Castle. The proposed undergrounding of electric and communication improvements to be constructed are the within public right-of-way and/or easements owned by the serving utility.

The cost of the Improvements and incidental expenses was estimated to total approximately $5,808,679 (excluding financing costs) based on the Engineer’s Report prepared by the Assessment Engineer in connection with the formation of the Assessment District. “THE BONDS – Sources and Uses of Funds.”
The design of the Improvements is complete and the City has received bids to complete the construction of the Improvements. The lowest responsive bid was submitted by Hot Line Construction, Inc. The City Council awarded the construction to Hot Line Construction, Inc. on September 23, 2025. The following table shows a summary of the total cost estimated based on the construction bid received and other costs as contained in the Engineer’s Report prepared by the Assessment Engineer, as further updated by the City. A copy of the Engineer’s Report is attached hereto as Appendix G – “ENGINEER’S REPORT.”
TABLE 2

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Estimate of Costs and Expenses
Construction Costs $5,808,679
Project Incidental Expenses 184,160
Bond Financing Costs (1) 422,286*
Total Project Costs $6,415,125*
Less: City Contribution $707,536
Less: City Contribution for General Benefit 707,536
Less: Property Owner Prepayments 1,110,053
Total Unpaid Assessments (2) $3,890,000*
(1) Includes Reserve Fund deposit equal to the Reserve Requirement of the Bonds, capitalized interest, underwriter’s discount, costs of issuance and other costs associated with the issuance of the Bonds totaling ($587,859 less the premium on the Bonds ($165,573).
(2) Total may not foot due to rounding.
*Preliminary; subject to change.

Source: Assessment Engineer and DTA.

Formation Proceedings
The City Council has taken proceedings under the 1913 Act for the formation of the Assessment District and has confirmed the Assessments. On September 23, 2025, the City Council conducted a duly noticed public hearing regarding the formation of the Assessment District. As of the close of the public hearing, there was no majority protest and the majority of the assessment ballots cast, weighted by the amount of the assessments represented thereby, were in favor of the 90 20
formation of the Assessment District and levy of the Assessments. Property owners were then given an opportunity to prepay their Assessments in cash or to pay them in annual installments following the issuance of the Bonds. At the end of the cash collection period, a list of unpaid assessments was filed with the City Treasurer, acting as treasurer pursuant to Section 8620 of the 1915 Act. The Assessments and a related diagram were recorded in the office of the City Engineer/Superintendent of Streets, and with the County Recorder of the County. A notice of assessment, as prescribed in Section 3114 of the Streets and Highways Code, was recorded with the County Recorder of the County, whereupon the Assessments attached as a lien upon the property assessed within the Assessment District as provided in Section 3115 of the Streets and Highways Code.

Allocation of Assessments
The Assessment District was formed under the authority of the 1913 Act and Article XIIID of the California State Constitution, together with its implementing legislation (collectively “Proposition 218”), which require that local agencies levy assessments according to the special benefit and prescribe the procedures for such levy. Costs and expenses of the proposed Improvements must be apportioned against the parcels in the Assessment District by a formula which proportionally and equitably distributes the costs in direct proportion to the estimated special benefits these parcels receive from the Improvements. Neither the 1913 Act nor Proposition 218 specifies the method that is used to apportion the benefits.

In the Engineer’s Report, the Assessment Engineer identified the benefits the proposed Improvements will render to the properties within the Assessment District and determined that the property owners of assessed parcels will receive a unique and special benefit distinguished from general benefits to the area at large. The unique and special benefit from the Improvements identified in the Engineer’s Report are improved neighborhood aesthetics, enhanced safety, and enhanced reliability of service from utilities. See APPENDIX G – “ENGINEER’S REPORT” for a description of the method of apportionment of the Assessments. Assessments on assessed parcels in the Assessment District range from a high of approximately $141,563 to a low of approximately $19,374 depending on the special benefit each property will receive from the Improvements as set forth in the Engineer’s Report and confirmed by the City Council.

Maximum Annual Assessment for Administrative Costs and Expenses The annual costs associated with administering the Assessment District will be spread to each parcel in the Assessment District with unpaid Assessments on a pro-rata basis. Administrative costs for the Assessment District cannot exceed a total of $85 per parcel per year, subject to an annual increase based on the Consumer Price Index or 3%, whichever is greater, during the preceding year ending in January, for all Urban Consumers in the Los Angeles, Orange and Riverside County areas.

The exact amount of the administration charge will be established each year by the City Treasurer’s Office. Costs of administering the Assessment District will first be paid in fiscal year 2025-26.

The annual administrative assessment described above is separate from and is in addition to the $16.00 per parcel collection fee which will be added to each annual installment pursuant to Section 8682 of the California Streets and Highways Code, and is further separate from and in addition to specific fees payable to the City in connection with (a) prepayments of assessments by property owners, (b) apportionments of assessments to reflect divisions of parcels and (c) late 91 21
charges and penalties which become payable in the event of delinquency in the payment of assessment installments by December 10 and April 10 each year.

Pursuant to the Fiscal Agent Agreement, the amounts of the annual assessments collected by the City for the payment of administration costs pursuant to Sections 8682, 8682.1 and 10204(f) of the California Streets and Highways Code and Assessment Prepayments are not pledge as security for the Bonds. See “SECURITY FOR THE BONDS – Pledge and Transfers of Assessment Revenues.”
Value-to-Lien Ratios
The value of the land within the Assessment District with unpaid Assessments is significant because in the event of a delinquency in the payment of Assessments, the City may foreclose only against delinquent parcels. According to the County’s property ownership records, the assessed value of the property within the Assessment District with unpaid Assessments was $143,451,408 for fiscal year 2025-26. Based on fiscal year 2025-26 assessed values and the unpaid Assessments, the 78] parcels within the Assessment District with unpaid Assessments have an aggregate assessed value-toassessment lien ratio of 28.38 to 1* (including overlapping tax and assessment debt).

Table 3 shows the stratification of the estimated value-to-assessment liens and the estimated overall value-to-debt ratios including overlapping tax and assessment debt for the parcels with unpaid Assessments within the Assessment District. Table 4 shows each of the parcels with unpaid Assessments within the Assessment District with value-to-lien ratios less than 3.00 to 1 (including overlapping tax and assessment debt).

Appendix H lists each of the parcels with unpaid Assessments within the Assessment District and calculates the estimated value-to-assessment lien and the estimated overall value-to-lien (including overlapping tax and assessment debt). See Appendix H – “LIST OF UNPAID ASSESSMENTS.”
Assessed values do not necessarily represent market values. Article XIIIA of the California Constitution (Proposition 13) defines “full cash value” to mean “the County assessor’s valuation of real property as shown on the 1975/76 roll under ‘full cash value’, or, thereafter, the appraised value of real property when purchased or newly constructed or when a change in ownership has occurred after the 1975 assessment,” subject to exemptions in certain circumstances of property transfer or reconstruction. The “full cash value” is subject to annual adjustment to reflect increases, not to exceed 2% for any year, or decreases in the consumer price index or comparable local data, or to reflect reductions in property value caused by damage, destruction or other factors. Because of the general limitation to 2% per year in increases in full cash value of properties which remain in the same ownership, the County tax roll does not reflect values uniformly proportional to actual market values. From time to time, property sales occur which result in new Proposition 13 base values on the assessment roll.

No single owner is expected to be responsible for more than 2.34% of the total unpaid Assessments.
* Preliminary; subject to change.
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TABLE 3

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Assessed Value-to-Lien Summary
Fiscal Year 2025-26 Assessed Value (1)
Value to
Lien Ratio
No.
of
Parcel Land Improvements Total
Original
Assessment
District
Lien
Outstanding
Assessment
District
Lien (2)*
% of
Outstanding
Assessment
District Lien*
Total
Direct and
Overlapping
Debt (3)*
Total
Lien (4)*
Valueto-Lien
Ratio*
Greater than 100: 1 2 $5,082,818 $982,226 $6,065,044 $55,912 $54,376 1.38% $2,229 $56,605 107.15 50:1 to 99.99:1 8 $22,671,369 $3,911,242 $26,582,611 $378,025 $367,642 9.32% $9,779 $377,421 70.43 25:1 to 49.99:1 33 $52,645,690 $7,568,822 $60,214,512 $1,748,802 $1,700,769 43.11% $28,402 $1,729,172 34.82 10:1 to 24.99:1 20 $13,671,486 $2,886,932 $16,558,418 $1,061,487 $1,032,332 26.17% $6,059 $1,038,391 15.95 3:1 to 9.99:1 8 $2,284,031 $883,775 $3,167,806 $400,448 $389,449 9.87% $1,160 $390,610 8.11 Less than 2.99:1 7 $394,685 $353,369 $748,054 $411,740 $400,431 10.15% $262 $400,693 1.87 Total 78 $96,750,079 $16,586,366 $113,336,445 $4,056,412 $3,945,000 100.00% $47,892 $3,992,892 28.38 (1) Assessed Value as of January 1, 2025 as provided by County of Orange Assessor. (2) Based on par amount of Bonds.
(3) Sourced from California Municipal Statistics, Inc. Includes senior assessment lien on three parcels (Assessor Parcel Numbers 056-062-06, 056-062-07, and 056-062-08) in the Assessment District are also within the boundaries of Assessment District 09-1. (4) Represents the projected outstanding assessment plus the total direct and overlapping debt. *Preliminary; subject to change.

Source: Orange County Assessor’s office as compiled by DTA. 93 23
TABLE 4

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Parcels with Value-to-Lien Less than 3:1 (1)
Fiscal Year 2025-26 Assessed Value (1)
Assmt. # APN Land Improvements Total
Original
Assessment
District Lien
Outstanding
Assessment
District Lien (2)*
Total
Direct and
Overlapping
Debt (3)*
Value-toLien*
% of Total
Outstanding
Balance*
10 056-070-22 (4) $56,340 $56,866 $113,206 $56,079 $54,538 $42 2.07 1.38% 12 056-070-37 (5) $56,348 $73,714 $130,062 $54,249 $52,759 $45 2.46 1.34% 24 056-070-30 (6) $64,777 $36,112 $100,889 $87,542 $85,138 $35 1.18 2.16% 51 056-063-04 (7) $50,820 $30,865 $81,685 $52,079 $50,649 $30 1.61 1.28% 54 056-063-03 (8) $50,813 $43,273 $94,086 $51,590 $50,173 $32 1.87 1.27% 57 056-063-14 (9) $59,242 $33,036 $92,278 $57,302 $55,728 $31 1.65 1.41% 77 056-086-29 (10) $56,345 $79,503 $135,848 $52,899 $51,446 $47 2.64 1.30% Total $394,685 $353,369 $748,054 $411,740 $400,431 $262 1.87 10.15% (1) Assessed Value and ownership as of January 1, 2025, as provided by County of Orange Assessor. (2) Based on par amount of Bonds.
(3) Sourced from California Municipal Statistics, Inc.
(4) No sales/transaction on file. Property looks fully developed based on satellite image. (5) No sales/transaction on file. Property looks fully developed based on satellite image. (6) No sales/transaction have occurred on the property since 1978. (7) No sales/transaction have occurred on the property since 1997. (8) Sold for $1.6M on August 8, 2025. New assessed value will be included in Fiscal Year 2025-26. (9) No sales/transaction have occurred on the property since 1982. (10) No sales/transaction have occurred on the property since 1986. *Preliminary; subject to change.

Source: DTA; City of Laguna Beach.
94 24
Largest Property Owners
Table 5 below lists the top 10 property owners within the Assessment District by share of unpaid Assessments.

TABLE 5

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Largest Property Owners
Fiscal Year 2025-26 Assessed Value (1)
Owner
No. of
Parcels
Land
Value
Improvement
Value
Total
Assessed
Value
Outstanding
Assessment
District
Lien *
Total
Direct and
Overlapping
Debt (3)* Total Lien
Value-toLien*% of
Lien*
DICKINSON, ALEXANDER G TR 1 $3,735,568 $864,741 $4,600,309 $92,200 $1,690 $93,890 49.00 2.34% BENHAM, MARY ANN TR (2) 1 $64,777 $36,112 $100,889 $85,138 $35 $85,172 1.18 2.16% BLEVINS, LEE DUDLEY TR 2 $2,164,863 $0 $2,164,863 $84,144 $366 $84,511 25.62 2.13% ZHOU, CHUANJIE TR Z & P 1 $1,974,531 $45,069 $2,019,600 $73,094 $743 $73,837 27.35 1.85% MCCUE, SAM TR THE 1 $1,659,387 $86,710 $1,746,097 $67,299 $642 $67,941 25.70 1.71% DAHLE, DENNIS J 1 $1,595,583 $100,089 $1,695,672 $64,260 $624 $64,884 26.13 1.63% KLOKOW, ANNE E 1 $801,492 $133,399 $934,891 $64,109 $341 $64,450 14.51 1.63% KORNBLAU, JEROME E TR 1 $712,544 $227,738 $940,282 $63,731 $343 $64,074 14.67 1.62% LICHTENBERG, DANIEL S TR 1 $1,672,831 $449,766 $2,122,597 $61,702 $778 $62,480 33.97 1.56% LAWS, DAVID 1 $1,950,058 $162,192 $2,112,250 $61,702 $777 $62,479 33.81 1.56% Subtotal Top Owners 11 $16,331,634 $2,105,816 $18,437,450 $717,378 $6,341 $723,719 25.48 18.18% All Other Owners 67 $80,418,445 $14,480,550 $94,898,995 $3,227,622 $41,551 $3,269,173 29.03 81.82% Total 78 $96,750,079 $16,586,366 $113,336,445 $3,945,000 $47,892 $3,992,892 28.38 100.00%

(1) Assessed Value as of January 1, 2025 as provided by County of Orange Assessor. (2) Property built in 1935. No sales/transactions have occurred on the property since 1978. *Preliminary; subject to change.

Source: Orange County Assessor’s office as compiled by DTA. 95 25
Direct and Overlapping Debt
The ability of an owner of land within the Assessment District to pay the Assessment Installments could be affected by the existence of other taxes and assessments imposed upon the property. These other taxes and assessments, some of which secure the repayment of overlapping debt, are detailed in Table 6 below (the “Debt Report”). See Table 6 below for all entities levying taxes, assessments or other charges on property in the Assessment District. The Debt Report has been derived from data assembled and reported to the City by California Municipal Statistics, Inc. as of ________, 2025.

The Debt Report includes information for all parcels within the Assessment District, including the 22 parcels which have prepaid their Assessment in full. Neither the City nor the Underwriter has independently verified the information in the Debt Report and neither guarantees its completeness or accuracy.

TABLE 6

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Direct and Overlapping Debt
2025-26 Assessed Valuation: $
DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: % Applicable Debt [11/1/25] Metropolitan Water District General Obligation Bonds % $ Laguna Beach Unified School District General Obligation Bonds City of Laguna Beach Assessment District No. 2021-1 West Street 100.000 0 (2) City of Laguna Beach Underground Utility Assessment District No. 09-1 (3) TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT $
OVERLAPPING GENERAL FUND DEBT:

Orange County General Fund Obligations % $
Orange County Board of Education General Fund Obligations City of Laguna Beach General Fund Obligations
TOTAL OVERLAPPING GENERAL FUND DEBT $
COMBINED TOTAL DEBT $ (4)
Ratios to 2025-26 Assessed Valuation:

Total Direct Debt (1) .........................................................................0.00% Total Overlapping Tax and Assessment Debt ...........................[__]% Combined Total Debt................................................................. [__]% (1) Includes all parcels in the boundaries of Assessment District No. 2021-1 West Street. (2) Excludes issue to be sold.
(3) Remaining principal.
(4) Excludes tax and revenue anticipation notes, revenue, mortgage revenue and non-bonded capital lease obligations.

Source: California Municipal Statistics, Inc.
96 26
Sample Tax Bill
The following table sets forth a sample estimated property tax bill for a random parcel’s assessed value among the homes in the Assessment District, and effective tax rates in the Assessment District, based on tax rates for fiscal year 2025-26.

TABLE 7

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
Sample Tax Bill – Fiscal Year 2025-26 (Estimate) (1)
ESTIMATED ASSESSED VALUATION(1)
Gross Assessed Valuation $1,453,031
LESS: Homeowner Exemption ($7,000)
Net Assessed Value $1,446,031
AD VALOREM TAXES(2) RATE AMOUNT
Basic Levy Rate 1.00000% $14,460
Laguna Beach USD 2010R 0.00885% $128
Metro Water D-MWDOC 0.00700% $101
TOTAL GENERAL PROPERTY TAXES 1.0159% $14,689.51
OVERLAPPING ASSESSMENTS (2)
Vector Control Chg $1.92
Mosq., Fire Ant Assmt $9.07
MWD Water Stdby Chg $11.60
Laguna Beach Sewer Asmt $429.20
Laguna Beach Solid Waste $1,247.34
ASSESSMENT DISTRICT NO. 2021-1 (ESTIMATE) (3)* $3,767.69 TOTAL SPECIAL ASSESSMENTS & CHARGES $5,466.82
PROJECTED TOTAL PROPERTY TAXES $29,156.33
PROJECTED TOTAL EFFECTIVE TAX RATE 1.39%
(1) Based on the average Assessed Value for parcels with unpaid Assessments. (2) Based on the property tax bill for fiscal year 2025-26 (3) Estimate for fiscal year 2025-26 based on parcel's share of debt service on the Bonds ($287,250) plus an administration fee of $85.
*Preliminary; subject to change.

Source: DTA.
97 27
BONDOWNERS’ RISKS
The purchase of the Bonds involves certain investment risks. The following is a discussion of certain risk factors which should be carefully considered, in addition to other matters set forth herein, in evaluating the investment quality of the Bonds. The City cautions prospective investors that this discussion does not purport to be comprehensive or definitive and does not purport to be a complete statement of all factors which may be considered as risks in evaluating the credit quality of the Bonds. The occurrence of one or more of the events discussed herein could adversely affect the ability or willingness of property owners in the Assessment District to pay their Assessments when due. Any such failure to pay Assessments could result in the inability of the City to make full and punctual payments of debt service on the Bonds. In addition, the occurrence of one or more of the events discussed herein could adversely affect the value of the property in the Assessment District.

Potential Insufficiency of Assessment Installments
As previously described, the Bonds will be secured under the Fiscal Agent Agreement by a pledge of all of the Assessment Revenues and all moneys deposited in the Redemption Fund, all moneys deposited in the Reserve Fund and, until disbursed as provided in the Fiscal Agent Agreement, all moneys deposited in the Improvement Fund. See “SECURITY FOR THE BONDS.” Assessment Revenues principally consist of the annual installments of the unpaid Assessments, excluding amounts collected for administrative costs pursuant to Sections 8682, 8682.1 and 10204(f) of the California Streets and Highways (i.e. the Assessment Installments).

In order to pay debt service on the Bonds, it is necessary that unpaid Assessment Installments be paid in a timely manner. The Reserve Fund will be used to pay debt service on the Bonds if delinquent Assessment Installments should occur. The Assessments are a lien on the parcels of land and the City will covenant to institute foreclosure proceedings under certain circumstances, as described in the Fiscal Agent Agreement, against parcels with delinquent Assessment Installments.

See “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure.” Failure by the owners of the parcels within the Assessment District to pay Assessment Installments when due, depletion of the Reserve Fund or the inability to sell the parcels within the Assessment District at foreclosure proceedings for amounts sufficient to cover delinquent Assessment Installments levied against such parcels would result in the inability to make full or punctual payments of debt service to the Owners of the Bonds, and Owners of the Bonds would therefore be adversely affected.

The 1915 Act provides that except under certain circumstances property is to be sold upon foreclosure at a Minimum Price. “Minimum Price” as defined in the 1915 Act is the amount equal to the delinquent installments of principal or interest of the assessment or assessment, together with all interest penalties, costs, fees, charges and other amounts more fully detailed in the 1915 Act. The court may authorize a sale at less than the Minimum Price if the court determines that sale at less than the Minimum Price will not result in an ultimate loss to the Owners of the Bonds or, under certain circumstances, if owners of 75% or more of the outstanding Bonds consent to such sale.

There can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Fund and a delay in payments of debt service on the Bonds. See “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure” and “– Foreclosure Shortfall” below.
98 28
The timely payment of the Assessment Installments will depend upon the willingness and ability of the owners of the assessable parcels of property in the Assessment District to pay such installments when due. Neither the City nor the Underwriter have undertaken to assess the financial condition of the owners of the assessable parcels of property in the Assessment District (except to the limited extent to determine household income of property owners of certain assessable parcels solely for purposes of determining their eligibility to participate in the Deferral Program for the Assessment District) or the likelihood that they will pay or will be able to pay the Assessment Installments when due, and neither expresses any view concerning these matters. See “SECURITY FOR THE BONDS – Deferral Program.”
Assessments Are Not Personal Obligations
The current and future owners of land within the Assessment District are not personally liable for the payment of the Assessments. Rather, the Assessments are a lien secured only by the parcels of land with unpaid Assessment Installments within the Assessment District. If the value of a parcel is not sufficient, taking into account other liens imposed by public agencies, to secure fully the Assessment Installments, the City has no recourse against the owner.

Risks of Real Estate Secured Investments Generally
The Owners of the Bonds will be subject to the risks generally incident to an investment secured by real estate, including, without limitation, (a) adverse changes in local market conditions, such as changes in the market value of real property in the vicinity of the Assessment District, the supply of or demand for competitive properties in such area, and the market value of competitive properties in the event of sale or foreclosure, (b) changes in real estate tax rates and other operating expenses, governmental rules (including, without limitation, zoning laws and laws relating to endangered species and hazardous materials) and fiscal policies, and (c) natural disasters (including, without limitation, earthquakes, fires, droughts and floods), which may result in uninsured losses.

No assurance can be given that the property owners will pay Assessments in the future or that they will be able to pay such Assessments on a timely basis. See “– Bankruptcy and Foreclosure” and “– Foreclosure Shortfall” below, for a discussion of certain limitations on the City’s ability to pursue judicial proceedings with respect to delinquent parcels.

Limited Obligations
The Bonds are not payable from the general funds of the City. Except for the pledge of the Assessment Revenues, which principally consist of the Assessment Installments, the credit and the taxing power of the City is not pledged for the payment of principal or interest of the Bonds, and, except as provided in the Fiscal Agent Agreement, no Owner of the Bonds may compel the exercise of any taxing power by the City or force the forfeiture of any City property. The principal of, premium, if any, and interest on the Bonds are not a debt of the City or a legal or equitable pledge, charge, lien or encumbrance upon any of the City’s property or upon any of the City’s income, receipts or revenues, except the amounts pledged under the Fiscal Agent Agreement. 99 29
Delinquency Resulting in Ultimate or Temporary Loss on Bonds If a temporary deficiency occurs in the Redemption Fund with which to pay the principal of or interest on Bonds that have then matured, or the principal and interest on Bonds coming due during the current year, unless it appears to the City Treasurer that there will be an ultimate loss to the Owners of the Bonds, the City Treasurer shall cause the Fiscal Agent to pay the principal of Bonds which have matured as presented and make interest payments on the Bonds when due, as long as there are available funds in the Redemption Fund, in the order of priority and as required by the Fiscal Agent Agreement. If it appears to the City Treasurer that there is a danger of an ultimate loss accruing to the Owners of the Bonds for any reason, the City Treasurer is required pursuant to the 1915 Act to withhold payment on all matured Bonds and interest on all Bonds and report the facts to the City so that the City may take proper action to equitably protect all Owners of the Bonds. See “SECURITY FOR THE BONDS – Delinquency Resulting in Ultimate or Temporary Loss on Bonds.”
Potential Early Redemption of Bonds from Prepayments or Other Sources Property owners within the Assessment District are permitted to prepay their Assessments at any time. Such prepayments could also be made from the proceeds of bonds issued by or on behalf of an overlapping special assessment district or community facilities district. Such prepayments will result in an extraordinary mandatory redemption of Bonds on the Interest Payment Date for which timely notice may be given under the Fiscal Agent Agreement following the receipt of the prepayment. The Fiscal Agent Agreement also provides that any surplus amount in the Improvement Fund transferred by the Fiscal Agent to the City shall be used by the City to prepay Assessments and redeem Bonds in accordance with Section 10427.1 of the 1913 Act. Any extraordinary mandatory redemption of Bonds from prepayments that were purchased at a price greater than par could reduce the otherwise expected yield on such Bonds. See the caption “THE BONDS – Redemption of Bonds – Mandatory Redemption From Assessment Prepayments.”
Non-Cash Payments of Assessments
The 1915 Act may permit the owner of a parcel that is subject to an unpaid Assessment Installment to tender any Bond secured by such Assessment in payment or partial payment of any installment of the Assessment or interest or penalties thereon which may be due or payable. A Bond so tendered is to be accepted at the par amount thereof and credit is to be given for any interest thereon accrued to the date of the tender. Thus, if Bonds can be purchased at a discount, it may be to the advantage of a property owner to pay amounts due with respect to an assessment by tendering a Bond. Such a practice would decrease the cash flow available to the City to make payments with respect to other Bonds then outstanding and could result in a default in payment on the Bonds.

Limited City Obligation Upon Delinquency
Pursuant to the 1915 Act, the City has elected not to be obligated to advance funds from the treasury of the City for delinquent Assessment Installments. The only obligation of the City with respect to such delinquencies and the consequent deficiencies in the Redemption Fund is to advance money to the Redemption Fund from the Reserve Fund. The City has no obligation to replenish the Reserve Fund except to the extent that delinquent Assessment Installments are paid or proceeds from foreclosure sales are realized. There is no assurance that the balance in the Reserve Fund will always be adequate to pay the principal of and interest on the Bonds if there are delinquent Assessment 100
30 Installments when due. If during the period of delinquency there are insufficient funds in the Reserve Fund, a delay may occur in payments to the Owners of the Bonds.

Bankruptcy and Foreclosure
The payment of Assessment Installments and the ability of the City to foreclose on the lien of a delinquent unpaid Assessment Installment, as discussed in the section entitled “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure,” may be limited by bankruptcy, insolvency or other laws generally affecting creditors’ rights or by the laws of the State relating to judicial foreclosure. In addition, the prosecution of a foreclosure could be delayed due to crowded local court calendars, delays in the legal process and procedural delaying tactics.

Potential investors should be aware that judicial foreclosure proceedings are not summary remedies and can be subject to significant procedural and other delays caused by crowded court calendars and other factors beyond the control of the City. Potential investors should assume that, under current conditions, a judicial foreclosure of the lien of assessments may take two or three years from initiation to the lien foreclosure sale. At an assessment lien foreclosure sale, each parcel will be sold for not less than the “minimum bid amount” which is equal to the sum of all delinquent Assessment Installments, penalties and interest thereon, costs of collection (including reasonable attorneys’ fees), post-judgment interest and costs of sale. Each parcel is sold at foreclosure for the amounts secured by the assessment lien on such parcel and multiple parcels may not be aggregated in a single “bulk” foreclosure sale. If any parcel fails to obtain a “minimum bid,” the City may, but is not obligated to, seek superior court approval to sell such parcel at an amount less than the minimum bid. Such superior court approval requires the consent of the Owners of 75% of the aggregate principal amount of the outstanding Bonds. See “– Foreclosure Shortfall” below.

Delays and uncertainties in the assessment lien foreclosure process create significant risks for Owners of the Bonds. High rates of assessment payment delinquencies which continue during the pendency of protracted assessment lien foreclosure proceedings, could result in the rapid, total depletion of the Reserve Fund prior to replenishment from the resale of property upon foreclosure.

In that event, there could be a delay or default in payment of the principal of, and interest on, the Bonds.

The various legal opinions to be delivered concurrently with the delivery of the Bonds (including Bond Counsel’s approving legal opinion) will be qualified, as to the enforceability of the various legal instruments, by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the creditors’ rights, by the application of equitable principles and by the exercise of judicial discretion in appropriate cases.

Although bankruptcy proceedings would not cause the lien of the assessment to become extinguished, the bankruptcy of a property owner or of a partner or other equity owner of a property owner, could result in the stay of the enforcement of the lien for the assessments, a delay in prosecuting superior court foreclosure proceedings or adversely affect the ability or willingness of a property owner to pay the Assessment Installments and could result in the possibility of delinquent Assessment Installments not being paid in full. In addition, the amount of any lien on property securing the payment of delinquent Assessment Installments could be reduced if the value of the property were determined by the bankruptcy court to have become less than the amount of the lien, and the amount of the delinquent assessments in excess of the reduced lien could then be treated as an unsecured claim by the court. Any such stay of the enforcement of the lien, or any such delay or 101
31 non-payment, would increase the likelihood of a delay or default in payment of the principal of and interest on the Bonds and the possibility of delinquent Assessment Installments not being paid in full.

Moreover, amounts received upon foreclosure sales may not be sufficient to fully discharge delinquent installments.

Other laws generally affecting creditors’ rights or relating to judicial foreclosure may affect the ability to enforce payment of Assessment Installments or the timing of enforcement of Assessment Installments. For example, the Soldiers and Sailors Civil Relief Act of 1940 affords protections such as a stay in enforcement of the foreclosure covenant, a six-month period after termination of such military service to redeem property sold to enforce the collection of a tax, assessment or reassessment and a limitation on the interest rate on the delinquent tax, assessment or reassessment to persons in military service if the court concludes the ability to pay such taxes, assessments or reassessments is materially affected by reason of such service.

FDIC/Federal Government Interests in Properties
The City’s ability to enforce the lien of an Assessment Installment and to foreclose the lien of a delinquent Assessment Installment, is limited with regard to properties in which the Internal Revenue Service, the Drug Enforcement Agency, Federal Deposit Insurance Corporation (the “FDIC”), or other federal government entities such as Fannie Mae or Freddie Mac, has or obtains an interest. Specifically, in the event that any financial institution making a loan which is secured by parcels is taken over by the FDIC and the applicable Assessment Installment is not paid, the remedies available to the City may be constrained. The FDIC’s policy statement regarding the payment of state and local real property taxes (the “Policy Statement”) provides that taxes other than ad valorem taxes which are secured by a valid lien in effect before the FDIC acquired an interest in a property will be paid unless the FDIC determines that abandonment of its interests is appropriate. The Policy Statement provides that the FDIC generally will not pay installments of non-ad valorem taxes which are levied after the time the FDIC acquires its fee interest, nor will the FDIC recognize the validity of any lien to secure payment except in certain cases where the Resolution Trust Corporation had an interest in property on or prior to December 31, 1995. Moreover, the Policy Statement provides that, with respect to parcels on which the FDIC holds a mortgage lien, the FDIC will not permit its lien to be foreclosed out by a taxing authority without its specific consent, nor will the FDIC pay or recognize liens for any penalties, fines or similar claims imposed for the non-payment of taxes.

If a parcel with unpaid Assessments within the Assessment District is owned by a federal governmental entity, or a private deed of trust secured by a parcel with unpaid Assessments within the Assessment District is owned by a federal governmental entity, the ability to foreclose on the parcel to collect delinquent Assessments may be limited. Federal courts have held that, based on the supremacy clause of the United States Constitution, in the absence of Congressional intent to the contrary, a state or local agency cannot foreclose to collect delinquent taxes or assessments if foreclosure would impair the federal government interest. This means that, unless Congress has otherwise provided, if a federal governmental entity owns a parcel with unpaid Assessment Installments within the Assessment District but does not pay taxes and assessments levied on the parcel (including Assessment Installments), the applicable state and local governments cannot foreclose on the parcel to collect the delinquent taxes and assessments.

Moreover, unless Congress has otherwise provided, if the federal government has a mortgage interest in the parcel and the City wishes to foreclose on the parcel as a result of delinquent 102
32 Assessment Installments, the property cannot be sold at a foreclosure sale unless it can be sold for an amount sufficient to pay delinquent taxes and assessments on a parity with the Assessment Installments and preserve the federal government’s mortgage interest. In Rust v. Johnson (9th Circuit; 1979) 597 F.2d 174, the United States Court of Appeal, Ninth Circuit held that the Federal National Mortgage Association (“FNMA”) is a federal instrumentality for purposes of this doctrine, and not a private entity, and that, as a result, an exercise of state power over a mortgage interest held by FNMA constitutes an exercise of state power over property of the United States.

The City has not undertaken to determine whether any federal governmental entity currently has, or is likely to acquire, any interest (including a mortgage interest) in any of the parcels with unpaid Assessment Installments within the Assessment District, and therefore expresses no view concerning the likelihood that the risks described above will materialize while the Bonds are outstanding.

The City’s remedies may also be limited in the case of delinquent Assessment Installments with respect to parcels in which other federal agencies (such as the Internal Revenue Service and the Drug Enforcement Administration) have or obtain an interest.

The City is unable to predict what effect the FDIC’s application of the Policy Statement would have in the event of a delinquency on a parcel within the City in which the FDIC has an interest, although prohibiting the lien of the FDIC to be foreclosed at a judicial foreclosure sale would reduce or eliminate the persons willing to purchase a parcel at a foreclosure sale. Owners and beneficial owners of the Bonds should assume that the City will be unable to foreclose on any parcel owned by the FDIC. According to County records, as of January 1, 2025, no property in the Assessment District with unpaid Assessments was owned by the FDIC or any other federal government entity.

No Acceleration Provision
The Bonds do not contain a provision allowing for the acceleration of the Bonds in the event of a payment default or other default under the Bonds or the Fiscal Agent Agreement or in the event interest on the Bonds becomes included in gross income for federal income tax purposes. See “– Limitations on Remedies” below.

Limitations on Remedies
Remedies available to the Owners of the Bonds may be limited by a variety of factors and may be inadequate to assure the timely payment of principal of and interest on, or to preserve the taxexempt status of, the Bonds.

Bond Counsel has limited its opinion as to the enforceability of the Bonds and of the Fiscal Agent Agreement to the extent that enforceability may be limited by bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium, or others similar laws affecting generally the enforcement of creditor’s rights, by equitable principles, by the exercise of judicial discretion and by limitations on remedies against public agencies in the State. Additionally, the Bonds are not subject to acceleration in the event of the breach of any covenant or duty under the Fiscal Agent Agreement. See “– No Acceleration Provision” above. The lack of availability of certain remedies or the limitation of remedies may entail risks of delay, limitation or modification of the rights of the Owners of the Bonds.
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33 Foreclosure Shortfall
Pursuant to the 1915 Act, if a parcel which is included within the Assessment District is foreclosed upon and cannot be sold at the foreclosure sale at a price equal to the amount of the judgment for delinquent Assessment Installments with costs and interest thereon, the City may petition a court to authorize the sale of such parcel at a lesser Minimum Price or without a Minimum Price. There can be no assurance that foreclosure proceedings will occur in a timely manner so as to avoid depletion of the Reserve Fund and a delay in payments of debt service on the Bonds. See “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure.” In comparing the aggregate value of real property within the Assessment District and the principal amount of the Bonds, it should be noted that only parcels upon which there is a delinquent Assessment Installments can be foreclosed, and the other parcels within the Assessment District cannot be foreclosed upon as a whole to pay delinquent Assessment Installments of the owners of such delinquent parcels. In any event, individual parcels may be foreclosed upon to pay delinquent Assessment Installments levied only against such parcels. See “– Parity of Liens, Bonds and Special Assessments” below.

Natural Disasters
The value of the assessed property in the Assessment District in the future can be adversely affected by a variety of additional factors, particularly those which may affect infrastructure and other public improvements and private improvements on the assessed parcels and the continued habitability and enjoyment of such private improvements. Such additional factors include, without limitation, geologic conditions such as earthquakes, topographic conditions such as earth movements, landslides, wildfires, floods, and climatic conditions such as droughts.

It is possible that one or more of the conditions described below may occur and may result in damage to improvements of varying seriousness, that the damage may entail significant repair or replacement costs and that repair or replacement may never occur either because of the cost or because repair or replacement will not facilitate habitability or other use, or because other considerations preclude such repair or replacement. Under any of these circumstances, the value of the assessed property may well depreciate or disappear.

Topography. The Assessment District is located in the southern, coastal portion of the City of Laguna Beach. The Assessment District is not in an area specifically determined to be in danger of potential slope instability but is adjacent to areas subject to surficial creep and/or mudflow in the event of heavy rains, particularly following the occurrence of wildfires that damage the groundcover.

Such damage could reduce the value of the parcels in the Assessment District and, if Assessment Installments are not paid, could result in the default on timely payment of principal and interest when due.

Seismic Activity. The Assessment District is also located in a seismically active area of Southern California and is subject to unpredictable seismic activity. There is no evidence that a ground surface rupture will occur in the event of an earthquake, but there is significant potential for destructive ground-shaking during the occurrence of a major seismic event. Known active faults that could cause significant ground shaking in the Assessment District include, but are not limited to, the San Andreas Fault and the Newport-Inglewood Fault. In addition, land susceptible to seismic activity 104
34 may be subject to liquefaction during the occurrence of such an event. In the event of a severe earthquake, there may be significant damage to both property and infrastructure in the Assessment District. As a result, a substantial portion of the property owners may be unable or unwilling to pay the Assessment Installments when due. In addition, the value of land in the Assessment District could be diminished in the aftermath of such an earthquake, reducing the resulting proceeds of foreclosure sales in the event of delinquencies in the payment of Assessment Installments. The land within the Assessment District is not located within a liquefaction potential zone. See “– Landslides” below.

Floods. The Assessment District is not located within a known 100-year base flood zone which signifies a 1% annual chance of flooding according to the Federal Emergency Management Agency.

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

The Assessment District is located in the vicinity of what is known as the Wildland/Urban Interface (“WUI”). The WUI is the area where structures and other human developments meet or intermingle with undeveloped wildland or areas with heavy vegetation. Each year, many homes across the United States have been lost to WUI fires. The City of Laguna Beach, including the Assessment District, is in an area that has been designated as a “Very High Fire Hazard Severity Zone” on the State (Cal Fire) maps. Within the previous several years, there have been two fires in the open space within and adjacent to the City, one of which destroyed approximately 24 homes in a nearby city. In 1993, the City lost more than 400 homes in a major wildfire.

Landslides. Of the 100 assessable parcels in the Assessment District, 19 parcels (assessments 5 through 12, 15 through 17, 20, 26, 27, 30, 34 through 36, and 102) lie within a “seismic hazard landslide area” as defined by the California Geological Survey. A “seismic hazard landslide area” is a regulatory zone that encompasses areas prone to liquefaction (failure of water-saturated soil) and earthquake-induced landslides. While, grading and slopes in the Assessment District are constructed in a manner expected to remain stable, no assurance can be given as to whether such grading will prevent a future landslide within the Assessment District. See “– Seismic Activity” above.

Drought. From time to time the desert southwest and much of California experiences extended drought conditions. Droughts impact public health and safety related to both water supply and wildfire risk. On October 19, 2021, the Governor declared a Statewide drought state of emergency and requested that all water users voluntarily reduce water use by 15%. On March 24, 2023, the Governor eased the emergency drought restrictions imposed as a result of the Governor’s 2021 declaration. There can be no assurance that subsequent declarations will not impose mandatory water use restrictions should dry conditions persist in the future years.

Climate Change. The State has historically been susceptible to wildfires and hydrologic variability. As greenhouse gas emissions continue to accumulate in the atmosphere as a result of economic activity, climate change is expected to intensify, increasing the frequency, severity and timing of extreme weather events such as coastal storm surges, drought, wildfires, floods and heat waves, king tides, and rising sea levels. The future fiscal impact of climate change on the City and 105
35 the Assessment District is difficult to predict, but it could be significant and it could have a material adverse effect on the City by requiring greater expenditures to counteract the effects of climate change, and by changing the business and activities of the City, its residents and businesses within the City.

Hazardous Substances
One of the most serious risks in terms of the potential reduction in the value of real property is a claim with regard to a hazardous substance. In general, the owners and operators of real property may be required by law to remedy conditions of the lot relating to release or threatened releases of hazardous substances. The federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, sometimes referred to as “CERCLA” or the “Superfund Act,” is the most wellknown and widely applicable of these laws, but California laws with regard to hazardous substances are also similarly stringent. Under many of these laws, the owner or operator is obligated to remedy a hazardous substance condition of the property whether or not the owner or operator had anything to do with creating or handling the hazardous substance. The effect, therefore, should any of the assessable property within the Assessment District be affected by a hazardous substance, will be to reduce the marketability and value of such parcel by the costs of remedying the condition, because the prospective purchaser, upon becoming owner, will become obligated to remedy the condition just as the seller is so obligated.

SCWD’s parcel in the Assessment District includes a reservoir and a fueling station on site.

SCWD has informed the City that SCWD maintains sodium hypochlorite for use at the reservoir.

Sodium hypochlorite is a chemical compound commonly known as bleach that is often used as a disinfectant in water treatment. Sodium hypochlorite is among the substances classified as hazardous under CERCLA. In addition, SCWD has also informed the City that SCWD maintains approximately 5,000 gallons of gasoline and 275 gallons of diesel fuel at the fueling station. As previously described, SCWD prepaid its assessment during the cash prepayment period. However, no assurance can be provided that any such substances or other hazardous substances maintained on SCWD’s parcel in the Assessment District will not affect surrounding parcels in the Assessment District with unpaid Assessments.

Further, it is possible that liabilities may arise in the future with respect to any of the assessable property within the Assessment District resulting from the current existence on such parcel of a substance currently classified as hazardous but which has not been released or the release of which is not presently threatened, or may arise in the future resulting from the current existence on such parcel of a substance not presently classified as hazardous but which may in the future be so classified. Further, such liabilities may arise not simply from the existence of a hazardous substance but from the method in which it is handled. All of these possibilities could significantly affect the value of assessable parcels of property in the Assessment District that is realizable upon a foreclosure.

Other than the parcel that is owned by SCWD in the Assessment District, the City has no knowledge of any hazardous substances being located on the assessable parcels of property in the Assessment District.
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36 Property Values
The value of the property within the Assessment District is a critical factor in determining the investment quality of the Bonds. If a property owner defaults in the payment of Assessment Installments, the City’s only remedy is to commence foreclosure proceedings in an attempt to obtain funds to pay the Bonds. Reductions in property values due to a downturn in the economy, physical events such as earthquakes, wildfires or floods, stricter land use regulations or other events could adversely impact the security underlying the Assessments.

The assessed values set forth in this Official Statement do not represent market values arrived at through an appraisal process and generally reflect only the sales price of a parcel when acquired by its current owner, adjusted annually by an amount determined by the County Assessor, generally not to exceed an increase of more than 2% per Fiscal Year. No assurance can be given that a parcel could actually be sold for its assessed value. Additionally, market values within the Assessment District could be impacted by a failure to complete the Improvements in a timely manner. The City can make no assurance with respect to whether taxable values of real property will decline in the future. See “THE ASSESSMENT DISTRICT – Value-to-Lien Ratios” And Appendix H – “LIST OF UNPAID ASSESSMENTS.”
The estimated value-to-lien ratio of individual parcels varies greatly. No assurance can be given that should a parcel with delinquent Assessment Installments be foreclosed upon and sold for the amount of the delinquency, any bid will be received for such parcel or, if a bid is received, that such bid will be sufficient to pay all delinquent Assessment Installments. Further, no assurance can be given that such value-to-lien ratios will be maintained over time. As discussed herein, many factors which are beyond the control of the City could adversely affect the property values within the Assessment District. The City also has no control over the amount of additional indebtedness that may be issued by other public agencies, the payment of which, through the levy of a tax or an assessment or reassessment, is on a parity with the Assessment Installments. See “– Parity of Taxes, Bonds and Special Assessments” and “– Future Debt Issuance” below and “THE ASSESSMENT DISTRICT – Direct and Overlapping Debt.” A decrease in the property values in the Assessment District or an increase in the parity liens on property in the Assessment District, or both, could result in a lowering of the value-to-lien ratios of the property in the Assessment District.

See “SECURITY FOR THE BONDS – Covenant to Commence Superior Court Foreclosure” for a discussion of the provisions which apply, and procedures which the City is obligated to follow under the Fiscal Agent Agreement, in the event of delinquencies in the payment of Assessment Installments. Although the 1915 Act authorizes the City to cause a foreclosure action to be commenced and diligently pursued to completion, the 1915 Act does not specify any obligation of the City with regard to purchasing or otherwise acquiring any parcel of property sold at a foreclosure sale in any such action if there is no other purchaser at such sale. The City has not in any way agreed, nor does it expect, to be such a purchaser. See “– FDIC/Federal Government Interests in Properties” for a discussion of the policy of the FDIC regarding the payment of assessments and special taxes and limitations on the City’s ability to foreclose on the lien of the Assessments in certain circumstances.

Parity of Taxes, Bonds and Special Assessments
The Assessments and any penalties with respect thereto constitute a lien against the assessable property within the Assessment District until they are paid. The lien of the Assessments is 107
37 subordinate to all fixed special assessment liens previously imposed upon the same property but has priority over all private liens and over all fixed special assessment liens which may thereafter be created against the property. Such lien is co-equal to and independent of the lien for general taxes and any lien imposed under the Mello-Roos Community Facilities Act of 1982, as amended.

As previously described, three parcels in the Assessment District are also within the boundaries of Assessment District 09-1. The lien of the assessments levied on such parcels for Assessment District 09-1 is senior to the lien of the unpaid Assessments levied on such parcels for the Assessment District. See “SECURITY FOR THE BONDS – Priority of Lien; Senior Prior Lien” and Appendix H – “LIST OF UNPAID ASSESSMENTS.” See also “THE ASSESSMENT DISTRICT – Direct and Overlapping Debt” herein for a description of other special taxes or assessments secured by a lien on property within the Assessment District.

The City does not have control over the ability of other local government agencies to issue indebtedness secured by assessments or special taxes against all or a portion of the Assessment District. In addition, the owners of assessable parcels of property in the Assessment District may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by assessments or special taxes. Any such assessments or special taxes may have a lien on such property on a parity with the Assessments. See “THE ASSESSMENT DISTRICT – Direct and Overlapping Debt” and “– Future Debt Issuance” below.

Moreover, in the event of a delinquency in the payment of the assessment levy, no assurance can be given that the proceeds of any foreclosure sale would be sufficient to pay the delinquent assessments and any other delinquent assessments, special taxes or taxes. See “–Property Values” above.

Right to Vote on Taxes Act
On November 5, 1996, the voters of the State approved Proposition 218, the so-called “Right to Vote on Taxes Act.” Proposition 218 added Articles XIIIC and XIIID to the State Constitution, which contain, among other things, a number of provisions affecting the ability of the City to levy and collect both existing and future taxes, assessments, fees and charges.

Article XIIID requires that, beginning July 1, 1997, the proceedings for the levy of any assessment by the City under the 1913 Act (including, if applicable, any increase in such assessment or any supplemental assessment under the 1913 Act) must be conducted in conformity with the provisions of Section 4 of Article XIIID. The City completed its proceedings for the levy of assessments in the Assessment District after complying with the procedural requirements of Section 4 of Article XIIID. Under Section 10400 of the 1913 Act, any challenge to the proceedings or the Assessment must be brought within 30 days after the date the assessment was levied.

Article XIIIC removes limitations on the initiative power in matters of local taxes, assessments, fees and charges. Article XIIIC does not define the term “assessment”, and it is unclear whether this term is intended to include assessments levied under the 1913 Act. Furthermore, this provision of Article XIIIC is not, by its terms, restricted in its application to assessments which were established or imposed on or after July 1, 1997. In the case of the unpaid Assessments which are pledged as security for the payment of the Bonds, the 1915 Act provides a mandatory, statutory duty of the City and the County Auditor to post installments on account of the unpaid Assessments to the 108
38 property tax roll of the County each year while any of the Bonds are outstanding, in amounts equal to the principal of and interest on the Bonds coming due in the succeeding calendar year. Although the matter is not free from doubt, it is likely that a court would hold that Article XIIIC has not conferred on the voters the power to reduce or repeal the unpaid Assessments which are pledged as security for payment of a Bond or to otherwise interfere with performance of the mandatory, statutory duty of the City and the County Auditor with respect to the unpaid Assessments which are pledged as security for payment of the Bonds.

The interpretation and application of Article XIIIC will ultimately be determined by the courts with respect to a number of the matters discussed above, and it is not possible at this time to predict with certainty the outcome of such determination or the timeliness of any remedy afforded by the courts. See “BONDOWNERS’ RISKS – Limitations on Remedies.” Ballot Initiatives and Legislative Measures
Proposition 218 was adopted pursuant to a measure qualified for the ballot pursuant to California’s constitutional initiative process, and the State Legislature has in the past enacted legislation which has altered the spending limitations or established minimum funding provision for particular activities. From time to time, other initiative measures could be adopted by California voters or legislation enacted by the Legislature. The adoption of any such initiative or legislation might place limitations on the ability of the State, the City or local districts to increase revenues or to increase appropriations or on the ability of a landowner to complete the development of property.

Impact of Legislative Proposals, Clarifications of the Tax Code and Court Decisions on Tax Exemption
Future legislative proposals, if enacted into law, clarification of the Internal Revenue Code of 1986, as amended (the “Tax Code”) of court decisions may cause interest on 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 of the Bonds from realizing the full current benefit of the tax status of such interest.

For example, Congress has considered in the past and may consider in the future, legislative proposals, including some that carry retroactive effective dates, that, if enacted, would alter or eliminate the exclusion from gross income for federal income tax purposes of interest on municipal bonds, such as the Bonds. Prospective purchasers of the Bonds should consult their own tax advisors regarding any pending or proposed federal tax legislation.

The introduction or enactment of any such future 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 any pending or proposed federal or state tax legislation, regulations or litigation as to which Bond Counsel expresses no opinion.

Loss of Tax Exemption
Interest on the Bonds could become includable in gross income for purposes of federal income taxation retroactive to the date the Bonds were issued as a result of future acts or omissions of the City in violation of its covenants in the Fiscal Agent Agreement. Should such an event of 109
39 taxability occur, the Bonds are not subject to a special redemption and will remain outstanding until maturity or until redeemed under one of the other redemption provisions contained in the Fiscal Agent Agreement.

IRS Audit of Tax-Exempt Bond Issues
The Internal Revenue Service has a program for the auditing of tax-exempt bond issues, including both random and targeted audits. It is possible that the Bonds will be selected for audit by the Internal Revenue Service. It is also possible that the market value of the Bonds might be affected as a result of such an audit of the Bonds (or by an audit of similar bonds or securities).

Absence of Secondary Market for the Bonds
There can be no assurance that there will be a secondary market for purchase or sale of the Bonds or, if a secondary market exists, that such Bonds can be sold for any particular price.

Occasionally, because of general market conditions or because of adverse history or economic prospects connected with a particular issue, secondary marketing practices in connection with a particular issue are suspended or terminated. Additionally, prices of issues for which a market is being made will depend upon then prevailing circumstances. Such prices could be substantially different from the original purchase price. From time to time, there may be no secondary market for the Bonds, depending upon prevailing market conditions, the financial condition or market position of firms (if any) who may make the secondary market in the Bonds and the financial condition of the owners of property within the Assessment District. The Bonds should therefore be considered longterm investments in which funds are committed to maturity, subject to redemption prior to maturity as described herein.

Future Debt Issuance
The ability of an owner of land within the Assessment District to pay the Assessment Installments could be affected by the existence of other taxes and assessments imposed upon parcels in the Assessment District with unpaid Assessment Installments. In addition, the City and other public agencies whose boundaries overlap those of the Assessment District could impose additional taxes or assessment liens on the property within the Assessment District in order to finance public improvements or services to be located or provided inside of or outside of such area. The lien created on the property within the Assessment District through the levy of such additional taxes may be on a parity with the lien of the Assessment Installments levied by the City. See “THE ASSESSMENT DISTRICT – Direct and Overlapping Debt” herein.

The imposition of additional liens on a parity with the Assessment Installments may reduce the ability or willingness of the landowners to pay the Assessment Installments and increase the possibility that foreclosure proceeds will not be adequate to pay delinquent Assessment Installments.

The City does not have control over the ability of other entities and districts to issue indebtedness secured by special taxes, ad valorem taxes or assessments payable from all or a portion of the property within the Assessment District. In addition, the landowners within the Assessment District may, without the consent or knowledge of the City, petition other public agencies to issue public indebtedness secured by special taxes, ad valorem taxes or assessments. Any such special 110
40 taxes, ad valorem taxes or assessments could reduce the estimated value-to-lien ratios for property within the Assessment District described herein.

Disclosures to Future Purchasers
The willingness or ability of an owner of a parcel to pay the Assessment Installments even if the value of the parcel is sufficient may be affected by whether or not the owner was given due notice of the Assessment Installments authorization at the time the owner purchased the parcel, was informed of the amount of the Assessment Installments on the parcel and the risk of such a levy, and, at the time of such a levy, has the ability to pay it as well as pay other expenses and obligations. The City has caused a notice of the Assessment lien to be recorded in the Office of the Recorder for the County against each parcel in the Assessment District. While title companies normally refer to such notices in title reports, there can be no guarantee that such reference will be made or, if made, that a prospective purchaser or lender will consider such Assessment Installments obligation in the purchase of a property within the Assessment District or lending of money thereon.

Cybersecurity
The City, like many other public and private entities, relies on computer and other digital networks and systems to conduct its operations. The City is potentially subject to multiple cyber threats, including without limitation hacking, viruses, ransomware, malware and other attacks. No assurance can be given that the efforts of the City to manage cyber threats and attacks will be successful in all cases, or that any such attack will not materially impact the operations or finances of the City, or the administration of the Bonds. The City is also reliant on other entities and service providers in connection with the administration of the Bonds, including without limitation the County tax collector for the levy and collection of the unpaid Assessments and the Fiscal Agent. No assurance can be given that the City and these other entities will not be affected by cyber threats and attacks in a manner that may affect the Bond owners.

LEGAL MATTERS
The validity of the Bonds and certain other legal matters are subject to the approval of Bond Counsel. Bond Counsel will render an opinion with respect to the validity and enforceability of the Bonds and the Fiscal Agent Agreement. Such opinion will be subject to the various assumptions, exceptions and limitations stated therein. See Appendix B – “FORM OF BOND COUNSEL OPINION.”
Certain legal matters will be passed on for the City by the City Attorney, and by Anzel Galvan LLP, San Francisco, California, as Disclosure Counsel. Certain legal matters will be passed on for the Underwriter by Kutak Rock LLP, Irvine, California.

ABSENCE OF LITIGATION
There is no action, suit, or proceeding pending or, to the best knowledge of the City, threatened to restrain or enjoin the delivery of the Bonds or in any way contesting or affecting the validity of the Bonds or any proceedings of the City taken with respect to the issuance or sale thereof.

The City will certify at closing that there is no litigation of any nature pending against the City to restrain or enjoin the issuance, sale, execution or delivery of the Bonds or in any way 111
41 contesting or affecting the validity of the Bonds, the proceedings of the City taken with respect to the issuance of sale thereof, the proceedings of the City taken with respect to the assessment of property within the Assessment District, the existence or powers of the City or the title of any officers of the City to their respective position. In addition, a no litigation opinion rendered by the City Attorney will be required to be delivered to the Underwriter simultaneously with the delivery of the Bonds.

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 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 Internal Revenue Code of 1986, as amended (“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 112
42 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 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 B.

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 113
43 regarding any pending or proposed federal or state tax legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.

CONTINUING DISCLOSURE
The City has covenanted for the benefit of holders of the Bonds to provide certain financial information and operating data relating to itself and the Assessment District not later than March 1 of each year, commencing on March 1, 2026 with the report for the 2025-26 fiscal year (the “Continuing Disclosure Annual Report”) and to provide notices of the occurrence of certain enumerated events. The Continuing Disclosure Annual Report and the notices of enumerated events will be filed by the City with the Municipal Securities Rulemaking Board (the “MSRB”) through the Electronic Municipal Market Access system (the “EMMA System”) in an electronic format and accompanied by identifying information as prescribed by the MSRB. The specific nature of the information to be contained in the Continuing Disclosure Annual Report or the notices of enumerated events is set forth in the Continuing Disclosure Certificate to be delivered by the City in connection with the Bonds, the form of which is included as Appendix D – “FORM OF CONTINUING DISCLOSURE CERTIFICATE.” These covenants have been made in order to assist the Underwriter in complying with S.E.C. Rule 15c2- 12(b)(5) (the “Rule”).

In addition to its governance of the Assessment District, the City Council is the legislative body of certain other assessment districts established by the City Council. The City has from time to time entered into undertakings under the Rule in connection with bond issuances thereof. Within the last five years, the City complied in all material respects with its undertakings under the Rule, except that (i) the City failed to file on the EMMA System its audited financial statements for the fiscal years ending June 30, 2021, June 30, 2022 and June 30, 2023, on or before the respective deadlines therefor, and (ii) the City failed to file on the EMMA System a notice regarding its failure to file the financial statements for June 30, 2023 on or before the deadline. The City subsequently filed its audited financial statements for the fiscal years ending June 30, 2021, June 30, 2022 and June 30, 2023, on the EMMA System, approximately 19 days, 90 days and 3 days, respectively, after the respective deadlines.

To assist the City to comply with its existing continuing disclosure undertakings and undertaking under the Rule with respect to the Bonds, the City has designated the City Treasurer with responsibility of ensuring timing and complete filings with respect thereto. In addition, the City has adopted policies and procedures for the City regarding continuing disclosure and has appointed DTA as dissemination agent under the Continuing Disclosure Certificate.

NO RATING
The City has not made, and does not contemplate making, application to any rating agency for the assignment of a rating to the Bonds.

UNDERWRITING
The Bonds are being purchased through negotiation by Oppenheimer & Co. Inc. (the “Underwriter”). The Underwriter has agreed to purchase the Bonds for $________, which represents the par amount of the Bonds, plus net original issue premium of $________and less an underwriter’s discount of $________. The purchase contract for the Bonds provides that the Underwriter will purchase all of the Bonds, if any are purchased, the obligation to make such purchase being subject to 114
44 certain terms and conditions set forth in such purchase contract, the approval of certain legal matters by counsel and certain other conditions.

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.

MUNICIPAL ADVISOR
Fieldman, Rolapp & Associates, Inc. has acted as Municipal Advisor (the “Municipal Advisor”) to the City in connection with the issuance of the Bonds. The Municipal Advisor has assisted in matters related to the planning, structuring, execution, and delivery of the Bonds. The Municipal Advisor will receive compensation contingent upon the sale and delivery of the Bonds.

The Municipal Advisor has not audited, authenticated, or otherwise independently verified the information set forth in this Official Statement, or any other related information available, with respect to accuracy and completeness of disclosure of such information. Because of this limited participation, the Municipal Advisor makes no guaranty, warranty, or other representation with respect to the accuracy or completeness of this Official Statement, or any other matter related to this Official Statement.

FINANCIAL INTERESTS
The fees of the Underwriter, Anzel Galvan LLP, as Disclosure Counsel, Kutak Rock LLP, as Underwriter’s Counsel, and the Municipal Advisor are contingent upon issuance of the Bonds.

MISCELLANEOUS
Insofar as any statements made in this Official Statement involve matters of opinion or of estimates, whether or not expressly stated, they are set forth as such and not as representations of fact.

No representation is made that any of such statements made will be realized. Neither this Official Statement nor any statement which may have been made verbally or in writing is to be construed as a contract with the Owners of the Bonds.

The execution and delivery of this Official Statement have been duly authorized by the City.

CITY OF LAGUNA BEACH
By:

Assistant City Manager
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APPENDIX A

GENERAL ECONOMIC DATA REGARDING THE CITY AND THE COUNTY

THE FOLLOWING DATA HAS BEEN PROVIDED AS GENERAL BACKGROUND INFORMATION ONLY. NEITHER THE FULL FAITH AND CREDIT NOR THE TAXING

POWER OF THE CITY, THE COUNTY, THE STATE OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE BONDS.

ALTHOUGH REASONABLE EFFORTS HAVE BEEN MADE TO INCLUDE UP-TODATE INFORMATION HEREIN, MUCH OF THE INFORMATION IS NOT CURRENT. IT

SHOULD NOT BE ASSUMED THAT THE TRENDS INDICATED BY THE FOLLOWING DATA WOULD CONTINUE BEYOND THE SPECIFIC PERIODS REFLECTED HEREIN.

General and Location
The City of Laguna Beach (the “City”) is located in County of Orange (the “County”). The City was incorporated as a general law city in 1927, operates under the council- manager form of government. The voters of the City elect five council members by popular vote on a non-partisan basis for staggered terms of four years. The council selects the mayor from among its members. The council enacts all local laws, approves the City budget, appoints City officials, and adopts the City tax rate.

The City is a residential community located on the Pacific coastline 50 miles south of Los Angeles and 80 miles north of San Diego. The City is bounded by beach for about seven miles and consists of 3,328 acres situated in southern Orange County. Originally settled in the late 1800s the City has gradually become known as an artists’ colony and popular tourist area because of its location, scenic surroundings, and Mediterranean-type climate.

The City is well known for its summer artistic events. The Festival of Arts, which began over 80 years ago, provides a forum for the talents of several hundred artists. The Pageant of the Masters is a tribute to the achievements of famous painters and sculptors during which their works are replicated as real-life exhibits. These cultural attractions, coupled with the physical attributes of the coastline setting, distinguish the City as offering unusual recreation opportunities throughout the year.

The City maintains its own police and fire departments. The public beaches are protected by a lifeguard contingent fully activated during the summer season. 116
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Population
The following table shows population estimates for the City, the County and the State as of January 1 for the past five calendar years.

CITY OF LAGUNA BEACH, COUNTY OF ORANGE

AND STATE OF CALIFORNIA
Population Estimates
Calendar Years 2021 through 2025
Year
City of
Laguna Beach
County of
Orange California
2021 22,648 3,174,592 39,369,530
2022 22,506 3,159,797 39,179,680
2023 22,445 3,156,200 39,228,444
2024 22,759 3,170,070 39,420,663
2025 22,763 3,175,427 39,529,101
Source: State Department of Finance.
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Employment and Industry
The following table summarizes the civilian labor force, employment and unemployment, as well as employment by industry, in the Anaheim-Santa Ana-Irvine Metropolitan Division for the years 2020 through 2024.

ANAHEIM-SANTA ANA-IRVINE METROPOLITAN DIVISION
Employment by Industry
Annual Averages
(March 2024 Benchmark)
2020 2021 2022 2023 2024
Civilian Labor Force (1) 1,575,300 1,569,400 1,593,400 1,611,700 1,623,300 Employment 1,436,000 1,476,000 1,542,300 1,555,700 1,559,600 Unemployment 139,300 93,400 51,100 56,000 63,600
Unemployment Rate 8.8% 6.0% 3.2% 3.5% 3.9%
Wage and Salary Employment(2)
Agriculture 1,900 2,000 1,700 1,700 1,700
Mining and Logging 500 400 400 300 300
Construction 101,300 102,200 105,300 104,600 105,500
Manufacturing 150,100 149,800 155,400 156,600 155,300
Wholesale Trade 76,800 77,500 79,000 81,100 80,800
Retail Trade 137,600 143,400 145,500 145,800 144,800
Transportation, Warehousing and Utilities 29,600 31,100 33,800 35,700 35,400 Information 24,100 24,000 24,300 22,700 21,500
Finance and Insurance 77,700 78,100 72,200 63,200 62,400 Real Estate and Rental and Leasing 38,200 39,000 40,100 40,500 40,800 Professional and Business Services 309,200 321,700 331,500 320,100 315,100 Private Education and Health Services 225,800 237,300 249,200 263,600 274,000 Leisure and Hospitality 161,800 180,400 217,900 229,800 234,500 Other Services 44,100 47,500 53,100 55,200 56,000
Federal Government 11,600 11,000 10,800 10,700 10,700
State Government 32,600 34,200 33,400 33,300 32,700
Local Government 111,900 110,500 114,000 116,500 119,800 Total, All Industries (3) 1,534,600 1,589,800 1,667,700 1,681,400 1,691,400 (1) Labor force data is by place of residence; includes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(2) Industry employment is by place of work; excludes self-employed individuals, unpaid family workers, household domestic workers, and workers on strike.
(3) Figures may not total due to rounding.

Source: State of California Employment Development Department. 118
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Employers
The following table shows the largest employers in the City for the fiscal year ending June 30, 2024.

CITY OF LAGUNA BEACH
Largest Employers
Number of
Employees
Percent of Total
Employment
Montage Laguna Beach Hotel** 602 4.93%
Laguna Beach School District 376 3.08%
Mission Hospital, Laguna Beach (1) 350 2.87%
City of Laguna Beach*** 346 2.83%
Laguna College of Art & Design** 233 1.91%
Surf & Sand Resort** 222 1.82%
Las Brisas Restaurant** 177 1.45%
Pacific Edge Hotel** (2) 114 0.93%
Anneliese Schools 111 0.91%
Mozambique Restaurant** 100 0.82%

**Includes full and part time.
***Includes full time only.
(1) Laguna Beach campus only.
(2) Count includes both hotel and restaurants.

Source: City of Laguna Beach.
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The table below lists the largest employers in the County, listed alphabetically.

COUNTY OF ORANGE
Largest Employers
April 2024
Employer Name Location Industry
Abbvie Irvine Pharmaceutical Research Laboratories
American Funds Irvine Services NEC
Anaheim City Hall Anaheim City Hall
B Braun Medical Inc Irvine Physicians & Surgeons Equip & Supls-Mfrs Boeing Co Coml Airlines Spprt Seal Beach Call Centers
Broadcom Corp Irvine Semiconductors & Related Devices (mfrs) California State Univ Fllrtn Fullerton Schools-Universities & Colleges Academic Edwards Lifesciences Corp Irvine Orthopedic Prosthetic/Srgcl Appl (mfrs) Emplicity Irvine Business Services NEC
Fairview Developmental Ctr Costa Mesa Hospitals
James R Glidewell Dental Crmcs Irvine Dentists
Jefferson School of Philosophy Laguna Hills Books School & Textbooks Judicial Council of California Santa Ana Federal Government Contractors Kaiser Permanente Orange Anaheim Hospitals
Laguna Woods Village Cmnty Ctr Laguna Woods Senior Citizens Service Largo Concrete Tustin Concrete Contractors
Menzies Aviation Costa Mesa Airline Support Services
Pacifi Care Health Systems LLC Cypress Insurance
Parker Customer Response Ctr Irvine Customer Loyalty Programs & Svc Providence Mission Hosp Msn Vj Mission Viejo Hospitals
Providence St Joseph Hosp Orng Orange Hospitals
Pylusd Schools Placentia Schools
Quest Diagnostics San Juan Cpstrno Laboratories-Medical UCI Health-Fountain Valley Fountain Valley Hospitals
University of Ca-Irvine Irvine Schools-Universities & Colleges Academic Source: State of California Employment Development Department, extracted from the America's Labor Market Information System (ALMIS) Employer Database, 2025 2nd Edition. 120
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Personal Income
Personal Income is the income that is received by all persons from all sources. It is calculated as the sum of wage and salary disbursements, supplements to wages and salaries, proprietors’ income with inventory valuation and capital consumption adjustments, rental income of persons with capital consumption adjustment, personal dividend income, personal interest income, and personal current transfer receipts, less contributions for government social insurance.

The personal income of an area is the income that is received by, or on behalf of, all the individuals who live in the area; therefore, the estimates of personal income are presented by the place of residence of the income recipients.

The following table summarizes the personal income for the County for 2014 through 2023.

COUNTY OF ORANGE
Personal Income (1)
Year
County of
Orange
Percentage
Change
2014 $173,769,675 N/A
2015 187,042,532 7.64%
2016 194,223,700 3.84
2017 202,337,241 4.18
2018 210,648,610 4.11
2019 221,785,219 5.29
2020 239,165,288 7.84
2021 257,606,430 7.71
2022 264,973,116 2.86
2023 278,760,587 5.20
(1) All dollar estimates are in thousands of current dollars (not adjusted for inflation). Statistics presented in thousands of dollars do not indicate more precision than statistics presented in.

Source: U.S. Department of Commerce, Bureau of Economic Analysis. 121
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The following table summarizes per capita personal income for the County, California and the United States for 2014 through 2023. This measure of income is calculated as the personal income of the residents of the area divided by the resident population of the area.

COUNTY OF ORANGE,

STATE OF CALIFORNIA AND THE UNITED STATES
Per Capita Personal Income
Year
County of
Orange California United States
2014 $55,457 $50,617 $ 44,402
2015 59,238 53,816 46,289
2016 61,184 55,862 48,062
2017 63,510 58,214 48,974
2018 66,056 60,984 51,006
2019 69,616 64,219 53,311
2020 75,074 70,098 55,567
2021 81,505 76,882 59,151
2022 84,109 76,941 64,692
2023 88,897 81,255 66,298

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

Commercial Activity
A summary of historic taxable sales within the City and the County during the past five years for which data is available is shown in the following tables.

CITY OF LAGUNA BEACH
Taxable Transactions
Calendar Years 2020 through 2024
(Dollars in Thousands)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 1,453 $274,151 2,320 $351,518
2021 1,297 380,176 2,078 498,067
2022 1,265 461,629 2,105 612,102
2023 1,196 445,205 2,038 544,327
2024 1,162 478,596 1,995 562,412
Source: State Department of Tax and Fee Administration. 122
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COUNTY OF ORANGE
Taxable Transactions
Calendar Years 2020 through 2024
(Dollars in Millions)
Retail Stores Total All Outlets
Number
of Permits
Taxable
Transactions
Number
of Permits
Taxable
Transactions
2020 76,066 $44,257 132,807 $63,834
2021 67,060 53,651 118,779 78,254
2022 67,272 58,099 119,697 88,027
2023 65,013 57,322 116,309 87,298
2024 65,391 56,820 117,426 86,337
Source: State Department of Tax and Fee Administration.

Construction Activity
The following tables shows a five-year summary of the valuation of building permits issued in the City and the County.

CITY OF LAGUNA BEACH
City of Laguna Beach Building Permit Valuation
(Valuation in Thousands of Dollars)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $16,003.8 $14,698.6 $3,577.1 $22,722.9 $31,375.9 New Multi-family 1,972.6 1,099.7 191.0 0.0 0.0
Res. Alterations/Additions 36,706.5 91,683.1 10,980.0 29,203.8 40,957.2 Total Residential 54,682.9 107,481.4 14,748.1 51,926.7 72,333.1 New Commercial 681.8 655.0 0.0 0.0 1,894.6
New Industrial 0.0 0.0 0.0 0.0 0.0
New Other 4,882.8 3,468.4 979.7 2,586.0 7,786.3
Com. Alterations/Additions 8,140.8 3,614.2 855.1 4,036.6 28,265.0 Total Nonresidential 13,705.4 7,737.6 1,834.8 6,622.6 37,945.9 New Dwelling Units
Single Family 23 27 9 51 69
Multiple Family 6 2 2 0 0
TOTAL 29 29 11 51 69
Source: Construction Industry Research Board, Building Permit Summary. 123
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COUNTY OF ORANGE
County of Orange Building Permit Valuation
(Valuation in Thousands of Dollars)
2018 2019 2020 2021 2022
Permit Valuation
New Single-family $1,442,020.5 $1,094,668.2 $902,643.6 $1,051,349.7 $903,918.4 New Multi-family 726,503.6 1,010,555.6 582,219.6 856,973.7 639,435.9 Res. Alterations/Additions 582,094.5 537,089.8 386,094.4 485,637.1 671,417.6 Total Residential 2,750,618.6 2,642,313.6 1,870,957.6 2,393,960.5 2,214,771.9 New Commercial 1,986,089.1 1,586,162.0 621,133.5 618,834.6 359,401.4 New Industrial 24,323.9 2,412.5 14,052.7 46,820.3 11,700.0 New Other 289,986.9 229,473.5 409,763.1 371,405.3 414,491.5 Com. Alterations/Additions 1,231,885.1 1,334,453.1 939,371.9 788,015.5 1,142,718.9 Total Nonresidential 3,532,285.0 3,152,501.1 1,984,321.2 1,825,075.7 1,928,311.8 New Dwelling Units
Single Family 3,975 3,125 2,863 3,292 2,929
Multiple Family 4,130 7,169 3,032 4,002 3,405
TOTAL 8,105 10,294 5,895 7,294 6,334
Source: Construction Industry Research Board, Building Permit Summary.

Transportation
The City has convenient access to the San Diego and Santa Ana freeways via Laguna Canyon Road and connections to the San Joaquin Hills Corridor Toll Road, San Diego and Newport freeways via Coast Highway. The Orange County Transit Authority provides bus service to Santa Ana, the county seat. In addition, the City operates its own municipal trolly service linking a seven-mile stretch along Coast Highway. Although the City does not have railroad facilities within the City, Amtrak, offering passenger services, has a platform in San Juan Capistrano located 10 miles away and in Irvine located 7 miles away. Air passenger and freight service is available at the nearby John Wayne Airport in Santa Ana. Long Beach Municipal Airport and Los Angeles International Airport are located just off the San Diego freeway about an hour’s drive from the City. 124
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APPENDIX B

FORM OF BOND COUNSEL OPINION
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APPENDIX C

SUMMARY OF THE FISCAL AGENT AGREEMENT
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APPENDIX D

FORM OF CONTINUING DISCLOSURE CERTIFICATE
$[PAR]

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1
(WEST STREET)

LIMITED OBLIGATION IMPROVEMENT BONDS
This CONTINUING DISCLOSURE CERTIFICATE (this “Disclosure Certificate”) is executed and delivered by the City of Laguna Beach, California (the “City”), in connection with the issuance by the City of the bonds captioned above (the “Bonds”). The Bonds are being issued pursuant to a Fiscal Agent Agreement dated as of January 1, 2026 (the “Fiscal Agent Agreement”), by and between the City of Laguna Beach (the “City”) and The Bank of New York Mellon Trust Company, N.A., as fiscal agent (the “Fiscal Agent”). The City hereby covenants and agrees as follows:

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

Section 2. Definitions. In addition to the definitions set forth above and in the Fiscal Agent Agreement, which apply to any capitalized term used in this Disclosure Certificate unless otherwise defined in this Section 2, the following capitalized terms shall have the following meanings:
“Annual Report” means any Annual Report provided by the City pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. “Annual Report Date” means March 1 after the end of the City’s fiscal year. “Dissemination Agent” means David Taussig and Associates, Inc. (doing business as “DTA”), or any successor Dissemination Agent, designated in writing by the City and which has filed with the City a written acceptance of such designation. “Listed Events” means any of the events listed in Section 5(a) of this Disclosure Certificate. “MSRB” means the Municipal Securities Rulemaking Board, which has been designated by the Securities and Exchange Commission as the sole repository of disclosure information for purposes of the Rule, or any other repository of disclosure information that may be designated by the Securities and Exchange Commission as such for purposes of the Rule in the future. “Official Statement” means the final official statement dated ______, 2026, executed by the City in connection with the issuance of the Bonds.
“Participating Underwriter” means Oppenheimer & Co. Inc., the original purchaser of the Bonds required to comply with the Rule in connection with offering of the Bonds. 127
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“Rule” means Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as it may be amended from time to time.

Section 3. Provision of Annual Reports.
(a) The City shall, or shall cause the Dissemination Agent to, not later than the Annual Report Date, commencing March 1, 2026, with the report for fiscal year 2025-26 provide to the MSRB, in an electronic format as prescribed by the MSRB, an Annual Report that is consistent with the requirements of Section 4 of this Disclosure Certificate. Not later than 15 Business Days prior to the Annual Report Date, the City shall provide the Annual Report to the Dissemination Agent (if other than the City). If by 15 Business Days prior to the Annual Report Date the Dissemination Agent (if other than the City) has not received a copy of the Annual Report, the Dissemination Agent shall contact the City to determine if the City is in compliance with the previous sentence. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may include by reference other information as provided in Section 4 of this Disclosure Certificate; provided that the audited financial statements of the City may be submitted separately from the balance of the Annual Report, and later than the Annual Report Date, if not available by that date. If the City’s fiscal year changes, it shall give notice of such change in the same manner as for a Listed Event under Section 5(b). The City shall provide a written certification with each Annual Report furnished to the Dissemination Agent to the effect that such Annual Report constitutes the Annual Report required to be furnished by the City hereunder. (b) If the City does not provide (or cause the Dissemination Agent to provide) an Annual Report by the Annual Report Date, the City shall provide (or cause the Dissemination Agent to provide) a notice to the MSRB in a timely manner, in an electronic format as prescribed by the MSRB.
(c) With respect to each Annual Report, the Dissemination Agent shall:
(i) determine each year prior to the Annual Report Date the then-applicable rules and electronic format prescribed by the MSRB for the filing of annual continuing disclosure reports; and
(ii) if the Dissemination Agent is other than the City, file a report with the City certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, and stating the date it was provided.

Section 4. Content of Annual Reports. The City’s Annual Report shall contain or incorporate by reference the following:
(a) The City’s audited financial statements for the preceding fiscal year prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the City’s audited financial statements are not available by the Annual Report Date, the Annual Report shall contain unaudited financial statements, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
(b) Unless otherwise provided in the audited financial statements filed on or before the Annual Report Date, financial information and operating data with respect to the City for the 128
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preceding fiscal year, substantially similar to that provided in the corresponding tables in the Official Statement, as follows:
(i) the principal amount of Bonds outstanding as of the September 3 preceding the filing of the Annual Report;
(ii) the balance in each fund and account established under the Fiscal Agent Agreement as of the September 30 preceding the filing of the Annual Report; (iii) the aggregate assessed valuation (land and improvements) for the Assessment District for the current fiscal year and the prior fiscal year; (iv) the current delinquency rate for the Assessment District indicating, on a summary basis, the annual assessment lien, the amount delinquent, the percent delinquent and the delinquent number of parcels; and
(v) a listing of the principal property owners representing 5% or more of the annual assessment installment.
(c) In addition to any of the information expressly required to be provided under this Disclosure Certificate, the City shall provide such further material information, if any, as may be necessary to make the specifically required statements, in the light of the circumstances under which they are made, not misleading.
(d) Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the City or related public entities, which are available to the public through the MSRB. The City shall clearly identify each such other document so included by reference. If the document included by reference is a final official statement, it must be available from the MSRB.

Section 5. Reporting of Listed Events.
(a) The City shall give, or cause to be given, notice of the occurrence of any of the following Listed Events with respect to the Bonds:
(1) Principal and interest payment delinquencies.
(2) Non-payment related defaults, if material.
(3) Unscheduled draws on debt service reserves reflecting financial difficulties. (4) Unscheduled draws on credit enhancements reflecting financial difficulties. (5) Substitution of credit or liquidity providers, or their failure to perform. (6) Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701- TEB) or other material notices or determinations with respect to the tax status of the Bonds, or other material events affecting the tax status of the Bonds. 129
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(7) Modifications to rights of security holders, if material. (8) Bond calls, if material, and tender offers.
(9) Defeasances.
(10) Release, substitution, or sale of property securing repayment of the securities, if material.
(11) Rating changes, if applicable.
(12) Bankruptcy, insolvency, receivership or similar event of the City or other obligated person.
(13) The consummation of a merger, consolidation, or acquisition involving the City or an obligated person, or the sale of all or substantially all of the assets of the City or an obligated person (other than in the ordinary course of business), the entry into a definitive agreement to undertake such an action, or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material. (14) Appointment of a successor or additional trustee or the change of name of a trustee, if material.
(15) Incurrence of a financial obligation of the City, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the City, any of which affect security holders, if material. (16) Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the City, any of which reflect financial difficulties.
(b) Upon the occurrence of a Listed Event, the City shall, or shall cause the Dissemination Agent (if not the City) to, file a notice of such occurrence with the MSRB, in an electronic format as prescribed by the MSRB, in a timely manner not in excess of 10 business days after the occurrence of the Listed Event. Notwithstanding the foregoing, notice of Listed Events described in subsections (a)(8) and (9) above need not be given under this subsection any earlier than the notice (if any) of the underlying event is given to holders of affected Bonds under the Fiscal Agent Agreement.
(c) The City acknowledges that the events described in subparagraphs (a)(2), (a)(7), (a)(8) (if the event is a bond call), (a)(10), (a)(13), (a)(14) and (a)(15) of this Section 5 contain the qualifier “if material” and that subparagraph (a)(6) also contains the qualifier "material" with respect to certain notices, determinations or other events affecting the tax status of the Bonds. The City shall cause a notice to be filed as set forth in paragraph (b) above with respect to any such event only to the extent that it determines the event’s occurrence is material for purposes of U.S. federal securities law. Upon the occurrence of any of these Listed Events, the City will as soon as possible determine if such event would be material under applicable federal securities law. If such event is determined to be material, the City will cause a notice to be filed as set forth in paragraph (b) above. 130
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(d) For purposes of this Disclosure Certificate, any event described in paragraph (a)(12) above is considered to occur when any of the following occur: the appointment of a receiver, fiscal agent, or similar officer for the City in a proceeding under the United States Bankruptcy Code or in any other proceeding under state or federal law in which a court or governmental authority has assumed jurisdiction over substantially all of the assets or business of the City, or if such jurisdiction has been assumed by leaving the existing governing body and officials or officers in possession but subject to the supervision and orders of a court or governmental authority, or the entry of an order confirming a plan of reorganization, arrangement, or liquidation by a court or governmental authority having supervision or jurisdiction over substantially all of the assets or business of the City. (e) For purposes of Section 5(a)(15) and (16), “financial obligation” means a (i) debt obligation; (ii) derivative instrument entered into in connection with, or pledged as security or a source of payment for, an existing or planned debt obligation; or (iii) guarantee of (i) or (ii). The term financial obligation shall not include municipal securities as to which a final official statement has been provided to the MSRB consistent with the Rule.

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

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

Section 8. Dissemination Agent. The City may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Disclosure Certificate, and may discharge any Dissemination Agent, with or without appointing a successor Dissemination Agent. The initial Dissemination Agent shall be David Taussig and Associates, Inc. Any Dissemination Agent may resign by providing 30 days’ written notice to the City.

Section 9. Amendment; Waiver. Notwithstanding any other provision of this Disclosure Certificate, the City may amend this Disclosure Certificate, and any provision of this Disclosure Certificate may be waived, provided that the following conditions are satisfied:
(a) if the amendment or waiver relates to the provisions of Sections 3(a), 4 or 5(a), it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature, or status of an obligated person with respect to the Bonds, or type of business conducted; (b) the undertakings herein, as proposed to be amended or waived, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the primary offering of the Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and (c) the proposed amendment or waiver either (i) is approved by holders of the Bonds in the manner provided in the Fiscal Agent Agreement for amendments to the Fiscal Agent Agreement with the consent of holders, or (ii) does not, in the opinion of nationally 131
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recognized bond counsel, materially impair the interests of the holders or beneficial owners of the Bonds.

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

If an amendment is made to this Disclosure Certificate modifying the accounting principles to be followed in preparing financial statements, 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. The comparison shall include a qualitative discussion of the differences in the accounting principles and the impact of the change in the accounting principles on the presentation of the financial information, in order to provide information to investors to enable them to evaluate the ability of the City to meet its obligations. To the extent reasonably feasible, the comparison shall be quantitative.

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

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

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

Section 12. Duties, Immunities and Liabilities of Dissemination Agent. (a) The Dissemination Agent shall have only such duties as are specifically set forth in this Disclosure Certificate, and the City agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents, harmless against any loss, expense and liabilities which they 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 have no duty or obligation to review any information provided to it by the 132
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City hereunder, and shall not be deemed to be acting in any fiduciary capacity for the City, the Bond holders or any other party. The obligations of the City under this Section shall survive resignation or removal of the Dissemination Agent and payment of the Bonds. (b) The Dissemination Agent shall be paid compensation by the City for its services provided hereunder in accordance with its schedule of fees as amended from time to time, and shall be reimbursed for all expenses, legal fees and advances made or incurred by the Dissemination Agent in the performance of its duties hereunder.

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

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

Section 15. Governing Law and Venue. This Disclosure Certificate shall be governed by and construed in accordance with the laws of the State of California. Venue shall be in the County of Orange, California.

Date: ______, 2026

CITY OF LAGUNA BEACH
By:

Name:

Title:

AGREED AND ACCEPTED:

David Taussig and Associates, Inc.,
d/b/a DTA
as Dissemination Agent
By:

Name:

Title:
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APPENDIX E

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

Neither the issuer of the Bonds (the “Issuer”) nor the trustee, fiscal agent or paying agent appointed with respect to the Bonds (the “Agent”) take any responsibility for the information contained in this Appendix.

No assurances can be given that DTC, DTC Participants or Indirect Participants will distribute to the Beneficial Owners (a) payments of interest, principal or premium, if any, with respect to the Bonds, (b) certificates representing ownership interest in or other confirmation or ownership interest in the Bonds, or (c) redemption or other notices sent to DTC or Cede & Co., its nominee, as the registered owner of the Bonds, or that they will so do on a timely basis, or that DTC, DTC Participants or DTC Indirect Participants will act in the manner described in this Appendix.

The current “Rules” applicable to DTC are on file with the Securities and Exchange Commission and the current “Procedures” of DTC to be followed in dealing with DTC Participants are on file with DTC.

1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the Bonds (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for each maturity of the Securities in the aggregate principal amount of such maturity, and will be deposited with DTC. If, however, the aggregate principal amount of any issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.

2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. 134
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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 an S&P Global Ratings rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at www.dtcc.com. The information contained on this Internet site is not incorporated herein by reference.

3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.

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

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

6. Redemption notices shall be sent to DTC. If less than all of the Securities within a maturity are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such maturity to be redeemed.
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7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to the Authority as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).

8. Principal, redemption price and interest payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC.

DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from the Authority 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 Authority, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of principal, redemption price and interest payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of the Authority 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.

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

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

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

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

CITY OF LAGUNA BEACH
UNDERGROUND UTILITY ASSESSMENT DISTRICT NO. 2021-1 (WEST STREET)

ASSESSMENT DIAGRAM
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APPENDIX G
ENGINEER’S REPORT
138
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APPENDIX H

LIST OF UNPAID ASSESSMENTS
139
Assmt. # APN Owner Land Value Impr. Value Total Value
Total Value
(Excludes Cash
Payments)
Original Assessment
Lien Cash Payment [2] Outstanding Balance
*Projected*
Outstanding
Assessment Lien [3]
Senior Assessment
Lien [4]
Other
Overlapping
Debt [4] Value-to-Lien % of Lien
Estimated
Annual Assessment FY
2026-2027
1 056-070-13 ZIMMERMAN, MICHAEL THOMAS $2,423,109 $376,842 $2,799,951 $2,799,951 $29,682 $0 $29,682 $28,867 $0 $1,030 93.65 0.73% $2,187 2 056-070-14 SCHATZ, MARTIN TR M $1,952,425 $1,000,417 $2,952,842 $0 $28,042 $24,769 $0 $0 $0 NA NA 0.00% $0 3 056-070-15 PALSULE, HIMANSHU S TR $2,602,000 $834,721 $3,436,721 $3,436,721 $30,502 $0 $30,502 $29,664 $0 $1,265 111.12 0.75% $2,245 4 056-070-16 AUT, WARREN E TR THE W & $667,233 $501,158 $1,168,391 $1,168,391 $28,675 $0 $28,675 $27,888 $0 $365 41.35 0.71% $2,116 5 056-070-17 OLSEN, BRIAN TR THE OLSEN $2,480,818 $147,505 $2,628,323 $2,628,323 $25,409 $0 $25,409 $24,712 $0 $965 102.36 0.63% $1,884 6 056-070-18 ROSENBERG, MICHAEL E TR $1,868,467 $705,505 $2,573,972 $2,573,972 $53,807 $0 $53,807 $52,329 $0 $945 48.32 1.33% $3,895 7 056-070-19 COGDILL, RUSSELL TR $1,307,285 $312,573 $1,619,858 $1,619,858 $53,317 $0 $53,317 $51,852 $0 $593 30.89 1.31% $3,861 8 056-070-20 MILLLER, CHRISTINE T TR $428,161 $353,869 $782,030 $782,030 $54,870 $0 $54,870 $53,363 $0 $285 14.58 1.35% $3,971 9 056-070-21 STERIS, JASON TR $2,079,106 $1,009,106 $3,088,212 $3,088,212 $55,561 $0 $55,561 $54,035 $0 $1,134 55.98 1.37% $4,019 10 056-070-22 MC KEVITT SEAN & KEVITT JEAN $56,340 $56,866 $113,206 $113,206 [5] $56,079 $0 $56,079 $54,538 $0 $42 2.07 1.38% $4,056 11 056-070-23 SACCANI, MIRKO & GAYNOR FAIRWEATHER $2,068,773 $329,666 $2,398,439 $2,398,439 $59,460 $0 $59,460 $57,826 $0 $883 40.85 1.47% $4,296 12 056-070-37 REILLY, JOHN R TR $56,348 $73,714 $130,062 $130,062 [6] $54,249 $0 $54,249 $52,759 $0 $45 2.46 1.34% $3,927 13 056-070-36 LEBLOCH, JAMES G TR OCP $692,554 $224,400 $916,954 $916,954 $59,531 $0 $59,531 $57,896 $0 $335 15.75 1.47% $4,301 14 056-070-06 FAEC HOLDINGS 390645 LLC $2,233,885 $575,272 $2,809,157 $2,809,157 $32,272 $0 $32,272 $31,385 $0 $1,034 86.65 0.80% $2,370 15 056-070-05 GOODMAN, ETHAN TR E & R $1,680,080 $123,973 $1,804,053 $1,804,053 $55,388 $0 $55,388 $53,867 $0 $661 33.08 1.37% $4,007 16 056-070-04 RIVAS, ERNEST & LAURA $2,011,166 $392,918 $2,404,084 $2,404,084 $55,411 $0 $55,411 $53,889 $0 $882 43.89 1.37% $4,009 17 056-070-03 LAWRENCE MICHAEL JOHNSON SEPARATE PROPERTY TRUST $709,122 $487,861 $1,196,983 $0 $56,827 $51,320 $0 $0 $0 NA NA 0.00% $0 18 056-070-02 CRAWFORD, ROBERT B & DARCI L $2,641,121 $1,127,046 $3,768,167 $0 $60,567 $54,771 $0 $0 $0 NA NA 0.00% $0 19 056-070-01 MYERS, STEVEN MARK TR $495,848 $171,522 $667,370 $0 $54,525 $49,197 $0 $0 $0 NA NA 0.00% $0 20 056-070-26 SOUTH COAST COUNTY WATER DISTRICT $93,128 $887,551 $980,679 $0 $141,563 $129,483 $0 $0 $0 NA NA 0.00% $0 ** 21 056-070-34 SOUTH COAST COUNTY WATER DIST $230 $0 $230 $0 $0 $0 $0 $0 $0 NA NA 0.00% $0 22 056-070-27 DAHLE, DENNIS J $1,595,583 $100,089 $1,695,672 $1,695,672 $66,074 $0 $66,074 $64,260 $0 $624 26.13 1.63% $4,764 23 056-070-40 PLAVSIC, KARYN $4,247,212 $434,588 $4,681,800 $4,681,800 $56,772 $0 $56,772 $55,213 $0 $1,723 82.23 1.40% $4,105 24 056-070-30 BENHAM, MARY ANN TR $64,777 $36,112 $100,889 $100,889 [7] $87,542 $0 $87,542 $85,138 $0 $35 1.18 2.16% $6,284 25 056-062-36 EPSTEIN, ALEXANDER & CASSANDRA $2,893,589 $166,411 $3,060,000 $3,060,000 $58,570 $0 $58,570 $56,962 $0 $1,126 52.68 1.44% $4,233 26 056-062-34 SKYRMS, FREDERICK B $799,135 $176,844 $975,979 $0 $50,900 $45,853 $0 $0 $0 NA NA 0.00% $0 27 056-062-35 CHAMBERLAIN, JEFFREY W TR $959,323 $1,169,658 $2,128,981 $0 $48,034 $43,210 $0 $0 $0 NA NA 0.00% $0 28 056-062-37 LEEMON, STANTON J TR THE $516,283 $324,733 $841,016 $841,016 $56,306 $0 $56,306 $54,760 $0 $307 15.27 1.39% $4,072 29 056-062-20 BOSHNACK JUSTIN TR $402,035 $899,364 $1,301,399 $0 $55,618 $50,206 $0 $0 $0 NA NA 0.00% $0 30 056-062-25 ZHOU, CHUANJIE TR Z & P $1,974,531 $45,069 $2,019,600 $2,019,600 $75,158 $0 $75,158 $73,094 $0 $743 27.35 1.85% $5,407 31 056-062-24 BOSHNACK, JUSTIN TR THE $1,868,495 $564,756 $2,433,251 $0 $55,561 $50,153 $0 $0 $0 NA NA 0.00% $0 32 056-062-38 BERNARDI, ARMAN TR $2,765,147 $162,973 $2,928,120 $0 $57,719 $52,143 $0 $0 $0 NA NA 0.00% $0 33 056-062-18 GLENDINNING, JAMES ALBERT $170,096 $340,851 $510,947 $510,947 $60,567 $0 $60,567 $58,904 $0 $185 8.65 1.49% $4,374 34 056-062-26 LAWS, DAVID $1,950,058 $162,192 $2,112,250 $2,112,250 $63,445 $0 $63,445 $61,702 $0 $777 33.81 1.56% $4,578 35 056-062-28 LICHTENBERG, DANIEL S TR $1,672,831 $449,766 $2,122,597 $2,122,597 $63,445 $0 $63,445 $61,702 $0 $778 33.97 1.56% $4,578 36 056-062-27 BEUTIN, DUSTIN TR BEUTIN $1,497,910 $350,868 $1,848,778 $0 $68,091 $61,711 $0 $0 $0 NA NA 0.00% $0 37 056-062-03 MCCUE, SAM TR THE $1,659,387 $86,710 $1,746,097 $1,746,097 $69,199 $0 $69,199 $67,299 $0 $642 25.70 1.71% $4,985 38 056-062-41 BLACK, JANIS TR J BLACK $1,517,262 $423,737 $1,940,999 $1,940,999 $51,935 $0 $51,935 $50,509 $0 $714 37.89 1.28% $3,763 39 056-062-40 LIUZZI, STEVEN BRUCE TR $1,014,906 $300,245 $1,315,151 $1,315,151 $43,304 $0 $43,304 $42,114 $0 $481 30.88 1.07% $3,151 40 056-062-05 HUNTER, MATTHEW F TR $724,901 $159,645 $884,546 $884,546 $61,275 $0 $61,275 $59,592 $0 $323 14.76 1.51% $4,424 41 056-062-06 PACELLA, MARK S & LUISA CHONG $450,048 $79,050 $529,098 $529,098 $56,320 $0 $56,320 $54,774 $0 $195 9.63 1.39% $4,073 42 056-062-07 NELSON, JAMES POLLOCK TR $1,859,001 $82,219 $1,941,220 $1,941,220 $55,403 $0 $55,403 $53,881 $3,167 $714 33.61 1.37% $4,008 43 056-062-08 SUNSET EQUITY PARTNERS LLC $1,672,357 $94,170 $1,766,527 $1,766,527 $52,799 $0 $52,799 $51,348 $3,167 $650 32.02 1.30% $3,824 45 056-063-06 ANDERSON, WILLIAM T $1,101,531 $51,523 $1,153,054 $1,153,054 $52,528 $0 $52,528 $51,085 $0 $424 22.39 1.29% $3,805 46 056-063-07 WILLIAMS, PATRICIA S TR $2,060,293 $62,123 $2,122,416 $0 $52,626 $47,445 $0 $0 $0 NA NA 0.00% $0 47 056-063-08 KLEIN, ELIZABETH $311,004 $59,932 $370,936 $370,936 $52,453 $0 $52,453 $51,013 $0 $136 7.25 1.29% $3,799 48 056-063-09 VINCENT, LEONARD TR $545,915 $92,526 $638,441 $638,441 $60,412 $0 $60,412 $58,753 $0 $232 10.82 1.49% $4,363 49 056-063-10 DEGARMO, CHARLES W TR $264,410 $167,376 $431,786 $431,786 $51,216 $0 $51,216 $49,809 $0 $159 8.64 1.26% $3,712 50 056-063-05 ROUNAGHI, ALI REZA TR $542,895 $200,199 $743,094 $0 $51,360 $46,278 $0 $0 $0 NA NA 0.00% $0 51 056-063-04 PETERSON, KAREN A TR $50,820 $30,865 $81,685 $81,685 [8] $52,079 $0 $52,079 $50,649 $0 $30 1.61 1.28% $3,773 52 056-063-13 KRAFT, PAUL TR KRAFT $1,023,091 $136,584 $1,159,675 $0 $55,388 $49,993 $0 $0 $0 NA NA 0.00% $0 53 056-063-12 DOW, MARK EDWIN $2,153,284 $274,418 $2,427,702 $0 $55,388 $49,993 $0 $0 $0 NA NA 0.00% $0 54 056-063-03 SMITH, ALAN TR $50,813 $43,273 $94,086 $94,086 [9] $51,590 $0 $51,590 $50,173 $0 $32 1.87 1.27% $3,738 55 056-063-02 KORNBLAU, JEROME E TR $712,544 $227,738 $940,282 $940,282 $65,531 $0 $65,531 $63,731 $0 $343 14.67 1.62% $4,725 56 056-063-15 ZARIE, FREID Y TR THE DF $2,507,656 $199,116 $2,706,772 $2,706,772 $61,712 $0 $61,712 $60,017 $0 $996 44.36 1.52% $4,455 57 056-063-14 PADDOCK, DEXTER S TR $59,242 $33,036 $92,278 $92,278 [10] $57,302 $0 $57,302 $55,728 $0 $31 1.65 1.41% $4,143 58 056-087-12 KORMELUK, NICHOLAS M & STEPHANIE M $1,968,973 $76,823 $2,045,796 $2,045,796 $53,446 $0 $53,446 $51,978 $0 $753 38.80 1.32% $3,870 59 056-086-07 KD2 LLC $2,886,733 $779,006 $3,665,739 $3,665,739 $54,122 $0 $54,122 $52,636 $0 $1,349 67.90 1.33% $3,918 60 056-086-06 DICKINSON, ALEXANDER G TR $3,735,568 $864,741 $4,600,309 $4,600,309 $94,804 $0 $94,804 $92,200 $0 $1,690 49.00 2.34% $6,798 61 056-086-40 MORCK, STIAN Z TR S Z $528,277 $87,765 $616,042 $616,042 $55,388 $0 $55,388 $53,867 $0 $224 11.39 1.37% $4,007 62 056-086-41 STEINCKE, BRIAN TR $1,379,570 $0 $1,379,570 $1,379,570 $55,374 $0 $55,374 $53,853 $0 $508 25.38 1.37% $4,006 63 056-086-37 KNOTT, BRIAN JAMES TR $283,102 $376,024 $659,126 $659,126 $55,388 $0 $55,388 $53,867 $0 $240 12.18 1.37% $4,007 64 056-086-39 KNOTT, BRIAN JAMES TR B J $327,533 $0 $327,533 $327,533 $53,627 $0 $53,627 $52,154 $0 $121 6.27 1.32% $3,883 65 056-086-35 NORING, PAUL THOMAS TR R $378,259 $162,111 $540,370 $540,370 $52,626 $0 $52,626 $51,181 $0 $196 10.52 1.30% $3,812 * 66 056-086-36 CITY OF LAGUNA BEACH $0 $0 $0 $0 $55,613 $50,200 $0 $0 $0 NA NA 0.00% $0 * 67 056-086-01 CITY OF LAGUNA BEACH $109,234 $0 $109,234 $0 $51,659 $46,554 $0 $0 $0 NA NA 0.00% $0 * 68 056-086-02 CITY OF LAGUNA BEACH $109,234 $0 $109,234 $0 $52,948 $47,743 $0 $0 $0 NA NA 0.00% $0 69 056-086-24 TERRY RD LLC $1,585,347 $191,826 $1,777,173 $1,777,173 $52,971 $0 $52,971 $51,516 $0 $654 34.06 1.31% $3,836 70 056-086-23 LEON, DANIEL STEVEN TR $1,589,431 $74,845 $1,664,276 $1,664,276 $53,144 $0 $53,144 $51,684 $0 $612 31.82 1.31% $3,848 71 056-086-22 BENEDICK, JEFFREY L TR $197,443 $108,843 $306,286 $306,286 $44,149 $0 $44,149 $42,937 $0 $113 7.11 1.09% $3,211 72 056-086-21 KLOKOW, ANNE E $801,492 $133,399 $934,891 $934,891 $65,919 $0 $65,919 $64,109 $0 $341 14.51 1.63% $4,753 73 056-086-20 EAGLE ROCK PARK LLC $1,587,568 $4,244 $1,591,812 $1,591,812 $52,896 $0 $52,896 $51,444 $0 $586 30.59 1.30% $3,831 74 056-086-19 GARCIA, GERALD A TR G A $598,472 $61,316 $659,788 $0 $52,899 $47,698 $0 $0 $0 NA NA 0.00% $0 75 056-086-31 SNYDER, KENNETH M JR TR $417,591 $203,888 $621,479 $621,479 $52,899 $0 $52,899 $51,446 $0 $226 12.03 1.30% $3,831 76 056-086-32 BERK, DAVID M TR BERK $1,845,273 $330,765 $2,176,038 $2,176,038 $52,896 $0 $52,896 $51,444 $0 $798 41.65 1.30% $3,831 77 056-086-29 MILLER, NANCY TR LIVING $56,345 $79,503 $135,848 $135,848 [11] $52,899 $0 $52,899 $51,446 $0 $47 2.64 1.30% $3,831 78 056-086-27 TRACY, JILL ANN $3,224,835 $180,720 $3,405,555 $3,405,555 $43,785 $0 $43,785 $42,583 $0 $1,253 77.69 1.08% $3,186 79 056-086-17 GALLO, KEITH EDWIN TR $1,090,479 $223,886 $1,314,365 $1,314,365 $37,602 $0 $37,602 $36,569 $0 $484 35.47 0.93% $2,748 80 056-086-43 SLATTERY, KATHRYN LANG TR $81,436 $74,446 $155,882 $0 $28,488 $25,180 $0 $0 $0 NA NA 0.00% $0 81 056-086-44 SLATTERY, FRIEDA KATHRYN TR $346,304 $596,137 $942,441 $0 $23,473 $20,554 $0 $0 $0 NA NA 0.00% $0 82 056-086-14 SLATTERY, THOMAS E TR $71,920 $430,798 $502,718 $0 $19,374 $16,773 $0 $0 $0 NA NA 0.00% $0 83 056-088-15 HOPPER, RICHARD A TR $1,080,357 $46,396 $1,126,753 $1,126,753 $38,070 $0 $38,070 $37,024 $0 $415 30.10 0.94% $2,781 84 056-088-12 BELL, REX TR $1,254,377 $28,020 $1,282,397 $1,282,397 $44,239 $0 $44,239 $43,024 $0 $472 29.48 1.09% $3,218 85 056-088-11 RONG, JOHN JUN TR $2,682,900 $389,297 $3,072,197 $3,072,197 $47,260 $0 $47,260 $45,962 $0 $1,130 65.24 1.17% $3,432 86 056-088-09 SEAMAN, THOMAS A TR THE T $1,090,791 $115,520 $1,206,311 $1,206,311 $51,187 $0 $51,187 $49,781 $0 $441 24.02 1.26% $3,710 87 056-088-10 JAEGER, DAVID L TR JAEGER $462,261 $43,396 $505,657 $505,657 $43,332 $0 $43,332 $42,142 $0 $186 11.95 1.07% $3,154 88 056-088-08 LEAVERTON, SHANNON D $850,167 $45,595 $895,762 $895,762 $47,260 $0 $47,260 $45,962 $0 $330 19.35 1.17% $3,432 89 056-088-07 GILLESPIE, JOHN $804,821 $27,938 $832,759 $832,759 $45,030 $0 $45,030 $43,793 $0 $304 18.88 1.11% $3,274 90 056-088-06 NOVICK ERIKA TR $1,929,468 $99,471 $2,028,939 $2,028,939 $42,440 $0 $42,440 $41,275 $0 $747 48.28 1.05% $3,090 91 056-088-02 GONZALEZ, BARBARA CHERNEY $265,885 $42,528 $308,413 $308,413 $38,811 $0 $38,811 $37,745 $0 $113 8.15 0.96% $2,833 92 056-088-01 ALTUWAIJRI, AHMED $980,685 $0 $980,685 $980,685 $45,506 $0 $45,506 $44,256 $0 $361 21.98 1.12% $3,307 93 056-085-03 GARY LEGRAND $997,988 $812,111 $1,810,099 $1,810,099 $51,517 $0 $51,517 $50,102 $0 $666 35.65 1.27% $3,733 Assessment District No. 2021-1
City of Laguna Beach
Fiscal Year 2025-2026 Assessed Value [1]
Value-to-Lien Detail by Parcel
(West Street Utility Undergrounding)
140
94 056-085-02 SPCH LAGUNA LLC $510,973 $6,371 $517,344 $517,344 $43,302 $0 $43,302 $42,113 $0 $190 12.23 1.07% $3,151 95 056-085-01 JK ENTERPRISES $845,341 $250,491 $1,095,832 $1,095,832 $49,741 $0 $49,741 $48,375 $0 $403 22.47 1.23% $3,607 ** 96 658-091-06 BLEVINS, LEE DUDLEY TR $995,837 $0 $995,837 $995,837 $43,453 $0 $43,453 $42,260 $0 $366 23.36 1.07% $3,162 ** 97 658-091-05 BLEVINS, LEE DUDLEY TR $1,169,026 $0 $1,169,026 $1,169,026 $43,068 $0 $43,068 $41,885 $0 $430 27.63 1.06% $3,135 98 658-091-04 LYONS, KENNY $1,149,120 $69,492 $1,218,612 $1,218,612 $43,304 $0 $43,304 $42,114 $0 $448 28.63 1.07% $3,151 99 658-091-03 STINNETT, MARY $297,612 $85,195 $382,807 $382,807 $43,304 $0 $43,304 $42,114 $0 $138 9.06 1.07% $3,151 100 658-091-02 PP HOLDINGS LCC $1,465,003 $106,439 $1,571,442 $1,571,442 $43,304 $0 $43,304 $42,114 $0 $578 36.81 1.07% $3,151 ** 101 658-091-01 31502 PCH LLC $1,061,208 $0 $1,061,208 $1,061,208 $42,738 $0 $42,738 $41,564 $0 $390 25.29 1.05% $3,111 102 056-070-07 NOYES, TOM E TR $730,358 $330,657 $1,061,015 $1,061,015 $38,458 $0 $38,458 $37,402 $0 $388 28.08 0.95% $2,808 ** 103 056-062-33 WHITAKER, DAVID L TR $0 $0 $0 $0 [12] $0 $0 $0 $0 $0 NA NA 0.00% $0 Total NA NA $118,030,161 $25,421,247 $143,451,408 $113,336,445 $5,233,077 $1,061,227 $4,056,412 $3,945,000 $6,334 $41,558 28.38 100% $293,880 $287,250
$1,453,031.35 $3,945,000 $3,767.69
Notes:
[1] Assessed Value as of January 1, 2025 as provided by County of Orange Assessor. [2] Cash payments as of November 17, 2025.
[3] Based on bond sizing dated November 18, 2025.
[4] APNs 056-062-06, 056-062-07, and 056-062-08 are within the boundaries of Assessment District No. 09-1. [5] Property built in 1963. No sales/transactions on file. Property looks fully developed based on satellite image. [6] Property built in 1972. No sales/transactions on file. Property looks fully developed based on satellite image. [7] No sales/transactions have occurred on the property since 1978. [8] No sales/transactions have occurred on the property since 1997. [9] Recent sale of $1.6M as of August 8, 2025. However, value will be included in the next fiscal year. [10] No sales/transactions have occurred on the property since 1982. [11] No sales/transactions have occurred on the property since 1986. [12] No sales/transactions have occurred on the property since 1997. *Source: First American Data Tree, Property Detail Report. 141

Laguna Beach City CouncilDecember 9, 2025

Laguna Beach City Council
December 9, 2025